Victorian Consolidated Legislation
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Grain Handling and Storage Act 1995 - SCHEDULE 1
s. 5 The Agreement Sale of Business and Shares Agreement SALE OF BUSINESS AND
SHARES AGREEMENT made 10 May 1995 BETWEEN
(1) THE HONOURABLE ALAN STOCKDALE, Treasurer of the State of Victoria acting
for and on behalf of the Crown in right of the State of Victoria (the
"State");
(2) VICGRAIN OPERATIONS LIMITED ACN 069 291 532 of 24-28 Collins Street,
Melbourne, Victoria ("the Purchaser");
(3) VICTORIAN GRAIN SERVICES LIMITED ACN 059 347 349 of 24-28 Collins Street,
Melbourne, Victoria ("Victorian Grain Services");
(4) GRAINCORP OPERATIONS LIMITED ACN 003 875 401 of Level 10, 51 Druitt
Street, Sydney, NSW ("GrainCorp"); and
(5) THE AUSTRALIAN BARLEY BOARD of Grain House, 123-130 South Terrace,
Adelaide, South Australia ("ABB"). RECITALS:
A. The State of Victoria by the Grain Elevators Act 1934 established The Grain
Elevators Board ("the GEB") as a body corporate owned by the State, and the
GEB now operates pursuant to the Grain Elevators Act 1958 (the "Act").
B. In accordance with the Act, the GEB constructed, and now operates and
maintains facilities for receiving, storing and out-turning Grain and other
dry and semi-dry bulk products and carries on related business activities.
C. The GEB has been declared to be a "reorganising body" under Part 2 of the
State Owned Enterprises Act 1992 and has received or will before the
Completion Date receive a duly authorised direction pursuant to section 9 of
that Act to transfer certain assets to its wholly owned subsidiary.
D. The State wishes to dispose of the Business including all of the GEB's
right, title and interest in the Assets (including the Shares) and Liabilities
and the Purchaser wishes to acquire the Business, the Assets and Liabilities
and each has respectively agreed to do so on the terms and conditions of this
agreement. THE PARTIES AGREE AND DECLARE AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1. Definitions In this agreement unless the contrary intention appears-
"this agreement" means this agreement, the schedules and any annexures to this
agreement; "Assets" means those assets owned by the GEB which are used in the
Business and are set out in Schedule 1 (which does not include the Fixed
Assets) including-
(i) any legal or equitable estate or interest in personal property,
including a contingent one; and
(ii) any right, privilege and immunity, including a contingent or
prospective one; "Business" means the business of the GEB described in
the Recital B; "Business Day" means a day on which banks in Melbourne
are open for business during normal hours; "Completion" means
completion of the sale and purchase of the Business in accordance with
clause 5; "Completion Date" means 30 June 1995 or such other date
after 30 June 1995 but prior to or on 31 October 1995 as is notified
by the State under clause 5.1; "Consideration" means the consideration
for the acquisition of the Business and Assets as defined in clause
3.1; "Contracts" means all agreements and contracts to which the GEB
or the State in respect of the GEB is a party, including without
limitation, insurance policies and contracts with Customers, but
excluding any contracts giving rise to an equitable or legal interest
in land in favour of the GEB and excluding any contracts relating to
Excluded Liabilities; "Customers" means persons who use the facilities
and services of the Business including Grain Customers; "the
Direction" means the direction of the Treasurer pursuant to section 9
of the State Owned Enterprises Act 1995 referred to in Recital C;
"Employee" means a person who on the Completion Date is an employee of
the GEB other than an Excluded Employee; "Employee Entitlements" means
the vested and contingent amounts or entitlements to which Employees
are entitled as at the Completion Date in respect of sick leave,
maternity leave, annual leave, long service leave, accrued rostered
hours for rostered days off and approved time off in lieu of overtime;
"Excluded Employees" means those persons in respect of whom written
nomination is delivered to the State by the Purchaser before execution
of this agreement; "Excluded Liabilities" means the Liabilities
described in Schedule 2; "Fixed Assets" means all inventory and motor
vehicles used by the Business and all assets noted in the Assets
Register of the GEB (which is maintained at its head office at 43-51
Lonsdale Street, Melbourne) and all Land which is transferred to the
GEB Subsidiary under the Direction; "GEB Subsidiary" means the entity
referred to in clause 2.3; "Grain" means grains, oil seeds and pulses
of all kinds, qualities and varieties including, wheat, barley, oats,
sorghum, maize and rice; "Grain Customers" means Growers and other
owners from time to time of Grain stored in the facilities of the
Business; "Growers" means growers of Grain who as part of their
farming business, generally deliver Grain to the facilities of the
Business; "Immediately Available Funds" means funds-
(a) which are upon payment immediately available for use and access by the
recipient, or if paid into a bank account, immediately available for
withdrawal from that bank account by the person or persons entitled to
operate that bank account; and
(b) the payment of which is not capable of being cancelled or avoided by
the payer or any person on behalf of the payer; "Land" means any legal
or equitable estate in real property vested in the GEB; "Liabilities"
means any and all liabilities and obligations of the GEB in respect of
the Business of any nature known or unknown and duties, actual
contingent or prospective, excluding any bank overdraft, loans and the
Excluded Liabilities and including but not limited to-
(a) all obligations and burdens arising from the Assets and Fixed Assets;
(b) Deferred Revenue;
(c) contractual and lease obligations;
(d) payment obligations in respect of trade creditors and accruals;
(e) liabilities to pay Employee Entitlements; and
(f) liability to pay the Superannuation Provision, as defined in the
Balance Sheet and notes of the GEB in its 1994 Annual Report; "Plant
and Equipment Leases" means the leases set out in Item 1 of
Schedule 1; "Projected Schedule" means the Projected Schedule of
Assets (other than Shares) and Liabilities in Schedule 3; "Purchase
Price" means the amount determined under clause 4; "Purchaser's Fund"
means a superannuation fund within the meaning of the
Superannuation Industry (Supervision) Act 1993 (Commonwealth) which
has been established or identified by the Purchaser for the benefit of
the Transferring Members under clause 20; "Scheme" means each of the
State Superannuation Revised Scheme, State Superannuation New Scheme,
State Employee Retirement Benefits Scheme and the Transport
Superannuation Scheme; "Shares" means shares held by the GEB
immediately before Completion in the GEB Subsidiary; "Superannuation
Provision" means in respect of each Scheme, an amount calculated by an
actuary appointed by the State as the amount payable to the Trustee of
that Scheme in full and final satisfaction of the liability of the GEB
to the Trustee of that Scheme at the Completion Date; "Transferring
Employee" means an employee who accepts employment with the Purchaser
in accordance with clause 19; "Transferring Member" means a
Transferring Employee who has elected to transfer his or her
superannuation benefits under clause 20.5(a); "Trustee" in relation to
a Scheme means the entity which holds the assets of the Scheme on
behalf of the members, whether or not the State.
1.2. Interpretation In this agreement unless the contrary intention appears-
(a) a reference to this agreement, any other agreement or another document
includes any variation or replacement of any of them;
(b) a reference to a statute, ordinance, code or other law includes
regulations and other statutory instruments under it and
consolidations, amendments, re-enactments or replacements of any of
them;
(c) a reference to a clause includes a sub-clause and a reference to a
paragraph includes a sub-paragraph;
(d) the singular includes the plural and vice versa;
(e) a reference to any gender includes all genders;
(f) where an expression is deferred, another part of speech or grammatical
form of that expression has a corresponding meaning;
(g) the word "person" includes a firm, body corporate, and unincorporated
association or an authority;
(h) a reference to a person includes a reference to a person's executors,
administrators, successors, substitutes (including without limitation,
persons taking by novation) and assigns;
(i) a reference to an accounting term is to be interpreted in accordance
with accounting standards under the Corporations Law, Schedule 5 to
the Corporations Regulations and, where not inconsistent with those
accounting standards and that schedule, generally accepted principles
and practices in Australia consistently applied by a body corporate or
as between bodies corporate and over time;
(j) headings are for convenience only and are not an aid in the
interpretation of this agreement;
(k) words and phrases defined in the recitals or elsewhere in this
agreement have the meaning there ascribed to them; and
(l) where any obligation to be performed under this agreement falls on a
day other than a Business Day, this agreement shall be construed as
requiring that obligation to be performed on the next Business Day.
1.3. Purchaser For the purposes of clauses 14 and 15, references to the
Purchaser in the context of the provision or disclosure of information, any
inspection or examination or the making of and judgment or evaluation shall be
taken to include each of the Purchaser, ABB, Victorian Grain Services,
GrainCorp or any person acting on behalf of any of them.
2. CONDITIONS PRECEDENT
2.1. Condition Clauses 3 to 29 (other than clause 4.3) inclusive of this
agreement are of no force or effect unless and until-
(a) the Parliament of Victoria has enacted legislation that has come into
effect which ratifies this agreement and authorises its
implementation; and
(b) the Direction is in force.
2.2. Satisfaction of Condition The parties shall use reasonable endeavours to
secure satisfaction of the conditions in paragraph 2.1 and the State shall
ensure that a Minister of the Crown introduces and sponsors a bill in the
Parliament which, if passed by Parliament, would satisfy the condition
referred to in clause 2.1(a).
2.3. Incorporation of Subsidiary of GEB The State shall ensure that a wholly
owned subsidiary of the GEB is incorporated prior to Completion (the "GEB
Subsidiary") and that the GEB transfers to the GEB Subsidiary all its right,
title and interest in the Fixed Assets including Land as required by the
Direction.
3. TRANSFER OF BUSINESS AND ASSETS
3.1. Consideration The purpose of this agreement is to provide for the
Purchaser to acquire (subject to the limitations contained in this agreement)
the benefit and burden of Business from the Completion Date in consideration
of the Purchaser paying the Purchase Price to the State and assuming the
Liabilities (the "Consideration").
3.2. Transfer of the Business, Assets and Liabilities Subject to Completion
(and with effect from the Completion Date)-
(a) all property and rights in the Business and Assets vest in the
Purchaser as a going concern free from all encumbrances; and
(b) the Liabilities are assumed by the Purchaser, for the Consideration on
and subject to the terms of this agreement.
3.3. Obligations Interdependent The obligations of the parties in respect of
Completion under this agreement and the requirements in respect of transfer of
Fixed Assets under the Direction shall be interdependent. All actions at
Completion under this agreement and under the Direction shall be deemed to
take place simultaneously and no delivery or payment will be deemed to have
been made until all deliveries required to be made at Completion under this
agreement and the Direction have been made.
3.4. This Agreement is not a Contract for the Sale of Land The parties
acknowledge that this agreement is not a contract for the sale of land.
4. PURCHASE PRICE
4.1. Immediately Available Funds The Purchase Price is to be paid in
Australian dollars in Immediately Available Funds.
4.2. Apportionment The Purchase Price shall be allocated as follows-
(a) Assets Located in Victoria 97.5%
(b) Assets Located in New South Wales 2.5%
4.3. Banker's Guarantee as Deposit
(a) Promptly after executing this agreement, the Purchaser will provide to
the State an unconditional irrevocable enforceable banker's guarantee
in favour of the State for the amount of $2 500 000 payable on demand
by the State, which is in a form and is given by a bank acceptable to
the State, and upon which any applicable stamp duty has been paid.
(b) The banker's guarantee shall be security for the performance by the
Purchaser of its obligations in relation to Completion and shall be
surrendered by the State immediately after the Purchaser has
discharged those obligations.
(c) If the Purchaser fails to perform any obligation in relation to
Completion, the State may give the Purchaser a notice requiring that
the matter be remedied within seven Business Days.
(d) If a notice is given by the State under clause 4.3(c) and the matter
is not remedied (or, if the matter is incapable of remedy, agreement
has not been reached as to adequate monetary compensation) by the
expiration of the period specified in the notice, the State may by
further notice terminate this agreement, and-
(i) the State will be entitled to call on and apply for its own benefit
the full amount of the banker's guarantee; and
(ii) without prejudice to any rights that have already accrued (including
any right to claim for damages), each party will be released from any
further obligations arising by virtue of this agreement.
(e) Until the conditions set out in clause 2.1 are satisfied, the State
shall have no right to call on the banker's guarantee and if those
conditions are not satisfied by 29 June 1995, the State shall return
the banker's guarantee to the Purchaser.
4.4. Adjustment of Purchase Price for Completion Date The Purchase Price shall
be determined according to the date elected by the State under clause 5.1 to
be the Completion Date, as follows-
(a) if Completion is notified by the State to be 30 June 1995 the Purchase
Price is $51 000 000;
(b) if Completion is notified by the State to be a day after 30 June 1995
but no later than 31 July 1995 the Purchase Price is $50 000 000;
(c) if Completion is notified by the State to be a day after 31 July 1995
but no later than 31 August 1995 the Purchase Price is $52 000 000;
(d) if Completion is notified by the State to be a day after 31 August
1995 but no later than 30 September 1995 the Purchase Price is $54 000
000; and
(e) if Completion is notified by the State to be a day after 30 September
1995 but no later than 31 October 1995 the Purchase Price is $56 000
000. In determining the Purchase Price under this clause, if a notice
is given under clause 4.3(c) and Completion subsequently occurs,
Completion will be deemed to have occurred on the day of that notice.
4.5. Adjustment of Purchase Price for Current Assets and Liabilities The
Purchase Price shall be reduced by the net amount of Forecast Net Liabilities
shown in Schedule 3 as at the Completion Date, or such other amount as agreed
by the parties as representing that forecast. If the parties cannot agree the
amount of Forecast Net Liabilities then the reduction in the Purchase Price
under this clause shall be the amount shown as the Forecast Net Liabilities
for 30 June 1995 in Schedule 3.
4.6. Adjustment of Purchase Price for Portland Land
(a) In this clause, "Portland Land" means the land described in the leases
which are described in Schedule 2 of the Direction and bear the
references LS25 to LS31 inclusive.
(b) If the State procures the sale of the Portland Land to the Purchaser
then the price shall be $3 000 000.
(c) Neither party is under any obligation to proceed with the sale and
purchase of the Portland Land under this clause.
5. COMPLETION
5.1. Time for Completion
(a) The State may elect by notice in writing to the Purchaser given before
30 June 1995 and at least 7 days prior to the elected date, that
Completion will occur on a day between or on 30 June 1995 and 31
October 1995 and if such an election is made, "Completion Date" under
this agreement shall mean that day. If no election is made, Completion
shall occur on 30 June 1995.
(b) Subject to clause 2, Completion shall take place at 12.00 midday on
the Completion Date at the offices of Blake Dawson Waldron, Level 37,
101 Collins Street, Melbourne.
5.2. Payment The Purchaser shall at Completion-
(a) pay to the State the amount of the Purchase Price; and
(b) assume liability for and indemnify and hold the GEB and the State
harmless from and against the Liabilities.
5.3. Control Upon Completion, the State shall, and shall procure that the GEB
shall-
(a) deliver up operating control of the Business and the Assets to the
Purchaser;
(b) deliver (or where the GEB or the State is legally required to retain
them, make available) to the Purchaser (to the extent not already done
so) all books of account, files and correspondence, reports, records
and other financial and business data and papers relating to the
Business and the Assets (including documents of title relating to the
Assets, executed copies of leases, executed copies of the Contracts
and board and committee minutes and papers);
(c) deliver or make available to the Purchaser (to the extent not already
done so) all customer lists relating to the Business;
(d) deliver to or at the direction of the Purchaser all Assets, including
the certificates for the Shares, which are capable of transfer by
delivery at the places within Australia at which they are usually
located in the normal course of operations of the Business;
(e) deliver to or at the direction of the Purchaser instruments of
transfer of the Shares which have been duly executed in blank by the
transferor and are in registrable form;
(f) execute and deliver to the Purchaser the documents necessary to give
effect to the Direction including all necessary Transfers of Land,
consents, orders, assignments of leases and licences, in registrable
form where necessary;
(g) execute and deliver to the Purchaser all documents, deeds and
instruments in registrable form where applicable and do all things
which may be necessary to novate Plant and Equipment leases to the
Purchaser or otherwise to give effect to this agreement to vest in the
Purchaser absolute legal title to and beneficial interest in the
Assets as at Completion;
(h) deliver to the Purchaser all certificates and instruments evidencing
that the benefit of all and any licences, permits or registrations
necessary for the conduct of the Business are vested in the Purchaser
pursuant to this agreement (other than those licences, permits or
registrations which are available to the Purchaser from the
appropriate authorities), including any documents held by the GEB
relevant to the re-issue of any such licences, permits and
registrations to the Purchaser; and
(i) deliver all securities and guarantees held from Customers.
6. FURTHER PAYMENTS AND ADJUSTMENTS
6.1. Working Capital Adjustment
(a) In this clause-
(i) "Adjustment Amount" means the difference between the Net Amount at
Completion and the Net Amount at Adjustment;
(ii) "Adjustment Date" means the day which is 90 days after the Completion
Date;
(iii) "Projected Net Amount at Completion" means the total amount shown in
the Projected Schedule at the Completion Date;
(iv) "Actual Net Amount at Completion" means the actual audited amount
which is the difference between the value of the Assets and
Liabilities shown in the Projected Schedule as at the Completion Date,
calculated on the Adjustment Date under paragraph (b) of this clause;
(b) The parties shall arrange that an auditor appointed by the State shall
calculate the Actual Net Amount at Completion and the Adjustment
Amount on the Adjustment Date.
(c) If the Adjustment Amount represents an amount by which the Actual Net
Amount at Completion is a lesser liability than the Projected Net
Amount at Completion, then the Purchaser shall pay the Adjustment
Amount to the State within 5 Business days after the Adjustment Date.
(d) If the Adjustment Amount represents an amount by which the Projected
Net Amount at Completion is a greater liability than the Actual Net
Amount at Completion, then the State shall pay the Adjustment Amount
to the Purchaser within 5 Business days after the Adjustment Day.
6.2. Depreciation Adjustment
(a) If, in respect of depreciation of the Fixed Assets-
(i) the Purchaser or an entity related to the Purchaser is allowed a
deduction from its assessable income for the year of income
immediately following Completion which is based on a cost base of the
book written down value of the Fixed Assets; or
(ii) the Purchaser or an entity related to the Purchaser obtains a ruling
or determination from the Australian Taxation Office that a deduction
will be allowed which is based on a cost base of the book written down
value of the Fixed Assets, the Purchaser shall pay $5 000 000 to the
State.
(b) The Purchaser shall or shall procure an entity related to the
Purchaser to either-
(i) within two years of the Completion Date, apply to the Australian
Taxation Office for a ruling that the cost base of the Fixed Assets
for the purpose of calculation of depreciation for taxation purposes
is the book written down value of those Fixed Assets; or
(ii) claim a deduction for depreciation of the Fixed Assets calculated on
the basis that the cost base of those assets is their book written
down value for the purposes of any taxation return for the year of
income immediately following Completion.
(c) The Purchaser shall, or shall procure an entity related to the
Purchaser to-
(i) give notice to the State within 7 days of it being notified of an
allowance or disallowance of a claim or a ruling or refusal to make a
ruling in respect of depreciation of the Fixed Assets; and
(ii) if required by the State, at the State's expense, no later than 14
days before the last day for lodging an objection, lodge a written
objection with the Commissioner of Taxation containing such grounds as
the State shall reasonably require.
(d) If such objection is disallowed in whole or in part, the State shall
be entitled to elect by notice in writing whether or not the objection
should be further pursued at the expense of the State. If the State
elects to pursue the objection, it shall be entitled to conduct such
proceedings in the name of the Purchaser or entity related to the
Purchaser and to compromise the matter on such terms as the State
determines.
(e) The Purchaser shall pay any amount required to be paid under paragraph
(a) to the State within 14 days after the claim or deduction is
ultimately determined.
7. PROPERTY AND TITLE Property in, title to and risk of the Business and the
Assets as at the Completion Date shall vest in the Purchaser on the Completion
Date.
8. SECURITIES AND GUARANTEES Any securities or guarantees held from Customers
and capable of being exercised only by the State or the GEB may be exercised
or enforced by the Purchaser at its expense in the name of the GEB or the
State as and from the Completion Date, and the State shall do all things
reasonably required, and shall ensure that the GEB will do all things
reasonably required, to enable the Purchaser to do this.
9. TRADE DEBTORS The State shall procure that, upon Completion the GEB gives
to each trade debtor notice of the assignment of the debt to the Purchaser
under this agreement.
10. THE CONTRACTS
10.1. Vesting Subject to Completion and without prejudice to the rights of the
parties under clause 10.3, with effect from the Completion Date all the right
title and interest of the State and the GEB in or arising out of the Contracts
are vested in the Purchaser including all monies payable, whether already
payable or payable in the future and whether or not contingently payable.
10.2. Purchaser's Assumption of Obligations under Contracts Subject to clause
10.3, on the Completion Date, the Purchaser shall assume all and any of the
obligations of the GEB and the State under the Contracts and the Purchaser
shall indemnify and hold the GEB and the State harmless against-
(a) all liabilities, losses, damages, costs or expenses incurred or
suffered by the GEB and/or the State under any such Contract; and
(b) all actions, proceedings, claims or demands made against the GEB
and/or the State under any such Contract.
10.3. Payments in Respect of Prior Years' Harvests Where, under any Contract
with respect to Grain received by the GEB before Completion-
(a) there arises an obligation to pay an amount in respect of out-turn
performance under the Contract, the Purchaser and the State shall each
be liable to pay half that amount; and
(b) there arises a right to receive an amount in respect of out-turn
performance under the Contract, the Purchaser and the State shall each
be entitled to receive half that amount and the Purchaser shall within
7 days of receipt or payment of such amount or of ascertainment of any
such obligation or right, claim from the State, or account to the
State for, as the case requires, the amount received from or due to
the State as the case may be.
11. PLANT AND EQUIPMENT On or before Completion, the State shall, and shall
procure that the GEB shall execute and deliver to the Purchaser all documents,
deeds and instruments and do all things which may be necessary to vest the
benefit of the Plant and Equipment Leases in the Purchaser as from Completion.
12. LAND The State shall ensure that, prior to the Completion Date, the GEB,
complies with the Direction in relation to the transfer of Land to the GEB
Subsidiary.
13. PORT FACILITIES The shipping gallery and loader facility used by the
Business at the Port of Geelong Grain Terminal and the rights of the GEB under
section 13 of the Act to enter upon the pier at the Port of Portland and to
erect, maintain and operate appurtenances and appliances are Assets subject to
this agreement and the State shall ensure that those rights survive the repeal
of the Act.
14. STATE WARRANTIES AND INDEMNITIES
14.1. Authority The State warrants that-
(a) it has full power and authority to enter into, execute and complete
the transactions contemplated by this agreement;
(b) this agreement has been duly authorised, executed and delivered by the
State and is a valid and legally binding obligation of the State
enforceable against it in accordance with its terms subject to general
equity principles; and
(c) no other acts on the part of the State are necessary to authorise the
execution and delivery of the agreement by it and the completion of
the transactions contemplated on its part.
14.2. Warranties The State warrants that at Completion each of the statements
set out below is accurate and not misleading-
(a) the Direction has been fully complied with, or arrangements have been
made to comply with it, in all material respects;
(b) the Assets are not subject to any mortgage, pledge, charge or lien;
(c) the State has sufficient authority to enter this agreement and to
ensure that the Assets are transferred to the Purchaser;
(d) the written information given by or on behalf of the State to the
Purchaser, in respect of the GEB's assets and business is accurate and
not misleading in the context in which it was given;
(e) the GEB-
(i) complies with all laws and regulations relating to human health and
safety applicable to the Business and is not aware of any notice,
order, prosecution, action or suit taken or likely to be taken against
it pursuant to any such laws or regulations, except as disclosed to
the Purchaser;
(ii) has obtained and maintained all permits, orders or approvals required
by the Business under those laws and regulations; and
(iii) nothing is likely to prejudice the continuance of such permits,
orders or approvals;
(f) the Assets are substantially in the same condition (fair wear and tear
excepted) as the Assets were when inspected by the Purchaser, as part
of its due diligence investigations;
(g) no guarantee has been given by the GEB except as disclosed in writing
prior to the date of this agreement;
(h) except where previously advised to the Purchaser by the State or the
GEB, all material contracts entered in to by the GEB have been
disclosed to the Purchaser in writing prior to the date of this
agreement;
(i) the GEB is not involved in any material litigation or arbitration
proceedings and no such litigation or arbitration has been compromised
except as disclosed to the Purchaser in writing prior to the date of
this agreement on the basis that litigation and arbitration is
material if it involves a claim or claims totalling more than $100 000
which was made during the 5 years prior to the date of this agreement;
(j) the accounts of the GEB for the period ended 30 September 1994 ("1994
accounts") present fairly the financial position and assets and
liabilities of the GEB and its business at the date of those accounts;
(k) since the date of the 1994 accounts-
(i) the business of the GEB has been carried out in the ordinary course of
business;
(ii) no substantial asset of the GEB has been disposed of or acquired or
become subject to any option except in the ordinary course of
business;
(iii) no liability has been incurred except in the ordinary course of
business; and
(iv) there have been no brand names, copyright, franchises, intellectual
property, licences, patents or trademarks created, acquired or
revalued in respect of the GEB's business; and
(l) to the best of the State's knowledge and belief no contract to which
the GEB is a party is liable to be rescinded or terminated by any
other party by reason of a breach or default by the GEB, or by reason
of this agreement;
(m) to the best of the State's knowledge and belief each contract to which
the GEB is a party is binding on each party, valid and, subject to the
discretions applying in respect of equitable remedies, enforceable
according to its terms;
(n) other than those disclosed to the Purchaser in writing prior to the
date of this agreement, the GEB is not a party to any agreement with a
union or with its employees (and no such agreement or award applies to
the GEB) and the GEB has complied with its obligations under all such
agreements or awards;
(o) other than as disclosed to the Purchaser in writing prior to the date
of this agreement, the GEB has not entered into any contract of
employment with any Employee and except as provided in an applicable
award or contract has not entered into any agreement or arrangement
for payment to an Employee of a retirement, severance or redundancy
allowance or benefit;
(p) the GEB Subsidiary has not (other than for the purpose of the
Direction)-
(i) given any mortgage, charge or pledge or created any encumbrance over
its assets;
(ii) issued any security (within the meaning of "securities" as defined in
Section 92 of the Corporations Law); or
(iii) entered into any contract, incurred any debt or fine or assumed any
liability or obligation apart from any obligation pursuant to the
Direction other than in the ordinary course of business; and
(q) the assets of the GEB Subsidiary are substantially in the same
condition (fair wear and tear excepted) as when inspected by the
Purchaser, as part of its due diligence investigations.
14.3. Exclusion of Liability To the extent permitted by law, all other
warranties in respect of the Business, the Assets, the Liabilities and the
entitlements of the Employees are expressly excluded.
14.4. Indemnities
(a) Notwithstanding anything elsewhere contained in this agreement, the
State indemnifies the Purchaser in respect of every cause of action or
liability to a third party arising from any act done or omitted to be
done on or before the Completion Date by the GEB or any of its agents
or employees and in respect of any loss, damage, liability or payment
(legally required to be made), which the Purchaser suffers, incurs or
is liable for as a result of such an act or omission.
(b) Where any action or claim is instituted against the Purchaser to which
paragraph (a) may apply-
(i) the Purchaser shall notify the State of the action or claim and all
the relevant details and that a claim for indemnity is likely to be
made by the Purchaser under paragraph (a) of this clause;
(ii) the Purchaser must not agree to arbitrate, settle or compromise the
claim without the consent of the State;
(iii) any defence or action will be conducted in the name of the Purchaser
but according to the directions of the State having regard to the
ongoing business relationships of the Purchaser; and
(iv) the Purchaser shall render such assistance to the State as it may
reasonably require in connection with such defence, including
providing witnesses, documentary and other evidence and affording the
State reasonable access to all relevant books, records and files.
15. PURCHASER RELIES ON OWN JUDGEMENT
15.1. Own Judgment The Purchaser relies on its own-
(a) judgement and evaluation of the information and data supplied by or on
behalf of the State and the GEB including, without limitation,
discussions with officers, employees and agents of the State and the
GEB conducted at the Purchaser's discretion; and
(b) inspection and appraisal of the Fixed Assets, Assets and Liabilities,
including contractual and other rights.
15.2. Representations and Statements The Purchaser does not rely upon any-
(a) conduct of; or
(b) statements, warranties or representations (other than those specified
in this agreement) made to the Purchaser or to any other person by,
the State or the GEB or any person acting on behalf of the State or
the GEB including any officer, director, employee, agent or adviser of
any of them.
15.3. Acknowledgment The Purchaser acknowledges that-
(a) it has had the opportunity to-
(i) examine the information and data supplied by or on behalf of the State
and the GEB;
(ii) seek such independent advice as it considers necessary and make
enquires of the State, the GEB and other persons; and
(iii) access information with respect to those matters in connection with
its purchase of the Assets and assumption of the Liabilities;
(b) it is capable of evaluating the merits and risks associated with the
purchase of the Assets and the assumption of the Liabilities;
(c) to the extent that-
(i) the Purchaser has failed to make an inquiry of the State or the GEB as
part of the Purchaser's due diligence about a matter material to its
purchase of the Assets and assumption of the Liabilities; or
(ii) there is a fault or defect with any of the Assets, the cost of
rectification of which, taken individually or together with the cost
of rectifying any other fault or defect, involves the expenditure of
less than $100 000, the Purchaser foregoes its right to claim damages
under the warranties given in clauses 14.1 and 14.2 in relation to
such matter;
(d) none of-
(i) the State or the GEB; and
(ii) any person acting on behalf of the State or the GEB including any
officer, director, employee, agent or adviser of any of them, has
given any representation or warranty as to the future prospects of the
Business; and
(e) no person other than the State has authorised or caused the issue of
any invitation or offer in respect of the subject matter of this
agreement.
16. PURCHASER'S WARRANTIES The Purchaser, the ABB, Victorian Grain Services
and GrainCorp each warrant that-
(a) it has full power and authority to enter into, execute and complete
the transactions contemplated by this agreement;
(b) the execution of this agreement has been duly authorised by all
necessary corporate action on its behalf;
(c) it is satisfied that the Purchaser or the GEB Subsidiary has all
necessary licences, consents, authorisations and permits required for
the ownership and operation of the Business;
(d) it has completed its due diligence to its satisfaction;
(e) it is satisfied that the Assets and the Liabilities are all the assets
and liabilities that the Purchaser and the GEB Subsidiary is acquiring
and that the Assets are sufficient for the Purchaser and the GEB
Subsidiary to properly operate the Business; and
(f) except as disclosed to the State and the GEB in writing, the Purchaser
has not entered into an agreement, arrangement or understanding with
any person in respect of-
(i) the management or operation of the Business; or
(ii) the Purchaser's acquisition of the Assets including, without
limitation, the provision of finance to the Purchaser.
17. GROWER OWNERSHIP AND CONTROL
(a) The Purchaser and Victorian Grain Services shall ensure that all
Growers are progressively given an equitable opportunity to acquire an
interest in Victorian Grain Services and that by 1 January 2001 all
Growers will have been given such opportunity to acquire the entire
ownership of Victorian Grain Services.
(b) The ABB, Victorian Grain Services, GrainCorp and the Purchaser shall
ensure that the issued capital of the Purchaser is initially owned as
follows- ABB not less than 10% GrainCorp not less than 20% Victorian
Grain Services not less than 65%, and that such proportions of
ownership are maintained for at least 2 years.
18. PROHIBITION ON USE OF NAME The Purchaser, the ABB, Victorian Grain
Services and GrainCorp each agrees that it shall not, and shall ensure that
its employees, agents and assigns shall not use the name "Grain Elevators
Board" in connection with any of the Assets or the Business in any way
whatsoever after Completion.
19. EMPLOYEES
19.1. Offers by Purchaser The Purchaser shall offer employment as from the day
following the Completion Date to each of the Employees on terms comparable to
those upon which the Employees are employed by the GEB including, where an
Employee is a member of a Scheme, terms which have regard to the benefits
available to the Employee under that Scheme.
19.2. Release from Employment The State shall ensure that the GEB shall
unconditionally release from its services Employees who wish to accept the
Purchaser's offer of employment and shall use its best endeavours to ensure
that each of the Employees accepts the offers as made.
19.3. Entitlements The Purchaser undertakes to honour all Employee
Entitlements (whether accrued or accruing) existing on the Completion Date of
each Transferring Employee including, without limiting the generality of this
clause, entitlements to long service leave, sick leave, maternity leave and
recreation leave.
19.4. Conditions of Employment On and from the day following the Completion
Date, the Purchaser is responsible for and must comply with all Awards
relating to Transferring Employees and employment award conditions, as varied
in accordance with their terms, including (without limitation) conditions
relating to redundancy and termination of employment, of each Transferring
Employee.
19.5. Non-accepting Employees The Purchaser indemnifies and holds the State
and the GEB harmless against any payments paid to an Employee to whom no offer
of comparable employment with the Purchaser was made or to whom an offer of
employment was made but not accepted, in accordance with the provisions of
this agreement.
19.6. Indemnity The Purchaser indemnifies and holds the State and the GEB
harmless against all expenses, losses, damages and costs that the State and
the GEB may sustain or incur as a result of, whether directly or indirectly,
any claim by a Transferring Employee in relation to payment or non-payment of
salary, holiday pay and long service leave to such employees which accrue on
and after the day following the Completion Date.
20. SUPERANNUATION
20.1. Definitions In this clause-
(a) "Three Month Date" means the day which is three months after the
Completion Date;
(b) "Estimated Superannuation Provision" means the amount calculated under
clause 20.7(a) in relation to each Scheme;
(c) "Actual Superannuation Provision" means the amount calculated under
clause 20.8(a)(i) on the Three Month Date in relation to each Scheme;
and
(d) "Adjustment Amount" means the amount calculated under clause
20.8(a)(ii).
20.2. The Purchaser to Provide Superannuation Benefits The Purchaser shall be
responsible for the provision of superannuation benefits for Employees and
shall comply with the Superannuation Guarantee (Administration) Act 1992 and
the Superannuation Industry (Supervision) Act 1993 after the Completion Date.
20.3. Establishment or Identification of Purchaser's Fund Before the
Completion Date, the Purchaser shall establish or identify one or more
superannuation funds-
(a) which provide benefits to Employees in association with their
employment by the Purchaser to a level at least sufficient to avoid
liability for a superannuation guarantee charge under the
Superannuation Guarantee (Administration) Act 1992;
(b) which are regulated superannuation funds under the
Superannuation Industry (Supervision) Act 1993; and
(c) which have all necessary approvals and powers to receive transfers of
members' benefits from the Schemes.
20.4. Transfer of Members As and from the Completion Date, the Purchaser shall
arrange for all Transferring Employees to be admitted as members of a
Purchaser's Fund.
20.5. Election by Members The Trustees and the GEB shall arrange for
Transferring Employees to elect to either-
(a) transfer an amount in respect of their accrued entitlements in the
Schemes to a Purchaser's Fund or any other superannuation fund elected
by a Transferring Employee which complies with the requirements set
out in paragraphs 20.3(a), (b) and (c); or
(b) subject their accrued entitlements to the
Superannuation (Portability) Act 1989.
20.6. Transfer of Benefits On the Three Month Date, the Purchaser shall
arrange for an amount representing the entitlements of each Transferring
Member in the Schemes at the Completion Date, to be accepted by the Trustee of
a Purchaser's Fund or any other fund elected by the Transferring Member which
complies with the requirements in paragraphs 20.3(a), (b) and (c) as a
transfer into that fund.
20.7. Calculation and Payment of Superannuation Provision
(a) Before the Completion Date, GEB shall ensure that the actuary of each
Scheme estimates by way of actuarial assessment the Superannuation
Provision in relation to that Scheme as at the Completion Date, and
the GEB shall notify the Purchaser of that amount (the "Estimated
Superannuation Provision").
(b) The calculation of the Superannuation Provision for each Scheme shall
be on an actuarial basis recommended by the actuary of that Scheme and
approved by the State.
(c) Before the Completion Date, the GEB shall arrange for the Purchaser to
be authorised to pay the Superannuation Provision in respect of each
Scheme, to the Trustee of that Scheme.
(d) On the Completion Date, the Purchaser shall pay into a bank account
held in the name of the Purchaser, to which a representative of the
Purchaser and a representative of the State are joint signatories, the
aggregate amount of the Estimated Superannuation Provision in relation
to each Scheme.
(e) Within three Business Days of the Completion Date, the Purchaser shall
pay 95% of the amount of the Estimated Superannuation Provision
calculated for each Scheme under paragraph (b) (and held under
paragraph (d)) to the Trustee of that Scheme.
(f) The parties shall ensure that their nominated signatories to the bank
account described in paragraph (d) sign withdrawal forms relating to
that account for, but only for, the purpose of the payment required
under paragraph (e) or under clause 20.8(b).
(g) After the obligations under this clause 20 have been satisfied,
paragraph (f) shall no longer apply and the Purchaser shall not be
required to maintain a nominee of the State as a signatory to the bank
account described in paragraph (d).
20.8. Adjustment for Actual Superannuation Provision
(a) The GEB shall arrange for the actuary of each Scheme to calculate
before the Three Month Date-
(i) the Superannuation Provision as at the Completion Date (the "Actual
Superannuation Provision"); and
(ii) the excess of the Actual Superannuation Provision over the amount paid
under clause 20.7(e) to the Trustee of each Scheme (the "Adjustment
Amount"), and shall notify the Purchaser of those amounts.
(b) The Purchaser shall pay to the Trustee of each Scheme the Adjustment
Amount and interest on the Adjustment Amount calculated at 10% per
annum for the period between the Completion Date and the Three Month
Date, for that Scheme.
(c) Any payment required to be made under this clause shall be made within
14 days of the Three Month Date.
21. STAMP DUTY The State shall bear and be responsible for the payment of all
and any stamp duty payable in Victoria and the Purchaser shall bear and be
responsible for stamp duty payable in New South Wales, on or in respect of
this agreement or any instrument or transaction contemplated in or necessary
to give effect to this agreement or the Direction.
22. PUBLIC ANNOUNCEMENT
22.1. The Purchaser, ABB, Victorian Grain Services and GrainCorp The
Purchaser, the ABB, Victorian Grain Services and GrainCorp shall not, except
as required by law, make or cause to be made any public announcement of, or in
relation to, the sale and purchase of the Business or the Assets without the
prior written consent of each of the other parties.
22.2. The State The State may make public announcements of, or in relation to,
the sale of the Business and Assets.
23. PARTIES TO FACILITATE REGISTRATION OF OWNERSHIP
23.1. Transfer of Assets The State will and will ensure that the GEB will,
execute all documents and do all things reasonably necessary to facilitate the
registration of the Purchaser as the legal owner of the Assets at Completion.
23.2. Facilities on Land Owned by Third Parties Where the Assets comprise
facilities constructed on land which on the Completion Date is owned by a
person other than the State or the GEB or the GEB Subsidiary, the State
undertakes to execute and to ensure that the GEB or the GEB Subsidiary
executes all documents and do all things reasonably necessary to vest those
Assets in the Purchaser, together with any ancillary rights in relation to
land necessary for the conduct of the Business which are held by the State or
the GEB or the GEB Subsidiary, without further payment to the State by the
Purchaser.
24. DEFAULT AND TERMINATION
24.1. Events of Default In addition to its rights to terminate under clauses
4.3 and 25.3, the State may at its option terminate this agreement by notice
in writing to the Purchaser, the ABB, Victorian Grain Services and GrainCorp
if-
(a) any litigation is commenced or threatened against the Purchaser, the
ABB, Victorian Grain Services or GrainCorp or any judgment order or
decree is made by a court or tribunal against any of them which in the
State's reasonable opinion is material;
(b) a receiver, receiver and manager, liquidator, administrator or any
similar person is appointed to the Purchaser, the ABB, Victorian Grain
Services or GrainCorp or any action is taken which has the likely
effect of such appointment;
(c) the Purchaser, the ABB, Victorian Grain Services or GrainCorp does any
act or thing or omits to do any act or thing which will make it liable
to any fine, penalty or prosecution which in the State's reasonable
opinion is material;
(d) the Purchaser, the ABB, Victorian Grain Services or GrainCorp does any
act or thing or omits to do any act or thing which might adversely
affect (in the reasonable opinion of the State) its ability to perform
its obligations under this agreement;
(e) any part of the Purchase Price or any payment required to be paid by
the Purchaser under clause 6 is not paid when due and payable;
(f) any representation, warranty or statement made by the Purchaser, the
ABB, Victorian Grain Services or GrainCorp in connection with this
agreement is untrue or misleading (whether by omission or otherwise)
in any material respect when made; or
(g) the Purchaser defaults under, breaches any term of, or fails to comply
with the Direction.
24.2. Default Interest Any amount payable to the State under this agreement
not paid when due shall bear interest on the amount outstanding from time to
time at the same rate as is payable from time to time on a judgment for debt
entered in the Supreme Court of Victoria.
24.3. Termination by Purchaser The Purchaser may at its option terminate this
agreement by notice in writing to the State if-
(a) the State does any act or thing or omits to do any act or thing which
might adversely affect (in the reasonable opinion of the Purchaser)
the ability of the State to perform its obligations under this
agreement;
(b) any representation, warranty or statement made by the State in
connection with this agreement is untrue or misleading (whether by
omission or otherwise) in any material respect when made; or
(c) the State defaults under or breaches any term of the Direction.
25. PERFORMANCE SECURITY
25.1. Banker's Guarantee to secure Purchaser's Performance The Purchaser shall
at Completion provide to the State an unconditional irrevocable enforceable
banker's guarantee in favour of the State for the amount of $2 500 000 payable
on demand by the State, which is in a form and is given by a bank acceptable
to the State, and upon which any applicable stamp duty has been paid.
25.2. Guarantee The banker's guarantee shall be security for the due and
punctual payment of any amount required to be paid by the Purchaser under
clauses 6, 10.3 and 20.8 of this agreement.
25.3. Default in Performance
(a) If the Purchaser fails to perform any of the payment obligations
described in clause 25.2, the State may give the Purchaser a notice
requiring that the matter be remedied within seven Business Days.
(b) If a notice is given by the State under paragraph (a) and the matter
is not remedied (or, if the matter is incapable of remedy, agreement
has not been reached as to adequate monetary compensation) by the
expiration of the period specified in the notice, the State may by
further notice terminate this agreement in relation to that
obligation, whereupon-
(i) the State will be entitled to call on and apply for its own benefit up
to the full amount of the banker's guarantee provided under this
clause; and
(ii) without prejudice to any rights that have already accrued (including
any right to claim for damages), each party will be released from any
further obligations arising by virtue of this agreement in relation to
the relevant obligation.
26. ASSIGNMENT
26.1. No assignment ABB, Victorian Grain Services, GrainCorp or the Purchaser
may not assign any of their rights or obligations under this agreement except
with the prior written consent of the State, which may be withheld at its
absolute discretion.
27. LEGAL AND ACCOUNTING COSTS Each party bears its own legal, accounting and
other advisory costs and expenses in relation to the preparation, execution
and implementation of this agreement.
28. NOTICES
28.1. Method of Giving Notices A notice, consent, approval or other
communication (each a "Notice") under this agreement shall be signed by or on
behalf of the person giving it, addressed to the person to whom it is to be
given and-
(a) delivered to that person's address;
(b) sent by pre-paid mail to that person's address; or
(c) transmitted by facsimile to that person's address.
28.2. Time of Receipt A Notice given to a person in accordance with this
clause is treated as having been given and received-
(a) if delivered to a person's address, on the day of delivery if a
Business Day, otherwise on the next Business Day;
(b) if sent by pre-paid mail, on the third Business Day after posting; or
(c) if transmitted by facsimile to a person's address and a correct and
complete transmission report is received, on the day of transmission
if a Business Day, otherwise on the next Business Day.
28.3. Addresses for Notices For the purpose of this clause the address of a
person is the address set out below or another address of which that person
may from time to time give Notice to each other person- State: Attention: The
Secretary
Department of the Treasury and Finance Address: Level 7
55 Collins Street
MELBOURNE VIC 3000 Facsimile: (03) 9654 6861 Purchaser: Attention: The
Executive Director,
Grains Group
Victorian Farmers Federation Address: Level 3
Farrer House
24-28 Collins Street
MELBOURNE VIC 3000 Facsimile: (03) 9207 5539 GrainCorp: Attention: Mr Tom
Keene Address: Level 10
51 Druitt Street
SYDNEY NSW 2000 Facsimile: (02) 9325 9180 ABB: Attention: Mr Michael Iwaniw
Address: 123-130 South Terrace
ADELAIDE SA 5000 Facsimile: (08) 8321 1249 Victorian Grain Services:
Attention: The Executive Director,
Grains Group
Victorian Farmers Federation Address: Level 3
Farrer House
24-28 Collins Street
MELBOURNE VIC 3000 Facsimile: (03) 9207 5539
2.29. CONTINUITY OF GEB The State shall ensure that the GEB shall continue in
existence with undiminished power for as long as is necessary for it to
perform its obligations under this agreement for a period of up to 12 months
after the Completion Date.
30. GENERAL
30.1. No Merger Any rights and obligations of the parties under this agreement
which are expressed to operate or may have effect upon or after Completion or
have not been fulfilled in whole or in part by Completion, as the case may be,
(including the representations, warranties and indemnities made and given
pursuant to this agreement) shall not merge on Completion, but shall remain in
full force and effect.
30.2. Time of the Essence Time shall be of the essence of this agreement.
30.3. Waiver The non-exercise of or delay in exercising any power or right of
a party does not operate as a waiver of that power or right nor does any
single exercise of a power or right preclude any other or further exercise of
it or the exercise of any other power or right. A power or right may only be
waived in writing signed by the party to be bound by the waiver.
30.4. Amendment The parties may from time to time by agreement in writing vary
any provision of this agreement and-
(a) a Minister of the Crown must cause a copy of that agreement to be laid
before each House of Parliament within 6 sitting days of the House
following the making of that agreement;
(b) that agreement comes into operation on the expiration of 6 sitting
days after a copy of that agreement has been laid before each House of
Parliament unless revoked in whole or in part by either House of
Parliament;
(c) paragraphs (a) and (b) shall not apply to the giving of a waiver, a
failure of a party to require full or part performance of an
obligation or the granting of or agreement to an extension of time
under this agreement.
30.5. Attorneys Each attorney who executes this agreement on behalf of a party
declares that the attorney has no notice of the revocation or suspension of
the power of attorney under the authority of which the attorney executes this
agreement.
30.6. Severability Any provision in this agreement which is invalid or
unenforceable in any jurisdiction is to be read down for the purposes of that
jurisdiction, if possible, so as to be valid and enforceable, and is otherwise
capable of being severed to the extent of the invalidity or unenforceability,
without affecting the remaining provisions of this agreement or affecting the
validity or enforceability of that provision in any other jurisdiction.
30.7. Counterparts This Agreement may be executed in any number of
counterparts and all of those counterparts taken together constitute one and
the same instrument.
30.8. Further Assurance Each party shall do, sign, execute and deliver and
shall procure that each of its employees and agents does, signs, executes and
delivers, all deeds, documents, instruments and acts reasonably required of it
or them by notice from another party to effectively carry out and give full
effect to this agreement and the rights and obligations of the parties under
it.
30.9. Entire Agreement This Agreement is the entire agreement of the parties
on the subject matter. The only enforceable obligations and liabilities of the
parties in relation to the subject matter are those that arise out of the
provisions contained in this agreement. All representations, communications
and prior agreements in relation to the subject matter are merged in and
superseded by this agreement.
31. LAW AND JURISDICTION
31.1. Governing Law This Agreement is governed by the law in force in
Victoria.
31.2. Submission to Jurisdiction The parties submit to the non-exclusive
jurisdiction of the courts of Victoria and any courts which may hear appeals
from those courts in respect of any proceedings in connection with this
agreement. EXECUTED as an agreement. Signed for and on behalf of THE STATE OF
VICTORIA by the Honourable Alan Stockdale, MP, Treasurer in the presence of: ü
î ì þ
Peter Coatman ...............................................
Alan R. Stockdale ..................................... Witness:
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