EX-2.1 2 a2239107zex-2_1.htm EX-2.1

Exhibit 2.1

 

CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. THE OMITTED PORTIONS OF THIS DOCUMENT ARE INDICATED BY [***].

 

 

Agreement

 

Share sale agreement — Cork

 

Wesfarmers Limited

 

Coronado Australia Holdings Pty Ltd

 

Coronado Group LLC

 


 

 

 

Contents

 

Table of contents

 

 

 

 

1

Definitions and interpretation

8

 

 

 

 

1.1

Definitions

8

 

1.2

Interpretation

27

 

1.3

Business Day

28

 

1.4

Inclusive expressions

28

 

1.5

Agreement components

28

 

 

 

2

Conditions for Completion

28

 

 

 

 

2.1

Conditions precedent

28

 

2.2

Notice

29

 

2.3

Reasonable endeavours

29

 

2.4

Waiver

31

 

2.5

Cut Off Date

31

 

2.6

No binding agreement for transfer

31

 

 

 

3

Termination

31

 

 

 

 

3.1

Termination by the Buyer Entities

31

 

3.2

Termination by the Seller

31

 

3.3

Effect of termination

32

 

3.4

No other right to terminate or rescind

32

 

 

 

4

Sale and purchase

33

 

 

 

 

4.1

Actions immediately prior to Completion

33

 

4.2

Sale Shares

33

 

4.3

Share Purchase Price

33

 

4.4

Existing WES Intercompany Loan Agreement and Existing WES GSA

34

 

4.5

Debt Purchase Price

34

 

4.6

Actions on Completion

34

 

4.7

Title and risk in Sale Shares

34

 

 

 

5

Period before Completion

34

 

 

 

 

5.1

Carrying on of business

34

 

5.2

Material Contracts and proposed actions

36

 

5.3

Pre Completion Dividend or Distribution

37

 

5.4

Permitted acts

37

 

5.5

Intra-group loans

37

 

5.6

Wesfarmers Guarantees

38

 

5.7

Target Entity a member of a Consolidated Group

38

 

5.8

Access to business

39

 

5.9

Information rights

40

 

5.10

Co-operation with debt financing

40

 

5.11

Financial assistance whitewash

42

 

5.12

Notification of change of control

42

 

5.13

VSM Deed

42

 

5.14

Transitional Services Agreement

43

 

5.15

United States Tax filing

43

 

 

 

6

IT Licences

43

 

 

 

 

6.1

Transfer

43

 

1


 

 

6.2

Obligations pending transfer

44

 

6.3

Buyer indemnity in respect of the IT Licences

44

 

6.4

Warranty in respect of IT Licences

45

 

 

 

7

Employees

45

 

 

 

 

7.1

Existing Employees

45

 

7.2

Employees

45

 

7.3

Payment and indemnity

46

 

7.4

Seller Indemnity

46

 

7.5

Employment Records

47

 

7.6

No solicitation of employees

47

 

 

 

8

Superannuation

47

 

 

 

 

8.1

Buyer’s Fund

47

 

8.2

Buyer’s undertakings

47

 

 

 

9

Completion

48

 

 

 

 

9.1

Time and Place

48

 

9.2

Completion

48

 

9.3

Notice to complete

48

 

9.4

Completion timing

48

 

 

 

10

Completion Accounts

49

 

 

 

 

10.1

Preparation of Completion Accounts

49

 

10.2

Debt Purchase Price adjustments following Completion Accounts

49

 

10.3

Payment of adjustments

49

 

 

 

11

Warranties and indemnity

50

 

 

 

 

11.1

Warranties by the Seller

50

 

11.2

Independent Warranties

50

 

11.3

Reliance

50

 

11.4

Indemnity for breach of Warranty

50

 

11.5

Tax indemnity

50

 

 

 

12

Qualifications and limitations on Claims

51

 

 

 

 

 

12.1

Disclosure

51

 

12.2

Awareness

52

 

12.3

No reliance

52

 

12.4

Opinions, estimates and forecasts

53

 

12.5

Maximum and minimum amounts

54

 

12.6

Time limits

54

 

12.7

No double claims

55

 

12.8

Mitigation of loss

55

 

12.9

Personal Liability

55

 

12.10

General limitations

57

 

12.11

Other limitations

58

 

12.12

Consequential loss

58

 

12.13

Sole remedy

59

 

12.14

Statutory actions

59

 

12.15

Payments affecting the Debt Purchase Price

60

 

12.16

Fraud

60

 

12.17

Independent limitations

60

 

2


 

13

Procedures for dealing with Claims

60

 

 

 

 

13.1

Notice of Claims

60

 

13.2

Third Party Claims

61

 

13.3

Tax Demands

62

 

 

 

14

Buyer Warranties

64

 

 

 

 

14.1

Buyer Warranties

64

 

14.2

Independent Warranties

64

 

14.3

Reliance

64

 

 

 

15

Period after Completion

64

 

 

 

 

15.1

Appointment of proxy

64

 

15.2

Access to records by Seller

65

 

15.3

Access to records by Buyer

65

 

15.4

Branding and phase out

66

 

15.5

Insurance policies in respect of Target Entities

67

 

15.6

Pre Completion tax returns

67

 

15.7

Other Tax obligations

69

 

15.8

Financial Assurances and Bank Guarantees

69

 

15.10

Indemnity in respect of post Completion matters

71

 

15.11

Environmental obligations and indemnity

71

 

15.12

Wrong pockets

72

 

 

 

16

Confidentiality and announcements

72

 

 

 

 

16.1

Agreed announcement

72

 

16.2

Confidentiality

73

 

 

 

17

Duties, costs and expenses

74

 

 

 

 

17.1

Duties

74

 

17.2

Costs and expenses

74

 

 

 

18

GST

74

 

 

 

19

Notices

75

 

 

 

 

19.1

Form of Notice

75

 

19.2

How Notice must be given and when Notice is received

75

 

19.3

Notice must not be given by electronic communication

76

 

 

 

20

Guarantee by Buyer’s Guarantor

76

 

 

 

 

20.1

Consideration

76

 

20.2

Guarantee and indemnity

76

 

20.3

Non-payment and non-performance

76

 

20.4

Extent of guarantee and indemnity

77

 

20.5

Principal and independent obligation

77

 

20.6

Continuing guarantee and indemnity

77

 

20.7

No withholdings

78

 

20.8

Currency

78

 

20.9

No set off

78

 

20.10

Buyer’s Guarantor’s liability

78

 

20.11

Assigning benefit

78

 

 

 

21

General

78

 

 

 

 

21.1

Governing law and jurisdiction

78

 

3


 

 

21.2

Arbitration

78

 

21.3

Arbitration proceedings

79

 

21.4

Service of process

79

 

21.5

Actions against Finance Related Parties

79

 

21.6

Invalidity and enforceability

80

 

21.7

Waiver

80

 

21.8

Waiver of Claims Against Finance Related Parties

81

 

21.9

Variation

81

 

21.10

Assignment

81

 

21.11

Further action to be taken at each party’s own expense

82

 

21.12

Relationship of the parties

82

 

21.13

Exercise of rights

82

 

21.14

Remedies cumulative

82

 

21.15

Counterparts

82

 

21.16

No merger

82

 

21.17

Entire agreement

82

 

21.18

No reliance

82

 

21.19

Default interest

83

 

21.20

Benefits held on trust

83

 

21.21

Attorneys

83

 

21.22

No withholdings

83

 

 

 

 

Schedules

 

 

 

 

 

Schedule 1

 

 

Notice details

85

 

 

 

 

Schedule 2

 

 

Tenements

86

 

 

 

 

Schedule 3

 

 

Target Entity Details

87

 

 

 

 

Schedule 4

 

 

Warranties

88

 

 

 

 

Schedule 5

 

 

Buyer Warranties

89

 

 

 

 

Schedule 6

 

 

Completion Steps

90

 

 

 

 

Schedule 7

 

 

4


 

 

Completion Accounts

91

 

 

 

 

Schedule 8

 

 

Pro forma Completion Accounts

92

 

 

 

 

Schedule 9

 

 

Structure Diagram

93

 

 

 

 

Schedule 10

 

 

Financial Assurances and Bank Guarantees

94

 

 

 

 

Schedule 11

 

 

Properties

95

 

 

 

 

Schedule 12

 

 

Business Intellectual Property

96

 

 

 

 

Schedule 13

 

 

Third Party Intellectual Property

97

 

 

 

 

Schedule 14

 

 

Seller Trade Marks

98

 

 

 

 

Schedule 15

 

 

Plant and Equipment

99

 

 

 

 

Schedule 16

 

 

Insurance policies

167

 

 

 

 

Schedule 17

 

 

Employees

168

 

 

 

 

Schedule 18

 

 

Deed of Assignment (Debt and Security)

169

 

 

 

 

Schedule 19

 

 

Financial statements

170

 

5


 

 

Schedule 20

 

 

 

VSM Deed

 

172

 

 

 

 

 

Schedule 21

 

 

 

Transitional Services Agreement

 

173

 

 

 

 

 

Schedule 22

 

 

 

New Intercompany Loan Agreement

 

174

 

 

 

 

 

Schedule 23

 

 

 

New Intercompany Loan Documents (GSA)

 

175

 

 

 

 

 

Schedule 24

 

 

 

Deed of release

 

176

 

 

 

 

 

Signing page

 

177

 

6


 

Cork share sale agreement

 

 

 

 

 

Date  22 December 2017

 

 

 

 

 

Between the parties

 

 

 

Seller

 

Wesfarmers Limited

 

 

 

 

 

ACN 008 984 049 of Level 14, Brookfield Place Tower 2,

 

 

123 St Georges Terrace

 

 

Perth

 

 

Western Australia

 

 

6000

 

 

 

 

 

(Seller)

 

Buyer

 

Coronado Australia Holdings Pty Ltd

 

 

 

 

 

ACN 623 524 989 of C/- Jones Day, Level 31, Riverside Centre, 123

 

 

Eagle Street

 

 

Brisbane

 

 

Queensland

 

 

4000

 

 

 

 

 

(Buyer)

 

Assignee

 

Coronado Group LLC, a Delaware limited liability company

 

 

 

 

 

57 Danbury Road, Suite 101

 

 

Wilton

 

 

CT, USA

 

 

06897

 

 

 

 

 

(Assignee)

 

Buyer’s Guarantor

 

Coronado Group LLC, a Delaware limited liability company

 

 

 

 

 

57 Danbury Road, Suite 101

 

 

Wilton

 

 

CT.USA

 

 

06897

 

 

 

 

 

(Buyer’s Guarantor)

 

Recitals

 

The Seller owns the Sale Shares.

 

 

 

 

 

2 The Seller has agreed to sell and the Buyer has agreed to buy the Sale Shares and the Seller has agreed to assign and the Buyer has agreed to the assignment of the Existing WES lntercompany Loan Agreement on the terms and conditions of this agreement.

 

 

3 The Buyer’s Guarantor has agreed to guarantee the Buyer’s and Assignee’s obligations under this agreement.

 

7


 

The parties agree as follows:

 

 

 

1                                                  Definitions and interpretation

 

1.1                                        Definitions

 

The meanings of the terms used in this agreement are set out below.

 

Term

 

Meaning

 

 

 

A IFRS

 

Australian equivalents to International Financial Reporting Standards.

 

 

 

Accounting Standards

 

is defined in Schedule 7.

 

 

 

Accounts

 

in respect of the Target Entities, the consolidated balance sheet as at the Accounts Date, and the consolidated profit and loss statement of the Target Entities for the year ending on the Accounts Date.

 

 

 

Accounts Date

 

30 June 2017.

 

 

 

Adjustment Amount

 

the amount (if any) equal to the Completion Working Capital Balance minus the Target Working Capital Balance, plus Completion Net Debt.

 

 

 

Advance

 

the cash advance made by the Buyer to Wesfarmers Curragh under the New Intercompany Loan Agreement in the amount of the Repayment Amount.

 

 

 

ASIC

 

the Australian Securities and Investments Commission.

 

 

 

Authorisation

 

any approval, licence, consent, authority or permit.

 

 

 

Bank Guarantee Beneficiary

 

in respect of each Bank Guarantee, the beneficiary of that guarantee.

 

 

 

Bank Guarantees

 

the bank guarantees listed in Schedule 10.

 

8


 

Term

 

Meaning

 

 

 

Bank Guarantees Replacement

 

in respect of the Bank Guarantees, a bank guarantee or bank guarantees in favour of the relevant Bank Guarantee Beneficiary in the sum stated in Schedule 10 (or such other amount as the Bank Guarantee Beneficiary may require) and in such form and from such institutions as the Bank Guarantee Beneficiary requires.

 

 

 

Business

 

the business carried out by the Target Entities.

 

 

 

Business Day

 

a day on which banks are open for business in Brisbane and Perth, other than a Saturday, Sunday or public holiday in either (or both) of those cities.

 

 

 

Business Intellectual Property

 

1            the Intellectual Property Rights set out in Schedule 12; and

 

2            any other Intellectual Property Rights owned by a Target Entity,

 

and the right to take action against Third Parties for infringement of those Intellectual Property Rights whether occurring before or after the date of this agreement, but excluding the Third Party Intellectual Property.

 

 

 

Business Records

 

all original and certified copies of the books, records, documents, information, accounts and data (whether machine readable or in printed form) owned by a Target Entity or the property of a Target Entity and any source material owned by a Target Entity and used to prepare them.

 

 

 

Buyer Claim

 

any claim, demand, legal proceedings or cause of action, including any claim, demand, legal proceedings or cause of action under common law or under statute in any way relating to any Transaction Agreement, the Sale or the Transfer, and includes a claim, demand, legal proceedings or cause of action arising from a breach of a Buyer Warranty, or under an indemnity in any Transaction Agreement.

 

 

 

Buyer Entities

 

means the Buyer and the Assignee.

 

 

 

Buyer Group

 

the Buyer Entities and each of their Related Bodies Corporate (other than the Target Entities), including the Buyer’s Guarantor and Buyer Group Member means any member of the Buyer Group.

 

 

 

Buyer Released Matters

 

has the meaning given in clause 12.9(d)(1).

 

 

 

Buyer Warranties

 

the representations and warranties in Schedule 5.

 

 

 

Buyer’s Consolidated Group

 

the Consolidated Group of which the Buyer is a member, if any.

 

9


 

Term

 

Meaning

 

 

 

Buyer’s Fund

 

a superannuation fund established or nominated by the Buyer and notified to the Seller not less than 10 Business Days prior to Completion.

 

 

 

Change of Control Consent

 

means consent to the change of control of Wesfarmers Curragh in accordance with the Ergon Contract.

 

 

 

Claim

 

any claim, demand, legal proceedings or cause of action, including any claim, demand, legal proceedings or cause of action under common law or under statute in any way relating to any Transaction Agreement, the Sale or the Transfer and includes a claim, demand, legal proceedings or cause of action arising from a breach of Warranty, or under an indemnity in any Transaction Agreement.

 

For the avoidance of doubt, a Claim includes a Tax Claim.

 

 

 

Completion

 

Share Completion and Debt Completion.

 

 

 

Completion Accounts

 

the accounts setting out Completion Working Capital Balance and Completion Net Debt, prepared as at the Effective Time in accordance with Schedule 7 and in the format set out in Schedule 8, together with such information required by Schedule 7 and Schedule 8.

 

 

 

Completion Date

 

the date on which Completion occurs.

 

 

 

Completion Net Debt

 

is defined in Schedule 7.

 

 

 

Completion Steps

 

the steps that each party must carry out at Completion, which are set out in Schedule 6.

 

 

 

Completion Working Capital Balance

 

is defined in Schedule 7.

 

 

 

Condition

 

a condition in clause 2.1.

 

 

 

Confidentiality Agreements

 

the confidentiality agreement dated 10 January 2017 between the Seller and the Buyer and the confidentiality deed poll dated 23 January 2017 by the Buyer in favour of the relevant beneficiaries, as amended from time to time.

 

10


 

Term

 

Meaning

 

 

 

Consequential Loss

 

1            special, exemplary or punitive damages;

 

2            loss of production, loss of anticipated production, loss of revenue, loss of anticipated revenue, loss of profits or loss of anticipated profits;

 

3            loss of business opportunities, including the opportunity to enter into or complete an arrangement with a third party; and

 

4            damages to goodwill or reputational damage,

 

whether arising in contract, tort (including negligence), equity or under statute and whether or not foreseeable at the date of this agreement.

 

 

 

Consolidated Group

 

a ‘Consolidated Group’ or a ‘MEC’ group as those terms are defined in section 995-1 of the ITAA 1997.

 

 

 

Contamination

 

the presence of any substance in the Environment, whether solid, liquid or gaseous, including a ‘contaminant’ as defined in the Environmental Protection Act 1994 (Qld), which is:

 

1            harmful or potentially harmful to property, human beings, vegetation, animals, birds or other terrestrial or marine life or ecosystems; or

 

2                 unlawful to emit, discharge or deposit to, or disturb in, the Environment.

 

 

 

Corporations Act

 

the Corporations Act 2001 (Cth).

 

 

 

Curragh Mine

 

the mine known as ‘Curragh’ which is located on the Tenements.

 

 

 

Cut Off Date

 

the date which is six months after the date of this agreement.

 

 

 

Data Room

 

the online data room entitled ‘09 Cork Mine’ as hosted by Ansarada and accessed at https://dataroom.ansarada.com/projectwalter.dataroom and made available to the Buyer Entities, their representatives or advisers, the contents of which will be reproduced on a CD or USB stick (or in a form agreed between the Seller and the Buyer), and the CD or USB stick (or other device) will be initialled by the Seller and the Buyer and delivered to the Buyer on execution of this agreement.

 

 

 

Debt Commitment Letter

 

means, collectively:

 

1                 the commitment letter among Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., the Buyer and the Buyer’s Guarantor dated on or before the date of this agreement; and

 

2                 the Fee Letters related to paragraph 1,

 

in each case as amended, modified, supplemented or replaced from time to time, to the extent permitted by clause 5.10(c).

 

11


 

Term

 

Meaning

 

 

 

Debt Completion

 

completion of the sale and transfer of the Existing WES Intercompany Loan Agreement and the Existing WES GSA under clause 4.4.

 

 

 

Debt Completion Payment

 

[***]

 

 

 

Debt Financing Commitments

 

means the commitment of the Debt Financing Parties to provide the Debt Financing.

 

 

 

Debt Financing Documents

 

means the definitive documentation for the Debt Financing.

 

 

 

Debt Financing Parties

 

means the entities that have committed to provide or arrange or otherwise entered into agreements (including any commitment letters) in connection with the Debt Financing, the Debt Financing Commitments or other debt financings in connection with the transactions contemplated by this agreement.

 

 

 

Debt Financing

 

means the debt financing contemplated by the Debt Commitment Letter.

 

 

 

Debt Purchase Price

 

the Debt Completion Payment plus or minus (as applicable) the Adjustment Amount and plus or minus any other adjustments made under this agreement.

 

For the avoidance of doubt, in this agreement, Debt Purchase Price is exclusive of GST.

 

 

 

Deed of Assignment (Debt and Security)

 

the deed of assignment of the Existing WES Intercompany Loan Agreement and the Existing WES GSA between the Seller as assignor and the Buyer as assignee in the form of Schedule 18.

 

 

 

Demand

 

a written notice of, or demand for, an amount payable.

 

 

 

Disclosure Letter

 

a letter dated on or about the date of this agreement together with the attachments to that letter addressed by the Seller to the Buyer Entities disclosing facts, matters and circumstances that are, or may be, inconsistent with the Warranties.

 

 

 

Disclosure Materials

 

1            all documents and information that were contained in the Data Room as at 21 December 2017 and included on the CD or USB stick (or other device) to be initialled by the Seller and the Buyer and delivered to the Buyer Entities on execution of this agreement; and

 

2            the information set out in the Disclosure Letter.

 

 

 

Disputed Matters

 

is defined in Schedule 7.

 

12


 

Term

 

Meaning

 

 

 

Disputing Action

 

in respect of Tax Demand, any action to cause the Tax Demand to be withdrawn, reduced or postponed or to avoid, resist, object to, defend, appear against or compromise the Tax Demand and any judicial or administrative proceedings arising out of that action.

 

 

 

DPT Assessment

 

an assessment raised under section 145-10 of Schedule 1 of the Taxation Administration Act 1953 (Cth).

 

 

 

Duty

 

any stamp, transaction or registration duty or similar charge imposed by any Governmental Agency and includes any interest, fine, penalty, charge or other amount imposed in respect of any of them, but excludes any Tax.

 

 

 

Effective Time

 

is defined in Schedule 7.

 

 

 

Employee

 

1            an Existing Employee;

 

2            a Pre-Completion Transferring Employee; and

 

3            a Transferring Employee.

 

 

 

Employee Entitlement List

 

a document setting out at the date specified in the document the period of service (including prior service with any Target Entity or Seller Group Member), remuneration package (including details of any bonuses, profit share, or employee share plan entitlements), applicable allowances and accrued leave (including long service leave, annual leave and personal leave) of each Employee, but without identifying the name of the Employee that corresponds to that information.

 

 

 

Employee Entitlements

 

all of the Leave Benefits of each Pre-Completion Transferring Employee or Transferring Employee who accepts employment with a Target Entity in accordance with clause 7.2, accrued as at Completion.

 

 

 

Encumbrance

 

an interest or power:

 

1            reserved in or over an interest in any asset; or

 

2            created or otherwise arising in or over any interest in any asset under a security agreement, a bill of sale, mortgage, charge, lien, pledge, trust or power,

 

by way of, or having similar commercial effect to, security for the payment of a debt, any other monetary obligation or the performance of any other obligation, and includes, but is not limited to:

 

3            any agreement to grant or create any of the above; and

 

4            a security interest within the meaning of section 12(1) and section 12(2) of the PPSA,

 

but does not include a Permitted Encumbrance.

 

13


 

Term

 

Meaning

 

 

 

Enterprise Agreement

 

the enterprise agreement titled ‘Curragh Mine Operations Enterprise Agreement 2015’.

 

 

 

Environment

 

has the meaning given to it in the Environmental Protection Act 1994 (Qld).

 

 

 

Environmental Harm

 

has the meaning given to it in the Environmental Protection Act 1994 (Qld).

 

 

 

Environmental Law

 

any statute or common law relating to the Environment including any law relating to land use, planning, heritage, coastal protection, water catchments, pollution of air or waters, soil or groundwater contamination, Contamination, Environmental Harm, chemicals, waste, noise, use of hazardous or dangerous goods or substances, building regulations, public and occupational health and safety, noxious trades, or any other aspect of protection of the Environment or person or property.

 

 

 

Environmental Obligations

 

the Indemnified Parties’ obligations in relation to the Tenements, the Properties or the Curragh Mine, which arise either:

 

1            prior to Completion and remains unsatisfied at Completion; or

 

2            after Completion,

 

and relate to:

 

3            remediation, rehabilitation, restoration or Contamination in respect of the Tenements or Properties; or

 

4            any notice, direction or requirement given under an Environmental Law (including in relation to financial assurance).

Equity Financing

 

has the meaning given in the Debt Commitment Letter.

 

 

 

[***]

 

[***]

 

 

 

[***]

 

[***]

 

 

 

Existing Employee

 

an employee of a Target Entity as at the date of this agreement who remains employed by a Target Entity immediately before Completion.

 

 

 

Existing Member

 

an Employee who is a member of the Wesfarmers’ Fund on Completion.

 

 

 

Existing WES GSA

 

the general security agreement dated 25 January 2017 granted by Wesfarmers Curragh and the Wesfarmers Guarantors in favour of the Seller as amended from time to time.

 

14


 

Term

 

Meaning

 

 

 

Existing WES Intercompany Loan Agreement

 

the loan agreement dated 25 January 2017 between the Seller as lender, Wesfarmers Curragh as borrower and the Wesfarmers Guarantors as guarantors as amended from time to time.

 

 

 

Exit Payment

 

the payment determined in accordance with the Tax Sharing Agreement and pursuant to section 721-35 of the ITAA 1997, which is required to be made by clause 5.7(e).

 

 

 

Expert

 

is defined in Schedule 7.

 

 

 

Expert’s Report

 

is defined in Schedule 7.

 

 

 

Fee Letters

 

means the letters between Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., the Buyer and the Buyer’s Guarantor that address fees and expenses related to the Debt Financing, each dated on or about the date of this agreement.

 

 

 

Finance Related Parties

 

means the Debt Financing Parties, and the parties to any joinder agreements, indentures or credit agreements entered pursuant thereto or relating thereto, together with their respective affiliates, and their respective affiliates’ officers, directors, employees, agents and representatives and their respective successors and assigns.

 

 

 

Financial Assurances

 

the bank guarantees provided by or on behalf of the Target Entities to the State of Queensland and the Department of Natural Resources and Mines in respect of the Tenements and related environmental authorities, for an aggregate amount of $269,048,091.19 as listed in Schedule 10.

 

 

 

Financial Assurances Replacement

 

in respect of the Financial Assurances, a bank guarantee or bank guarantees in favour of the State of Queensland or the Department of Natural Resources and Mines (as applicable) in the aggregate sum of $269,048,091.19 (or such other amount as the relevant Governmental Agency may require) and in such form and from such institutions as required by that Governmental Agency.

 

 

 

Freehold Properties

 

the freehold real estate listed in Part 1 of Schedule 11.

 

 

 

[***]

 

[***]

 

 

 

Governmental Agency

 

any government or governmental, administrative, monetary, fiscal or judicial body, department, commission, authority, tribunal, agency or entity in any part of the world.

 

15


 

Term

 

Meaning

 

 

 

Group Liability

 

has the same meaning as that term is defined in section 721-10(1)(a) of the ITAA 1997.

 

 

 

Group Liability Date

 

the date Group Liability becomes due and payable.

 

 

 

GST

 

has the meaning given in clause 18.

 

 

 

GST Act

 

the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

 

 

 

Head Company

 

has the same meaning as that term is defined in section 995-1 of the ITAA 1997.

 

 

 

Immediately Available Funds

 

telegraphic or other electronic means of transfer of cleared funds into a bank account nominated in advance by the payee.

 

 

 

Indemnifiable U.S. Tax

 

U.S. federal income tax liability of an Indemnified Party or Target Entity to the extent such U.S. federal income tax liability arises as a result of an election made pursuant to clause 5.15(a) of this agreement and would not have arisen in the absence of such election.

 

 

 

Indemnified Parties

 

1            the Seller Group Members;

 

2            each director, officer, employee or agent of the Seller Group Members; and

 

3            the Specified Executives.

 

 

 

Insurance

 

is defined in Warranty 16.1 in Schedule 4.

 

 

 

Intellectual Property Rights

 

all intellectual and industrial property rights and interests throughout the world, whether registered or unregistered, including trade marks, designs, patents, inventions, circuit layouts, copyright and analogous rights, confidential information, know-how and all other intellectual property rights as defined in Article 2 of the convention establishing the World Intellectual Property Organisation of 14 July 1967 as amended from time to time.

 

 

 

Interest Rate

 

the daily 11.00am cash rate quoted on Reuters page RBA30.

 

16


 

Term

 

Meaning

 

 

 

IT Licences

 

[***]

 

 

 

ITAA 1997

 

the Income Tax Assessment Act 1997 (Cth).

 

 

 

Key Mining Services Contracts

 

[***]

 

 

 

Last Payment Date

 

is defined in clause 10.3.

 

 

 

Leasehold Properties

 

the properties leased by a Target Entity under the Property Leases.

 

 

 

Leave Benefits

 

1            annual leave and leave loading;

2            accumulated personal leave; and

3            long service leave.

 

 

 

Loss

 

losses, liabilities, damages, costs, charges and expenses and includes Taxes, Duties and Tax Costs.

 

17


 

Term

 

Meaning

 

 

 

Management Accounts

 

means the:

1            Board and Managing Director Reports for the period after the Accounts Date and date of this agreement (document numbers 09.06.04.01.04.07, 09.06.04.01.04.08 and 09.06.04.01.04.09);

2            Mine Cash Cost Reports for the period after the Accounts Date and the date of this agreement (document numbers 09.06.04.06.04.07, 09.06.04.06.04.08 and 09.06.04.06.04.09 in the Data Room); and

3            Trial Balance Apr-Sep 17 and Oct-Nov 17 (document numbers 09.06.06.10 and 09.06.06.12 in the Data Room).

 

 

 

Marketing Period

 

the first period of 12 consecutive New York Business Days commencing after the date of this agreement throughout which and on the first and last day of which:

1            the Buyer has the Pre-Completion Financial Statements; and

2            the Conditions in clause 2.1 have been satisfied or waived,

 

provided that 15 January 2018, 19 February 2018, 30 March 2018 and 28 May 2018 will not count towards the 12 New York Business Days for purposes of the Marketing Period (but for the avoidance of doubt, such exclusion shall not restart the period), and such Marketing Period will not commence before 2 January 2018.

 

 

 

Material Adverse Change

 

means any change, matter, event or circumstance which happens or is announced after the date of this agreement and before Completion which (individually or when aggregated with all such changes, matters, events or circumstances of a like kind):

1            has resulted in, or is reasonably likely to result in, a reduction in the assets or an increase in the liabilities of the Target Entities on a consolidated basis by $50,000,000 or more;

2            has resulted in the projected output of run of mine (ROM) coal of the Curragh Mine, or is reasonably likely to result in the projected output of run of mine (ROM) coal of the Curragh Mine, being reduced by two million tonnes or more over the 12 month period commencing on the Scheduled Completion Date (assuming the Marketing Period has expired as at the date that the change, matter, event or circumstance is announced or becomes known, whichever is the later) when compared to the projected output of run of mine (ROM) coal of the Curragh Mine set out in document number 09.01.02.01 in the Data Room;

3            results in the appointment of a receiver, receiver and manager, judicial manager, liquidator, administrator or like official to or over the whole or a substantial part of the undertaking or property of Wiggins Island Coal Export Terminal Pty Ltd ACN 131 210 038; or

4            has resulted in or is reasonably likely to permanently or for a material period of time result in the Target Entities carrying on their business in a substantially worse manner as was carried on as at the date of this agreement,

but does not include any change, matter, event or circumstance:

5            that has been fairly disclosed in, or otherwise reasonably identifiable or reasonably evident from (including in accordance with clause 12.1(c)) the

 

18


 

Term

 

Meaning

 

 

 

 

 

information contained in, the Disclosure Materials, which the parties agree does not include disclosure of the risk that a change, matter, event or circumstance may occur;

6            to the extent the Buyer or a Buyer Group Member has contributed to the change, matter, event or circumstance occurring;

7            agreed to, requested by, or consented to, in writing by the Buyer or a Buyer Group Member;

8            arising from changes in commodity prices (including coal prices and demand for coal), exchange rates or interest rates, or changes in general economic, political or business conditions, or changes that generally affect Bowen Basin coal miners;

9            arising from changes or major disruptions to, or fluctuations in, domestic or international financial markets;

10     arising from activism, acts of terrorism, riot or war (whether or not declared) that affect the Target Entities and their competitors in a similar manner;

11     relating to any change in general legal or regulatory conditions, including the enactment, adoption, implementation, promulgation, repeal, modification, reiteration or proposal of any law, regulation or government policy;

12     relating to any change in the judicial or administrative interpretation of the law or any regulation;

13     relating to any change in Tax rates or Tax Laws;

14     arising as a result of any change in accounting policy required by law or to comply with any changes to generally accepted accounting principles;

15     arising as a result of any change in accounting policy or generally accepted accounting principles;

16     arising from changes to the Bank Guarantees and the Financial Assurances or a change in rehabilitation obligations;

17     arising from changes in the mine plan for the Curragh Mine except to the extent the mine plan is changed because of the relevant change, matter, event or circumstance;

18     occurring directly as a result of an action required to be undertaken or procured pursuant to this agreement or any Transaction Agreement; or

19     to the extent insured and reasonably likely to be recovered by the Target Entities (including where the beneficiary is the Seller).

 

 

 

Material Coal Contract

 

any coal sales or marketing agreement:

1            for the sale of or other dealing with coal on the basis of coal specifications inconsistent with that capable of being produced from the Curragh Mine; or

2            for:

(a)              500,000 tonnes of coal (aggregated for any one customer) in any period after the Scheduled Completion Date (assuming the Marketing Period has expired as at the date of entering into the agreement); and

(b)              a term that expires 12 months or more after the Scheduled Completion Date (assuming the Marketing Period has expired as at the date of entering into the agreement).

 

19


 

Term

 

Meaning

 

 

 

Material Contracts

 

[***]

 

 

 

Material Proceedings

 

is defined in Warranty 12.1 in Schedule 4.

 

 

 

Net Balance

 

is the amount which is equal to the aggregate of amounts owing to the Seller under the Existing WES Intercompany Loan Agreement and the New WES Intercompany Loan Agreement at the Completion Date less the Repayment Amount.

 

 

 

New Intercompany Loan Agreement

 

the intercompany loan agreement between the Buyer as lender, Wesfarmers Curragh as borrower and the Wesfarmers Guarantors as guarantors, in substantially the form of Schedule 22 subject to the changes to the interest rate and interest payable under the agreement.

 

 

 

New Intercompany Loan Documents

 

1            the New Intercompany Loan Agreement; and

 

2            the general security agreement granted by Wesfarmers Curragh and the Wesfarmers Guarantors to the Buyer, in substantially the form of Schedule 23.

 

 

 

New WES GSA

 

[***]

 

20


 

Term

 

Meaning

 

 

 

New WES Intercompany Loan Agreement

 

[***]

 

 

 

New York Business Day

 

is a day on which banks are open for business in New York, other than a Saturday, Sunday or public holiday in New York.

 

 

 

Permitted Encumbrance

 

1            PPS Register Security Interest registered in the ordinary course of business by suppliers or contractors of a Target Entity (or subcontractors of those suppliers or contractors);

 

2            any Security Interest created or which is permitted to exist as contemplated by this agreement or any agreement entered into in contemplation of this agreement;

 

3            the Existing WES GSA and New WES GSA;

 

4            the caveat contemplated in the VSM Deed;

 

5            any mortgage or registration (including any covenant or easement) against the Tenements or Properties that is included in the Disclosure Materials or would have shown on a resource authority public report or a search of the public register maintained by the Queensland Title Registry three Business Days before the date of this agreement;

 

6            in respect of the Tenements, any reservation or covenant arising under law or arising in respect of the grant of the Tenement;

 

7            every lien or retention of title arrangement securing the unpaid balance of purchase money for property acquired in the ordinary course of business;

 

8            any Encumbrance in relation to personal property (as defined in the PPSA and to which that Act applies) that is created or provided for by:

 

(a)         a transfer of an Account or Chattel Paper;

 

(b)         a PPS Lease; or

 

(c)          a Commercial Consignment,

 

that is not a security interest within the meaning of section 12(1) of the PPSA; or

 

9            the interest of the lessor or owner in respect of assets subject to a finance or capital lease, a hire-purchase agreement or a conditional sale agreement in each case entered into in the ordinary course of business.

 

In this definition, Account, Chattel Paper, PPS Lease and Commercial Consignment have the meanings given in the PPSA.

 

 

 

Plan of Operations

 

the plan of operations for the Curragh Mine as set out in document number 09.03.03.01 in the Data Room.

 

 

 

Plant and Equipment

 

the plant and equipment listed in Schedule 15.

 

21


 

Term

 

Meaning

 

 

 

Post Completion Financial Statements

 

the financial statements set out in Part 2 of Schedule 19.

 

 

 

PPS Register

 

the register established under the PPSA.

 

 

 

PPSA

 

the Personal Property Securities Act 2009 (Cth).

 

 

 

Pre Completion Dividend or Distribution

 

a dividend or a repayment of a loan (approved in advance by the Seller) from cash held by Wesfarmers Curragh made in accordance with clause 5.3.

 

 

 

Pre Completion Financial Statements

 

the financial statements set out in Part 1 of Schedule 19.

 

 

 

Pre Completion Returns

 

is defined in clause 15.6.

 

 

 

Pre-Completion Transferring Employees

 

each of those employees employed by WRL or the Seller in connection with the Business as at the date of this agreement listed in Part A of Schedule 17 who remains employed by WRL or the Seller prior to a transfer contemplated by clause 7.2(a).

 

 

 

Properties

 

the Freehold Properties and State Leasehold Properties.

 

 

 

Property Leases

 

the real estate leases (and licences) listed in Part 3 of Schedule 11.

 

 

 

Related Body Corporate

 

has the meaning given in the Corporations Act.

 

 

 

Repayment Amount

 

[***]

 

 

 

[***]

 

[***]

 

 

 

Replacement Mining Services Contract

 

a contract or contracts that replace the Key Mining Services Contracts.

 

 

 

Royalty Agreement

 

[***]

 

22


 

Term

 

Meaning

 

 

 

Sale

 

the sale and purchase of the Sale Shares in accordance with clause 4.2.

 

 

 

Sale Shares

 

all of the issued share capital in Wesfarmers Curragh, as set out in Schedule 3.

 

 

 

Scheduled Completion Date

 

the last Business Day of the month in which the first Business Day following expiration of the Marketing Period occurs.

 

If the Scheduled Completion Date would otherwise fall on a Monday or a day on, or following a day on, which banks are not open for business in New York, the Scheduled Completion Date will be the following Business Day.

 

 

 

Security Interest

 

a security interest as defined in the PPSA.

 

 

 

Seller Group

 

the Seller and each of its Related Bodies Corporate (other than the Target Entities) and Seller Group Member means any member of the Seller Group.

 

 

 

Seller Group Representative or Adviser

 

any representative or adviser of any Seller Group Member and any Related Bodies Corporate of such representative or adviser (or any current or former director, officer or employee of any of them).

 

 

 

Seller Released Matters

 

has the meaning given in clause 12.9(b)(1).

 

 

 

Seller Trade Marks

 

the words, logos and marks listed in Schedule 14.

 

 

 

Seller’s Consolidated Group

 

the Consolidated Group of which the Seller and any of the Target Entities are members.

 

 

 

Seller’s Head Company

 

the Head Company of the Seller’s Consolidated Group.

 

 

 

Seller’s Report

 

as defined in Schedule 7.

 

 

 

Seller’s Tax Sharing Agreement

 

the Tax Sharing Agreement entered into by the Seller’s Head Company and each Target Entity dated 1 September 2007, as amended 23 September 2011

and 3 February 2014.

 

 

 

SGA

 

Superannuation Guarantee (Administration) Act 1992 (Cth).

 

 

 

Share Completion

 

completion of the sale and purchase of the Sale Shares under clause 4.2.

 

 

 

Share Purchase Price

 

$1.00.

 

23


 

Term

 

Meaning

 

 

 

Specified Executives

 

[***]

 

 

 

Stanwell

 

Stanwell Corporation Limited ABN 37 078 848 674.

 

 

 

[***]

 

[***]

 

 

 

[***]

 

[***]

 

 

 

[***]

 

[***]

 

 

 

[***]

 

[***]

 

 

 

State Leasehold Properties

 

the properties leased by or licenced to a Target Entity from the State of Queensland as listed in Part 2 of Schedule 11.

 

 

 

Straddle Returns

 

is defined in clause 15.6.

 

 

 

Target Entities

 

each of the entities listed in Schedule 3.

 

 

 

Target Working Capital Balance

 

is defined in Schedule 7.

 

 

 

Tax

 

any tax, levy, charge, impost, fee, deduction, goods and services tax, compulsory loan or withholding, that is assessed, levied, imposed or collected by any Governmental Agency and includes any interest, fine, penalty, charge, fee or any other amount imposed on, or in respect of any of the above but excludes Duty.

 

 

 

Tax Claim

 

any claim, demand, legal proceedings or cause of action including any claim, demand, legal proceedings or cause of action arising from a breach of a Tax Warranty, any Tax obligation given by a Buyer Entity under this agreement or which is the subject of the indemnity in clause 11.5.

 

24


 

Term

 

Meaning

 

 

 

Tax Costs

 

all costs, and expenses incurred in:

 

1            managing an inquiry in relation to a Tax Demand; or

 

2            conducting any Disputing Action in relation to a Tax Demand.

 

 

 

Tax Demand

 

1            a Demand or assessment from a Governmental Agency requiring the payment of any Tax or Duty;

 

2            any document received from a Governmental Agency administering any Tax or Duty assessing, imposing, claiming or indicating an intention to claim any Tax or Duty;

 

3            a notice to a contributing member of a Consolidated Group given under section 721-15(5) or (5A) of the ITAA 1997; or

 

4            lodgement of a tax return or a request for an amendment under a law about self-assessment of Tax.

 

 

 

Tax Funding Agreement

 

any agreement where a Target Entity may be required to pay an amount to the Seller’s Head Company to pay a Group Liability or to reimburse the Seller’s Head Company after payment of the Group Liability.

 

 

 

Tax Law

 

any law relating to either Tax or Duty as the context requires.

 

 

 

Tax Payor

 

is defined in clause 13.3.

 

 

 

Tax Relief

 

any relief, allowance, exemption, exclusion, set-off, deduction, loss, rebate, refund, right to repayment or credit granted or available in respect of a Tax or Duty under any law.

 

 

 

Tax Sharing Agreement

 

an agreement contemplated by section 721-25 of the ITAA 1997.

 

 

 

Tax Warranty

 

Warranty 17 in Schedule 4.

 

 

 

Tenements

 

the tenements described in Schedule 2.

 

 

 

[***]

 

[***]

 

 

 

Third Party

 

any person or entity (including a Governmental Agency) other than a Seller Group Member, a Buyer Group Member or a Target Entity.

 

 

 

Third Party Claim

 

any claim, Demand, legal proceedings or cause of action made or brought by a Third Party, other than a Tax Demand.

 

25


 

Term

 

Meaning

 

 

 

Third Party Intellectual Property

 

the:

 

1            the Intellectual Property Rights listed in Schedule 13; and

 

2            any other Intellectual Property Rights used by a Target Entity in the conduct of the Business that are owned by a Third Party.

 

 

 

Total Consideration

 

the Debt Purchase Price plus the Repayment Amount plus the Share Purchase Price.

 

 

 

Transaction Agreements

 

the following agreements:

 

1            this agreement;

 

2            the VSM Deed; and

 

3            the Transitional Services Agreement.

 

 

 

Transfer

 

the sale and transfer of the Existing WES Intercompany Loan Agreement and the Existing WES GSA in accordance with clause 4.4.

 

 

 

Transferring Employee

 

each of those employees employed by WRL or the Seller in connection with the Business as at the date of this agreement listed in Part B of Schedule 17 who remains employed by WRL or the Seller prior to a transfer contemplated by clause 7.2(b).

 

 

 

Transitional Services Agreement

 

the transitional services agreement between the Seller, Wesfarmers Curragh and the Buyer’s Guarantor substantially on the terms of the agreement outlined in Schedule 21 or such other terms as the parties may agree.

 

 

 

VSM Deed

 

a value share mechanism deed between the Seller and Wesfarmers Curragh substantially on the terms outlined in Schedule 20.

 

 

 

Warranties

 

the warranties in Schedule 4.

 

 

 

Wesfarmers Curragh

 

Wesfarmers Curragh Pty Ltd ACN 009 362 565.

 

 

 

Wesfarmers Guarantees

 

any guarantees, indemnities, charges or other securities given by a Seller Group Member to a Third Party to secure the performance of a Target Entity or required for the benefit of a Target Entity, excluding the Financial Assurances, Bank Guarantees and any related Security Interests.

 

 

 

Wesfarmers Guarantors

 

each of Curragh Queensland Mining Pty Ltd ACN 095 450 418 and Curragh Coal Sales Co. Pty. Ltd. ACN 010 459 220.

 

26


 

Term

 

Meaning

 

 

 

[***]

 

[***]

 

 

 

Wilful Misconduct

 

any act or omission which is known to be wrongful and in respect of which a reasonable person would understand that Loss will result from the act or omission.

 

 

 

WRL

 

Wesfarmers Resources Limited ACN 096 857 126.

 

1.2                                        Interpretation

 

In this agreement:

 

(a)                                          Headings and bold type are for convenience only and do not affect the interpretation of this agreement.

 

(b)                                          The singular includes the plural and the plural includes the singular.

 

(c)                                           Words of any gender include all genders.

 

(d)                                          Other parts of speech and grammatical forms of a word or phrase defined in this agreement have a corresponding meaning.

 

(e)                                           An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Governmental Agency as well as an individual.

 

(f)                                            A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this agreement.

 

(g)                                           A reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements or re-enactments of any of them.

 

(h)                                          A reference to a document includes all amendments or supplements to, or replacements or novations of, that document.

 

(i)                                              A reference to a party to a document includes that party’s successors and permitted assignees.

 

(j)                                             A promise on the part of two or more persons binds them jointly and severally.

 

(k)                                          A reference to an agreement other than this agreement includes a deed and any legally enforceable undertaking, agreement, arrangement or understanding, whether or not in writing.

 

(l)                                              A reference to liquidation or insolvency includes appointment of an administrator, compromise, arrangement, merger, amalgamation, reconstruction, winding up, dissolution, deregistration, assignment for the benefit of creditors, scheme, composition or arrangement with creditors, insolvency, bankruptcy, or any similar procedure or, where applicable, changes in the constitution of any partnership or person, or death.

 

27


 

(m)                                      No provision of this agreement will be construed adversely to a party because that party was responsible for the preparation of this agreement or that provision.

 

(n)                                          A reference to a body, other than a party to this agreement (including an institute, association or authority), whether statutory or not:

 

(1)                                          which ceases to exist; or

 

(2)                                          whose powers or functions are transferred to another body,

 

is a reference to the body which replaces it or which substantially succeeds to its powers or functions.

 

(o)                                          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.

 

(p)                                          A reference to a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later.

 

(q)                                          If an act prescribed under this agreement to be done by a party on or by a given day is done after 5.00pm on that day, it is taken to be done on the next day.

 

(r)                                             A reference to time is a reference to Brisbane time.

 

(s)                                            Where a matter or action is referred to as occurring before Completion, that shall be taken to mean before both Share Completion and Debt Completion.

 

(t)                                             Where a matter or action is referred to as occurring after Completion, that shall be taken to mean after both Share Completion and Debt Completion.

 

(u)                                          Where a matter or action is referred to as occurring at Completion, that shall be taken to mean at either Share Completion or at Debt Completion, as the context requires.

 

(v)                                          A reference to $ is to Australian currency unless denominated otherwise.

 

1.3                                        Business Day

 

Where the day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the next Business Day.

 

1.4                                        Inclusive expressions

 

Specifying anything in this agreement after the words ‘include’ or ‘for example’ or similar expressions does not limit what else is included.

 

1.5                                        Agreement components

 

This agreement includes any schedule and any attachment.

 

2                                                  Conditions for Completion

 

2.1                                        Conditions precedent

 

Clauses 4, 5 (other than clauses 5.1, 5.2 and 5.4) and 6 do not become binding on the parties and are of no force or effect unless and until each of the following Conditions have been satisfied or waived in accordance with clause 2.4:

 

28


 

(a)                                          Foreign Investment Review Board approval:

 

(1)                                          the Buyer Entities have received a written notice under the Foreign Acquisitions and Takeovers Act 1975 (Cth), by or on behalf of the Treasurer of the Commonwealth of Australia stating or to the effect that the Commonwealth Government does not object to the transactions contemplated by this agreement, either unconditionally or on terms that do not impose unduly onerous obligations on the Buyer Entities; or

 

(2)                                          the Treasurer of the Commonwealth of Australia becomes precluded from making an order in relation to the subject matter of this agreement and the transactions contemplated by it under the Foreign Acquisitions and Takeovers Act 1975 (Cth); or

 

(3)                                          if an interim order is made under the Foreign Acquisitions and Takeovers Act 1975 (Cth) in respect of the transactions contemplated by this agreement, the subsequent period for making a final order prohibiting the transactions contemplated by this agreement elapses without a final order being made;

 

(b)                                          receiving the Stanwell Consent in a form reasonably acceptable to the Buyer and the Seller; and

 

(c)                                           receiving the Change of Control Consent in a form reasonably acceptable to the Buyer and the Seller.

 

2.2                                        Notice

 

Each party must promptly notify the others in writing if it becomes aware that any Condition in clause 2.1 has been satisfied or has become incapable of being satisfied.

 

2.3                                        Reasonable endeavours

 

(a)                                          The Buyer Entities must use all reasonable endeavours to ensure that the Condition in clauses 2.1(a) is satisfied as expeditiously as possible and in any event on or before the Cut Off Date.

 

(b)                                          The Buyer Entities and the Seller must use all reasonable endeavours to ensure that the Conditions in clauses 2.1(b) and 2.1(c) are satisfied as expeditiously as possible and in any event on or before the Cut Off Date.

 

(c)                                           The Buyer Entities must keep the Seller informed of the progress towards satisfaction of its obligations under clause 2.3(a).

 

(d)                                          The Buyer Entities and the Seller must keep each other informed of the progress towards satisfaction of its obligations under clause 2.3(b).

 

(e)                                           The Buyer Entities and the Seller must provide all reasonable assistance to the other as is necessary to satisfy the Conditions.

 

(f)                                            The Buyer Entities must, within 10 Business Days after the date of this agreement file all notices and applications for approval necessary to satisfy the Condition in clause 2.1(a) and must:

 

(1)                                          consult with, and provide information to, the Seller concerning any proposed approach by the Buyer Entities to a Governmental Agency or the content of any such application for approval and related material correspondence;

 

(2)                                          provide the Seller with a copy of any notices and applications for approval before lodgement; and

 

29


 

(3)                                          provide the Seller with a copy of any notices and applications promptly following lodgement.

 

The Seller must provide all information as may be reasonably requested by the Buyer Entity in connection with any notices and applications for approval under this clause 2.3(f).

 

(g)                                           Promptly after the date of this agreement, the Buyer and the Seller must meet to discuss and agree an approach for engaging with Stanwell in respect of obtaining the fulfilment of the Condition in clause 2.1(b), including to:

 

(1)                                          discuss the information which will be provided to Stanwell; and

 

(2)                                          the timing of the provision of all notices and information to Stanwell.

 

(h)                                          Without limiting any other obligations set out in this clause 2.3, to the extent reasonably considered by the Seller to be necessary or desirable in order to obtain the fulfilment of the Condition in clause 2.1(b), the Buyer Entities must:

 

(1)                                          provide all information reasonably required by Stanwell; and

 

(2)                                          provide in respect of the Stanwell Contracts, a parent company guarantee from the Buyer’s Guarantor.

 

(i)                                              Without limiting any other obligations set out in this clause 2.3, in respect of the fulfilment of the Conditions in clause 2.1(b) and 2.1(c), the Buyer Entities must:

 

(1)                                          consult with, and provide information to, the Seller concerning any proposed approach by the Buyer to Stanwell and Ergon and obtaining the Stanwell Consent and the Change of Control Consent (including all related material correspondence);

 

(2)                                          allow the Seller and its representatives the opportunity to be present at any meetings or other engagement with Stanwell or Ergon;

 

(3)                                          provide the Seller with a copy of any correspondence to Stanwell or Ergon for prior approval; and

 

(4)                                          provide the Seller with a copy of any correspondence from Stanwell or Ergon promptly following receipt.

 

(j)                                             Without limiting any other obligations set out in this clause 2.3, to the extent reasonably considered by the Seller to be necessary or desirable in order to obtain the fulfilment of the Condition in clause 2.1(c), the Buyer Entities must provide in respect of the contract the subject of the Condition, a deed of covenant in the form required by that contract.

 

(k)                                          Other than in respect of the Conditions in clauses 2.1(a) or 2.1(b) and clause 2.3(j), nothing in this clause 2.3 will require the Buyer to pay any money or provide other valuable consideration to or for the benefit of any person or otherwise take any action which, in the Buyer’s reasonable opinion, would or may impact adversely on or otherwise be contrary to the interests of the Buyer.

 

(l)                                              Nothing in this clause 2.3 will require the Seller to pay any money or provide other valuable consideration to or for the benefit of any person or otherwise take any action which, in the Seller’s reasonable opinion, would or may impact adversely on or otherwise be contrary to the interests of the Seller.

 

(m)                                      Promptly after the date of this agreement the parties will jointly approach the relevant Queensland Governmental Agencies including in respect of the replacement of the Financial Assurances and the Bank Guarantee Beneficiaries in respect of the replacement of the Bank Guarantees, and the Buyer and its representatives will be permitted to meet with those persons as reasonably required to discuss the replacement, provided it allows the Seller and its

 

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representatives the opportunity to be present at any meetings or other engagement with those persons.

 

2.4                                        Waiver

 

(a)                                          The Conditions in clause 2.1(a) and clause 2.1(b) are for the benefit of both the Seller and the Buyer and may only be waived by written agreement between the Seller and the Buyer.

 

(b)                                          The Condition in clause 2.1(c) is for the benefit of the Buyer only and may only be waived in writing by the Buyer.

 

2.5                                        Cut Off Date

 

If a Condition in clauses 2.1(a), 2.1(b) or 2.1(c) has not been satisfied or waived in accordance with clause 2.4 by the Cut Off Date, then the Buyer Entities or the Seller may, provided they have complied with their obligations under clause 2.3, terminate this agreement before Completion by not less than two Business Days’ written notice to the other parties.

 

2.6                                        No binding agreement for transfer

 

For the avoidance of doubt, nothing in this agreement requires the Seller to transfer the Sale Shares or assign the Existing WES Intercompany Loan Agreement and the Existing WES GSA, unless and until the Conditions have been satisfied or waived in accordance with clause 2.4 and the Buyer does not obtain any rights in relation to the Sale Shares (except to the extent set out in clause 5.1, 5.2 and 5.4) nor does the Assignee acquire any rights in relation to the Existing WES Intercompany Loan Agreement or the Existing WES GSA as a result of this agreement unless and until those Conditions have been satisfied or waived.

 

3                                                  Termination

 

3.1                                        Termination by the Buyer Entities

 

The Buyer Entities may terminate this agreement at any time before Completion by notice in writing to the Seller if:

 

(a)                                          a Material Adverse Change occurs;

 

(b)                                          an order is made or an effective resolution is passed for the winding up or dissolution without winding up (otherwise than for the purposes of reconstruction or amalgamation) of the Seller or any Target Entity;

 

(c)                                           a receiver, receiver and manager, judicial manager, liquidator, administrator or like official is appointed over the whole or a substantial part of the undertaking or property of the Seller or any Target Entity; or

 

(d)                                          a holder of an Encumbrance takes possession of the whole or any substantial part of the undertaking and property of the Seller or any Target Entity.

 

3.2                                        Termination by the Seller

 

The Seller may terminate this agreement at any time before Completion by notice in writing to the Buyer Entities if:

 

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(a)                                          an order is made or an effective resolution is passed for the winding up or dissolution without winding up (otherwise than for the purposes of reconstruction or amalgamation) of a Buyer Group Member;

 

(b)                                          a receiver, receiver and manager, judicial manager, liquidator, administrator or like official is appointed over the whole or a substantial part of the undertaking or property of a Buyer Group Member; or

 

(c)                                           a holder of an Encumbrance takes possession of the whole or any substantial part of the undertaking and property of a Buyer Group Member.

 

3.3                                        Effect of termination

 

If this agreement is terminated under clause 2.5, this clause 3, clause 9.3(b) or clause 21.10(c), then:

 

(a)                                          the parties will procure that each other Transaction Agreement (if permitted by the terms of that contract) that has already been executed is terminated in accordance with its terms;

 

(b)                                          each party is released from its obligations to further perform its obligations under the Transaction Agreements, except those expressed to survive termination;

 

(c)                                           each party retains the rights it has against the other in respect of any breach of this agreement occurring before termination;

 

(d)                                          the Buyer Entities and the Buyer’s Guarantor must return to the Seller all documents or information and other materials obtained from or on behalf of the Seller, any Target Entity or any of their advisers (other than a copy of the Transaction Agreements and the Confidentiality Agreements);

 

(e)                                           the rights and obligations of each party under each of the following clauses and schedules will continue independently from the other obligations of the parties and survive termination of this agreement:

 

(1)                                          clause 1 (Definitions and Interpretation);

 

(2)                                          clause 3 (Termination);

 

(3)                                          clause 12 (Qualifications and limitations of Claims);

 

(4)                                          clause 13 (Procedures for dealing with Claims);

 

(5)                                          clause 16 (Confidentiality and announcements);

 

(6)                                          clause 17 (Duties, costs and expenses);

 

(7)                                          clause 18 (GST);

 

(8)                                          clause 19 (Notices);

 

(9)                                          clause 20 (Guarantee by Buyer’s Guarantor); and

 

(10)                                   clause 21 (General); and

 

(f)                                            any indemnity under this agreement is independent and survives termination of this agreement.

 

3.4                                        No other right to terminate or rescind

 

No party may terminate or rescind this agreement (including on the grounds of any breach of Warranty or misrepresentation that occurs or becomes apparent before

 

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Completion) except as permitted under clause 2.5, this clause 3, clause 9.3(b) or clause 21.10(c).

 

4                                                  Sale and purchase

 

4.1                                        Actions immediately prior to Completion

 

[***]

 

4.2                                        Sale Shares

 

On the day for Completion determined under clause 9.1, and with effect from Share Completion, the Seller must sell, and the Buyer must buy, the Sale Shares for the Share Purchase Price:

 

(a)                                          free and clear of all Encumbrances and Permitted Encumbrances; and

 

(b)                                          with all rights, including dividend and voting rights, attached or accrued to them on and from Share Completion,

 

subject to this agreement.

 

4.3                                        Share Purchase Price

 

(a)                                          The consideration for the sale of the Sale Shares is the payment by the Buyer of the Share Purchase Price.

 

(b)                                          The Share Purchase Price will be paid on Share Completion in accordance with clause 4.6.

 

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4.4                                        Existing WES Intercompany Loan Agreement and Existing WES GSA

 

With effect from Debt Completion and on and subject to the terms of this agreement and the Deed of Assignment (Debt and Security):

 

(a)                                          the Seller agrees to sell and transfer, and the Assignee agrees to purchase and accept the transfer of, all of the Seller’s right, title and interest in the Existing WES Intercompany Loan Agreement and the Existing WES GSA free of Encumbrances and Permitted Encumbrances affecting the Seller’s right, title and interest for an amount equal to the Debt Purchase Price, it being acknowledged that such right title and interest will be transferred subject to the interests of the Debt Financing Parties; and

 

(b)                                          the Assignee agrees to assume and discharge all liabilities relating to the Existing WES Intercompany Loan Agreement and the Existing WES GSA arising on or after Debt Completion.

 

4.5                                        Debt Purchase Price

 

(a)                                          The consideration for the sale and transfer of all of the Seller’s right, title and interest in the Existing WES Intercompany Loan Agreement and the Existing WES GSA is the payment by the Assignee of the Debt Purchase Price.

 

(b)                                          The Debt Purchase Price will be paid as follows:

 

(1)                                          the Debt Completion Payment, payable by the Assignee on Debt Completion in accordance with clause 4.6 and clause 9;

 

(2)                                          the Adjustment Amount, if any, payable following finalisation of the Completion Accounts in accordance with clauses 10.2 and 10.3; and

 

(3)                                          any other adjustments to the Debt Purchase Price payable in accordance with this agreement.

 

4.6                                        Actions on Completion

 

(a)                                          On Share Completion the Buyer must pay the Share Purchase Price to the Seller.

 

(b)                                          On Debt Completion the Assignee must pay the Debt Completion Payment to the Seller.

 

(c)                                           All payments under this clause 4.6 must be made in Immediately Available Funds without counter-claim or set-off.

 

4.7                                        Title and risk in Sale Shares

 

Title to and risk in the Sale Shares passes to the Buyer on Share Completion.

 

5                                                  Period before Completion

 

5.1                                        Carrying on of business

 

Subject to clause 5.2, clause 5.4, clause 5.5 and clause 5.6, between the date of this agreement and the earlier of Completion and termination of this agreement, the Seller must:

 

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(a)                                          ensure that the business of the Target Entities is conducted materially in the ordinary course and substantially consistent with past practice including in relation to the manner in which coal stock inventory is managed (and having regard to their obligations under law, and practices generally undertaken and observed by open-cut coal mine operators in the Queensland coal industry);

 

(b)                                          procure that no Target Entity:

 

(1)                                          buys back any of its shares;

 

(2)                                          issues any shares, options or securities that are convertible into shares in that Target Entity;

 

(3)                                          sells, leases, subleases or otherwise disposes of or agrees to dispose of or creates or agrees to create or permits to exist any Encumbrance over any material asset of a Target Entity (including any such asset required for the conduct of the Business or the operation of the Mine but excluding any residential property in the Blackwater region), other than in the ordinary course of business (and the ordinary course of business includes where an asset has reached its useful life, is being replaced or is part of a capital project);

 

(4)                                          in respect of the Tenements:

 

(A)                                        takes steps to surrender, cancel or transfer any Tenement (other than to the extent that the relevant part of the Tenement is required by the Mineral Resources Act 1989 (Qld) to be relinquished or surrendered);

 

(B)                                        assigns, transfers, Encumbers, declares itself a trustee of or otherwise deals with or disposes of a Tenement; or

 

(C)                                        fails to renew a Tenement or allows any to lapse;

 

(5)                                          enters into any joint venture, partnership, unincorporated association, alliance or similar arrangement with any person;

 

(6)                                          enters into any abnormal or unusual transaction which materially adversely affects the Business or a Target Entity;

 

(7)                                          enters into, amends or terminates a contract or commitment that will result in aggregate receipts or expenditure in excess of $30,000,000 in any calendar year, other than for any coal sale or marketing agreement, Material Contract, Replacement Coal Handling Agreement, Replacement Mining Services Contract, Enterprise Agreement or Plan of Operations;

 

(8)                                          enters into an agreement that contains an obligation on a Target Entity that materially limits or purports to materially limit the ability of the Target Entity to compete in any line of business or in any geographic area;

 

(9)                                          enters into any agreement with a Related Body Corporate;

 

(10)                                   amends terms of a material engagement of, or terminates the employment or encourages the resignation of, any employee of a Target Entity on total salary of over $300,000 per annum (excluding any summary dismissal or other dismissal for cause) or agrees to hire any employee, agent or contractor on total salary of over $300,000 per annum, or enters into, amends the terms of or terminates any agreement, arrangement or understanding in respect of enterprise agreements related to employees of a Target Entity, other than for the Enterprise Agreement;

 

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(11)                                   sells, leases, subleases or otherwise disposes of or agrees to dispose of or creates or agrees to or permits to exist any Encumbrance over any real property other than a sale, lease, sublease or disposal of any residential property in the Blackwater region;

 

(12)                                   enter into any new bank facilities or other financing agreement;

 

(13)                                   enter into any guarantee or indemnity on behalf of any person other than a Target Entity or provide security for the obligations of any person other than a Target Entity, except as disclosed in the Disclosure Material or which will be released on or prior to Completion;

 

(14)                                   pays, authorises the payment of or agrees or commits to pay any bonuses or other incentives to any employee, agent or contractor of the Business other than under an arrangement in place prior to the execution of this agreement;

 

(15)                                   alters its constitution;

 

(16)                                   changes any accounting method, practice or principle used by it; or

 

(17)                                   amend the Existing WES Intercompany Loan Agreement or the Existing WES GSA or repay any amount owing under the Existing WES Intercompany Loan Agreement, except as contemplated by this agreement,

 

or authorise, or agree conditionally or otherwise to do, any of the things referred to in this clause 5.1(b);

 

(c)                                           ensure that the Financial Assurances are maintained (and, if necessary, increased) in accordance with the Environmental Protection Act 1994 (Qld), Environmental Protection Regulation 2008 (Qld), Mineral Resources Act 1989 (Qld) and the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld); and

 

(d)                                          promptly notify the Buyer in the event that a Target Entity becomes aware of a material breach of an agreement which is material to the operation of the Business or any claim, proceeding or investigation which is material to the operation of the Business.

 

5.2                                        Material Contracts and proposed actions

 

(a)                                          Between the date of this agreement and the earlier of Completion and termination of this agreement, the Seller must procure Wesfarmers Curragh to, no less than once per month, provide the Buyer with reasonable details about:

 

(1)                                          the progress of the tender for the Replacement Mining Services Contract;

 

(2)                                          the progress of the negotiations for the new Enterprise Agreement; and

 

(3)                                          any proposed amendments to the Plan of Operations.

 

(b)                                          If during the date of this agreement and the earlier of Completion and termination of this agreement Wesfarmers Curragh intends to:

 

(1)                                          vary, amend or change a Material Contract;

 

(2)                                          commence an employee voting process for the new Enterprise Agreement;

 

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(3)                                          extend the term of a Key Mining Services Contract or enter into the Replacement Mining Services Contract;

 

(4)                                          enter into the Replacement Coal Handling Agreement;

 

(5)                                          enter into a Material Coal Contract; or

 

(6)                                          amend the Plan of Operations,

 

the Seller must procure Wesfarmers Curragh to:

 

(7)                                          provide the Buyer with all information reasonably required by the Buyer to assess Wesfarmers Curragh’s proposed action; and

 

(8)                                          reasonably consider (and, to the extent reasonable, adopt) any comments provided by the Buyer in connection with Wesfarmers Curragh’s proposed action. If the Buyer does not provide any comments within five days of the provision of information under clause 5.2(b)(7), the Buyer will be deemed not to have provided any comments.

 

(c)                                           Nothing in this clause 5.2 requires the Seller or Wesfarmers Curragh to do anything which would be a breach of any legal or contractual obligation.

 

5.3                                        Pre Completion Dividend or Distribution

 

Before Completion but after the Buyer’s nominated directors have been appointed to the board of Wesfarmers Curragh, the Seller is entitled to, and the Buyer must procure the payment (without set off, deduction or condition) to the Seller of, a Pre Completion Dividend(s) or Distribution(s) in the amount and on such date as is nominated by the Seller from time to time. The Buyer must (and must procure that any other Buyer Group Member) does all things necessary to procure the payment of a Pre Completion Dividend(s) or Distribution(s) in accordance with this clause 5.3.

 

5.4                                        Permitted acts

 

Nothing in clause 5.1 or clause 5.2 restricts a Seller Group Member or any Target Entity from doing any of the following permitted actions:

 

(a)                                          Transaction Agreements: that is contemplated in (or is necessary to comply with) any Transaction Agreement (including Schedule 8) or the Disclosure Materials (including any contractual obligations);

 

(b)                                          emergencies: to reasonably and prudently respond to an emergency or disaster (including a situation giving rise to a risk of personal injury or damage to property);

 

(c)                                           legal obligations: that is necessary for a Target Entity to meet its legal obligations; or

 

(d)                                          Buyer approval: approved by a Buyer Entity in writing, such approval not to be unreasonably withheld or delayed.

 

5.5                                        Intra-group loans

 

(a)                                          Before Completion, the Seller must:

 

(1)                                          identify all existing loans between a Seller Group Member and a Target Entity; and

 

(2)                                          other than in respect of the loans under the Existing WES Intercompany Loan Agreement or the New WES Intercompany Loan

 

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Agreement, procure that all payments are made and such other actions are taken as may be necessary to ensure the payment in full, forgiveness or elimination of loan balances between any Seller Group Members (on the one hand) and any Target Entities (on the other hand).

 

(b)                                          Nothing in clause 5.5(a)(2) requires the Seller to pay in full or eliminate any trading debts which exist between a Seller Group Member and a Target Entity and were incurred in the ordinary course of business. Following Completion, the Buyer must procure any Target Entity to pay any trading debt which exists between a Seller Group and that Target Entity and which was incurred in the ordinary course of business, such payment to be made in accordance with the normal terms of trade that applied as between the Seller Group Member and the Target Entity prior to Completion.

 

5.6                                        Wesfarmers Guarantees

 

(a)                                          If a Seller Group Member has not been released from a Wesfarmers Guarantee disclosed in the Disclosure Material by Completion, then:

 

(1)                                          the Buyer Entities must continue to take all reasonable steps to release each Seller Group Member from any actual, contingent or accrued liabilities under each Wesfarmers Guarantee until they have all been released; and

 

(2)                                          the Buyer Entities and the Buyer’s Guarantor must pay the Seller, and must indemnify the Seller against, an amount equal to any Loss that the Seller Group Member pays, suffers, incurs or is liable for under or in relation to that Wesfarmers Guarantee after Completion.

 

(b)                                          To the extent necessary or desirable to comply with the requirements of a contract or arrangement of a Target Entity because of the Sale, the Buyer Entities must provide (at the Seller’s request) any new guarantee or security or increased guarantee or security in connection with that contract or arrangement, effective from Completion, on terms:

 

(1)                                          the same or substantially the same as the terms of the existing guarantee or security; or

 

(2)                                          to the extent of any new guarantee or security or any increased amount of any existing guarantee or security, in accordance with the terms of the contract or arrangement.

 

5.7                                        Target Entity a member of a Consolidated Group

 

If any Target Entity is, or will be, a member of the Seller’s Consolidated Group with effect from a date prior to Completion, the Seller must:

 

(a)                                          not less than seven Business Days before Completion (or other agreed date) notify or procure that the Seller’s Head Company notify the Buyer of any elections or choices made, or to be made, in forming the Seller’s Consolidated Group that the Seller reasonably considers will, or might reasonably be expected to, impact on the Tax position of that Target Entity or the Buyer’s Consolidated Group;

 

(b)                                          at least five Business Days prior to Completion, enter, or procure that the Seller’s Head Company enters into, a Tax Sharing Agreement with each Target Entity that covers all Group Liabilities of the Seller’s Consolidated Group which fall due after execution of that agreement. The parties acknowledge that, as at

 

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the date of this agreement, the Target Entities are already parties to a Tax Sharing Agreement with the Seller’s Head Company;

 

(c)                                           at least five Business Days prior to Completion, provide the Buyer with a copy of the Tax Sharing Agreement entered into between the Seller and the Target Entities;

 

(d)                                          at least five Business Days prior to Completion, provide the Buyer with a draft calculation of the Exit Payment for each Target Entity, for the Buyer’s review (and the Buyer must provide any comments to the Seller within two Business Days);

 

(e)                                           procure that each Target Entity pay the relevant Exit Payments to the Seller at least one Business Day prior to Completion; and

 

(f)                                            if required by the Buyer, procure that, before Completion, the Seller releases each Target Entity from its obligations under the Tax Sharing Agreement or under any Tax Funding Agreement entered into by that Target Entity.

 

5.8                                        Access to business

 

(a)                                          Subject to clause 5.8(b), clause 5.8(d) and clause 16.2 and provided the Buyer Entities and their representatives strictly comply with any safety or other site requirement, prior to the earlier of Completion and any termination of this agreement, the Seller will allow a reasonable number of persons authorised by the Buyer Entities reasonable access during normal business hours and on reasonable notice:

 

(1)                                          to inspect the premises of the Target Entities (to the extent the Seller is legally able to); and

 

(2)                                          to meet with senior management of the Target Entities and accounting personnel of the Target Entities and the Seller Group,

 

for the purpose of planning the integration of the Target Entities with the Buyer Group following Completion.

 

(b)                                          Access to the Curragh Mine in accordance with clause 5.8(a)(1) and to the senior management of the Target Entities in accordance with clause 5.8(a)(2) is in each case subject to the Seller receiving written notice from a Buyer Entity at least three Business Days (or as otherwise agreed) in advance of the requested access.

 

(c)                                           Subject to compliance with clauses 5.8(a), 5.8(b) and 5.8(d), during a visit to the Target Entities’ premises a Buyer Entity may, with the Seller’s prior consent, make copies of material examined and consult with employees of the Target Entities.

 

(d)                                          The Buyer Entities and each member of the Buyer Group and their respective representatives must not (prior to Completion):

 

(1)                                          cause material disruption to, or have a material adverse effect on, the day to day conduct of the Business;

 

(2)                                          give any direction to or seek to influence any employee of a Target Entity;

 

(3)                                          directly or indirectly offer any employment or other contract to any employee or contractor of a Target Entity;

 

(4)                                          cause or encourage any employee of a Target Entity to leave their employment;

 

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(5)                                          other than as required by clause 2, contact a contractor or supplier of a Target Entity except with the prior written consent of the Seller (acting reasonably); or

 

(6)                                          other than as required by clause 2, contact any Governmental Agency in connection with the Curragh Mine or any Transaction Agreement.

 

(e)                                           Subject to the other provisions of this agreement, the parties acknowledge that this clause 5.8 does not impose any obligation on the Seller to conduct the Business in accordance with any direction or representation made by the Buyer and the parties acknowledge their obligations under the Competition and Consumer Act 2010 (Cth) and all applicable laws (including all other applicable competition or anti-trust laws).

 

5.9                                        Information rights

 

The Seller must, between the date of this agreement and the earlier of Completion and termination of this agreement:

 

(a)                                          promptly notify the Buyer Entities (including reasonable details) of any significant environmental, safety or community incident, including by providing copies of any notice, direction or other significant communication received from a Government Agency in relation to the Curragh Mine; and

 

(b)                                          promptly notify the Buyer Entities in the event that there is a significant disruption, interference or suspension of mine development, coal mining, coal washing, train loading or port operations.

 

5.10                                 Co-operation with debt financing

 

(a)                                          In the period between the date of this agreement and the earlier of Completion and termination of this agreement the Seller shall, and shall cause each of the Target Entities to, use its reasonable endeavours to cause its and their respective officers, directors, employees, attorneys, auditors and other representatives to, use reasonable endeavours to provide all reasonable and customary co-operation to the Buyer in connection with the arrangement of the Debt Financing or any replacement thereof where reasonably requested by the Buyer as follows:

 

(1)                                          providing the Buyer and the Finance Related Parties with the Pre Completion Financial Statements by the dates set out in Schedule 19 and other pertinent historical financial information relating solely to the Business and customarily included in information memoranda for financings of the type contemplated by the Debt Commitment Letter, including information required to prepare pro forma financial statements as Buyer may reasonably request;

 

(2)                                          providing such information and assistance as the Buyer and the Finance Related Parties may reasonably request in connection with preparing bank information memoranda, lender presentations, rating agency presentations, reasonable due diligence information and other marketing materials customarily used to arrange financing of a type similar to the Debt Financing;

 

(3)                                          causing such senior executives as approved by the Seller to attend a reasonable number of meetings by phone, conference calls, presentations, and due diligence sessions with arrangers, rating agencies and prospective lenders and investors, and other marketing

 

40


 

activities, in each case that are customary for financings of a type similar to the Debt Financing; and

 

(4)                                          facilitating the creation and perfection of security interests in collateral in connection with the Debt Financing provided that such security interests are not effective prior to Completion.

 

Notwithstanding anything to the contrary in this clause 5.10, nothing in this clause 5.10 shall (i) require cooperation to the extent it would interfere unreasonably with the business or operations of the Target Entities or any Seller Group Member, (ii) require any Seller Group Member or any Target Entity to incur any cost or expense (other than where the Buyer pays such cost or expense), (iii) prior to Completion, require the Target Entities to pay any commitment or other similar fee or incur or become subject to any other liability or obligation, or agree to provide any indemnity, in connection with the Debt Financing, (iv) require the Target Entities or any of their directors, officers or employees to give any indemnities or incur any liabilities in connection with the Debt Financing that are effective prior to Completion, (v) require any Seller Group Member or any Target Entity to provide any information that it does not have access to, (vi) require any Seller Group Member or any Target Entity to waive any legal professional privilege or permit disclosure of commercially sensitive information, (vii) require any Seller Group Member or any Target Entity to provide information which would cause any Seller Group Member to be in breach of an obligation of confidentiality to any person or which information concerns the consideration of the sale of the Curragh Mine (including any actual or potential competing proposal), (viii) require any Seller Group Member to pay any commitment or other similar fee or incur or become subject to any other liability or obligation, or agree to provide any indemnity, in connection with the Debt Financing, or (ix) require any Seller Group Member or any of their directors, officers or employees to give any indemnities in connection with the Debt Financing.

 

(b)                                          The Buyer will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange and obtain the Debt Financing and Equity Financing on the terms and conditions (including the flex provisions) contemplated by the Debt Commitment Letter, including using commercially reasonable endeavours to:

 

(1)                                          maintain in effect the Debt Commitment Letter until the transactions contemplated by this agreement are consummated;

 

(2)                                          satisfy on a timely basis all conditions and covenants applicable to the Buyer and its Related Bodies Corporate in the Debt Commitment Letter;

 

(3)                                          negotiate and enter into definitive agreements with respect to the Debt Financing and the Equity Financing on the terms and conditions (including the flex provisions) contemplated by the Debt Commitment Letter (or other terms which do not materially and adversely affect the availability of funds sufficient to pay the Debt Purchase Price by Completion); and

 

(4)                                          upon satisfaction of the conditions contained in the Debt Commitment Letter, consummate the Debt Financing and the Equity Financing (as defined in the Debt Commitment Letter) at or prior to Completion.

 

(c)                                           Notwithstanding clause 5.10(b), the Buyer may amend, modify, supplement, replace or waive any provision of the Debt Commitment Letters provided that such amendment, modification, supplement or waiver would not reasonably be expected to have the effect of:

 

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(1)                                          making the funding of the Debt Financing or Equity Financing less likely to occur;

 

(2)                                          amending, modifying, supplementing or waiving the conditions or contingencies to the Debt Financing or Equity Financing in a manner materially adverse to the Seller; or

 

(3)                                          materially delaying or preventing Completion or otherwise materially adversely affecting the Seller.

 

5.11                                 Financial assistance whitewash

 

The Seller and the Buyer will take such steps, and procure the passing of such resolutions before Completion within their respective control (including by directors or shareholders of relevant Target Entities and the Buyer (as applicable)), and the lodgement of such documents with ASIC (including the lodgement of all ASIC forms required under section 260B(6) at least 14 days before the Scheduled Completion Date), in order to approve the transactions contemplated by this agreement and the giving of financial assistance (including the Debt Financing and the Debt Financing Documents) for the purposes of section 260A(1)(b) of the Corporations Act and:

 

(a)                                          the Seller will procure that Wesfarmers Curragh provides the Buyer with the proposed notice of meeting and any other document that will accompany the notice of meeting to be sent to the direct shareholders in each Target Entity for the purpose of approving the financial assistance before those documents are lodged with ASIC under section 260B(5) of the Corporations Act;

 

(b)                                          the Buyer will provide the Seller with the proposed notice of meeting and any other document that will accompany the notice of meeting to be sent to the shareholders of the Buyer for the purpose of approving the financial assistance before the document is lodged with ASIC under section 260B(5) of the Corporations Act; and

 

(c)                                           subject to clause 5.11(d), each of the Buyer and Seller will reasonably consider (and, to the extent reasonable, adopt) any comments provided by the other in connection with the resolutions to approve the financial assistance (and if the Buyer or Seller does not provide any comments within five days of the provision of such information they will be deemed not to have provided any comments); and

 

(d)                                          notwithstanding clause 5.11(c), each of the Buyer and the Seller acknoweldge that any resolutions or other documents to be lodged with ASIC in connection with the approval for the purposes of section 260A(1)(b) of the Corporations Act contemplated by this clause 5.11 will need to be reviewed by, and in a form and substance satisfactory to, the Debt Financing Parties (acting reasonably).

 

5.12                                 Notification of change of control

 

To the extent necessary or desirable to comply with the requirements of a contract or arrangement of a Target Entity because of the Sale, the Seller must give or procure the giving of any notice or request for consent required in accordance with the requirements of that contract or arrangement.

 

5.13                                 VSM Deed

 

(a)                                          Before Share Sale Completion but after the Buyer’s nominated directors have been appointed to the board of Wesfarmers Curragh, the Seller and Wesfarmers Curragh must enter into the VSM Deed.

 

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(b)                                          Prior to Completion, the Seller may not amend the terms of the VSM Deed without the agreement of the Buyer.

 

(c)                                           From Completion, the Buyer Entities must procure that Wesfarmers Curragh at all times complies with the terms of the VSM Deed.

 

(d)                                          No Buyer Group Member may undertake any act or omit to do anything which would cause a breach of the VSM Deed.

 

5.14                                 Transitional Services Agreement

 

Promptly after the date of execution the Seller and Buyer will enter into good faith negotiations with a view to entering into the Transitional Services Agreement before Completion.

 

5.15                                 United States Tax filing

 

[***]

 

6                                                  IT Licences

 

6.1                                        Transfer

 

(a)                                          The Seller must use all reasonable endeavours to, in respect of the IT Licences:

 

(1)                                          novate to a Target Entity before Completion the rights and obligations under the IT Licences to the extent those rights and obligations relate to the supply of services under those agreements to the Business; or

 

(2)                                          assign to a Target Entity before Completion the rights under the IT Licences to the extent those rights relate to the supply of services under those agreements to the Business,

 

and to procure that:

 

(3)                                          the Seller (and each other Seller Group Entity) is released from any obligations and liabilities arising under those agreements (whether due to be performed before, on or after Completion); and

 

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(4)                                          the novation or assignment takes effect at or before Completion.

 

(b)                                          If a Third Party consent is required for a novation or assignment contemplated by clause 6.1(a), the Seller, Buyer Entities and the Target Entities must use all reasonable endeavours to obtain that consent as soon as practicable before Completion.

 

(c)                                           Where an assignment or novation required under clause 6.1(a) has not occurred at or by Completion, the Seller and the Buyer Entities must use all reasonable endeavours to ensure that novation or assignment occurs in accordance with this agreement as soon as practicable after Completion. Except where the Seller has not discharged its obligations under clause 6.1(a), clause 6.1(b) or clause 6.2, the Buyer Entities will not be entitled to make any Claim in respect of the failure to novate or assign in accordance with clause 6.1(a).

 

(d)                                          Nothing in this clause 6.1 requires the Seller to make any payment, provide other valuable consideration or take any action contrary to the reasonable interests of the Seller to procure a novation or assignment.

 

(e)                                           The obligation in this clause 6.1 for the Buyer Entities to use all reasonable endeavours includes the Buyer Entities paying the reasonable costs and expenses incurred or charged by Third Parties in relation to the novation of rights and obligations or assignment of rights under the IT Licences.

 

(f)                                            Any novation or assignment under this clause 6.1 must be substantially in the form approved by the Seller (acting reasonably).

 

6.2                                        Obligations pending transfer

 

(a)                                          If an assignment or novation required under clause 6.1 has not occurred by Completion, then after Completion and until such novation or assignment has occurred:

 

(1)                                          to the extent it lawfully can, the Seller must permit the Buyer to exercise and have the benefit of the Seller’s rights under the IT Licences from Completion, to the extent that those rights relate to the Business; and

 

(2)                                          the Buyer must, to the extent it lawfully can, perform the non-personal obligations of the Seller under the IT Licences from Completion, to the extent that those non-personal obligations relate to the Business.

 

(b)                                          Nothing in this agreement is to be construed as an attempt to assign the benefit of any contract that by its terms or by law is not assignable without a Third Party consent, unless such consent has been given.

 

6.3                                        Buyer indemnity in respect of the IT Licences

 

With effect from Completion, the Buyer Entities indemnify each Seller Group Member and must keep each Seller Group Member indemnified against any Loss which the Seller Group Member may pay, suffer, incur or be liable for as a result of or in connection with:

 

(a)                                          any obligations, Claims and Losses in respect of the IT Licences (whether relating to the period before, on or after Completion); or

 

(b)                                          any breach by the Buyer of clause 6.2(a)(2).

 

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6.4                                        Warranty in respect of IT Licences

 

To the extent an assignment or novation is effected under clause 6.1, the Warranty in clauses 6.1, 6.2, 6.3 and 6.4 of Schedule 4 is deemed to be given in respect of the IT Licences the subject of that assignment or novation.

 

7                                                  Employees

 

7.1                                        Existing Employees

 

(a)                                          Subject to clause 7.1(b), the Buyer will procure that those Target Entities which employ Existing Employees will, on and from Completion, comply in comparable respects with the terms of the existing contracts of employment pursuant to which the Existing Employees are employed at the time immediately before Completion.

 

(b)                                          To the extent that any terms of an existing contract of any Existing Employee are conditional upon a Target Entity being a member of the Seller Group, the Buyer will make available alternative or different terms to the relevant Existing Employee, provided that the terms, considered on an overall basis, remain no less favourable than the terms of the existing contract of employment.

 

7.2                                        Employees

 

(a)                                          The Seller must use reasonable endeavours to procure that Pre-Completion Transferring Employees become employed by a Target Entity before Completion. If Pre-Completion Transferring Employees do not become employed by a Target Entity before Completion, liability for any such employees will remain with the Seller.

 

(b)                                          The Seller and the Buyer must work cooperatively to enable offers of employment to be made to the Transferring Employees by a Target Entity (on behalf of the Buyer) or by an alternative entity identified by the Buyer, as soon as possible after the date of this agreement (but in no event later than 21 days prior to Completion):

 

(1)                                          for a position that is at least comparable or substantially similar to the existing position of the Transferring Employee commencing on Completion;

 

(2)                                          on terms and conditions of employment (including superannuation and incentives) that are substantially similar to, and, considered on an overall basis, no less favourable than the existing terms and conditions of employment of the Transferring Employee; and

 

(3)                                          that states, and ensures that any contract arising from acceptance of the offer provides, that:

 

(A)                                        the offer is conditional on Completion and on the resignation of the Transferring Employee from his or her existing position with WRL or the Seller (as applicable);

 

(B)                                        employment commences on Completion; and

 

(C)                                        the prior service of the Transferring Employee with any Target Entity or Seller Group Member will be recognised for the purposes of all service related entitlements, including the

 

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Leave Benefits to be paid or provided and any redundancy payment that may be made after Completion,

 

(D)                                        the Transferring Employee must inform the Seller of his or her acceptance within 14 days after the date of the offer and that the offer will lapse if it has not been accepted by the Transferring Employee by the end of such 14 day period; and

 

(E)                                         the offer is conditional on the Transferring Employee remaining an employee of WRL or the Seller, and no notice of termination of employment having been given in respect of the Transferring Employee’s employment (other than pursuant to this agreement), immediately prior to Completion.

 

and the Seller and the Buyer must each use reasonable endeavours to encourage the Transferring Employees to accept the offers of employment referred to in this clause 7.2(a) and (b).

 

(c)                                           The Seller must inform the Buyer of which Transferring Employees have accepted the offer referred to in clause 7.2(b) within 17 days after the date of the offer.

 

(d)                                          The Seller agrees to pay to, or in respect of, each Pre-Completion Transferring Employee and to, or in respect of, each Transferring Employee who accepts employment with a Target Entity in accordance with clause 7.2(b):

 

(1)                                          all amounts to which that employee is entitled including wages, salary, allowances, superannuation contributions and commissions accrued or arising up to and including the day of Completion (whether arising by law or under any agreement or instrument) in relation to their employment before Completion; and

 

(2)                                          to the extent it has not already done so, all bonus payments which have fallen due for payment before the Completion Date,

 

but nothing in this clause places any obligation on the Seller to make, or to procure the making of, any payment of the Employee Entitlements of any Pre- Completion Transferring Employee or any Transferring Employee who commences employment with such Target Entity prior to or as of Completion.

 

7.3                                        Payment and indemnity

 

The Buyer and the Buyer’s Guarantor must indemnify each Seller Group Member against any Loss suffered or incurred by it:

 

(a)                                          for Leave Benefits due to or accrued by an Employee after the Completion Date (including, for the avoidance of doubt, any Leave Benefits attributable to service by the Employee with the relevant Target Entity or Seller Group Member and any predecessor of the Target Entity or relevant Seller Group Member up to the Completion Date); and

 

(b)                                          arising from any Claim by an Employee that is based on any event occurring on or after Completion.

 

7.4                                        Seller Indemnity

 

The Seller acknowledges and agrees that it remains liable for, and indemnifies the Buyer against, any Claim made against the Buyer or a Target Entity by a Transferring Employee who does not accept an offer of employment with a Target Entity for such Transferring

 

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Employee’s Leave Benefits or in respect of the termination of his or her employment by WRL or the Seller.

 

7.5                                        Employment Records

 

At Completion, the Seller must give the Buyer complete and accurate written details of the Transferring Employee’s Leave Benefits and length of service as at the Completion Date.

 

7.6                                        No solicitation of employees

 

During the period of 12 months from Completion, the Seller must not, and must procure that each Seller Group Member does not, without the prior written consent of the Buyer, solicit, canvass, induce or encourage any Employee or contractor of a Target Entity or Buyer Group Member to leave their employment or engagement with the Target Entity or Buyer Group Member. This restriction does not apply where such an Employee responds to an advertisement published by a Seller Group Member that is targeted to a wide audience of potential applicants.

 

8                                                  Superannuation

 

8.1                                        Buyer’s Fund

 

(a)                                          Subject to any choice of fund election made by an Existing Member in accordance with relevant law, within three months (or any longer period agreed between the Buyer and the Seller) after Completion, the Buyer must ensure that the Buyer’s Fund replaces the Wesfarmers’ Fund as the default superannuation fund pursuant to the SGA in respect of the Existing Members, with effect on and from Completion.

 

(b)                                          For the purposes of clause 8.1(a), membership of the Buyer’s Fund for each Existing Member (in respect of the period after Completion) must be on terms and conditions so as to provide benefits which, in aggregate, are no less favourable than those provided in respect of the Existing Member under the governing rules of the Wesfarmers’ Fund in force immediately before Completion.

 

8.2                                        Buyer’s undertakings

 

(a)                                          The Buyer must provide, and must use all reasonable endeavours to ensure that the trustee of the Buyer’s Fund provides, to the Seller and the trustee of the Wesfarmers’ Fund any information reasonably required by them in connection with this clause 8.

 

(b)                                          The Buyer must use all reasonable endeavours to ensure that the governing rules of the Buyer’s Fund are amended to the extent necessary to give effect to this clause 8.

 

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9                                                  Completion

 

9.1                                        Time and Place

 

(a)                                          Subject to clause 2, Completion must take place at the office of Herbert Smith Freehills at Level 31, 480 Queen Street, Brisbane, Queensland, at 10am on the Scheduled Completion Date, or such other place, time and date as the Seller and Buyer agree.

 

(b)                                          The parties acknowledge and agree that Share Completion and Debt Completion are to take place on the same date.

 

9.2                                        Completion

 

(a)                                          On or before Completion (as specified in Schedule 6), each party must carry out the Completion Steps referable to it in accordance with Schedule 6.

 

(b)                                          Completion is taken to have occurred when each party has performed all its obligations under this clause 9.2 and Schedule 6.

 

9.3                                        Notice to complete

 

(a)                                          If the Seller or a Buyer Entity (Defaulting Party) fails to satisfy its obligations under clause 9.2 and Schedule 6 on the day and at the place and time for Completion determined under clause 9.1, then the Seller (in the case of a default by a Buyer Entity) or the Buyer Entities (in the case of a default by the Seller) (Notifying Party) may give the Defaulting Party a notice requiring the Defaulting Party to satisfy those obligations within a period of 10 Business Days from the date of the notice and declaring time to be of the essence.

 

(b)                                          If the Defaulting Party fails to satisfy those obligations within those 10 Business Days the Notifying Party may, without limitation to any other rights it may have, terminate this agreement by giving written notice to the Defaulting Party.

 

9.4                                        Completion timing

 

(a)                                          Subject to clause 9.4(b), the actions to take place as contemplated by clauses 4.1, 4.2, 4.4, 4.6 and 9.2 and Schedule 6 must take place on the same Business Day and in the order specified in Schedule 6. If one action does not take place, then without prejudice to any rights available to any party as a consequence:

 

(1)                                          there is no obligation on any party to undertake or perform any of the other actions;

 

(2)                                          to the extent that such actions have already been undertaken, the parties must do everything reasonably required to reverse those actions; and

 

(3)                                          the Seller and the Buyer Entities must each return to the other all documents delivered to it under clause 9.2(a) and Schedule 6 and must each repay to the other all payments received by it under clauses 4.1, 4.2, 4.4, 4.6 and 9.2(a) and Schedule 6, without prejudice to any other rights any party may have in respect of that failure.

 

(b)                                          The Buyer Entities may, in their sole discretion, waive any or all of the actions that the Seller is required to perform under clause 2.1 of Schedule 6 and the

 

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Seller may, in its sole discretion, waive any or all of the actions that the Buyer Entities are required to perform under clause 2.2 of Schedule 6.

 

(c)                                           For the avoidance of doubt, Share Completion must occur prior to Debt Completion.

 

(d)                                          Without prejudice to clause 9.4(a)(2), if Completion does not occur as contemplated by that clause, and the Buyer’s nominated directors have been appointed to the board of Wesfarmers Curragh, the Buyer must procure that those directors resign from the board of Wesfarmers Curragh as directed by the Seller.

 

10                                           Completion Accounts

 

10.1                                 Preparation of Completion Accounts

 

Following Completion the Seller and the Assignee must procure that the Completion Accounts are prepared and finalised in accordance with Schedule 7 and Schedule 8.

 

10.2                                 Debt Purchase Price adjustments following Completion Accounts

 

If the Adjustment Amount:

 

(a)                                          is less than zero (being a negative amount), the Seller must pay the Adjustment Amount to the Assignee, as an adjustment to the Debt Purchase Price;

 

(b)                                          is more than zero (being a positive amount), the Assignee must pay the Adjustment Amount to the Seller, as an adjustment to the Debt Purchase Price; or

 

(c)                                           is zero, no adjustment to the Debt Purchase Price will be made under this clause 10.2.

 

10.3                                 Payment of adjustments

 

(a)                                          A party required to make a payment to another party under this clause 10 must make the payment in Immediately Available Funds without counter-claim or set-off within five Business Days after the finalisation of the Completion Accounts or Expert’s Report as applicable.

 

(b)                                          All amounts payable by a party under clause 10.2 will accrue interest on a daily basis at the Interest Rate from and including the Completion Date to and including the earlier of the date of payment or five Business Days after the finalisation of the Completion Accounts or Expert’s Report as applicable (Last Payment Date). If any amount remains unpaid on or after the Last Payment Date, interest under clause 21.19 will apply from and including the Last Payment Date until the date of payment with respect to that amount.

 

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11                                           Warranties and indemnity

 

11.1                                 Warranties by the Seller

 

Subject to the qualifications and limitations in clause 12, the Seller gives the Warranties in favour of the Buyer Entities:

 

(a)                                          in respect of each Warranty that is expressed to be given on a particular date, on that date; and

 

(b)                                          in respect of each other Warranty, immediately before Completion.

 

11.2                                 Independent Warranties

 

Each of the Warranties:

 

(a)                                          remains in full force and effect after Completion; and

 

(b)                                          is to be construed independently of the others and is not limited by reference to any other Warranty.

 

11.3                                 Reliance

 

The Seller acknowledges that the Buyer Entities have entered into this agreement and will complete this agreement in reliance on the Warranties.

 

11.4                                 Indemnity for breach of Warranty

 

The Seller indemnifies the Buyer Entities against any Loss suffered or incurred by the Buyer Entities as a result of a breach of a Warranty, except to the extent that the Warranty or the Seller’s liability for the Loss are limited or qualified under clause 12, and this will be the sole remedy of the Buyer Entities in respect of any such breach. The Loss compensated through the indemnity under this clause 11.4 will be such as to put the Buyer Entities in the position they would have been in had the relevant Warranty not been breached.

 

11.5                                 Tax indemnity

 

Subject to clause 17, the Seller indemnifies the Buyer Entities and each Target Entity against, and must pay the Buyer Entities or the Target Entities the amount of, any:

 

(a)                                          Tax or Duty payable by a Target Entity to the extent that Tax or Duty relates to any period, or part period, prior to Completion;

 

(b)                                          Tax Costs incurred by or on behalf of a Target Entity to the extent those Tax Costs arise from or relate to any of the matters for which the Seller may be liable under clause 11.5(a); and

 

(c)                                           Tax payable by a Target Entity under the Seller’s Tax Sharing Agreement or as a result of the Seller’s Tax Sharing Agreement not satisfying the requirements of section 721-25 of the ITAA 1997,

 

except to the extent that:

 

(d)                                          the Seller’s liability for the Tax or Duty is limited or qualified under clauses 12.4, 12.6, 12.7, 12.8, 12.9, 12.10(j), 12.12 or 12.13;

 

(e)                                           the Claim results from an act of a Buyer Group Member in circumstances which breach clause 13.3(a) or clause 13.3(e); or

 

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(f)                                            the amount is in relation to Tax and is provided for in a Completion Working Capital Balance, but only to the extent of the relevant amount provided.

 

12                                           Qualifications and limitations on Claims

 

12.1                                 Disclosure

 

(a)                                          The Buyer Entities and the Buyer’s Guarantor each acknowledge and agree that the Seller has disclosed or is deemed to have disclosed against the Warranties (other than the Tax Warranties), and each of the Buyer Entities and the Buyer’s Guarantor are aware of, and will be treated as having actual knowledge of, all facts, matters and circumstances that:

 

(1)                                          are provided for or described in any Transaction Agreement;

 

(2)                                          are fairly disclosed in, or otherwise reasonably identifiable or reasonably evident from the information contained in, the Disclosure Materials;

 

(3)                                          would have been disclosed to the Buyer Entities if they had conducted searches 10 Business Days before the date of this agreement of the public registers maintained by any of:

 

(A)                                   the High Court of Australia, the Federal Court of Australia, the Supreme Courts (including any Court of Appeal) throughout Australia, the District Court of Queensland, the Land Court of Queensland and the Land Appeal Court of Queensland;

 

(B)                                   the Queensland Titles Registry, Queensland Department of Environment and Heritage Protection and Queensland Department of Natural Resources and Mines;

 

(C)                                   the National Native Title Tribunal; or

 

(D)                                   ASIC;

 

(4)                                          would have been disclosed to the Buyer Entities if they had conducted searches on the third Business Day before the date of this agreement of the PPS Register using the company names, ABNs or ACNs of each of the Target Entities and the Seller as the search term;

 

(5)                                          are within:

 

(A)                                        the actual knowledge of [***]; and

 

(B)                                        those facts, matters or circumstances of which a person listed in clause 12.1(a)(5)(A) would have been aware had that person made reasonable enquiries in the circumstances.

 

(b)                                          For the avoidance of doubt, the awareness attributable to one Buyer Entity by virtue of clause 12.1(a)(5) will apply to each Buyer Entity and the Buyer’s Guarantor regardless of the capacity in which any person contemplated by clause 12.1(a)(5) may act.

 

(c)                                           In clause 12.1(a)(2) (and in the definition of Material Adverse Change), the phrase ‘otherwise reasonably identifiable’ or ‘reasonably evident’ in relation to a fact, matter, circumstance or liability means that it is reasonably likely that a

 

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prudent prospective purchaser for value of a business of the type conducted by the Target Entities, that has conducted a thorough examination of the disclosure or deemed disclosure described in clauses 12.1(a)(1) to 12.1(a)(5) by and through its:

 

(1)                                          officers, employees, agents and representatives; and

 

(2)                                          suitably qualified legal, accounting, financial and other professional advisers and consultants, including industry consultants,

 

who have been directly involved in the Buyer Entities’ consideration and preparation for the transactions contemplated by this agreement, would have become aware of, or being put on notice of, the relevant fact, matter, circumstance or liability.

 

(d)                                          The Warranties (other than the Tax Warranties) are given subject to the disclosures or deemed disclosures described in clause 12.1(a). A Warranty (other than a Tax Warranty) will not be regarded as being untrue by reason of facts, matters or circumstances that have been disclosed or are deemed to have been disclosed under clause 12.1(a). Except for the Tax Warranties, the Seller will have no liability under the Warranties to the extent that disclosure is made or is deemed to have been made against the Warranties under this clause 12.1.

 

(e)                                           The Buyer Entities and the Buyer’s Guarantor must not make a Claim (other than a Tax Claim), and the Seller will not be in breach of a Warranty, if the facts, matters or circumstances giving rise to such Claim are disclosed or are deemed to have been disclosed under clause 12.1.

 

12.2                                 Awareness

 

Where a Warranty is given ‘to the best of the Seller’s knowledge’, or ‘so far as the Seller is aware’ or with a similar qualification as to the Seller’s awareness or knowledge, the Seller’s awareness is limited to and deemed only to include those facts, matters or circumstances only of which a Specified Executive is actually aware as at the date of this agreement or would have been aware had the Specified Executive made reasonable enquiries in the circumstances.

 

12.3                                 No reliance

 

(a)                                          The Buyer Entities and the Buyer’s Guarantor each represent and warrant to each Seller Group Member, that:

 

(1)                                          at no time has:

 

(A)                                        any Seller Group Member or any person on its behalf, made or given; or

 

(B)                                        any Buyer Group Member relied on,

 

any representation, warranty, promise or undertaking in respect of the future financial performance of prospects of the Target Entities or otherwise except those expressly set out in this agreement (including in the Warranties);

 

(2)                                          it has not relied on anything other than the Warranties and the terms of this agreement in agreeing to buy the Sale Shares and agreeing to the assignment of the Existing WES Intercompany Loan Agreement and the Existing WES GSA and, in particular, no representations, warranties, promises, undertakings, statements or conduct in respect

 

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of the future financial performance or prospects of the Target Entities or otherwise have:

 

(A)                                        induced or influenced the Buyer Entities or the Buyer’s Guarantor to enter into, or agree to any terms or conditions of, this agreement;

 

(B)                                        been relied on in any way as being accurate by a Buyer Group Member;

 

(C)                                        been warranted to a Buyer Group Member as being true; or

 

(D)                                        been taken into account by a Buyer Entity or the Buyer’s Guarantor as being important to its decision to enter into, or agree to any or all of the terms of, this agreement,

 

except those expressly set out in this agreement (including in the Warranties);

 

(3)                                          it has entered into this agreement after satisfactory inspection and investigation of the affairs of the Target Entities, including a detailed review of all the Disclosure Materials;

 

(4)                                          it has made, and it relies upon, its own searches, investigations, enquiries and evaluations in respect of the Business, except to the extent expressly set out in this agreement (including in the Warranties); and

 

(5)                                          on the basis of the due diligence enquiries carried out by the Buyer Entities and the Buyer’s Guarantor, the Disclosure Materials and any other information of which it is aware at the date of this agreement, none of the persons identified in clause 12.1(a)(5) are actually aware of any breach of any warranty or of any matter that may result in a Claim (other than a Tax Claim).

 

(b)                                          The Buyer Entities and the Buyer’s Guarantor acknowledge that the Seller has agreed to sell the Sale Shares and assign the Existing WES Intercompany Loan Agreement and the Existing WES GSA and enters into this agreement relying on the representations and warranties in this clause 12.3 and would not be prepared to sell the Sale Shares and assign the Existing WES Intercompany Loan Agreement and the Existing WES GSA on any other basis.

 

12.4                                 Opinions, estimates and forecasts

 

The parties acknowledge that no Seller Group Member is under any obligation to provide any Buyer Group Member or its advisers or representatives with any information on the future financial performance or prospects of the Target Entities. If a Buyer Group Member has received opinions, estimates, projections, business plans, budget information, coal quality information, future recoverable resources, characteristics or prospects in relation to the Tenements, likely performance or cost of infrastructure or other forecasts in respect of the Business or the Curragh Mine, the Buyer Entities and the Buyer’s Guarantor each acknowledge and agree that:

 

(a)                                          there are uncertainties inherent in attempting to make these estimates, projections, business plans, budgets, forecasts and information and the Buyer Entities and the Buyer’s Guarantor are familiar with these uncertainties;

 

(b)                                          the Buyer Entities and the Buyer’s Guarantor are taking full responsibility for making their own evaluation of the adequacy and accuracy of all estimates, projections, business plans, budgets, forecasts and information furnished to them; and

 

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(c)                                           the Seller is not liable under any Claim arising out of or relating to any opinions, estimates, projections, business plans, budgets, forecasts or information in respect of the Target Entities, the Business or Curragh Mine.

 

Nothing in this clause 12.4 limits or derogates from the Buyer Entities’ representations and warranties in clause 12.3 or the Seller’s reliance on those representations and warranties.

 

12.5                                 Maximum and minimum amounts

 

(a)                                          The Seller is not liable under a Claim arising from a breach of Warranty (including a Claim under clause 11.4 but excluding a Claim under clause 10 or a Tax Claim) unless the amount finally agreed or adjudicated to be payable in respect of that Claim:

 

(1)                                         exceeds $2,000,000; and

 

(2)                                          either alone or together with the amount finally agreed or adjudicated to be payable in respect of other Claims that satisfy clause 12.5(a)(1) exceeds $10,000,000,

 

in which event, subject to clauses 12.5(b) and 12.5(d), the Seller is liable for the entire amount of the Claim and not only the excess above $10,000,000.

 

(b)                                          Except in relation to a Claim under clause 10 or a Tax Claim but subject to clause 12.5(c), the maximum aggregate amount that the Seller is required to pay in respect of all Claims whenever made and howsoever arising is limited to:

 

(1)                                          in respect of all Claims arising under Warranty 1 Ownership and structure, Warranty 2 Power and authority, Warranty 9 Tenements and Warranty 15 Solvency, 100% of the Total Consideration expressed as a dollar amount; and

 

(2)                                          in respect of all other Claims arising from a breach of Warranty, 30% of the Total Consideration expressed as a dollar amount.

 

(c)                                           Despite any other provision of this agreement or any other Transaction Agreement, except for a Claim under clause 11.5, the maximum amount that the Seller is required to pay in respect of any and all Claims (including a Claim made by a Buyer Group Member or a Target Entity), howsoever arising, is limited to the amount of the Total Consideration.

 

(d)                                          For the purposes of clause 12.5(a)(1):

 

(1)                                          Claims arising out of separate sets of facts, matters or circumstances will not be treated as one Claim, even if each set of facts, matters or circumstances may be a breach of the same Warranty; and

 

(2)                                          Claims of the same or similar nature arising out of the same or similar facts, matters and circumstances will be treated as one Claim.

 

(e)                                           The Buyer agrees that the maximum liability cap described in clauses 12.5(b) and 12.5(c) apply to all Claims (other than a Claim under clause 11.5), whether made by any Buyer Group Member, any Debt Financing Party or any subsequent purchaser of a Target Entity or the Curragh Mine.

 

12.6                                 Time limits

 

The Seller may only be liable under a Claim if:

 

(a)                                          a Buyer Entity notifies the Seller of the Claim in accordance with clause 13.1(a) within:

 

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(1)                                          seven years after Completion in respect of a Tax Claim; or

 

(2)                                          18 months after Completion in all other cases; and

 

(b)                                          within 12 months of the date the Buyer Entity is required to notify the Seller of the Claim under clause 12.6(a):

 

(1)                                          the Claim has been agreed, compromised or settled; or

 

(2)                                          the Buyer Entity has issued and served legal proceedings against the Seller in respect of the Claim in accordance with clause 21.1.

 

12.7                                 No double claims

 

(a)                                          The Seller is not liable under a Claim for any Loss that a Buyer Group Member or a Target Entity recovers, or is compensated for, under a Transaction Agreement (other than this agreement) or an adjustment in accordance with clause 10.

 

(b)                                          The Buyer Group Members and the Target Entity may not recover, or be compensated, under any Transaction Agreement more than once for any Loss.

 

(c)                                           This clause 12.7 does not prevent the Buyer Group Member or Target Entity entitled to make a Claim under a Transaction Agreement (other than this agreement) from commencing that Claim. However, if for any reason more than one amount is paid in respect of the same Loss, the Buyer must procure that the additional amount is immediately repaid to one or more Seller Group Members nominated by the Seller so as to give full effect to clause 12.7(a).

 

12.8                                 Mitigation of loss

 

(a)                                          The Buyer Entities must:

 

(1)                                          take, and procure that each other Buyer Group Member and, after Completion, each Target Entity takes, all reasonable actions to mitigate any Loss that may give rise to a Claim; and

 

(2)                                          not omit, and procure that no other Buyer Group Member or, after Completion, no Target Entity omits, to take any reasonable action that would mitigate any Loss that may give rise to a Claim.

 

(b)                                          If the Buyer Entities do not comply with clause 12.8(a) and compliance with clause 12.8(a) would have mitigated the Loss, the Seller is not liable for the amount by which the Loss would have been reduced.

 

12.9                                 Personal Liability

 

(a)                                          The Buyer Entities and the Buyer’s Guarantor agree that:

 

(1)                                          no natural person (including the Specified Executives) will bear any liability to a Buyer Group Member or a Target Entity in respect of this agreement, the transactions contemplated by this agreement or any other Transaction Agreement, other than for an act of fraud or Wilful Misconduct by that person;

 

(2)                                          no current or former officer, employee or agent of a Seller Group Member (including the Specified Executives) or any Seller Group Representative or adviser in its capacity as such in relation to the transactions contemplated by this agreement or other Transaction Agreement, will be liable to a Buyer Group Member or a Target Entity in respect of any act, matter or thing which occurred before, at or after

 

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Completion, other than an act of fraud or Wilful Misconduct by that person; and

 

(3)                                          the persons referred to in clause 12.9(a)(1) and clause 12.9(a)(2) are entitled to the benefit of this clause and the Seller holds such benefit on trust for those persons and the Seller is entitled to enforce this clause on behalf of those persons.

 

(b)                                          The Buyer Entities and the Buyer’s Guarantor:

 

(1)                                          release and discharge the natural persons referred to in clause 12.9(a)(1) and clause 12.9(a)(2) that are current or former officers of a Seller Group Member or a Target Entity (including the Specified Executives) from any claim, action, demand, suit or proceeding for damages, debt, restitution, equitable compensation, account, injunction, specific performance or any other remedy that the Buyer Entities and the Buyer’s Guarantor have or may have against those natural persons in respect of any actions taken by those natural persons to cause the Target Entities to enter into the Transaction Agreements, including, without limitation, any damage, loss, cost or expense suffered by the Buyer Entities and the Buyer’s Guarantor whether arising at common law, in equity, or under statute or otherwise (the Seller Released Matters); and

 

(2)                                          the Buyer Entities and the Buyer’s Guarantor acknowledge that the natural persons referred to in clause 12.9(b)(1) are entitled to enforce this clause 12.9 to the same extent as if those natural persons were parties to this agreement and may plead this clause 12.9 in bar to any claim or proceeding by any Buyer Entity or the Buyer’s Guarantor (or any other Buyer Group Member or a Target Entity) in respect of the Seller Released Matters.

 

(c)                                           The Seller agrees that:

 

(1)                                          no natural person will bear any liability to a Seller Group Member or a Target Entity in respect of this agreement, the transactions contemplated by this agreement or any other Transaction Agreement, other than for an act of fraud or Wilful Misconduct by that person;

 

(2)                                          no current or former officer, employee or agent of a Buyer Group Member or adviser in its capacity as such in relation to the transactions contemplated by this agreement or other Transaction Agreement, will be liable to a Seller Group Member or a Target Entity in respect of any act, matter or thing which occurred before, at or after Completion, other than an act of fraud or Wilful Misconduct by that person; and

 

(3)                                          the persons referred to in clause 12.9(c)(1) and clause 12.9(c)(2) are entitled to the benefit of this clause and the Buyer holds such benefit on trust for those persons and the Buyer is entitled to enforce this clause on behalf of those persons.

 

(d)                                          The Seller:

 

(1)                                          releases and discharges the natural persons referred to in clause 12.9(c)(1) and clause 12.9(c)(2) that are current or former officers of a Buyer Group Member from any claim, action, demand, suit or proceeding for damages, debt, restitution, equitable compensation, account, injunction, specific performance or any other remedy that the Seller has or may have against those natural persons in respect of any actions taken by those natural persons to cause the Buyer

 

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Entities and Buyer Guarantor to enter into the Transaction Agreements, including, without limitation, any damage, loss, cost or expense suffered by the Seller whether arising at common law, in equity, or under statute or otherwise (the Buyer Released Matters); and

 

(2)                                          the Seller acknowledges that the natural persons referred to in clause 12.9(d)(1) are entitled to enforce this clause 12.9 to the same extent as if those natural persons were parties to this agreement and may plead this clause 12.9 in bar to any claim or proceeding by any Seller Group Member in respect of the Buyer Released Matters.

 

12.10                          General limitations

 

The Seller’s liability for any Claim is reduced or extinguished to the extent that:

 

(a)                                          the Claim is in respect of a contingent Loss (unless and until the Loss becomes an actual Loss and is due and payable) but the parties agree that a diminution in the value of the Sale Shares is not a contingent Loss;

 

(b)                                          the subject matter of the Claim arises from an act or omission:

 

(1)                                          at the direction, or with the prior written approval, of or, by or on behalf of, a Buyer Group Member;

 

(2)                                          with the knowledge of a Buyer Group Member and the Buyer did not object to the act or omission; or

 

(3)                                          after Completion at the direction, or with the prior written approval, of or, by or on behalf of, a Target Entity;

 

but excluding an act or omission of a Buyer Group Member or, after Completion, a Target Entity, that is carried out:

 

(4)                                          in the ordinary course of business;

 

(5)                                          in performing this agreement, including in response to a breach by the Seller of this agreement (including a breach of Warranty); or

 

(6)                                          for the purpose of meeting a contractual or legal obligation.

 

(c)                                           the Claim arises from:

 

(1)                                          the enactment or amendment of any legislation or regulations;

 

(2)                                          a change in the judicial or administrative interpretation of the law; or

 

(3)                                          a change in the practice or policy of any Governmental Agency,

 

after the date of this agreement, including legislation, regulations, amendments, interpretation, practice or policy that has a retrospective effect;

 

(d)                                          the Claim arises or is increased as a result of a change after Completion in any accounting policy or practice of a Buyer Group Member or a Target Entity (including to align those accounting policies or practices with those used by a Buyer Entity);

 

(e)                                           the Claim arises out of the cessation or alteration of the Business after Completion;

 

(f)                                            the subject matter of the Claim is provided for in the Completion Accounts;

 

(g)                                           the Claim arises from a Buyer Entity’s or a Target Entity’s failure to:

 

(1)                                          make any Claim, election, surrender or disclaimer or give any notice or consent or do any other thing after Completion, the making, giving

 

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or doing of which was taken into account or assumed in computing the provision for Tax in the Completion Accounts; or

 

(2)                                          take any action after Completion required by, or that should reasonably be taken under, any applicable Tax Law in relation to any Tax or Duty (including any failure to take any such action within the time allowed),

 

but only to the extent that the failure has contributed to the Loss;

 

(h)                                          the Claim arises in connection with any increase in the rate of Tax liable to be paid or any imposition of Tax not in effect at the date of Completion;

 

(i)                                              the Claim is in connection with a matter, event or circumstance that would not have arisen but for a Buyer Group Member, or after Completion, a Target Entity admitting liability in respect of that matter, event or circumstance without the written consent of the Seller;

 

(j)                                             the matter that gives rise to the Claim results in any Buyer Group Member or any Target Entity receiving, in equivalent present value terms:

 

(1)                                          Tax Relief, credit, deduction, exemption, exclusion, set off, refund, right to repayment, rebate, relief or set-off;

 

(2)                                          compensation or indemnification including under any contract, indemnity or otherwise (including under any insurance policy or from a Governmental Agency);

 

(3)                                          an amount under any Claim against a Third Party; or

 

(4)                                          payment, reduction in Tax, reduction of liability, corresponding net saving or other benefit; or

 

(k)                                          the matter that gives rise to the Claim is remediable, provided it is remedied within 30 Business Days after the Seller receives notice under clause 13.1(a).

 

Except to the extent expressly provided under clause 11.5, this clause 12.10 will not otherwise apply in respect of a Claim under clause 11.5.

 

12.11                          Other limitations

 

The liability of the Seller in respect of any Tax Claim is reduced or extinguished:

 

(a)                                          by the amount of actual excess or actual understatement (as applicable) where:

 

(1)                                          an accrual, allowance, provision or reserve in the Completion Accounts in respect of a Tax exceeds the actual liability in respect of that Tax and that liability has been finally satisfied; or

 

(2)                                          an entitlement to any Tax Relief that is shown in the Completion Accounts is understated and the amount of the understatement has been actually received by a Target Entity;

 

(b)                                          to the extent that it arises as a result of any income derived, loss, outgoing or deductions incurred or activities undertaken, or deemed for Tax purposes to have been undertaken, after the Completion Date; or

 

(c)                                           to the extent that it arises as a result of the transactions contemplated by this agreement.

 

12.12                          Consequential loss

 

(a)                                          Notwithstanding any other provision of this agreement, the Seller will not, in any circumstances, be liable to a Buyer Group Member, Target Entity or any other

 

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person for any Consequential Loss in relation to this agreement, any transaction contemplated by this agreement or any other Transaction Agreement.

 

(b)                                          In a circumstance where the Buyer Entities wrongfully fail to Complete, the Buyer Entities and the Buyer’s Guarantor will not be liable to the Seller for any:

 

(1)                                          special, exemplary or punitive damages;

 

(2)                                          loss of revenue, loss of profit or loss of business opportunity assessed only by reference to an investment which the Seller could have made using any part of the Total Consideration; or

 

(3)                                          damages to goodwill or reputational damage.

 

12.13                          Sole remedy

 

(a)                                          It is the intention of the parties that the Buyer Group’s sole remedies in connection with the Sale or any matter under or contemplated by any Transaction Agreement (including the Disclosure Materials) will be as set out in, or determined under, this agreement.

 

(b)                                          The sole remedy of the Buyer Entities in respect of any Claim, including for a breach of a Warranty (and a Buyer Entity is the only person entitled to make a Claim for breach of a Warranty), is common law damages and in no circumstances is a Buyer Entity entitled to terminate this agreement as a consequence of a Claim.

 

(c)                                           No Seller Group Member has any liability to a Buyer Group Member or a Target Entity (or any of their respective officers, employees or advisers) under a Claim in connection with, or resulting from or implied by conduct made in the course of communications or negotiations in respect of, the Sale, the Transfer or any matter under or contemplated by any Transaction Agreement (including the Disclosure Materials), unless the Claim may be made under the terms of this agreement or arises out of a statutory right or other claim that cannot be excluded by contract.

 

(d)                                          The Buyer Entities must not, and must procure that each Target Entity and other Buyer Group Member does not, make any Claim:

 

(1)                                          that a Buyer Entity or the Buyer’s Guarantor would not be entitled to make under this agreement; or

 

(2)                                          against a Seller Group Member that is not a party to this agreement.

 

12.14                          Statutory actions

 

To the maximum extent permitted by law, each of the Buyer Entities and the Buyer’s Guarantor agrees not to make and waives any right it might have to make any Claim against a Seller Group Member or any of its current or former officers or employees or any Seller Group Representative or Adviser, whether in connection with this agreement, another Transaction Agreement, the Sale, the Transfer or otherwise, under:

 

(a)                                          Part 7.10 of the Corporations Act;

 

(b)                                          the Australian Securities and Investments Commission Act 2001 (Cth) in connection with a breach of section 12DA of that Act;

 

(c)                                           the Australian Consumer Law (as contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth)) and equivalent Australian State and Territory fair trading legislation,

 

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or any corresponding or similar provision of any Australian State or Territory legislation or any similar provision of any legislation in any relevant jurisdiction or any other applicable laws.

 

12.15                          Payments affecting the Debt Purchase Price

 

(a)                                          Any payment made by a Seller Group Member to a Buyer Group Member or a Target Entity in respect of any Claim will be in reduction of the Debt Purchase Price.

 

(b)                                          Any payment (including a reimbursement) made by a Buyer Group Member or a Target Entity to a Seller Group Member in respect of any Buyer Claim will be an increase in the Debt Purchase Price.

 

(c)                                           If any deduction or withholding is required by law to be deducted or withheld from any payment by the Seller in respect of a Claim, or if a Buyer Group Member or Target Entity is subject to Tax in respect of any such payment, the amount of the payment shall be increased by such additional amount as is necessary to ensure that the net amount received and retained by the Buyer Group or Target Entity is equal to the amount which it would have received and retained had the payment in question not been subject to any deductions or withholdings or Tax.

 

12.16                          Fraud

 

The qualifications and limitations in this clause 12 do not apply in the case of fraud or Wilful Misconduct of a Seller Group Member or one or more employees, officers or directors of a Seller Group Member and the Buyer is not prevented from making a Claim against the Seller to the extent and in respect of those rights of recovery arising out of or relating to the fraud or Wilful Misconduct of the Seller Group Member or those persons.

 

12.17                          Independent limitations

 

Each qualification and limitation in this clause 12 is to be construed independently of the others and is not limited by any other qualification or limitation.

 

13                                           Procedures for dealing with Claims

 

13.1                                 Notice of Claims

 

(a)                                          (Actual Claims): The Buyer must within a reasonable time period notify the Seller if:

 

(1)                                          it, the Assignee or the Buyer’s Guarantor decides to make a Claim against the Seller that either alone or together with other Claims exceeds any applicable thresholds set out in clause 12.5; or

 

(2)                                          a Third Party Claim or Tax Demand is made that may give rise to a Claim against the Seller.

 

(b)                                          (Potential Claims): Without limiting clause 13.1(a) the Buyer must also notify the Seller if:

 

(1)                                          the Buyer believes that a Buyer Entity or the Buyer’s Guarantor would be entitled to make a Claim against the Seller but for the thresholds set out in clause 12.5; or

 

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(2)                                          the Buyer becomes aware of any events, matters or circumstances (including any potential threatened Third Party Claim or Tax Demand) that are reasonably likely to give rise to a Claim against the Seller, whether alone or with any other Claim or circumstances or with the passage of time).

 

(c)                                           (Details required): The Buyer must include in each notice given under clause 13.1(a) or clause 13.1(b) all relevant details (including the amount) then known to a Buyer Group Member or a Target Entity of:

 

(1)                                          the Claim and if applicable, any other Claims that together with the Claim give rise to any applicable thresholds in clause 12.5 being exceeded;

 

(2)                                          if applicable, the Third Party Claim or Tax Demand; and

 

(3)                                          the events, matters or circumstances giving rise to the Claim.

 

(d)                                          (Extracts): The Buyer must also include in each notice given under clause 13.1(a) or clause 13.1(b) an extract of:

 

(1)                                          any part of a Demand (including a Tax Demand) that identifies the liability or amount to which the Claim relates or other evidence of the amount of the Demand to which the Claim relates; and

 

(2)                                          if available or relevant, any corresponding part of any adjustment sheet or other explanatory material issued by a Governmental Agency that specifies the basis for the Demand to which the Claim relates or other evidence of that basis.

 

(e)                                           (Demands): The Buyer must provide a copy of any document referred to in clause 13.1(d) to the Seller as soon as practicable and in any event within five days of receipt of that document by a Buyer Group Member or a Target Entity.

 

(f)                                            (Developments): The Buyer must also, on an on-going basis, keep the Seller informed of all material developments in relation to the Claim notified under clause 13.1(a) or clause 13.1(b).

 

(g)                                           (Compliance): If the Buyer does not fully comply with this clause 13 in respect of a Claim, the Seller is not liable under the Claim to the extent that the non- compliance has increased the amount of the Claim.

 

13.2                                 Third Party Claims

 

The following additional obligations apply in respect of the Third Party Claims.

 

(a)                                          (No admission): The Buyer must not, and must ensure that each Target Entity and Buyer Group Member does not:

 

(1)                                          accept, compromise or pay;

 

(2)                                          agree to arbitrate, compromise or settle; or

 

(3)                                          make any admission or take any action in relation to,

 

a Third Party Claim that may lead to liability on the part of the Seller under a Claim without the Seller’s prior written approval.

 

(b)                                          (Defence of claim): Following receipt of a notice under clause 13.1(a) in respect of a Claim that arises from or involves or could potentially involve a Third Party Claim, the Seller may, by giving written notice to the Buyer, assume the conduct of the defence of the Third Party Claim.

 

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(c)                                           (Seller assumes conduct): If the Seller advises the Buyer that it wishes to assume the conduct of the defence of the Third Party Claim:

 

(1)                                          (indemnity): provided that the Seller provides the Buyer with an indemnity against all Loss that may result from such action, the Buyer must promptly take, and must procure that each Buyer Group Member and Target Entity promptly takes, at the Seller’s cost and expense, all action reasonably requested by the Seller to avoid, contest, compromise or defend the Third Party Claim, including using professional advisers nominated by the Seller and approved by the Seller for this purpose;

 

(2)                                          (access): the Buyer must provide, and must procure that each Buyer Group Member and Target Entity provides, at the Seller’s cost and expense, the Seller with all reasonable assistance requested by it in relation to the Third Party Claim, including providing access to witnesses and documentary or other evidence relevant to the Third Party Claim, allowing it and its legal advisers to inspect and take copies of all relevant books, records, files and documents, and providing it with reasonable access to the personnel, premises and chattels of the Seller Group Members and the Target Entities for the sole purpose of obtaining information in relation to the Third Party Claim;

 

(d)                                          (Conduct of claim by Seller): If the Seller assumes the conduct of the defence of a Third Party Claim, in conducting any proceedings or actions in respect of that Third Party Claim the Seller must:

 

(1)                                          act in good faith;

 

(2)                                          liaise with the Buyer in relation to the defence of the Third Party Claim; and

 

(3)                                          provide the Buyer with reasonable access to a copy of any notice, correspondence or other document relating to the Third Party Claim.

 

(e)                                           (Buyer assumes conduct): If the Seller advises the Buyer that it does not wish to assume the conduct of the defence of the Third Party Claim (or does not advise the Buyer that it wishes to assume the conduct of the defence of the Third Party Claim within 15 Business Days of notification of the Third Party Claim under clause 13.1(a)(2)), then the Buyer must procure that any Buyer Group Member or Target Entity that is conducting any proceedings or actions in respect of that Third Party Claim:

 

(1)                                          acts in good faith;

 

(2)                                          liaises with the Seller in relation to the defence of the Third Party Claim;

 

(3)                                          provides the Seller with reasonable access to a copy of any notice, correspondence or other document relating to the Third Party Claim; and

 

(4)                                          acts reasonably in all the circumstances, including, having regard to the likelihood of success and the effect of the proceedings or actions on the goodwill or reputation of the business of the Seller Group.

 

13.3                                 Tax Demands

 

The following additional obligations apply in respect of Claims made against the Seller arising from or involving a Tax Demand.

 

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(a)                                          (No admission): The Buyer must not, and must ensure that each Target Entity and Buyer Group Member does not:

 

(1)                                          accept, compromise or pay;

 

(2)                                          agree to arbitrate, compromise or settle; or

 

(3)                                          make any admission or take any action in relation to,

 

a Tax Demand that may lead to liability on the part of the Seller under a Claim without the prior written approval of the Seller (which must not be unreasonably withheld or delayed). However, the Buyer or a Target Entity may pay any Tax or Duty to a Governmental Agency by the due date for payment without affecting any of its rights under this agreement.

 

(b)                                          (Payment if not contesting a Tax Demand): If the Seller does not advise the Buyer that it wishes to contest the Tax Demand then the Seller must pay in Immediately Available Funds and as a reduction in the Debt Purchase Price the amount notified by the Buyer by the later of:

 

(1)                                          two Business Days before the due date for payment to the Governmental Agency; or

 

(2)                                          10 Business Days after receipt of the notice given by the Buyer under clause 13.1.

 

(c)                                           (Contesting a Tax Demand): Following receipt of a notice under clause 13.1 in respect of a Claim that arises from or involves a Tax Demand, the Seller may, by written notice to the Buyer no later than five Business Days before the date due for payment of the relevant Tax or Duty or five Business Days after receipt of the notice, whichever is later, advise the Buyer that it wishes to contest the Tax Demand.

 

(d)                                          (Procedure for contesting a Tax Demand): If the Seller advises the Buyer that it wishes to contest the Tax or Duty the subject of the Tax Demand under clause 13.3(c) then:

 

(1)                                          (Payment of Tax): the Seller must pay the Buyer, in Immediately Available Funds and as a reduction in the Debt Purchase Price, so much of the Tax or Duty as is required by the relevant Governmental Agency to be paid while any action is being taken under this clause 13.3 by the date that is the later of two Business Days before the due date for payment to the Governmental Agency and 10 Business Days after receipt of the notice given by the Buyer under clause 13.1; and

 

(2)                                          (Objection to Tax Demand or Disputing Action): at the Seller’s written request, the Buyer must take, or procure that the person required to pay the Tax or Duty (Tax Payor) takes such Disputing Action in a timely manner in relation to the Tax Demand as the Seller may require.

 

(e)                                           (Conduct of proceedings by the Seller): If the Seller contests the Tax or Duty the subject of a Tax Demand then the Buyer must follow, and must procure that each Buyer Group Member and Target Entity follows, all directions of the Seller relating to the conduct of any Disputing Action contemplated by this clause 13.3, including using professional advisers nominated by the Seller. In making any such directions, the Seller must:

 

(1)                                    &