Market City Sale Agreement

144 Pages·2016·50.69 MB·English

HERBERT
SMITH
FREEHILLS
Agreement
Market City Sale
Agreement
State of Western Australia (Seller)
Perth Markets Limited (Buyer OpCo)
One Funds Management Limited (as trustee for the
Perth Markets Land Trust) (Buyer Trustee)
Market City Operator Co Pty Ltd (Operator Co)
Market City Asset Manager Co Pty Ltd (as trustee for
the Market City Asset Trust) (Market City Asset
Trustee)
QV.l Building 250 St Georges Terrace Perth WA 6000 Australia T [phone] F [phone]
GPO Box U1942 Perth WA 6645 Australia herbertsmithrreehills.com DX 104 Perth
HERBERT
SMITH
FREEHILLS
Contents
Table of contents
1 Definitions and interpretation 3
1.1 Definitions .................................................................................................................. 3
1.2 Interpretation ............................................................................................................ 16
1.3 Business Day ........................................................................................................... 17
1.4 Inclusive expressions ............................................................................................... 17
1.5 Agreement components ........................................................................................... 17
1.6 Knowledge and belief .............................................................................................. 17
1.7 Joint and several liability .......................................................................................... 18
2 Termination 18
2.1 Termination by the Seller ......................................................................................... 18
2.2 Termination by the Buyer for Material Adverse Change .......................................... 18
2.3 Termination by either party for destruction of CTA .................................................. 18
2.4 Exclusivity ................................................................................................................ 19
2.5 Extension of period for termination .......................................................................... 20
2.6 Recourse to insurance .............................................................................................2 0
2.7 Effect of termination ................................................................................................. 21
2.8 No other right to terminate or rescind ...................................................................... 22
3 Sale and purchase 22
3.1 Sale Shares and Sale Units ..................................................................................... 22
3.2 Associated Rights ....................................................................................................2 2
3.3 Purchase Price ......................................................................................................... 22
3.4 Deposit ..................................................................................................................... 22
3.5 Actions on Completion ............................................................................................. 23
3.6 Payment of Deferred Consideration ........................................................................2 3
3.7 Title and risk ............................................................................................................. 23
4 Period before Completion 24
4.1 Carrying on of business ........................................................................................... 24
4.2 Restricted activity ..................................................................................................... 24
4.3 Permitted acts .......................................................................................................... 25
4.4 Access ..................................................................................................................... 25
4.5 GST registration ....................................................................................................... 26
4.6 Restrictions on the Market City Asset Trustee and Operator Co ............................ 26
4.7 Publication of Market City Transfer Order ............................................................... 26
5 Completion 26
5.1 Time and Place ........................................................................................................ 26
5.2 Completion ...............................................................................................................2 7
5.3 Notice to complete ...................................................................................................2 7
5.4 Completion simUltaneous ........................................................................................2 7
6 Market continuity 27
6.1 Minimum Market Standards ..................................................................................... 27
6.2 Warehousing capacity .............................................................................................2 8
6.3 Lease terms and occupancy .................................................................................... 28
6.4 Pass through of land tax and electricity ...................................................................2 8
6.5 Market Trading Rules .............................................................................................. 30
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SMITH
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Contents
6.6 Notification to State .................................................................................................. 30
6.7 Damages is an inadequate remedy ......................................................................... 30
6.8 Audit and reporting ................................................................................................... 30
6.9 Restriction on transfer .............................................................................................. 30
6.10 Restrictions on Change of Control ........................................................................... 32
6.11 Publication of wholesale fruit and vegetable information and pricing ...................... 32
7 Adjustment Statement 32
7.1 Adjustment Statement ............................................................................................. 32
7.2 Payment of Adjustment Amount .............................................................................. 34
7.3 Wrong pockets ......................................................................................................... 34
8 Employees 34
8.1 Offer of employment ................................................................................................ 34
8.2 Payment for transfer incentives ............................................................................... 35
8.3 New employees and terminating employees ........................................................... 35
8.4 Release .................................................................................................................... 36
8.5 Payment and indemnity for Personal Leave Benefits .............................................. 36
8.6 Payment and indemnity for Public Sector Benefits and Transition Payments ........ 36
8.7 Superannuation ........................................................................................................ 36
8.8 Cost apportionment on subsequent employment.. .................................................. 36
9 Transfer of Specified Contracts and Bank Guarantees 38
9.1 Transfer of Specified Contracts ............................................................................... 38
9.2 Obligations pending transfer .................................................................................... 38
9.3 Indemnities ............................................................................................................... 39
9.4 Termination .............................................................................................................. 39
9.5 Bank Guarantees ..................................................................................................... 39
9.6 Security Deposits ..................................................................................................... 40
9.7 Direction to tenants ................................................................................................. .40
10 Warranties 40
10.1 Warranties by the Seller ......................................................................................... .40
10.2 Independent Warranties .......................................................................................... 40
10.3 Reliance ................................................................................................................... 40
11 W&llnsurance Policy 41
11.1 No recourse in respect of Warranties ...................................................................... 41
11.2 W&I Insurance Policy taken out ............................................................................... 41
11.3 Required terms in W&I Insurance Policy ................................................................. 41
11.4 Status of W&I Insurance Policy ............................................................................... 42
11.5 Buyer's obligations in respect of W&I Insurance Policy .......................................... .42
11.6 Fraud ....................................................................................................................... .42
11.7 Benefit ..................................................................................................................... .43
11.8 Indemnity ................................................................................................................ .43
11.9 Inconsistency .......................................................................................................... .43
12 Qualifications and limitations on Claims 43
12.1 Disclosure ................................................................................................................ 43
12.2 No reliance .............................................................................................................. .44
12.3 Opinions, estimates and forecasts ........................................................................... 45
12.4 Maximum and minimum amounts ............................................................................ 45
12.5 Time limits ................................................................................................................ 46
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Contents
12.6 Disposal of the Business ......................................................................................... 46
12.7 Recovery under other rights and reimbursement ................................................... .46
12.8 No double claims ..................................................................................................... 47
12.9 Mitigation of loss ..................................................................................................... .47
12.10 General limitations ................................................................................................... 47
12.11 Buyer benefits ......................................................................................................... .48
12.12 Sole remedy ............................................................................................................ .48
12.13 Payments affecting the Purchase Price ................................................................... 49
12.14 Independent limitations ............................................................................................ 49
13 Procedures for dealing with Claims 49
13.1 Notice of Claims ....................................................................................................... 49
13.2 Third Party Claims ................................................................................................... 50
14 Buyer Warranties 51
14.1 Buyer Warranties ..................................................................................................... 51
14.2 Independent Warranties .......................................................................................... 52
14.3 Reliance ................................................................................................................... 52
15 Period after Completion 52
15.1 Access to records by Seller ..................................................................................... 52
15.2 Access to records by Buyer ..................................................................................... 52
15.3 Cease use of State Government Logos ................................................................... 53
15.4 Seller to provide assistance ..................................................................................... 53
15.5 Business Assets and Intellectual Property Rights ................................................... 53
15.6 GGG Intellectual Property Sublicense ..................................................................... 54
16 Limitation of liability of Buyer Trustee 54
16.1 Limitation of liability .................................................................................................. 54
16.2 Acts on behalf of Buyer Trustee .............................................................................. 55
16.3 Limitation not affected by other proVisions .............................................................. 55
16.4 Undertakings regarding the Buyer Trust... ............................................................... 55
16.5 Interpretation and paramountcy ............................................................................... 55
17 Confidentiality 56
18 Costs and expenses 57
18.1 Costs and expenses ................................................................................................ 57
19 GST 57
19.1 Definitions ................................................................................................................ 57
19.2 GST .......................................................................................................................... 57
19.3 Tax invoices ............................................................................................................. 58
19.4 Reimbursements ...................................................................................................... 58
19.5 Information, returns and accounting to end GST Group .......................................... 58
20 Notices 58
20.1 Form of Notice ......................................................................................................... 58
20.2 How Notice must be given and when Notice is received ......................................... 59
20.3 Notice must not be given by email or other electronic communication ................... 59
21 General 59
21.1 Governing law and jurisdiction ................................................................................. 59
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21.2 Service of process ................................................................................................... 59
21.3 Invalidity and enforceability ...................................................................................... 60
21.4 Waiver ......................................................................................................................6 0
21.5 Variation ................................................................................................................... 60
21.6 Assignment ..............................................................................................................6 0
21.7 Further action to be taken at each party's own expense ......................................... 60
21.8 Relationship of the parties ....................................................................................... 61
21.9 Exercise of rights ..................................................................................................... 61
21.10 Remedies cumulative ..............................................................................................6 1
21.11 Counterparts ............................................................................................................6 1
21.12 No merger ................................................................................................................ 61
21.13 Entire agreement ..................................................................................................... 61
21.14 No reliance ............................................................................................................... 61
21.15 Default interest. ........................................................................................................ 61
Schedules
Schedule 1
Notice details 64
Schedule 2
Deed of accession (clause 6.9) 65
Schedule 3
Adjustment Statement (clause 7.1) 67
Schedule 4
Warranties 69
Schedule 5
Buyer Warranties 80
Schedule 6
Completion Steps 83
Schedule 7
Purchase Price Allocation 86
Schedule 8
Permitted Freehold Encumbrances 87
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Contents
Signing page 89
Attachment 1
Market City Transfer Order
Herbert Smith Freehills owns the copyright in this document and using it without permission
is strictly prohibited.
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Market City Sale Agreement
Date ~
Between the parties
Seller State of Western Australia, acting through the Treasurer
of Level 13, Dumas House, 2 Havelock Street, West Perth Western
Australia 6005
(Seller)
Buyer OpCo Perth Markets Limited
ACN 608 334 989 of 280 Bannister Road, Canning Vale, WA, 6155
(Buyer OpCo)
Buyer Trustee One Funds Management Limited as trustee for the Perth Markets
Land Trust
ACN 117 797403 of Level 11, 20 Hunter Street, Sydney NSW 2000
(Buyer Trustee)
Operator Co Market City Operator Co Pty Lld
ACN 610129149 of Level 13, Dumas House, 2 Havelock Street, West
Perth Western Australia 6005
(Operator Co)
Market City Asset Market City Asset Manager Co Pty Ltd as trustee for the Market
Trustee City Asset Trust
ACN 610 128688 of Level 13, Dumas House, 2 Havelock Street, West
Perth Western Australia 6005
(Market City Asset Trustee)
Recitals 1. The Perth Market Authority (trading as Market City) (Market City)
currently owns and operates the wholesale fruit and vegetable
market located in Canning Vale, Western Australia.
2. Market City is a statutory authority established pursuant to the
Perth Market Act 1926 (WA) and currently owns the Business
Assets and Freehold Properties in that capacity.
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3. To facilitate the sale of the Business Assets and Freehold
Properties it is proposed that Market City will undertake a
restructure so that:
a. the Seller will become the sole shareholder in Operator Co and
the Market City Asset Trustee and the sole unit holder in the
Market City Asset Trust;
b. the Business Assets will be transferred to Operator Co on a
cash free and debt free basis;
c. the Market City Asset Trust will be established and the
Freehold Properties and Leases transferred to the Market City
Asset Trust; and
d. the Market City Asset Trustee will enter into the Market City
Ground Lease Agreement to lease the Freehold Properties to
Operator Co.
4. The Seller will own the Sale Shares and Sale Units following the
completion of the restructure above.
5. The Seller has agreed to sell and Buyer OpCo has agreed to buy
the Sale Shares on the terms and conditions of this agreement.
6. The Seller has agreed to sell and Buyer Trustee has agreed to buy
the Sale Units on the terms and conditions of this agreement.
The parties agree as follows:
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1 Definitions and interpretation
1.1 Definitions
The meanings of the terms used in this agreement are set out below. Capitalised terms not
otherwise defined in this agreement have the same meanings given in the Market City
Transfer Order.
Term Meaning
Accounting Standards the accounting standards required under the Financial Management
Act 2006 (Act), Financial Management Regulations 2007, Western
Australia Treasurer's Instructions made under section 78 of the Act,
and accounting standards and other requirements issued by the
Australian Accounting Standards Board as specified in the Western
Australia Treasurer's Instructions.
Accounts in respect of Market City the audited balance sheet of Market City as
at the Accounts Date and the audited profit and loss account of
Market City for the year ending on the Accounts Date.
Accounts Date 30 June 2015.
Adjustment Amount the amount set out in the last row of the:
final Adjustment Statement agreed between the Buyer and the
Seller under clause 7.1( f) (or deemed to have been agreed under
that clause); or
2 amended Adjustment Statement provided with the Expert's
Report,
whichever is applicable.
Adjustment Statement has the meaning given in clause 7.1.
Affiliates a shareholder who owns 20% of more of the shares of the party;
2 a related body corporate of the party;
3 a person the party controls;
4 a person that controls the party; and
5 a person that is controlled by an entity that controls the party,
(where 'control' has the meaning given in s50AA of the Corporations
Act).
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Definitions and interpretation
HERBERT
SMITH
FREEHILLS
Term Meaning
ASIC the Australian Securities and Investments Commission.
Associates has the meaning given in section 12 of the Corporations Act.
Authorisation any approval, licence, consent, authority, permit, certificate,
notification, declaration, exemption or waiver.
Annual Leave Benefits accrued annual leave.
Available Employee each Employee who has consented to the disclosure of their
employee information to the Buyer on or prior to the date of this
agreement.
Bank Guarantee each Specified Bank Guarantee and to the extent necessary to give
effect to the Market City Transfer Order, each WA Bank Guarantee.
Benchmark Tariff Synergy's published tariff that would be available to each Lessee if
they were operating on a standalone basis outside Market City but
within the South West Interconnected System or, if Synergy ceases
to exist the equivalent published tariff for Synergy's successor, or if
there is no successor, the average of relevant published tariffs of two
major energy suppliers on the South West Interconnected System.
Without prejudice to the cascade contemplated above in this
definition, if more than one published tariff (Synergy or otherwise) is
available and relevant to a Lessee, the Buyer can nominate the
applicable tariff in its discretion, acting reasonably.
Business the business carried out by Market City as at the date of this
agreement.
Business Assets has the meaning given in the Market City Transfer Order.
Business Day a day on which banks are open for business in Perth, Western
Australia, other than a Saturday, Sunday or public holiday in that city.
Business Records all original and certified copies of:
each Lease identified in the Tenancy Schedule, along with all
correspondence and any other notices or communications
relating to those Leases;
2 all site diagrams, plans, surveys or drawings owned by Market
City or the property of Market City; and
3 all books, records, documents, information, accounts and data
(whether machine readable or in printed form) owned by Market
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