Dated September 2005 KERR-MCGEE NORTH SEA (U.K.) LIMITED TALISMAN NORTH SEA LIMITED
Dated
September 0000
XXXX-XXXXX
XXXXX XXX (U.K.) LIMITED
TALISMAN
NORTH SEA LIMITED
AGREEMENT
FOR THE SALE AND
PURCHASE
OF THE XXXXXX XXXXX
ASSETS
CONTENTS
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CLAUSE
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PAGE
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1.
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DEFINITIONS
AND INTERPRETATION…………………………………..
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1
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2.
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SALE
AND PURCHASE……………………………………………………..
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9
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3.
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CONSIDERATION……………………………………………………………
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10
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4.
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COMPLETION………………..………………………………………………
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10
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5.
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XXXX-XXXXX
WARRANTIES AND LIMITATIONS……………………..
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11
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6.
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THE
BUYER’S WARRANTIES……………………………………………..
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14
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7.
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CONDUCT
OF CLAIMS……………………………………………………..
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14
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8.
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COMPLETION
ADJUSTMENTS…………………………………………….
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15
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9.
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INFORMATION,
RECORDS AND ASSISTANCE POST
COMPLETION…………………………………………………………………
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19
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10.
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TAXATION……………………………………………………………………
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19
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11.
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TRANSITION
PERIOD……………………………………………………….
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20
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12.
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INDEMNITY…………………………………………………………………..
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21
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13.
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INTEREST
ON LATE PAYMENT…………………………………………...
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24
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14.
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COSTS…………………………………………………………………………
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24
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15.
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CONFIDENTIALITY…………………………………………………………
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25
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16.
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ANNOUNCEMENTS…………………………………………………………
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25
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17.
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MISCELLANEOUS……………………………………………………………
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25
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18.
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ENTIRE
AGREEMENT……………………………………………………….
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26
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19.
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FURTHER
ASSURANCE……………………………………………………..
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27
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20.
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NOTICES……………………………………………………………………...
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28
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21.
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GOVERNING
LAW AND JURISDICTION………………………………….
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28
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SCHEDULE
1 XXXX-XXXXX WARRANTIES…………………………………………..
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30
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SCHEDULE
2 THE BUYER WARRANIES…..…………………………………………..
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33
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SCHEDULE
3 LIMITATIONS ON LIABILITY………………………………………….
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34
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SCHEDULE
4 ASSET DOCUMENTS……………………………………………….……
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39
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SCHEDULE
5 COMPLETION ADJUSTMENTS…………………………………………
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40
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EXHIBIT
1 PROFORMA COMPLETION STATEMENT……………………………….
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43
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SCHEDULE
6 LIST OF COMPLETION DOCUMENTS…………………………………
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44
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SCHEDULE
7 THE ASSETS….…………………………………………………………..
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115
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SCHEDULE
8 TAXATION………..………………………………………………………
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116
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PART
1
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…………………………………………………………………….…………..
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116
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PART
2
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…………………………………………………………………………………
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122
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SCHEDULE
9 BUYER PARENT COMPANY GUARANTEE……………………….….
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123
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THIS
AGREEMENT is
made this day of September 2005
Between:
| (1) |
Xxxx-XxXxx
North Sea (UK) Limited
a company incorporated in England and having its registered office
at 00
Xxxxxxxxx Xxxxxx, Xxxxxx X0X 0XX (Xxxx-XxXxx);
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| (2) |
Talisman
North Sea Limited
a company incorporated in England and having its registered office
at
00-00 Xxxxxxx Xxx, Xxxxxx XX0X 0XX (the Buyer);
|
Whereas:
(A) Xxxx-XxXxx
wishes to sell and the Buyer wishes to purchase the Assets (as hereinafter
defined).
(B) The
Parties wish to set out herein the terms and conditions upon which the aforesaid
sale and purchase shall take place.
Now
therefore it is hereby agreed as
follows:
1. Definitions
and Interpretation
1.1 In
this Agreement, the following expressions shall, except where the context
otherwise requires, have the following meanings:
Accrual
Basis of Accounting means
the basis of accounting under which costs and benefits are regarded as
applicable to the period in which the liability to the cost is incurred or
the
right to the benefit arises regardless of when invoiced, paid or
received;
Adjustment
has
the meaning given in clause 8.1;
Adjustment
Clauses has
the meaning given in clause 8.1;
Administrator
means
UKCS Administrator Limited;
Affiliate
means:
| (a) |
if
the Party is a subsidiary of another company, the Party’s ultimate holding
company and any subsidiary (other than the Party itself) of the Party’s
ultimate holding company; or
|
| (b) |
if
the Party is not a subsidiary of another company, any subsidiary
of the
Party.
|
For
the purpose of this definition holding company and subsidiary shall have the
meanings given to those expressions in Section 736 of the Companies Xxx 0000,
as
amended by Section 144 of the Companies Xxx 0000;
1
Asset
Data means
all data, reports and other information held by Xxxx-XxXxx relating directly
to
the Assets and forming part of the property jointly owned by Xxxx-XxXxx and
the
other parties to an Operating Agreement in accordance with its terms, but
excluding all internal communications within Xxxx-XxXxx and between Xxxx-XxXxx
and its Affiliates and internal memoranda, reports, interpretations and
documents created for Xxxx-XxXxx’x (or its Affiliates’) own use and excluding
Traded Data and the Asset Documents;
Asset
Documents means
the deeds, agreements, licences, letters and other documents specified in
Schedule 4;
Asset
Property means
all of the property related to the Assets including, but not limited to
platforms, pipelines, plant, machinery, xxxxx, facilities and all other offshore
and onshore installations and structures and all items taken into account in
Schedule 5;
Assets
means
the interests set out in Schedule 7,
including, but without limitation, such interest in the Asset Property and
the
Asset Data, and the Asset Documents;
Assignment
Documents means
the execution deeds in the form as attached as first annex to Schedule 2 to
the
Master Deed dated 28 April 2003 in respect of the transfers contemplated under
this Agreement, as further detailed in Schedule 6;
Base
Consideration means
seventy-eight million and four hundred and sixty thousand United States Dollars
(US $78,460,000);
Benefits
means
all income, receipts, rebates, assets and other amounts or benefits calculated
on an Accrual Basis of Accounting in connection with or arising out of the
Assets (including in respect of tax);
Billed
Invoice Adjustment has
the meaning given in Schedule 5;
Block
means
a block on the United Kingdom Continental Shelf as shown on the reference map
deposited at the principal office of the Department of Trade and Industry in
London;
Business
Day means
a day, other than a Saturday or Sunday, on which banks are or, as the context
may require, were generally open for normal business in London and New
York;
the
Buyer’s Account means
a bank account to be notified by the Buyer to Xxxx-XxXxx not later than two
(2)
Business Days prior to the Completion Date;
Buyer
Group means
the Buyer and its Affiliates from time to time;
Buyer
Parent Company Guarantee means
the guarantee by Talisman Energy (UK) Limited in the agreed form as set out
in
Schedule 9;
Buyer
Warranties means
the warranties set out in Schedule 2;
2
Buyer
Warranty Claims means
any claim against the Buyer for breach of the Buyers Warranties;
Chargeable
Period means
for Petroleum Revenue Tax a period of six months ending at the end of June
or
December and for Corporation Tax means a Corporation Tax Accounting
Period;
Claim
means
any claim by the Buyer or its Affiliates under or for breach of this Agreement
(other than under clauses 8
and 12
of this Agreement, save as expressly provided therein), including, without
limitation, any Xxxx-XxXxx Warranty Claim;
Completion
means
the fulfilment by the Parties of their respective obligations pursuant to
clause 4.1;
Completion
Date means
the date occurring five (5) Business Days after satisfaction or waiver of the
last of the Conditions Precedent (provided that the Conditions Precedent remain
satisfied on such date or have been waived) or such other date as shall be
agreed between the Parties;
Completion
Documents means
the Assignment Documents and other documentation necessary to give effect to
the
terms of this Agreement (a list of which is set out in Schedule 6),
each in a form to be agreed between Xxxx-XxXxx and the Buyer, such agreement
not
to be unreasonably withheld or delayed;
Completion
Venue means
the offices of Freshfields Bruckhaus Xxxxxxxx, 00 Xxxxx Xxxxxx, Xxxxxx XX0X
0XX
or such other location as the Parties may agree;
Conditions
Precedent means
the conditions listed in clause 2.2;
Connected
Persons means
(in relation to Xxxx XxXxx or the Buyer) any of its Affiliates or any of the
officers, employees, agents and advisers of that Party or any of its
Affiliates;
Corporation
Tax or
CT
means
corporation tax as charged under the Income and Corporation Taxes Act 1988
(as
amended from time to time) and includes the supplementary charge (SCT) imposed
by 501A of that Act arising in respect of profits from ring fence trades in
accordance with section 502 of the same Act;
Corporation
Tax Accounting Period means
an accounting period as defined under Section 12 of the Income and Corporation
Taxes Act 1988 (as amended from time to time);
Data
Room means
the Data Room relating to the Assets comprising the information made available
to the Buyer and its advisers referred to in the Disclosure Letter;
Decommissioning
Liabilities means
any and all claims, costs, charges, expenses, liabilities or obligations
incurred in relation to decommissioning, abandonment, removing, or making safe
all of the Asset Property (including platforms, pipelines, plant, machinery,
xxxxx (including well cuttings), facilities and all other offshore and onshore
installations and structures) whether such claims, costs, charges, expenses,
liabilities or obligations are incurred under or pursuant to any of the Asset
Documents or under statutory obligation, common law, international law,
international convention or any other obligation including any decommissioning
plans or IMO Guidelines and Standards or regulations under OSPAR Decision 98/3
or any subsequent decisions of OSPAR and including any residual liability for
anticipated or necessary continuing insurance, maintenance and monitoring
costs;
3
Disclosure
Letter means
the letter of 6 August 2005 to Centrica Resources Limited from Xxxx-XxXxx
entitled Xxxxxx Assets Disclosure Letter as amended pursuant to
clause 5.5;
Disputed
Amounts has
the meaning given in clause 8.4;
Effective
Date means
00.01 hours (London time) on 1 July 2005;
Environment
means
all or any of the following, alone or in combination, the air (including the
air
within buildings and the air within any other natural or man-made structures
above or below ground or above or below water), water (including seawater inside
or outside any territorial limits, freshwater and water under or within land
or
in pipes or sewerage systems), soil and land (including the seabed, subsoil
and
land under water) flora, fauna, fish and any ecological systems and living
organisms supported by those media including man;
Environmental
Law means
all European Union law, international treaties, national, federal, provincial,
state or local statutes or regulations, the common law, and any codes and
conventions of law (having legal effect), from time to time, in any relevant
jurisdiction including any guidelines, notes for industry on decommissioning
offshore installations and pipelines made under the Xxxxxxxxx Xxx 0000 or other
relevant legislation and decommissioning programmes in effect from time to
time
concerning:
| (a) |
harm
or damage to or protection of the Environment or the provision of
remedies
in respect of or compensation for harm or damage to the
Environment;
|
| (b) |
emissions,
discharges, releases or escapes into or the presence in the Environment
of
Hazardous Substances or the production, processing, management, treatment,
storage, transport, handling or disposal of Hazardous Substances
or the
disposal or abandonment of any oil
platform;
|
| (c) |
worker
or public health and safety; or
|
| (d) |
decommissioning,
abandonment, removing or making safe any property (including platforms,
pipelines, plant, machinery, xxxxx (including well cuttings), facilities
and all other offshore and onshore installations and
structures),
|
and
any bylaws, regulations or subordinate legislation, judgements, decisions,
notices, orders, circulars, technical instructions, licences or permits and
codes of practice issued or made thereunder from time to time;
4
Environmental
Liabilities means
any and all claims, costs, charges, expenses, liabilities or obligations in
respect of the Assets under any Environmental Law or in relation to cleaning
up,
decontamination of, removing and disposing of debris or any property (including
platforms, pipelines, plant, machinery, xxxxx (including well cuttings),
facilities and all other offshore and onshore installations and structures)
from
and for reinstating any area of land, foreshore or seabed, wherever situated,
whether such claims, costs, charges, expenses, liabilities or obligations are
incurred under or pursuant to any of the Asset Documents or under any
Environmental Law or any other obligation and including any residual liability
for anticipated or necessary continuing insurance, maintenance and monitoring
costs;
Exchange
Rate means
the closing mid-point spot exchange rate for the applicable currency against
United States Dollars as quoted in the London Financial Times published one
(1)
Business Day prior to the date on which the relevant payment is due or receipt
occurs;
Final
Completion Statement means
the final completion statement referred to in clause 8.4;
HMRC
means
Her Majesty’s Revenue and Customs;
Hazardous
Substances means
any wastes, pollutants, contaminants and any other natural or artificial
substances (whether in the form of a solid, liquid, gas or vapour, and whether
alone or in combination) or contained in any pipes, cables, containers,
structures, plant or equipment which are capable of causing harm or damage
to
the Environment;
IMO
Guidelines and Standards means
the International Maritime Organisation Guidelines and Standards for the Removal
of Offshore Installations and Structures on the Continental Shelf and in the
Exclusive Economic Zone;
Interim
Completion Statement has
the meaning given in clause 8.3(b);
Interim
Net Adjustment Amount has
the meaning given in clause 8.3(a);
Interest
Adjustment
has the meaning given in Schedule 5;
Interim
Period means
the period from and including the Effective Date up to and excluding the
Completion Date;
Joint
Account means
any joint account held by the relevant Operator in accordance with the
appropriate Operating Agreement or Unit Agreement;
Joint
Venture Xxxxxxxx means
any xxxxxxxx issued by the relevant Operator in accordance with the appropriate
Operating Agreement or Unit Agreement;
Xxxx-XxXxx’x
Account means
the account nominated by Xxxx-XxXxx not less than 2 Business Days prior to
Completion;
Xxxx-XxXxx
Group means
Xxxx-XxXxx and its Affiliates from time to time;
5
Xxxx-XxXxx
Guarantees has
the meaning given in clause 12.11;
Xxxx-XxXxx
Warranties means
the warranties set out in Schedule 1;
Xxxx-XxXxx
Warranty Claim means
any claim against Xxxx-XxXxx for breach of the Xxxx-XxXxx
Warranties;
Licences
means
United Kingdom Petroleum Production Licences as detailed in Schedule 4
and, where the context so admits, any one or more of such Licences;
Longstop
Date has
the meaning given in clause 2.5;
Losses
and Expenses means
actions, proceedings, losses, damages, liabilities (including in respect of
tax), claims, demands, costs and expenses including fines, penalties, clean-up
costs, legal and other professional fees and any VAT payable in relation to
any
such matter, circumstances or item;
Net
Adjustment Amount means
the cash amount expressed in US Dollars to be calculated by adding together
all
the relevant Adjustments in accordance with clause 8,
and which, if positive, shall increase the Base Consideration and, if negative,
shall reduce the Base Consideration;
Nominated
Independent Accountant has
the meaning given in clause 8.7;
NORM
has
the meaning given in clause 12.7;
NPR
Adjustment has
the meaning set out in Schedule 5;
Objection
Notice has
the meaning given in clause 8.4;
Obligations
means
all costs, charges, expenses, liabilities and obligations calculated on an
Accrual Basis of Accounting in connection with or arising out of the Assets
(including in respect of tax) (but other than Environmental Liabilities and
Decommissioning Liabilities);
Operator
means
the operator under the relevant Operating Agreements or Unit Agreements (as
the
case may be);
Operating
Agreements means
the operating agreements more particularly described in Schedule 4,
and where the context so admits, any one or more of such
agreements;
Party
means
Xxxx-XxXxx or the Buyer and Parties
means
both of them;
Petroleum
has
the meaning ascribed thereto in the Licences;
Petroleum
Sales Adjustment has
the meaning set out in Schedule 5;
Petroleum
Revenue Tax or
PRT
means
petroleum revenue tax as imposed by the Oil Taxation Xxx 0000 and the Oil
Taxation Xxx 0000;
6
Pounds
Sterling or
£
means the lawful currency of the United Kingdom from time to time;
Records
has
the meaning set out in clause 9;
Reference
Interest Rate means
the rate quoted by the Royal Bank of Scotland to prime banks in the London
Interbank Market at or about 11.30 a.m. British Standard Time for one (1) month
deposits in United States Dollars in the amount (or as close an amount thereto
as is practicable) of the sum due but unpaid. In respect of any date which
is
not a Business Day, the rate set for the immediately preceding Business Day
shall apply;
Schedules
means
the schedules to this Agreement;
SDLT
means
stamp duty land tax (as referred to in Section 42 of the Finance Act 2003)
together with any interest and penalties thereon;
Secretary
of State means
the Minister as defined from time to time under the Licences;
Secretary
of State Consents means
the approval of the Secretary of State to the transactions contemplated by
this
Agreement and such of the Completion Documents as is appropriate, including
the
consent of the Secretary of State to the assignment of the Licences relating
to
the Assets;
tax
means
(a) taxes on income, profits and gains, and (b) all other taxes, levies, duties,
imposts, charges and withholdings in the nature of taxation, including any
excise, property, value added, sales, transfer, franchise and payroll taxes,
PRT, corporation tax, supplementary charge and any national insurance or social
security contributions, together with all penalties, charges and interest
relating to any of the foregoing or to any late or incorrect return in respect
of any of them (and taxation
shall
be construed accordingly);
Taxation
Adjustment has
the meaning set out in Schedule 5;
tax
authority means
any taxing or other authority (whether within or outside the United Kingdom)
competent to impose any tax liability;
Total
Consideration means
the Base Consideration as adjusted by the Adjustments as determined pursuant
to
clauses 8.3
to 8.7;
Traded
Data means
data acquired from a third party by Xxxx-XxXxx or its Affiliates by trade,
purchase or otherwise which cannot be provided to the Buyer because such
transfer is prohibited by the agreement pursuant to which it was acquired by
Xxxx-XxXxx or its Affiliates;
Transition
Period means
the period between the date hereof and the Completion Date;
7
Transaction
Document means
this Agreement, the Disclosure Letter and the Confidentiality
Agreement;
Unit
Agreement means
any unit operating agreement more particularly described in Schedule 4;
United States Dollars,
Dollars,
US$
and $
means the lawful currency of the United States of America from time to
time;
Value
Added Tax or
VAT
means
value added tax as imposed by the Value Added Tax Act 1994 (as amended from
time
to time) and any other provision or regulation including any interest and
penalties thereon; and
Working
Capital Adjustment has
the meaning set out in Schedule 5.
1.2 All
references to clauses and Schedules are, unless otherwise expressly stated,
references to clauses of and schedules to this Agreement.
1.3 The
headings in this Agreement are inserted for convenience only and shall be
ignored in construing this Agreement.
1.4 Any
reference to any statute or statutory instrument in this Agreement shall be
a
reference to the same as amended, supplemented or re-enacted from time to
time.
1.5 Unless
the context otherwise requires, reference to the singular shall include the
plural and vice versa, reference to any gender shall include all genders, and
references to persons shall include natural persons, bodies corporate,
unincorporated associations and partnerships.
1.6 The
Schedules form part of this Agreement and shall be construed and have the same
force and effect as if expressly set out in the main body of this
Agreement.
1.7 Any
reference to any agreement in this Agreement shall be a reference to the same
as
amended, supplemented or novated from time to time.
1.8 Where
a Xxxx-XxXxx Warranty is qualified by the words “so far as Xxxx-XxXxx is aware”,
or any similar expression, such warranty is given only to the extent that any
of
Xxxxxxx Xxxx (Managing Director of Xxxx-XxXxx), Xxxx Xxxxxx (Technical Director
of Xxxx-XxXxx), Xxxx Xxxxxxxxx (Drilling and Completions director), Xxxxx
Xxxxxxxx (Manager of Business Development), Xxxxx Xxxxxx (Company Secretary
and
Legal and Commercial Manager of Xxxx-XxXxx), Xxxxxxx Xxxxx (Financial and Tax
Manager of Xxxx-XxXxx) and Xxx Xxxxx (Operations Director of Xxxx-XxXxx) are
actually aware of the matters to which it refers as at the date hereof (having
made enquiries of their respective direct reports).
1.9 References
in this Agreement to the words ‘include’, ‘including’ and ‘other’ shall be
construed without limitation.
8
2. Sale
and Purchase
2.1 (a)Subject
as herein provided, Xxxx-XxXxx hereby agrees to sell and transfer the Assets
free from all liens, charges, mortgages, pledges, encumbrances or security
interests whatsoever relating thereto (subject to the provisions of the Asset
Documents) to the Buyer for the consideration referred to in
clause 3
and the Buyer hereby agrees to purchase and acquire the Assets.
| (b) |
The
transfer referred to in clause 2.1(a)
shall, as between the Parties, be deemed for all purposes to be made
with
effect on and from the Effective
Date.
|
2.2 The
obligations of the Parties under clause 2.1
and clause 4
are conditional on the satisfaction of the following Conditions
Precedent:
| (a) |
the
Secretary of State Consents having been duly obtained in a form reasonably
satisfactory to Xxxx-XxXxx and the
Buyer;
|
| (b) |
the
waiver or non-exercise of any applicable pre-emption rights by all
of the
parties with the benefit thereof;
|
| (c) |
the
due execution by the signatory parties (other than the Parties) or
the
Administrator on their behalf of the Completion Documents and the
receipt
by the Parties from the other parties to the Completion Documents
of all
requisite consents and approvals to the transactions contemplated
by this
Agreement (in a form reasonably satisfactory to the Parties);
and
|
| (d) |
the
Completion of one of the other sale and purchase agreements of even
date
between the Buyer and Xxxx-XxXxx or one of its Affiliates in respect
of
the Brae field, the Skene field or the Buckland
field.
|
2.3 The
Conditions Precedent set forth in clauses 2.2(a),
2.2(b),
2.2(c)
and 2.2(d)
may not be waived by either Party, without the written consent of the other
Party.
2.4 The
Parties shall use all reasonable endeavours to ensure that the Conditions
Precedent are satisfied as soon as reasonably practicable and in any event
before the Longstop Date. The Parties shall keep each other informed of the
progress in satisfying these conditions and the date of when they have been
fulfilled.
2.5 If
any of the Conditions Precedent have not been satisfied or waived on or before
four (4) months after the date of signing of this agreement (the Longstop Date),
either the Buyer or Xxxx-XxXxx shall have the right, after such date, to serve
written notice on the other Party terminating this Agreement, whereupon this
Agreement shall terminate with effect from the date of such notice and no Party
shall have any liability to another under this Agreement except in respect
of
clauses 15
and 16
and any breach of the terms hereof committed before such date.
9
3. Consideration
The
consideration for the transfer of the Assets shall be the payment by the Buyer
to Xxxx-XxXxx of the Base Consideration as adjusted pursuant to this Agreement
plus any VAT thereon.
4. Completion
4.1 Completion
of the transfer of the Assets shall take place on the Completion
Date:
| (a) |
Xxxx-XxXxx
shall:
|
| (i) |
deliver
to the Buyer copies of the Secretary of State
Consents;
|
| (ii) |
deliver
to the Buyer the Completion Documents duly executed by the signatory
parties, other than the Parties, or the Administrator on their behalf;
and
|
| (iii) |
deliver
to the Buyer a copy, certified as a true copy, of the power of attorney
or
written resolution of the directors of Xxxx-XxXxx authorising the
execution of the Completion Documents on behalf of Xxxx-XxXxx;
|
| (b) |
the
Buyer shall:
|
| (i) |
deliver
to Xxxx-XxXxx a copy, certified as a true copy, of the power of attorney
or written resolution of the directors of the Buyer authorising the
execution of the Completion Documents on behalf of the
Buyer;
|
| (ii) |
pay
to Xxxx-XxXxx the Base Consideration as adjusted by the Interim Net
Adjustment Amount by means of a direct transfer in cleared immediately
available funds to Xxxx-XxXxx’x Account on the Completion Date;
|
| (iii) |
deliver
to Xxxx XxXxx the Buyer Parent Company Guarantee;
and
|
| (c) |
the
Parties shall execute the Completion
Documents.
|
4.2 Each
of the Parties shall, and shall procure that its respective Affiliates shall,
execute such other documents and do all such other acts and things as may
reasonably be required in order to effect the transfer of the Assets to the
Buyer and otherwise carry out the true intent of this Agreement.
4.3 Xxxx-XxXxx
shall deliver to the Buyer the Asset Data and the Asset Documents as soon as
practicable following the Completion Date but no later than thirty (30) days
following the Completion Date.
4.4 Without
prejudice to Xxxx XxXxx’x rights under clause 9,
the Buyer acknowledges that Xxxx-XxXxx shall have the right to make at its
own
expense and retain copies of any of the Asset Data and the Asset Documents,
subject to the same being maintained in confidence in accordance with the
provisions of clause 15.
10
4.5 The
Buyer undertakes that, following 30 Business Days after Completion, it shall
not
and it shall procure that its Affiliates shall not make use of any stationery,
invoices, forms, seals, trade marks, logos and any other similar articles or
symbols showing the expressions “Xxxx-XxXxx” or any other expression likely to
suggest a connection with the Xxxx-XxXxx Group.
5. Xxxx-XxXxx
Warranties and Limitations
5.1 Subject
to the provisions of this clause 5,
Xxxx-XxXxx hereby warrants to the Buyer in the terms set out in Schedule 1
as at the date hereof.
5.2 Subject
to the provisions of this clause 5
and subject to the matters notified pursuant to clause 5.5,
Xxxx-XxXxx’x Warranties under clauses 1.1,
1.2,
1.7(a),
1.10,
1.13,
2,
and 4
of Schedule 1
shall be repeated at Completion by reference to the facts and circumstances
then
existing.
5.3 The
Xxxx-XxXxx Warranties are given subject to:
| (a) |
any
matters fully and fairly disclosed by or under this Agreement, the
Disclosure Letter, any document or material contained in the Data
Room or
any other information provided to the Buyer or its advisers during
the
course of any investigation, whether authorised by Xxxx-XxXxx or
not, by
or on behalf of the Buyer into the affairs of Xxxx-XxXxx, its Affiliates
or the Assets;
|
| (b) |
any
matters set forth in the Asset Documents;
and
|
| (c) |
the
other limitations set out in this clause 5
and in Schedule 3.
|
5.4 The
Buyer acknowledges and agrees that:
| (a) |
any
Claims shall be subject to the limitations on liabilities and other
provisions set out in Schedule 3;
|
| (b) |
the
Xxxx-XxXxx Warranties are the only warranties or representations
of any
kind given by or on behalf of Xxxx-XxXxx or any of its Affiliates
on which
the Buyer or any of its Affiliates may rely in entering into this
Agreement; and
|
| (c) |
no
other statement, promise or forecast made by or on behalf of Xxxx-XxXxx
or
any of its Connected Persons may form the basis of any claim by the
Buyer
or any of its Connected Persons under or in connection with this
Agreement
and all responsibility for any such statement, promise or forecast
is
disclaimed; without limitation, the Buyer acknowledges and agrees
that
neither Xxxx-XxXxx nor any of its Connected Persons makes any
representation or warranty as to: (i) the accuracy of any forecasts,
estimates, projections, statements of intent or statements of opinion
provided to the Buyer or any of its Connected Persons or to its or
their
advisers on or prior to the date of this Agreement, including those
contained in any documents in the Data Room; (ii) the accuracy of
any
information, documents or materials furnished to or for the Buyer
by
Xxxx-XxXxx or any of its Connected Persons, including any information,
documents or material made available to the Buyer in the Data Room,
management presentation or any other form in expectation of the
transactions contemplated by this Agreement provided always that
this
clause 5.4(c)
shall not apply to any information, documents or materials the subject
of
the warranties set out in paragraphs 1.5
and 1.6
of Schedule 1;
(iii) the amounts, quality or deliverability of reserves of crude
oil,
natural gas or other hydrocarbons attributable to the Assets; (iv)
any
geological, geographical, engineering, economic or other interpretations,
forecasts or evaluations; (v) any forecast of expenditures, budgets
or
financial projections; (vi) any geological formation, drilling prospect
or
hydrocarbon reserve; or (vii) the condition, performance or operability
of
the Asset Property.
|
11
5.5 Xxxx-XxXxx
shall promptly notify the Buyer in writing of any circumstances, facts or
matters which following execution of this Agreement become known to it prior
to
Completion which are inconsistent in any material respect with any of the
Xxxx-XxXxx Warranties
provided that notwithstanding such notification the Buyer shall be obliged
to
complete this Agreement in accordance with its terms and provided further that
in relation to such circumstances, facts or matters the Buyer shall have no
Claim against Xxxx-XxXxx to the extent that such circumstances, facts or matters
arise after signature of this Agreement and the warranty is not a warranty
to be
repeated at Completion pursuant to clause 5.2.
5.6 Xxxx-XxXxx
shall promptly notify the Buyer in writing of any circumstances, facts or
matters which following execution of the Agreement became known to it prior
to
Completion or which would if subsisting at Completion be inconsistent with
any
of the warranties under paragraphs 1.1,
1.2,
1.7(a),
1.10,
1.13,
2
and 4 of Schedule 1
(as repeated at the Completion Date pursuant to clause 5.2).
5.7 The
Parties agree that the Disclosure Letter shall be deemed to be amended with
effect on and from the date of this Agreement to reflect circumstances, facts
or
matters notified pursuant to clause 5.5
and 5.6.
5.8 Any
notice shall state that it is served pursuant to this clause 5.5 or 5.6 as
the
case may be.
5.9 In
the event that any circumstance, fact or matter (a) is notified by Xxxx-XxXxx
in
accordance with clause 5.5
or 5.6
or (b) otherwise becomes known to the Buyer following execution of this
Agreement which is inconsistent with the Xxxx-XxXxx Warranties or which would
if
subsisting at Completion be inconsistent under paragraphs 1.1,
1.2,
1.7(a),
1.10,
1.13,
2
and 4 of Schedule 1
(as repeated at the Completion Date pursuant to clause 5.2)
which (whether individually or in aggregate) materially affects the value of
the
Assets, then:
| (a) |
if
the inconsistency is capable of remedy, Xxxx-XxXxx shall have the
opportunity to remedy the same at its own expense and, if it chooses
to
exercise that right, it shall promptly notify the Buyer of its decision
to
do so and shall use reasonable endeavours to ensure remedy of the
inconsistency as soon as
practicable;
|
12
| (b) |
if
the inconsistency has not been so remedied not less than three (3)
Business Days prior to the Completion Date, Xxxx-XxXxx and the Buyer
shall
discuss the effects on the value of the Assets and whether the terms
hereof could be amended to take account of any such change in
circumstance, fact or matter;
|
| (c) |
subject
to clause 5.9(a)
and 5.9(b)
and in the absence of agreement between Xxxx-XxXxx and the Buyer
not less
than one (1) Business Day prior to the Completion Date, the Buyer
shall
not be obliged to complete the acquisition of the Assets and shall
be
entitled by notice in writing to Xxxx-XxXxx prior to Completion to
rescind
this Agreement; and
|
| (d) |
in
the circumstances contemplated by this clause 5.9,
such rights shall be the Buyer’s only remedy and whether or not the Buyer
chooses to rescind this Agreement pursuant to clause 5.9(c)
it shall not be entitled to make any claim for breach of warranty
in
respect of the circumstance, fact or matter notified or to any other
remedy in respect thereof.
|
For
the purposes of this clause 5.9,
the value of the Assets shall only be deemed to be materially affected if
reduced by an amount equivalent to 15% of the Base Consideration or
more.
5.10 In
the event that any such circumstance, fact or matter so notified or becoming
known would not (whether individually or in the aggregate) materially affect
the
value of the Assets as defined in clause 5.9,
the provisions of clause 5.9(a)
and 5.9(b)
shall apply but subject to clause 5.9(a)
and 5.9(b)
and in the absence of agreement between Xxxx-XxXxx and the Buyer prior to
Completion, the Buyer shall be obliged to complete the transaction and its
right
to make any claim for breach of warranty in respect of the circumstances, fact
or matter notified or any other remedy in respect thereof shall be preserved
and
shall subsist notwithstanding completion of the transaction and amendment to
the
Disclosure Letter pursuant to clause 5.7.
5.11 The
Buyer warrants to Xxxx-XxXxx that there are no circumstances, facts or matters
within the actual knowledge at the date hereof of the Buyer or its Affiliates,
financial or legal advisors which entitle the Buyer to make any Xxxx-XxXxx
Warranty Claim against Xxxx-XxXxx and, insofar as there are any such
circumstances, facts or matters within the actual knowledge at the date hereof
of the Buyer or its Affiliates, financial or legal advisors, the Buyer shall
not
be entitled to make any Xxxx-XxXxx Warranty Claim in respect
thereof.
5.12 The
Buyer undertakes to Xxxx-XxXxx (for the Buyer itself and as agent for each
of
its Connected Persons) that, except in the case of fraud or fraudulent
misrepresentation, it waives and shall not make any claim against any Connected
Persons of Xxxx-XxXxx on whom it may have relied in relation to any information
supplied or omitted to be supplied by any such person in connection with this
Agreement.
5.13 None
of the limitations in this clause 5
or in clause 12.12
or in Schedule 3
shall apply to any Claim which arises (or to the extent that it is increased)
as
a consequence of fraud or fraudulent misrepresentation by Xxxx-XxXxx or any
of
its Affiliates.
13
6. The
Buyer’s Warranties
6.1 Subject
to the provisions of this clause 6,
the Buyer hereby warrants to Xxxx-XxXxx in the terms set out in Schedule 2
as at the date hereof.
6.2 The
Buyer’s Warranties will be repeated at Completion to the extent that they relate
to the conduct of the Buyer by reference to the facts and circumstances then
existing.
6.3 If
the Buyer pays to Xxxx-XxXxx an amount pursuant to a Buyer Warranty Claim and
Xxxx Xx-Xxx is entitled to recover from some other person any sum to which
it
would not have been or become entitled but for the circumstances giving rise
to
such Buyer Warranty Claim, subject to being put in funds to the reasonable
satisfaction of Xxxx-XxXxx, Xxxx-XxXxx shall promptly undertake all appropriate
steps to enforce such recovery and shall as soon as practicable following any
such recovery repay to the Buyer the lesser of: (i) the amount paid to it by
the
Buyer pursuant to the Buyer Warranty Claim; and (ii) the amount recovered from
the third party in each case less all costs, charges and expenses reasonably
incurred by Xxxx XxXxx in obtaining (or consequent upon obtaining) that payment
and in recovering that amount from the third party and net of any tax payable
on
the amount received or that would have been payable but for the use of set
off
of any relief.
6.4 The
Buyer shall notify Xxxx-XxXxx in writing of any circumstances, facts or matters
which following execution of this Agreement become known to it prior to
Completion which are inconsistent with any of the Buyer’s Warranties or which
would if subsisting at Completion be inconsistent with any of those warranties,
as repeated at the Completion Date pursuant to clause 6.2.
Such notice shall state that it is served pursuant to this 6.4.
7. Conduct
of Claims
7.1 If
the Buyer becomes aware of any claim or potential claim by a third party (a
third
party claim)
which might result in a Claim being made, the Buyer shall:
| (a) |
promptly,
and in any event within thirty (30) days of it becoming aware of
it, give
notice of such third party claim to Xxxx-XxXxx, stating the nature,
basis
and amount thereof, to the extent known, along with copies of the
relevant
documents evidencing such third party claim and procure that Xxxx-XxXxx
and its representatives are given all reasonable facilities to investigate
it;
|
| (b) |
not
make (and procure that each member of the Buyer Group shall not make)
any
admission of liability, agreement or compromise with any person,
body or
authority in relation to that third party claim without the prior
written
approval of Xxxx-XxXxx, such approval not to be unreasonably withheld
or
delayed;
|
| (c) |
subject
to the Buyer or the relevant member of the Buyer Group being indemnified
by Xxxx-XxXxx against all reasonable out of pocket costs and expenses
properly incurred in respect of that third party
claim:
|
14
| (i) |
take,
and procure that each member of the Buyer Group shall take, such
action as
Xxxx-XxXxx may reasonably request to avoid, resist, dispute, appeal,
compromise or defend such third party
claim;
|
| (ii) |
allow,
or, as appropriate, procure that the relevant member of the Buyer
Group
shall allow, Xxxx-XxXxx to take over the conduct of all proceedings
and/or
negotiations of whatsoever nature arising in connection with the
third
party claim in question; and
|
| (iii) |
provide,
or procure that the relevant member of the Buyer Group shall provide,
such
information and assistance as Xxxx-XxXxx may reasonably require in
connection with the preparation for and conduct of any proceedings
and/or
negotiations relating to that third party
claim.
|
7.2 Without
prejudice to clause 7.1,
the Parties will use their reasonable best efforts to minimise Losses and
Expenses from third party claims and will act in good faith in responding to,
defending against, settling or otherwise dealing with such claims.
7.3 Failure
of the Buyer to give notice in accordance with clause 7.1(a)
shall not relieve Xxxx-XxXxx of any of its obligations relating to Claims under
this Agreement, except if and to the extent that Xxxx-XxXxx is actually
prejudiced thereby (except that Xxxx-XxXxx shall not be liable for any expenses
incurred during the period prior to the Buyer giving such notice).
7.4 Whether
or not Xxxx-XxXxx has assumed the conduct of proceedings or negotiations (in
accordance with clause 7.1(c)(ii)
above),
Xxxx-XxXxx shall not be liable under any Claim for any admission of liability,
agreement or compromise that was consented to without Xxxx-XxXxx’x prior written
approval which relates to such Claim unless such approval has been unreasonably
withheld or delayed.
7.5 If
the Buyer makes a Claim or notifies Xxxx-XxXxx of any third party claim which
might lead to such a claim being made, the Buyer shall at the Buyer’s cost make
available to accountants and other representatives appointed by Xxxx-XxXxx
such
access to personnel, records and information as Xxxx-XxXxx reasonably requests
in connection with such Claim or third party claim.
8. Completion
Adjustments
8.1 Where
any sums are taken into account in:
| (a) |
the
Working Capital Adjustment;
|
| (b) |
the
Billed Invoice Adjustment;
|
| (c) |
the
Petroleum Sales Adjustment;
|
| (d) |
the
NPR Adjustment;
|
15
| (e) |
the
Interest Adjustment;
|
| (f) |
the
Taxation Adjustment;
|
(together,
the Adjustments
(with
Adjustment meaning any or all of the above (as the context may require)), or
are
payable by the Buyer to Xxxx-XxXxx or by Xxxx-XxXxx to the Buyer pursuant to
this clause 8,
clause 10,
Schedule 5
or Schedule 8
(together the Adjustment
Clauses)
or pursuant to a Xxxx-XxXxx Warranty Claim under clause 5
or a Buyer Warranty Claim under clause 6 or a payment under
clause 12.4,
the same shall operate by way of increases or decreases, as the case may be,
in
the Base Consideration.
8.2 The
following principles shall apply in respect of the Adjustments and the Base
Consideration:
| (a) |
the
Base Consideration shall be adjusted by the
Adjustments;
|
| (b) |
no
item taken into account in calculating any one Adjustment or other
increases or decreases as the case may be under the Adjustment Clauses
or
clause 5
or 6
or 12.4
shall be taken into account in calculating any of the other Adjustments
so
as to result in a Party making or receiving payment twice in respect
thereof nor will any Party be entitled under clause 12
to reimbursement of any payment received from a third party to the
extent
such payment has been taken into account (to the benefit of that
Party) in
calculating any of the Adjustments;
|
| (c) |
no
adjustment to the Base Consideration shall be made in respect of
any
matters to which clauses 12.6
and 12.8
apply.
|
8.3 (a)Xxxx-XxXxx
shall provide the Buyer with a written statement specifying its best estimate
of
the sum of all the Adjustments as at the Completion Date (the Interim
Net Adjustment Amount)
which if positive shall increase the Base Consideration payable by the Buyer
at
Completion and if negative shall reduce the Base Consideration payable by the
Buyer at Completion.
| (b) |
Such
statement (the Interim
Completion Statement)
shall be provided no later than two (2) Business Days prior to Completion,
in the format set out in Schedule 5.
|
8.4 Within
sixty (60) days after Completion, and without prejudice to the provisions of
clause 12,
Xxxx-XxXxx shall provide the Buyer with a written statement (in the format
set
out in Schedule 5)
giving its calculation of the final amounts of each of:
| (a) |
the
Adjustments save in relation to the Taxation Adjustment for which
a
reasonable estimate shall be
calculated;
|
| (b) |
the
Net Adjustment Amount; and
|
16
| (c) |
the
balance payable by Xxxx-XxXxx or the Buyer after taking into account
the
Interim Net Adjustment Amount which adjusted the Base Consideration
paid
at Completion,
|
(the
Final
Completion Statement).
The Buyer shall notify Xxxx-XxXxx in writing (such notification being an
Objection
Notice)
within fifteen (15) Business Days after receipt whether or not it accepts that
the Final Completion Statement has been prepared in accordance with the relevant
provisions of this Agreement. Any notice indicating that the Buyer does not
so
accept the Final Completion Statement shall to the extent practicable and
reasonable:
| (i) |
set
out in detail the Buyer’s reasons for such non-acceptance;
and
|
| (ii) |
specify
the adjustments which, in the Buyer’s opinion, should be made to the Final
Completion Statement in order to comply with the provisions of this
Agreement; and
|
| (iii) |
set
out the specific items that are in dispute accompanied by the Buyer’s
calculation at its best estimate of each of the items that are in
dispute
(the Disputed
Amounts).
|
Except
for Disputed Amounts, the Buyer shall be deemed to have accepted the Final
Completion Statement in full.
8.5 If
the Buyer serves an Objection Notice in accordance with clause 8.4
above,
then the Buyer and Xxxx-XxXxx shall use all reasonable endeavours: (a) to meet
and discuss the objections of the Buyer; and (b) to reach agreement upon the
adjustments (if any) required to be made to the Final Completion Statement,
within a period of ten (10) Business Days after receipt by Xxxx-XxXxx of the
Objection Notice. During such ten (10) Business Days period Xxxx-XxXxx and
its
representatives shall be permitted to review the working papers of the Buyer
and
its representatives relating to the Objection Notice and the basis
therefor.
8.6 If
the Buyer notifies Xxxx-XxXxx in writing that it is satisfied with the Final
Completion Statement (either as originally submitted or after adjustments agreed
between Xxxx-XxXxx and the Buyer pursuant to clause 8.5)
or if the Buyer fails to give an Objection Notice within the fifteen (15)
Business Days period referred to in clause 8.4,
then the payment of the Net Adjustment Amount (after taking into account the
Interim Net Adjustment Amount which adjusted the Base Consideration paid at
Completion) due in accordance with the Final Completion Statement shall be
made
within three (3) Business Days of such written notification or such failure
to
give an Objection Notice (as the case may be), together with simple interest
on
such amount from and including the Completion Date up to and excluding the
date
of payment calculated on a daily basis on the basis of a 360 day year at the
rate of 2% per annum above the Reference Interest Rate.
17
8.7 If
the Parties cannot reach agreement as specified in clause 8.6
within the time limit provided in that clause, the Disputed Amounts may be
referred by any Party for determination by an independent chartered accountant
nominated by the Parties or, in the absence of agreement between the Parties
within five (5) Business Days of a Party notifying the other that it proposes
to
refer the dispute to an expert, by the President of the Institute of Chartered
Accountants in England and Wales (the Nominated
Independent Accountant).
The Parties shall instruct the Nominated Independent Accountant to render its
decision within sixty (60) days of its selection. The Nominated Independent
Accountant shall be afforded such access to books, records, accounts and
documents in the possession of the Parties as he may reasonably request, and
he
shall act as expert not as arbitrator. The said accountant’s determination
shall, in the absence of fraud or manifest error, be final and binding on the
Parties, his fees and disbursements shall be borne by Xxxx-XxXxx as to one
half
and the Buyer as to the other half and each party shall bear its own costs
in
respect of such references. Payment of the Net Adjustment Amount (after taking
into account the Interim Net Adjustment Amount which adjusted the Base
Consideration paid at Completion) in accordance with the Nominated Independent
Accountant’s determination of the Disputed Amounts and in accordance with the
Final Completion Statement in respect of all other items shall be made within
three (3) Business Days of the determination of the Nominated Independent
Accountant, together with simple interest on such amount from and including
the
Completion Date up to and excluding the date of payment calculated on a daily
basis on the basis of a 360 day year at the rate of 2% per annum above the
Reference Interest Rate.
8.8 Xxxx-XxXxx
shall provide the Buyer with copies of all Operator’s reports, billing
statements and correspondence and any and all other relevant documentation
in
its possession or under its control reasonably necessary to support the
statements referred to in clauses 8.3
and 8.4
simultaneously with the provision of such statements. The Parties shall liaise
on the compilation and agreement of the said statements.
8.9 To
enable Xxxx-XxXxx to meet its obligations under this clause 8,
the Buyer shall provide to Xxxx-XxXxx and to Xxxx-XxXxx’x accountants full
access to the books and records, employees and premises of the Buyer. The Buyer
shall fully co-operate with Xxxx-XxXxx and shall permit Xxxx-XxXxx and
Xxxx-XxXxx’x accountants to take copies (including electronic copies) of the
relevant books and records and shall provide all assistance reasonably requested
by Xxxx-XxXxx to facilitate the preparation of the Final Completion Statement.
The Buyer hereby agrees not to take any action which would impede or delay
the
preparation of the Final Completion Statement or the determination of the Total
Consideration in the manner and using the methods required by this Agreement.
The provisions of this clause 8.9
shall apply mutatis mutandis to Xxxx-XxXxx in relation to the obligations of
the
Buyer under this clause 8.
8.10 All
of the calculations to be made pursuant to this clause 8
shall be made on an Accrual Basis of Accounting and in accordance with
accounting principles generally accepted in the oil and gas industry in the
United Kingdom at the date of Completion unless otherwise stated in this
Agreement and such principles shall be consistently applied for the purposes
of
any and all disputes between the Parties.
8.11 Notwithstanding
any contrary provision in this Agreement the Parties agree to cooperate in
order
to re-calculate the estimated Taxation Adjustment (referred to in
clause 8.4)
prior to 30 June 2006 in accordance with the provisions of Schedule 8;
provided that this re-calculation shall not have any impact on the Final
Completion Statement or the Total Consideration and the provisions of
clause 8.7
shall apply mutatis mutandis in the event of failure to agree such Taxation
Adjustment by 30 June 2006.
18
8.12 In
the event of late payment, clause 13
will apply.
9. Information,
Records and Assistance Post Completion
9.1 Each
of Xxxx-XxXxx and the Buyer shall provide (and upon reasonable request procure
that its respective Affiliates provide) the other with reasonable access to
(and
the right, at the cost of the Party making the request, to take copies of)
the
books, accounts and all other records held by any member of the Buyer Group
or
the Xxxx-XxXxx Group respectively after Completion to the extent that such
books, accounts and records relate to the Assets and to the period up to
Completion (the Records).
This obligation is subject to:
| (a) |
the
provisions of clause 15;
|
| (b) |
the
person seeking access providing reasonable justification that the
same is
required;
|
| (c) |
access
being given only during working
hours;
|
| (d) |
any
restrictions on access imposed by law or the terms of any agreement;
and
|
| (e) |
any
claim for legal privilege.
|
9.2 For
a period of seven years following the Completion Date, neither Xxxx-XxXxx nor
the Buyer shall dispose of or destroy (and each shall procure that its
respective Affiliates do not dispose of or destroy) any of the Records without
first giving the other at least two months’ notice of its intention to do so and
giving the other a reasonable opportunity to remove and retain any of them
(at
that other person’s expense).
9.3 Without
prejudice to any information, access or assistance required under
clauses 7.5,
8.8
or 8.9,
the Buyer shall (and shall procure that each member of the Buyer Group shall),
at Xxxx-XxXxx’x expense and on reasonable notice from Xxxx-XxXxx, give such
assistance to any member of the Xxxx-XxXxx Group as Xxxx-XxXxx may reasonably
request in relation to any third party proceedings by or against any member
of
the Xxxx-XxXxx Group so far as the same relate to the Assets, including
proceedings relating to taxation.
9.4 This
clause 9
shall not apply to the process for ascertaining the Final Completion Statement
or in relation to any investigation of any actual or potential claim or dispute
in connection with this Agreement.
10. Taxation
Schedule 8
shall apply in relation to taxation.
19
11. Transition
Period
11.1 During
the Transition Period, Xxxx-XxXxx shall to the extent it is able so to do having
regard to the provisions of the relevant Operating Agreements and Unit
Agreements:
| (a) |
continue
to carry on its activities in relation to the Assets in all material
respects in the ordinary and usual course of business and comply
with
previously agreed decisions of the operating committees in relation
to the
Assets and any agreement relating to the Assets to which it is a
party;
|
| (b) |
consult
with the Buyer with regard to any material decisions relating to
the
Assets and co-operate with the Buyer so as to ensure an efficient
handover
of the Assets on Completion; and
|
| (c) |
insofar
as reasonably practicable, keep the Buyer informed in a timely manner
on
any and all matters (not of a routine or minor nature) relating to
the
Assets.
|
11.2 During
the Transition Period, subject to its obligations under clause 11.1
and its obligations to comply with the terms of the Asset Documents Xxxx-XxXxx
shall:
| (a) |
not,
except with the prior written approval of the Buyer (such approval
not to
be unreasonably withheld or delayed) enter into any agreement relating
to
the sale transportation or processing of gas, condensate or any other
liquids arising from the Assets or amend, terminate or agree to amend
or
terminate any of the Asset Documents in any material respect in so
far as
such amendment, termination or agreement to amend or terminate relates
to
or materially affects the Assets or waive or agree to waive any of
its
rights or remedies thereunder or arising therefrom in so far as such
rights and remedies relate to or materially affect the Assets and
relates
or is capable of relating to periods after the Effective
Date;
|
| (b) |
not
charge or otherwise encumber any of the
Assets;
|
| (c) |
if
it considers reasonably and in good faith that a particular matter
or
proposal is of a nature which may have a material adverse effect
on the
value of the Assets, notify the Buyer in writing, consult (to the
extent
reasonably practicable) with the Buyer in relation to that matter
or
proposal, take account of any reasonable representation which the
Buyer
may make and, provided always that such action shall not be prejudicial
to
any of Xxxx-XxXxx’x other business interests and Xxxx-XxXxx shall not be
in breach of any contractual, legal, statutory or regulatory requirement
whatsoever by doing so, carry out the wishes of the Buyer in so far
as it
is reasonable to do so following such consultation;
and
|
| (d) |
to
the extent practicable in the circumstances consult with the Buyer
in
relation to any matter requiring its vote under any Operating Agreement
and take account of the Buyer’s reasonable representations but so that
nothing in this sub-clause shall operate to xxxxxx the discretion
of
Xxxx-XxXxx in exercising its votes in respect
thereto.
|
20
11.3 Subject
to the provisions of this Agreement, the Buyer shall accept the Assets in the
physical condition in which they exist at the date of this Agreement and,
notwithstanding that title will not pass until Completion, shall assume the
risk
of damage thereto or the destruction thereof as from the date of this Agreement.
Notwithstanding clause 12
or any other provisions to the contrary, the Buyer shall with effect from the
date of this Agreement be obliged to effect and maintain appropriate insurance
in respect of the Assets and the Buyer shall accordingly have no benefit of
any
insurance maintained by Xxxx-XxXxx in respect of the Assets.
12. Indemnity
12.1 The
provisions of this clause 12
shall only take effect once Completion has occurred. All adjustments and
reimbursements made and the ascertainment of all Obligations and Benefits under
this clause 12
will be calculated using the Accruals Basis of Accounting.
12.2 Xxxx-XxXxx
shall be liable for all Obligations, and shall be entitled to all Benefits,
in
each case which accrue in or relate to any period before the Effective
Date.
12.3 The
Buyer shall be liable for all Obligations, and shall be entitled to all
Benefits, in each case which accrue in or relate to any period on or after
the
Effective Date.
12.4 Subject
to clauses 12.9,
12.12
and 12.13,
save to the extent the same falls to be taken into account in the Net Adjustment
Amount and subject to clauses 5,
6,
10
and 14:
| (a) |
if
any Obligations are incurred by Xxxx-XxXxx or any of its Connected
Persons
in respect of any period on or after the Effective Date, the Buyer
shall
reimburse and indemnify Xxxx-XxXxx and its Connected Persons in respect
thereof;
|
| (b) |
if
any Obligations are incurred by the Buyer or any of its Connected
Persons
in respect of any period prior to the Effective Date, Xxxx-XxXxx
shall
(subject to paragraph 3.7
of Schedule 8)
reimburse and indemnify the Buyer and its Connected Persons in respect
thereof;
|
| (c) |
if
any Benefits accrue to Xxxx-XxXxx or any of its Connected Persons
in
respect of any period on or after the Effective Date, Xxxx-XxXxx
shall
(subject to paragraph 3.6
of Schedule 8)
account to and reimburse the Buyer and its Connected Persons in respect
thereof; and
|
| (d) |
if
any Benefits accrue to the Buyer or any of its Connected Persons
in
respect of any period prior to the Effective Date, the Buyer shall
account
to and reimburse Xxxx-XxXxx and its Connected Persons in respect
thereof.
|
21
12.5 Any
amount to be paid or reimbursed in accordance with clause 12.4
or any other provision of this clause 12
shall: (i) in the case of those amounts that arise prior to the Completion
Date,
be paid or reimbursed on Completion; and (ii) in the case of those amounts
that
arise on or after the Completion Date be paid or reimbursed within ten (10)
Business Days of receipt thereof (or, in the case of Obligations, within ten
(10) Business Days of receipt of notification from the Party which has incurred
such Obligations) in each case, to Xxxx-XxXxx’x Account or the Buyer’s Account
(as the case may be). Without prejudice to the generality of the foregoing,
each
Party undertakes to provide written advice to the other Party of any event
giving rise to an adjustment under this clause 12
within fifteen (15) Business Days of becoming aware of such an event. Such
advice will include a copy of such documentary evidence as is reasonably
necessary to enable the other Party to verify the adjustment.
12.6 For
the avoidance of doubt and notwithstanding the foregoing provisions of this
clause 12,
the Buyer shall at its cost and expense perform and shall be responsible for
decommissioning, abandonment, removing and making safe all plant, equipment
and
machinery, xxxxx and other installations (including offshore installations,
pipelines and submarine pipelines) and facilities relating to operations under
any of the Licences or under each and any Operating Agreement or other Asset
Document to the extent that such obligations are attributable to the Assets
whether under or pursuant to any of the Asset Documents or under statutory
obligation, common law, international law, international convention or any
other
obligation. The Buyer covenants that it shall indemnify and hold Xxxx-XxXxx
and
its Connected Persons harmless against any and all Losses and Expenses which
Xxxx-XxXxx or any of its Connected Persons may incur arising out of or in
connection with the Decommissioning Liabilities regardless of whensoever such
Decommissioning Liabilities may arise or may have arisen, regardless of
whosoever is or was a licensee under the relevant Licence or a party to the
relevant Operating Agreement or owned or leased the relevant property and
regardless of whether such Losses and Expenses arise as a consequence of
negligence on the part of Xxxx-XxXxx or any of its Connected Persons or any
other person provided that for the avoidance of doubt the Buyer shall not be
required to reimburse Xxxx-XxXxx for amounts actually expended by Xxxx-XxXxx
prior to the Effective Date in respect of Decommissioning
Liabilities.
12.7 The
Buyer is hereby notified that detectable amounts of hazardous substances
(including chemicals known to cause cancer, birth defects, and reproductive
harm
or any other harm) may be found in, on, or around the Assets. In addition,
the
Buyer acknowledges that some oil field production equipment may contain
naturally occurring radioactive material (NORM),
asbestos and/or other hazardous substances. In this regard, the Buyer expressly
understands that NORM and other hazardous substances may affix or attach itself
to the inside of xxxxx, materials and equipment as scale or in other forms,
and
that xxxxx, materials and equipment located on the Assets may contain NORM
and
other hazardous substances and that materials containing NORM and other
hazardous substances may be buried or have been otherwise disposed of on or
under the Assets. The Buyer also expressly understands that special procedures
may be required for the removal and disposal of NORM, asbestos and other
hazardous substances from the Assets where it may be found, and that the Buyer
assumes all liability and responsibility for such activities when and if
performed after the Effective Date.
22
12.8 Notwithstanding
the other provisions of this clause 12,
the Buyer covenants that it shall indemnify and hold Xxxx-XxXxx and its
Connected Persons harmless against any Losses and Expenses which Xxxx-XxXxx
or
any of its Connected Persons may incur arising out of or in connection with
the
Environmental Liabilities regardless of whensoever such Environmental
Liabilities may arise or may have arisen, regardless of whosoever is or was
a
licensee under the relevant Licence or a party to the relevant Operating
Agreement or owned or leased the relevant property.
12.9 Upon
Xxxx-XxXxx’x request from time to time, the Buyer will support any application
by Xxxx-XxXxx to obtain from the relevant authorities an irrevocable release
of
Xxxx-XxXxx from its obligations and liabilities under the Xxxxxxxxx Xxx 0000
or
other relevant statute, regulations, order from any competent authority or
guidelines and all notices and regulations served and issued pursuant thereto,
insofar as the same relate to the Assets. Without prejudice to the foregoing,
if, following the Completion Date, the Secretary of State requests that
Xxxx-XxXxx prepares and implements a programme or requirement for or in respect
of any part of the Decommissioning Liabilities, whether pursuant to the terms
of
the Xxxxxxxxx Xxx 0000 or other relevant statute, regulations, order from any
competent authority or guidelines, Xxxx-XxXxx shall do so in accordance with
the
requirements of the Xxxxxxxxx Xxx 0000 or other relevant statute, regulation,
order or guidelines, as the case may be, and all other relevant statutes,
regulations, orders and guidelines and the indemnities in
clause 12.6
and 12.8
shall extend to all Losses and Expenses incurred by or on behalf of Xxxx-XxXxx
in the preparation and implementation of such programme.
12.10 Without
prejudice to the provisions of clauses 12.2,
12.3
and 12.4,
any Benefits or Obligations (including the cost of any audit) accruing in
respect of the Assets in the form of amounts receivable or payable resulting
from an audit pursuant to a Operating Agreement or from any other subsequent
adjustment in relation to the operation of, and expenditure attributable to,
the
Assets in the period prior to the Effective Date shall accrue to Xxxx-XxXxx
and
any such Benefits or Obligations attributable to the Assets in the period from
and after the Effective Date shall accrue to the Buyer. Where any such audit
takes place after the Completion Date, the Buyer shall promptly notify Xxxx
Mc
Xxx thereof and shall be obliged to take account of Xxxx-XxXxx’x reasonable
representations in connection with such audit and to notify Xxxx-XxXxx of any
audit adjustment as soon as practicable after the results of such audit are
known. If, as a result of any audit adjustment or otherwise, either Xxxx-XxXxx
or the Buyer is, on the principles set out in clauses 12.2,
12.3
and 12.4,
so liable to pay any amount to the other, then, to the extent that the same
has
not been taken into account or falls to be taken into account in the Net
Adjustment Amount, or the amount has not otherwise been paid in accordance
with
clause 12.4,
such amount shall be paid to Xxxx-XxXxx’x Account or the Buyer’s Account (as
appropriate) within thirty (30) Business Days after the amount receivable or
payable as a result of such an audit or other subsequent adjustment has been
taken into account by the relevant Operator in the Operator’s billing
statement.
12.11 The
Buyer and Xxxx-XxXxx shall use all reasonable endeavours to procure the
unconditional and irrevocable release of Xxxx-XxXxx and its Affiliates from
all
guarantees and indemnities to which Xxxx-XxXxx or any of its Affiliates is
a
party (the Xxxx-XxXxx Guarantees) given in the ordinary course of business
related to the operations of the Assets. The Buyer covenants that it shall
indemnify and hold Xxxx-XxXxx and its Affiliates harmless against all Losses
and
Expenses which Xxxx-XxXxx or any of its Affiliates may incur arising out of
or
in connection with any of the Xxxx-XxXxx Guarantees which have not been
discharged on or before Completion, in respect of Losses or Expenses incurred
in
respect of the period after the Effective Date.
23
12.12 Paragraphs 7,
8,
9,
10,
11,
12,
13,
and 15
of Schedule 3
(Limitations on Liabilities) shall apply to any Claim made under this
Clause 12.
12.13 Notwithstanding
anything herein provided to the contrary, Xxxx-XxXxx and the Buyer do hereby
covenant and agree that the recovery by either Party hereto of any damages
suffered or incurred by it as a result of any breach by the other party of
any
of its covenants, agreements, representations, guaranties, warranties,
indemnities, disclaimers, waivers or continuing obligations under this Agreement
shall be limited to the actual damages suffered or incurred by the non-breaching
party as a result of such breach, and in no event shall such recovery include
any indirect, consequential, exemplary or punitive damages.
12.14 If
final judgement which is not capable of being appealed by Xxxx-XxXxx is obtained
against Xxxx-XxXxx as a result of the breach of a Xxxx-XxXxx Warranty and such
judgement provides for the payment of damages to the Buyer by Xxxx-XxXxx,
Xxxx-XxXxx may not claim to be indemnified by the Buyer against the cost of
paying such damages to the Buyer provided that
| (a) |
notwithstanding
this clause 12.14
Xxxx-XxXxx shall at all times and in all circumstances be able to
claim
indemnity from the Buyer pursuant to Clause 12.6;
and
|
| (b) |
except
as expressly provided in this Clause 12.14
nothing in this Agreement shall operate to limit the right of Xxxx-XxXxx
to be indemnified by the Buyer; and
|
| (c) |
if
Xxxx-XxXxx agrees to pay a sum claimed by the Buyer in respect of
a
Xxxx-XxXxx Warranty Claim then Xxxx-XxXxx agrees not to claim an
indemnity
from the Buyer under this Agreement in relation
thereto.
|
13. Interest
on Late Payment
Where,
in this Agreement, any date is specified as being the due date for payment
and
payment is not made on that date, simple interest calculated on the basis of
a
360 day year shall be paid on the amount outstanding on a daily basis (after
as
well as before any judgement) from the start of the due date to the end of
the
day preceding the date of actual payment at the rate of three per cent (3%)
per
annum above the Reference Interest Rate.
14. Costs
Except
as otherwise provided herein, the Parties shall pay their own costs and expenses
in connection with this Agreement and the documents executed pursuant
hereto.
24
15. Confidentiality
15.1 This
Agreement and its terms shall be held confidential by the Parties and shall
not
be divulged in any way to any third party by one Party without the prior written
approval of the other Party; provided that any Party may, without such approval,
disclose such terms to:
| (a) |
any
Affiliate of it provided the disclosing Party procures that such
Affiliate
maintains such terms confidential;
or
|
| (b) |
any
outside professional consultants or other professional advisers consulted
in connection with the terms of this Agreement, provided the disclosing
Party obtains a similar undertaking of confidentiality (but excluding
this
proviso) from such consultants or professional advisers;
or
|
| (c) |
any
bank or financial institution from whom such Party is seeking or
obtaining
finance, provided the disclosing Party obtains a similar undertaking
of
confidentiality (but excluding this proviso) from such bank or
institution; or
|
| (d) |
the
extent required by any applicable laws, the Licences, or the requirements
of any recognised stock exchange in compliance with its rules and
regulations; or
|
| (e) |
any
independent public accountants; or
|
| (f) |
any
Government agency lawfully compelling the disclosure of such terms;
or
|
| (g) |
any
Court of competent jurisdiction acting in pursuance of its powers;
or
|
| (h) |
to
any person seeking to purchase the Assets from the Buyer;
or
|
| (i) |
the
extent that the terms of this Agreement become public knowledge or
for any
other reason ceases to be confidential otherwise than through breach
of
this undertaking.
|
16. Announcements
No
Party shall make a public announcement or statement regarding the execution,
existence or terms of this Agreement without the prior agreement of the other
Party, such agreement not to be unreasonably withheld or delayed; provided,
however, that any such Party may make such public disclosure it believes in
good
faith is required by applicable law including the rules and regulations of
any
applicable stock exchange or governmental or regulatory authority (in which
case
the disclosing Party shall use its reasonable endeavours to advise the other
Parties prior to making such disclosure).
17. Miscellaneous
17.1 The
sole remedy of the Buyer for any breach of any of the Warranties or any other
breach of this Agreement by Xxxx-XxXxx or any member of Xxxx-XxXxx Group shall
be an action for damages. The Buyer shall not be entitled to rescind or
terminate this Agreement in any circumstances whatsoever (whether before or
after Completion), other than pursuant to any such rights which arise in respect
of fraud or fraudulent misrepresentation or which arise under
clause 2.5
or clause 5.9.
25
17.2 Except
insofar as any term or provision of this Agreement is satisfied on Completion,
this Agreement shall remain in full force and effect after
Completion.
17.3 No
waiver by any Party of any breach of a provision of this Agreement shall be
binding unless made expressly in writing. Any such waiver shall relate only
to
the breach to which it expressly relates and shall not apply to any subsequent
or other breach.
17.4 All
payments to be made under this Agreement shall be made in United States Dollars
unless otherwise agreed between the Parties and shall be paid in cash in
immediately cleared funds directly to Xxxx-XxXxx’x Account or the Buyer’s
Account (as appropriate) by bank transfer unless otherwise agreed between the
Parties. All payments made or received in currencies other than United States
Dollars shall be converted into United States Dollars at the Exchange
Rate.
17.5 To
the extent that there is an inconsistency between this Agreement and any of
the
Completion Documents, this Agreement shall prevail as between the
Parties.
17.6 Unless
expressly stated herein, no term in this Agreement is intended to be enforceable
by third parties under the Contracts (Rights of Third Parties) Xxx 0000 and,
where an obligation is expressly stated to be enforceable by a third party,
the
consent of that third party will not be required to rescind or vary the relevant
term. Connected Persons shall have the right to enforce the terms of
clause 18
under such Act.
17.7 No
Party shall have the right to assign, transfer or otherwise dispose of its
rights and obligations under this Agreement without the consent of the other
Party, which consent shall not be unreasonably withheld or delayed; save that
each of Xxxx-XxXxx and the Buyer shall have the right to assign, transfer or
otherwise dispose of its rights under this Agreement to any of their Affiliates
without the consent of the other.
17.8 This
Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the Parties.
17.9 Nothing
in this Agreement shall be read or construed as excluding any liability or
remedy in respect of fraud.
18. Entire
Agreement
18.1 The
Transaction Documents set out the entire agreement and understanding between
the
Parties. The Transaction Documents supersedes all prior agreements,
understandings or arrangements (whether oral or written) relating to the sale
and purchase of the Assets which shall cease to have any further force or
effect. It is agreed that:
26
| (a) |
neither
Party has entered into the Transaction Documents in reliance upon,
nor
shall any party have any claim or remedy in respect of, any statement,
representation, warranty, undertaking, assurance, collateral contract
or
other provision made by or on behalf of the other Party (or any of
its
Connected Persons) which is not expressly set out in this
Agreement;
|
| (b) |
all
terms and conditions which are implied under the Sale of Goods Act
in a
contract of sale of goods to which that Act applies are expressly
excluded
from the sale and purchase under this agreement, except that this
clause
shall not exclude any liability under section 12 of the Sale of Goods
Act;
|
| (c) |
the
only right or remedy of a Party in relation to any statement,
representation, warranty, undertaking, assurance, collateral contract
or
other provision set out in this Agreement shall be for breach of
this
Agreement; and
|
| (d) |
except
for any liability which a Party (or any of its Connected Persons)
has
under or in respect of any breach of this Agreement, no Party (or
any of
its Connected Persons) shall owe any duty of care or have any liability
in
tort or otherwise to any other party (or its respective Connected
Persons)
in respect of, arising out of, or in any way relating to the proposed
transaction,
|
provided
that this clause shall not exclude any liability for (or remedy in respect
of)
fraud or fraudulent misrepresentation.
18.2 The
agreements and undertakings in this clause 18
are given by each Party on its own behalf and as agent for each of its Connected
Persons. Each Party acknowledges that the other Party gives such agreements
and
undertakings as agent with the full knowledge and authority of each of its
respective Connected Persons.
19. Further
Assurance
19.1 Xxxx-XxXxx
shall, from time to time on being required to do so by the Buyer, promptly
and
at the cost and expense of Xxxx-XxXxx do or procure the doing of all such acts
and execute or procure the execution of all such documents in a form
satisfactory to the Buyer as the Buyer may reasonably consider necessary for
giving full effect to this Agreement (or to such parts of it as remain operative
after termination) and securing to the Buyer the full benefit of the rights,
powers and remedies conferred by Xxxx-XxXxx in this Agreement.
19.2 The
Buyer shall, from time to time on being required to do so by Xxxx-XxXxx,
promptly and at the cost and expense of the Buyer do or procure the doing of
all
such acts and execute or procure the execution of all such documents in a form
satisfactory to Xxxx-XxXxx as Xxxx-XxXxx may reasonably consider necessary
for
giving full effect to this Agreement (or to such parts of it as remain operative
after termination) and securing to Xxxx-XxXxx the full benefit of the rights,
powers and remedies conferred by the Buyer in this Agreement.
27
20. Notices
20.1 Any
notice pursuant to this Agreement may be given by facsimile transmission
(promptly followed by a hard copy delivered in accordance with this
clause 20.1)
or letter delivered to the Party to be served at the address stated in
clause 20.3
or such other address as may be given for the purposes of this Agreement by
written notice to the other Party.
20.2 A
notice given by facsimile transmission shall be deemed to be served on the
first
Business Day following the date of dispatch but a notice sent by post or
delivered personally shall not be deemed to be delivered until received. A
notice sent by email shall be for information only and shall not be deemed
to be
served until served by facsimile transmission or letter in accordance with
clause 20.1.
20.3 The
respective addresses for service are:
|
Xxxx-XxXxx:
|
Xxxxxx
Xxxxx
|
|
Xxxxxxxx
Xxxx
|
|
|
Xxxxxx
|
|
|
Xxxxxxxx
|
|
|
XX00
0XX
|
|
|
Fax:
00000 000000
|
|
|
Email:
|
|
|
For
the attention of the Legal Director
|
|
|
With
a copy to:
|
|
|
X.X.
Xxx 00000, XX 00
|
|
|
000
Xxxxxx X. Xxxx Xxx.
|
|
|
Xxxxxxxx
Xxxx, XX, XXX 00000\
|
|
|
Fax:
(000) 000 0000
|
|
|
Email:
|
|
|
For
the attention of Xxxx-XxXxx Corporation’s General
|
|
|
Counsel
|
|
|
The
Buyer:
|
|
|
Talisman
North Sea Limited:
|
Xxxxxxxx
Xxxxx
|
|
000
Xxxxxxx Xxxxxx
|
|
|
Xxxxxxxx
|
|
|
XX00
0X0
|
|
|
Fax: x00
0000 000000
|
|
|
For
the attention of General Counsel and Company
|
|
|
Secretary
|
21. Governing
Law and Jurisdiction
21.1 This
Agreement and the legal relationships established by or otherwise arising in
connection with this Agreement shall be governed by, and interpreted in
accordance with, English law.
28
21.2 Each
of the Parties agrees that the courts of England are to have exclusive
jurisdiction to settle any disputes (including claims for set off and
counterclaims) which may arise in connection with the creation, validity,
effect, interpretation or performance of, or the legal relationships established
by, this Agreement or otherwise arising in connection with this Agreement,
and
for such purposes irrevocably submit to the jurisdiction of the English
courts.
21.3 Each
Party irrevocably waives any objections to the jurisdiction of any court
referred to in this clause.
21.4 Each
Party irrevocably agrees that a judgment or order of any court referred to
in
this clause in connection with this Agreement is conclusive and binding on
it
and may be enforced against it in the courts of any other
jurisdiction.
In
witness whereof this
Agreement has been duly executed on the day and year first above
written.
SIGNED
for
and on behalf of
Xxxx-XxXxx
North Sea (U.K.) Limited
___________________________________
SIGNED
for
and on behalf of
Talisman
North Sea Limited
____________________________________
29
