Dated 6th August 2005 KM DENMARK OVERSEAS APS CENTRICA CANADA LIMITED
Exhibit
10.6
Dated
6th August 2005
KM
DENMARK OVERSEAS APS
CENTRICA
CANADA LIMITED
AGREEMENT
FOR THE SALE AND PURCHASE OF
THE
SHARES IN
XXXX-XXXXX
CANADA LIMITED
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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8
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3.
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PRICE………………………………………………………………………….
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8
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4.
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COMPLETION
CONDITIONS………………………………………………..
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8
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5.
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XXXX-XXXXX
UNDERTAKINGS……………………….…………………..
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9
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6.
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COMPLETION…………………………………………………………………
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9
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7.
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XXXX-XXXXX
WARRANTIES AND LIMITATIONS………………………
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9
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8.
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THE
BUYER’S WARRANTIES………………………………………………
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10
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9.
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COMPLETION
ADJUSTMENTS……………………………………………..
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11
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10.
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INFORMATION,
RECORDS AND ASSISTANCE POST COMPLETION..
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14
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11.
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ENVIRONMENT
AND DECOMMISSIONING AND OTHER RIGHTS
AND
LIABILITIES…………………………………………………………….
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15
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12.
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CONDUCT
OF CLAIMS………………………………………………………
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16
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13.
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NO
RIGHTS OF RESCISSION OR TERMINATION………………………...
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17
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14.
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PAYMENT
OF INTER-COMPANY PAYABLES AND RECEIVABLES…...
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18
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15.
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DELIBERATELY
LEFT BLANK……………………………………………..
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18
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16.
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TAX…………………………………………………………………………….
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18
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17.
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INSURANCE…………………………………………………………………..
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18
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18.
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CHANGES
OF NAME…………………………………………………………
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19
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19.
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PAYMENTS……………………………………………………………………
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19
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20.
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ANNOUNCEMENTS…………………………………………………………..
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20
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21.
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CONFIDENTIALITY…………………………………………………………..
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20
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22.
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FURTHER
ASSURANCE……………………………………………………...
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22
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23.
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COSTS………………………………………………………………………….
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22
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24.
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NOTICES……………………………………………………………………….
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22
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25.
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CONFLICT
WITH OTHER AGREEMENTS………………………………….
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24
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26.
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ENTIRE
AGREEMENT………………………………………………………..
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24
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27.
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WAIVERS,
RIGHTS AND REMEDIES……………………………………….
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25
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28.
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CONTRACTS
(RIGHTS OF THIRD PARTIES) XXX 0000………………….
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25
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29.
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GENERAL……………………………………………………………………..
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25
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30.
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GOVERNING
LAW, JURISDICTION AND SERVICE OF PROCESS……..
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27
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SCHEDULE
1 DETAILS OF THE COMPANY….………………………………………..
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29
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SCHEDULE
2 XXXX-XXXXX WARRANTIES.…………………………………………..
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30
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PART
A GENERAL/COMMERCIAL…………………………………………
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30
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PART
B TAXATION…………………………………………………………..
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33
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SCHEDULE
3 THE BUYER WARRANTIES……..……………………………………….
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35
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SCHEDULE
4 LIMITATIONS ON LIABILITY……………..……………………….……
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36
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SCHEDULE
5 CONDUCT OF THE COMPANY PRE-COMPLETION………………..…
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40
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SCHEDULE
6 COMPLETION ADJUSTMENTS………….………………………………
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41
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PART
A…………………………………………………………………………
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41
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PART
B - SPECIFIC ACCOUNTING TREATMENTS………………………
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41
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PART
C - ADJUSTMENTS……………………………………………………
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42
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SCHEDULE
6 EXHIBIT 1 PROFORMA COMPLETION STATEMENT………………...
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45
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SCHEDULE
7 TAX MATTERS….....………………………………………………………
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46
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PART
A - DEFINITIONS………………………………..……………………
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46
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PART
B - 116 WITHHOLDING TAX………………………………………...
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47
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PART
C - COVENANTS………………………………………………………
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48
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SCHEDULE
8 COMPLETION ARRANGEMENTS…………...……………………….….
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51
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SCHEDULE
9 BUYER PARENT COMPANY GUARANTEE……………………………
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53
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SCHEDULE
10 XXXX-XXXXX PARENT COMPANY GUARANTEE………………….
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56
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THIS
AGREEMENT is
made this 6th
day of August 2005
Between:
| (1) |
KM
DENMARK OVERSEAS APS,
a company incorporated in Denmark and having its registered office
at
Xxxxxxxxxxxxx 00, 0., XX-0000 Xxxxxxxxxx, Xxxxxxx (Xxxx-XxXxx);
and
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| (2) |
CENTRICA
CANADA LIMITED,
a corporation incorporated under the laws of Canada and having its
registered office at Suite 1500, 25 Xxxxxxxx Avenue West, Toronto,
Ontario, Canada M2N 000 (xxx
Xxxxx)
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Whereas:
(A) Xxxx-XxXxx
Canada Ltd. (the Company)
is a corporation incorporated under the laws of Alberta, Canada.
(B) Xxxx-XxXxx
wishes to sell and the Buyer wishes to purchase the outstanding shares in the
capital of the Company.
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:
2004
Accounts
means:
| (a) |
the
unaudited balance sheet of the Company as at 31 December 2004;
and
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| (b) |
the
unaudited profit and loss account of the Company as at 31 December
2004 both in the Agreed Form.
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Adjustment
has
the meaning given in clause 9.1;
Adjustment
Clauses has
the meaning given in clause 9.1;
Affiliate
means:
| (a) |
if
the Party is a subsidiary undertaking of another company, the Party’s
ultimate holding company and any subsidiary undertaking (other than
the
Party itself) of the Party’s ultimate holding company;
or
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| (b) |
if
the Party is not a subsidiary undertaking of another company, any
subsidiary undertaking of the Party,
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in
each case at the date hereof.
For
the purpose of this definition, holding company and subsidiary undertaking
shall
have the meanings given to those expressions in Sections 736 and 258 of the
Companies Xxx 0000, as amended by Section 144 of the Companies Xxx 0000;
1
Agreed
Form
means, in relation to a document, the form of that document which has been
initialled on the date of this Agreement for the purpose of identification
by or
on behalf of Xxxx-XxXxx and the Buyer (in each case with such amendments as
may
be agreed by or on behalf of Xxxx-XxXxx and the Buyer);
Applicable
Tax Legislation
has the meaning given in Part A,
Schedule 7
(Tax Matters);
Assessment
has
the meaning given in Part A,
Schedule 7
(Tax Matters);
Asset
Sale Agreement
means the agreement between the Asset Seller and Centrica Resources Limited
for
the sale and purchase of the interests held by Xxxx-XxXxx Oil (UK) Limited
in
the Brae Area dated of even date herewith in the Agreed Form;
Asset
Seller
means Xxxx-XxXxx Oil (UK) Limited, a company organised and existing under the
laws of England and Wales;
Assets
means the assets to be sold pursuant to the Asset Sale Agreement;
Assignment,
Assumption and Indemnity Agreement
means the agreement so called in the Agreed Form;
Base
Consideration means
twenty eight million United States Dollars (US $ 28,000,000);
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;
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; and a member
of the Buyer Group shall
mean any of the foregoing;
Buyer
Obligation means
any representation, warranty or undertaking to indemnify (including any covenant
to pay pursuant to the Tax Matters) given by the Buyer to Xxxx-XxXxx under
this
Agreement;
Buyer
Parent Company Guarantee
means the guarantee by Centrica plc in the agreed form as set out in Schedule
9;
Buyer
Warranties means
the warranties set out in Schedule 3;
Buyer
Warranty Claims means
any Claim against the Buyer for breach of the Buyer Warranties;
Buyer’s
Solicitors
means Ashurst, Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
Claim
means
any claim by the Buyer or its Affiliates under or for breach of this Agreement,
including, without limitation, any Xxxx-XxXxx Warranty Claim, a claim under
an
indemnity given by Xxxx-XxXxx or a claim under the Tax Matters provided that
Claims shall not include a Clause 11.1
or 11.2
Claim ;
2
Clause 11.1
or 11.2
Claim
means any Claim pursuant to the provisions of Clause 11.1
or Clause 11.2
of this Agreement;
Company
Business means
the business of the Company carried on from time to time;
Completion
means
the fulfilment by the Parties of their respective obligations pursuant to clause
6.2;
Completion
Date has
the meaning ascribed to that term in the Asset Sale Agreement or such other
date
as shall be agreed between the Parties;
Completion
Inter-Company Payables means
any amounts owed as at Completion by the Company to any member of Xxxx-XxXxx
Group which are not in respect of Tax or group relief, and Completion
Inter-Company Payable shall
be construed accordingly;
Completion
Inter-Company Receivables means
any amounts owed as at Completion to the Company from any member of Xxxx-XxXxx
Group which are not amounts in respect of Tax or group relief and Completion
Inter-Company Receivable shall
be construed accordingly;
Completion
Venue means
the offices of Freshfields Bruckhaus Xxxxxxxx, 00 Xxxxx Xxxxxx, Xxxxxx, XX0X
0XX
or such other location as the Parties may agree;
Condition
Precedent means
the condition specified in clause 4.1;
Connected
Persons
means in relation to a person any of its Affiliates or any of the officers,
employees, agents and advisers of that person or any of its
Affiliates;
Contribution
Adjustment has
the meaning set out in Schedule 6;
Costs
means
losses, damages, costs (including reasonable legal costs) and expenses, in
each
case of any nature whatsoever;
Damages
Payment has
the meaning given in Schedule 4
(Limitations on Liability);
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 property relating to the Company Business (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, or in relation to, any operations relating to the Company Business
or any former licences or operating agreement, or license interest document
or
other agreement to which the Company is or was a party or under statutory
obligation, common law, international law, international convention or any
other
obligation, including any decommissioning plans or IMO Guidelines or Standards
or regulations under OSPAR Decision 98/3 or any subsequent decisions of OSPAR
and including any residual liability for anticipated or necessary continuing
maintenance and monitoring costs;
Disputed
Amounts has
the meaning given in clause 9.4;
Distribution
Adjustment has
the meaning set out in Schedule 6;
Effective
Date means
00.01 hours (London time) on 1 July 2005;
3
Encumbrance
means
any interest or equity of any person (including any right to acquire, option
or
right of pre-emption or conversion) or any mortgage, charge, pledge, lien,
assignment, hypothecation, security interest, title retention or any other
security agreement or arrangement, or any agreement to create any of the
above;
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;
Environmental
Liabilities
means any and all claims, costs, charges, expenses, liabilities or obligations
in respect of the Company Business under any Environmental Law or in relation
to
cleaning up, remediating, reclaiming, 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 or preventing or
continuing contamination of any area of land, foreshore or seabed (including
the
subsoil), wherever situated, whether such claims, costs, charges, expenses,
liabilities or obligations are incurred under or pursuant to or in relation
to
any operations relating to the Company Business or any former licences or any
operating agreement, licensed interest documents or other agreement to which
the
Company is or was a party or under any Environmental Law or any other obligation
and including, without limitation, any residual liability for anticipated and/or
necessary continuing maintenance and monitoring costs;
4
Exchange
Rate means
the completion 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 relevant date;
Final
Completion Statement means
the final completion statement as defined in clause 9.4;
Financial
Debt means
borrowings and indebtedness in the nature of borrowing (including by way of
acceptance credits, discounting or similar facilities, loan stocks, bonds,
debentures, notes, overdrafts or any other similar arrangements the purpose
of
which is to raise money) owed to any banking, financial, acceptance credit,
lending or other similar institution or organisation;
Framework
Agreement means
the Agreement between
Sunningdale Oils Limited, Sunningdale Oils (U.K.) Limited and Xxxx-XxXxx Oil
(U.K.) Limited dated 30 April 1981;
GST
means
Goods and Service Tax provided for in Part IX of the Excise
Tax Act
(Canada);
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;
HMRC
means Her Majesty’s Revenue Customs;
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;
Intellectual
Property Rights or
IPR means
patents, trade marks, service marks, logos, get-up, trade names, internet domain
names, rights in designs, copyright (including rights in computer software)
and
moral rights, database rights, semi-conductor topography rights, utility models,
rights in know-how and other intellectual property rights, in each case whether
registered or unregistered and including applications for registration, and
all
rights or forms of protection having equivalent or similar effect anywhere
in
the world;
Inter-Company
Notes Receivables Adjustment has
the meaning set out in Schedule 6;
Interest
Adjustment has
the meaning set out in Schedule 6;
Interim
Completion Statement has
the meaning given in clause 9.3(b);
Interim
Net Adjustment Amount
has the meaning given in clause 9.3(a);
Xxxx-XxXxx’x
Account means
a bank account to be notified by Xxxx-XxXxx to the Buyer no later than two
(2)
Business Days prior to the Completion Date;
Xxxx-XxXxx
Group means
Xxxx-XxXxx and its Affiliates from time to time but excluding the
Company;
Xxxx-XxXxx
Parent Company Guarantee
means the guarantee by Xxxx XxXxx Corporation in the agreed form as set out
in
Schedule 10;
5
Xxxx-XxXxx
Warranties means
the warranties set out in Schedule 2
(Xxxx-XxXxx Warranties);
Xxxx-XxXxx
Warranty Claim
means any claim against Xxxx-XxXxx for breach of the Xxxx-XxXxx
Warranties;
Last
Accounts Date
means 31 December 2004;
Longstop
Date has
the meaning ascribed to that term in the Asset Sale Agreement;
Losses
and Expenses means
actions, proceedings, losses, damages, liabilities (including for the avoidance
of doubt in relation to Tax or amounts in respect of Tax), claims demands,
costs
and expenses including fines, penalties, clean-up costs, decommissioning,
reclaiming or remediation costs, legal and other professional fees and any
GST
or VAT payable in relation to any such matter, circumstances or
item;
Net
Adjustment Amount means
the cash amount expressed in United States Dollars to be calculated by adding
together all the relevant Adjustments in accordance with clause 9,
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 9;
Non-Tax
Claim
means a Claim other than a claim for breach of any of the Tax Warranties or
a
claim under the Tax Matters;
Objection
Notice
has the meaning given in clause 9.4;
Party
means Xxxx-XxXxx or the Buyer and Parties
means
both of them;
Pounds
Sterling
or £
means the lawful currency of the United Kingdom from time to time;
Proposed
Transaction means
the transactions contemplated by the Transaction Documents;
Records
has
the meaning set out in clause 10;
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;
Secretary
of State
means the Secretary of State for Trade and Industry in the United Kingdom or
his
successor in office;
Shares
means the outstanding shares comprising the entire issued share capital of
the
Company;
Tax
or Taxes has
the meaning given in Part A,
Schedule 7
(Tax Matters);
6
Taxation
Authority has
the meaning given in Part A,
Schedule 7
(Tax Matters);
Tax
Claims
means any Claim in respect of the Tax Warranties;
Tax
Matters
means the covenant (and provisions) relating to Tax set out in Schedule 7
(Tax Matters);
Tax
Returns has
the meaning given in Part A,
Schedule 7
(Tax Matters);
Tax
Warranties
means any warranties of Xxxx-XxXxx in connection with Taxes;
Tax
Withheld Amount has
the meaning given in Part B,
Schedule 7
(Tax Matters);
Third
Party Assurances means
all guarantees, indemnities, counter-indemnities and letters of comfort of
any
nature whatsoever:
| (a) |
given
to a third party by the Company in respect of any obligation of a member
of Xxxx-XxXxx Group; and/or (as the context may require);
|
| (b) |
given
to a third party by a member of Xxxx-XxXxx Group in respect of any
obligation of the Company.
|
Third
Party Claim
has the meaning given to it in clause 12;
Transaction
Documents
means this Agreement and the Asset Sale Agreement;
United
States Dollars,
US$
and $
means the lawful currency of the United States of America from time to
time;
US
GAAP
means generally accepted accounting principles in the United States of
America;
Value
Added Tax
or VAT
means value added tax as imposed by the Value Added Tax Act 1994 (as amended
from time to time) or any other provision or regulation (whether or not of
the
United Kingdom) including any interest and penalties thereon; and
Working
Capital Adjustment has
the meaning set out in Schedule 6.
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;
7
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
director or officer of the Company, Xxxxx Xxxxxx - Manager UK Tax, and Xxxx
Xxxxx - Global Tax Director or Xxxx Xxxxxx, Vice President and Assistant General
Counsel, Xxxx-XxXxx Oil & Gas Corporation is actually aware of the matters
to which it refers as at the date hereof.
1.9 References
in this Agreement to the words ‘include’, ‘including’ and ‘other’ shall be
construed without limitation.
1.10 Any
assistance information or access to be given by the Buyer to Xxxx-XxXxx shall
be
at the expense and cost of Xxxx-XxXxx notwithstanding anything otherwise
contained in this Agreement unless it relates to a claim made by Xxxx XxXxx
against the Buyer;
2. Sale
and Purchase
2.1 Subject
to and in accordance with this Agreement, Xxxx-XxXxx
shall sell
and transfer, and the Buyer shall purchase, the Shares with effect from
Completion, together with all rights attaching to them at Completion including
the right to receive all distributions and dividends declared, paid or made
in
respect of the Shares after Completion.
2.2 The
Parties acknowledge that the transfers of the Shares shall be completed on
the
basis of the share transfer and other arrangements set out or referred to in
clause 6
and Schedule 8
(Completion Arrangements).
3. Price
The
consideration for the transfer of the Shares shall be the payment by the Buyer
to Xxxx-XxXxx of the Base Consideration as adjusted pursuant to this
Agreement.
4. Completion
conditions
4.1 The
obligations of the Parties under clauses 2.1
and 2.2
and clause 6
are conditional upon the satisfaction of the conditions precedent set out in
clause 2.2 of the Asset Sale Agreement.
4.2 The
Condition Precedent set forth in clause 4.1
may not be waived by either Party, without the written consent of the other
Party.
4.3 The
Parties shall use all reasonable endeavours to ensure that the Condition
Precedent is 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 this condition and the date when it has been fulfilled.
4.4 If
the Condition Precedent has not been satisfied or waived before the Longstop
Date, this Agreement shall terminate with effect from the date on which either
the buyer or the Asset Seller serves written notice on the Asset Seller or
the
buyer thereunder, as the case may be, terminating the Asset Sale Agreement
under
clause 2.5 thereof and no Party shall have any liability to another under this
Agreement except in respect of clauses 20
and 21
and any breach of the terms hereof committed before such date.
8
5. Xxxx-XxXxx
Undertakings
5.1 During
the period from the date of this Agreement to Completion, Xxxx-XxXxx shall
perform its obligations set out in Schedule 5
(Conduct of the Company Pre-Completion).
5.2 During
such period Xxxx-XxXxx will execute and take all steps within its power
(i) to consummate the provisions of the Assignment, Assumption and
Indemnity Agreement, (ii) to register such applicable documents, agreements
and Xxxx-XxXxx of Canada Northwest Ltd (Northwest)
with all relevant Canadian federal and provincial authorities and post any
necessary bonds or other security to take over any Decommissioning Liabilities
or Environmental Liabilities of the Company and to ensure Northwest steps into
the position of and fulfils all the obligations of the Company under the
Agreement and Plan of Merger among Devon Energy Corporation (Nevada), Xxxx-XxXxx
Corporation, Xxxx-XxXxx North American Onshore Corporation and Xxxx-XxXxx Canada
Onshore Ltd dated October 17, 1996.
5.3 Xxxx-XxXxx
shall notify the Buyer of all claims against the Company between signing and
completion.
6. Completion
6.1 Completion
of the transfer of the Shares shall take place on the Completion Date at the
Completion Venue, contemporaneously with Completion under and as defined in
the
Asset Sale Agreement.
6.2 At
Completion each of Xxxx-XxXxx and the Buyer shall deliver or perform (or procure
that there is delivered or performed) all those documents, items and actions
respectively listed in relation to that Party, the members of Xxxx-XxXxx Group,
the Company or the Buyer Group (as the case may be) in Schedule 8 (Completion
Arrangements).
6.3 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 Shares to the
Buyer and otherwise carry out the true intent of this Agreement.
6.4 The
Buyer undertakes that, as soon as reasonably practicable after the Completion
Date, 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.
7. Xxxx-XxXxx
Warranties
and Limitations
7.1 Subject
to the provisions of this clause 7,
Xxxx-XxXxx hereby warrants to the Buyer in the terms set out in Schedule 2
(Xxxx-XxXxx Warranties) as at the date hereof and in the terms of
paragraphs1.2,
1.3,
2.1(b),
3,
5,
6,
7,
8
and 9 of Part A
of Schedule 2
as at the Completion Date.
7.2 The
Xxxx-XxXxx Warranties are given subject to the other limitations and
qualifications set out in this clause 7
and in Schedule 4
(Limitations on Liability).
7.3 The
Buyer acknowledges and agrees that:
9
| (a) |
any
Claims shall be subject to the limitations on liabilities and other
provisions set out in Schedule 4
(Limitations on Liability) and the Tax
Matters;
|
| (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
or any other Transaction Document 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 its Connected Persons
or to
its or their advisers on or prior to the date of this Agreement;
(ii) the accuracy of any information, documents or materials
furnished to or for the Buyer or any other person by Xxxx-XxXxx or
any of
its Connected Persons in expectation of the transactions contemplated
by
this Agreement provided this shall not apply to any information, documents
or material the subject of the warranty in paragraph 10
of Part A
of Schedule 2;
(iii) the amounts, quality or deliverability of reserves of crude oil,
natural gas or other hydrocarbons attributable to the Company; (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.
|
7.4 This
Agreement shall be rescinded upon the Asset Sale Agreement being rescinded
in
accordance with clause 5.9 thereof.
7.5 Xxxx-XxXxx
shall not be liable under the Xxxx XxXxx Warranties in this Agreement in respect
of any matters disclosed in writing to the Buyer in a letter of even
date.
8. THE
BUYER’S Warranties
8.1 Subject
to the provisions of this clause 8,
the Buyer hereby warrants to Xxxx-XxXxx in the terms set out in Schedule 3
(The Buyer Warranties) as at the date hereof.
8.2 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.
8.3 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 out-of-pocket third party 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.
10
8.4 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 Warranties or which
would if subsisting at Completion be inconsistent with any of those warranties
(as repeated at the Completion Date pursuant to clause 8.2).
Such notice shall state that it is served pursuant to this clause 8.4.
9. Completion
Adjustments
9.1 Where
any sums are taken into account in:
| (a) |
the
Working Capital Adjustment;
|
| (b) |
the
Distribution Adjustment;
|
| (c) |
the
Contribution Adjustment;
|
| (d) |
the
Inter-Company Notes Receivables Adjustment; and
|
| (e) |
the
Interest 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
9,
Schedule 6
or Schedule 8
(together the Adjustment
Clauses)
or pursuant to a Xxxx-XxXxx Warranty Claim under clause 7
or a Buyer Warranty Claim under clause 8,
the same shall operate by way of increases or decreases, as the case may be,
in
the Base Consideration.
9.2 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 7
or 8
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;
|
| (c) |
no
adjustment to the Base Consideration shall be made in respect of any
matters to which clause 11
applies.
|
9.3
| (a) |
Xxxx-XxXxx
shall provide the Buyer with a written statement specifying (i) 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;
(ii) its best estimate of each Completion Inter-Company Payable and
each
Completion Inter-Company Receivable; and (iii) the amount, if any,
of the
Tax Withheld Amount pursuant to Part B,
Schedule 7
(Tax Matters) provided always that the Buyer shall be able to withhold
such amount in respect of the Tax Withheld Amount as it reasonably
thinks
is due and payable.
|
11
| (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 6
(Completion Adjustments).
|
9.4 Within
sixty (60) days after Completion, Xxxx-XxXxx shall provide the Buyer with a
written statement (in the format set out in Schedule 6
(Completion Adjustments)) giving its calculation of the final amounts of each
of:
| (a) |
the
Adjustments;
|
| (b) |
the
Net Adjustment Amount;
|
| (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; and
|
| (d) |
the
Completion Inter-Company Payables and Completion Inter-Company
Receivables.
|
(the
Final
Completion Statement).
The Buyer shall notify Xxxx-XxXxx in writing (such notification being an
Objection
Notice)
within sixty (60) 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) set
out
in detail the Buyer’s reasons for such non-acceptance and specifies 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 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).
Ultimately, the validity of any such notice shall be a matter for determination
by the Nominated Independent Accountant (as set out in clause 9.7
below).
Except for Disputed Amounts, the Buyer shall be deemed to have accepted the
Final Completion Statement in full.
9.5 If
the Buyer serves an Objection Notice in accordance with clause 9.4,
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.
9.6 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 9.5)
or if the Buyer fails to give an Objection Notice within the sixty (60) days
period referred to in clause 9.4,
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, net of any
applicable Tax Withheld Amount, 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 less any applicable withholding tax on such interest.
12
9.7 If
the Parties cannot reach agreement as specified in clause 9.5
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 Nominated Independent 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 reference.
Payment of the Net Adjustment Amount (after taking into account the Interim
Net
Adjustment Amount which adjusted the Base Consideration paid at Completion)
(the
Adjustment
Amount)
in accordance with the Nominated Independent Accountant’s determination of any
Disputed Amounts in respect of the Net Adjustment Amount and in accordance
with
the Final Completion Statement in respect of all other items shall be made,
net
of any applicable Tax Withheld Amount, within three (3) Business Days of the
determination of the Nominated Independent Accountant
of the Disputed Amounts, together with simple interest on the Adjustment 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 less any applicable withholding tax
on
such interest.
9.8 Xxxx-XxXxx
shall provide the Buyer with copies of all 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
9.3
and 9.4.
The Parties shall liaise on the compilation and agreement of the said
statements.
9.9 To
enable Xxxx-XxXxx to meet its obligations under this clause 9,
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/or
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 in the manner and using the
methods required by this Agreement.
9.10 Xxxx-XxXxx
shall procure that:
| (a) |
The
amount payable by the Buyer to Xxxx-XxXxx in respect of the Adjustments
shall not exceed US$ 2,000,000 excluding items attributable to the
Framework Agreement in respect of the period since the Effective Date
and
Xxxx-XxXxx shall prior to the Completion Date take all necessary steps
to
ensure that this is so.
|
13
| (b) |
the
Company has no third party indebtedness at the Completion Date excluding
where attributable to the Framework Agreement in respect of the period
since the Effective Date.
|
| (c) |
Nothing
contained in this Clause 9.10
shall affect any amount payable pursuant to paragraph 4 of Part C
of Schedule 6.
|
10. Information,
Records and Assistance Post Completion
10.1 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 Company and to the period up to
Completion (the Records).
This obligation is subject to:
| (a) |
the
provisions of clause 21;
|
| (b) |
the
person seeking access providing reasonable justification that the same
is
required;
|
| (c) |
access
being given only during working hours and at a time acceptable to the
holder of the relevant Records;
|
| (d) |
the
provisions of the Tax Matters;
|
| (e) |
any
restrictions on access imposed by law or the terms of any agreement;
and
|
| (f) |
any
claim for legal privilege.
|
10.2 For
the period from the Completion Date until the expiration of the applicable
limitation periods for all Tax periods as provided by relevant Taxation
Legislation or Taxation Authorities (or such longer period as required by Tax
Legislation), 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).
10.3 Without
prejudice to any information, access or assistance required under clauses
9.8,
9.9
or 12.5,
the Buyer shall (and shall procure that each member of the Buyer Group shall),
on the basis that reasonable out-of-pocket third party costs properly incurred
in relation to it will be borne by Xxxx-XxXxx and on reasonable notice from
Xxxx-XxXxx, give such assistance to any member of the Xxxx-XxXxx Group as
Xxxx-XxXxx may 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 Company,
including proceedings relating to Tax. The provisions hereof shall apply
mutatis
mutandis
to Xxxx-XxXxx save the Buyer shall not be required to pay any sums of
money.
14
10.4 This
clause 10
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.
11. Environment
and Decommissioning
and other rights and liabilities
11.1 Other
than in respect of the Assets Xxxx-XxXxx shall at its cost and expense discharge
all Decommissioning Liabilities including being responsible for decommissioning,
abandonment, removing and making safe all plant, equipment and machinery, xxxxx
(including well cuttings) and other installations (including offshore
installations, pipelines and submarine pipelines) and facilities relating to
operations under any former licences and/or each and any operating agreement,
licensed interest document or other agreements to which the Company was a party
or were previously owned by the Company prior to the Completion Date, whether
the same are incurred under or pursuant to any of such licensed interest
documents or other agreements or under statutory law, common law, international
law or international convention.
11.2 Xxxx-XxXxx
covenants that it shall indemnify (on an after-Tax basis) and hold the Buyer
and
its Connected Persons harmless against:
| (a) |
Other
than in the respect of the Assets, any and all Losses and Expenses
which
the Buyer or any of its Connected Persons may incur arising out of
or in
connection with Decommissioning Liabilities or otherwise in respect
of the
costs, expenses and obligations Xxxx-XxXxx agrees to incur, discharge
or
perform pursuant to Clause 11.1,
where the circumstances giving rise to such Decommissioning
Liabilities
result arose from the Company Business carried on prior to the Completion
Date whether such Losses and Expenses arise prior to or after the
Completion Date ; and
|
| (b) |
Other
than in the respect of the Assets, any and all Losses and Expenses
which
the Buyer or any of its Connected Persons may incur arising out of
or in
connection with Environmental Liabilities where the circumstances from
which such Environmental Liabilities result
arose from the Company Business carried on prior to the Completion
Date
whether such Losses and Expenses arise prior to or after the Completion
Date; and
|
| (c) |
Other
than in respect of the Assets, any Losses and Expenses which the Buyer
or
any of its Connected Persons may incur arising out of or in connection
with the Company Business,
other than in respect of the Assets or Tax where the circumstances
from
which such Losses and Expenses result, arose from the Company Business
prior to the Completion Date whether such Losses and Expenses arise
prior
to or after the Completion Date; and
|
| (d) |
Any
Tax which is payable by the Company in respect
of:
|
| (i) |
any
Taxation year or other period ending on or prior to the Effective Date
(and, for greater certainty, if a relevant Taxation year or other period
does not end on or prior to the Effective Date, Taxes relating to the
period prior to the Effective Date shall be determined as if such period
ended immediately prior to the Effective Date);
and
|
15
| (ii) |
any
Tax which is payable by the Company in respect of the period between
the
Effective Date and the Completion Date (other than Tax which is related
to
income arising under the Framework
Agreement);
|
| (e) |
any
Losses and Expenses payable by the Company as a result of the failure
by
Xxxx-XxXxx to comply with the provisions of Clause 5.2
or Clause 9.10
or by North-West to comply with the provisions of the Assignment
Assumption and Indemnity Agreement.
|
11.3 The
Buyer covenants that it shall indemnify (on an after-Tax basis) and hold
Xxxx-XxXxx and its Connected Persons harmless against
| (a) |
Subject
always to the provisions of Clauses 11.1
and 11.2
any and all Losses and Expenses that result from the Company Business
carried on after the Completion Date; and
|
| (b) |
(i)Losses
and Expenses; and
|
| (ii) |
Tax
related to income
|
In
either case arising under the Framework Agreement from the Effective Date;
and
| (c) |
any
and all Decommissioning Liabilities and Environmental Liabilities relating
to the Assets other than Decommissioning Liabilities and Environmental
Liabilities for which Xxxx XxXxx’x Connected Person who is party to the
Asset Sale Agreement is liable under the terms of the Asset Sale Agreement
in the form in which it exists at the date
hereof.
|
The
Buyer shall not be entitled to be indemnified under clause 11.2 to the extent
it
indemnifies Xxxx XxXxx under this clause 11.3.
12. Conduct
of Claims
12.1 If
the Buyer or any member of the Buyer Group becomes aware of any claim or
potential claim by a third party or any assessment, action or demand against
it
or any other matter (each a
Third Party Claim)
which might result in a Non-Tax 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 facilities to investigate
it;
|
| (b) |
not
make (and procure that each member of the Buyer Group shall not make)
any
admission of liability, agreement, compromise with or payment to any
person, body or authority in relation to that Third Party Claim without
the prior written approval of Xxxx-XxXxx such agreement 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 third party costs
and
expenses properly incurred in respect
thereof:
|
16
| (i) |
take
(and procure that each member of the Buyer Group or the Company shall
take) such action as Xxxx-XxXxx may request to avoid, resist, dispute,
appeal, compromise or defend such Third Party Claim;
and
|
| (ii) |
allow
(and, 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
|
| (d) |
provide
(and procure that the relevant member of the Buyer Group shall provide)
such information and assistance (including access to personnel) 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 or otherwise in relation to that Third Party
Claim.
|
12.2 Without
prejudice to clause 12.1
and the provisions of the Tax Matters, 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.
12.3 Failure
of the Buyer to give notice in accordance with clause 12.1(a)
shall not relieve Xxxx-XxXxx of any of its obligations relating to Non-Tax
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).
12.4 Whether
or not Xxxx-XxXxx has assumed the conduct of proceedings or negotiations (in
accordance with clause 12.1(c)(ii)
above),
Xxxx-XxXxx shall not be liable under any Claim for any admission of liability,
agreement, compromise or payment that was consented to without Xxxx-XxXxx’x
prior written approval which relates to such Claim such approval not to be
unreasonably withheld or delayed.
12.5 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:
| (a) |
make
available to accountants and other representatives appointed by Xxxx-XxXxx
such access to personnel, records and information as Xxxx-XxXxx requests
in connection with such Claim or Third Party Claim;
and
|
| (b) |
to
the extent requested by Xxxx-XxXxx, use all reasonable endeavours to
procure that the auditors (both past and then current) relating to
the
Company make available their audit working papers in respect of audits
of
the accounts of the Company for any accounting period relevant to such
Claim or third party claim.
|
13. No
Rights of Rescission or Termination
The
sole remedy of the Buyer for any breach of any of the Xxxx-XxXxx Warranties
or
any other breach of this Agreement or any other Transaction Document 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 (a)
pursuant to any such rights which arise in respect of fraudulent
misrepresentation or which arise under clause 4.4.
or if the Asset Sale Agreement is terminated pursuant to Clause 5.9
thereof
or if (b) the value of the Company is reduced by fifteen (15) per cent or more
of the Base Consideration as a result of a breach by Xxxx-XxXxx of the
provisions of this Agreement a Xxxx-XxXxx Warranty Claim or a
Clause 11.1
or 11.2
Claim which Xxxx-XxXxx has not remedied to the satisfaction of the Buyer prior
to Completion.
17
14. Payment
of Inter-Company Payables and Receivables
14.1 On
the date on which payment is due under clause 9.6
or 9.7:
| (a) |
the
Buyer shall procure that the Company pays to Xxxx-XxXxx (for itself
or, as
the case may be, as agent for the members of the Xxxx-XxXxx Group to
which
Completion Inter-Company Payables are owed) an amount in the applicable
currency equal to each of the Completion Inter-Company Payables (if
any)
of the Company which are owed to any member of the Xxxx-XxXxx Group
and
the Completion Inter-Company Payable shall be treated as discharged
to the
extent of that payment;
and
|
| (b) |
Xxxx-XxXxx
shall (for itself or, as the case may be, as agent for each relevant
member of the Xxxx-XxXxx Group) pay to the Company, an amount in the
applicable currency equal to each of the Completion Inter-Company
Receivables (if any) of the Company which are owed by any member of
the
Xxxx-XxXxx Group and the Completion Inter-Company Receivable
shall be treated as discharged to the extent of that
payment.
|
15. Deliberately
left blank
16. Tax
16.1 Xxxx-XxXxx
and the Buyer shall, with effect from Completion, comply with the provisions
of
Schedule 7 (Tax Matters).
16.2 All
sums payable under this Agreement shall be paid free and clear of all deductions
or withholdings whatsoever save only as provided in this Agreement or as may
be
required by law.
16.3 If
any deduction or withholding is required by law from any payment in respect
of a
Buyer Obligation or any obligation of Xxxx-XxXxx then, except in relation to
interest, the person making the payment shall be obliged to pay the other person
such additional sum as will, after such deduction or withholding has been made,
leave the other person with the same amount as it would have been entitled
to
receive in the absence of any such requirement to make a deduction or
withholding.
16.4 All
sums payable under this Agreement are (unless expressly stated otherwise)
exclusive of any applicable GST, VAT, sales, use, transfer and documentary
Taxes
and recording and filing fees applicable to the transfer of the shares to the
Buyer at Completion.
17. Insurance
17.1 Upon
Completion, all insurance cover provided in relation to the Company by the
Xxxx-XxXxx Group (whether under policies maintained with third party insurers
or
other members of the Xxxx-XxXxx Group) shall cease and the Buyer shall procure
that the Company or member of the Buyer Group shall not make any claim under
any
such policies in relation to any event, fact, circumstance or matter arising
before or after Completion. Xxxx-XxXxx shall be entitled to make arrangements
with its insurers to reflect the principle of this clause 17.1.
18
18. Changes
of name
18.1 The
Buyer acknowledges that Xxxx-XxXxx and/or its Affiliates have the absolute
and
exclusive proprietary right to all trade or service names or marks, business
names, logos or domain names incorporating the word “Xxxx-XxXxx” or any
derivation thereof and any corporate symbols or logos related thereto. The
Buyer
agrees that it will not, and will cause its Affiliates not to, use the word
“Xxxx-XxXxx” or any symbol or logo incorporating any such word in connection
with the sale of any goods or services or otherwise in the conduct of its or
their businesses.
18.2 Without
prejudice to the foregoing, the Buyer undertakes to Xxxx-XxXxx to procure
that:
| (a) |
as
soon as reasonably practicable after the Completion Date and in any
event
within 30 (thirty) days afterwards, the name of the Company which consists
of or incorporates the word “Xxxx-XxXxx” is changed to a name which does
not include the word “Xxxx-XxXxx” or any name which, in the reasonable
opinion of Xxxx-XxXxx, is substantially or confusingly
similar;
|
| (b) |
as
soon as reasonably practicable after the Completion Date and in any
event
within 30 (thirty) days afterwards, the Company shall cease in any
manner
whatsoever to use or display any trade or service name or xxxx, business
name, logo or domain name used or held by any member of Xxxx-XxXxx
Group
or trade or service name or xxxx, business name, logo or domain name
which, in the reasonable opinion of Xxxx-XxXxx, is substantially or
confusingly similar to any of them.
|
19. Payments
19.1 Any
payment to be made pursuant to this Agreement or any of the other Transaction
Documents by the Buyer or any member of the Buyer Group shall be made to
Xxxx-XxXxx’x Account, or such other account as Xxxx-XxXxx shall nominate in
writing, in cash in immediately available funds by electronic transfer in United
States Dollars unless otherwise agreed on the due date for payment. All payments
made or received in currencies other than United States Dollars shall be
converted into United States Dollars at the Exchange Rate. Xxxx-XxXxx agrees
to
pay each member of Xxxx-XxXxx Group that part of each payment to which it is
entitled. Receipt of such sums in the relevant bank account shall be an
effective discharge of the obligation of the Buyer or any member of the Buyer
Group to pay such sums to Xxxx-XxXxx or a member of Xxxx-XxXxx Group, as the
case may be, and neither the Buyer nor any member of the Buyer’s Group shall be
concerned to see to the application or be answerable for loss or misapplication
of such amount.
19
19.2 Any
payment to be made pursuant to this Agreement or any of the other Transaction
Documents by Xxxx-XxXxx or any member of Xxxx-XxXxx Group shall be made to
the
Buyer’s Account, or such other account as the Buyer shall nominate in writing,
in cash in immediately available funds by electronic transfer in United States
Dollars unless otherwise agreed on the due date for payment. All payments made
or received in currencies other than United States Dollars shall be converted
into United States Dollars at the Exchange Rate. The Buyer agrees to pay each
member of the Buyer Group that part of each payment to which it is entitled.
Receipt of such sums in the relevant bank account shall be an effective
discharge of the obligation of Xxxx-XxXxx or any member of Xxxx-XxXxx Group
to
pay such sums to the Buyer or a member of the Buyer Group, as the case may
be,
and neither Xxxx-XxXxx nor any member of Xxxx-XxXxx Group shall be concerned
to
see to the application or be answerable for loss or misapplication of such
amount.
19.3 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.
20. Announcements
No
Party shall make a public announcement or statement regarding the execution
or
existence 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 any 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 Party
prior to making such disclosure).
21. Confidentiality
21.1 For
the purposes of this clause 21:
| (a) |
Confidential
Information means:
|
| (i) |
(in
relation to the obligations of the Buyer under this clause 21)
any information received or held by the Buyer (or any of its
Representatives) where such information relates to the Xxxx-XxXxx Group
or, prior to Completion, the Company; or
|
| (ii) |
(in
relation to the obligations of Xxxx-XxXxx under this clause 21)
any information received or held by Xxxx-XxXxx (or any of its
Representatives) where such information relates to the Buyer Group
or,
following Completion, the Company; and
|
| (iii) |
information
relating to the provisions and subject matter of, and negotiations
leading
to, this Agreement and any other Transaction
Document;
|
and
includes not only written information but information transferred or obtained
orally, visually, electronically or by any other means; and
| (b) |
Representatives
means, in relation to a Party, its respective Affiliates and the
directors, officers, employees, agents, external legal advisers,
accountants, consultants and financial advisers of that Party and/or
of
its respective Affiliates.
|
20
21.2 Each
of Xxxx-XxXxx and the Buyer undertakes that it shall (and shall procure that
each of its Representatives shall) maintain Confidential Information in
confidence and not disclose that Confidential Information to any person except
as permitted by this clause 21
or envisaged in the Tax Matters or with the prior written approval of the other
Party.
21.3 The
confidentiality obligation under clause 21.2
shall not apply if and to the extent that Xxxx-XxXxx or the Buyer (as the case
may be) can demonstrate that:
| (a) |
such
disclosure is required by law or regulation or by any stock exchange
or
any regulatory, governmental or antitrust body (including, for the
avoidance of doubt, any Tax Authority) having applicable jurisdiction
(provided that, in such circumstances, the disclosing Party shall first
inform the Buyer or Xxxx-XxXxx (as applicable) of its intention to
disclose such information and take into account the reasonable comments
of
the other Party);
|
| (b) |
the
Confidential Information concerned was lawfully in the relevant Party’s
possession or the possession of any of its Representatives (in either
case
as evidenced by written records) and not subject to any obligation
of
secrecy on its part prior to its being received or held as described
in
clause 21.2;
|
| (c) |
the
Confidential Information concerned has come into the public domain
other
than through its fault (or that of its Representatives) or the fault
of
any person to whom such Confidential Information has been disclosed
in
accordance with this clause 21.3;
or
|
| (d) |
the
disclosure is required for the purpose of any arbitral or judicial
proceedings arising out of this Agreement or any other Transaction
Document.
|
21.4 Each
of Xxxx-XxXxx and the Buyer undertakes that it (and its Affiliates) shall only
disclose Confidential Information to Representatives if it is reasonably
required for the purposes of exercising the rights or performing the obligations
under this Agreement or any other Transaction Document and only if the
Representatives are informed of the confidential nature of the Confidential
Information.
21.5 If
this Agreement is terminated in accordance with its terms, the Buyer shall
as
soon as practicable on request by Xxxx-XxXxx:
| (a) |
return
to Xxxx-XxXxx all written documents and other materials relating to
Xxxx-XxXxx or the Company or the subject matter of this Agreement
(including any Confidential Information) which have been provided to
the
Buyer (or its Representatives) by Xxxx-XxXxx (or its Representatives)
without keeping any copies thereof;
|
| (b) |
destroy
all information or other documents derived from such Confidential
Information; and
|
| (c) |
so
far as it is practicable to do so, expunge such Confidential Information
from any computer, word processor or other
device.
|
21.6 The
provisions of this clause 21
shall survive termination and/or Completion of this Agreement.
21
22. Further
Assurance
22.1 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/or 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.
22.2 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/or 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.
22.3 Without
limiting the foregoing the Buyer agrees at the expense of Xxxx XxXxx to procure
that the Company executes any document reasonably required to perfect the
provisions of the Assignment Assumption and Indemnity Agreement, the Agreement
and Plan of Merger and any other agreement to which it is a party.
23. Costs
23.1 Subject
to clause 23.2
and except as otherwise provided in this Agreement, each of Xxxx-XxXxx and
the
Buyer shall be responsible for its own costs, charges and other expenses
(including those of its Affiliates) incurred in connection with the negotiation,
preparation, entering into and Completion of this Agreement and any other
Transaction Document.
23.2 The
Buyer or its Affiliates shall bear all stamp, notarisation fees or other
documentary or transaction duties, stamp duty reserve tax, stamp duty land
tax
and any other transfer taxes arising as a result, or in consequence, of this
Agreement or any other Transaction Document or of their respective
implementation.
24. Notices
24.1 Any
notice pursuant to this Agreement may be given by facsimile transmission
(promptly followed by a hard copy delivered in accordance with this clause
24.1)
or letter delivered to the Party to be served at the address stated in clause
24.3
or such other address as may be given for the purposes of this Agreement by
written notice to the other Parties.
24.2 A
notice given by facsimile transmission shall be deemed to be served on the
first
(1st)
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 24.1.
24.3 The
respective addresses for service are:
22
|
Xxxx-XxXxx:
|
Xxxxxx
Xxxxx
|
|
Xxxxxxxx
Xxxx
|
|
|
Xxxxxx
|
|
|
Xxxxxxxx
|
|
|
XX00
0XX
|
|
|
Fax:
x00 (0)0000 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:
|
Centrica
Canada Ltd
|
|
X/x
Xxxxxxxxxx
|
|
|
Xxxxxxxxxx
Xxxx
|
|
|
Xxxxxxx
|
|
|
Xxxxxxxxx
|
|
|
XX0
0XX
|
|
|
Fax: x00
(0)0000 000000
|
|
|
For
the attention of General Counsel and Company Secretary
|
|
|
Notices
to be copied to:
|
|
|
Centrica
Canada Ltd
|
|
|
Xxxxx
0000
|
|
|
00
Xxxxxxxx Xxxxxx
|
|
|
Xxxxxxx
|
|
|
Xxxxxxx
X0X 656
|
|
|
Fax:
x(000) 000 0000
|
|
|
For
the attention of Senior Vice President and General
Counsel
|
24.4 A
Party may notify the other Party to this Agreement of a change to its name,
relevant addressee, address or fax number for the purposes of this clause
24,
provided that such notice shall only be effective on:
| (a) |
the
date specified in the notice as the date on which the change is to
take
place; or
|
23
| (b) |
if
no date is specified or the date specified is less than five (5) Business
Days after the date on which notice is given, the date which is the
fifth
(5th)
Business Day after notice of any change has been
given.
|
24.5 In
proving such service it shall be sufficient to prove that the envelope
containing such notice was properly addressed and delivered either to the
address shown thereon or into the custody of the postal authorities as a
pre-paid recorded delivery, special delivery or registered post letter, or
that
the notice was transmitted by fax to the fax number of the relevant Party set
out in this clause 24
(or as otherwise notified under it).
24.6 The
parties agree that the provisions of this clause 24
shall not apply to the service of any claim form, application notice, order
or
judgment.
24.7 All
notices, demands, requests, statements, certificates or other communications
under this Agreement shall be in English unless otherwise agreed in
writing.
25. Conflict
with other Agreements
In
the event of any conflict between this Agreement and any other agreement
relating to the Proposed Transaction, this Agreement shall prevail (as between
the Parties to this Agreement and as between any other members of Xxxx-XxXxx
Group and the Buyer Group) unless:
| (a) |
such
other agreement expressly states that it (or any part of it) overrides
this Agreement in any respect and Xxxx-XxXxx and the Buyer are either
also
parties to that other agreement or otherwise expressly agree in writing
that such other agreement shall override this Agreement in that respect;
or
|
| (b) |
the
contrary is expressly provided elsewhere in this
Agreement.
|
26. Entire
Agreement
26.1 This
Agreement and the other Transaction Documents set out the entire agreement
and
understanding between the Parties. This Agreement and the other Transaction
Documents supersede all prior agreements, understandings or arrangements
(whether oral or written) relating to the sale and purchase of the Shares which
shall cease to have any further force or effect. It is agreed that:
| (a) |
neither
Party has entered into this Agreement and the other 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 or any of the other Transaction
Documents;
|
| (b) |
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 or any other Transaction
Document shall be for breach of this Agreement or the relevant Transaction
Document to the extent of all other rights and remedies;
and
|
24
| (c) |
except
for any liability which a Party (or any of its Connected Persons) has
under or in respect of any breach of this Agreement or any of the other
Transaction Documents, 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)
fraudulent misrepresentation.
26.2 The
agreements and undertakings in this clause 26
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 is
respective Connected Persons.
27. Waivers,
Rights and Remedies
Except
as otherwise provided in this Agreement, no failure or delay by any Party in
exercising any right or remedy provided by law or under or pursuant to this
Agreement or any other Transaction Document shall impair such right or remedy
or
operate or be construed as a waiver or variation of it or preclude its exercise
at any subsequent time and no single or partial exercise of any such right
or
remedy shall preclude any further exercise of it or the exercise of any other
remedy.
28. Contracts
(Rights of Third Parties) Xxx 0000
28.1 Each
Party undertakes to the other Party that Connected Persons shall have the right
to enforce the terms of clause 26
under the Contracts (Rights of Third Parties) Xxx 0000.
28.2 Except
as provided in clause 28.1,
a person who is not a Party to this Agreement shall have no right under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce any of its
terms.
29. General
29.1 This
Agreement may be executed in any number of counterparts and by the Parties
on
separate counterparts, each of which is an original but all of which taken
together shall constitute one and the same instrument.
29.2 No
amendment, variation or waiver of this Agreement or any other Transaction
Document shall be valid unless it is in writing and duly executed by or on
behalf of the Parties. The expression variation
shall
include any variation, supplement, deletion or replacement howsoever
effected.
Unless expressly agreed, no variation shall constitute a general waiver of
any
provision of this Agreement, nor shall it affect any rights, obligations or
liabilities under or pursuant to this Agreement which have already accrued
up to
the date of variation, and the rights and obligations under or pursuant to
this
Agreement shall remain in full force and effect except and only to the extent
that they are so varied.
29.3 Each
of the provisions of this Agreement and any other Transaction Document is
severable. If any such provision is held to be or becomes illegal, invalid
or
unenforceable in any respect under the law of any jurisdiction:
25
| (a) |
so
far as it is illegal, invalid or unenforceable, it shall be given no
effect and shall be deemed not to be included in this Agreement or
the
relevant Transaction Document but it shall not affect or impair the
legality, validity or enforceability in that jurisdiction of any other
provisions of this Agreement or the relevant Transaction Document (or
of
the provisions of this Agreement or that Transaction Document in any
other
jurisdiction); and
|
| (b) |
the
Parties shall use all reasonable endeavours to replace it with a valid
and
enforceable substitute provision or provisions but differing from the
replaced provision as little as possible and the effect of which is
as
close to the intended effect of the illegal, invalid or unenforceable
provision.
|
29.4 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.
29.5 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
either the Buyer or Xxxx-XxXxx shall have the right to assign, transfer or
otherwise dispose of its rights under this Agreement to any of its Affiliates
without the consent of the other.
29.6 This
Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the Parties.
29.7 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.
29.8 Nothing
in this Agreement shall be read or construed as excluding any liability or
remedy in respect of fraud.
29.9 Buyer
covenants and agrees to use and disclose Personal Information only for those
purposes for which the Personal Information was initially collected from or
in
respect of the individual to which such Personal Information relates,
unless:
| (a) |
Xxxx-XxXxx
or Buyer has first notified such individual of such additional purpose,
and where required by the Personal Information Protection and Electronic
Documents (Canada) Act and the Albertan provincial Personal Information
Protection Act (Alberta) or by any subordinate legislation or regulations
made pursuant to such Acts (the “Privacy Acts”), obtained the consent of
such individual to such additional purpose;
or
|
| (b) |
such
use or disclosure is permitted or authorized by the Privacy Acts, without
notice to, or consent from, such
individual.
|
26
30. Governing
law, jurisdiction and Service of Process
30.1 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.
30.2 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.
30.3 Each
Party irrevocably waives any objections to the jurisdiction of any court
referred to in this clause.
30.4 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.
27
Signed
for and on behalf of
KM
DENMARK OVERSEAS APS
XXXXXXX
XXXX
Signed
for and on behalf of
THE
BUYER
XXXXXXX
X XXXXXXX
28
