Document:

exv10w1

Exhibit 10.1

FORBEARANCE AGREEMENT

THIS FORBEARANCE AGREEMENT (hereinafter, this “Agreement”) dated as of July 29, 2011 is by and
among:

YA GLOBAL INVESTMENTS, L.P., formerly known as Cornell Capital Partners, LP (the
“Lender”), a Cayman Islands exempt limited partnership with an office located at 101 Hudson
Street, Suite 3700, Jersey City, New Jersey 07302;

HOMELAND SECURITY CAPITAL CORPORATION, a Delaware corporation (the “Company”) with its
principal office located at 4601 North Fairfax Road, Suite 1200, Arlington, VA 22203;

HOMELAND SECURITY ADVISORY SERVICES, INC., a Delaware corporation (“HSAS”), with its
principal office located at 4601 North Fairfax Road, Suite 1200, Arlington, VA 22203;

CELERITY SYSTEMS, INC., a Nevada corporation (“Celerity”), with its principal office
located at 4601 North Fairfax Road, Suite 1200, Arlington, VA 22203; and

NEXUS TECHNOLOGY GROUP, INC., a Delaware corporation (“Nexus” and, collectively with
HSAS and Celerity, the “Guarantors” and each, a “Guarantor”), with its principal office
located at 7 West Cross Street, Hawthorne, NY 10532.

WITNESSETH

WHEREAS, the Lender has made loans and other financial accommodations to or for the benefit of
the Company and the Guarantors in accordance with the documents, instruments, and agreements set
forth on Exhibit A hereto (hereinafter, collectively, with all other documents, instruments, and
agreements executed in connection therewith or related thereto, the “Financing Documents”);

WHEREAS, one or more Events of Default (as defined in the Financing Documents) have occurred
and are continuing as a consequence of the Company having failed to pay, when due at maturity, all
outstanding principal and accrued and unpaid interest under the Promissory Notes (the “Existing
Defaults”);

WHEREAS, the Company has requested that the Lender forbear from exercising its rights and
remedies under the Financing Documents and applicable law in respect of the Existing Defaults, and
the Lender is willing to do so, but only on the terms and conditions set forth herein.

 

 

 

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

Definitions

	1.	 	Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned
in the Financing Documents and the following terms shall have the following meanings:

“Acquisitions” shall have the meaning ascribed thereto in that certain Waiver, Consent and
Release of Security Interests entered into as of the date hereof by and between the Company
and the Lender.

“Ecology” means Safety & Ecology Holdings Corporation, a Nevada corporation.

“Ecology Sale” means a sale of all or substantially all of the assets of Ecology or a sale
or all or substantially all of the equity interests of Ecology.

“First March 2008 Promissory Note” shall have the meaning ascribed thereto in Exhibit A.

“Forbearance Effective Date” means the first date on which the conditions precedent
specified in Section 5 of this Agreement shall have been satisfied or the satisfaction
thereof shall have been waived in accordance with the terms hereof.

“Forbearance Period” means the period beginning on the Forbearance Effective Date and ending
on the Forbearance Termination Date.

“Forbearance Termination Date” means the earlier to occur of (i) the Termination Date and
(ii) a Termination Event.

“Net Cash Proceeds” means cash proceeds received by the Company or any Guarantor from any
sale, conveyance, transfer, lease or other disposition of any of their respective assets or
any interest therein (including the sale or factoring at maturity or collection of any
accounts), net of (i) the reasonable cash costs of sale, assignment or other disposition
(ii) taxes paid or reasonably estimated to be payable as a result thereof, (iii) reserves
for post-closing adjustments in the purchase price; provided that, to the extent and
at the time any such reserves are no longer required to be maintained by the Company or any
Guarantor, such funds shall constitute Net Cash Proceeds, (iv) post-closing adjustments to
the purchase price in connection with any indemnification payments made by the Company or
any Guarantor with respect thereto and (v) up to $550,000 of proceeds from the Nexus Sale to
be used by the Company for the Acquisitions; provided, however, that
evidence of each of clauses (i), (ii), (iii) and (iv) above is provided to the Lender in
form and substance satisfactory to it in its sole and absolute discretion.

“Nexus Sale” means a sale of all or substantially all of the assets of Nexus or a sale or
all or substantially all of the equity interests of Nexus.

“November 28 Promissory Note” shall have the meaning ascribed thereto in Exhibit A.

 

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“November 26 Promissory Note” shall have the meaning ascribed thereto in Exhibit A.

“Promissory Notes” shall have the meaning ascribed thereto in Exhibit A.

“Second March 2008 Promissory Note” shall have the meaning ascribed thereto in Exhibit A.

“Security Agreement” shall have the meaning ascribed thereto in Exhibit A.

“Termination Date” means August 31, 2011.

“Termination Event” means the occurrence of an event of termination as provided in Section 3
of this Agreement.

“Third March 2008 Promissory Note” shall have the meaning ascribed thereto in Exhibit A.

Forbearance by Lender

	2.	 	Notwithstanding the occurrence and continuance of the Existing Defaults, subject to the terms
and conditions hereof, the Lender hereby agrees to forbear, during the Forbearance Period,
from the exercise of any and all rights or remedies under the Financing Documents or
applicable law solely in respect of the Existing Defaults. Notwithstanding the foregoing,
nothing contained in this Agreement shall constitute a waiver by the Lender of any default or
Event of Default, whether now existing or hereafter arising (including, without limitation,
the Existing Defaults). This Agreement shall only constitute an agreement by the Lender to
forbear from enforcing its rights and remedies upon the terms and conditions set forth herein.

Termination Events

	3.	 	The occurrence of any one or more of the following events shall constitute a termination
event under this Agreement:

	 	a.	 	The failure of the Company or any Guarantor to promptly, punctually, or
faithfully perform or comply with any term or condition of this Agreement as and when
due, it being expressly acknowledged and agreed that TIME IS OF THE ESSENCE, including,
without limitation, any agreement set forth in Sections 6 through 12 hereto;

	 	b.	 	The determination by the Lender that any warranty or representation made by the
Company or any Guarantor in connection with this Agreement was false or misleading;

 

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	 	c.	 	The occurrence of a materially adverse change in or to the collateral granted
to the Lender under the Financing Documents and/or herein, as determined by the Lender
in its sole and exclusive discretion; and

	 	d.	 	The occurrence of any default and/or Event of Default (other than the Existing
Defaults) under the Financing Documents.

Rights Upon Occurrence of a Termination Event

	4.	 	On and after the Forbearance Termination Date, the Lender’s agreement to forbear as set forth
in this Agreement shall automatically terminate without any further action of any party and
the Lender may immediately commence enforcing its rights and remedies pursuant to this
Agreement, the Financing Documents and/or otherwise under applicable law.

Conditions Precedent

	5.	 	The Lender’s agreement to forbear as contemplated herein, shall not be effective unless and
until each of the following conditions precedent have been fulfilled, all as determined by the
Lender in its sole and exclusive discretion:

	 	a.	 	All action on the part of the Company and each Guarantor necessary for the
valid execution, delivery, and performance by the Company and each Guarantor of this
Agreement shall have been duly and effectively taken, and the Lender shall have
received from the Company and each Guarantor: (i) copies, certified by a duly
authorized officer of the Company and each Guarantor to be true and complete as of the
date hereof, of each of (A) the governing documents of the Company and each Guarantor
as in effect on the date hereof, including, without limitation, the Articles of
Incorporation and the By-laws and any and all amendments thereto, (B) the resolutions
of the Company and each Guarantor authorizing the execution and delivery of this
Agreement, the other documents executed in connection herewith and the Company’s and
each Guarantor’s performance of all of the transactions contemplated hereby, and (C) an
incumbency certificate giving the name and bearing a specimen signature of each
individual who shall be so authorized; and (ii) such other evidence reasonably
satisfactory to the Lender that all such actions on the part of the Company and each
Guarantor have been duly and effectively taken; and

	 	b.	 	This Agreement shall be executed and delivered to the Lender by the Company and
each Guarantor, shall be in full force and effect and shall be in a form and substance
reasonably satisfactory to the Lender.

 

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Agreements

	6.	 	On or before August 5, 2011, the Company shall deliver to the Lender one or more certificated
securities representing one hundred percent (100%) of its equity
interest in Nexus, along with an executed but undated stock power, satisfactory to Lender in its sole
and absolute discretion.

	7.	 	On or before August 5, 2011, Fiducia Holdings LLC, a Delaware limited liability company
(“Fiducia Holdings”), shall execute and deliver a guaranty agreement in favor of Lender with a
maximum liability not to exceed $1,800,000, in form and substance reasonably satisfactory to
Lender in its sole and absolute discretion.

	8.	 	On or before August 5, 2011, Fiducia Holdings and Nexus shall execute and deliver a joinder
agreement in favor of Lender pursuant to which Fiducia Holdings and Nexus each become a
Grantor under the Security Agreement.

	9.	 	On or before August 5, 2011, the Company shall deliver to the Lender one or more certificated
securities representing one hundred percent (100%) of its equity interest in Fiducia Holdings
along with an executed and undated membership interest power, reasonably satisfactory to the
Lender in its sole and absolute discretion.

	10.	 	On or before August 5, 2011, Fiducia Holdings shall incorporate into its operating agreement
a provision pursuant to which each membership interest of Fiducia Holdings shall be deemed a
security within the meaning of Sections 8-102(15) and 8-103 of the Code (as defined in the
Security Agreement). The designation of any membership interest as a “security” under this
provision shall be solely for the purposes of the Code and shall not indicate that it is a
“security” for any other purposes under any other provision of law.

	11.	 	On or before August 5, 2011, Fiducia Holdings shall deliver to the Lender one or more
certificated securities representing one hundred percent (100%) of its equity interest in
Fiducia Real Estate Solutions, Inc., a Delaware corporation (“Fiducia Real Estate”), along
with an executed but undated stock power, reasonably satisfactory to Lender in its sole and
absolute discretion.

 

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Transfer of Equity Interests in Fiducia Holdings and Fiducia Real Estate

	12.	 	The Company hereby represents and warrants that no provision of the operating agreement or
other agreement governing the transfer of equity interests of Fiducia Holdings (the “Fiducia
Holdings Charter Documents”) or the by-laws or other agreement governing the transfer of
equity interests of Fiducia Real Estate (the “Fiducia Real Estate Charter Documents”)
restricts, directly or indirectly, the transfer of equity interests in Fiducia Holdings or
Fiducia Real Estate, respectively. The Company shall not take any action, and shall cause
Fiducia Holdings not to take any action, directly or indirectly, to amend, modify or otherwise
change the Fiducia Holdings Charter Documents or Fiducia Real Estate Charter Documents to
impose any restrictions upon the transfer of the equity interests in Fiducia Holdings or
Fiducia Real Estate.

Mandatory Prepayments in Connection with Ecology Sale and Nexus Sale

	13.	 	Notwithstanding anything in the Financing Documents to the contrary, upon receipt by the
Company or any Guarantor of Net Cash Proceeds arising from the Ecology Sale and/or Nexus Sale,
the Company shall immediately prepay the Obligations (as hereinafter defined) in an amount
equal to one hundred percent (100%) of such Net Cash Proceeds up to the amount of the
Obligations. To the extent that any portion of the purchase price paid in connection with the
Ecology Sale or Nexus Sale is paid by the purchaser issuing to the seller a debt instrument,
all payments made on account of such debt instrument shall be made to account no.
1000038719851 held by the Company at SunTrust Bank. Neither this section nor any other
provision herein shall constitute a consent by Lender to the Ecology Sale or Nexus Sale or
shall in any way constitute a release by Lender of any security interests or liens in any
assets subject to the Ecology Sale or Nexus Sale.

Acknowledgment of Indebtedness

	14.	 	The Company and each Guarantor hereby acknowledges and agrees that, in accordance with the
terms and conditions of the Financing Documents, it is jointly and severally liable to the
Lender as follows:

	 	a.	 	Due under November 28 Promissory Note as of the date hereof:

	 	 	 	 	 
	Principal
	 	$	71,345.00	 
	Interest
	 	$	26,993.82	 
	 
	 	 	 
	Total
	 	$	98,338.82	 

	 	b.	 	Due under the November 26 Promissory Note as of the date hereof:

	 	 	 	 	 
	Principal
	 	$	178,655.00	 
	Interest
	 	$	67,722.48	 
	 
	 	 	 
	Total
	 	$	246,377.48	 

	 	c.	 	Due under the First March 2008 Promissory Note as of the date hereof:

	 	 	 	 	 
	Principal
	 	$	878,923.00	 
	Interest
	 	$	0.00	 
	 
	 	 	 
	Total
	 	$	878,923.00	 

	 	d.	 	Due under the Second March 2008 Promissory Note as of the date hereof:

	 	 	 	 	 
	Principal
	 	$	6,750,000.00	 
	Interest
	 	$	3,176,568.49	 
	 
	 	 	 
	Total
	 	$	9,926,568.49	 

 

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	 	e.	 	Due under the Third March 2008 Promissory Note as of the date hereof:

	 	 	 	 	 
	Principal
	 	$	6,310,000.00	 
	Interest
	 	$	2,469,503.29	 
	 
	 	 	 
	Total
	 	$	8,779,503.29	 

	 	f.	 	For all interest accruing upon the principal balances of the Promissory Notes
from and after the date hereof, and for all fees, redemption premiums, liquidated
damages, costs, expenses, and costs of collection (including attorneys’ fees and
expenses) heretofore or hereafter accrued or incurred by the Lender in connection with
the Financing Documents.

Hereinafter all amounts due as set forth in this Section 13, and all amounts payable under
this Agreement and the Financing Documents, shall be referred to collectively as the “Obligations”.

Waiver of Claims

	15.	 	The Company and each Guarantor hereby acknowledges and agrees that it has no offsets,
defenses, claims, or counterclaims against the Lender, its general partner, and its investment
manager, and each of their respective agents, servants, attorneys, advisors, officers,
directors, employees, affiliates, representatives, investors, partners, members, managers,
predecessors, successors, and assigns (collectively, the “Lender Parties”) and that if the
Company or any Guarantor now has, or ever did have, any offsets, defenses, claims, or
counterclaims against the Lender Parties, or any one of them, whether known or unknown, at
law or in equity, from the beginning of the world through this date and through the time of
execution of this Agreement, all of them are hereby expressly WAIVED, and the Company hereby
RELEASES the Lender Parties from any liability therefor.

Ratification of Loan Documents; Cross-Default; Cross-Collateralization; Further Assurances

	16.	 	The Company and each Guarantor:

	 	a.	 	Hereby ratifies, confirms, and reaffirms all and singular the terms and
conditions of the Financing Documents and acknowledges and agrees that the Financing
Documents remain in full force and effect;

 

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	 	b.	 	Hereby ratifies, confirms, and reaffirms that (i) the obligations secured by
the Financing Documents include, without limitation, the Obligations, and any future
modifications, amendments, substitutions or renewals thereof, (ii) all collateral,
whether now existing or hereafter acquired, granted to the Lender pursuant to the
Financing Documents or otherwise shall secure all of the Obligations until full and
final payment of the Obligations, and (iii) the occurrence of a default and/or Event
of Default under any Financing Document and/or the occurrence of a Termination Event
under this Agreement, shall constitute an Event of Default under all of the
Financing Documents and a Termination Event hereunder, it being the express intent
of the Company that all of the Obligations be fully cross-collateralized and
cross-defaulted. Without limiting the foregoing, and for the avoidance of doubt, in
order to secure all debts, liabilities, obligations, covenants and duties owing by
the Company to the Lender, whether now existing or hereafter arising, including,
without limitation, the Obligations, the Company and each Guarantor hereby grants
the Lender a security interest in all of its assets, whether now existing or
hereafter acquired, including, without limitation, all accounts, inventory, goods,
equipment, software and computer programs, securities, investment property, equity
interests in any of the Company’s subsidiaries, financial assets, deposit accounts,
chattel paper, electronic chattel paper, instruments, documents, letter-of-credit
rights, health-care-insurance receivables, supporting obligations, notes secured by
real estate, commercial tort claims, and general intangibles, including payment
intangibles, and all products and proceeds of the foregoing; and

	 	c.	 	Shall, from and after the execution of this Agreement, execute and deliver to
the Lender whatever additional documents, instruments, and agreements that the Lender
may reasonably require in order to correct any document deficiencies, or to vest or
perfect the Financing Documents and the collateral granted therein or herein more
securely in the Lender and/or to otherwise give effect to the terms and conditions of
this Agreement, and hereby authorizes the Lender to file any financing statements
(including financing statements with a generic description of the collateral such as
“all assets”), and take any other normal and customary steps, the Lender deems
necessary to perfect or evidence the Lender’s security interests and liens in any such
collateral. This Agreement constitutes an authenticated record.

Costs and Expenses

	17.	 	The Company and each Guarantor shall be jointly and severally liable to Lender for any and
all unreimbursed costs, expenses, and costs of collection (including attorneys’ fees and
expenses) heretofore or hereafter incurred by the Lender in connection with the protection,
preservation, and enforcement by the Lender of its rights and remedies under the Financing
Documents and this Agreement.

 

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Representations, Warranties, and Covenants

	18.	 	The Company and each Guarantor hereby represents, warrants, and covenants to the Lender as
follows:

	 	a.	 	The execution and delivery of this Agreement by the Company and each Guarantor
and the performance by the Company and each Guarantor of its obligations and agreements
under this Agreement and the Financing Documents are within the authority of the
Company and each Guarantor, have been duly authorized by all necessary corporate
proceedings, if applicable, on behalf of the Company and each Guarantor, and do not and
will not contravene any provision of law, statute, rule or regulation to which the
Company or any Guarantor is subject or, if applicable, any of the Company’s or any
Guarantor’s charter, other organization papers, by-laws or any stock provision or any
amendment thereof or of any agreement or other instrument binding upon the Company or
any Guarantor.

	 	b.	 	This Agreement and the Financing Documents constitute legal, valid and binding
obligations of the Company and each Guarantor, enforceable in accordance with their
respective terms, except as limited by bankruptcy, insolvency, moratorium, fraudulent
transfer, reorganization and other laws of general applicability relating to or
affecting the rights or remedies of creditors and by general equitable principles
(whether considered in a proceeding in equity or at law).

	 	c.	 	No approval or consent of, or filing with, any governmental agency or authority
is required to make valid and legally binding the execution, delivery or performance by
the Company or any Guarantor of this Agreement or any of the Financing Documents.

	 	d.	 	The Company and each Guarantor has performed and complied in all material
respects with all terms and conditions herein required to be performed or complied with
by the Company and each Guarantor prior to or at the time hereof, and as of the date
hereof, to the best knowledge of the Company and each Guarantor, no default and/or
Event of Default has occurred and is continuing under any of the Financing Documents,
with the sole exception of the Existing Defaults.

	 	e.	 	The representations and warranties contained in the Financing Documents were
true and correct in all material respects at and as of the date made and are true and
correct as of the date hereof, except to the extent of changes resulting from
transactions specifically contemplated or specifically permitted by this Agreement and
the Financing Documents, and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse to the financial condition of the
Company, and to the extent that such representations and warranties relate expressly to
an earlier date.

	 	f.	 	To the best knowledge of the Company and each Guarantor, the Company and each
Guarantor currently has no commercial tort claims (as such term is defined in the
Code), and hereby covenants and agrees that in the event the Company or any Guarantor
shall hereafter hold or acquire a commercial tort claim, the
Company and/or such Guarantor shall immediately notify the Lender of the particulars
of such claim in writing and shall grant to the Lender a security interest therein
and in the proceeds thereof, upon such terms and documentation as may be
satisfactory to the Lender.

 

9

 

	 	g.	 	The Company and each Guarantor has read and understands each of the terms and
conditions of this Agreement and confirms that it is entering into this Agreement
freely and voluntarily, without duress, after having had an opportunity for
consultation with independent counsel of its own selection, and not in reliance upon
any representations, warranties, or agreements made by the Lender and not set forth in
this Agreement.

Notices

	19.	 	Any communication between the Lender and the Company or any Guarantor shall be forwarded via
certified mail, return receipt requested, or via recognized overnight courier, addressed as
follows:

	 	 	 	 	 
	 

	 	If to the Lender:
	 	YA Global Investments, L.P.
	 

	 	 	 	101 Hudson Street, Suite 3700
	 

	 	 	 	Jersey City, New Jersey 07302
	 

	 	 	 	Attention: Michael Rosselli
	 

	 	 	 	Telephone: (201) 985-8300
	 

	 	 	 	Facsimile: (201) 985-8266
	 
	 	 	 	 
	 

	 	If to Company or:
	 	Homeland Security Capital Corporation.
	 

	 	Any Guarantor
	 	4601 North Fairfax Road, Suite 1200
	 

	 	 	 	Arlington, VA 22203
	 

	 	 	 	Attention: Thomas McMillen, CEO
	 

	 	 	 	Telephone: (703) 528-7073
	 

	 	 	 	Facsimile: (703) 528-0956

Waivers

	20.	 	Non-Interference. On and after the Forbearance Termination Date, the Company and
each Guarantor agrees not to interfere with the exercise by the Lender of any of its rights
and remedies. The Company and each Guarantor further agrees that it shall not seek to
distrain or otherwise hinder, delay, or impair the Lender’s efforts to realize upon any
collateral granted to the Lender, or otherwise to enforce its rights and remedies pursuant to
the Financing Documents, this Agreement and/or applicable law. The provisions of this
Paragraph shall be specifically enforceable by the Lender.

 

10

 

	21.	 	Automatic Stay. The Company and each Guarantor agrees that upon the filing of any
Petition for Relief by or against the Company or any Guarantor under the United States
Bankruptcy Code, the Lender shall be entitled to immediate and complete relief
from the automatic stay with respect to the Company and any Guarantor, and
Lender shall be permitted to proceed to protect and enforce its rights and
remedies under state law. The Company and each Guarantor hereby expressly
assents to any motion filed by the Lender seeking relief from the automatic
stay. The Company and each Guarantor further hereby expressly WAIVES the
protections afforded under Section 362 of the United States Bankruptcy Code
with respect to the Lender.

	22.	 	Jury Trial. The Company, each Guarantor and the
Lender hereby make the following
waiver knowingly, voluntarily, and
intentionally, and understand that
the other, in entering into this
Agreement, is relying on such a
waiver: THE COMPANY, EACH GUARANTOR
AND THE LENDER EACH HEREBY
IRREVOCABLY WAIVE ANY PRESENT OR
FUTURE RIGHT TO A JURY IN ANY TRIAL
OF ANY CASE OR CONTROVERSY IN WHICH
THE OTHER BECOMES A PARTY (WHETHER
SUCH CASE OR CONTROVERSY IS
INITIATED BY OR AGAINST SUCH PARTY
OR IN WHICH SUCH PARTY IS JOINED AS
A PARTY LITIGANT), WHICH CASE OR
CONTROVERSY ARISES OUT OF, OR IS IN
RESPECT OF, ANY RELATIONSHIP BETWEEN
THE COMPANY, ANY GUARANTOR OR ANY
OTHER PERSON, AND THE LENDER.

Entire Agreement

	23.	 	This Agreement shall be binding upon the Company, each Guarantor, and the Company’s and each
Guarantor’s employees, representatives, successors, and assigns, and shall inure to the
benefit of the Lender and the Lender’s successors and assigns. This Agreement incorporates
all of the discussions and negotiations between the Company, each Guarantor and the Lender,
either expressed or implied, concerning the matters included herein and in such other
documents, instruments and agreements, any statute, custom, or usage to the contrary
notwithstanding. No such discussions or negotiations shall limit, modify, or otherwise affect
the provisions hereof. No modification, amendment, or waiver of any provision of this
Agreement, or any provision of any other document, instrument, or agreement between the
Company, any Guarantor and the Lender shall be effective unless executed in writing by the
party to be charged with such modification, amendment, or waiver, and if such party be the
Lender, then by a duly authorized officer thereof.

Construction of Agreement

	24.	 	In connection with the interpretation of this Agreement:

	 	a.	 	All rights and obligations hereunder and thereunder, including matters of
construction, validity, and performance, shall be governed by and construed in
accordance with the law of the State of New Jersey and are intended to take effect as
sealed instruments.

 

11

 

	 	b.	 	The captions of this Agreement are for convenience purposes only, and shall not
be used in construing the intent of the Lender, the Company or any Guarantor under this
Agreement.

	 	c.	 	In the event of any inconsistency between the provisions of this Agreement and
any other document, instrument, or agreement entered into by and between the Lender,
the Company or any Guarantor, the provisions of this Agreement shall govern and
control.

	 	d.	 	The Lender, the Company and the Guarantors have prepared this Agreement with
the aid and assistance of their respective counsel. Accordingly, all of them shall be
deemed to have been drafted by the Lender, the Company and the Guarantors and shall not
be construed against the Lender, the Company or the Guarantors.

Illegality or Unenforceability

	25.	 	Any determination that any provision or application of this Agreement is invalid, illegal, or
unenforceable in any respect, or in any instance, shall not affect the validity, legality, or
enforceability of any such provision in any other instance, or the validity, legality, or
enforceability of any other provision of this Agreement.

Counterparts

	26.	 	This Agreement may be executed in multiple identical counterparts, each of which when duly
executed shall be deemed an original, and all of which shall be construed together as one
agreement. This Agreement will not be binding on or constitute evidence of a contract between
the parties hereto until such time as a counterpart has been executed by such party and a copy
thereof is delivered to each other party to this Agreement.

[Remainder of Page Intentionally Left Blank]

 

12

 

IN WITNESS WHEREOF, this Agreement has been executed as of the date first set forth above.

	 	 	 	 	 
	 	HOMELAND SECURITY CAPITAL CORPORATION

 	 
	 	By:  	/c/
C. Thomas McMillen	 
	 	 	Name:  	C. Thomas McMillen	 
	 	 	Title:  	Cheif Executive Officer	 
	 
	 	HOMELAND SECURITY ADVISORY SERVICES, INC.

 	 
	 	By:  	/c/
C. Thomas McMillen	 
	 	 	Name:  	C. Thomas McMillen	 
	 	 	Title:  	President	 
	 
	 	CELERITY SYSTEMS, INC.

 	 
	 	By:  	/c/
C. Thomas McMillen	 
	 	 	Name:  	C. Thomas McMillen	 
	 	 	Title:  	President	 
	 
	 	NEXUS TECHNOLOGY GROUP, INC.

 	 
	 	By:  	/c/
Michael T. Brigante	 
	 	 	Name:  	Michael T. Brigante	 
	 	 	Title:  	Cheif Executive Officer	 

 

 

 

	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	YA GLOBAL INVESTMENTS, L.P.
	 
	 	 	 	 	 	 
	 	 	By: Yorkville Advisors, LLC

Its: Investment Manager
	 
	 	 	 	 	 	 
	 

	 	By:	 	 /c/ David Gonzalez
	 	 	 	 	 
	 

	 	 	 	Name:	 	David Gonzalez
	 

	 	 	 	Title:	 	Memberexv10w1

Exhibit 10.1

Agreement

Co-operation and

contribution agreement

Peabody Acquisition Co. No. 3 Pty Ltd

ArcelorMittal Netherlands B.V.

ArcelorMittal Mining Australasia B.V.

Peabody Acquisition Co. No. 2 Pty Ltd

Peabody Acquisition Co. No. 4 Pty Ltd

tony.damian@freehills.com

	 	 	 

	MLC Centre Martin Place Sydney NSW 2000 Australia 

GPO Box 4227 Sydney NSW 2001 Australia
	 	Telephone +61 2 9225 5000 Facsimile +61 2 9322 4000

www.freehills.com DX 361 Sydney
	 	 	 
	Sydney Melbourne Perth Brisbane Singapore
	 	Associated offices in Jakarta Beijing Shanghai Hanoi Ho Chi Minh City

 

 

Contents

	 
	 
	 
	 
	 
	 	 	 	Table of contents     

	 	 	 	 	 	 	 

	 

	 	The agreement
	 	 	1	 
	 
	 	 	 	 	 	 
	1

	 	Definitions, interpretation and agreement components
	 	 	3	 
	 

	 	1.1 Agreement components
	 	 	3	 
	 

	 	1.2 Definitions
	 	 	3	 
	 

	 	1.3 Interpretation
	 	 	9	 
	 

	 	1.4 Inclusive expressions
	 	 	10	 
	 
	 	 	 	 	 	 
	2

	 	The Takeover Bid
	 	 	10	 
	 
	 	 	 	 	 	 
	3

	 	Takeover Bid funding arrangements
	 	 	10	 
	 

	 	3.1 Initial subscription by Peabody and AM BV2
	 	 	10	 
	 

	 	3.2 Further subscriptions by Peabody and AM BV2
	 	 	11	 
	 

	 	3.3 Set-off
	 	 	15	 
	 

	 	3.4 Fractions
	 	 	15	 
	 

	 	3.5 Constitution
	 	 	15	 
	 

	 	3.6 Rights and ranking
	 	 	15	 
	 

	 	3.7 Holdco’s obligations
	 	 	15	 
	 
	 	 	 	 	 	 
	4

	 	Conduct of the Offer
	 	 	16	 
	 

	 	4.1 Substantial holder notifications
	 	 	16	 
	 

	 	4.2 Conduct of the Offer
	 	 	16	 
	 

	 	4.3 Reserved decisions in respect of the Offer
	 	 	16	 
	 

	 	4.4 Public announcements
	 	 	18	 
	 

	 	4.5 Dealings with Governmental Agencies
	 	 	18	 
	 

	 	4.6 Compulsory acquisition
	 	 	19	 
	 
	 	 	 	 	 	 
	5

	 	Bidder’s Statement
	 	 	19	 
	 

	 	5.1 Preparation
	 	 	19	 
	 

	 	5.2 Compliance
	 	 	19	 
	 

	 	5.3 Peabody Information
	 	 	20	 
	 

	 	5.4 AM Information
	 	 	20	 
	 

	 	5.5 Statements in the Bidder’s Statement
	 	 	20	 
	 

	 	5.6 Updating information
	 	 	21	 
	 

	 	5.7 Standstill
	 	 	21	 
	 
	 	 	 	 	 	 
	6

	 	Exclusivity arrangements
	 	 	22	 
	 

	 	6.1 Prohibition
	 	 	22	 
	 

	 	6.2 Cease existing discussions
	 	 	23	 
	 

	 	6.3 Notification of approaches
	 	 	23	 
	 
	 	 	 	 	 	 
	7

	 	Director arrangements
	 	 	24	 
	 

	 	7.1 Notifications
	 	 	24	 
	 

	 	7.2 Board resolution
	 	 	24	 
	 

	 	7.3 Holdco constitution
	 	 	24	 
	 

	 	7.4 Observer rights
	 	 	24	 
	 
	 	 	 	 	 	 
	8

	 	Termination
	 	 	25	 
	 

	 	8.1 Termination
	 	 	25	 
	 

	 	8.2 Effect of termination
	 	 	25	 

Co-operation and contribution agreement Contents 1

 

 

Contents

	 	 	 	 	 	 	 

	 

	 	8.3 Duties imposed as a result of termination
	 	 	26	 
	 

	 	8.4 Automatic termination
	 	 	26	 
	 

	 	8.5 Termination by AM
	 	 	27	 
	 
	 	 	 	 	 	 
	9

	 	Warranties
	 	 	29	 
	 

	 	9.1 Mutual warranties
	 	 	29	 
	 

	 	9.2 Warranties by AM
	 	 	29	 
	 

	 	9.3 Warranties by Peabody
	 	 	31	 
	 

	 	9.4 Warranties by Peabody, Holdco and Bidco
	 	 	31	 
	 

	 	9.5 Reliance on representations and warranties
	 	 	32	 
	 

	 	9.6 Notification
	 	 	32	 
	 

	 	9.7 Independent warranties
	 	 	32	 
	 
	 	 	 	 	 	 
	10

	 	Confidentiality
	 	 	33	 
	 
	 	 	 	 	 	 
	11

	 	Duties, costs and expenses
	 	 	33	 
	 

	 	11.1 Duties
	 	 	33	 
	 

	 	11.2 Parties to pay own other costs
	 	 	33	 
	 

	 	11.3 Common advisory costs
	 	 	33	 
	 

	 	11.4 Break fees and other payments
	 	 	33	 
	 
	 	 	 	 	 	 
	12

	 	GST
	 	 	34	 
	 

	 	12.1 Definitions
	 	 	34	 
	 

	 	12.2 GST
	 	 	34	 
	 

	 	12.3 Tax invoices
	 	 	34	 
	 

	 	12.4 Reimbursements
	 	 	35	 
	 
	 	 	 	 	 	 
	13

	 	General
	 	 	35	 
	 

	 	13.1 Notices
	 	 	35	 
	 

	 	13.2 Governing law and jurisdiction
	 	 	37	 
	 

	 	13.3 Service of process
	 	 	37	 
	 

	 	13.4 Waivers and variation
	 	 	38	 
	 

	 	13.5 Assignment
	 	 	38	 
	 

	 	13.6 Further assurances
	 	 	38	 
	 

	 	13.7 Approvals and consent
	 	 	38	 
	 

	 	13.8 Remedies cumulative
	 	 	39	 
	 

	 	13.9 Counterparts
	 	 	39	 
	 

	 	13.10 Prohibition and enforceability
	 	 	39	 
	 

	 	13.11 No merger
	 	 	39	 
	 

	 	13.12 Entire agreement
	 	 	39	 
	 

	 	13.13 Contra proferentem excluded
	 	 	39	 
	 

	 	13.14 Specific performance
	 	 	39	 
	 

	 	13.15 Attorneys
	 	 	40	 
	 
	 	 	 	 	 	 
	 

	 	Schedules	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Schedule 1	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Agreed Announcement
	 	 	42	 
	 
	 	 	 	 	 	 
	 

	 	Schedule 2	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Transfer steps
	 	 	44	 
	 
	 	 	 	 	 	 
	 

	 	Signing page
	 	 	46	 

Co-operation and contribution agreement Contents 2

 

 

The agreement

	 	 	 	Co-operation and contribution agreement

	 	 	 	Date ► 29 July 2011

	 	 	 

	Between the parties
	 	 
	 
	 	 
	Peabody

	 	Peabody Acquisition Co. No. 2 Pty Ltd
	 
	 	 
	 

	 	ACN 146 797 417 of Level 13, BOQ Centre, 259 Queen
Street, Brisbane, Queensland 4000
	 
	 	 
	 

	 	(Peabody)
	 
	 	 
	AM

	 	ArcelorMittal Netherlands B.V.
	 
	 	 
	 

	 	of Eemhavenweg 70, 3089 KH Rotterdam, Netherlands
	 
	 	 
	 

	 	(AM)
	 
	 	 
	AM BV2

	 	ArcelorMittal Mining Australasia B.V.
	 
	 	 
	 

	 	of Eemhavenweg 70, 3089 KH Rotterdam, Netherlands
	 
	 	 
	 

	 	(AM BV2)
	 
	 	 
	Holdco

	 	Peabody Acquisition Co. No. 3 Pty Ltd
	 
	 	 
	 

	 	ACN 152 004 398 of Level 13, BOQ Centre, 259 Queen
Street, Brisbane, Queensland 4000
	 
	 	 
	 

	 	(Holdco)
	 
	 	 
	Bidco

	 	Peabody Acquisition Co. No. 4 Pty Ltd
	 
	 	 
	 

	 	ACN 152 004 772 of Level 13, BOQ Centre, 259 Queen
Street, Brisbane, Queensland 4000
	 
	 	 
	 

	 	(Bidco)
	 
	 	 
	Recitals

	 	1   Bidco is considering making a takeover bid for MCC. 

	 
	 	 
	 

	 	2   Peabody owns all the shares in Holdco and Holdco owns all the shares
in Bidco.

	 
	 	 
	 

	 	3   AM owns the AM Shares which it intends to transfer to AM BV2. 

	 
	 	 
	 

	 	4   AM and Bidco have entered into the Pre-Bid Acceptance Deed under which
AM has agreed to procure that AM BV2 sells the AM Shares to Bidco by accepting
an offer under the takeover bid.

	 
	 	 
	 

	 	5   Peabody has agreed to subscribe for Holdco Shares from time to time
under this agreement. AM BV2 has agreed to subscribe for Holdco Shares from time
to time under this agreement. The subscription consideration will be paid to
Holdco during the Offer 

Co-operation and contribution agreement

page 1

 

The agreement

	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	Period and the Holdco Shares will be issued following
the end of the Offer Period. Such proceeds may only be used by Holdco to fund
Bidco paying:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	•
	 	MCC shareholders for acceptances under its takeover bid for MCC;
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	•
	 	MCC shareholders for their MCC Shares pursuant to the exercise of Bidco’s right to compulsorily acquire any outstanding MCC Shares under the Corporations Act; and
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	•
	 	any Duty arising in connection with its takeover bid for MCC.
	 
	 	 	 	 	 	 	 	 
	 	 	 	6	 	 	It is the intention of all the parties (contributors and contributee)
that the contribution of share capital to Holdco is not treated as a loan for
Dutch corporation tax purposes.
	 
	 	 	 	 	 	 	 	 
	 	 	 	7	 	 	Peabody, AM BV2 and Holdco and others have entered into the
Shareholders’ Agreement.
	 
	 	 	 	 	 	 	 	 
	The parties agree	 	 	as set out in the Operative part of this agreement, in consideration of,
among other things, the mutual promises contained in this agreement.

Co-operation and contribution agreement

page 2

 

	1	 	Definitions, interpretation and agreement components
	 
	1.1	 	Agreement components
	 
	 	 	This agreement includes any schedule.     
	 
	1.2	 	Definitions
	 
	 	 	The meanings of the terms used in this agreement are set out below, unless the
context otherwise appears or requires.

	 	 	 
	Term	 	Meaning
	Agreed Announcement

	 	an announcement relating to the possible Takeover Bid in the form set out in
Schedule 1 to this agreement or in a form as may otherwise be agreed in
writing between Peabody, AM and Bidco.
	 
	 	 
	Agreed Constitution

	 	the agreed form constitution of Holdco that is initialled for identification
by Peabody, Holdco and AM.
	 
	 	 
	AM BV2 Shares

	 	the entire issued and to be issued share capital of AM BV2 and financial
instruments that provide the holder with rights to part of the income or
profit (before payments on such instrument) of AM BV2 or that could be
converted into shares or equivalent rights in the share capital of AM BV2 and
any other rights or interests AM may have in the capital of AM BV2.
	 
	 	 
	AM Duty Shares

	 	has the meaning given to it in clause 3.2(j)(2).
	 
	 	 
	AM Information

	 	has the meaning given in clause 5.4(a).
	 
	 	 
	AM Group

	 	means the group of companies comprising ArcelorMittal S.A. and each of its
subsidiaries.
	 
	 	 
	AM Party

	 	AM and each of its Related Bodies Corporate.
	 
	 	 
	AM Shares

	 	48,552,062 MCC Shares, registered in the name of AM.
	 
	 	 
	AM Subscription Shares

	 	has the meaning given to it in clause 3.2(a).
	 
	 	 
	AM Top-Up Shares

	 	has the meaning given to it in clause 3.2(g)(2).

page 3

 

	 	 	 

	

	 	1 Definitions, interpretation and agreement components

	 	 	 	 	 
	Term	 	Meaning
	Announcement Window	 	has the meaning given to it in clause 2(a).
	 
	 	 	 	 
	ASIC	 	the Australian Securities and Investments Commission.
	 
	 	 	 	 
	ASX	 	as the context requires, ASX Limited ABN 98 008 624 691 or the securities
market conducted by ASX Limited.
	 
	 	 	 	 
	Associate	 	has the meaning set out in section 12(2) of the Corporations Act.
	 
	 	 	 	 
	Bidco Duty	 	has the meaning in clause 3.2(j).
	 
	 	 	 	 
	Bidder’s Statement	 	the bidder’s statement to be prepared by Bidco under the Corporations Act in
connection with the Offer.
	 
	 	 	 	 
	Business Day	 	a day on which banks are open for business in Brisbane, other than a
Saturday, Sunday or public holiday in Brisbane and ASX is open for trading.
	 
	 	 	 	 
	Competing Proposal	 	any proposal, agreement, arrangement or transaction, which, if entered into
or completed, would mean a Third Party (either alone or together with any
Associate) may:
	 
	 	 	 	 
	 

	 	 1
	 	directly or indirectly acquire a Relevant Interest in, or have the
right to acquire, a legal, beneficial or economic interest in, or control of,
any of the MCC Shares or in the share capital in any Subsidiary of MCC;
	 
	 	 	 	 
	 

	 	 2
	 	acquire Control of MCC or a Subsidiary of MCC;
	 
	 	 	 	 
	 

	 	 3
	 	otherwise (whether directly or indirectly) acquire, become the
holder of, have a right to acquire or have an economic interest in all or a
material part of MCC’s business or assets or the business or assets of any
Subsidiary of MCC;
	 
	 	 	 	 
	 

	 	 4
	 	otherwise acquire (whether directly or indirectly) or merge with
MCC or a Subsidiary of MCC;
	 
	 	 	 	 
	 

	 	 5
	 	enter into any agreement, arrangement or understanding requiring
MCC or any of its directors to change, withdraw or modify the directors’
recommendation of the Takeover Bid;
	 
	 	 	 	 
	 	 	whether by way of takeover bid, scheme of arrangement, trust scheme,
unitholder or securityholder approved acquisition, capital reduction or buy
back, sale or purchase of shares, units, securities or assets, global
assignment of assets and liabilities, incorporated or unincorporated joint
venture, dual-listed company and/or trust structure (or other synthetic
merger), or other transaction or arrangement. For the avoidance of doubt, the
Takeover Bid is not a Competing Proposal.
	 
	 	 	 	 
	Confidentiality 

Agreement	 	the confidentiality agreement between Peabody Investments Corp. and
ArcelorMittal S.A. dated 16 June 2011.

page 4

 

	 	 	 

	

	 	1    Definitions, interpretation and agreement components

	 	 	 
	Term	 	Meaning
	Control

	 	has the meaning given in section 50AA of the Corporations Act.
	 
	 	 
	Corporations Act

	 	the Corporations Act 2001 (Cth).
	 
	 	 
	Deal

	 	1 sell, assign, transfer, declare a trust over or otherwise dispose
of;

	 
	 	 
	 

	 	2    agree or offer to sell, assign, transfer of otherwise dispose of;

	 
	 	 
	 

	 	3    enter into or agree to enter into any option which, if exercised,
enables or requires the person to sell, assign, transfer, declare a trust
over or otherwise dispose of;

	 
	 	 
	 

	 	4    enter into any derivative or synthetic agreement, deed or other
arrangement under which payments may be made that are referrable (in whole or
part) to the trading price, or the economic value, of the relevant shares;

	 
	 	 
	 

	 	5    create or agree or offer to create or permit to be created any
interest or encumbrance;

	 
	 	 
	 

	 	6    vote or agree to vote the relevant shares in favour of a Competing
Proposal; or

	 
	 	 
	 

	 	7    agree to do any of the above.

	 
	 	 
	Deed of Guarantee

	 	      the deed of guarantee dated on or about the date of this agreement to which
Peabody Energy Corporation, ArcelorMittal S.A., AM BV2 and Holdco are
parties.

	 
	 	 
	Duty

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

	 
	 	 
	Duty Payment Date

	 	    has  the meaning in clause 3.2(k)(2).

	 
	 	 
	Duty Notice

	 	     has the meaning in clause 3.2(j).

	 
	 	 
	Encumbrance

	 	    an interest or power:

	 
	 	 
	 

	 	1    reserved in or over an interest in any asset including any
retention of title; or

	 
	 	 
	 

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

	 
	 	 
	 

	 	       by way of security for the payment of a debt, any other monetary obligation
or the performance of any other obligation, and includes, but is not limited
to, any agreement to grant or create any of the above.

	 
	 	 
	Entity

	 	        has the meaning set out in section 64A of the Corporations Act.

page 5

 

	 	 	 

	

	 	1    Definitions, interpretation and agreement components

	 	 	 
	Term	 	Meaning
	Equity Completion Date

	 	has the meaning in clause 3.2(m).
	 
	 	 
	Exclusivity Period

	 	the period from and including the date of this agreement until and including
the date which is the later of:
	 
	 	 
	 

	 	1    6 months after the date of this agreement; and

	 
	 	 
	 

	 	2    provided that at least one of Peabody, AM and Bidco releases the
Agreed Announcement to the ASX within the Announcement Window, 6 months after
the date of the Offer.

	 
	 	 
	FIRB

	 	Foreign Investment Review Board.
	 
	 	 
	GFC Event

	 	is an event or series of events which has a material adverse effect on the
ability of any person to obtain acquisition debt funding from reputable
financial institutions on commercially reasonable terms.
	 
	 	 
	Governmental Agency

	 	any government or any governmental, semi-governmental, statutory or judicial
entity, regulatory body, agency or authority, whether in Australia, or
elsewhere, including any self-regulatory organisation established under
statute or otherwise discharging substantially public or regulatory functions
(including ASIC and the Takeovers Panel), and ASX or any other stock
exchange.
	 
	 	 
	GST

	 	goods and services tax or similar value added tax levied or imposed in
Australia under the GST Law or otherwise on a supply.
	 
	 	 
	GST Act

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

	 	has the same meaning as in the GST Act.
	 
	 	 
	Holdco Share

	 	an ordinary share in the capital of Holdco.
	 
	 	 
	Jointly Retained Party

	 	has the meaning given in clause 11.3.
	 
	 	 
	LIBOR

	 	the British Bankers’ Association Interest Settlement Rate for the relevant
currency and for a period of 1 month displayed as at 11.00am (London time) on
the relevant date on the LIBOR01 of the Reuters Screen.
	 
	 	 
	MCC

	 	Macarthur Coal Ltd (ABN 40 096 001 955).
	 
	 	 
	MCC Share

	 	a fully paid ordinary share in the capital of MCC.

page 6

 

	 	 	 

	

	 	1 Definitions, interpretation and agreement components

	 	 	 
	Term	 	Meaning
	New Peabody Shares

	 	has the meaning in clause 5.7(b)(3).
	 
	 	 
	Offer

	 	each offer to acquire an MCC Share to be made in connection with the Takeover
Bid.
	 
	 	 
	Offer Period

	 	the period that the Offer will be open for acceptance under the Takeover Bid.
	 
	 	 
	Payment Business Day

	 	a day:
	 
	 	 
	 

	 	1    on which banks are open for business in Brisbane (Australia), Paris
(France) and St. Louis, Missouri (United States of America), other than a
Saturday, Sunday or public holiday in Brisbane (Australia), Paris (France)
and St. Louis, Missouri (United States of America); and

	 
	 	 
	 

	 	2 which is a ‘business day’ as defined in the official listing rules
of ASX.
	 
	 	 
	Peabody Duty Shares

	 	has the meaning given to it in clause 3.2(j)(1).
	 
	 	 
	Peabody Information

	 	has the meaning in clause 5.3(a).
	 
	 	 
	Peabody Group

	 	means the group of companies comprising Peabody Energy Corporation and each
of its subsidiaries.
	 
	 	 
	Peabody Party

	 	Peabody, each of its Related Bodies Corporate and its nominee (if any),
including, for the avoidance of doubt, Holdco and Bidco.
	 
	 	 
	Peabody Shares

	 	any MCC Shares held by Bidco or any Related Body Corporate of Peabody as at
the date of this agreement.
	 
	 	 
	Peabody Subscription 

Shares

	 	has the meaning given to it in clause 3.2(a).
	 
	 	 
	Peabody Top-Up Shares

	 	has the meaning given to it in clause 3.2(g)(1).
	 
	 	 
	Pre-Bid Acceptance Deed

	 	the pre-bid acceptance deed dated on or about the date of this agreement to
which AM and Bidco are parties.
	 
	 	 
	Purchase Price

	 	has the meaning given to it in clause 8.5(a)(2).
	 
	 	 
	Purchase Price 

Calculation Period

	 	has the meaning given to it in clause 8.5(i).

page 7

 

	 	 	 

	

	 	1 Definitions, interpretation and agreement components

	 	 	 
	Term	 	Meaning
	Related Body Corporate

	 	has the meaning given in section 50 of the Corporations Act.
	 
	 	 
	Related Persons

	 	in relation to an Entity means:
	 
	 	 
	 

	 	1 a Related Body Corporate of that Entity;
	 
	 	 
	 

	 	2 an Entity that Controls that Entity;
	 
	 	 
	 

	 	3 an adviser of that Entity or an adviser of a Related Body Corporate
of that Entity; and
	 
	 	 
	 

	 	4 a director, officer or employee of any Entity referred to in items
1, 2 or 3 of this definition.
	 
	 	 
	Relevant Interest

	 	has the meaning given in sections 608 and 609 of the Corporations Act.
	 
	 	 
	Settlement Date

	 	has the meaning given to it in clause 8.5(i).
	 
	 	 
	Shareholders’ Agreement

	 	the shareholders’ deed between Holdco, AM, Peabody and others dated on or
about the date of this agreement.
	 
	 	 
	Subscription Notice

	 	has the meaning given to it in clause 3.2(a).
	 
	 	 
	Subscription Payment 

Date

	 	has the meaning given to it in clause 3.2(c)(2).
	 
	 	 
	Subsidiary

	 	has the meaning given in section 9 of the Corporations Act.
	 
	 	 
	Takeover Bid

	 	a takeover bid to be made by Bidco for MCC Shares, as referred to in the
Agreed Announcement.
	 
	 	 
	Tax

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

	 	has the meaning given to it in clause 8.1(b).
	 
	 	 
	Third Party

	 	a party other than Peabody or Bidco.
	 
	 	 
	Top-Up Notice

	 	has the meaning given to it in clause 3.2(g).
	 
	 	 
	Top-Up Payment Date

	 	has the meaning given to it in clause 3.2(h)(2).

page 8

 

	 	 	 

	

	 	1 Definitions, interpretation and agreement components

	 	 	 
	Term	 	Meaning
	Tranche A Shares

	 	45,313,851 of the AM Shares.
	 
	 	 
	Tranche B Shares

	 	3,238,211 of the AM Shares.
	 
	 	 
	Transfer Date

	 	has the meaning given to it in clause 8.5(a).

1.3 Interpretation

	 	In this agreement headings are inserted for convenience and do not affect the
interpretation of this agreement and unless the contrary intention appears:
	 
	 	(a)	 	a reference to this agreement or another instrument includes any
variation or replacement of any of them;
	 
	 	(b)	 	a reference to a statute, ordinance, code or other law includes
regulations and other instruments under it and consolidations, amendments,
re-enactments or replacements of any of them;
	 
	 	(c)	 	the singular includes the plural and vice versa;
	 
	 	(d)	 	the word ‘person’ includes a firm, a body corporate, an unincorporated
association or an authority;
	 
	 	(e)	 	a reference to a person includes a reference to the person’s executors,
administrators, successors, substitutes (including persons taking by novation) and
assigns;
	 
	 	(f)	 	if a period of time is specified and dates from a given day or the day of
an act or event, it is to be calculated exclusive of that day;
	 
	 	(g)	 	a reference to a day is to be interpreted as the period of time
commencing at midnight and ending 24 hours later;
	 
	 	(h)	 	if an act prescribed under this agreement to be done by a party on or by
a given day is done after 5.00pm on that day, it is taken to be done on the next
day;
	 
	 	(i)	 	if an event must occur on a stipulated day that is not a Business Day
then the stipulated day will be taken to be the next Business Day;
	 
	 	(j)	 	a reference to time is a reference to Brisbane time;
	 
	 	(k)	 	a reference to any thing (including any amount) is a reference to the
whole and each part of it and a reference to a group of persons is a reference to
any one or more of them;
	 
	 	(l)	 	a reference to a part, clause, party, attachment, exhibit or schedule is
a reference to a part and clause of, and a party, attachment, exhibit and schedule
to, this agreement and a reference to this agreement includes any attachment,
exhibit and schedule;
	 
	 	(m)	 	a reference to $ or A$ is to Australian currency unless denominated
otherwise; and
	 
	 	(n)	 	a term defined in the Corporations Act shall have the same meaning in
this agreement.

page 9

 

			
	
	 	2 The Takeover Bid

	1.4	 	Inclusive expressions
	 
	 	 	Specifying anything in this agreement after the words ‘including’, ‘includes’ or ‘for
example’ or similar expressions does not limit what else is included unless there is
express wording to the contrary.
	 
	2	 	The Takeover Bid

 

	 	(a)	 	Peabody, AM and Bidco each irrevocably and unconditionally authorise each other
to release the Agreed Announcement to the ASX at any time during the period
commencing on the date of this agreement and ending on the date which is 20 Business
Days after the date of the agreement (the Announcement Window).
	 
	 	(b)	 	If any party releases the Agreed Announcement to the ASX during the
Announcement Window, each other party agrees, subject to the terms of this agreement,
to abide by the terms of the Agreed Announcement and to proceed with the
implementation of the Takeover Bid.
	 
	 	(c)	 	Holdco and Bidco must not, without the prior written consent of Peabody and
AM, enter into any contract relating to the Offer or the financing of the Offer
(including, for the avoidance of doubt, any bid implementation agreement) with MCC.
	 
	 	(d)	 	Nothing in this agreement constitutes, or is intended to constitute, a
proposal to make a takeover bid at any stage before the Agreed Announcement is
released (if ever) to the ASX.

	3	 	Takeover Bid funding arrangements

 

	3.1	 	Initial subscription by Peabody and AM BV2
	 
	 	 	As soon as practicable after the date of this agreement and, in any event, before the
first day of the Offer Period:

	 	(a)	 	AM BV2 shall:

	 	(1)	 	subscribe for 2 Holdco Shares;
	 
	 	(2)	 	deliver to Holdco an application for 2 Holdco Shares
duly completed and executed by AM BV2;
	 
	 	(3)	 	pay to Holdco $2 in immediately available funds, being
the subscription price for 2 Holdco Shares; and
	 
	 	(4)	 	agree to be bound by the constitution of Holdco upon
the issuance of the 2 Holdco Shares;

	 	(b)	 	Peabody shall:

	 	(1)	 	subscribe for 1 Holdco Share;
	 
	 	(2)	 	deliver to Holdco an application for 1 Holdco Share,
duly completed and executed by Peabody; and
	 
	 	(3)	 	pay to Holdco $1 in immediately available funds, being
the subscription price for 1 Holdco Share;
	 
	 	(4)	 	agree to be bound by the constitution of Holdco upon
the issuance of the 1 Holdco Share;

page 10

 

			
	
	 	3 Takeover Bid funding arrangements

	 	(c)	 	subject to AM BV2 complying with its obligations under clause 3.1(a), Holdco
shall:

	 	(1)	 	issue 2 Holdco Shares and deliver to AM BV2 a share
certificate or holding statement in respect of 2 Holdco Shares; and
	 
	 	(2)	 	enter AM BV2’s name in Holdco’s register of members as
the registered holder of 2 Holdco Shares;

	 	(d)	 	subject to Peabody complying with its obligations under clause 3.1(b),
Holdco shall:

	 	(1)	 	issue 1 Holdco Share and deliver to Peabody a share
certificate or holding statement in respect of 1 Holdco Share; and
	 
	 	(2)	 	enter Peabody’s name in Holdco’s register of members as
the registered holder of that 1 Holdco Share.

	3.2	 	Further subscriptions by Peabody and AM BV2

	 	(a)	 	Subject to all of the defeating conditions of the Offer being fulfilled or freed,
Holdco may require:

	 	(1)	 	Peabody to subscribe for Holdco Shares (the Peabody
Subscription Shares); and
	 
	 	(2)	 	AM BV2 to subscribe for Holdco Shares (the AM
Subscription Shares),

	 	 	 	by giving to Peabody and AM BV2 a subscription notice (Subscription Notice).

	 	(b)	 	Holdco shall only use the cash proceeds that it receives from Peabody and
AM BV2 under this clause 3 for the sole purposes of:

	 	(1)	 	funding Bidco’s acquisition of MCC Shares during the
Offer Period through a combination of debt and equity;
	 
	 	(2)	 	if Bidco becomes entitled to and exercises its right to
compulsorily acquire any outstanding MCC Shares under Chapter 6A of the
Corporations Act, funding Bidco’s acquisition of MCC Shares pursuant to
such compulsory acquisition; and
	 
	 	(3)	 	funding Bidco’s payment obligations in respect of any
Duty arising in connection with Bidco’s acquisition of MCC Shares,

	 	 	 	and Holdco agrees to ensure that, at all necessary times, it has given cash to
Bidco, in immediately available funds, so as to ensure that Bidco has sufficient
cash available to it to meet its funding obligations as referred to in
paragraphs (1), (2) and (3) above. Holdco and Bidco agree that:

	 	(4)	 	75% of such funding shall be in the form of an
interest-free loan which loan will be repayable on demand by Bidco on not
less than 30 Business Days’ notice in writing provided that such notice
cannot be given until after the date which is 6 weeks after the end of the
Offer Period (or, in either case, on such earlier date(s) as may be agreed
between Holdco and Bidco); and
	 
	 	(5)	 	25% of such funding shall be in the form of equity,
which shall require Bidco to issue to Holdco fully paid ordinary shares in
Bidco (or such other equity securities as Bidco and Holdco may agree),

	 	 	 	provided always that Holdco and Bidco may, with the prior written consent of the
other parties, change the relevant percentage split referred to in paragraphs
(4) and (5) above. Despite the foregoing, Holdco may commence charging
interest on the loan referred to in paragraph (4) above (at a rate not exceeding
LIBOR, unless Bidco and Holdco otherwise agree) on not less than 30 Business

page 11

 

			
	
	 	3 Takeover Bid funding arrangements

	 	 	 	Day’ notice to Bidco, provided that no interest may be charged until after
the completion of the compulsory acquisition of all outstanding MCC Shares under
Chapter 6A of the Corporations Act.
	 
	 	(c)	 	Each Subscription Notice given by Holdco under clause 3.2(a) must specify:

	 	(1)	 	the number of:

	 	(A)	 	Peabody Subscription Shares that
Peabody must subscribe for in accordance with the following
formula:

	 	-	 	in respect of the first Subscription Notice,
(NB + NP) x 0.6; and
	 
	 	-	 	in respect of the second and each subsequent
Subscription Notice, NB x 0.6; and

	 	(B)	 	AM Subscription Shares that AM BV2
must subscribe for in accordance with the following formula:

	 	-	 	 in respect of the first Subscription Notice,
(NB + NP) x 0.4; and
	 
	 	-	 	in respect of the second and each subsequent
Subscription Notice, NB x 0.4;

	 	(2)	 	the date (Subscription Payment Date) on which:

	 	(A)	 	Peabody must pay for the Peabody
Subscription Shares; and
	 
	 	(B)	 	AM BV2 must pay for the AM
Subscription Shares,
	 
	 	provided that such date shall be no earlier than the second Payment
Business Day after the date on which the Subscription Notice was given
and, in the case of the first Subscription Notice, such date shall be
no earlier than the date on which the consideration for the AM Shares
is due and payable to AM BV2 under the Offer; and

	 	(3)	 	the number of MCC Shares that Bidco will pay for using
the proceeds that are to be received by Holdco from Peabody for the Peabody
Subscription Shares and from AM BV2 for the AM Subscription Shares.

	 	(d)	 	Peabody must pay to Holdco (or as directed by Holdco), on the Subscription
Payment Date, in immediately available funds, an amount in respect of the Peabody
Subscription Shares equal to:

	 	(1)	 	in respect of the first Subscription Notice, (the
Initial Cash Amount x 0.6) less (the Peabody Credit x 0.4); and
	 
	 	(2)	 	in respect of the second and each subsequent
Subscription Notice, NB x OC x 0.6.

	 	(e)	 	AM BV2 must pay to Holdco (or as directed by Holdco), on the Subscription
Payment Date, in immediately available funds, an amount in respect of the AM
Subscription Shares equal to:

	 	(1)	 	in respect of the first Subscription Notice, (the
Initial Cash Amount x 0.4) plus (the Peabody Credit x 0.4); and
	 
	 	(2)	 	in respect of the second and each subsequent
Subscription Notice, NB x OC x 0.4.

	 	(f)	 	For purposes of this clause 3:

	 	(1)	 	Initial Cash Amount means (NB x OC);

page 12

 

			
	
	 	3 Takeover Bid funding arrangements

	 	(2)	 	NB is the number of MCC Shares that Bidco is proposing to
pay for using the proceeds that are to be received by Holdco for those
Peabody Subscription Shares and AM Subscription Shares;
	 
	 	(3)	 	NP is the number of MCC Shares held by Bidco
immediately before the start of the Offer Period (or which Bidco will hold
within 2 days after the first day of the Offer Period);
	 
	 	(4)	 	NT is the number of MCC Shares that Bidco
has proposed to pay for under all Subscription Notices at the time a Top-Up
Notice is given;
	 
	 	(5)	 	OC is the amount of the Offer consideration payable by
Bidco per MCC Share at the time the relevant Subscription Notice or Top-Up
Notice is given;
	 
	 	(6)	 	OCL is the amount of the Offer consideration
payable by Bidco per MCC Share at the time the previous Subscription Notice
or Top-Up Notice (whichever is later) is given; and
	 
	 	(7)	 	Peabody Credit means the aggregate price paid or
payable by Peabody or Bidco to third parties for the New Peabody Shares.

	 	(g)	 	If, after the time a Subscription Notice is given, Bidco increases the
amount of the Offer consideration, Holdco shall give Peabody and AM BV2 notice of
this fact (Top-Up Notice) and must require:

	 	(1)	 	Peabody to subscribe for Holdco Shares (the Peabody
Top-Up Shares); and
	 
	 	(2)	 	AM BV2 to subscribe for Holdco Shares (the AM Top-Up
Shares).

	 	(h)	 	Each Top-Up Notice given by Holdco under clause 3.2(g) must specify:

	 	(1)	 	the number of:

	 	(A)	 	Peabody Top-Up Shares that Peabody
must subscribe for in accordance with the following formula:
	 
	 	 	 	{[(OC — OCL) x
NT]/OC} x 0.6; and
	 
	 	(B)	 	AM Top-Up Shares that AM BV2 must
subscribe for in accordance with the following formula:
	 
	 	 	 	{[(OC — OCL) x
NT]/OC} x 0.4,

	 	 	 	in each such case, where OC and OCL are treated as numbers
rather than dollar amounts;
	 
	 	(2)	 	the date (Top-Up Payment Date) on which:

	 	(A)	 	Peabody must pay for the Peabody
Top-Up Shares; and

	 	(B)	 	AM BV2 must pay for the AM Top-Up
Shares,

	 	 	 	provided that such date shall be no earlier than the second Payment
Business Day after the date on which the Top-Up Notice was given and,
in the case of the first Top-Up Notice to AM BV2, such date shall be
no earlier than the date on which the consideration for the AM Shares
is due and payable to AM BV2 under the Offer.

	 	(i)	 	On the Top-Up Payment Date:

	 	(1)	 	Peabody must pay to Holdco (or as directed by Holdco),
in immediately available funds, an amount in respect of the Peabody Top-Up
Shares equal to (OC — OCL) x NT x 0.6; and
	 
	 	(2)	 	AM BV2 must pay to Holdco (or as directed by Holdco),
in immediately available funds, an amount in respect of the AM Top-Up
Shares equal to (OC — OCL) x NT x 0.4.

page 13

 

			
	
	 	3 Takeover Bid funding arrangements

	 	(j)	 	If Bidco incurs any liability to pay any amount in respect of Duty in connection
with the acquisition of MCC Shares (such amount being, Bidco Duty), Holdco shall give
Peabody and AM BV2 notice of this fact (Duty Notice) and must require:

	 	(1)	 	Peabody to subscribe for Holdco Shares (the Peabody
Duty Shares); and
	 
	 	(2)	 	AM BV2 to subscribe for Holdco Shares (the AM Duty
Shares).

	 	(k)	 	Each Duty Notice given by Holdco under clause 3.2(j) must specify:

	 	(1)	 	the number of:

	 	(A)	 	Peabody Duty Shares that Peabody
must subscribe for in accordance with the following formula:
	 
	 	 	 	(Bidco Duty/OC) x 0.6; and
	 
	 	(B)	 	AM Duty Shares that AM BV2 must
subscribe for in accordance with the following formula:
	 
	 	 	 	(Bidco Duty/OC) x 0.4,

	 	 	 	in each such case, where OC is treated as a number rather than a
dollar amount;
	 
	 	(2)	 	the date (Duty Payment Date) on which:

	 	(A)	 	Peabody must pay for the Peabody
Duty Shares; and

	 	(B)	 	AM BV2 must pay for the AM Duty
Shares,

	 	 	 	provided that such date shall be no earlier than the second Payment
Business Day after the date on which the Duty Notice was given.

	 	(l)	 	On the Duty Payment Date:

	 	(1)	 	Peabody must pay to Holdco (or as directed by Holdco),
in immediately available funds, an amount in respect of the Peabody Duty
Shares equal to (the amount of the Bidco Duty) x 0.6; and
	 
	 	(2)	 	AM BV2 must pay to Holdco (or as directed by Holdco),
in immediately available funds, an amount in respect of the AM Duty Shares
equal to (the amount of the Bidco Duty) x 0.4.

	 	(m)	 	The relevant Holdco Shares to be issued under this clause 3 will be issued
on the later of:

	 	(1)	 	the first Business Day after the end of the Offer
Period; and
	 
	 	(2)	 	the Subscription Payment Date, the Top-Up Payment Date
or the Duty Payment Date (as the case may be),

	 	 	 	(each such date, an Equity Completion Date).

	 	(n)	 	In performing their obligations pursuant to this clause 3, the parties will
deal with each other reasonably and in good faith so as to accommodate any reasonable
request from each other to modify settlement arrangements or the sequence of required
steps to reduce the cost or administrative inconvenience that would otherwise arise
for that party.

	 	(o)	 	The parties agree that:

	 	(1)	 	a Subscription Notice, a Top-Up Notice or a Duty Notice
may be given to Peabody and AM BV2 under clause 3.2 during, or after the
end of, the Offer Period;

page 14

 

			
	
	 	3 Takeover Bid funding arrangements

	 	(2)	 	even if AM BV2 gives Peabody and Holdco a Termination Notice:

	 	(A)	 	Bidco will be entitled to continue
to give a Subscription Notice, a Top-Up Notice and/or a Duty
Notice to AM BV2 up to and including on the Settlement Date; and
	 
	 	(B)	 	AM BV2 will be required to pay to
Holdco all amounts due and payable by it under any Subscription
Notice, Top-Up Notice or Duty Notice given to it up to and
including on the Settlement Date;

	 	(3)	 	any issue or proposed issue of Holdco Shares under this
clause 3 will not trigger the operation of the provisions in the
Shareholders’ Agreement relating to the issue of Holdco Shares;
	 
	 	(4)	 	Holdco can direct Peabody or AM BV2 to pay the
subscription monies to Bidco or a third party for the sole purpose of that
third party paying MCC shareholders for the acquisition by Bidco of their
MCC Shares.

	3.3	 	Set-off

	 	(a)	 	Holdco directs AM BV2 to pay directly to Bidco any amount due for payment by AM
BV2 to Holdco under clause 3.2(e) and 3.2(i)(2).
	 
	 	(b)	 	AM BV2 and Bidco hereby agree that (unless AM BV2, Holdco and Bidco
otherwise agree in writing) Bidco and AM BV2 shall set-off any amount due for payment
by Bidco to AM BV2 under the terms of the Offer as a result of the acquisition of the
AM Shares by Bidco against any amount due for payment by AM BV2 to Bidco as a result
of the direction referred to in clause 3.3(a).

	3.4	 	Fractions
	 
	 	 	Any fractional entitlement to a Holdco Share under this clause 3 shall be rounded
down to the nearest whole number of Holdco Shares.

	3.5	 	Constitution

	 	(a)	 	On each issue of Peabody Subscription Shares, Peabody Top-Up Shares or Peabody
Duty Shares, Peabody agrees to be bound by the constitution of Holdco.
	 
	 	(b)	 	On each issue of AM Subscription Shares, AM Top-Up Shares or AM Duty
Shares, AM BV2 agrees to be bound by the constitution of Holdco.

	3.6	 	Rights and ranking
	 
	 	 	All Holdco Shares issued to Peabody as referred to in clause 3.1(d), all Peabody
Subscription Shares, Peabody Top-Up Shares and Peabody Duty Shares issued to Peabody, all
Holdco Shares issued to AM BV2 as referred to in clause 3.1(c), all AM Subscription
Shares, AM Top-Up Shares and AM Duty Shares issued to AM BV2 shall:

	 	(a)	 	be issued as fully paid;
	 
	 	(b)	 	be issued free of all Encumbrances; and
	 
	 	(c)	 	rank equally in all respects with the other fully paid ordinary shares on
issue in the capital of the Holdco as at the date of issue.

	3.7	 	Holdco’s obligations
	 
	 	 	On the relevant Equity Completion Date, Holdco must:

page 15

 

			
	
	 	4 Conduct of the Offer

	 	(a)	 	issue the relevant Peabody Subscription Shares, Peabody Top-Up Shares or Peabody
Duty Shares to Peabody;
	 
	 	(b)	 	issue the relevant AM Subscription Shares. AM Top-Up Shares or AM Duty
Shares to AM BV2;
	 
	 	(c)	 	issue to Peabody share certificates or holding statements in respect of the
relevant Peabody Subscription Shares, Peabody Top-Up Shares or Peabody Duty Shares;
	 
	 	(d)	 	issue to AM BV2 share certificates or holding statements in respect of the
relevant AM Subscription Shares, AM Top-Up Shares or AM Duty Shares;
	 
	 	(e)	 	enter Peabody’s name in Holdco’s register of members as the registered
holder of the relevant Peabody Subscription Shares, Peabody Top-Up Shares or Peabody
Duty Shares; and
	 
	 	(f)	 	enter AM BV2’s name in Holdco’s register of members as the registered
holder of the relevant AM Subscription Shares, AM Top-Up Shares or AM Duty Shares.

	4	 	Conduct of the Offer

 

	4.1	 	Substantial holder notifications
	 
	 	 	The parties will co-operate with each other to make the disclosures required by, and
within the time limits prescribed by, Part 6C.1 of the Corporations Act.

	4.2	 	Conduct of the Offer

	 	(a)	 	The parties will work together to implement the Offer and to formulate the
negotiation strategy regarding the Offer.

	 	(b)	 	Bidco and Holdco will ensure representatives of Peabody and AM will have
the opportunity to:

	 	(1)	 	participate in material meetings with MCC and MCC’s
major shareholders; and
	 
	 	(2)	 	access any due diligence information provided by MCC,

	 	 	 	in each case, subject to appropriate confidentiality arrangements being in
place.

	 	(c)	 	Each party will provide regular updates to the other parties on any
material developments in relation to:

	 	(1)	 	any discussions and negotiations with MCC and MCC’s
major shareholders; and
	 
	 	(2)	 	the progress of the Offer generally.

	 	(d)	 	Except to the extent otherwise provided for, or otherwise contemplated in,
this agreement, the parties will be jointly responsible for the conduct of the
Takeover Bid and for making all material decisions in relation to the Offer.

	4.3	 	Reserved decisions in respect of the Offer

	 	(a)	 	Bidco must not, without the prior written consent of Peabody and AM:

	 	(1)	 	free the Offer from the minimum acceptance condition to
the Offer referred to in the Agreed Announcement (including by making a
statement that the minimum acceptance condition will be freed if

page 16

 

			
	
	 	4 Conduct of the Offer

	 	 	 	Bidco achieves a different percentage Relevant Interest by a particular
date), unless and until the aggregate of the MCC Shares:

	 	(A)	 	in which Bidco has a Relevant
Interest; and
	 
	 	(B)	 	for which the acceptance collection
agent under any institutional acceptance facility relating to the
Offer has received acceptance instructions in respect of the
Offer,

	 	 	 	represents at least 50.01% of the MCC Shares (on a fully diluted
basis). For the avoidance of doubt, for the purposes of the foregoing,
Bidco shall be treated as having a Relevant Interest in the Tranche A
Shares and the Tranche B Shares;
	 
	 	(2)	 	free the Offer from the material adverse change
condition to the Offer referred to in the Agreed Announcement if that
condition has been breached or it is reasonably foreseeable that the
condition will be breached before the time when Bidco proposes to free the
Offer from all conditions;
	 
	 	(3)	 	free the Offer from the ‘prescribed occurrence’
condition to the Offer referred to in the Agreed Announcement if that
condition has been breached or it is reasonably foreseeable that the
condition will be breached before the time when Bidco proposes to free the
Offer from all conditions;
	 
	 	(4)	 	free the Offer from the FIRB condition referred to in
the Agreed Announcement;
	 
	 	(5)	 	free the Offer from the other regulatory approvals
condition referred to in the Agreed Announcement;
	 
	 	(6)	 	consent to any variation of, or waive any right of
Bidco (other than a right to waive bid conditions) under, any contract
relating to the Offer (including, for the avoidance of doubt, any bid
implementation agreement) between Bidco and MCC; or
	 
	 	(7)	 	extend the Offer Period so that the Offer Period is
greater than 6 months.

	 	(b)	 	However, nothing in clause 4.3(a) limits the ability of Bidco to vary the
Offer by extending the Offer Period up to an aggregate duration of 6 months (without
limiting clause 4.3(a)(7)) or to free the Offer of the defeating conditions referred
to in clauses 4.3(a)(1), 4.3(a)(2), 4.3(a)(3), 4.3(a)(4) and 4.3(a)(5) unless
expressly limited by those clauses. All other Offer variations or Offer condition
waivers require the prior written consent of Peabody and AM, who agree to consider a
request for consent in good faith and neither of them shall withhold consent for an
ulterior purpose, including if one of their purposes or intentions for doing so is to
frustrate or delay the Takeover Bid. If Bidco requests approval for a matter listed
in clause 4.3(a), Peabody and AM must each use its best endeavours to respond to the
request as soon as reasonably practicable and in any event within 2 Business Days after the date on which the relevant request is
received or otherwise within any reasonable timeframe set by Bidco.

	 	(c)	 	For the purposes of this clause 4.3:

	 	(1)	 	Peabody agrees that Richard A. Navarre shall be
authorised to bind Peabody; and
	 
	 	(2)	 	AM agrees that Carole Whittall shall be authorised to
bind AM,

	 	 	 	in relation to any request from Bidco referred to in clause 4.3(b).

page 17

 

			
	
	 	4 Conduct of the Offer

	4.4	 	Public announcements

	 	(a)	 	Bidco will prepare all public announcements relating to the Offer, except for the
Agreed Announcement.
	 
	 	(b)	 	Except to the extent required by law or the rules of any relevant stock
exchange, Bidco shall not make any public announcements relating to the Offer, except
for:

	 	(1)	 	the Agreed Announcement; and
	 
	 	(2)	 	any procedural announcements relating to notifications
required under the Corporations Act, including notifications under section
630, section 633 (without prejudice to clause 5.1(b)), section 643 (without
prejudice to clause 5.6), section 650D (without prejudice to clause
4.3(a)), section 650F (without prejudice to clause 4.3(a)), section 652B
and Chapter 6A (each a Procedural Announcement),

	 	 	 	without the prior written consent of Peabody and AM. If Bidco proposes to make
any public announcement relating to the Offer because it is required to do so by
law or the rules of any relevant stock exchange (except for the Agreed
Announcement or a Procedural Announcement), it shall provide Peabody and AM with
a reasonable opportunity to review and comment on any such announcement, having
regard to the urgency of its release, and give reasonable consideration to any
comments made by Peabody and AM on any such announcement.
	 
	 	(c)	 	Except to the extent required by law or the rules of any relevant stock
exchange, Peabody shall not, and Peabody shall procure that none of its Related
Bodies Corporate shall, make any public announcements relating to the Offer (except
for the Agreed Announcement or a Procedural Announcement) without the prior written
consent of AM and Bidco. If Peabody or a Related Body Corporate of Peabody proposes
to make any public announcement relating to the Offer because it is required to do so
by law or the rules of any relevant stock exchange, Peabody shall provide Bidco and
AM with a reasonable opportunity to review and comment on any such announcement,
having regard to the urgency of its release, and give reasonable consideration to any
comments made by AM and Bidco on any such announcement.
	 
	 	(d)	 	Except to the extent required by law or the rules of any relevant stock
exchange, AM shall not, and AM shall procure that none of its Related Bodies
Corporate shall, make any public announcements relating to the Offer (except for the
Agreed Announcement) without the prior written consent of Peabody and Bidco. If AM or
a Related Body Corporate of AM proposes to make any public announcement relating to
the Offer because it is required to do so by law or the rules of any relevant stock
exchange, AM shall provide Bidco and Peabody with a reasonable opportunity to review
and comment on any such announcement, having regard to the urgency of its release,
and give reasonable consideration to any comments made by Peabody and Bidco on any
such announcement.

	4.5	 	Dealings with Governmental Agencies

	 	(a)	 	(FIRB) Bidco will, as soon as reasonably practicable after the date of this
agreement (if it has not already done so before the date of this agreement), file an
application with FIRB:

	 	(1)	 	on behalf of itself, the Peabody group of companies and
the AM group of companies seeking to fulfil the FIRB condition to the Offer
referred to in the Agreed Announcement; and
	 
	 	(2)	 	on behalf of itself and the Peabody Group seeking to
fulfil the FIRB condition referred to in the Pre-Bid Acceptance Deed.

page 18

 

			
	
	 	5 Bidder’s Statement

	 	 	 	Peabody, AM and Holdco agree to co-operate with, and provide all reasonable
assistance and information to, Bidco to enable Bidco to complete and file that
application.

	 	(b)	 	(Other consents and approvals) Each party:

	 	(1)	 	will use its reasonable endeavours to obtain any other
consents or approvals required from any Governmental Agencies in connection
with this agreement or the Takeover Bid;
	 
	 	(2)	 	will provide all reasonable assistance to the other
parties (as required) in connection with obtaining any such consents or
approvals;
	 
	 	(3)	 	will not, and will ensure its Related Bodies Corporate
and Associates do not, do anything intended to prevent or delay, or that
would be reasonably likely to have the effect of preventing or delaying,
any such consents or approvals being given to any party; and
	 
	 	(4)	 	will consult with each other party in good faith as to
any applications or submissions to be made to Governmental Agencies and
give reasonable consideration to all comments made on those applications or
submissions.

	 	(c)	 	(No undertakings) Nothing in this clause 4.5 requires any party to give any
undertakings to any Governmental Agency.

	4.6	 	Compulsory acquisition

	 	(a)	 	If Bidco acquires the right to compulsorily acquire any outstanding MCC Shares
under Chapter 6A of the Corporations Act, Bidco must exercise that right.
	 
	 	(b)	 	Bidco must keep Peabody and AM reasonably informed of the progress of, and
all material actions and developments in relation to, the compulsory acquisition
process.

	5	 	Bidder’s Statement

 

	5.1	 	Preparation

	 	(a)	 	As required by the Corporations Act, Bidco must prepare, lodge and serve the
Bidder’s Statement.
	 
	 	(b)	 	Bidco will:

	 	(1)	 	prepare the Bidder’s Statement in consultation with
Peabody and AM;
	 
	 	(2)	 	provide Peabody and AM with a reasonable opportunity to
review and comment on drafts of the Bidder’s Statement; and
	 
	 	(3)	 	give reasonable consideration to all comments made by
Peabody and AM on drafts of the Bidder’s Statement.

	5.2	 	Compliance
	 
	 	 	Each party must take all reasonable steps to ensure that the Bidder’s Statement is
not misleading or deceptive in any material respect (whether by omission or otherwise) and
complies with the requirements of all applicable laws and regulations including:

	 	(a)	 	the Corporations Act;
	 
	 	(b)	 	the ASX Listing Rules;

page 19

 

			
	
	 	5 Bidder’s Statement

	 	(c)	 	ASIC Regulatory Guides; and
	 
	 	(d)	 	Takeovers Panel Guidance Notes.

	5.3	 	Peabody Information

	 	(a)	 	Peabody must provide to Bidco all information relating to Peabody and its Related
Bodies Corporate which is required to be included in the Bidder’s Statement (Peabody
Information), including a description of itself, its arrangements for satisfying its
funding obligations under clause 3 of this agreement and its intentions in relation
to MCC.
	 
	 	(b)	 	Bidco must not lodge the Bidder’s Statement with ASIC unless and until
Bidco receives from Peabody a duly completed and signed consent to be named in the
Bidder’s Statement in accordance with section 636(3) of the Corporations Act in
connection with:

	 	(1)	 	the Peabody Information; and
	 
	 	(2)	 	Bidco’s intentions with respect to MCC (noting that
Peabody, AM and Bidco will jointly agree the intentions to be set out in
the Bidder’s Statement).

	 	 	 	Peabody shall not unreasonably withhold or delay the giving of such consent.

	5.4	 	AM Information

	 	(a)	 	AM must provide to Bidco all information relating to AM and its Related Bodies
Corporate which is required to be included in the Bidder’s Statement (AM
Information), including a description of itself, the arrangements for satisfying the
funding obligations of AM BV2 under clause 3 of this agreement and its intentions in
relation to MCC.
	 
	 	(b)	 	Bidco must not lodge the Bidder’s Statement with ASIC unless and until
Bidco receives from AM a duly completed and signed consent to be named in the
Bidder’s Statement in accordance with section 636(3) of the Corporations Act in
connection with:

	 	(1)	 	the AM Information; and
	 
	 	(2)	 	Bidco’s intentions with respect to MCC (noting that
Peabody, AM and Bidco will jointly agree the intentions to be set out in
the Bidder’s Statement).

	 	 	 	AM shall not unreasonably withhold or delay the giving of such consent.

	5.5	 	Statements in the Bidder’s Statement

	 	(a)	 	Peabody acknowledges that the Bidder’s Statement will include a statement to the
effect that Peabody takes responsibility for the Peabody Information and
that neither Holdco, Bidco, AM nor any member of the AM Group is responsible for
the Peabody Information contained in the Bidder’s Statement.
	 
	 	(b)	 	To the extent permitted by law, Peabody indemnifies Holdco, Bidco and AM
from and against any and all claims, actions, damages, losses, liabilities, costs,
expenses or payments of whatever nature and however arising, which Holdco, AM or
Bidco may suffer or incur by reason of or in relation to the Peabody Information
contained in the Bidder’s Statement.
	 
	 	(c)	 	AM acknowledges that the Bidder’s Statement will include a statement to the
effect that AM takes responsibility for the AM Information and that neither Holdco,
Bidco, Peabody nor any member of the Peabody Group is responsible for the AM
Information contained in the Bidder’s Statement.

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	 	5 Bidder’s Statement

	 	(d)	 	To the extent permitted by law, AM indemnifies Holdco, Bidco and Peabody from and
against any and all claims, actions, damages, losses, liabilities, costs, expenses or
payments of whatever nature and however arising, which Holdco, Peabody or Bidco may
suffer or incur by reason of or in relation to the AM Information contained in the
Bidder’s Statement.

	5.6	 	Updating information

	 	(a)	 	AM and Peabody must each take all reasonable steps to ensure that the Bidder’s
Statement be updated by all such further or new information which may arise after the
Bidder’s Statement has been issued which is necessary to ensure that it is not
misleading or deceptive in any material respect (whether by omission or otherwise),
including by providing details of such information to Bidco as soon as possible.
	 
	 	(b)	 	Bidco must provide Peabody and AM with a reasonable opportunity to review
and comment on drafts of any supplementary bidder’s statement and must give
reasonable consideration to all comments made by Peabody and AM on drafts of any
supplementary bidder’s statement.

	5.7	 	Standstill

	 	(a)	 	Subject to clause 5.7(b), Peabody and AM must not, and must ensure that their
respective Related Bodies Corporate and Associates (other than Holdco and Bidco)
(alone or with others) do not:

	 	(1)	 	acquire a Relevant Interest in any MCC Shares;
	 
	 	(2)	 	provide, or agree to provide, any consideration for MCC
Shares under any purchase or agreement;
	 
	 	(3)	 	enter into any derivative or synthetic agreement, deed
or other arrangement under which payments may be made that are referable
(in whole or part) to the trading price, or the economic value, of MCC
Shares; or
	 
	 	(4)	 	aid, abet, counsel, assist, facilitate or induce any
other person in doing, or publicly announce that it will do, any of the
things mentioned in this clause 5.7(a).

	 	(b)	 	Nothing in clause 5.7(a) prevents:

	 	(1)	 	any party (or any of their respective Related Bodies
Corporate or Associates) from taking any steps to implement the Offer;
	 
	 	(2)	 	any party (or any of their respective Related Bodies
Corporate or Associates) acquiring a Relevant Interest in MCC Shares as a
result of:

	 	(A)	 	acceptances of the Offer;
	 
	 	(B)	 	the terms of this agreement; or
	 
	 	(C)	 	the terms of the Pre-Bid Acceptance
Deed; or

	 	(3)	 	Bidco or Peabody (or any of their respective Related
Bodies Corporate) acquiring a Relevant Interest in MCC Shares, for
consideration per MCC Share which does not exceed the consideration per MCC
Share set out in the Agreed Announcement, prior to the commencement of the
Offer Period (including by way of on-market acquisitions, option agreements
or pre-bid acceptance agreements) (any such shares, the New Peabody
Shares), provided that, pursuant to the terms of the acquisition, Bidco is
entitled (whether or not subject to the fulfilment of any conditions) to
become

page 21

 

			
	
	 	6 Exclusivity arrangements

	 	 	 	registered as the sole legal and full beneficial owner of the relevant
MCC Shares on or before the date the first Subscription Notice is
given under clause 3.2(a).

	6	 	Exclusivity arrangements
	 
	6.1	 	Prohibition

	 	(a)	 	During the Exclusivity Period, the parties must not, and must ensure that none of
their respective Related Persons, directly or indirectly:

	 	(1)	 	(no shop) solicit, invite, encourage or initiate
(including by the provision of non-public information) any inquiry,
expression of interest, offer, proposal or discussion by any person in
relation to, or which would reasonably be expected to encourage or lead to
the making of, an actual, proposed or potential Competing Proposal or
communicate to any person an intention to do anything referred to in this
clause 6.1(a)(1); or
	 
	 	(2)	 	(no talk)

	 	(A)	 	participate in or continue any
negotiations or discussions with respect to any inquiry,
expression of interest, offer, proposal or discussion by any
person to make or which would reasonably be expected to encourage
or lead to the making of an actual, proposed or potential
Competing Proposal or participate in or continue any negotiations
or discussions with respect to any actual, proposed or potential
Competing Proposal;
	 
	 	(B)	 	negotiate, accept or enter into, or
offer or agree to negotiate, accept or enter into, any agreement,
arrangement or understanding regarding an actual, proposed or
potential Competing Proposal;
	 
	 	(C)	 	disclose any non-public information
about the business or affairs of MCC or any Subsidiary of MCC to
a Third Party (other than a Governmental Agency) with a view to
obtaining or which would reasonably be expected to encourage or
lead to receipt of an actual, proposed or potential Competing
Proposal; or
	 
	 	(D)	 	communicate to any person an
intention to do anything referred to in this clause 6.1(a)(2).

	 	(b)	 	(No participation in consortiums etc) Without limiting clause 6.1(a),
during the Exclusivity Period:

	 	(1)	 	the parties must not, and must ensure that none of
their respective Related Bodies Corporate (alone or with others), directly
or indirectly, participate in a consortium, joint bidding structure or
other structure which is similar to the structure contemplated by this
agreement in connection with an actual, proposed or potential Competing
Proposal or agree to do anything in the foregoing;
	 
	 	(2)	 	AM must not, and must ensure that none of its Related
Bodies Corporate (alone or with others), Deal or agree to Deal in any of
the AM Shares, other than:

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	 	6 Exclusivity arrangements

	 	(A)	 	if the result of the Dealing is
merely that AM BV2 holds the AM Shares in which case AM must
ensure that AM BV2 does not Deal in any of the AM Shares;
	 
	 	(B)	 	entering into the Pre-Bid
Acceptance Deed; and
	 
	 	(C)	 	AM BV2 accepting the Offer; and

	 	(3)	 	AM will vote the AM Shares against, or will ensure that
the AM Shares are voted against, any Competing Proposal.

	 	(c)	 	(FIRB) Despite any other provision of this agreement, clause 6.1(b) is of
no force or effect in relation to the Tranche B Shares only (and not, for the
avoidance of doubt, in relation to the Tranche A Shares) unless and until one of the
following matters has occurred:

	 	(1)	 	Holdco or Bidco has received a written notice under the
Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA), by or on behalf
of the Treasurer of the Commonwealth of Australia stating that the
Commonwealth Government does not object to the transactions contemplated by
the Pre-Bid Acceptance Deed, either unconditionally or on terms that are
acceptable to Holdco;
	 
	 	(2)	 	the Treasurer of the Commonwealth of Australia becomes
precluded from making an order in relation to the transactions contemplated
by the Pre-Bid Acceptance Deed under the FATA; or
	 
	 	(3)	 	if an interim order is made under the FATA in respect
of the transactions contemplated by the Pre-Bid Acceptance Deed, the
subsequent period for making a final order prohibiting the transactions
contemplated by it elapses without a final order being made.

	 	(d)	 	For the avoidance of doubt, it is agreed that AM BV2 is, and shall be
treated in this agreement as, a Related Body Corporate of AM.

	6.2	 	Cease existing discussions
	 
	 	 	During the Exclusivity Period, the parties will cease and will not recommence any discussions
or negotiations existing before the entry into this agreement relating to any actual, proposed or
potential Competing Proposal.
	 
	6.3	 	Notification of approaches

	 	(a)	 	During the Exclusivity Period, each party must as soon as possible notify the
other parties in writing if it, or any of its Related Persons, becomes aware of any
direct or indirect:

	 	(1)	 	approach or attempt to initiate any negotiations or
discussions, or intention to make such an approach or attempt to initiate
any negotiations or discussions, in respect of any expression of interest,
offer, proposal or discussion in relation to an actual Competing Proposal
or a proposed or potential Competing Proposal; or
	 
	 	(2)	 	proposal made to it or any of its Related Persons, in
connection with, or in respect of any exploration or completion of, an
actual Competing Proposal or a proposed or potential Competing Proposal.

	 	(b)	 	A notification given under clause 6.3(a) must include details of:

	 	(1)	 	the identity of the relevant person making or proposing
the relevant actual, proposed or potential Competing Proposal and the
nature and circumstances of the relevant approach or attempt (including
details of what was said and by whom);

 page 23

 

			
	
	 	7 Director arrangements

	 	(2)	 	all material terms and conditions of the actual,
proposed or potential Competing Proposal;
	 
	 	(3)	 	the type of Competing Proposal involved; and
	 
	 	(4)	 	the form and aggregate amount of consideration proposed
to be offered (including in the case of any securities that will form all
or part of the consideration, whether the securities are proposed to be
listed on any stock exchange).

	 	(c)	 	Except as required by law or the rules of any relevant stock exchange, AM
must not make, and must ensure that none of its Related Bodies Corporate make, any
announcements in relation to an actual, proposed or potential Competing Proposal
without the prior written consent of Peabody and Bidco. If AM or any
Related Body Corporate proposes to make any public announcement relating to an
actual, proposed or potential Competing Proposal because it is required to do so
by law or the rules of any relevant stock exchange, it shall provide Bidco and
Peabody with a reasonable opportunity to review and comment on any such
announcement, having regard to the urgency of its release, and give reasonable
consideration to any comments made by Peabody and Bidco on any such
announcement.

	7	 	Director arrangements
	 
	 
	7.1	 	Notifications
	 
	 	 	At least 5 Business Days before the last day of the Offer Period, AM must notify Holdco and
Bidco of the names of up to 2 persons it wishes to be appointed as directors of Holdco and Bidco
from the first day after the end of the Offer Period and deliver to Holdco and Bidco a consent to
act and notification of interests signed by each such person.
	 
	7.2	 	Board resolution
	 
	 	 	Holdco and Bidco must ensure that a meeting of:

	 	(a)	 	the directors of Bidco is convened and the appointment of each person
notified under clause 7.1 as a director of Bidco is approved; and
	 
	 	(b)	 	the directors of Holdco is convened and the appointment of each person
notified under clause 7.1 as a director of Holdco is approved,

	 	 	provided that a consent to act and notification of interests signed by each such person
has been delivered to Holdco and Bidco.
	 
	7.3	 	Holdco constitution
	 
	 	 	Peabody must procure that, on the first day after the end of the Offer Period, Holdco’s
constitution is the Agreed Constitution.
	 
	7.4	 	Observer rights

	 	(a)	 	Subject to clause 7.4(d), from the date of this agreement until the end of the
Offer Period, AM and Peabody shall each have the right to have an observer present at
Holdco and Bidco board meetings.
	 
	 	(b)	 	AM and Peabody shall notify each other party in writing of any person that
it wishes to have appointed as its observer during the period referred to in clause
7.4(a).

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	 	8 Termination

	 	(c)	 	Holdco and Bidco shall ensure that any observer nominated by either AM or
Peabody shall have reasonable notice of any Holdco or Bidco board meetings.
	 
	 	(d)	 	Any observer nominated by either AM or Peabody shall not be entitled to:

	 	(1)	 	be present at any board meeting, or during part of any
board meeting, if that person would not have been entitled to be so present
if that person was a Holdco or Bidco director, including on the grounds of
a conflict of interest; or
	 
	 	(2)	 	receive any information if to do so would or would
reasonably be likely to result in the waiver of legal professional
privilege.

	8	 	Termination
	 
	 
	8.1	 	Termination
	 
	 	 	Subject to clause 8.2, this agreement will terminate automatically and with immediate effect
if:

	 	(a)	 	no party releases (or causes the release of) the Agreed Announcement to ASX
during the Announcement Window;
	 
	 	(b)	 	AM or AM BV2 tenders the AM Shares into the Offer and AM advises Peabody
and Holdco by written notice given to Peabody and Holdco before the expiration of the
Offer Period that AM wishes to terminate this agreement (Termination Notice);
	 
	 	(c)	 	not all of the defeating conditions to the Offer have either been freed or
fulfilled by the end of the Offer Period; or
	 
	 	(d)	 	Bidco is entitled to withdraw unaccepted Offers under the Takeover Bid and
withdraws those unaccepted Offers in accordance with section 652A of the Corporations
Act.

	 	8.2	 	Effect of termination
	 
	 	 	 	If this agreement is terminated under this clause 8 then:
	 
	 	(a)	 	each party is released from its obligations to further perform its
obligations under this agreement, except those expressed to survive termination;
	 
	 	(b)	 	each party retains the rights it has against the others in respect of any
breach of this agreement occurring before termination; and
	 
	 	(c)	 	the rights and obligations of each party under each of the following
clauses and schedules will continue independently from the other obligations of the
parties and survive termination of this agreement:

	 	(1)	 	clause 1 (Definitions, interpretation and agreement
components);
	 
	 	(2)	 	if this agreement is terminated under clause 8.1(b),
clause 3 (Takeover Bid funding arrangements);
	 
	 	(3)	 	clause 6 (Exclusivity arrangements), provided that, if
this agreement is terminated by AM pursuant to clause 8.1(b), Peabody,
Holdco, Bidco and their respective Related Persons shall cease to be bound
by clause 6;
	 
	 	(4)	 	clause 8 (Termination);

 page 25

 

			
	
	 	8 Termination

	 	(5)	 	if this agreement is terminated under clause 8.1(b),
clause 9.1 (Mutual warranties) but only to the extent that the warranties
in clause 9.1 are given by AM and AM BV2 and clause 9.2 (Warranties by
AM);
	 
	 	(6)	 	clause 10 (Confidentiality);
	 
	 	(7)	 	clause 11 (Duties, costs and expenses), except for
clause 11.4 if this agreement is terminated by AM pursuant to clause
8.1(b);
	 
	 	(8)	 	clause 12 (GST);
	 
	 	(9)	 	clause 13 (General); and
	 
	 	(10)	 	Schedule 2 (Transfer Steps).

	8.3	 	Duties imposed as a result of termination

	 	(a)	 	AM agrees to pay Peabody an amount equal to 50% of any Duties in any jurisdiction
that may be suffered or incurred by a Peabody Party directly or indirectly as a
result of or in connection with the termination of this agreement under clause 8.1
and the transactions and matters contemplated by clause 8.4 and 8.5. Such payment
shall be made within 5 Payment Business Days of Peabody providing AM with evidence of
such Duty becoming payable or having
been paid. Peabody holds the benefit of this clause on trust for the benefit of
each Peabody Party.
	 
	 	(b)	 	Peabody agrees to pay AM an amount equal to 50% of any Duties in any
jurisdiction that may be suffered or incurred by an AM Party directly or indirectly
as a result of or in connection with the termination of this agreement under clause
8.1 and the transactions and matters contemplated by clause 8.4 and 8.5. Such payment
shall be made within 5 Payment Business Days of AM providing Peabody with evidence of
such Duty becoming payable or having been paid. AM holds the benefit of this clause
on trust for the benefit of each AM Party.

	8.4	 	Automatic termination

	 	(a)	 	If this agreement is terminated under clause 8.1(a), 8.1(c) or 8.1(d), at 11.00am
on the day that is 2 Payment Business Days after the date of termination at the
Sydney offices of Freehills or at such other time or place agreed in writing by AM
BV2, Peabody and Holdco (the Automatic Termination Completion Date):

	 	(1)	 	AM BV2 must sell to Peabody (or its nominee), and
Peabody must purchase (or must procure that its nominee shall purchase),
the Holdco Shares issued to AM BV2 referred to in clause 3.1 clear and free
of all Encumbrances and other third party rights or interests of any nature
(whether legal or otherwise);
	 
	 	(2)	 	AM BV2 must deliver to Peabody (or its nominee) the
share certificates or holding statements, and executed transfers in favour
of Peabody (or its nominee), for the Holdco Shares issued to AM BV2
referred to in clause 3.1; and
	 
	 	(3)	 	subject to AM BV2 complying with its obligations under
clause 8.4(a)(2), Peabody must pay (or must procure that its nominee shall
pay) $2 to AM BV2 (or as directed by AM BV2) in immediately available
funds, being the purchase price for the Holdco Shares issued to AM BV2 as
referred to in clause 3.1.

	 	(b)	 	If this agreement is terminated under clause 8.1(a), 8.1(c) or 8.1(d), AM
BV2 will be deemed to have represented and warranted in favour of Peabody on the
Automatic Termination Completion Date that it transfers to Peabody (or its

 page 26

 

			
	
	 	8 Termination

	 	 	 	nominee) legal and beneficial title to the Holdco Shares issued to AM BV2
referred to in clause 3.1, free of any Encumbrances or third party rights or
interests of any nature (whether legal or otherwise) and with all rights,
including dividend rights, attached or accruing to them on and from the date of
this agreement. AM BV2 gives no other express or implied warranties other than
set out in this clause 8.4(b). All warranties implied by statute, general law or
custom are excluded except to the extent that exclusion is prohibited by law.

	8.5	 	Termination by AM

	 	(a)	 	If AM causes this agreement to be terminated under clause 8.1(b), at 11.00am on
the third Payment Business Day after the Settlement Date or on an earlier date
nominated in writing by Peabody to AM (Transfer Date), at the Sydney offices of
Freehills or at such other time or place agreed in writing by AM and Peabody:

	 	(1)	 	AM must sell to Peabody, and Peabody must purchase for
the Purchase Price, the AM BV2 Shares clear and free clear of all
Encumbrances and other third party interests of any nature (whether legal
or otherwise);
	 
	 	(2)	 	subject to AM complying with its obligations in
Schedule 2, Peabody must pay to AM as the Purchase Price for the AM BV2
Shares, in immediately available funds, an amount equal to the sum of:

	 	(A)	 	the aggregate of all amounts
received by Holdco from AM BV2 from the date of this agreement
until the end of the
Purchase Price Calculation Period pursuant to AM BV2’s
obligations under clause 3.2 (Funding Amounts);
	 
	 	(B)	 	an amount equal to all interest
paid or payable by AM on the Funding Amounts in respect of the
Purchase Price Calculation Period; and
	 
	 	(C)	 	any utilisation fee paid or payable
by AM in respect of the Funding Amounts, but excluding, for the
avoidance of doubt, all arrangement and facility fees and other
costs and expenses paid or payable by AM in respect of the
Funding Amounts,

	 	 	 	(the Purchase Price).

	 	(b)	 	AM must sell the AM BV2 Shares to Peabody together with all rights:

	 	(1)	 	attached to them as at the date of this agreement; and
	 
	 	(2)	 	that accrue between the date of this agreement and the
Transfer Date.

	 	(c)	 	On or before the Transfer Date, AM and Peabody must carry out the steps
referable to each of them in Schedule 2.
	 
	 	(d)	 	Title to and risk in the AM BV2 Shares will pass to Peabody on the Transfer
Date when AM and Peabody have performed the obligations under Schedule 2.
	 
	 	(e)	 	If AM causes this agreement to be terminated under clause 8.1(b), AM BV2
irrevocably directs Bidco to pay to AM (or as AM directs), in immediately available
funds, all amounts payable to AM BV2 under the Offer.
	 
	 	(f)	 	Peabody may direct AM to transfer the AM BV2 Shares to an entity it
nominates in writing at least 3 Business Days before the Transfer Date. In that
event, references to ‘Peabody’ in this clause 8.5 shall be deemed to be references to
the entity so nominated (except for the references contained in clauses 8.5(a)(2) and
8.5(g)).

 page 27

 

			
	
	 	8 Termination

	 	(g)	 	If AM causes this agreement to be terminated under clause 8.1(b), AM shall
promptly indemnify Peabody (and each of its Related Bodies Corporate and Peabody’s
nominee (if any)), Bidco, Holdco and AM BV2 from and against:

	 	(1)	 	(Prior Duties) except as provided for in clause 8.3,
any and all Duties in any jurisdiction imposed on AM BV2, or in respect of
which AM BV2 became liable, in any such case on or before the Transfer
Date, or which otherwise directly or indirectly relate to matters, events
or circumstances that occurred or arose on or before the Transfer Date,
including any and all Duties arising as a direct or indirect result of the
transfer of the AM Shares from AM to AM BV2. For the avoidance of doubt,
AM will not be liable under this paragraph (1) for any Duties in any
jurisdiction which result from or are connected with the termination of
this agreement under clause 8.1 and the transactions and matters
contemplated by this clause 8.5;
	 
	 	(2)	 	(Taxes relating to the period before termination) any
and all Taxes in any jurisdiction imposed on AM BV2, or in respect of which
AM BV2 became liable, in any such case on or before the Transfer Date, or
which otherwise directly or indirectly relate to matters, events or
circumstances that occurred or arose on or before the Transfer Date,
including any and all Taxes arising as a direct or indirect result of (i)
the transfer of the AM Shares from AM to AM BV2 or (ii) the transfer of the
AM Shares to Bidco as a result of an acceptance of the Offer; and
	 
	 	(3)	 	(Other losses) any and all claims, actions, damages,
losses, liabilities, costs, expenses or payments of whatever nature and
however arising and in whichever jurisdiction, which Peabody or a Related
Body Corporate or Peabody’s nominee (if any) may suffer or incur as a
direct or indirect result of any of the representations and warranties in
clause 9.1 and 9.2 being untrue.

	 	 	 	Peabody holds the benefit of this clause on trust for the benefit of each of its
Related Bodies Corporate and its nominee (if any).
	 
	 	(h)	 	Following the payment of the Purchase Price, Peabody shall have no further
liability to AM in connection with the termination of this agreement under clause
8.1(b), except to the extent provided for in clause 9.2(a).
	 
	 	(i)	 	For the purposes of this agreement:

	 	(1)	 	Settlement Date means the later of:

	 	(A)	 	the date which is 90 days after the
date on which the Termination Notice is given to Peabody and
Holdco; or
	 
	 	(B)	 	if on or after the date on which
the Termination Notice is given to Peabody and Holdco but before
the date referred to in clause 8.5(i)(1)(A), a GFC Event occurs,
the date which is 120 days after the date on which the
Termination Notice is given to Peabody and Holdco; and

	 	(2)	 	Purchase Price Calculation Period means the period
commencing on the date on which the Termination Notice is given to Peabody
and Holdco and ending on the earlier of:

	 	(A)	 	the Settlement Date; and
	 
	 	(B)	 	the date which is 3 Payment
Business Days before any earlier date nominated by Peabody
pursuant to the introductory paragraph of this clause 8.5(a).

 page 28

 

			
	
	 	9 Warranties

	 	(j)	 	AM agrees to procure that from the time this agreement is entered into
until the later of the end of the Offer Period or, AM causes this agreement to be
terminated under clause 8.1(b), the Transfer Date (each inclusive):

	 	(1)	 	AM BV2 does not commence trading or have any function
or operations other than the holding of Holdco Shares;
	 
	 	(2)	 	AM BV2 does not acquire any assets (excluding cash),
except for the Holdco Shares issued or to be issued to it under the terms
of this agreement or incur any liabilities or engage the services of any
employees; and
	 
	 	(3)	 	AM BV2 does not enter into any agreement, arrangement
or understanding, except for this agreement and the Shareholders’ Deed.

	9	 	Warranties
	 
	 
	 
	9.1	 	Mutual warranties
	 
	 	 	Each party represents and warrants to each other party as at the date of this agreement and on
each day until the end of the Offer Period (each inclusive) that:

	 	(a)	 	(validly existing) it is a validly existing corporation registered under
the laws of its place of incorporation;
	 
	 	(b)	 	(authority) the execution and delivery of this agreement has been properly
authorised by all necessary corporate action by it;
	 
	 	(c)	 	(power) it has full corporate power and lawful authority to execute,
deliver and perform this agreement and to consummate and perform or cause to be
performed its obligations under this agreement in accordance with its terms;
	 
	 	(d)	 	(binding obligations) subject to laws generally affecting creditors’ rights
and the principles of equity, this agreement constitutes legal, valid and binding
obligations on it; and
	 
	 	(e)	 	(no default) this agreement does not conflict with or result in the breach
of or a default under any provision of its constitution or any writ, order or
injunction,
judgment, law, rule or regulation to which it is party or subject or by which it is bound.

	9.2	 	Warranties by AM
	 
	 	 	AM represents and warrants in favour of Peabody, Holdco and Bidco as at the date of this
agreement and on each day until the end of the Offer Period or, if a Termination Notice has been
given, until the Transfer Date (in each case, each inclusive) that:

	 	(a)	 	(ownership) it is the legal and full beneficial owner of the AM Shares
(subject to the proposed transfer of its AM Shares to AM BV2, the terms of this
agreement and the Offer after AM BV2 accepts the Offer) and neither it, nor any
Related Body Corporate nor any Associate (other than a party to this agreement) has a
Relevant Interest in any other MCC Shares;
	 
	 	(b)	 	(Encumbrances) except for AM BV2’s Relevant Interest in the AM Shares, the
AM Shares are:

	 	(1)	 	free of all Encumbrances and other third party rights
or interests of any nature (whether legal or otherwise) (subject to the
terms of the Offer after it accepts the Offer);

 page 29

 

			
	
	 	9 Warranties

	 	(2)	 	free from restrictions on transfer of any nature
(whether legal or otherwise); and

	 	(3)	 	fully paid and no money is owing to MCC in respect of
the AM Shares;

	 	(c)	 	(compliance with laws) other than as contemplated under this agreement or
by any of the conditions in the Agreed Announcement, no approvals are required to be
obtained by AM or any of its Related Bodies Corporate under any law, rule or
regulation to perform and observe its obligations under this agreement;
	 
	 	(d)	 	(MCC Shares) as at the date of this agreement, neither it nor any of its
Related Bodies Corporate nor any of its Associates (other than a party to this
agreement):

	 	(1)	 	has a Relevant Interest in any MCC Shares (other than
the AM Shares) and that the AM Shares are the only MCC Shares in which it
and its Related Bodies Corporate and its Associates (other than a party to
this agreement) have a Relevant Interest;
	 
	 	(2)	 	is a party to any derivative or synthetic agreement,
deed or other arrangement under which payments may be made that are
referable (in whole or part) to the trading price, or the economic value,
of MCC Shares; or
	 
	 	(3)	 	has provided, or agreed to provide, any consideration
for MCC Shares under any purchase or agreement during the 4 month period
ending on the date of this agreement;

	 	(e)	 	(provision of information) subject to any obligations of confidence or
other restrictions imposed by contract, law, regulation or order of any Governmental
Agency, AM has not, so far as AM’s members of the AM deal team are aware, before the
entry into this agreement, deliberately withheld from Peabody, Holdco or Bidco any
information relating to MCC that would reasonably be expected to materially affect
the decision of Peabody, Holdco or Bidco to invest in MCC, other than information
that is the subject of legal professional privilege and other than information the
disclosure of which would prejudice AM’s legitimate commercial business interests
(including board papers and subjective internal assessments of value) and which no
reasonable commercial business person would expect AM to disclose to Peabody;
	 
	 	(f)	 	(existing shares)

	 	(1)	 	AM is the legal and beneficial owner of the AM BV2
Shares;
	 
	 	(2)	 	the AM BV2 Shares comprise all of the equity interests
in AM BV2, have been validly issued, are fully paid and no money is owing
in respect of them;
	 
	 	(3)	 	other than the terms of the AM BV2 Shares, no
agreement, arrangement, or understanding has been entered into or made to
issue further equity interests in AM BV2 and no instruments or other rights
exist which may convert into, or result in the issuance of, any equity
interests in AM BV2;
	 
	 	(4)	 	only Peabody is entitled to acquire any equity interest
in AM BV2, and such entitlement is on the terms and conditions of this
agreement;
	 
	 	(5)	 	AM owns all the equity interests in the capital of AM
BV2, and no one other than Peabody will have a right to acquire any shares
in the capital of AM BV2; and
	 
	 	(6)	 	on the Transfer Date, Peabody will acquire the full
legal and beneficial ownership of the AM BV2 Shares free and clear of all
Encumbrances and other third party interests of any nature (whether legal
or

 page 30

 

			
	
	 	9 Warranties

	 		 	otherwise), subject to registration of Peabody in the register of
members of AM BV2;

	 	(g)	 	(no trading) AM BV2 had not commenced trading and has, and has had, no
function or operations other than the holding of Holdco Shares;
	 
	 	(h)	 	(assets and liabilities) AM BV2 has no assets, except for cash and the
Holdco Shares issued or to be issued to it under the terms of this agreement and AM
BV2 has no liabilities or employees. The Holdco Shares issued or to be issued to AM
BV2 under the terms of this agreement will held by AM BV2 free and clear of all
Encumbrances and other third party rights or interests of any nature (whether legal
or otherwise) and AM BV2 will be the legal and beneficial owner of the Holdco Shares
issued or to be issued to AM BV2 under the terms of this agreement; and
	 
	 	(i)	 	(agreements) AM BV2 has not entered into any agreement, arrangement or
understanding, except for this agreement and the Shareholders’ Deed.

	9.3	 	Warranties by Peabody
	 
	 	 	Peabody represents and warrants in favour of AM as at the date of this agreement and on each
day until the end of the Offer Period (each inclusive) that:

	 	(a)	 	(Encumbrances) the Holdco Shares that are issued to AM BV2 under this
agreement will:

	 	(1)	 	be free of all Encumbrances and other third party
rights or interests of any nature (whether legal or otherwise);
	 
	 	(2)	 	rank equally in all respects with the other Holdco
Shares; and
	 
	 	(3)	 	be issued as fully paid;

	 	(b)	 	(solvency) Holdco is solvent and able to pay its debts as and when they
fall due (other than as a result of any default by AM of its obligations pursuant to
clause 3);
	 
	 	(c)	 	(Peabody Shares) either it or Bidco is the legal and beneficial owner of
the Peabody Shares; and
	 
	 	(d)	 	(provision of information) subject to any obligations of confidence or
other restrictions imposed by contract, law, regulation or order of any Governmental
Agency, Peabody has not, so far as Peabody’s members of the Peabody deal team are
aware, before the entry into this agreement, deliberately withheld from AM any
information relating to MCC that would reasonably be expected to materially affect
the decision of AM to reinvest in MCC, other than information that is the subject of
legal professional privilege and other than information the disclosure of which would
prejudice Peabody’s legitimate commercial business interests (including board papers
and subjective internal assessments of value) and which no reasonable commercial
business person would expect Peabody to disclose to AM.

	9.4	 	Warranties by Peabody, Holdco and Bidco
	 
	 	 	Peabody, Holdco and Bidco each represent and warrant in favour of AM as at the date of this
agreement and on each day until the end of the Offer Period (each inclusive) that:

	 	(a)	 	(compliance with laws) other than as contemplated under this agreement or
in the Agreed Announcement, no approvals are required to be obtained by Peabody,
Holdco or Bidco or by any Related Body Corporate of any of them under any law, rule
or regulation to perform and observe their obligations under this agreement;

 page 31

 

			
	
	 	10 Confidentiality

	 	(b)	 	(MCC Shares) as at the date of this agreement, none of them nor any Related
Body Corporate nor any Associates of any of them (other than a party to this
agreement):

	 	(1)	 	has a Relevant Interest in any MCC Shares (other than
the AM Shares, the Peabody Shares and any New Peabody Shares);
	 
	 	(2)	 	is a party to any derivative or synthetic agreement,
deed or other arrangement under which payments may be made that are
referable (in whole or part) to the trading price, or the economic value,
of MCC Shares; or
	 
	 	(3)	 	has provided, or agreed to provide, any consideration
for MCC Shares (other than the AM Shares, the Peabody Shares and any New
Peabody Shares) under any purchase or agreement during the 4 month period
ending on the date of this agreement;

	 	(c)	 	(existing shares)

	 	(1)	 	at the date of this agreement, Peabody owns all the
Holdco Shares;
	 
	 	(2)	 	at the date of this agreement, the entire issued share
capital of Holdco comprises 2 Holdco Shares;
	 
	 	(3)	 	only Peabody and AM BV2 will, before the end of the
Offer Period, be entitled to acquire Holdco Shares, and such entitlement
will be on the terms and conditions of this agreement only; and
	 
	 	(4)	 	Holdco owns all the shares in the capital of Bidco, and
no one other than Holdco will have a right to acquire any shares in the
capital of Bidco before the end of the Offer Period; and

	 	(d)	 	(no trading) as at the date of this agreement, neither Holdco nor Bidco had
commenced trading and neither had any assets or liabilities.

	9.5	 	Reliance on representations and warranties

	 	(a)	 	Each party acknowledges that no party (nor any person acting on its behalf) has
made any representation, warranty or other inducement to it to enter into this
agreement, except for representations, warranties or inducements expressly set out in
this agreement.
	 
	 	(b)	 	Each party acknowledges and confirms that it does not enter into this
agreement in reliance on any representation, warranty or other inducement by or on
behalf of any other party, except for any representation, warranty or inducement
expressly set out in this agreement.

	9.6	 	Notification
	 
	 	 	Each party will promptly advise the other parties in writing if it becomes aware of any fact,
matter or circumstance that constitutes or may constitute a breach of any of the representations
and warranties given by it under this agreement.
	 
	9.7	 	Independent warranties

Each of the representations and warranties in this agreement is to be construed independently
of the others and is not limited by reference to any other representation or warranty.

 page 32

 

			
	
	 	10 Confidentiality

	10	 	Confidentiality
	 
	 

	 	(a)	 	Each party acknowledges and agrees that it continues to be bound by the
Confidentiality Agreement in respect of all information received by it from the other
party before or after the date of this agreement.
	 
	 	(b)	 	The rights and obligations of the parties under the Confidentiality
Agreement survive termination of this agreement.

	11	 	Duties, costs and expenses
	 
	 
	 
	11.1	 	Duties
	 
	 	 	Holdco must pay all Duty in respect of the execution, delivery and performance of this
agreement, unless otherwise provided for in this agreement.
	 
	11.2	 	Parties to pay own other costs

	 	(a)	 	Except as set out in clause 11.1 and 11.3, and unless otherwise provided for in
this agreement, each party must pay its own costs and expenses in respect of the
negotiation, preparation, execution, delivery and registration of this agreement and
any other agreement or document entered into or signed under this agreement or in
connection with the Offer.
	 
	 	(b)	 	Any action to be taken by any party in performing its obligations under
this agreement must be taken at its own cost and expense unless otherwise provided in
this agreement.

	11.3	 	Common advisory costs

	 	(a)	 	Peabody will pay directly 100% of, and AM will reimburse Peabody 40% of, any
legal, accounting, tax, financial, facilitation and other advisory fees and
disbursements of common advisors or service providers (each a Jointly Retained Party)
to Peabody, AM, Holdco and Bidco in connection with the transactions contemplated by
this agreement, including the Offer, whose appointment as a Jointly Retained Party
is, and the terms of that appointment are, agreed in writing between Peabody and AM.
	 
	 	(b)	 	AM will reimburse Peabody for 40% of the fees and disbursements of the
Jointly Retained Parties within 2 Payment Business Days of Peabody providing AM with
evidence of such fees and disbursements being paid.

	11.4	 	Break fees and other payments

	 	(a)	 	If MCC pays Holdco or Bidco any break fee (or similar consideration) in
connection with the Offer:

	 	(1)	 	60% of the amount of that break fee must be paid to
Peabody in immediately available funds within 2 Payment Business Days of
Holdco or Bidco receiving the break fee; and
	 
	 	(2)	 	40% of the amount of that break fee must be paid to AM
in immediately available funds within 2 Payment Business Days of Peabody,
Holdco or Bidco receiving the break fee.

 page 33

 

			
	
	 	12 GST

	 	(b)	 	If Holdco or Bidco receives any payments (other than any break fee or
similar consideration which is captured by clause 11.4(a)), damages or reimbursements
from MCC which relate to the Offer:

	 	(1)	 	60% of the amount of that payment, damages or
reimbursement must be paid to Peabody in immediately available funds within
2 Payment Business Days of Holdco or Bidco receiving the payment, damages
or reimbursement; and
	 
	 	(2)	 	40% of the amount of that payment, damages or
reimbursement must be paid to AM in immediately available funds within 2
Payment Business Days of Holdco or Bidco receiving the payment, damages or
reimbursement.

	 	(c)	 	If Peabody receives any of the payments contemplated pursuant to clause
11.4(a) or clause 11.4(b) directly from MCC, then Peabody must within 2 Payment
Business Days pay 40% of those to AM.
	 
	 	(d)	 	If AM receives any of the payments contemplated pursuant to clause 11.4(a)
or clause 11.4(b) directly from MCC, then AM must within 2 Payment Business Days pay
60% of those to Peabody.

	12	 	GST
	 
	 
	 
	12.1	 	Definitions
	 
	 	 	Words used in this clause 12 that have a defined meaning in the GST Law have the same meaning
as in the GST Law unless the context indicates otherwise.
	 
	12.2	 	GST

	 	(a)	 	Unless expressly included, the consideration for any supply under or in
connection with this agreement does not include GST.
	 
	 	(b)	 	To the extent that any supply made under or in connection with this
agreement is a taxable supply (other than any supply made under another agreement
that contains a specific provision dealing with GST), the recipient must pay, in
addition to the consideration provided under this agreement for that supply (unless
it expressly includes GST) an amount (additional amount) equal to the amount of that
consideration (or its GST exclusive market value) multiplied by the rate at which GST
is imposed in respect of the supply. The recipient must pay the additional amount at
the same time as the consideration to which it is referable.
	 
	 	(c)	 	Whenever an adjustment event occurs in relation to any taxable supply to
which clause 12.2(b) applies:

	 	(1)	 	the supplier must determine the amount of the GST
component of the consideration payable; and
	 
	 	(2)	 	if the GST component of that consideration differs from
the amount previously paid, the amount of the difference must be paid by,
refunded to or credited to the recipient, as applicable.

	12.3	 	Tax invoices
	 
	 	 	The supplier must issue a tax invoice to the recipient of a supply to which clause 12.2
applies no later than 10 days following payment of the GST inclusive consideration for that supply
under that clause.

 page 34

 

			
	
	 	13 General

	12.4	 	Reimbursements
	 
	 	 	If either party is entitled under this agreement to be reimbursed or indemnified by the other
party for a cost or expense incurred in connection with this agreement, the reimbursement or
indemnity payment must not include any GST component of the cost or expense to the extent that the
cost or expense is the consideration for a creditable acquisition made by the party being
reimbursed or indemnified, or by its representative member.
	 
	13	 	General
	 
	 
	 
	13.1	 	Notices

	 	(a)	 	Any notice or other communication (including any request, demand, consent or
approval) to or by a party to this agreement must be in legible writing and in
English addressed as shown below (or as specified to the sender by any party by
notice):

	 	 	 	 	 	 	 
	Party	 	Address	 	Attention	 	Facsimile
	Peabody

	 	Level 13, BOQ

Centre, 259 Queen
	 	The Company Secretary

with a copy to Freehills:
	 	+61 7 3225 5555
	 

	 	Street, Brisbane
	 	Attention:	 	 
	 

	 	QLD 4000
	 	Tony Damian / Andrew Rich

Address:	 	 
	 

	 	 	 	Level 32, MLC Centre,

19 Martin Place, Sydney

NSW 2000

Australia

Fax:	 	 
	 

	 	 	 	+61 2 9322 4000	 	 
	 
	 	 	 	 	 	 
	Holdco

	 	Level 13, BOQ

Centre, 259 Queen
	 	The Company Secretary 

with a copy to Freehills:
	 	+61 7 3225 5555
	 

	 	Street, Brisbane
	 	Attention:	 	 
	 

	 	QLD 4000
	 	Tony Damian / Andrew Rich	 	 
	 

	 	 	 	

Address:

Level 32, MLC Centre,

19 Martin Place, Sydney

NSW 2000

Australia

Fax:	 	 
	 

	 	 	 	+61 2 9322 4000	 	 
	 
	 	 	 	 	 	 
	Bidco

	 	Level 13, BOQ

Centre, 259 Queen
	 	The Company Secretary

with a copy to Freehills:
	 	+61 7 3225 5555
	 

	 	Street, Brisbane	 	 	 	 
	 

	 	QLD 4000	 	Attention:	 	 

 page 35

 

			
	
	 	13 General

	 	 	 	 	 	 	 
	Party	 	Address	 	Attention	 	Facsimile
	 

	 	 	 	Tony Damian / Andrew Rich

Address:	 	 
	 

	 	 	 	Level 32, MLC Centre,

19 Martin Place, Sydney

NSW 2000

Australia

Fax:	 	 
	 

	 	 	 	+61 2 9322 4000	 	 
	 
	 	 	 	 	 	 
	AM

	 	Eemhavenweg 70,

3089 KH Rotterdam,

Netherlands
	 	Carole Whittall

with a copy to the London
office of AM:
	 	+44 20 7629 5351
	 

	 	 	 	

Attention: Carole Whittall

Address:	 	 
	 

	 	 	 	7th Floor Berkeley Square
House, Berkeley Square,
London W1J 6AD

with a further copy to 

Mallesons Stephen Jaques:	 	 
	 

	 	 	 	

Attention:	 	 
	 

	 	 	 	David Friedlander / Paul

Schroder

Address:	 	 
	 

	 	 	 	Level 61, Governor

Phillip Tower, 1 Farrer

Place, Sydney NSW 2000

Fax:	 	 
	 

	 	 	 	+61 2 9296 3999	 	 
	 
	 	 	 	 	 	 
	AM BV2

	 	Eemhavenweg 70,

3089 KH Rotterdam,

Netherlands
	 	Carole Whittall

with a copy the London
office of AM BV2:
	 	+44 20 7629 5351
	 

	 	 	 	

Attention: Carole Whittall

Address:	 	 
	 

	 	 	 	7th Floor Berkeley Square

House, Berkeley Square,

London W1J 6AD

with a further copy to

Mallesons Stephen Jaques:	 	 
	 

	 	 	 	

Attention:	 	 
	 

	 	 	 	David Friedlander / Paul

Schroder

Address:	 	 
	 

	 	 	 	Level 61, Governor

Phillip Tower, 1 Farrer

Place, Sydney NSW 2000

Fax:	 	 
	 

	 	 	 	+61 2 9296 3999	 	 

 page 36

 

			
	
	 	13 General

	 	 	 	If the sender is a company, the notice or communication must be signed by
an officer or under the common seal of the sender.
	 
	 	(b)	 	A notice or communication given in accordance with clause 13.1(a) can be
relied on by the addressee and the addressee is not liable to any other person for
any consequences of that reliance if the addressee believes it to be genuine, correct
and authorised by the sender.
	 
	 	(c)	 	Any notice or other communication to or by a party to this agreement is
regarded as being given by the sender and received by the addressee:

	 	(1)	 	if by delivery in person, when delivered to the
addressee;
	 
	 	(2)	 	if by post within Australia, 4 Business Days from and
including the date of postage;
	 
	 	(3)	 	if by post to or from a place outside Australia, 7
Business Days from and including the date of postage;
	 
	 	(4)	 	if by facsimile transmission, when a facsimile
confirmation receipt is received indicating successful delivery,

	 	 	 	but if the delivery or receipt is on a day that is not a Business Day or is
after 5.00pm (addressee’s time) it is regarded as received at 9.00am on the
following Business Day.
	 
	 	(d)	 	A facsimile transmission is regarded as legible unless the addressee
telephones the sender within 2 hours after the transmission is received or regarded
as received under clause 13.1(c) and informs the sender that it is not legible.
	 
	 	(e)	 	In this clause 13.1, reference to an addressee includes a reference to an
addressee’s officers, agents or employees.

	13.2	 	Governing law and jurisdiction

	 	(a)	 	This agreement is governed by the laws of New South Wales.
	 
	 	(b)	 	Each party irrevocably submits to the non-exclusive jurisdiction of the
courts of New South Wales.

	13.3	 	Service of process

	 	(a)	 	Without preventing any other mode of service, any document in an action
(including any writ of summons or other originating process or any third or other
party notice) may be served on any party by being delivered to or left for that party
at its address for service of notices under clause 13.1.
	 
	 	(b)	 	AM irrevocably appoints Mallesons Stephen Jaques (attention: David
Friedlander / Paul Schroder) of Level 61, Governor Phillip Tower, 1 Farrer Place,
Sydney New South Wales 2000, as its agent for the service of process in Australia in
relation to any matter arising out of this agreement. If Mallesons Stephen Jaques
ceases to be able to act as such or have an address in Australia, AM agrees to
appoint a new process agent in Australia and delver to the other parties within 2
Business Days a copy of a written acceptance of

 page 37

 

			
	
	 	13 General

	 	 	 	appointment by the process agent, upon receipt of which the new appointment
becomes effective for the purpose of this agreement. AM must inform the other
parties in writing of any change in the address of its process agent within 2
Business Days of the change.
	 
	 	(c)	 	AM BV2 irrevocably appoints Mallesons Stephen Jaques (attention: David
Friedlander / Paul Schroder) of Level 61, Governor Phillip Tower, 1 Farrer Place,
Sydney New South Wales 2000, as its agent for the service of process in Australia in
relation to any matter arising out of this agreement. If Mallesons Stephen Jaques
ceases to be able to act as such or have an address in Australia, AM BV2 agrees to
appoint a new process agent in Australia and delver to the other parties within 2
Business Days a copy of a written acceptance of appointment by the process agent,
upon receipt of which the new appointment becomes effective for the purpose of this
agreement. AM BV2 must inform the other parties in writing of any change in the
address of its process agent within 2 Business Days of the change.
	 
	 	(d)	 	Peabody irrevocably appoints Freehills (attention: Tony Damian / Andrew
Rich) of Level 32, MLC Centre, 19 Martin Place, Sydney New South Wales 2000, as its
agent for the service of process in Australia in relation to any matter arising out
of this agreement. If Freehills ceases to be able to act as such or have an address
in Australia, Peabody agrees to appoint a new process agent in Australia and delver
to the other parties within 2 Business Days a copy of a written acceptance of
appointment by the process agent, upon receipt of which the new appointment becomes
effective for the purpose of this agreement. Peabody must inform the other parties
in writing of any change in the address of its process agent within 2 Business Days
of the change.

	13.4	 	Waivers and variation

	 	(a)	 	A provision of, or a right, discretion or authority created under, this agreement
may not be:

	 	(1)	 	waived except in writing signed by the party granting
the waiver; and
	 
	 	(2)	 	varied except in writing signed by the parties,

	 	 	 	except to the extent this agreement expressly provides otherwise.

	 	(b)	 	A failure or delay in exercise, or partial exercise, of a power, right,
authority, discretion or remedy arising from a breach of, or default under this
agreement does not result in a waiver of that right, power, authority, discretion or
remedy.

	13.5	 	Assignment
	 
	 	 	A party may not assign its rights or delegate its obligations under this agreement without the
written consent of each other party.
	 
	13.6	 	Further assurances
	 
	 	 	Subject to clause 10, each party must do all things and execute all further documents
reasonably necessary to give full effect to this agreement and the transactions contemplated by it.
	 
	13.7	 	Approvals and consent
	 
	 	 	If the doing of any act, matter or thing under this agreement is dependent on the approval or
consent of a party, that party may give conditionally or unconditionally or withhold its approval
or consent in its absolute discretion, unless this agreement expressly provides otherwise.

 page 38

 

			
	
	 	13 General

	13.8	 	Remedies cumulative
	 
	 	 	Except as provided in this agreement and permitted by law, the rights, powers and remedies
provided in this agreement are cumulative with and not exclusive to the rights, powers or remedies
provided by law independently of this agreement.
	 
	13.9	 	Counterparts
	 
	 	 	This agreement may be executed in any number of counterparts which together will constitute
one instrument. A party may execute this agreement by signing any counterpart.
	 
	13.10	 	Prohibition and enforceability
	 
	 	 	Any provision of, or the application of any provision of, in this agreement that is void,
illegal or unenforceable in any jurisdiction is to be read down for the purpose of that
jurisdiction, if possible, so as to be valid and enforceable, and otherwise shall be severed to the
extent of the invalidity, illegality or unenforceability, without affecting the remaining
provisions of this agreement or affecting the validity or enforceability of that provision in any
other jurisdiction.
	 
	13.11	 	No merger
	 
	 	 	The rights and obligations of the parties under this agreement do not merge on completion of
any transaction contemplated by this agreement.
	 
	13.12	 	Entire agreement
	 
	 	 	This agreement, the Shareholders’ Agreement, the Pre-Bid Acceptance Deed and the Deed of
Guarantee embody the entire agreement between the parties and supersede any prior negotiation,
conduct, arrangement, understanding or agreement, express or implied, with respect to the subject
matter of this agreement other than the Confidentiality Agreement.
	 
	13.13	 	Contra proferentem excluded
	 
	 	 	No term or condition of this agreement will be construed adversely to a party solely on the
ground that the party was responsible for the preparation of this agreement or that provision.
	 
	13.14	 	Specific performance

	 	(a)	 	AM and AM BV2 each acknowledge that monetary damages alone would not be adequate
compensation:

	 	(1)	 	to Holdco for a breach by AM or AM BV2 of their
obligations to complete the sale of the AM Shares in accordance with clause
8.5; and
	 
	 	(2)	 	to Peabody for a breach by AM or AM BV2 of their
obligations to complete the sale of the AM BV2 Shares in accordance with
clause 8.5,

	 	 	 	under this agreement and that accordingly specific performance of those
obligations is an appropriate remedy.
	 
	 	(b)	 	Peabody acknowledges that monetary damages alone would not be adequate
compensation to AM for a breach by Peabody of its obligations to complete the
purchase of the AM Shares in accordance with clause 8.5 under this agreement

 page 39

 

			
	
	 	13 General

	 	 	 	and that accordingly specific performance of those obligations is an appropriate
remedy.

	13.15	 	Attorneys
	 
	 	 	If this agreement is executed by attorneys, each of the attorneys executing this agreement
states that the attorney has no notice of the revocation of the power of attorney appointing that
attorney.

 page 40

 

Schedules

	 	 	 	 	 
	Table of contents	 	 	 	 
	Schedule 1
	 	 	 	 
	 
	 	 	 	 
	Agreed Announcement
	 	 	42	 
	 
	 	 	 	 
	Transfer steps
	 	 	44	 

page 41

 

Schedule 1

Agreed Announcement

Takeover bid for Macarthur Coal Limited

Peabody Energy Corporation (Peabody) (NYSE: BTU) and ArcelorMittal S.A.
(ArcelorMittal) (NYSE: MT) today announce that they intend jointly to make an off-market
takeover bid for all of the shares in Macarthur Coal Limited (Macarthur) (ASX: MCC) at a
price of A$15.50 per share (inclusive of any dividends declared or paid after the date of
this announcement).

The conditions of the proposed takeover bid are set out in the attached Annexure.

The takeover bid will be made by a special purpose company (Bidco), which is indirectly
owned as to 60% by Peabody and as to 40% by ArcelorMittal.

Bidco currently has a relevant interest in approximately 16.1% of the shares in Macarthur
as a result of entering into a pre-bid acceptance deed with ArcelorMittal.

Further details in relation to the joint takeover bid will be released to the market in
due course.

Peabody has engaged UBS and Bank of America Merrill Lynch as its financial advisers and
Freehills as its Australian legal adviser in relation to the takeover. ArcelorMittal has
engaged RBC as its financial adviser and Mallesons Stephen Jaques as its Australian legal
adviser in relation to the takeover.

[•] 2011

*****************

Annexure — Bid conditions

[To be attached. The parties agree that the conditions to this announcement are those

conditions that have been agreed in writing between them.]

page 42

 

Schedule 2

		 	Transfer steps

	1	 	Pre-transfer steps

 

	 	(a)	 	At least 2 Business Days before the Transfer Date, Peabody must notify AM of the
address to which the registered office of AM BV2 is to be changed following
completion of the sale of the AM BV2 Shares.
	 
	 	(b)	 	On or before the Transfer Date:

	 	(1)	 	AM must approve and resolve, subject to completion of
the sale of the AM BV2 Shares occurring, the resignations of the existing
directors and officers of AM BV2; and
	 
	 	(2)	 	AM must ensure that the directors of AM BV2 approve and
resolve, subject to completion of the sale of the AM BV2 Shares occurring):

	 	(A)	 	the change of the registered office
of AM BV2 to an address nominated in writing by Peabody; and
	 
	 	(B)	 	the revocation of all existing
mandates for the operation of bank accounts by AM BV2 and the
replacement of those mandates with the mandates approved in
writing by Peabody.

	 	(b)	 	Before the Transfer Date:

	 	(1)	 	AM and AM BV2 will deliver to a Dutch civil law notary
executed powers of attorney authorising the notary to execute a deed of
transfer relating to the transfer of the AM BV2 Shares to Peabody (or its
nominee); and
	 
	 	(2)	 	Peabody will deliver to the same Dutch civil law notary
executed powers of attorney authorising the notary to execute the deed of
transfer.

	2	 	AM’s obligations on the Transfer Date
	 
	 
	 	 	On the Transfer Date:

	 	(a)	 	AM and AM BV2 shall instruct the Dutch civil law notary to execute the deed
of transfer of the AM BV2 Shares and shall take all such further actions and execute
all such further documents as shall be necessary to fully effect the transfer of the
AM BV2 Shares by AM to Peabody (or its nominee); and
	 
	 	(b)	 	AM must give Peabody (or its nominee):

	 	(1)	 	all documents necessary to fully effect the transfer of
the AM BV2 Shares to Peabody (or its nominee);
	 
	 	(2)	 	signed resignations of each director and officer of AM
BV2;
	 
	 	(3)	 	the corporate documents, all prescribed registers, all
statutory, minute and other business records of AM BV2;

 

 

Schedule 2 Transfer steps o

	 	(4)	 	all ledgers, journals and books of account of AM BV2;
	 
	 	(5)	 	all cheque books of each AM BV2 and a list of all bank
accounts maintained by AM BV2;
	 
	 	(6)	 	all documents of title in the possession of AM BV2
relating to the ownership of AM BV2’s Holdco Shares; and
	 
	 	(7)	 	all other books, records, accounts and other documents
of AM BV2.

	3	 	Peabody’s obligations on the Transfer Date
	 
	 
	 	 	Upon compliance by AM with the provisions of paragraph 2 of this Schedule 2, on the
Transfer Date, Peabody shall:

	 	(a)	 	pay the Purchase Price;
	 
	 	(b)	 	instruct the Dutch civil law notary to execute the deed of transfer of the
AM BV2 Shares and shall take all such further actions and execute all such further
documents as shall be necessary to fully effect the transfer of the AM BV2 Shares by
AM to Peabody (or its nominee);
	 
	 	(c)	 	appoint new directors of AM BV2 immediately after execution of the deed of
transfer of the AM BV2 Shares.

page 44

 

Signing page

	 	 	 	 	 
	 	Executed as an agreement

Signed for 

Peabody Acquisition Co. No. 3 Pty Ltd in accordance
with section 127 of the Corporations Act 2001 (Cth)

by 

 
	sign here ►		/s/ Julian Derek Thornton
 	 
	 	Director 	 
	 	 	 
	 print name 	Julian Derek Thornton  	 
	 	 	 
	sign here ►		/s/ Murray Hundleby
 	 
	 	Company Secretary 	 
	 	 	 
	print name 	Murray Hundleby  	 
	 

	 	 	 	 	 
	 	Signed for 

Peabody Acquisition Co. No. 2 Pty Ltd in accordance
with section 127 of the Corporations Act 2001 (Cth)

by 

 
	sign here ►		/s/ Julian Derek Thornton
 	 
	 	Director 	 
	 	 	 
	print name 	Julian Derek Thornton  	 
	 
	sign here ►		/s/ Murray Hundleby
 	 
	 	/Company Secretary 	 
	 	 	 
	print name 	Murray Hundleby  	 

page 45

 

			
	
	 	Signing page

	 	 	 	 	 
	 	Signed for 

Peabody Acquisition Co. No. 4 Pty Ltd in accordance

with section 127 of the Corporations Act 2001 (Cth)

by 

 
	sign here ►   	              /s/ Julian Derek Thornton
 	 
	 	Director 	 
	 	 	 
	print name 	Julian Derek Thornton  	 
	 
	sign here ►   	              /s/ Murray Hundleby
 	 
	 	Company Secretary 	 
	 
	print name	Murray Hundleby  	 
	 

	 	 	 	 	 
	 	Signed for 

ArcelorMittal Netherlands B.V.

by its attorney 

 
	sign here ►   	/s/ Carole Whittall
 	 
	 	Attorney 	 
	 
	print name 	Carole Whittall

	 
	 
	 	in the presence of 	 
	 
	sign here ►   	/s/ Guillame Vercaemer
 	 
	 	Witness 	 
	 
	print name 	Guillame Vercaemer 	 

 

 

Signing
page

	 	 	 	 	 
	 	Signed for 

ArcelorMittal Mining Australasia B.V.

by its attorney 

 	 
	sign here ►   	/s/ Carole Whittall
 	 
	 	Attorney 	 
	 
	print name 	Carole Whittall  	 
	 	 	 
	 	in the presence of	 
	 
	sign here ►   	/s/ Guillame Vercaemer
 	 
	 	Witness 	 
	 
	print name 	Guillame Vercaemer 	 

page 47

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