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EXHIBIT 2.1
SEPARATION ARRANGEMENT AGREEMENT
RELATING TO THE SEPARATION OF THE ▇▇▇▇▇▇
& PAYKEL GROUP
▇▇▇▇▇▇ & PAYKEL INDUSTRIES LIMITED
AND
▇▇▇▇▇▇ & PAYKEL APPLIANCES HOLDINGS
LIMITED
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CONTENTS
1. INTERPRETATION....................................................... 3
2. SEPARATION........................................................... 9
3. THE SEPARATION ARRANGEMENT PROCESS................................... 10
4. CONDITIONS TO THE SEPARATION ARRANGEMENT............................. 10
5. CONDUCT OF THE PARTIES PRIOR TO THE SEPARATION DATE.................. 10
6. INTERNAL REORGANISATION.............................................. 12
7. ONGOING CO-OPERATION AND INDEMNITIES................................. 14
8. PAYMENT.............................................................. 20
9. REVERSAL OF SEPARATION ARRANGEMENT................................... 20
10. AMENDMENT............................................................ 20
11. TAXATION............................................................. 21
12. GENERAL.............................................................. 22
SCHEDULE 1: SEPARATION ARRANGEMENT PLAN.................................. 26
SCHEDULE 2: ▇▇▇▇▇▇ & PAYKEL GROUP........................................ 32
SCHEDULE 3: CONDITIONS.................................................... 33
SCHEDULE 4: APPLIANCES COMPANIES, FINANCE COMPANIES AND
HEALTHCARE COMPANIES................................................. 35
SCHEDULE 5: MISPLACED ASSETS AND LIABILITIES............................. 37
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This AGREEMENT is made on 23 August 2001
BETWEEN (1) ▇▇▇▇▇▇ & PAYKEL INDUSTRIES LIMITED, a company governed by
the laws of New Zealand (FPIL); and
AND (2) ▇▇▇▇▇▇ & PAYKEL APPLIANCES HOLDINGS LIMITED, a company
governed by the laws of New Zealand (FPAH).
INTRODUCTION
A. The ▇▇▇▇▇▇ & Paykel Group is a group of companies engaged in the
appliances, finance and healthcare businesses.
B. FPIL, the ultimate holding company of the ▇▇▇▇▇▇ & Paykel Group,
proposes to separate its appliances and finance businesses and its
healthcare business into two listed companies, namely:
(i) FPAH, which will own the appliances and finance businesses; and
(ii) ▇▇▇▇▇▇ & Paykel Healthcare Corporation Limited, which will own the
healthcare business.
C. It is also proposed that FPAH will sell a portion of the FPIL Shares it
acquires as part of the Separation Arrangement, amounting to
approximately 18% of the FPHC Shares then outstanding, to investors in
the United States.
D. It is proposed the various transactions will be implemented through a
High Court-approved arrangement under Part XV (section 236) of the
Act.
E. The boards of directors of FPIL and FPAH have determined that it is in
the best interests of their respective companies and shareholders to
enter into this Agreement and to implement the Separation Arrangement.
F. The parties have agreed to implement the Separation Arrangement and
related transactions on the terms set out in this Agreement.
IT IS AGREED
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement (including the Schedules to this Agreement), unless
otherwise specified or the context otherwise requires:
ACT means the Companies ▇▇▇ ▇▇▇▇, as amended from time to time;
ACTUAL ALLOCATED TOTAL BORROWINGS AS AT THE SEPARATION DATE has the
meaning ascribed to it in clause 6.2(f);
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AF INVESTMENTS means AF Investments Limited, a wholly-owned subsidiary
of FPAH;
AGENCY means any domestic or foreign court or tribunal or governmental
agency or other regulatory authority or administrative agency or
commission or any elected or appointed public official;
ANNUAL SHAREHOLDERS MEETING means the next occurring annual meeting of
FPIL Shareholders (and any adjournments or postponements of that annual
meeting) which meeting will include consideration, and if thought fit,
approval, of the Separation Arrangement;
APPLIANCES COMPANIES means ▇▇▇▇▇▇ & Paykel and its direct and indirect
ownership interests in the entities as disclosed in Schedule 4;
COMPLETION DATE means the date on which completion of the sale of FPHC
Shares pursuant to the U.S. Healthcare Offer occurs;
COURT means the High Court of New Zealand;
EXISTING EMPLOYEE SHARE SCHEMES means the ▇▇▇▇▇▇ & Paykel Employee Share
Scheme established by deed dated 15 October 1979, the ▇▇▇▇▇▇ & Paykel
Executive Staff Share Purchase Scheme established by deed dated 2
December 1983 and the ▇▇▇▇▇▇ & Paykel Australian Employee Share Purchase
Scheme established by deed dated 1 August 1996;
FINANCE COMPANIES means ▇▇▇▇▇▇ & Paykel Finance and its direct and
indirect ownership interests in the entities as disclosed in Schedule 4;
FINAL COURT ORDERS means the final orders of the Court approving the
Separation Arrangement and making it binding on FPIL, the FPIL
Shareholders and FPAH, made under Part XV of the Act;
▇▇▇▇▇▇ & PAYKEL means ▇▇▇▇▇▇ & Paykel Limited (to be renamed ▇▇▇▇▇▇ &
Paykel Appliances Limited after implementation of the Separation
Arrangement);
▇▇▇▇▇▇ & PAYKEL FINANCE means ▇▇▇▇▇▇ & Paykel Finance Limited;
▇▇▇▇▇▇ & PAYKEL GROUP means all the companies within the ▇▇▇▇▇▇ & Paykel
Group as set out in the corporate chart in Schedule 2;
▇▇▇▇▇▇ & PAYKEL HEALTHCARE means ▇▇▇▇▇▇ & Paykel Healthcare Limited;
FPAH means ▇▇▇▇▇▇ & Paykel Appliances Holdings Limited;
FPHC means ▇▇▇▇▇▇ & Paykel Healthcare Corporation Limited;
FPHC SHARES means shares in the capital of FPHC;
FPIL means ▇▇▇▇▇▇ & Paykel Industries Limited (to be renamed FPHC on the
Separation Date), provided that where it is appropriate to specifically
refer FPIL as it will exist on completion of the transactions in clauses
2.1(b)(i) to (x) of the Separation Arrangement Plan, FPIL will be
referred to as FPHC;
FPIL SHARES means shares in the capital of FPIL;
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HEALTHCARE COMPANIES means FPIL and its direct and indirect ownership
interests in the entities as disclosed in Schedule 4;
INTERIM COURT ORDERS means the interim orders of the Court in respect of
the Separation Arrangement, made under section 236(2) of the Act;
LAW means all laws, by-laws, rules, regulations, orders, ordinances,
protocols, codes, guidelines, policies, notices, directions and
judgements or other requirements of any government or Agency;
MATERIALLY ADVERSE means, with respect to the Separation Arrangement or
with respect to a person, a fact, circumstance, event or term that can
reasonably be expected to materially and adversely affect the expected
outcome of the Separation Arrangement or the operations, results of
operation, business or assets of that person taken as a whole;
MISPLACED ASSET has the meaning ascribed to it in Schedule 5;
MISPLACED LIABILITY has the meaning ascribed to it in Schedule 5;
NZSE means the New Zealand Stock Exchange;
NZ$ and NZ DOLLARS means the lawful currency of New Zealand;
RECORD DATE means the date by reference to which the entitlement of
holders of shares in FPIL to participate in the Separation Arrangement
Plan is determined, being 9 November 2001; provided however that if at
any time before such date (or before any extended Record Date as
contemplated in this definition), any event shall have occurred which,
in the opinion of the board of directors of FPIL, acting reasonably and
in good faith:
(a) is of such a material nature that it is no longer prepared to
recommend the Separation Arrangement to the FPIL Shareholders unless
circumstances change; or
(b) makes it impractical to proceed with the Separation Arrangement
at that time,
the Record Date may be extended to such revised Record Date as may be
selected and notified by FPIL to the NZSE as specified, being a date
which is not later than 31 December 2001 or such later date as may be
agreed by FPIL and FPAH and approved by the Court. Notification of any
revised Record Date must be given not less than 6 days (or such lesser
period as the NZSE may permit) before the then current Record Date;
SEPARATION ARRANGEMENT means the Court approved arrangement to effect
the separation of FPIL's appliances and finance businesses and FPIL's
healthcare business into two listed companies and to undertake the U.S.
Healthcare Offer, the key elements of which are described in the
Separation Arrangement Plan set out as Schedule 1, subject to any
amendment or variation made in accordance with this Agreement;
SEPARATION ARRANGEMENT PLAN means the separation arrangement plan set
out in Schedule 1, subject to any amendment or variation made in
accordance with this Agreement;
SEPARATION DATE means the date on which the appliances and finance
businesses of FPIL are acquired by FPAH under the Separation
Arrangement, being the date selected by FPIL and notified immediately to
the NZSE as the "Separation Date" for the purposes of this Agreement and
the Separation Arrangement, and being a date not later than 5 business
days after the Record Date;
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SHAREHOLDERS means shareholders in a company;
SHAREHOLDERS' MATERIALS means the FPIL notice of meeting, the FPHC
information memorandum and the FPAH information memorandum (and (or
including) any prospectus, investment statement, registration statement
or other documentation required pursuant to Law in connection with the
Annual Shareholders Meeting or the Separation Arrangement);
SUBSIDIARY has the meaning in the Act;
TOTAL BORROWINGS means all borrowings of the ▇▇▇▇▇▇ & Paykel Group
including:
(a) (i) term borrowings;
(ii) term borrowings (current);
(iii) bank overdraft; and
(iv) call borrowings; less
(b) cash and bank balances,
but excluding all borrowings of the finance business;
UNDERWRITING AGREEMENT means the agreement entered into between FPAH,
FPHC and certain underwriters referred to in clause 2.1(b)(xi) of the
Separation Arrangement Plan;
U.S. HEALTHCARE OFFER means the offer and sale by FPAH primarily to
U.S. investors under a U.S. public offering registered with the U.S.
Securities and Exchange Commission, as well as to certain qualifying
investors in other selected jurisdictions, of approximately 18% of
the FPHC Shares outstanding immediately following the acquisition of
the appliances and finance businesses of FPIL by FPAH under the
Separation Arrangement; and
US$ and US DOLLARS means the lawful currency of United States.
1.2 CONSTRUCTION OF CERTAIN REFERENCES
In this Agreement (including the Schedules to this Agreement), unless
otherwise specified or the context otherwise requires:
(a) AGREEMENT includes a contract, licence, franchise, undertaking,
arrangement or understanding (in each case whether oral or written),
deed or other document recording obligations (whether mutual or
otherwise), and includes that agreement as modified, supplemented,
novated or substituted from time to time;
(b) ASSETS includes the whole or any part of the relevant person's
business, undertaking, property, revenues or chose in action, in
each case, present or future, and a reference to an asset also
includes any legal or equitable interest in it;
(c) BUSINESS DAY means any day other than a Saturday, Sunday, a public
holiday in New Zealand or a day on which banks are not open for
business in Auckland, New Zealand;
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(d) EVENT includes any act, omission, transaction or other occurrence,
or any series of events, but excludes completion of the transactions
contemplated by this Agreement;
(e) LIABILITIES includes any obligation (whether present or future,
actual or contingent, secured or unsecured, joint or several, as
principal, surety by way of guarantee or otherwise) whether for the
payment of money or otherwise;
(f) LOSSES do not include consequential losses;
(g) an asset or liability is PROPERLY ATTRIBUTABLE to:
(i) the appliances or finance business; or
(ii) the healthcare business,
carried on by the ▇▇▇▇▇▇ & Paykel Group prior to the Separation Date
and by FPAH or FPHC (and their respective Subsidiaries) respectively
on and after the Separation Date, if:
(A) the parties have agreed that it will be attributable to
that business; or
(B) if not covered by (A), the asset or liability was
attributed to that business in the preparation of the
consolidated audited accounts of the ▇▇▇▇▇▇ & Paykel Group
as at 31 March 2001 or, in the case of an asset or
liability arising subsequent to 31 March 2001 the asset or
liability would be attributed to that business pursuant to
the terms of reference applied in the preparation of the
consolidated audited accounts of the ▇▇▇▇▇▇ & Paykel Group
as at 31 March 2001; or
(C) if not covered by (A) or (B), in respect of an asset, the
asset is used principally or arises principally in respect
of that business and, in respect of a liability, the
liability arises principally in respect of that business.
If the asset or liability is not covered by any of the categories in
(A) to (C) above, unless otherwise agreed by the parties, the asset
or liability shall be PROPERLY ATTRIBUTABLE to each of (i) the
appliances and finance businesses; and (ii) the healthcare business,
pro-rata in proportion to the respective values attributed by FPIL
to (iii) ▇▇▇▇▇▇ & Paykel and ▇▇▇▇▇▇ & Paykel Finance taken together;
and (iv) FPHC as at the date, and for the purposes, of this
Agreement (as such values are recorded in the letter between FPIL
and FPAH dated the same date as this Agreement).
For these purposes, the parties agree that, except as otherwise
provided in this Agreement or agreed in writing by the parties, any
taxation arising in connection with any aspect of the internal
reorganisation of the ▇▇▇▇▇▇ & Paykel Group referred to in clause
6.1 or any of the components of the Separation Arrangement shall
respectively be assets or liabilities properly attributable to:
(i) in the case of the internal reorganisation, the business
which the relevant aspect of the internal reorganisation is
designed to benefit; and
(ii) in the case of any of the components of the Separation
Arrangement (subject to any express provisions of the
Separation Arrangement Plan), each of:
(A) the appliances and finance businesses; and
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(B) the healthcare business,
pro rata in proportion to the respective values attributed
by FPIL to:
(C) ▇▇▇▇▇▇ & Paykel and ▇▇▇▇▇▇ & Paykel Finance taken
together; and
(D) FPHC,
as at the date, and for the purposes, of this Agreement (as
such values are recorded in the letter between FPIL and FPAH
dated the same date as this Agreement).
(h) RELIEF includes:
(i) any relief, loss, allowance, credit, deduction or set-off in
computing income, profits or gains for the purposes of
taxation, or any grant conferred on any person; or
(ii) any right to repayment of taxation (whether or not including
interest) available to that person,
whether in New Zealand or elsewhere; and
(i) TAXATION includes:
(i) all forms of taxation, withholdings, duties, dues, imposts,
levies and rates imposed in New Zealand or elsewhere, including
(but without limitation) income tax, withholding taxes, fringe
benefit tax, stamp duty, goods and services tax, gift duty,
customs or excise duties, regional or local taxes, municipal
taxes and accident compensation levies;
(ii) loss of relief; and
(iii) all interest, penalties, fines, costs and expenses incidental
and relating to or arising in connection with any such taxes,
withholdings, duties, dues, imposts, levies and rates or loss
of relief, or any actual or threatened claim or proceeding in
connection with any of them or the negotiation of any
settlement of any dispute as to the liability of any person
for any of them.
1.3 GENERAL REFERENCES
In this Agreement (including the Schedules to this Agreement), unless
otherwise specified or the context otherwise requires:
(a) CLAUSE, SCHEDULE, ANNEXURE
a reference to a clause, Schedule or Annexure is a reference to a
clause of, schedule to, or annexure to, this Agreement;
(b) SINGULAR INCLUDES PLURAL
the singular includes the plural and vice versa;
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(c) PERSON INCLUDES GROUPS
the word person includes an individual, a body corporate, a business
of FPIL, an association of persons (whether corporate or not), a
trust, a state and an agency of state, in each case, whether or not
having a separate legal personality;
(d) PERSON INCLUDES SUCCESSORS
a reference to a person includes a reference to the person's
executors, administrators, successors, substitutes (including, but
not limited to, persons taking by novation) and permitted assigns;
(e) ACCOUNTING MATTERS
all accounting terms used in this Agreement will have the meanings
attributable to such terms under generally accepted accounting
principles as applied by FPIL consistent with prior practice; and
determinations of an accounting nature required to be made will be
made in a manner consistent with generally accepted accounting
principles as applied by FPIL consistent with prior practice; and
(f) LEGISLATION
a reference to any legislation includes a modification and
re-enactment of, legislation enacted in substitution for and a
regulation, order-in-council and other instrument from time to time
issued or made under, that legislation.
1.4 HEADINGS
Ignore headings in construing this Agreement.
2. SEPARATION
Subject to the express provisions of this Agreement, the Separation
Arrangement and the other transactions provided for in this Agreement
and the agreements that it contemplates:
(a) FPIL will separate its appliances and finance businesses and its
healthcare business into two listed companies, namely:
(i) FPAH, which will own the appliances and finance businesses;
and
(ii) FPHC, which will own the healthcare business,
and will effect the U.S. Healthcare Offer, by implementing the
Separation Arrangement and related transactions, including the
following:
(A) FPAH will acquire from each FPIL Shareholder a proportion
of their FPIL Shares in return for FPAH Shares and a cash
payment amount;
(B) FPIL will buy back from FPAH 18,200,000 FPIL Shares in
consideration for a cash payment;
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(C) AF Investments will acquire the appliances and finance
business of FPIL by purchasing all the shares in ▇▇▇▇▇▇ &
Paykel and ▇▇▇▇▇▇ & Paykel Finance for cash;
(D) FPIL will change its name to FPHC; and
(E) FPAH will sell approximately 18% of the FPHC Shares then
outstanding (being a portion of the FPIL Shares that are
acquired by FPAH from FPIL Shareholders as described in
(A) above) pursuant to the U.S. Healthcare Offer.
3. THE SEPARATION ARRANGEMENT PROCESS
Subject to the terms and conditions of this Agreement:
(a) as soon as reasonably practicable after the execution of this
Agreement, and in any event before 30 September 2001, FPIL will
apply to the Court under section 236 of the Act for the Interim
Court Orders;
(b) provided the Interim Court Orders have been obtained, FPIL will call
and hold the Annual Shareholders Meeting as soon as reasonably
practicable after the Interim Court Orders have been obtained;
(c) FPIL will, in consultation with FPAH (as appropriate), prepare,
register and distribute as necessary or expedient the
Shareholders' Materials;
(d) provided the Separation Arrangement is approved at the Annual
Shareholders Meeting in accordance with the Interim Court Orders, as
soon as reasonably practicable after the Annual Shareholders
Meeting, FPIL will take the necessary steps to submit the Separation
Arrangement to the Court and seek the Final Court Orders in such
manner as the Court may direct; and
(e) provided the Final Court Orders are obtained, FPIL and FPAH will
take all action necessary to implement the Separation Arrangement in
accordance with the Final Court Orders.
4. CONDITIONS TO THE SEPARATION ARRANGEMENT
4.1 CONDITIONS
The respective obligations of FPIL and FPAH to complete the transactions
contemplated by the Separation Arrangement are subject to the
fulfilment, or the waiver by each of them, of the conditions set out in
Schedule 3.
4.2 SATISFACTION, WAIVER AND RELEASE OF CONDITIONS
On the acquisition of the appliances and finance businesses of FPIL by
FPAH under the Separation Arrangement in accordance with the Final Court
Orders, the conditions referred to in this clause 4 will be deemed
conclusively to have been satisfied, waived or released.
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5. CONDUCT OF THE PARTIES PRIOR TO THE SEPARATION DATE
5.1 MUTUAL OBLIGATIONS
(a) Subject to the terms and conditions of this Agreement, each of FPIL
and FPAH will, and will cause its Subsidiaries to, use all
reasonable efforts to satisfy each of the conditions to be satisfied
by it, as soon as is practical, and in any event before the
Separation Date, and take, or cause to be taken, all other action
necessary or expedient to permit the completion of the Separation
Arrangement and related transactions in accordance with this
Agreement, the agreements that it contemplates and applicable Law
and to co-operate with the other in connection with the Separation
Arrangement, including using all reasonable efforts to:
(i) obtain the Interim Court Orders, the approval of FPIL
Shareholders at the Annual Shareholders Meeting in the manner
specified in the Interim Court Orders and obtain the Final
Court Orders;
(ii) provide notice to, and obtain all necessary waivers, consents
and approvals or releases from, other parties to all material
agreements, understandings or other documents to which it or
its Subsidiaries is a party or by which it or its Subsidiaries
or its or their properties are bound or affected (including,
without limitation, shareholder agreements, leases, loan
agreements, guarantees and security), the failure of which to
provide or obtain would prevent the implementation of the
Separation Arrangement or which, individually or in the
aggregate, could reasonably be expected to be Materially
Adverse to either FPIL or FPAH and their respective
Subsidiaries (in each case taken as a whole), to the
implementation of the Separation Arrangement, to the
Appliances Companies and the Finance Companies (taken as a
whole), or to the Healthcare Companies (taken as a whole);
(iii) obtain all approvals, authorisations, consents, licences and
orders of, and effect or cause to be effected all
registrations and filings with, Agencies and other persons as
may be necessary to permit the implementation of the
Separation Arrangement, the failure of which to obtain or
effect would prevent the implementation of the Separation
Arrangement or could reasonably be expected to be Materially
Adverse to either FPIL or FPAH and their respective
Subsidiaries (in each case taken as a whole), to the
implementation of the Separation Arrangement, to the
Appliances Companies and the Finance Companies (taken as a
whole), or to the Healthcare Companies (taken as a whole); and
(iv) put in place separate funding arrangements for each of FPAH
and FPHC, such funding arrangements to take effect on the
Separation Date,
provided that in the process no agreement, understanding or other
document will be amended materially to increase the amount payable
under it or otherwise be materially more burdensome to FPIL or FPAH
or their respective Subsidiaries (in each case taken as a whole), to
the Appliances Companies and the Finance Companies (taken as a
whole), or to the Healthcare Companies (taken as a whole), without
the prior written approval of the other party, which will not be
unreasonably withheld.
(b) Neither FPIL nor FPAH will take any action that would preclude the
other from fulfilling its obligations under this Agreement and
(without limiting the foregoing) no party will take any steps that
might interfere with existing contractual relationships of the
other.
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5.2 BUSINESSES OF HEALTHCARE, APPLIANCES AND FINANCE COMPANIES PRIOR TO
THE SEPARATION DATE
(a) Prior to the Separation Date, unless FPAH otherwise agrees in
writing (which agreement will not be withheld unreasonably) or as
otherwise expressly contemplated or permitted by this Agreement or
the agreements that it contemplates, FPIL will conduct, or cause its
Subsidiaries to conduct, the businesses of the Healthcare Companies,
the Appliances Companies and the Finance Companies in the ordinary
course of business, in a manner consistent with previous practices
and policies of FPIL and to accommodate the separation of the
Appliances Companies and the Finance Companies from the ▇▇▇▇▇▇ &
Paykel Group;
(b) From the date of this Agreement, FPIL will procure that the
Appliances Companies and the Healthcare Companies individually fund
their working capital requirements through nominated bank accounts.
5.3 DEFENCE OF PROCEEDINGS
Each of FPIL and FPAH will vigorously defend any lawsuits or other legal
proceedings brought against it or any of its Subsidiaries challenging
this Agreement or the completion of the Separation Arrangement or the
transactions contemplated by this Agreement. Neither FPIL nor FPAH will
settle or compromise (or permit any of its Subsidiaries to settle or
compromise) any claim brought in connection with this Agreement, the
Separation Arrangement or any transaction contemplated by this Agreement
without the prior written consent of the other.
5.4 REGISTRAR AND TRANSFER AGENT
FPIL will permit the registrar and transfer agent for the FPIL shares to
act as depository in connection with the Separation Arrangement and
instruct that transfer agent to provide to FPAH (and such persons as it
may designate) at such times as it may request such information and such
other assistance as it may reasonably request in connection with the
implementation and completion of the Separation Arrangement.
6. INTERNAL REORGANISATION
6.1 INTERNAL REORGANISATION
On or before the Separation Date, FPIL will undertake an internal
reorganisation of the ▇▇▇▇▇▇ & Paykel Group to ensure that:
(a) the corporate structure of the ▇▇▇▇▇▇ & Paykel Group is as set
out in the corporate chart in Schedule 2;
(b) the Appliances Companies are the direct or indirect legal and
beneficial owner of all the assets and liabilities properly
attributable to the appliances business as carried on by the ▇▇▇▇▇▇
& Paykel Group prior to the Separation Date;
(c) the Finance Companies are the direct or indirect legal and
beneficial owner of all the assets and liabilities properly
attributable to the finance business as carried on by the ▇▇▇▇▇▇ &
Paykel Group prior to the Separation Date; and
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(d) the Healthcare Companies are the direct or indirect legal and
beneficial owner of all the assets and liabilities properly
attributable to the healthcare business as carried on by the ▇▇▇▇▇▇
& Paykel Group prior to the Separation Date.
6.2 ALLOCATION OF TOTAL BORROWINGS
(a) Notwithstanding clause 6.1, FPIL will procure that Total Borrowings
will be allocated to FPIL (on a non-consolidated basis), to the
healthcare business and to the appliances business as at the
Separation Date (and immediately prior to implementation of the
Separation Arrangement Plan) as follows:
(i) FPIL and the healthcare business will be allocated an amount of
Total Borrowings which will result in FPIL (after receipt from
AF Investments of the cash component of the purchase price of
the appliances and finance business sold by FPIL to AF
Investments under the Separation Arrangement Plan) having cash
in the range of $30 million to $35 million and the healthcare
business holding Total Borrowings in its foreign subsidiaries
of $5 million to $10 million; and
(ii) the balance of Total Borrowings will be allocated to the
appliances business.
(b) Notwithstanding clause 6.1, all borrowings incurred in respect of
the finance business will remain with the finance business.
(c) Nothing in this clause prevents FPIL from paying, prior to the
Separation Date, any distribution to FPIL Shareholders authorised by
the board of directors of FPIL for payment prior to that date nor
prevents ▇▇▇▇▇▇ & Paykel Group companies paying dividends to FPIL
prior to the Separation Date to enable FPIL to make such
distributions to FPIL Shareholders.
(d) FPIL will ensure that as at the Separation Date the separate funding
arrangements that are put in place as required by clause 5.1(a)(iv)
and paragraph (i) of Schedule 3 for each of FPAH and FPHC reflect
the debt allocations in this clause 6.2.
(e) At the date of this Agreement, FPIL and FPAH have agreed the "Total
Borrowings Attributable to Appliances" for the purposes of the
Separation Arrangement Plan.
(f) As soon as practicable after the Separation Date, FPHC (in its
capacity as the continuing FPIL) will calculate the actual amount of
Total Borrowings as at the Separation Date (and immediately prior to
implementation of the Separation Arrangement Plan) allocated to the
appliances business and have a director of FPHC certify those
amounts in a statement sent to FPAH.
This amount, together with the amount of $5 million to $10 million
held by the healthcare business pursuant to clause 6.2(a), will
become the "Actual Allocated Total Borrowings as at the Separation
Date" for the purposes of clause 6.4.
6.3 MISPLACED ASSETS AND LIABILITIES
If after the Separation Date either party identifies any asset or
liability:
(a) held by FPHC or any of its Subsidiaries that is properly
attributable to the appliances or finance business as carried on by
the ▇▇▇▇▇▇ & Paykel Group prior to the Separation Date and by FPAH
and its Subsidiaries on or after the Separation Date; or
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(b) held by FPAH or any of its Subsidiaries that is properly
attributable to the healthcare business as carried on by the ▇▇▇▇▇▇
& Paykel Group prior to the Separation Date and by FPHC and its
Subsidiaries on or after the Separation Date,
the provisions set out in Schedule 5 shall apply prior to any party
having recourse to any other remedy at law or in equity.
6.4 EXCEPTION TO MISPLACED ASSETS AND LIABILITIES FOR TOTAL BORROWINGS
The allocation of Total Borrowings to the appliances business and the
healthcare business under clause 6.2 as per the Actual Allocated Total
Borrowings as at the Separation Date shall be correct for all purposes
and shall not be subject to any adjustment pursuant to clauses 6.1 or
6.3.
6.5 EXCEPTION TO MISPLACED ASSETS AND LIABILITIES FOR EMPLOYEE SHARE
SCHEMES LOANS
After the Separation Date, FPHC will continue to hold and administer
loans made to employees under FPIL's Existing Employee Share Schemes and
such loans shall not be subject to clauses 6.1 or 6.3.
6.6 ELECTRICITY
Prior to the Separation Date, the parties restructure the current
arrangements which apply to the supply of electricity and the provision
of line function services to each of FPAH and FPIL on the basis of
either:
(a) having the third party supplier of electricity and the third party
provider of line function services agree to provide those services
on a separate basis to each of FPAH and FPIL; or
(b) failing those arrangements being satisfactory to FPAH and FPIL, on
the basis that FPAH and FPIL enter into appropriate back to back
arrangements in respect of the existing electricity supply agreement
and network and connection services agreement.
7. ONGOING CO-OPERATION AND INDEMNITIES
7.1 USE OF ▇▇▇▇▇▇ & PAYKEL NAME
Prior to the Separation Date, FPIL will, and will procure FPAH, ▇▇▇▇▇▇ &
Paykel Limited, ▇▇▇▇▇▇ & Paykel Finance Limited and ▇▇▇▇▇▇ & Paykel
Healthcare Limited to, enter into a deed of agreement on trade marks
under the terms of which, with effect from the Separation Date:
(a) ▇▇▇▇▇▇ & Paykel Limited assigns to each of ▇▇▇▇▇▇ & Paykel Finance
Limited and ▇▇▇▇▇▇ & Paykel Healthcare Limited its rights in respect
of the ▇▇▇▇▇▇ & Paykel name (and certain other associated names) for
certain agreed international classes of trademarks;
(b) ▇▇▇▇▇▇ & Paykel Limited agrees to change its name to include
"Appliances" from the time it is no longer a subsidiary of FPIL;
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(c) ▇▇▇▇▇▇ & Paykel Limited, ▇▇▇▇▇▇ & Paykel Finance Limited and ▇▇▇▇▇▇
& Paykel Healthcare Limited will use their respective best
endeavours to distinguish their respective businesses from each
other; and
(d) each of FPHC and FPAH will be authorised to use the relevant trade
marks and undertake to comply with the relevant provisions of the
Deed of Agreement.
7.2 USE OF DOMAIN NAMES
Prior to the Separation Date, FPIL will procure that ▇▇▇▇▇▇ & Paykel
Limited and ▇▇▇▇▇▇ & Paykel Healthcare Limited enter into a partial deed
of assignment of domain names, deed of assignment of domain names and
web page and link hosting agreement under the terms of which, with
effect from the Separation Date:
(a) each of ▇▇▇▇▇▇ & Paykel Limited and ▇▇▇▇▇▇ & Paykel Healthcare
Limited will be entitled to the common use of the domain names
"▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇" and "fisher&▇▇▇▇▇▇.▇▇▇ (and certain associated
domain names);
(b) ▇▇▇▇▇▇ & Paykel Healthcare Limited is assigned the right to use the
domain name "▇▇▇▇▇▇▇.▇▇▇" and certain other associated domain names;
(c) for a period of five years after the Separation Date, ▇▇▇▇▇▇ &
Paykel Limited will maintain, and provide links to ▇▇▇▇▇▇ & Paykel
Healthcare Limited websites from its websites linked to, the common
domain names referred to in subclause (a) above; and
(d) each of ▇▇▇▇▇▇ & Paykel Limited and ▇▇▇▇▇▇ & Paykel Healthcare
Limited will forward to the other any email queries received related
to the others business.
7.3 JOINT PROCUREMENT INITIATIVES
(a) FPAH and FPIL will procure that on or around 30 January 2002 and
then on or around the last days of each three month period
thereafter, representatives of FPAH and FPHC respectively meet to
discuss joint procurement initiatives, where the joint procurement
of goods and/or services by the two companies would produce obvious
efficiencies for both organisations.
(b) Neither company will be obliged to proceed with any joint
procurement initiative suggested by the other.
(c) At the representatives meeting to be held on or around 30 January
2003 FPAH and FPHC will review whether they wish to continue with
the joint procurement initiatives for a further year (with similar
annual reviews each year thereafter).
7.4 TECHNOLOGY INITIATIVES
With effect from the Separation Date:
(a) In relation to existing technologies developed by the ▇▇▇▇▇▇ &
Paykel Group prior to implementation of the Separation Arrangement
each of FPAH and FPHC will keep the other informed on a timely basis
of any new potential applications or developments of the existing
technologies which either FPAH or FPHC consider would be beneficial
to the other's business. This obligation is to continue for one year
after the Separation
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Date and will continue after that date unless either party gives to
the other six months notice of termination.
(b) Either FPAH or FPHC may request the other to provide R&D/engineering
services to the other on a basis agreed at the time of request.
(c) If either FPAH or FPHC develop new technology which they consider
might be of benefit to the other, then at the developing company's
election, it may inform the other of the development with a view to
agreeing a mutually beneficial basis for the further development or
sharing of that new technology.
(d) FPIL will procure ▇▇▇▇▇▇ & Paykel Limited to ▇▇▇▇▇ ▇▇▇▇▇▇ & Paykel
Healthcare Limited a patent licence to use certain motor technology
as agreed between the parties from time to time.
(e) Each of FPAH and FPHC will keep all information relating to any of
the other company's technology in the strictest of confidence and
will enter into any reasonable form of confidentiality agreement
required by the other as a precondition to any disclosure of
confidential information.
7.5 ADMINISTRATION OF EMPLOYEE SHARE SCHEMES
(a) On and after the Separation Date, FPHC will continue to administer
all outstanding loans under the Existing Employee Share Schemes.
(b) Where employees of FPAH or its Subsidiaries are having regular
deductions taken from their remuneration for the purposes of
repaying outstanding loans under the Existing Employee Share
Schemes, FPAH will use all reasonable endeavours to continue such
deductions and/or repayments after the Separation Date until all
such outstanding loans are repaid and will promptly pay all amounts
so deducted and/or received to FPHC.
(c) FPAH will notify FPHC on a timely basis of any employees of FPAH or
its Subsidiaries who have outstanding loans under the Existing
Employee Share Schemes but who become no longer entitled to have
shares vest in their names under the terms of the relevant employee
share scheme by virtue of ceasing to be employed by FPAH or one of
its Subsidiaries or other relevant circumstances.
7.6 LIABILITY INSURANCE
(a) On and after the Separation Date, the liability insurance policy,
travel insurance policies and death by accident policy for nominated
expatriates currently held by FPIL (as such policies have been
amended in light of the Separation Arrangement) will be maintained
for the benefit of and in the names of both FPAH and FPHC.
(b) Each of FPAH and FPHC will immediately notify the other of any claim
made under any such policy giving all details of the claim and
impact on the policy as the other may reasonably require.
(c) Each of FPAH and FPHC will pay such proportion of the premium
payable in respect of any such policy as is equivalent to the
proportion of premium in respect of that policy historically
attributed to the appliances and finance business and the healthcare
business respectively. If either FPAH or FPHC becomes aware that any
portion of the premium payable by the other or any excess payment
required under any such policy should have been paid by the other
company but has not been paid, then it may
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immediately make that payment to the insurer and the company which
should have made that payment but has not, will indemnify the paying
company for any amount so paid.
(d) FPAH and FPHC will procure that representatives of FPAH and FPHC
each year meet on or around the anniversary of the Separation Date
to decide whether to continue with such joint insurance policies or
to effect their own insurance policies.
7.7 ACCESS TO INFORMATION
From and after the Separation Date FPAH will retain, and will procure
its Subsidiaries to retain, all records pertaining to FPIL (other than
the items agreed to be retained by FPIL), the Appliances Companies and
the Finance Companies that relate to the period prior to the Separation
Date for a period of 8 years from the date of their creation and permit
FPHC and its representatives to inspect those records, upon reasonable
notice, during normal business hours and to make copies of those
records, as may be required by FPHC to discharge any obligations that it
may have.
7.8 CORPORATE OFFICE FUNCTIONS
The existing corporate office of FPIL will continue to provide corporate
office functions to both FPAH and FPHC for a transitional period from
the Separation Date to 31 December 2001, on the terms agreed between
FPHC and FPAH.
7.9 SUPERANNUATION
(a) As soon as practicable after the Separation Date and in any event no
later than six months after that date, FPHC will procure ▇▇▇▇▇▇ &
Paykel Healthcare to offer to all employees of the Healthcare
Companies who are members of the ▇▇▇▇▇▇ & Paykel Super Plan (▇▇▇▇▇▇
& PAYKEL PLAN) and whose benefits are determined on a defined
contribution basis (DEFINED CONTRIBUTION AFFECTED MEMBERS)
membership of a superannuation scheme (HEALTHCARE SCHEME)
established or made available for the purpose of providing benefits
that are equivalent to those provided to the Defined Contribution
Affected Employees under the ▇▇▇▇▇▇ & Paykel Plan immediately prior
to the Separation Date.
(b) FPHC will procure ▇▇▇▇▇▇ & Paykel Healthcare to use reasonable
endeavours to procure that the Defined Contribution Affected
Employees consent to transfer to the Healthcare Scheme. All
communications to Defined Contribution Affected Employees relating
to the transfer offer will:
(i) be subject to written approval by FPAH, which approval
should not be unreasonably withheld or delayed; and
(ii) specify the closing date for acceptance of the transfer
offer.
(c) FPAH will procure that, as soon as practicable after the closing
date for acceptance of the transfer offer in clause 7.9(a) and in
any event no later than 60 days after that date, the trustee of the
▇▇▇▇▇▇ & Paykel Plan will, in respect of all Defined Contribution
Affected Employees who accept the transfer offer in clause 7.9(a)
(TRANSFERRING AFFECTED EMPLOYEES), transfer to the trustee of the
Healthcare Scheme assets whose value (TRANSFER VALUE) is no less
than the sum of:
(i) the Transferring Affected Employees' Accrued Benefits (as
defined in the trust deed for the ▇▇▇▇▇▇ & Paykel Plan) or, if
the aggregate Accrued Benefits under
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the ▇▇▇▇▇▇ & Paykel Plan at the relevant time are greater than
the assets of the ▇▇▇▇▇▇ & Paykel Plan, the proportionate
share of the Transferring Affected Employees' Accrued Benefits
assuming all Accrued Benefits are scaled down pro rata to the
extent necessary to ensure that in aggregate they equal the
assets of the ▇▇▇▇▇▇ & Paykel Plan; and
(ii) a share of the assets of the ▇▇▇▇▇▇ & Paykel Plan (if any)
that exceed the Accrued Benefits of all members of the ▇▇▇▇▇▇
& Paykel Plan calculated as the proportion that the Accrued
Benefits of the Transferring Affected Employees bear to the
Accrued Benefits of all members of the ▇▇▇▇▇▇ & Paykel Plan,
as at the day preceding, if clause 6.1 of the trust deed of the
▇▇▇▇▇▇ & Paykel Plan applies, the cessation of participation, and,
if clause 7.3 of the trust deed of the ▇▇▇▇▇▇ & Paykel Plan applies,
the date of transfer, as determined by the ▇▇▇▇▇▇ & Paykel Plan's
actuary, based on the actuarial assumptions and methods adopted in
the ▇▇▇▇▇▇ & Paykel Plan's actuarial report prepared as at 1 April
2000, and notified to FPHC.
(d) In respect of any Defined Contribution Affected Employees who do not
accept the transfer offer in clause 7.9(a) by the closing date of
the offer and any other employees of the Healthcare Companies who
are members of the ▇▇▇▇▇▇ & Paykel Plan to whom the transfer offer
in clause 7.9(a) is not made (together, NON-TRANSFERRING AFFECTED
EMPLOYEES), subject to clause 7.9(e), FPAH and FPHC will agree the
arrangements to be put in place and the following provisions shall
apply, unless the parties agree otherwise:
(i) FPHC will procure that ▇▇▇▇▇▇ & Paykel Healthcare will:
(A) comply with its obligations under the trust deed for
the ▇▇▇▇▇▇ & Paykel Plan;
(B) not invite any other employees of the Healthcare
Companies to become members of the ▇▇▇▇▇▇ & Paykel Plan.
(ii) FPHC will procure ▇▇▇▇▇▇ & Paykel Healthcare to pay to the
trustees of the ▇▇▇▇▇▇ & Paykel Plan monthly an amount
equivalent, after deducting specified superannuation
contribution withholding tax, to the projected unit cost for
the Non-transferring Affected Employees remaining in the
▇▇▇▇▇▇ & Paykel Plan for the benefits accruing to those
Non-transferring Affected Employees (if any) in the normal
course of events during their membership in the ▇▇▇▇▇▇ &
Paykel Plan (less those Non-transferring Affected Employees'
contributions to the ▇▇▇▇▇▇ & Paykel Plan), as calculated by
the trustee of the ▇▇▇▇▇▇ & Paykel Plan based on the actuarial
assumptions and methods adopted in the ▇▇▇▇▇▇ & Paykel Plan's
then most recent actuarial report subject to consistency with
the FAS 87 actuarial principles.
(iii) FPAH will use all reasonable endeavours to ensure that no
actions are taken or discretions exercised, without FPHC's
prior written consent (not to be unreasonably withheld or
delayed), that would alter the level of benefits or
contributions under the rules of the ▇▇▇▇▇▇ & Paykel Plan from
the level applicable immediately prior to the Separation Date
or make any other amendments to the trust deed of the ▇▇▇▇▇▇ &
Paykel Plan that would adversely impact on ▇▇▇▇▇▇ & Paykel
Healthcare or the employees of the Healthcare Companies who
are members of the ▇▇▇▇▇▇ & Paykel Plan until all such
employees cease to be beneficiaries of the ▇▇▇▇▇▇ & Paykel
Plan.
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(e) Notwithstanding clause 7.9(d)(iii), FPAH will procure that, in
respect of any Defined Contribution Affected Employees who do not
accept the transfer offer in clause 7.9(a) by the closing date of
the offer, the ▇▇▇▇▇▇ & Paykel Plan will be amended so that, as from
the closing date of the transfer offer, no further contributions are
made by those members and no insured benefits will be provided in
respect of them.
(f) If FPHC does not accept the determination of the transfer value
within 10 days after notice of such determination is received by
FPHC, the issue in dispute will be referred, on the application of
either FPAH or FPHC, to an independent actuary nominated by the
President of the New Zealand Society of Actuaries for determination.
Such person will act as an expert and not as an arbitrator and the
provisions of the Arbitration ▇▇▇ ▇▇▇▇ will not apply to such
determination, which will be final and binding. FPAH and FPHC will
bear equally the expert's costs in making such determination. FPAH
will provide and use its reasonable endeavours to procure the
trustee of the ▇▇▇▇▇▇ & Paykel Plan to provide to FPHC information
reasonably required by FPHC to verify the calculations.
7.10 TAX
FPHC and FPAH will co-operate with each other, where necessary, to
ensure the efficient filing of relevant tax returns for the year ended
31 March 2002.
7.11 CROSS INDEMNITY
In addition to, and without limiting, the provisions of clause 6.3, from
the Separation Date:
(a) FPHC shall indemnify FPAH and its Subsidiaries from and against any
and all losses, damages, liabilities, claims, costs and expenses
(including, without limitation, taxation) sustained or incurred by
FPAH or any of its Subsidiaries on or after the Separation Date that
relate to the healthcare business as carried on by the ▇▇▇▇▇▇ &
Paykel Group prior to the Separation Date and by FPHC and its
Subsidiaries on or after the Separation Date;
(b) FPAH shall indemnify FPHC and its Subsidiaries from and against any
and all losses, damages, liabilities, claims, costs and expenses
(including, without limitation, taxation) sustained or incurred by
FPHC or any of its Subsidiaries on or after the Separation Date that
relate to the appliances or finance businesses as carried on by the
▇▇▇▇▇▇ & Paykel Group prior to the Separation Date and by FPAH and
its Subsidiaries after the Separation Date.
For the avoidance of doubt, it is acknowledged that the indemnities in
this clause 7.11 do not apply to any losses, damages, liabilities,
claims, costs or expenses to the extent they relate to any holding of
shares in FPHC by FPAH.
7.12 INDEMNITY FOR UNTRUE STATEMENTS
In addition to, and without limiting, the indemnities in this Agreement,
from the Separation Date:
(a) FPHC shall, to the fullest extent permitted by law, indemnify each
of FPAH and each of its directors and officers from time to time
from and against any and all losses, damages, liabilities, claims,
costs and expenses sustained or incurred by FPAH or any such person
arising in respect of any untrue statement relating to FPHC or the
healthcare business in any of the Shareholder Materials or the
Underwriting Agreement; and
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(b) FPAH shall, to the fullest extent permitted by law, indemnify each
of FPHC and each of its directors and officers from time to time
from and against any and all losses, damages, liabilities, claims,
costs and expenses sustained or incurred by FPHC or any such person
arising in respect of any untrue statement relating to FPAH or the
appliances or finance business in any of the Shareholder Materials
or the Underwriting Agreement.
For the avoidance of doubt, it is acknowledged that the indemnities in
this clause 7.12 do not apply in respect of Shareholders Materials that
are prepared after the Separation Date (if any).
7.13 GENERAL CO-OPERATION
For the first six months after the Separation Date, the parties will
procure their respective representatives to meet on a monthly basis to
consider any internal reorganisation, sharing, indemnity or taxation
issues as necessary. At the last such meeting, the parties will
determine whether any further meetings are required and if necessary,
agree an ongoing programme. If any matter arises at any such meeting
that is not resolved by the representatives at the meeting, the matter
shall be referred to the chief executive officer of each party to
resolve, each acting reasonably and in good faith.
8. PAYMENT
PAYMENT OBLIGATIONS
FPIL and FPAH will, or will cause their Subsidiaries to, make all
payments referred to in the Separation Arrangement Plan:
(a) on the dates specified in the Separation Arrangement Plan.
(b) in immediately available funds.
9. REVERSAL OF SEPARATION ARRANGEMENT
If the Separation Arrangement is reversed in accordance with clause 2.2
of the Separation Arrangement Plan, each of FPIL and FPAH will do (and
will cause their respective Subsidiaries to do) all acts and things
reasonably necessary to effect such reversal and reinstate the status
quo prior to execution of this Agreement; provided that the internal
reorganisation transactions referred to in clause 6.1 may at FPIL's
discretion continue in place without reversal or any amendment.
10. AMENDMENT
10.1 AMENDMENT BY AGREEMENT
(a) This Agreement or the Separation Arrangement may be amended by
written agreement of the parties at any time before or after the
Annual Shareholders Meeting provided that any amendment to the
Separation Arrangement must:
(i) be in the best interests of FPIL and FPIL Shareholders; and
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(ii) be contained in a written document which is filed with the
Court; and
(iii)be approved by the Court and, if material, communicated to
FPIL Shareholders in the manner required by the Court (if so
required).
(b) Without limiting the generality of the foregoing, any such
amendment may:
(i) waive compliance with, or modify, any of the covenants
contained in this Agreement, including waive or modify
performance of any of the obligations of either of the parties;
or
(ii) waive, or modify, any condition referred to in clause 4 of
this Agreement.
10.2 COURT DIRECTED AMENDMENTS
Any amendment to the Separation Arrangement which is requested or
proposed by the Court will be effective only if it is consented to by
FPIL and FPAH.
11. TAXATION
11.1 LOWEST PRICE
For the purposes of the accrual rules in the Income Tax ▇▇▇ ▇▇▇▇:
(a) the consideration payable for any property that is to be transferred
under this Agreement is the lowest price that the transferee and
transferor would have agreed for the property on the basis of
payment in full at the time at which the first right in the property
is to be transferred;
(b) the consideration payable is the value of the property; and
(c) the consideration payable does not include any capitalised
interest.
11.2 GST
(a) Any consideration payable for a supply made pursuant to this
Agreement is stated exclusive of GST. The party (the RECIPIENT) to
this Agreement which is, or a Subsidiary of which is, the recipient
of a supply will pay (and/or, as the case may require, will procure
any other person required to pay any consideration for that supply
to pay) to the supplier of that supply (the SUPPLIER), in addition
to the consideration otherwise payable for that supply, the amount
of any GST chargeable on that supply and any GST Penalties, so that
the supplier will receive and retain, after payment of any GST and
GST Penalties, the consideration otherwise payable. However, neither
the recipient (nor any other person required to pay any
consideration for that supply) will be liable to pay any GST
Penalties relating to that supply which accrue or are imposed solely
as a consequence of the supplier having failed to correctly account
to the relevant tax authority for the GST and GST Penalties after
the date on which the recipient (or other person) has paid to the
supplier in full all GST and GST Penalties which the supplier has
(in the manner set out in clause 11.2(b) below) notified the
recipient to be payable.
(b) Any GST and GST Penalties payable pursuant to this clause 11.2 are
payable upon presentation of a Tax Invoice issued by the supplier to
the recipient and, if any GST
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Penalties are payable, the Tax Invoice must be accompanied by a
document issued by the relevant tax authority and must specify the
amount of the GST Penalties payable.
(c) If any amount payable under clause 11.2(a) is not paid on
presentation of the items specified in clause 11.2(b) then interest
on such unpaid amount will be payable to the supplier and will
accrue from the date of such presentation at the rate of 10% per
annum, compounding monthly. The recipient will pay (and/or, as the
case may require, will procure any other person required to pay any
consideration for the relevant supply to pay) this interest on
demand by the supplier.
(d) Any liability to pay an amount under this clause 11.2 will, if owed
by more than one person, be joint and several.
(e) For the purposes of this clause 11.2:
(i) GST means tax charged in New Zealand under the Goods and
Services Tax ▇▇▇ ▇▇▇▇ (New Zealand) and any similar value
added tax charged or levied in any other jurisdiction;
(ii) GST LEGISLATION means legislation which charges or imposes
GST;
(iii) GST PENALTIES means any fines, penalties, additional taxes,
interest or similar charges imposed by any relevant tax
authority in respect of the late payment or non-payment of any
GST; and
(iv) TAX INVOICE means:
(A) for a supply subject to the Goods and Services Tax ▇▇▇
▇▇▇▇ (New Zealand), the meaning given to the term in that
legislation; or
(B) for any supply subject to GST under another jurisdiction,
a document in a form prescribed by the relevant GST
Legislation notifying or confirming an obligation to make
a payment and which may be necessary for the recipient of
the supply to claim a credit for the GST paid or payable.
12. GENERAL
12.1 ENTIRE AGREEMENT
This Agreement and the documents referred to in this Agreement
constitute the entire obligation of the parties with respect to their
subject matter and supersede any prior expression of intent or
understandings with respect to such subject matter.
12.2 SCHEDULES
The following are the Schedules to, and form an integral part of, this
Agreement:
Schedule 1 - Separation Arrangement Plan
Schedule 2 - ▇▇▇▇▇▇ & Paykel Group
Schedule 3 - Conditions
Schedule 4 - Appliances Companies, Finance Companies and Healthcare
Companies
Schedule 5 - Misplaced Assets and Liabilities
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12.3 FURTHER ASSURANCES
Subject to the conditions of this Agreement, FPIL and FPAH will do (and
will cause their respective Subsidiaries to do) all acts and things
reasonably necessary to give full effect to the transactions
contemplated in this Agreement and, where appropriate, co-operate with
each other in doing those acts and things.
12.4 BINDING EFFECT
This Agreement is binding upon and enures to the benefit of and is
enforceable by the parties to this Agreement and their respective
successors.
12.5 COVENANTS AND AGREEMENTS NOT TO SURVIVE
The covenants and agreements, and any representations and warranties, of
each of FPIL and FPAH contained in this Agreement apply only in respect
of the period from the date of this Agreement to the Separation Date and
will not survive beyond the Separation Date, except for the covenants
and agreements contained in clauses 1, 2, 6.2, 6.3, 6.4, 6.5, 6.6, 7, 8,
9, 10, 11 and 12 and in Schedules 5, 6, and 7, which will survive. No
action or claim may be brought or maintained after the Separation Date
in respect of any covenants, agreements, representations or warranties
contained in this Agreement (except for those contained in clauses 1, 2,
6.2, 6.3, 6.4, 6.5, 6.6, 7, 8, 9, 10, 11 and 12 and in Schedules 5, 6,
and 7).
12.6 ASSIGNMENT
This Agreement is not assignable by any party.
12.7 CONTRACTS PRIVITY
The provisions of this Agreement that are expressed to confer rights on
any Subsidiary of any party or any other person are for the benefit of,
and intended to be enforceable by, each such Subsidiary or other person
in accordance with the Contracts (Privity) ▇▇▇ ▇▇▇▇. Notwithstanding the
foregoing, the provisions of clause 6.3 and Schedule 5 are not intended
to create any obligation for the benefit of, or be enforceable by, any
third person to whom any obligations are owed in respect of any
Misplaced Asset or Misplaced Liability.
12.8 RESPONSIBILITY FOR EXPENSES
Unless otherwise provided, all expenses (other than expenses in
connection with the enforcement of rights or obligations under this
Agreement) incurred in connection with this Agreement and the
transactions that it contemplates will be for the account of FPAH.
12.9 TIME
Time is of the essence of this Agreement in each and every matter or
thing provided in this Agreement.
12.10 EXERCISE OF RIGHTS AND WAIVERS
No delay, grant of time, release, compromise, forbearance (whether
partial or otherwise) or other indulgence by any person in respect of
the breach of any party's obligations under this Agreement is to:
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(a) operate as a waiver of or prevent the subsequent enforcement of
that obligation; or
(b) be deemed a delay, grant of time, release, compromise, forbearance
(whether partial or otherwise) or other indulgence in respect of, or
a waiver of, any subsequent or other breach.
No waiver by a person of its rights under this Agreement will be
effective unless it is in writing and signed by that person.
12.11 NOTICES
(a) Each notice or other communication under this Agreement is to be in
writing, is to be made by facsimile, personal delivery or by post to
the addressee at the facsimile number or address, and is to be
marked for the attention of the person or office holder (if any),
from time to time designated for the purpose by the addressee to the
other party. The initial facsimile number, address and relevant
person or office holder of each party is set out below:
(i) in the case of FPIL:
▇▇▇▇▇▇ & Paykel Industries Limited
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (64) (▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
or after the Separation Date:
▇▇▇▇▇▇ & Paykel Healthcare Corporation Limited
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Facsimile No.: (64) (▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
(ii) in the case of FPAH:
▇▇▇▇▇▇ & Paykel Appliances Holdings Limited
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (64) (▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
24
25
(b) No communication is to be effective until received. A
communication is, however, to be deemed to be received by the
addressee:
(i) in the case of a facsimile that is recorded as successfully
transmitted, on the business day on which it is sent or, if
sent after 5pm (in the place of receipt) on a business day or,
if sent on a non-business day, on the next business day after
the date of sending; and
(ii) in the case of personal delivery, when delivered.
12.12 COUNTERPARTS
This Agreement may be signed in two counterparts (by facsimile or
otherwise), each of which is deemed to be an original and both of which,
when taken together, is deemed to constitute one and the same
instrument.
EXECUTION
EXECUTED as an agreement.
▇▇▇▇▇▇ & PAYKEL INDUSTRIES LIMITED
by:
/s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ ----------------------------------
Director Director
▇▇▇▇▇▇ & PAYKEL APPLIANCES
HOLDINGS LIMITED by:
/s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ ----------------------------------
Director Director
25
26
SCHEDULE 1: SEPARATION ARRANGEMENT PLAN
1. INTERPRETATION
1.1 DEFINITIONS
In this Separation Arrangement Plan:
ACT means the Companies ▇▇▇ ▇▇▇▇, as amended from time to time;
AF INVESTMENTS means AF Investments Limited, a wholly-owned
subsidiary of FPAH;
AF INVESTMENTS SHARES means the shares in the capital of AF
Investments;
BUSINESS DAY means any day other than a Saturday, Sunday, a public
holiday in New Zealand or a day on which banks are not open for business
in Auckland, New Zealand;
COMPLETION DATE means the date on which completion of the sale of
FPHC Shares pursuant to the U.S. Healthcare Offer occurs;
EVENT includes any act, omission, transaction or other occurrence, or
any series of events, but excludes completion of the transactions
contemplated by the Separation Arrangement Agreement;
EXISTING EMPLOYEE SHARE SCHEMES means the ▇▇▇▇▇▇ & Paykel Employee Share
Scheme established by deed dated 15 October 1979, the ▇▇▇▇▇▇ & Paykel
Executive Staff Share Purchase Scheme established by deed dated 2
December 1983 and the ▇▇▇▇▇▇ & Paykel Australian Employee Share Purchase
Scheme established by deed dated 1 August 1996;
EXTERNAL BORROWING AMOUNT means the amount to be borrowed by AF
Investments from external lenders, as part of the Separation
Arrangement, which equals the difference between the total purchase
price of all the shares in ▇▇▇▇▇▇ & Paykel Limited and ▇▇▇▇▇▇ & Paykel
Finance Limited as referred to in clause 2.1(b)(ix) and the amount
received by FPAH from FPIL in consideration for the FPIL Shares bought
back by FPIL as referred to in clause 2.1(b)(vi);
FPAH means ▇▇▇▇▇▇ & Paykel Appliances Holdings Limited;
FPAH SHARES means the shares in the capital of FPAH;
FPHC means ▇▇▇▇▇▇ & Paykel Healthcare Corporation Limited;
FPHC SHARES means the shares in the capital of FPHC;
FPIL means ▇▇▇▇▇▇ & Paykel Industries Limited;
FPIL SHARES means the shares in the capital of FPIL;
FPIL SHAREHOLDERS means the persons recorded on the FPIL share register
as holders of FPIL Shares on the relevant date;
27
NZSE means the New Zealand Stock Exchange;
NZ$ and NZ DOLLARS means the lawful currency of New Zealand;
OVER-ALLOTMENT OPTION means an over-allotment option granted by FPAH
in favour of the underwriters of the U.S. Healthcare Offer which, if
exercised, will require FPAH to sell to the underwriters of the U.S.
Healthcare Offer newly issued FPHC Shares equating in number up to an
additional 15% of the total number of FPHC Shares sold under the U.S.
Healthcare Offer;
PERSON includes an individual, a body corporate, a business of FPIL, an
association of persons (whether corporate or not), a trust, a state and
an agency of state, in each case, whether or not having a separate legal
personality;
RECORD DATE means the date by reference to which the entitlement of
holders of FPIL Shares to participate in this Separation Arrangement
Plan is determined, being 9 November 2001; provided however that if at
any time before such date (or before any extended Record Date as
contemplated in this definition), any event shall have occurred which,
in the opinion of the board of directors of FPIL, acting reasonably and
in good faith:
(a) is of such a material nature that it is no longer prepared to
recommend the Separation Arrangement to the FPIL Shareholders unless
circumstances change; or
(b) makes it impractical to proceed with the Separation Arrangement
at that time,
the Record Date may be extended to such revised Record Date as may be
selected and notified by FPIL to the NZSE as specified, being a date
which is not later than 31 December 2001 or such later date as may be
agreed by FPIL and FPAH and approved by the Court. Notification of any
revised Record Date must be given not less than 6 days (or such lesser
period as the NZSE may permit) before the then current Record Date;
SEPARATION ARRANGEMENT means the Court approved arrangement to effect
the separation of FPIL's appliances and finance businesses and FPIL's
healthcare business into two listed companies and to undertake the U.S.
Healthcare Offer, the key elements of which are described in this
Separation Arrangement Plan, subject to any amendment or variation made
in accordance with the Separation Arrangement Agreement;
SEPARATION ARRANGEMENT AGREEMENT means the separation arrangement
agreement dated on or about 23 August 2001, between FPIL and FPAH;
SEPARATION ARRANGEMENT PLAN means this separation arrangement plan;
SEPARATION DATE means the date on which the appliances and finance
businesses of FPIL are acquired by FPAH under the Separation
Arrangement, being the date selected by FPIL and notified immediately to
the NZSE as the "Separation Date" for the purposes of the Separation
Agreement and the Separation Arrangement, and being a date not later
than 5 business days after the Record Date;
TOTAL BORROWINGS means all borrowings of the ▇▇▇▇▇▇ & Paykel Group
including:
(a) (i) term borrowings;
(ii) term borrowings (current);
(iii) bank overdraft; and
28
(iv) call borrowings; less
(b) cash and bank balances,
but excluding all borrowings of the finance business;
TOTAL BORROWINGS ATTRIBUTABLE TO APPLIANCES means the amount agreed by
FPIL and FPAH as at the date of the Separation Arrangement Agreement to
be the total borrowings of the appliances business for the purposes of
clause 2.1(b)(ix) of this Separation Arrangement Plan;
TRANSFER AGENT means Computershare Registry Services Limited;
U.S. HEALTHCARE OFFER means the offer and sale by FPAH primarily to
U.S. investors under a U.S. public offering registered with the U.S.
Securities and Exchange Commission, as well as to certain qualifying
investors in other selected jurisdictions, of approximately 18% of
the FPHC Shares outstanding immediately following the acquisition of
the appliances and finance businesses of FPIL by FPAH under the
Separation Arrangement; and
US$ and US DOLLARS means the lawful currency of the United States.
1.2 HEADINGS AND REFERENCES
The division of this Separation Arrangement Plan into clauses and the
insertion of headings are for convenience of reference only and do not
affect the construction or interpretation of this Separation Arrangement
Plan. Unless otherwise specified, references to clauses are to clauses
of this Separation Arrangement Plan.
1.3 CURRENCY
Except as expressly indicated otherwise, all sums of money referred to
in this Separation Arrangement Plan are expressed and shall be payable
in New Zealand dollars.
1.4 TIME
Time is of the essence in each and every matter or thing provided in
this Separation Arrangement Plan. Unless otherwise indicated, all times
expressed in this Separation Arrangement Plan are local time, Auckland,
New Zealand.
2. THE SEPARATION ARRANGEMENT
2.1 Subject to any amendments to the Separation Arrangement made in
accordance with the Separation Arrangement Agreement, the following will
occur on the dates specified and sequentially in the specified order
without any further act or formality, except as otherwise provided:
(a) At close of trading on the NZSE on the Record Date, the FPIL share
register will be closed.
29
(b) On the Separation Date:
(i) FPIL will buy back from the trustees of the Existing Employee
Share Schemes all unallocated FPIL Shares existing as at the
Record Date in consideration for a cash payment per FPIL Share
of an amount to be agreed in writing between FPIL and the
trustees of the Existing Employee Share Schemes based on
FPIL's and the trustees' assessment of the fair value of the
FPIL Shares, and the FPIL share register will be amended
accordingly;
(ii) FPAH will acquire from each FPIL Shareholder recorded on the
FPIL share register at the close of trading on the NZSE on the
Record Date 472 of each 1,000 FPIL Shares held by that FPIL
Shareholder and 47.2% of any parcel of less than 1000 FPIL
Shares held by that FPIL Shareholder (rounded to the nearest
whole number), in consideration of:
(A) for every 472 FPIL Shares acquired from that FPIL
Shareholder, the issue of 550 fully paid FPAH Shares, and
for any 47.2% portion of any parcel of less than 1000
FPIL Shares held by that FPIL Shareholder, such number of
fully paid FPAH Shares such that the ratio of FPIL Shares
acquired out of that parcel to FPAH Shares issued for
such FPIL Shares equals the ratio of FPIL Shares acquired
to FPAH Shares issued applicable per 1000 FPIL Shares
held, with fractional entitlements rounded to the nearest
whole number; and
(B) a cash payment amount equal to that FPIL Shareholder's
pro rata entitlement to the difference between the gross
amount raised from the sale of FPHC Shares under the U.S.
Healthcare Offer referred to in clause 2.1(b)(xi) and
$105 million, with such cash payment amount being paid to
each FPIL Shareholder upon completion of the U.S.
Healthcare Offer.
(iii) FPAH will be entered in the share register of FPIL as the
holder of the FPIL Shares transferred to it pursuant to clause
2.1(b)(ii);
(iv) each FPIL Shareholder will cease to be a FPIL Shareholder in
respect of the FPIL Shares that FPIL Shareholder transferred
to FPAH, and will be entered on the share register of FPAH as
the holder of the FPAH Shares which that FPIL Shareholder is
entitled to receive pursuant to clause 2.1(b)(ii);
(v) the 3,000 FPAH Shares held by FPIL (having a value of $3,000)
will be cancelled upon payment of $3,000 to FPIL and FPIL will
cease to be a holder of FPAH Shares;
(vi) FPIL will buy back from FPAH 18,200,000 FPIL Shares in
consideration for a cash payment per FPIL Share of an amount
to be agreed in writing between FPIL and FPAH based on FPIL's
and FPAH's assessment of the fair value of the FPIL Shares,
and the FPIL share register will be amended accordingly;
(vii) FPAH will subscribe for a minimum of 100 million fully paid
shares in AF Investments (at a purchase price of $1.00 per AF
Investments Share) and will loan moneys to AF Investments such
that the aggregate dollar amount of subscription and loan
moneys paid to AF Investments pursuant to this clause
2.1(b)(vii) equals the amount received by FPAH from FPIL under
clause 2.1(b)(vi);
30
\ (viii) AF Investments will borrow the External Borrowing Amount
from external lenders;
(ix) AF Investments will purchase from FPIL all of the shares in
▇▇▇▇▇▇ & Paykel Limited and ▇▇▇▇▇▇ & Paykel Finance Limited
at a total purchase price of $309 million being FPIL's and
AF Investments' assessment of the fair value of those shares
taking into account (in respect of the shares of ▇▇▇▇▇▇ &
Paykel Limited) Total Borrowings Attributable to Appliances;
(x) The name of FPIL will change to FPHC; and
(xi) Upon completion of the transaction steps in clause 2.1(b)(i)
to (ix) and the change of name in clause 2.1(b)(x), subject
to the price obtained under the U.S. Healthcare Offer being
acceptable to each of the board of directors of FPAH and the
board of directors of FPHC (each acting reasonably and in
good faith and in what they believe to be in the best
interests of their respective companies and the shareholders
of their respective companies, after taking appropriate
advice), FPAH and FPHC will enter into:
(A) an underwriting agreement with the underwriters of the
U.S. Healthcare Offer to sell pursuant to the U.S.
Healthcare Offer approximately 18% of the FPHC Shares
then outstanding (being a portion of the FPHC Shares
acquired by it from FPHC Shareholders pursuant to the
transaction step in clause 2.1(b)(ii)) and granting the
Over-allotment Option; and
(B) an agreement under which FPHC agrees to issue to FPAH
such number of FPHC Shares as FPAH is obliged to sell
to the underwriters of the U.S. Healthcare Offer upon
exercise of the Over-allotment Option.
(c) On or as soon as practicable following the Completion Date:
(i) FPAH will loan an amount equal to the External Borrowing
Amount to AF Investments;
(ii) AF Investments will repay the External Borrowing Amount
referred to in clause 2.1(b)(viii);
(iii) FPHC and FPAH will jointly cause the Transfer Agent to
forward, or cause to be forwarded, by mail to each FPHC
Shareholder at the address specified in the FPHC share
register (or to such other person (at such address) as such
FPHC Shareholder may direct) a statement confirming their
holding of FPAH Shares and FPHC Shares; and
(iv) FPAH will cause the Transfer Agent to forward, or cause to
be forwarded, by mail to each FPHC Shareholder at the
address specified in the FPHC share register (or to such
other person (at such address) as such FPHC Shareholder may
direct) the cash payment amount to which they are entitled
pursuant to clause 2.1(b)(ii)(B).
(d) If the Over-allotment Option is exercised, FPHC will issue FPHC
Shares to FPAH in accordance with the terms of the agreement between
FPAH and FPHC referred to in clause 2.1(b)(xi)(B) and FPAH will on
sell those FPHC Shares to the underwriters of the U.S. Healthcare
Offer in accordance with the terms of the Over-allotment Option.
31
2.2 If for any reason the sale of FPHC Shares pursuant to the U.S.
Healthcare Offer does not close, or the proceeds of the sale of FPHC
Shares pursuant to the U.S. Healthcare Offer are not received by FPAH,
on or before 5pm on the date that is 10 business days after the Record
Date, then the Separation Arrangement steps set out in clause 2.1 are to
be reversed as follows:
(a) on the date that is 11 business days after the Record Date the
following transactions will occur sequentially in the following
order without any further act or formality, except as otherwise
provided:
(i) the name of FPIL (then FPHC) will change back to FPIL;
(ii) FPIL will reacquire from AF Investments all of the shares in
▇▇▇▇▇▇ & Paykel Limited and ▇▇▇▇▇▇ & Paykel Finance Limited at
a total purchase price of $309 million;
(iii) AF Investments will repay the External Borrowing Amount
referred to in clause 2.1(b)(viii);
(iv) AF Investments will buy back all the AF Investments Shares
issued to FPAH pursuant to clause 2.1(b)(vii) at the purchase
price of $1.00 per AF Investments Share and repay the loan made
to it by FPAH as referred to in that clause;
(v) FPIL will issue 18,200,000 FPIL Shares to FPAH in consideration
for the cash payment per FPIL Share agreed between FPAH and
FPIL as referred to in clause 2.1(b)(vi); and
(vi) FPAH will amalgamate into FPIL and FPIL will issue such number
of FPIL Shares to the holders of FPAH Shares as equals the
number of FPIL Shares acquired by FPAH from such holders of
FPAH Shares (in their then capacity as FPIL Shareholders)
pursuant to clause 2.1(b)(ii) in consideration for the
cancellation of their FPAH Shares and the cancellation of the
obligation of FPAH to make the cash payment referred to in
clause 2.1(b)(ii)(B); and
(b) the share registers of FPIL, FPAH, AF Investments, ▇▇▇▇▇▇ & Paykel
Limited and ▇▇▇▇▇▇ & Paykel Finance Limited will be amended to
reflect the transactions set out in clause 2.2(a).
3. AMENDMENTS
Any amendments to the Separation Arrangement made in accordance with
clause 10 of the Separation Arrangement Agreement will become part of
the Separation Arrangement for all purposes and clause 2 shall be deemed
amended as necessary to incorporate such amendments.
32
SCHEDULE 2: ▇▇▇▇▇▇ & PAYKEL GROUP
[Table Illustrating ▇▇▇▇▇▇ & Paykel Industries Limited and Subsidiaries
Organizational Chart]
Footnote 1: Hill & ▇▇▇▇▇▇▇ Appliances Limited is a subsidiary of FPIL with
49% of the shares held via a nominee company and voting rights
over other shares
33
SCHEDULE 3: CONDITIONS
The obligations of each of FPIL and FPAH to complete the transactions
contemplated by this Agreement will be subject to the fulfilment, or the waiver
(where applicable) by each of them, of each of the following conditions at or
prior to the Separation Date:
(a) the Interim Court Orders will have been obtained in form and
substance satisfactory to each of them, acting reasonably;
(b) the Separation Arrangement will have been approved at the Annual
Shareholders Meeting in accordance with the Interim Court Orders;
(c) the Final Court Orders will have been obtained in form and substance
satisfactory to each of them, acting reasonably;
(d) the matters referred to in paragraphs (ii) and (iii) of clause
5.1(a) will have been attended to and obtained on terms and
conditions acceptable to each of FPIL and FPAH as applicable;
(e) any applicable waiting periods will have expired without any action
being taken or threatened by any competent authority which would
restrain or prevent the Separation Arrangement or otherwise impose
conditions that are Materially Adverse to FPIL or FPAH and their
respective Subsidiaries (in each case taken as a whole), to the
implementation of the Separation Arrangement, to the Appliances
Companies and the Finance Companies (taken as a whole) or to the
Healthcare Companies (taken as a whole);
(f) no judgement or order will have been issued by any of the Agencies
and no Law shall have been proposed, enacted, promulgated or
applied:
(i) to prohibit or impose material limitations or conditions on
or to the implementation of the Separation Arrangement; or
(ii) that, if the Separation Arrangement were completed, would be
Materially Adverse to FPIL or FPAH and their respective
Subsidiaries (in each case taken as a whole), to the Appliances
Companies and the Finance Companies (taken as a whole) or to
the Healthcare Companies (taken as a whole);
(g) conditional approval (subject to filing documentation only) of
listing of FPAH shares on the NZSE and of listing of the FPIL Shares
on the NASDAQ;
(h) the FPHC Shares offered under the U.S. Healthcare Offer will have
achieved a share price that is acceptable to each of the board of
directors of FPAH and the board of directors of FPHC (each acting
reasonably and in good faith and in what they believe to be in the
best interests of their respective companies and the Shareholders of
their respective companies, after taking appropriate advice);
(i) funding arrangements (including any arrangements entered into in
connection with such funding arrangements) will have been put in
place for each of:
(A) the Healthcare Companies; and
(B) FPAH and the Appliances Companies and Finance Companies,
34
in each case on terms and conditions satisfactory in all respect to
those companies respectively; and any third party funding
arrangements (or arrangements associated with such funding
arrangements) in respect of which any of the Healthcare Companies
has any obligation but which is not properly attributable to the
healthcare business carried on by the ▇▇▇▇▇▇ & Paykel Group prior to
the Separation Date will have been repaid or otherwise assumed by
FPAH, the Appliances Companies and/or the Finance Companies;
(j) no event shall have occurred which, in the opinion of the board of
directors of FPIL acting reasonably and in good faith, is of such a
material nature that it is no longer prepared to recommend the
Separation Arrangement to the FPIL shareholders.
35
SCHEDULE 4: APPLIANCES COMPANIES, FINANCE COMPANIES AND HEALTHCARE COMPANIES
APPLIANCES COMPANIES
- ▇▇▇▇▇▇ & Paykel Limited
- NZ Exports Corporation Limited
- ▇▇▇▇▇▇ & Paykel (Singapore) Pte Limited
- ▇▇▇▇▇▇ & Paykel Appliances Limited (UK)
- ▇▇▇▇▇▇ & Paykel Appliances Inc
- ▇▇▇▇▇▇ & Paykel Production Machinery Limited
- Allied Industries Limited
- ▇▇▇▇▇▇ & Paykel Australia Holdings Limited
- ▇▇▇▇▇▇ & Paykel Australia Pty Limited
- ▇▇▇▇▇▇ & Paykel Manufacturing Pty Limited
- ▇▇▇▇▇▇ & Paykel Service Pty Limited
- ▇▇▇▇▇▇ & Paykel Finance Pty Limited
- ▇▇▇▇▇▇ & Paykel Customer Services Pty Limited
- Hill & ▇▇▇▇▇▇▇ Appliances Limited
FINANCE COMPANIES
- ▇▇▇▇▇▇ & Paykel Finance Limited
- Lifestyle Finance Limited
- Burtlea Investments No 93 Limited
- Consumer Finance Limited
- Commercial Finance Limited
- ▇-▇▇▇▇▇▇.▇▇.▇▇ Limited
- CIS Insurance Limited
- Consumer Finance Corporation Limited
- Consumer Insurance Services Limited
- Equipment Finance Limited
HEALTHCARE COMPANIES
- ▇▇▇▇▇▇ & Paykel Industries Limited
- ▇▇▇▇▇▇ & Paykel Holdings Inc (USA)
- ▇▇▇▇▇▇ & Paykel Healthcare Limited
- ▇▇▇▇▇▇ & Paykel Healthcare Limited (UK)
- ▇▇▇▇▇▇ & Paykel Healthcare Pty Limited
- ▇▇▇▇▇▇ & Paykel Holdings GmbH (Germany)
36
- ▇▇▇▇▇▇ & Paykel Healthcare SAS (France)
- ▇▇▇▇▇▇ & Paykel Healthcare GmbH & Co Kg (Germany)
- ▇▇▇▇▇▇ & Paykel Healthcare Properties Limited
- ▇▇▇▇▇▇ & Paykel Healthcare Inc
37
SCHEDULE 5: MISPLACED ASSETS AND LIABILITIES
1. INTERPRETATION
1.1 DEFINITIONS
In this Schedule 5, unless the context otherwise requires:
ASSET HOLDER means, in respect of any Misplaced Asset, the party that is
(or the Subsidiary of which is) the holder of the Misplaced Asset that
is properly attributable to the business carried on by the Business
Holdco;
BUSINESS HOLDCO means, in respect of any Misplaced Asset or Misplaced
Liability, the party that is carrying on the business to which the
Misplaced Asset or Misplaced Liability is properly attributable;
CLAIM means any demand, claim (including, without limitation, any tax
claim) or legal proceeding issued, or action taken or threatened to be
taken, against a party or any of its Subsidiaries (the INDEMNIFIED
PARTY) for which the Indemnified Party has a right under this Schedule 5
to be indemnified against by the other party (the INDEMNIFYING PARTY);
CONTRACTING HOLDCO has the meaning ascribed to it in clause 5;
EXPERT means a person agreed between the parties, or failing agreement
within three business days after a written nomination by either party,
at the request of either party, the expert selected by the President of
the New Zealand Law Society from a "panel" of nominees comprising one
person nominated as expert by each party;
LIABILITY HOLDER means, in respect of any Misplaced Liability, the
person that is (or the Subsidiary of which is) the holder of the
Misplaced Liability that is properly attributable to the business
carried on by the Business Holdco;
MISPLACED ASSET has the meaning ascribed to it in clause 2;
MISPLACED LIABILITY has the meaning ascribed to it in clause 3; and
NOTIFICATION DATE means, in respect of the any Misplaced Asset or
Misplaced Liability, the date on which notification of the Misplaced
Asset or Misplaced Liability is received by the notified party.
1.2 CONSTRUCTION OF CERTAIN REFERENCES
In this Schedule 5, unless the context otherwise requires:
(a) any reference to an ASSET HOLDER, LIABILITY HOLDER or BUSINESS
HOLDCO, OR A PARTY, TAKING OR OMITTING TO TAKE ANY ACTION includes
that person procuring any of its Subsidiaries to take or omit to
take that action; and
(b) if a SUBSIDIARY OF A BUSINESS HOLDCO HAS BEEN IDENTIFIED BY THE
BUSINESS HOLDCO AS THE APPROPRIATE HOLDER OF A MISPLACED ASSET OR
MISPLACED LIABILITY, as contemplated in clauses 2 or 3, without
prejudice to the obligations under this
38
Schedule 5 of the Business Holdco, references to THE BUSINESS
HOLDCO, in that context, shall be to that Subsidiary as appropriate.
1.3 CLAUSES
In this Schedule 5, unless otherwise specified, references to clauses
are to clauses of this Schedule 5.
2. MISPLACED ASSETS
2.1 MISPLACED ASSETS
If after the Separation Date either party identifies any asset (the
MISPLACED ASSET):
(a) held by FPHC or any of its Subsidiaries that is properly
attributable to the appliances or finance business as carried on by
the ▇▇▇▇▇▇ & Paykel Group prior to the Separation Date and by FPAH
and its Subsidiaries on or after the Separation Date; or
(b) held by FPAH or any of its Subsidiaries that is properly
attributable to the healthcare business as carried on by the ▇▇▇▇▇▇
& Paykel Group prior to the Separation Date and by FPHC and its
Subsidiaries on or after the Separation Date,
it will notify the other not later than 30 days after the date on which
such identification is made. The parties will then respectively procure
the transfer and assignment with effect from the Separation Date of all
the right, title and interest in and to the Misplaced Asset to FPAH or
FPHC respectively (or any Subsidiary thereof nominated by FPAH or FPHC
(as applicable)) for fair market value as agreed by the parties and
payable in cash not later than 30 days after the date on which
notification of the Misplaced Asset pursuant to this clause 2.1 is
received by the relevant party. For this purpose, the Asset Holder
shall, as soon as reasonably practicable, execute and deliver to the
Business Holdco such documents and take such steps as may be reasonably
required by the Business Holdco to vest in the Business Holdco legal
title to the Misplaced Asset; provided that if no such documents or
steps are required, by this clause, the Asset Holder transfers and
assigns, with effect as of the Separation Date, all its right, title and
interest in and to the Misplaced Asset to the Business Holdco.
2.2 CONSENTS OR WAIVERS; NOVATION
If any Misplaced Asset cannot effectively be assigned or transferred
without first obtaining a consent or waiver from a third person or
except by agreements of novation, the Asset Holder shall (upon request
of the Business Holdco) take all reasonable steps to procure that any
necessary consent or waiver is obtained or any agreement of novation is
entered into, and the Business Holdco shall co-operate with the Asset
Holder and any of its Subsidiaries for such purpose.
2.3 NOMINEE AND AGENT
(a) To the extent that the legal and beneficial right, title and
interest in any Misplaced Asset has not been transferred and
assigned pursuant to clause 2.1, the Asset Holder will hold the
Misplaced Asset as nominee and agent for the Business Holdco until
legal title to the Misplaced Asset has passed to the Business Holdco
and will account to the Business Holdco, promptly upon receipt, for
any benefit received by it in respect of the Misplaced Asset.
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(b) Clauses 2.1 and 2.3(a) shall not apply to any Misplaced Asset where
this would result in the Asset Holder being in breach of any terms
on which the Misplaced Asset is held, but in such case the Asset
Holder and the Business Holdco, each acting reasonably, shall use
all reasonable endeavours to conclude (at the cost of the Business
Holdco) a further arrangement which enables the Business Holdco or
such Subsidiary of the Business Holdco as the Business Holdco shall
identify as the appropriate holder of the Misplaced Asset to obtain
the benefit of the Misplaced Asset with effect as at the Separation
Date.
2.4 CONTINUING ARRANGEMENTS
The following provisions of this clause 2.4 apply to any Misplaced Asset
to which clause 2.3 applies:
(a) in respect of clause 2.3(a) only, beneficial ownership and risk in
respect of the Misplaced Asset shall pass to the Business Holdco as
at the Separation Date;
(b) from (and including) the Notification Date, the Business Holdco
shall perform and comply with or, if that is not possible or
practicable, (at the cost of the Business Holdco) assist the Asset
Holder and any of its Subsidiaries to perform and comply with, any
obligations that the Asset Holder or such Subsidiary may have in
relation to the Misplaced Asset;
(c) subject to clause 2.4(b), from (and including) the Notification
Date, the Asset Holder will:
(i) subject to subparagraph (ii) of this clause 2.4(c), continue to
perform and comply with any obligations that it or any of its
Subsidiaries may have in relation to the Misplaced Asset; and
(ii) comply with any lawful direction from the Business Holdco with
respect to the Misplaced Asset (provided that the Asset Holder
shall not be obliged to comply with any such direction if to do
so would prejudice it in a manner or to an extent for which it
is not compensated by the provisions of this Schedule 5); and
(d) the Business Holdco will indemnify the Asset Holder or any of its
Subsidiaries upon demand from and against any and all losses,
damages, liabilities, claims, costs and expenses of whatever nature
(including, without limitation, tax) sustained or incurred by the
Asset Holder or such Subsidiary (as applicable) under or in
connection with the Misplaced Asset (including, without limitation,
all costs and expenses (including all legal expenses on a solicitor
and own client basis and any tax) incurred by the Asset Holder or
such Subsidiary in the performance of the obligations of the Asset
Holder under this clause 2.4).
2.5 COSTS
To the extent not indemnified against under clause 2.4(d), all costs and
expenses (including legal expenses on a solicitor and own client basis
and any tax) incurred by the Asset Holder or any of its Subsidiaries in
the performance of the obligations of the Asset Holder under this clause
2 will be paid by the Business Holdco, or reimbursed to the Asset Holder
or such Subsidiary (as applicable), upon demand and presentation of such
documentation as may be reasonably required to evidence such costs and
expenses.
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3. MISPLACED LIABILITIES
3.1 MISPLACED LIABILITIES
If after the Separation Date either party identifies any liability (the
MISPLACED LIABILITY):
(a) held by FPHC or any of its Subsidiaries that is properly
attributable to the appliances or finance business as carried on by
the ▇▇▇▇▇▇ & Paykel Group prior to the Separation Date and by FPAH
and its Subsidiaries on or after the Separation Date; or
(b) held by FPAH or any of its Subsidiaries that is properly
attributable to the healthcare business as carried on by the ▇▇▇▇▇▇
& Paykel Group prior to the Separation Date and by FPHC and its
Subsidiaries on or after the Separation Date,
it will notify the other not less than 30 days after the date on which
the identification is made. The parties will then respectively:
(i) take such steps as may be reasonably required to obtain the
consent of each relevant obligee under the Misplaced Liability
to the entry into of arrangements whereby the obligations of
the Liability Holder and any of its Subsidiaries under the
Misplaced Liability are novated to the Business Holdco or to
such Subsidiary of the Business Holdco as the Business Holdco
shall identify as the appropriate holder of that Misplaced
Liability and as shall be acceptable to the relevant obligee;
and
(ii) to the extent that such consents are obtained, enter into
agreements of novation with any relevant obligees under which,
with effect as of the Separation Date, the relevant novatees
shall assume the obligations of the relevant novators under the
Misplaced Liability and the relevant novators are released from
their obligations under the Misplaced Liability.
3.2 CONTINUING ARRANGEMENTS
The following provisions of this clause 3.2 shall apply to any Misplaced
Liability to the extent that the Misplaced Liability is not novated
pursuant to clause 3.1:
(a) risk and liability in respect of the Misplaced Liability shall
pass to the Business Holdco as at the Separation Date;
(b) from (and including) the Notification Date, the Business Holdco
shall perform and comply with the Misplaced Liability in accordance
with its terms as if it were the original obligor thereof, or if
that is not possible or practicable, (at the cost of the Business
Holdco) assist the Liability Holder and any of its Subsidiaries to
perform and comply with any obligations that the Liability Holder or
such Subsidiary may have in relation to the Misplaced Liability;
(c) subject to clause 3.2(b), from (and including) the Notification
Date, the Liability Holder will:
(i) subject to sub-paragraph (ii) of this clause 3.2(c), continue
to perform and comply with any obligations that it or any of
its Subsidiaries may have in relation to the Misplaced
Liability; and
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(ii) comply with any lawful direction from the Business Holdco with
respect to the Misplaced Liability (provided that the Liability
Holder shall not be obliged to comply with any such direction
if to do so would prejudice it in a manner or to an extent for
which it is not compensated by the provisions of this Schedule
5); and
(d) the Business Holdco shall indemnify the Liability Holder and any of
its Subsidiaries from and against any and all losses, damages,
liabilities, claims, costs and expenses of whatever nature
(including, without limitation, tax) sustained or incurred by the
Liability Holder or such Subsidiary (as applicable), under or in
connection with the Misplaced Liability (including, without
limitation, all costs and expenses (including all legal expenses on
a solicitor and own client basis and any tax) incurred by the
Liability Holder or such Subsidiary in the performance of the
obligations of the Liability Holder under this clause 3.2).
3.3 COSTS
To the extent not indemnified against under clause 3.2(d), all costs and
expenses (including legal expenses on a solicitor and own client basis
and any tax) incurred by the Liability Holder or any of its Subsidiaries
in the performance of the obligations of the Liability Holder under this
clause 3 will be paid by the Business Holdco, or reimbursed to the
Liability Holder or such Subsidiary (as applicable), upon demand and
presentation of such documentation as may be reasonably required to
evidence such costs and expenses.
4. LIMITATION ON OBLIGATIONS
4.1 LIMITATION ON OBLIGATIONS OF BUSINESS HOLDCO
For the avoidance of doubt, it is acknowledged that the Business Holdco
shall not have any obligations under this Schedule 5 to the Asset Holder
or Liability Holder (as applicable) of any Misplaced Asset or Misplaced
Liability in excess of the obligations to the third person which the
Asset Holder or Liability Holder is able to meet from its own assets,
without any recourse to the provisions of this Schedule 5.
4.2 LIMITATION ON OBLIGATIONS OF ASSET HOLDER OR LIABILITY HOLDER
Notwithstanding any other provision of this Schedule 5, the Asset Holder
(in respect of any Misplaced Asset) or the Liability Holder (in respect
of any Misplaced Liability) shall not have any obligation to the
Business Holdco under this Schedule 5 to perform or comply with any
obligations it or any of its Subsidiaries may have in relation to the
Misplaced Asset or Misplaced Liability respectively in excess of the
obligation the Business Holdco would have if the Business Holdco was
directly responsible for such obligation.
4.3 MONETARY LIMITATIONS
No party shall have a right to indemnification under this Schedule 5
unless:
(a) the amount payable by way of indemnity equals or exceeds
$200,000; or
(b) the party has a number of indemnity claims and the aggregate amount
payable by way of indemnity under such claims (including any amount
payable under paragraph (a) of this clause 4.3) equals or exceeds
$500,000 in which case the party will be entitled to payment of each
and every such indemnity amount.
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5. PRESERVATION OF RIGHTS AND OBLIGATIONS/CO-OPERATION
5.1 NOT ALTER POSITION
Where the Asset Holder or Liability Holder (or a Subsidiary thereof)
(the CONTRACTING HOLDCO) holds any Misplaced Assets or Misplaced
Liabilities which are contracts to which the Contracting Holdco or any
such Subsidiary is a party or other chose in action under which the
Contracting Holdco or any such Subsidiary has rights or obligations, it
will not, at any time, except with the prior consent of the Business
Holdco:
(a) amend or vary, or consent to any amendment or variation of, any
such contract or other chose in action;
(b) avoid, terminate, rescind, repudiate, discharge (other than by
performance) or accept the termination, recission, repudiation or
discharge (other than by performance) of any such contract or other
chose in action;
(c) expressly or impliedly waive any right, or grant any consent
under any such contract or other chose in action; or
(d) release any party from any of its obligations under any such
contract or other chose in action.
5.2 ASSISTANCE/INFORMATION
Each party shall co-operate with, and render such assistance, make such
disclosures and provide such information to, the other and its
Subsidiaries as will ensure that after the Notification Date, as far as
reasonably practicable in respect of any Misplaced Asset or Misplaced
Liability, the Business Holdco or such Subsidiary will be able to deal
with the Misplaced Asset or Misplaced Liability, and generally so
conduct themselves in relation to such Misplaced Asset or Misplaced
Liability, as if it was the legal and beneficial owner or obligor (as
the case may be) thereof.
5.3 CO-OPERATION
The parties shall co-operate in effecting any transfer of the ownership
of any assets or liabilities as described in this Schedule 5 in the most
tax effective manner reasonably available to each party.
6. DISPUTE RESOLUTION
6.1 DISPUTE RESOLUTION
If either party disputes the proper attribution of any asset or
liability notified to it pursuant to clause 2 or clause 3, it shall give
written notice to the other not later than 30 days after the date on
which notification of such asset or liability is received by the
notified party, setting out sufficient detail to enable the other to
respond. If the parties then cannot agree the proper attribution of such
asset or liability within 5 business days of the date of receipt of the
dispute notice, or if the parties cannot agree the fair market value of
any Misplaced Asset within [5 business days] of the date on which
notification of the Misplaced Asset pursuant to clause 2.1 is received
by the relevant party, the matter shall be referred on the application
of either party to the Expert for determination. The Expert:
43
(a) will be deemed to act as an expert and not as an arbitrator;
(b) must be instructed to notify its determination to the parties within
14 days of its appointment by a written determination which shall
(in the absence of manifest error) be final and binding on the
parties;
(c) must make its determination by reference to the terms of this
Schedule 5; and
(d) will have the right to call for information from either party
relevant to the determination it is required to make.
6.2 CO-OPERATE WITH EXPERT
The parties must do all things reasonably required to co-operate with
the Expert in resolving the dispute and each will be entitled to submit
written representations to the Expert in connection with the dispute.
The parties will provide to the Expert, promptly following its request,
any information that the Expert (acting reasonably) considers to be
relevant to its determination.
6.3 COSTS
The parties shall bear their own costs of and incidental to this clause
6 and shall share equally the costs of the Expert.
7. LITIGATION
7.1 NOTIFICATION OF CLAIM
If, after the Separation Date, a party or any of its Subsidiaries
receives notice of any Claim, as a condition to it being entitled to be
indemnified under this Schedule 5, the party will promptly notify the
Indemnifying Party of that Claim (and provide copies of any
documentation relating to that Claim received by it).
7.2 LIMITATION ON INDEMNITIES
The indemnities in this Schedule 5 shall not apply in respect of a Claim
to the extent of any actual prejudice caused to the Indemnifying Party
if the Indemnified Party:
(a) fails to promptly notify the Indemnifying Party as required in
clause 7.1;
(b) admits any facts or allegations concerning the Claim;
(c) admits liability in respect of the Claim; or
(d) settles the Claim;
without the consent of the Indemnifying Party (which consent shall not
be unreasonably withheld or delayed).
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7.3 INDEMNIFYING PARTY MAY DEFEND
Subject to clause 7.4, if the Indemnifying Party acknowledges that it is
liable to indemnify the Indemnified Party in respect of a Claim, the
Indemnifying Party shall be entitled to conduct the defence of such
Claim under its sole management and control and at its sole cost
(including any reasonable management, legal or other costs incurred by
the Indemnified Party at the request of the Indemnifying Party) and, for
that purpose, to institute such legal and other proceeding (including
cross-claims) in the name of the Indemnified Party as it thinks fit.
7.4 NO PREJUDICE
In defending any Claim, the Indemnifying Party shall act in a manner
that does not unreasonably prejudice the Indemnified Party's reputation
in a manner or to an extent for which the Indemnified Party is not
compensated by the provisions of this Schedule 5 and shall take into
account the Indemnified Party's reasonable requests in this respect.
7.5 REASONABLE ASSISTANCE AND CO-OPERATION
For so long as the Indemnifying Party is entitled to conduct the defence
of such Claim and provided that the Indemnifying Party promptly pays all
reasonable management, legal or other costs thereby incurred by the
Indemnified Party, at the request of the Indemnifying Party, the
Indemnified Party must, and must ensure that its officers and employees,
promptly render all reasonable assistance and co-operation to the
Indemnifying Party in the conduct of the relevant proceedings as, where
and when the Indemnifying Party may direct.
7.6 ACCESS TO DOCUMENTS AND RECORDS
If a Claim is made, the Indemnified Party shall give the Indemnifying
Party reasonable access to the documents and records of the Indemnified
Party, for the purpose of defending such Claim.
8. INDEMNITIES CONTINUING AND SEPARATE
8.1 INDEMNITIES CONTINUING
Indemnities in this Schedule 5:
(a) shall be continuing and primary obligations of the applicable
party;
(b) shall be in addition to and shall not merge in or affect any
other rights to which the indemnified person may be or become
entitled; and
(c) shall not be discharged or impaired by any act, omission, matter or
thing which would or might, but for this clause 8, operate to impair
or discharge the liabilities of any party under this Schedule 5,
provided however that each party's obligations under the indemnities
in this Schedule 5 do not extend to any losses, damages,
liabilities, claims, costs or expenses:
(i) to the extent sustained or incurred by the indemnified
person as a result of it's the indemnified person's
negligence, default or fraud; or
45
(ii) to the extent of any actual prejudice caused to the
indemnifying party by any action of the indemnified person that
is in breach, or outside the provisions, of this Schedule 5 and
taken without the consent of the indemnifying party (which
consent shall not be unreasonably withheld or delayed).
8.2 SEPARATE AND INDEPENDENT OBLIGATIONS
The indemnities in this Schedule 5 shall be separate and independent
obligations and shall give rise to separate and independent causes of
action.
9. PAYMENTS
9.1 PAYMENTS TO BE FREE AND CLEAR
Each payment under this Schedule 5 is to be made:
(a) free of any restriction or condition; and
(b) free and clear of and (except to the extent required by law) without
any deduction or withholding for or on account of tax or on any
other account, whether by way of set-off, counterclaim or otherwise.
9.2 GROSSING-UP OF PAYMENTS
If:
(a) a party or any of its Subsidiaries or any person on behalf of the
party or such Subsidiary is required by law to make a deduction or
withholding for or on account of tax or on any other account,
whether by way of set-off or otherwise, from an amount paid or
payable by it pursuant to this Schedule 5; or
(b) a party or any of its Subsidiaries or any person on behalf of the
party or such Subsidiary is required by law to make a deduction or
withholding from, or a payment on or calculated by reference to, an
amount received or receivable pursuant to this Schedule 5(excluding
tax on its overall net income),
then the amount in respect of which that deduction, withholding or
payment is required to be made is to be increased to the extent
necessary to ensure that, after the making of that deduction,
withholding or payment, the payee receives and retains (free from any
liability in respect of that deduction, withholding or payment) a net
amount equal to the amount which it would have received and so retained
had no deduction, withholding or payment been required to be made;
provided however that this clause 9.2 shall not apply to any amount paid
or payable, or received or receivable, pursuant to clauses 2.3.
9.3 NOTICE OF LEGAL REQUIREMENTS
If a party or any of its Subsidiaries is required to make a deduction,
withholding or payment for or on account of tax or on any other account,
the party is to notify the payee or payor (as applicable) promptly.
46
9.4 TIMELY PAYMENT TO TAX AUTHORITY
If a party or any of its Subsidiaries is required to make a deduction,
withholding or payment for or on account of tax or on any other account,
the party is to account to the appropriate tax or other authority for
the relevant amount within the time allowed, without incurring a penalty
for late payment.
9.5 TAX RECEIPTS
Promptly after a party or any of its Subsidiaries making a deduction,
withholding or payment, the party is to deliver to the payee or payor
(as applicable) a receipt or other documentation satisfactory to that
payee or payor acting reasonably evidencing the deduction, withholding
or payment.
9.6 TAX CREDIT
If:
(a) a party or any of its Subsidiaries, being the payee, is entitled to
receive the benefit of any tax credit, tax deduction or similar
benefit (a credit) by reason of any deduction, withholding or
payment referred to in clause 9.2; and
(b) the payor has on account of such deduction, withholding or
payment made the increased payment required by clause 9.2,
then the party shall use reasonable efforts to obtain the credit and,
upon receipt of such credit (and to the extent that it can do so without
prejudice to the retention of such credit), pay to the payor, or
otherwise account for, such amount (if any) as equals the value to the
payee in its opinion (acting reasonably) of that part of such credit as
the payee considers allocable to such deduction, withholding or payment
(having regard to all its dealings giving rise to similar credits in
relation to the same tax period, and to the cost of obtaining the same).
Nothing in this clause shall interfere with the right of the payee to
arrange its tax affairs in whatever manner it deems fit, or oblige it to
disclose any information relating to the assessment or computation of
its tax liabilities or tax benefits and, in particular, the payee shall
not be under any obligation to claim relief from its profits or similar
tax liability in respect of any such deduction, withholding or payment
in priority to any other reliefs, claims, credits or deductions
available to it.
10. COSTS
Without prejudice to clauses 2.5 and 3.3, all reasonable costs
(including all losses, damages, liabilities, claims and expenses)
incurred as a result of the matters contemplated in this Schedule 5 in
relation to any Misplaced Asset or Misplaced Liability shall be for the
account of the Business Holdco that is carrying on the business to which
the Misplaced Asset or Misplaced Liability is properly attributable.
Such Business Holdco shall indemnify the other party and its respective
Subsidiaries from and against any and all such costs.
