DATED 30th day of November 2001
SOUTHERN PETROLEUM NO LIABILITY
('SELLER')
AND
ENERGY EXPLORATION NZ LIMITED
('SELLER GUARANTOR')
AND
SWIFT ENERGY NEW ZEALAND LIMITED (OR NOMINEE)
('BUYER')
AND
SWIFT ENERGY COMPANY
('BUYER GUARANTOR')
AND
ENERGY EXPLORATION NZ LIMITED
('EENZL')
- --------------------------------------------------------------------------------
SOUTHERN PETROLEUM (NEW ZEALAND) EXPLORATION LIMITED SHARE SALE
AND PURCHASE AGREEMENT
- --------------------------------------------------------------------------------
INDEX
1 DEFINITIONS............................................................................................2
2 INTERPRETATIONS........................................................................................8
3 SALE AND PURCHASE......................................................................................9
3.1 SALE AND PURCHASE...................................................................................9
3.2 DIVIDENDS...........................................................................................9
3.3 PURCHASE PRICE......................................................................................9
3.4 PAYMENT.............................................................................................9
3.5 EXISTING EMPLOYEES..................................................................................9
3.6 LOSS OFFSETS........................................................................................9
3.7 TAWN DEEP OPTION...................................................................................10
3.8 RIMU OPTION........................................................................................10
3.9 OPERATORSHIP.......................................................................................10
3.10 NOMINATION.........................................................................................10
3.11 NEW PLYMOUTH LEASE OBLIGATIONS.....................................................................11
4 CONDITIONS............................................................................................11
4.1 CONDITIONS PRECEDENT TO COMPLETION.................................................................11
4.2 RESPONSIBILITY.....................................................................................12
4.3 TERMINATION........................................................................................12
5 PERIOD BEFORE COMPLETION..............................................................................12
5.1 CARRYING ON OF BUSINESS............................................................................12
5.2 ACCESS TO WAIHAPA ASSETS, NGAERE ASSETS, EENZL ASSETS AND INFORMATION..............................14
5.3 PRE-COMPLETION DATE................................................................................14
5.4 TAX................................................................................................14
6 BUYER GUARANTOR.......................................................................................14
6.1 GUARANTEE..........................................................................................14
6.2 LIABILITY UNAFFECTED BY OTHER EVENTS...............................................................15
6.3 CONTINUING GUARANTEE AND INDEMNITY.................................................................15
6.4 WARRANTIES BY BUYER GUARANTOR......................................................................15
7 COMPLETION............................................................................................15
7.1 PLACE AND DATE OF COMPLETION.......................................................................15
7.2 DELIVERY OF DOCUMENTS BY SELLER....................................................................15
7.3 REPAYMENT OF ADVANCES..............................................................................17
7.4 POST-16 NOVEMBER NET REVENUES AND ADJUSTMENT TO PURCHASE PRICE.....................................17
7.5 BUYER'S OBLIGATIONS AT COMPLETION..................................................................17
7.6 COMPLIANCE.........................................................................................17
7.7 ALTERNATIVE BASIS FOR COMPLETION...................................................................18
7.8 POST COMPLETION....................................................................................18
7.9 OTHER DOCUMENTS....................................................................................18
7.10 NAME CHANGE........................................................................................18
7.11 INCOME TAX RETURN..................................................................................19
7.12 METERING OBLIGATIONS...............................................................................19
7.13 NGC GAS AGREEMENT..................................................................................19
8 INDEMNITIES...........................................................................................19
8.1 SELLER'S INDEMNITY.................................................................................19
8.2 BUYER'S INDEMNITY..................................................................................19
8.3 CONSEQUENTIAL LOSS.................................................................................20
8.4 EXCLUDED LIABILITIES...............................................................................20
8.5 LIMITATION ON CLAIMS...............................................................................20
8.6 NOTICE OF CIRCUMSTANCES............................................................................22
8.7 CONDUCT OF CLAIMS..................................................................................22
8.8 CONTINUING INDEMNITIES AND SURVIVAL OF INDEMNITIES.................................................22
8.9 INPUT TAX CREDITS..................................................................................23
9 WARRANTIES............................................................................................23
9.1 SELLER.............................................................................................23
9.2 BUYER..............................................................................................23
9.3 NO WARRANTY UNLESS EXPRESSLY INCLUDED..............................................................23
9.4 KNOWLEDGE..........................................................................................25
9.5 DURATION...........................................................................................25
10 PROPERTY..............................................................................................25
11 COSTS, EXPENSES AND DELAYED PAYMENT...................................................................25
11.1 COSTS AND EXPENSES.................................................................................25
11.2 LATE INTEREST......................................................................................25
12 TAX...................................................................................................25
12.1 INDEMNITY..........................................................................................25
12.2 REFUNDS............................................................................................28
12.3 GROSS UP...........................................................................................28
12.4 REFUND OF GROSS UP.................................................................................28
12.5 LIMITATION ON CLAIMS...............................................................................29
13 CONFIDENTIALITY AND ANNOUNCEMENTS.....................................................................29
13.1 AGREED ANNOUNCEMENTS...............................................................................29
13.2 LEGAL REQUIREMENTS.................................................................................29
13.3 PARTIES TO KEEP CONFIDENTIAL.......................................................................29
13.4 PERMITTED DISCLOSURE...............................................................................30
13.5 ADVISERS...........................................................................................30
13.6 RESPONSIBILITY FOR THIRD PARTIES...................................................................31
13.7 RESPONSIBILITY FOR AFFILIATE.......................................................................31
13.8 TERMINATION........................................................................................31
13.9 SURVIVAL OF CLAUSE 13..............................................................................31
14 GENERAL...............................................................................................31
14.1 NOTICES............................................................................................31
14.2 GOVERNING LAW AND JURISDICTION.....................................................................33
14.3 ARBITRATION........................................................................................33
14.4 WAIVERS............................................................................................33
14.5 VARIATION..........................................................................................33
14.6 ASSIGNMENT.........................................................................................33
14.7 ENTIRE AGREEMENT...................................................................................34
14.8 FURTHER ACTIONS....................................................................................34
14.9 PRIVITY............................................................................................34
15. SELLER GUARANTOR......................................................................................34
15.1 GUARANTEE..........................................................................................34
15.2 LIABILITY UNAFFECTED BY OTHER EVENTS...............................................................34
15.3 CONTINUING GUARANTEE AND INDEMNITY.................................................................34
15.4 WARRANTIES BY SELLER GUARANTOR.....................................................................35
16. NO CONFLICT...........................................................................................35
THIS AGREEMENT is made on the 30th day of November 2001
BETWEEN
SOUTHERN PETROLEUM NO LIABILITY ("Seller")
AND
ENERGY EXPLORATION NZ LIMITED ("Seller Guarantor")
AND
SWIFT ENERGY NEW ZEALAND LIMITED (or nominee) ("Buyer")
AND
SWIFT ENERGY COMPANY ("Buyer Guarantor")
AND
ENERGY EXPLORATION NZ LIMITED ("EENZL")
WHEREAS:
A. Seller owns all the Shares in the Company.
B. The Company owns the Waihapa Assets, the Ngaere Assets and the EENZL
Assets.
C. Prior to the Completion Date the Company will have acquired the EENZL
Assets pursuant to the EENZL Asset Sale and Purchase Agreement ("EENZL
Agreement") and prior to the Completion Date will have sold its shares
in Southern Petroleum (Ohanga) Limited pursuant to the Southern
Petroleum (Ohanga) Share Sale Agreement.
D. Seller has provided additional capital to ensure that the Company had
sufficient funds to discharge its obligations under the EENZL
Agreement and the Southern Petroleum (Ohanga) Share Sale Agreement.
E. Seller agrees to sell and Buyer agrees to buy the Shares on the terms
and conditions set out in this Agreement.
F. Seller Guarantor agrees to guarantee the performance of Seller's
obligations under this Agreement.
G. Buyer Guarantor agrees to guarantee the performance of Buyer's
obligations under this Agreement and in respect of Buyer's obligations
arising in respect of the Shares.
1
The Parties AGREE:
1 DEFINITIONS
1.1 Unless the context otherwise requires and subject to Clause 1.2 and 2,
any word or expression defined in the Petroleum Legislation has the
same meaning herein.
1.2 Unless otherwise required by the context or subject matter, subject to
Clause 2:
"Abandonment Costs" means all costs, charges, expenses, liabilities,
Taxes and obligations whatsoever associated with the abandonment of
all production facilities and pipelines included with the Waihapa
Assets, the Ngaere Assets, and the EENZL Assets to standards required
by the Petroleum Legislation consistent with best international
industry practice, including without limitation plugging and
abandoning wells, removing plant, equipment and infrastructure and
restoring and rehabilitating land and dealing with any environmental
or other claims and liabilities, regardless of when such costs,
charges, expenses, liabilities, Taxes and obligations are incurred;
"Affiliate" means in relation to any Party, any company which is
directly or indirectly affiliated with that Party and in the case of
Seller will include Koninklijke Nederlandsche Petroleum Maatschappij,
a Netherlands company, the "Shell" Transport and Trading Company
p.l.c., an English company and any company which is for the time being
directly or indirectly affiliated with these two companies or either
of them. For the purposes of this definition, a particular company is:
(a) directly affiliated with a company or companies if the
latter beneficially holds 50% or more of the shares carrying
the right to vote at a shareholders meeting (or its
equivalent) of the particular company; or
(b) indirectly affiliated with a company or companies ("the
parent company or companies") if a series of companies can
be specified, beginning with the parent company or companies
and ending with the particular company, so related that each
company in the series, except the parent company or
companies, is directly or indirectly affiliated with one or
more companies earlier in the series;
"Agreed Rate" means the average 30 day rate of interest quoted on the
page captioned BKBM of the Reuters screen at 11:00am (New Zealand
time) on the first Business Day of each month or part month for which
interest is to be calculated, as an average of those daily rates for
the relevant period;
"Ahuroa Permit" means Petroleum Mining Licence 38139 issued by the
Minister on 17 November 1987:
"Bank Account" means:
The National Bank of New Zealand Wellington Branch at Chase Manhattan
Bank One Chase Manhattan Plaza New York 10081 Account Number:
001-1-941473 Reference: SHELLN-USD00
"Business Day" means a day other than a Saturday or Sunday on which
trading banks are open for general banking business in Wellington, New
Zealand;
2
"Commercial Contracts" means the contracts listed in Schedule 3;
"Company" means Southern Petroleum (New Zealand) Exploration Limited;
"Companies Act" means the Companies Act 1993;
"Completion" means completion of the sale and purchase of the Shares
under Clause 7;
"Completion Date" means the later of:
(a) the day falling three (3) Business Days after Seller advises
Buyer that the conditions in Clause 4.1 are satisfied; or
(b) 23.59 hours on 31 December 2001;
"Confidentiality Agreement" means the agreement dated 6 June 2001
between an Affiliate of Seller and Buyer, in respect of the
confidentiality of information provided by or on behalf of such
Affiliate to Buyer for the purpose of Buyer evaluating the Waihapa
Assets, the Ngaere Assets, the EENZL Assets and other assets of the
Company and its Affiliates;
"Data Room" means the room at the offices of an Affiliate of Seller
accessed by Buyer or any of its advisers or representatives, or such
other place as information was provided or questions answered by or on
behalf of Seller or the Company, as part of Buyer's due diligence
investigations on the Waihapa Assets, the Ngaere Assets, the EENZL
Assets and other assets of the Company and its Affiliates;
"Disclosure Materials" means:
(a) this Agreement;
(b) all information and data provided in the Data Room;
(c) all information available by searches of the public
registers in New Zealand located at the Companies Office,
the Ministry of Economic Development, Land Information
Memoranda from local authorities, and the Commerce
Commission Public Register ; and
(d) all other information and data in connection with the
transaction contemplated by this Agreement provided or
communicated in writing, (whether electronically or any
other manner) to Buyer, its Affiliates, representatives,
advisers or employees by Seller, the Company or any of their
Affiliates or any of their representatives, advisers or
employees or any other person, before the date of this
Agreement;
"Distribution" has the meaning ascribed to that term in the Companies
Act 1993;
"Documents" mean any deed of assignment, assumption, covenant,
novation or other agreement required to effect the assignment and
transfer of the Shares;
"EENZL Agreement" means the asset purchase agreement relating to the
Company's purchase of the EENZL Assets executed and a copy of which is
attached in Appendix A;
"EENZL Assets" means EENZL's interest in and derived from or related
to the Permits and in and under the TAWN Joint Venture Operating
Agreement, and being the subject of the EENZL Agreement;
3
"Effective Date" means 1 January 2001;
"Encumbrance" means any overriding royalty interest, carried interest,
net profit interest, mortgage, charge, pledge, bill of sale, lien,
production payment or agreement for the sale of production or forward
sale of production, or other material adverse contractual liability or
obligation attached to the Waihapa Assets, the Ngaere Assets, EENZL
Assets or the Shares, including but not limited to any agreement to
grant or create any of the above;
"Environmental Claims" means all liabilities, obligations, costs,
damages, fines, penalties, actions, judgements, suits, demands,
proceedings, disbursements, claims and expenses whatsoever arising
directly or indirectly as a result of:
(a) the use of any land associated with the Waihapa Assets, the
Ngaere Assets and/or the EENZL Assets by Buyer or by the
Company after the Effective Date;
(b) any remediation, restoration or amelioration activities
being taken or required in respect of land or waters
associated with the Waihapa Assets, the Ngaere Assets and/or
the EENZL Assets or the Company, as a result of any
pollution or contamination (no matter when or by whom such
pollution or contamination was caused);
(c) any remediation, restoration or amelioration activities
being taken or required in respect of any other property as
a result of any pollution or contamination on, or which
emanated from, any land or waters associated with the
Waihapa Assets, the Ngaere Assets and/or the EENZL Assets or
the Company (no matter when or by whom such pollution or
contamination was caused); and
(d) a claim of any description whatsoever made by a third party
which arises directly or indirectly as a result of any
pollution or contamination on, or which emanated from, any
land or waters associated with the Ngaere Assets, Waihapa
Assets, the EENZL Assets and/or the Company (no matter when
or by whom such pollution or contamination was caused);
"Execution Date" means 30 November 2001;
"Gas Export Pipeline" means the Company's 96.76% indirect interest
(following completion of the EENZL Agreement) in the gas export
pipeline which is currently owned by the TAWN Joint Venturers and runs
between the Waihapa Production Facilities and the New Plymouth Power
Station;
"GST" means goods and services tax imposed under the Goods and
Services Tax Act 1985 ("GST Act");
"Governmental Agency" means any government or governmental,
semi-governmental, administrative, fiscal or judicial body,
department, commission, authority, tribunal, agency or entity;
"Information" means geological, geophysical or technical information
within the custody or control of Seller being information that relates
to the presence, absence, extent or production of hydrocarbon deposits
in the areas of the Permits and which has been obtained from the
exploration and prospecting for or production of Petroleum within the
area of the Permits including, without limitation, the books, records,
seismic (excluding the TAWN `3D' seismic data) and interpretative
data, notes, drawings, maps and other information (in various media)
related to the Permits;
"Interim Period" means the period on and from the Effective Date to,
and including, the Completion Date;
4
"Inventory" means the Company's 100% interest in the inventory listed
in Appendix G;
"Kaimiro Licence" means Petroleum Mining Licence 38091 issued by the
Minister on 4 April 1984;
"Mangahewa Field Asset Sale and Purchase Agreement" means the
agreement to be entered into on or before the date of this Agreement
between Energy Exploration NZ Limited and Southern Petroleum (Ohanga)
Limited relating to the sale of the participating interest in the
Mangahewa Permit and associated assets;
"Mangahewa Permit" means Petroleum Mining Permit 38150 issued by the
Minister on 1 May 2001;
"Minister" means the Minister of Energy or any other Minister for the
time being exercising the powers conferred on the Minister of Energy
by the Petroleum Act 1937 or the Crown Minerals Act 1991;
"Net Revenue" means the amount of the net revenues of the Company
(which for the purposes of this Agreement includes the net revenues of
the EENZL Assets) calculated in accordance with the methodology
applied to calculate "Total Due to Buyer re Interim Period" in
Schedule 7;
"New Plymouth Lease Obligations" means the obligations described in
the letter annexed in Appendix H;
"New Shares" means the 173,795,000 ordinary shares in the capital of
the Company to be issued to Seller and subsequently transferred to
Buyer together with such other additional shares as are necessary to
provide the Company with sufficient funding in combination with the
Company's other sources of finance including the dividend to be paid
to the Company by Southern Petroleum (Ohanga) Limited (utilising the
proceeds of the sale of assets under the Mangahewa Field Asset Sale
and Purchase Agreement) and the proceeds arising on completion of the
Southern Petroleum (Ohanga) Share Sale Agreement), to:
(a) repay existing intercompany debt;
(b) meet the Company's obligation to pay the purchase price for
the EENZL Assets under the EENZL Agreement; and
(c) meet Seller's obligations under this Agreement;
"Ngaere Assets" means the Company's 36.67% participating interest in
the Ngaere Permit, and the TAWN Joint Venture Operating Agreement
which it held prior to acquiring the EENZL Assets;
"Ngaere Permit" means Petroleum Mining Licence 38141 issued by the
Minister on 4 May 1988;
"Ngatoro Permit" means Petroleum Mining Permit 38148 issued by the
Minister on 23 December 1996;
5
"Ngatoro Spur Line" means the Petroleum liquids pipeline currently
owned by the TAWN Joint Venturers used for the transportation of
Petroleum liquids from the Kaimiro Permit and the Ngatoro Permit to
the Oil Export Pipeline;
"NGC Gas Agreement" has the meaning ascribed to that term in clause
7.13;
"Oil Export Pipeline" means the oil export pipeline which runs between
the Waihapa Production Facilities and the Omata Tank Farm and which is
currently owned by the TAWN Joint Venturers and includes the Ngatoro
Spur Line;
"Omata Tank Farm" means the crude oil and condensate storage facility
currently owned by an Affiliate of Seller and situated at Omata, New
Plymouth;
"Party" means a party to this Agreement;
"Permits" means the Ahuroa Permit, the Ngaere Permit, the Tariki
Permit and the Waihapa Permit;
"Petroleum" has the meaning given in the Crown Minerals Act 1991;
"Petroleum Legislation" means the Petroleum Act 1937 and the Crown
Minerals Act 1991 as well as all regulations, administrative
directions, programmes and determinations made under either or both of
those Acts;
"Post-16 November Net Revenues" means the Net Revenue for the calendar
month of November 2001 less NZ$1,964,959 plus all Net Revenue from and
including 1 December 2001 until Completion;
"Purchase Price" means the cash consideration of US$54,781,000;
"Rimu Assets" means Buyer's 90% interest in Petroleum Exploration
Permit 38719 and Buyer's interest in the Petroleum Mining Permit
application relating to Petroleum Exploration Permit 38719 (or any
resulting Petroleum Mining Permit (if granted)), and 100% of the Rimu
Production Facilities;
"Rimu Confidentiality Agreement" means the agreement dated 17 August
2001 between Buyer and an Affiliate of Seller (as varied by the
agreement dated 27 November 2001) in respect of the confidentiality of
information provided by Buyer for the purpose of Seller's evaluation
of the Rimu Assets;
"Rimu Production Facilities" means the full production and processing
facilities owned by Swift Energy New Zealand Limited located within
the area of Petroleum Exploration Permit 38719 designed to produce
specification gas, specification propane and butane, and stabilised
crude;
"Shares" means all of the shares in the Company comprising the
ordinary shares set out in Schedule 6 and the New Shares to be issued
by the Company to fund its obligations under the EENZL Agreement;
"Southern Petroleum (Ohanga) Share Sale Agreement" means the agreement
entered into on or about the date of this Agreement between the
Company and relating to the sale of shares in Southern Petroleum
(Ohanga) Limited, executed and attached as Appendix B;
6
"Tariki Permit" means Petroleum Mining Licence 38138 issued by the
Minister on 17 November 1987;
"TAWN Deep Option" means the option agreement described in clause 3.7;
"TAWN Deep Operations Agreement" means the operating agreement to be
agreed between the Parties and executed as contemplated in accordance
with clause 4.1(f);
"TAWN Deep Option Reservoirs" means that part of the land and parts of
the Permits that are stratagraphically described as every formation
underlying the base of Tikorangi limestone within (the Waihapa Permit
and the Ngaere Permit) and every formation underlying the base Tariki
sandstone within the Tariki Permit and the Ahuroa Permit;
"TAWN Joint Venture" means the joint venture formed and existing
pursuant to the TAWN Joint Venture Operating Agreement;
"TAWN Joint Venture Operating Agreement" means the Joint Venture
Operating Agreement dated 14 April 1986 by the then participants in
Petroleum Prospecting Licences 38034 and now applicable to the
Permits;
"TAWN Joint Venturers" means the parties from time to time to the TAWN
Joint Venture Operating Agreement;
"TAWN Land" means the Company's 96.76% indirect interest (following
completion of the EENZL Agreement) in those real property rights and
titles held by the Company or its Affiliates relating to the Permits
through its participation in the TAWN Joint Venture Operating
Agreement, as set out in Schedule 2;
"TAWN Operator" means the operator of the TAWN joint venture pursuant
to the TAWN Joint Venture Operating Agreement, currently being EENZL,
acting in that capacity and not as holder of a participating interest
in the TAWN Joint Venture;
"Tax Act" means the Income Tax Act 1994;
"Tax" includes any and all forms of tax (both domestic and foreign
imposed by any level of government or any public body) and in
particular (but without limitation):
(a) income tax, goods and services tax, fringe benefit tax,
stamp duty, land tax, gift duty, dividend withholding
payments, Energy Resources Levy (if applicable), government
royalties and excess retention tax;
(b) all other statutory or governmental impositions, dues,
duties, levies, tariffs, charges, rates or local taxes; and
(c) all charges, interest, penalties, fines, additional tax,
costs and expenses incidental and relating to or arising in
connection with the re-assessment of any tax or to the
negotiation of any closing of any dispute as to the
liability of any person for any tax, or any actual or
threatened taxation claim or proceeding taken in connection
with any tax.
"Taxation" and "Taxes" will be construed accordingly;
7
"US$" means the lawful currency of the United States of America;
"Waihapa Assets" means the Company's 36.67% participating interest in
the Waihapa Permit and the TAWN Joint Venture Operating Agreement
which it held prior to acquiring the EENZL Assets;
"Waihapa Permit" means Petroleum Mining Licence 38140 issued by the
Minister on 17 November 1987;
"Waihapa Production Facilities" means the facilities owned by the TAWN
Joint Venturers including but not limited to the Tariki/Ahuroa gas
plant, located within the area of the Waihapa Permit and currently
used for Petroleum production, processing, gathering, treatment,
storage and transportation operations; and
"Wilful Misconduct" means any act or omission done or omitted with
deliberate or reckless disregard for reasonably foreseeable and
harmful consequences, but not including any error of judgement,
mistake, act or omission, whether negligent or not, by a Party or any
Affiliate of a Party or any director, officer, employee or agent of a
Party or an Affiliate of a Party.
2 INTERPRETATIONS
In this Agreement, unless the context otherwise requires:
(a) headings are for convenience only and do not affect the
interpretation of this Agreement;
(b) words importing the singular include the plural and vice
versa;
(c) words importing a gender include any gender;
(d) other parts of speech and grammatical forms of a word or
phrase defined in this Agreement have a corresponding
meaning;
(e) a reference to a Clause or Schedule is a reference to a
clause of or schedule to this Agreement;
(f) a reference to this Agreement includes the Recitals and
Schedules;
(g) a reference to any law, statute, regulation, proclamation,
ordinance or by-law includes all statutes, regulations,
proclamations, ordinances or by-laws amending, consolidating
or replacing them, and a reference to a law or statute
includes all regulations, proclamations, programmes,
ordinances and by-laws issued under that law or statute;
(h) a reference to a document or permit includes any agreement
in writing, or any certificate, notice, instrument or other
document of any kind and any amendment or supplement to or
replacement or novation of them;
(i) a reference to a party to a document includes that party's
successors and permitted assigns;
(j) where the day on or by which any thing is to be done is not
a Business Day, that thing must be done on the next
succeeding Business Day;
(k) no rule of construction applies to the disadvantage of a
Party because that Party was responsible for the preparation
of this Agreement or any part of it; and
(l) all references to "$" or "Dollars" are references to New
Zealand dollars unless otherwise specified.
8
3 SALE AND PURCHASE
3.1 Sale and Purchase
Seller agrees to sell and Buyer agrees to buy the legal and beneficial
title to the Shares free from any Encumbrances and with the benefit of
all rights attaching to the Shares on or after the date of this
Agreement, on the terms and conditions set out in this Agreement.
3.2 Dividends
Buyer shall be entitled to all dividends payable on the Shares as from
the Effective Date.
3.3 Purchase Price
Buyer shall pay to Seller the Purchase Price in the manner and at the
time as provided for in this Agreement.
3.4 Payment
The Purchase Price shall be paid at Completion.
3.5 Existing Employees
To the extent any person employed in connection with the Waihapa
Assets, the Ngaere Assets, the EENZL Assets or the Kaimiro, McKee and
Mangahewa petroleum mining licences/permits is not currently employed
by the Company, Buyer or an Affiliate of Buyer will prior to the
Completion Date make to each employee selected by Buyer or an
Affiliate of Buyer and who is employed in connection with the Waihapa
Assets, the Ngaere Assets, the EENZL Assets, or the Kaimiro, McKee and
Mangahewa petroleum mining licences/permits both in the field and the
local office a written offer, in form and substance acceptable to
Seller, which offer will remain open for a reasonable period, offering
to employ each such employee with effect on and from the Completion
Date on terms and conditions of employment at least equivalent to the
existing terms and conditions (including superannuation and redundancy
entitlements or benefits and recognition of continuity of service) and
in a manner which does not result in Seller or its Affiliates being
liable to pay more than 70% of the total redundancy or severance
payments arising out of termination of those employees to whom offers
are not made or who do not accept such offers and who are made
redundant. Buyer or an Affiliate of Buyer will be liable for and
indemnify Seller and its Affiliates in respect of not more than 30% of
the total redundancy or severance payments referred to above.
3.6 Loss Offsets
(a) Seller or any of its Affiliates is entitled to elect to
offset against the net income of Seller or such Affiliate
any income tax losses of the Company up to the Completion
Date which would otherwise be eliminated as a result of this
Agreement.
(b) Buyer shall co-operate and procure the Company to co-operate
with Seller in the provision of reasonable assistance in
that regard.
9
3.7 TAWN Deep Option
Seller will, and Buyer agrees to procure the Company to, negotiate the
terms of a "put" option agreement, whereby the Company shall have the
right exercisable at any time within one year after Completion to
"put" 50% of Company's 96.76% interest (following completion of the
EENZL Agreement) in the TAWN Deep Option Reservoirs to Seller or a
Seller Affiliate and whereby Seller will have the right within one
year after receiving the "put" notice from Buyer to take up all, or
part, or none of such interest on terms and conditions to be agreed by
the Parties including the transfer by Seller or Seller Affiliate of
the TAWN `3D' seismic data (but with an exercise price of US$1 to be
paid and the transfer of the TAWN `3D' seismic data to take place
within 1 Business Day of the exercise of such "put" option regardless
of whether any such interest is transferred). If the interest is put
it will be on ground floor terms meaning no promote, no historical
cost reimbursement or other financial burden. The terms of the
operating arrangement will require unanimity between Company and
Seller as to any work programme or expenditures in respect of the TAWN
Deep Option Reservoirs. If Seller accepts the put the interest will be
held preferably by way of direct equity participation in the relevant
portion of the Permits but if this is not possible then a contractual
structure to achieve the required structure will be agreed.
3.8 Rimu Option
(a) Buyer grants Seller an exclusive option to acquire an
interest in the Rimu Assets, in the form attached in
Appendix I, including the area of mutual interest provision,
but subject to paragraph (b) below, so that on the exercise
of the option by Seller, Seller shall acquire a 25% interest
in the underlying permits and associated surface facilities
of the relevant assets and bring the area of mutual
provision into effect.
(b) The Parties agree that the terms and conditions relating to
the purchase of those permits and allocated surface
facilities of the relevant Rimu Assets are expected to be
substantially in the form attached to the "Exclusive Option
to Purchase an Interest in the Rimu Facilities" in Appendix
I, however the Parties specifically reserve their positions
in regard to those terms and conditions, particularly those
relating to liabilities, warranties and taxation which are
yet to be agreed.
3.9 Operatorship
On or before the Completion Date Seller will procure the appointment
of the Company as TAWN Operator.
3.10 Nomination
(a) Notwithstanding any provision contained in this Agreement to
the contrary, Buyer may nominate another company or party to
complete Buyer's obligations under this Agreement, and to
give effect to such nomination. Buyer shall advise Seller of
the company which Buyer so nominates, provided that Buyer
shall not be entitled to nominate any company that at both
the time of nomination and completion, is not a wholly owned
subsidiary of Swift Energy Company.
(b) Notwithstanding any nomination by Swift Energy New Zealand
Limited pursuant to the provisions of clause 3.10(a), Swift
Energy New Zealand Limited shall at all times
unconditionally guarantee the due performance of all the
terms and conditions of this Agreement, and the failure to
perform any of the terms and conditions of this Agreement by
such nominee shall not release or relieve Swift Energy New
Zealand Limited from any liability pursuant to this
Agreement.
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3.11 New Plymouth Lease Obligations
Buyer agrees to assume the lease obligations that will result from
exercise by Buyer of the first right of refusal described in the
letter annexed in Appendix H.
4 CONDITIONS
4.1 Conditions Precedent to Completion
The respective obligations of Seller to sell and Buyer to purchase the
Shares are conditional upon all the following occurring prior to
Completion:
(a) the dealings evidenced by the EENZL Agreement being approved
as may be required under the Petroleum Legislation on terms
that are acceptable to Buyer and Seller;
(b) execution of all Documents required under Clause 7.2 by
Seller, Buyer, the Company and all of the parties required
under the relevant Commercial Contracts;
(c) receipt of required waivers of pre emptive rights or failure
by the other TAWN Joint Venturers to exercise such
pre-emptive rights within the time limits required by the
TAWN Joint Venture Operating Agreement under the TAWN Joint
Venture Operating Agreement;
(d) the transactions evidenced by this Agreement being approved
(or not objected to) on terms that are acceptable to Buyer
in accordance with the provisions of the Overseas Investment
Act 1973, if the transaction is subject to the provisions of
that legislation, provided that in any event where a
relevant consent imposes conditions that:
(i) the consent will lapse if the Shares have not been
acquired within 12 months of the consent; and/or
(ii) that the activities of the Company be restricted
to the present business of the Company,
then these conditions shall be deemed to be acceptable to
Buyer;
(e) execution and completion of the EENZL Agreement and the
Southern Petroleum (Ohanga) Share Sale Agreement which
provides for the result that the Company at the Completion
Date to be beneficially entitled to a 96.76% interest in the
Ngaere Assets, the Waihapa Assets, the EENZL Assets, the
Commercial Contracts, Gas Export Pipeline, the Ngatoro Spur
Line, Oil Export Pipeline, TAWN Joint Venture, TAWN Land,
the Tawn Deep Option Reservoirs and the Waihapa Production
Facilities;
(f) an agreement being concluded by the TAWN Joint Venturers and
the holder(s) of the Kaimiro Licence and the Ngatoro Permit
formally granting rights of access to and capacity on the
Oil Export Pipeline for production from the areas of the
Kaimiro Licence and the Ngatoro Permit at an agreed tariff
as specified in the Commercial Contracts and otherwise on
terms that are acceptable to Buyer and Seller;
(g) execution of the TAWN Deep Option Agreement, the TAWN Deep
Operations Agreement and the Rimu Option referred to in
clauses 3.7 and 3.8;
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(h) documents evidencing the appointment of the Company as the
TAWN Operator;
(i) Seller arranging with the Inland Revenue Department for the
TAWN Joint Venture to have its own GST registration from the
Completion Date on terms reasonably acceptable to Buyer and
to Seller;
(j) Seller being satisfied that no material liability, whether
actual or contingent, exists in respect of the Company's own
GST registration.
4.2 Responsibility
The conditions set out in Clause 4.1 are for the benefit of each of
Seller and Buyer and cannot be unilaterally waived. Buyer must use all
reasonable endeavours to fulfil the conditions in Clause 4.1(a), (b),
(d) and (g) in a timely manner and Seller must provide all reasonable
assistance. Seller must use all reasonable endeavours to fulfil the
conditions in Clause 4.1(a), (b), (c), (e), (f), (g), (h), (i) and (j)
in a timely manner and Buyer must provide all reasonable assistance.
4.3 Termination
(a) The Party obliged to seek satisfaction of a condition
contained in Clause 4.1 must keep the other Party regularly
informed on the progress of the satisfaction of that
condition and within 2 Business Days of satisfaction of that
condition give notice to the other Party of that fact. If a
Party is unable to satisfy a condition contained in Clause
4.1, it shall immediately notify the other Party.
(b) If Completion does not occur within 120 Days after the date
of this Agreement or such later time as the Parties may
agree in writing, either Seller or Buyer may terminate this
Agreement by written notice to the other and no Party will
be under any further liability to the others, except in
respect of any antecedent breaches of this Agreement.
5 PERIOD BEFORE COMPLETION
5.1 Carrying on of Business
Seller shall, and shall procure that the Company shall, between the
date of this Agreement and the Completion Date, subject to obligations
of confidentiality where relevant:
(a) inform and consult with Buyer and obtain the prior written
consent of Buyer on all material matters relating to the
operation of the Ngaere Assets, the Waihapa Assets and the
EENZL Assets and, in particular, Seller will consult with
Buyer before it:
(i) approves any new work programme and budget of
operations; or
(ii) approves any drilling operations which are not at
the date of this Agreement approved or identified
in an approved work programme and budget;
(b) not dispose of any Ngaere Assets or any Waihapa Assets or
any EENZL Assets or any interest of Seller in the Commercial
Contracts, Gas Export Pipeline, Ngatoro Spur Line, Oil
Export Pipeline, TAWN Joint Venture, TAWN Land, the TAWN
Deep Option Reservoirs and the Waihapa Production Facilities
other than disposals of Petroleum pursuant to the Commercial
Contracts in the ordinary course of business, without the
prior written consent of Buyer;
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(c) not create or cause the Company or any Affiliate to create
any Encumbrances over any of the Ngaere Assets, the Waihapa
Assets or the EENZL Assets or the Shares or any interest of
Seller in the Commercial Contracts, Gas Export Pipeline,
Ngatoro Spur Line, Oil Export Pipeline, TAWN Joint Venture,
TAWN Land, the TAWN Deep Option Reservoirs and the Waihapa
Production Facilities without the prior written consent of
Buyer such consent not to be unreasonably withheld;
(d) ensure that the Company does not without the prior written
approval of Buyer:
(i) give notice of or otherwise institute any sole
risk operation;
(ii) farm-out the Ngaere Assets, the Waihapa Assets or
the EENZL Assets;
(iii) surrender or relinquish any part of the Ngaere
Assets, the Waihapa Assets or the EENZL Assets
(subject to any requirement pursuant to the
Petroleum Legislation); or
(iv) execute any instrument amending, waiving or
cancelling any provision of the Commercial
Contracts;
(e) provide to Buyer copies of all significant Information
supplied by or obtained from the TAWN Operator in respect of
the Ngaere Assets, the Waihapa Assets and the EENZL Assets
or the Shares or any interest of Seller in the Commercial
Contracts, Gas Export Pipeline, Ngatoro Spur Line, Oil
Export Pipeline, TAWN Joint Venture, TAWN Land, the TAWN
Deep Option Reservoirs and the Waihapa Production
Facilities, during that time, including any geological,
geophysical or engineering or other interpretations,
forecasts or evaluations of such Information;
(f) ensure that the Company does not seek any variations to the
conditions of the Permits without Buyer's prior written
consent (subject to any requirement pursuant to the
Petroleum Legislation);
(g) not enter into any major transaction (as defined in the
Companies Act) other than the EENZL Agreement and the
Southern Petroleum (Ohanga) Share Sale Agreement;
(h) ensure that the Company does not;
(i) issue any Shares, options or other securities
other than the New Shares;
(ii) declare or pay any dividend or other Distribution
(except as provided for in this Agreement or
without the prior written consent of Buyer);
(iii) effect any Distribution or make loan or other
payment (other than a payment in the ordinary
course of business) to its shareholders or any
other person;
(iv) buy back any of its own shares; or
(v) redeem any shares;
(i) ensure that no action is taken, or omitted to be taken, by
the Company, Seller or any other person which may adversely
affect the rights attaching to the Shares; and
13
(j) inform and consult with Buyer on all Taxation returns,
reports, declarations, notices, certificates,
reconciliations and other information required to be lodged
by the Company with the appropriate government body between
the date of this Agreement and the Completion Date.
Subject to the foregoing provisions contained in subclauses (a) to
(j), Seller may procure the Company, and the Company may, carry on its
business in the ordinary course.
5.2 Access to Waihapa Assets, Ngaere Assets, EENZL Assets and Information
In addition to its obligations under Clause 5.1, between the date of
this Agreement and the Completion Date Seller will, subject to any
confidentiality restrictions contained in the TAWN Joint Venture
Operating Agreement and the Commercial Contracts and subject to Clause
13, give Buyer reasonable access to the Waihapa Assets, Ngaere Assets,
EENZL Assets and Information and any other matters relating to the
Commercial Contracts during normal working hours and allow Buyer to
make copies thereof, at Buyer's cost.
In exercising its rights under this Clause 5.2, Buyer will not
interfere with the business or operations of Seller, the Company or
the TAWN Operator.
5.3 Pre-Completion Date
The Parties shall co-operate to obtain, by the Completion Date, the
execution of any required consents and releases which may be required
under the Commercial Contracts as a result of either the transaction
evidenced by the EENZL Agreement or the change of control of the
Company from the parties to the Commercial Contracts, and to give any
notices on the Completion Date such that the Company retains the
benefit of and remains subject to the obligations under the Commercial
Contracts.
5.4 Tax
Seller acknowledges that Buyer intends to make an election pursuant to
section 338(g) of the United States Internal Revenue Code of 1986, as
amended, with respect to the sale of the Company. Buyer shall allocate
the "aggregate deemed sales price" for the deemed sale of the assets
resulting from making the section 338(g) election and Seller, if
requested by Buyer, shall consent to such allocation.
6 BUYER GUARANTOR
6.1 Guarantee
In consideration of Seller entering into this Agreement and each of
the Documents at the request of Buyer Guarantor, Buyer Guarantor:
(a) unconditionally and irrevocably guarantees to Seller on
demand the due and punctual performance by Buyer of all its
obligations under this Agreement and each of the Documents;
and
(b) separately indemnifies Seller against any claim, action,
damages, loss, expense, liability or obligation which may be
incurred or sustained by Seller in connection with any
default or delay by Buyer in the due and punctual
performance of any of its obligations under this Agreement
and each of the Documents.
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6.2 Liability unaffected by other events
The liability of Buyer Guarantor under this Clause 6 is not affected
by any act, omission or thing which, but for this Clause 6, might in
any way operate to release or otherwise exonerate or discharge Buyer
Guarantor from any of its obligations including without limitation,
the entry into any of the Documents in a form not approved by Buyer
Guarantor, the grant to Buyer or any other person of any time, waiver
or other indulgence, or the discharge or release of Buyer or any other
person from any obligation.
6.3 Continuing guarantee and indemnity
The guarantee and indemnity constituted by this Clause 6:
(a) extends to cover Buyer's obligations under this Agreement
and each of the Documents, all as may be amended, varied or
replaced, whether with or without the consent of Buyer
Guarantor; and
(b) is a continuing guarantee and indemnity and, despite
Completion, re-transfer of the Shares to Seller, transfer of
any part or all of the Shares or termination of this
Agreement, remains in full force and effect for so long as
Buyer or any successor or permitted assignee of Buyer has
any actual or contingent liability or obligation to Seller
or its Affiliates, sucessors or assigns under this
Agreement.
6.4 Warranties by Buyer Guarantor
(a) Buyer Guarantor makes the warranties set forth in Schedule 4
(as if each reference therein to Buyer were to Buyer
Guarantor) in favour of Seller as at the Execution Date and
as at the Completion Date.
(b) Buyer Guarantor notes the acknowledgments of Buyer contained
in Clause 9.3 and confirms that such acknowledgments apply
equally to Buyer Guarantor.
7 COMPLETION
7.1 Place and Date of Completion
Subject to the satisfaction of the conditions set out in Clause 4.1,
Completion shall take place at 0600 hours on 31 December 2001 or on
the Completion Date (whichever is the later) at the offices of Shell
(Petroleum Mining) Company Limited in Wellington, New Zealand, or at
such other time or place as the Parties may agree.
7.2 Delivery of Documents by Seller
At Completion, Seller shall deliver to Buyer the Documents, which,
without limiting the generality of the defined term will include:
(a) registrable transfers of the Shares executed by Seller or
the relevant transferor in favour of Buyer, or Buyer's
designated nominee, together with the relevant share
certificates or a certificate from a director of the Company
certifying that no share certificates have been issued;
15
(b) any waivers or consents, whether under the Company's
constitution or otherwise, which are or may be required to
enable Buyer or its nominee to be registered as the holder
of the Shares, each waiver or consent to be in a form
acceptable to Buyer;
(c) the written resignations of all the directors of the Company
from their respective offices as director with written
confirmation that they are owed no money by the Company and
have no claim against the Company;
(d) (i) the common seal, certification of registration and
incorporation, minute book, share register, and interests
register; and
(ii) all other statutory and other records and
registers of the Company, copies of all
correspondence with the Inland Revenue Department
and all financial statements of the Company, in
each case in the known possession of the Company
or its Affiliates after reasonable and careful
enquiry by EENZL, the Company and their
Affiliates;
(e) releases of all encumbrances over the Shares and releases of
any guarantees or indemnities given by the Company other
than under the TAWN Joint Venture Operating Agreement, under
the Permits and/or the Commercial Contracts, in a form
acceptable to Buyer;
(f) evidence acceptable to Buyer that all moneys have been
repaid under sub-clause 7.3;
(g) a unanimous resolution in writing of the board of directors
of the Company (passed prior to the taking effect of the
resignations referred to at paragraph 7.2(c) above):
(i) revoking all mandates to bankers and giving
authority in favour of the directors appointed
under paragraph 7.2(h) below, or other persons
nominated by Buyer, to operate the Company's bank
accounts;
(ii) approving for registration the transfer of the
Shares;
(iii) authorising such administrative matters as Buyer
may reasonably require in that regard;
(h) a unanimous resolution in writing of the shareholders of the
Company;
(i) appointing such persons as Buyer may nominate to
be directors of the Company; and
(ii) authorising such administrative matters as Buyer
may reasonably require in that regard;
(i) any consents or releases obtained in accordance with clause
5.3;
(j) evidence of execution and completion of the EENZL Agreement
and the Southern Petroleum (Ohanga) Share Sale Agreement;
and
(k) documents evidencing the resignation of EENZL as the TAWN
Operator and the appointment of the Company as the TAWN
Operator.
16
7.3 Repayment of advances
Subject to 7.4, the following must be paid or discharged on or before
the Completion Date:
(a) all money or other obligations (whether actual or
contingent) owed to the Company by Seller and any of its
Affiliates or any other persons (other than debtors arising
in the ordinary course of business to the extent the debtors
are for amounts not included in the calculation of the
"Total Due to Buyer re Interim Period" in Schedule 7);
(b) all money or other obligations other than in respect of
income tax relating to the period from 1 January 2002
(whether actual or contingent) owed by the Company to Seller
and any of its Affiliates, financial institutions,
shareholder or any other person (other than creditors
arising in the ordinary course of business to the extent the
creditors are for amounts not included in the calculation of
the "Total Due to Buyer re Interim Period" in Schedule 7);
and
(c) subject to clause 8.4, all money or other obligations
(whether actual or contingent) owed by the Company to any
person prior to or in relation to the period prior to the
Effective Date.
7.4 Post-16 November Net Revenues and Adjustment to Purchase Price
(a) An amount equal to the Post-16 November Net Revenues will be
owed by Seller Affiliate to the Company on Completion.
(b) The obligation for Seller Affiliate to repay the amount of
the Post-16 November Net Revenues referred to in (a) to the
Company, shall be satisfied by:
(i) an amount equal to the Post-16 November Net
Revenues relating to 17 to 30 November 2001 being
paid by Seller Affiliate into a bank account
nominated by Buyer on or before the Completion
Date; and
(ii) an amount equal to the Post-16 November Net
Revenues relating to the period from 1 December
2001 to the Completion Date being paid by Seller
Affiliate into a bank account nominated by Buyer
within 60 days of the Completion Date.
7.5 Buyer's Obligations at Completion
On or before Completion Buyer must:
(a) pay to Seller the Purchase Price by means of electronic
transfer or transfers of immediately available funds to the
Bank Account in the name of Seller;
(b) execute and deliver to Seller an executed counterpart of
each of the relevant Documents delivered pursuant to Clause
7.2.
7.6 Compliance
Neither Seller nor Buyer shall be obliged to proceed to
Completion unless the other Party has complied with all of
its material obligations under this Clause 7 provided that
the exercise of any right not to proceed to Completion shall
not prejudice the right of Seller or Buyer, as the case may
be, to pursue any remedy for failure by the other Party to
comply with its obligations under this Clause 7.
17
7.7 lternative Basis for Completion
If, within 90 Days after the date of this Agreement, all of the
documentation specified in Clause 7.2 to be delivered at the
Completion Date has not been executed by all of the parties thereto
(other than Buyer, Seller and the Company), then the Parties shall
confer to discuss whether or not Completion can or should proceed in
accordance with this Clause 7 and, if the Parties agree on an
alternative basis for Completion, then Completion shall proceed as
modified by that agreement. Completion may not proceed in any
circumstances if Seller reasonably believes it would result in a
material breach of a provision of any Commercial Contract requiring
the consent or approval of the other party or parties thereto.
7.8 Post Completion
At and from Completion, Seller is responsible and will indemnify Buyer
for all liabilities, obligations expenses, claims and outgoings in
relation to the Ngaere Assets, the Waihapa Assets, the EENZL Assets
the Commercial Contracts, Gas Export Pipeline, Ngatoro Spur Line, Oil
Export Pipeline, TAWN Joint Venture, TAWN Land, the TAWN Deep Option
Reservoirs and the Waihapa Production Facilities arising on and after
the Effective Date as a direct result of the Wilful Misconduct of
Seller during the Interim Period.
7.9 Other Documents
Within 30 Days of Completion Seller will ensure that the Company has
in its possession:
(a) all technical and other data, books, records, accounts,
contracts, maps, notes, drawings and other written
information constituting the Information which has been
provided in the Disclosure Materials (other than that
referred to in paragraph (d) of the definition of Disclosure
Materials); and
(b) all original Commercial Contracts (to the extent that they
are in the possession of or under the control of Seller or
its Affiliates) or otherwise copies thereof and any other
documents which have been provided in the Disclosure
Materials (other than those referred to in paragraph (d) of
the definition of Disclosure Materials) that evidence the
Company's title to or interest in the Ngaere Assets, Waihapa
Assets and the EENZL Assets, the Commercial Contracts, Gas
Export Pipeline, Ngatoro Spur Line, Oil Export Pipeline,
TAWN Joint Venture, TAWN Land, the TAWN Deep Option
Reservoirs and the Waihapa Production Facilities.
Buyer agrees that Seller has the irrevocable and ongoing right to
retain copies of all the Information and other Disclosure Materials
for use of itself and its Affiliates for purposes of their own
operations post Completion PROVIDED THAT Seller covenants that it will
not without Buyer's prior written consent, disclose or permit the use
or disclosure of such Information or other Disclosure Materials as
relates to Company, the Ngaere Assets, Waihapa Assets and the EENZL
Assets, other than to the extent required by law.
7.10 Name Change
As soon as possible but in any event within 30 Business Days of
Completion, Buyer shall ensure that the name of the Company is changed
and that all signage and other materials located on or within the
Ngaere Assets, the Waihapa Assets and EENZL Assets relating to
18
Seller or any of its Affiliates is removed, and from Completion will
ensure that the name of Seller and its Affiliates are not used in any
form or context indicating any ownership of the Ngaere Assets, the
Waihapa Assets and the EENZL Assets.
7.11 Income Tax Return
Seller shall, in consultation with Buyer, prepare at its cost an
income tax return for the Company for the income tax year ending on 31
December 2001. The Company or Buyer shall prepare income tax returns
for subsequent periods but in consultation with Seller for any period
which includes the Completion Date should the Completion Date be after
31 December 2001.
7.12 Metering Obligations
Buyer agrees following Completion to procure the Company to install
the fiscal meters at the time and in the manner required by the
Agreement for Use of Omata Oil Storage Facilities that is included in
the Commercial Contracts.
7.13 NGC Gas Agreement
(a) Buyer acknowledges and agrees that the TAWN Operator is
negotiating the terms and conditions of the gas transport
agreement intended to govern the proposed arrangements
regarding gas transportation and related matters among the
TAWN Operator, Natural Gas Contracts Limited ("NGC") and
Natural Gas Corporation of New Zealand Limited ("NGCNZ"),
the current draft of which is attached as Appendix C ("NGC
Gas Agreement").
(b) Buyer further acknowledges and agrees for the period up
until 30 June 2002 the TAWN Operator or the Company as
proposed successor to EENZL as TAWN Operator (as
contemplated by this Agreement) may execute the NGC Gas
Agreement in the form attached in Appendix C or in such
other form as the TAWN Operator, NGC and NGCNZ may agree,
and as approved by Buyer, and Buyer shall procure that the
Company executes the NGC Gas Agreement as soon as is
practicable following Completion if the NGC Gas Agreement
remains unexecuted at Completion. Subject to subclause (c)
below, Buyer agrees that no claim against Seller shall arise
as a consequence of such execution and performance of the
NGC Gas Agreement.
(c) Buyer's acknowledgments and agreements regarding the NGC Gas
Agreement are made subject to the warranties and
representations in warranty 11 of Schedule 5.
8 INDEMNITIES
8.1 Seller's Indemnity
Subject only to the limitations in Clauses 8 and 9, Seller
indemnifies Buyer and its Affiliates against any and all
claims, actions, damages, losses, liability, obligation or
expenses suffered or incurred in respect of any breach of
warranties given by it under Clause 9.1. Any payment Seller
is required to make in relation to any claim under this
clause 8.1 is to be made to Buyer in reduction and refund of
the Purchase Price.
8.2 Buyer's Indemnity
19
Subject only to the limitations in Clauses 8 and 9, Buyer indemnifies
Seller and its Affiliates against any and all claims, actions,
damages, losses, liability, obligation or expenses suffered or
incurred in respect of any breach of warranties given by it under
Clause 9.2. Any payment Buyer is required to make in relation to any
claim under this clause 8.2 is to be made to Seller as an adjustment
of the Purchase Price.
8.3 Consequential Loss
Without limiting clause 12 and notwithstanding any other provision of
this Agreement neither Seller and its Affiliates nor Buyer and its
Affiliates shall under any circumstances be liable to the other Party
or its Affiliates under, arising out of or in any way connected with
this Agreement, the Ngaere Assets, the Waihapa Assets, the EENZL
Assets or the EENZL Agreement for any indirect or consequential loss
or damage whether arising in contract or tort (including negligence or
breach of any statutory duty) or elsewhere. For the purposes of this
Clause 8.3, consequential loss includes, but is not limited to, any
delay in or any obligation or inability to produce or transport
Petroleum, lost production, loss of use, loss of revenue or loss of
profits howsoever arising.
8.4 Excluded Liabilities
(a) Notwithstanding any other provision of this Agreement,
Seller and its Affiliates shall not under any circumstances
be liable to Buyer or its Affiliates for any costs, charges,
expenses, liabilities or obligations which arise or relate
to the physical condition or location of the Ngaere Assets,
Waihapa Assets, EENZL Assets, or to Abandonment Costs or
Environmental Claims, regardless of when such costs,
charges, claims, expenses, liabilities or obligations arose.
(b) Buyer shall indemnify and hold harmless Seller and its
Affiliates against all costs, charges, expenses, liabilities
and obligations of the type described in paragraph (a)
above.
(c) To the extent that EENZL would have any ongoing obligations
under Section 11.04 (a) of the TAWN Joint Venture Operating
Agreement following the transfers effected under the EENZL
Agreement such obligations will be the responsibility of
Buyer and Buyer shall indemnify and hold harmless Seller and
its Affiliates (including EENZL) against all such
obligations.
(d) Subject to clause 8.4(a), as between Seller, Buyer and
EENZL, Buyer shall be liable for all costs, charges,
expenses, liabilities and obligations of the Company
(excluding the obligation to pay the Purchase Price under
the EENZL Agreement) which relate to the period commencing
on or or after 16 November 2001.
(e) Subject to clause 8.4(a), as between Seller, Buyer and
EENZL, Seller and EENZL shall be liable for all costs,
charges, expenses, liabilities and obligations of the
Company which relate to the period before 16 November 2001.
8.5 Limitation on Claims
The right of either Buyer or Seller, as the case may be, to claim for
and seek indemnity in respect of any claim, action, damage, loss,
expense, liability, or obligation whatsoever (each a "claim") (whether
relating to a breach of Seller's or Buyer's warranties, as the case
may be, in Schedules 4 and 5 or otherwise) is limited as follows:
20
(a) Buyer or Seller, as the case may be, must give written
notice to other Party of the specific claim in question with
reasonable details of the relevant claim, including, if
possible, Buyer's or Seller's estimate of the amount of the
claim, on or before 18 months after the Completion Date;
(b) Buyer or Seller, as the case may be, may only bring a claim
or seek an indemnity for an event or circumstances or series
of events or circumstances if the amount reasonably claimed
exceeds US$100,000 excluding GST (if any);
(c) the maximum aggregate amount that Buyer or Seller, as the
case may be, may recover in total from the other Party in
relation to one or more claims is the amount of the Purchase
Price less the aggregate amount of any claims previously
paid under or in relation to this Agreement;
(d) where a claim relates to a breach of Seller's warranties,
the quantum of any liability Seller has to Buyer under or in
relation to this Agreement will be determined by reference
to the loss or damage suffered by Buyer or the Company which
results from the facts, matters or circumstances on which
the claim is based not being as warranted and it will not be
necessary for Buyer to establish loss or damage by way of
diminution in the value of the Shares;
(e) each of Seller's or Buyer's warranties, as the case may be,
is given subject to:
(i) anything done, or omitted to be done, either under
any provision of this Agreement or after the date
of this Agreement at the request of, or with the
approval of either Buyer or Seller, as the case
may be;
(ii) any matter to the extent that it was taken into
account in calculating the amount of any
allowance, provision or reserve, or was noted in,
any financial statements included in the
Disclosure Materials;
(f) the only relief available arising from any breach of a
Seller's warranty is a right of Buyer to claim under Clause
8.1. Buyer has no right to cancel this Agreement (whether
before or after Completion) as a result of any matter giving
rise to a claim under a Seller's warranty;
(g) a breach of Seller's or Buyer's warranties shall not give
rise to any other or separate cause of action for damages or
other relief from misrepresentation or breach of
representation or warranty or otherwise;
(h) no claim may be made to the extent that the relevant event
would not have arisen but for:
(i) a breach of the law or contract, or commission of
a tort by Buyer or Seller or the Company;
(ii) any obligation or commitment entered into by Buyer
or Seller or the Company after Completion;
(iii) Buyer, Seller or the Company admitting liability
without the prior written consent of the other; or
(iv) a change in the law occurring after the Effective
Date;
21
(i) Buyer or Seller shall not recover more than once in respect
of any one matter giving rise to a claim;
(j) in assessing any damages recoverable for any claim there is
to be deducted any savings by, or net benefit to, Buyer or
Seller or the Company or any current or former Affiliate of
Buyer;
(k) if in relation to any matter which would otherwise give rise
to a claim under this clause 8.5, Buyer or Seller or the
Company is entitled to make recovery or claim indemnity,
including indemnity under a policy or insurance (or would
have been so entitled if it had maintained in place a policy
or policies providing equivalent cover to Seller's or
Buyer's or the Company's policies of insurance current at
Completion), the recovery or claim then will reduce to the
extent of the recovery or claim or extinguish any such
claim. Buyer or Seller, as the case may be, shall use its
reasonable endeavours to recover or procure the recovery of
all claims from insurers or other persons; and
(l) if either Seller or Buyer makes any payment as a result of a
claim (the "Payment") and Buyer or Seller or the Company
receives any benefit otherwise than from Seller or Buyer
which would not have been received but for the circumstance
giving rise to the claim in relation to which the Payment
was made Buyer or Seller, as the case may be, will, once
such benefit has been received, immediately pay to Seller or
Buyer an amount equal to the lesser of the Payment and the
amount of such benefit.
8.6 Notice of circumstances
Either Buyer or Seller shall give notice to Seller or Buyer as soon as
reasonably practicable after it becomes aware of circumstances that
could reasonably be expected to form the basis of a claim under this
Agreement, regardless of value.
8.7 Conduct of Claims
If Buyer, Seller or the Company receives a claim which may give rise
to a claim against Seller or Buyer under this Agreement (except a
claim in relation to Tax, in which case clause 12.1(f) applies), Buyer
or Seller, as the case may be, must within 10 Business Days of receipt
notify the other Party of the claim giving full details so far as
practicable and, if Seller or Buyer, as the case may be, agrees to
indemnify the other Party to that other Party's reasonable
satisfaction against all and any costs, charges and expenses which may
be incurred or for which it may become liable, Buyer or Seller shall
take such action as Seller or Buyer, as the case may be, reasonably
instructs to avoid, dispute, resist, appeal against, compromise or
defend any such claim and as applicable any adjudication in respect of
it.
8.8 Continuing Indemnities and Survival of Indemnities
(a) Subject to Clause 8.4, each indemnity of Seller or Buyer
contained in this Agreement is a continuing obligation of
Seller or Buyer despite:
(i) any settlement of account; or
(ii) the occurrence of any other thing, and remains in
full force and effect until all money owing,
contingently or otherwise, under any indemnity has
been paid.
(b) Subject to Clause 8.4 each indemnity of Seller or Buyer
contained in this Agreement:
(i) is an additional, separate and independent
obligation of Seller or Buyer and no one indemnity
limits the generality of any other indemnity; and
22
(ii) survives the termination of this Agreement.
(c) Each Party acknowledges that it must take such steps to
mitigate any loss the subject of any indemnity in its favour
as it would be obliged to take, if the loss in question gave
rise to a claim for damages, rather than a right of
indemnity.
8.9 Input Tax Credits
For the avoidance of doubt any indemnities given by a Party under this
Agreement exclude any liability to indemnify the other Party to the
extent of any GST input tax credits which may be claimed by the other
Party in respect of the claim.
9 WARRANTIES
9.1 Seller
Seller makes the warranties set forth in Schedule 5 in favour of Buyer
as at the Execution Date and, subject to the following, as at the
Completion Date. Seller shall promptly disclose to Buyer any notices
or claims received by Seller between the Execution Date and Completion
Date in respect of the warranties in Schedule 5. Such warranties are
made subject to the qualifications made in this Agreement.
9.2 Buyer
Buyer makes the warranties set forth in Schedule 4 in favour of Seller
as at the Execution Date and subject to the following, as at the
Completion Date. Buyer shall promptly disclose to Seller any notices
or claims received by Buyer between the Execution Date and Completion
Date in respect of the warranties in Schedule 4. Such warranties are
made subject to the qualifications made in this Agreement.
9.3 No Warranty Unless Expressly Included
(a) Save as and to only the extent set forth in Clause 9.1,
Seller and its Affiliates make no representations or
warranties in respect of any matter or thing and disclaims
all liability and responsibility for any representation,
warranty, statement, opinion, information or advice made or
communicated (orally or in writing (including, without
restriction, electronically)) to any person including Buyer,
its Affiliates or any officer, stockholder, director,
employee, agent, consultant, counsel or adviser of Buyer or
its Affiliates (including, without limiting the generality
of the foregoing, any representation, warranty, statement,
opinion, information or advice made and communicated to
Buyer by any officer, stockholder, director, employee,
agent, consultant, counsel or adviser of Seller) and Buyer
acknowledges and affirms that it has not relied upon any
such representation, warranty, statement, opinion,
information or advice in entering into or carrying out the
transactions contemplated by this Agreement.
(b) Buyer acknowledges and affirms that it has made its own
independent investigation, analysis and evaluation of the
geological, geophysical and engineering interpretations,
economic valuations provided by EENZL (excluding the
underlying assumptions upon which such valuations and cost
allocations are based), physical condition of equipment and
assets, assessment of tax matters, legal and contractual
rights, obligations and liabilities and prospects for any of
the Ngaere Assets, the Waihapa Assets, or the EENZL Assets
or any interest of Seller in the Commercial
23
Contracts, Gas Export Pipeline, Ngatoro Spur Line, Oil
Export Pipeline, TAWN Joint Venture, TAWN Land, the TAWN
Deep Option Reservoirs and the Waihapa Production Facilities
and acknowledges and affirms, that in making the decision to
enter into the Agreement, it has relied to that extent upon
its independent investigation and those of its
representatives, including professional, legal, Tax,
financial, business and other advisers.
(c) Any breach of warranty shall not be enforceable against
Seller to the extent that it is shown that the inaccuracy,
error or omission underlying the alleged breach was known by
Buyer at the time Buyer entered into this Agreement.
(d) The warranties and any liabilities of Seller are subject to
the matters contained or referred to in the Disclosure
Materials, and the warranties do not apply to those matters.
Any breach of warranty will not be enforceable against
Seller to the extent that it is shown that the inaccuracy,
error or omission underlying the alleged breach was
disclosed in the Disclosure Materials.
(e) Buyer acknowledges that it has had the opportunity to
examine the Disclosure Materials, seek independent advice in
relation to the Shares, the Company, the Ngaere Assets, the
Waihapa Assets and the EENZL Assets, conduct a due diligence
exercise in relation to the Shares, the Ngaere Assets, the
Waihapa Assets and the EENZL Assets and to obtain
information in respect of those matters that Buyer considers
relevant, and that a buyer would reasonably consider
relevant, to entering into this Agreement and that it has
knowledge and experience in international and New Zealand
oil and gas exploration, development, production,
transportation, storage, marketing and in financial and
other business matters and is therefore capable of
evaluating the merits and risks associated with entering
into this Agreement;
(f) Without prejudice to any other provision of this Agreement,
Seller makes no representations or warranties as to:
(i) the amounts of reserves attributable to and the
field life of the Ngaere Assets, the Waihapa
Assets or the EENZL Assets or the availability of
Petroleum;
(ii) any geological, geophysical, engineering,
economic, fiscal or other interpretations,
forecasts or evaluations;
(iii) the physical condition of any equipment, material,
fixtures, fittings, wells or other items included
in the Ngaere Assets, the Waihapa Assets or the
EENZL Assets;
(iv) the extent of the liabilities and obligations and
rights and benefits under the Ngaere Permit and
the Waihapa Permit, the TAWN Joint Venture
Operating Agreement, the Commercial Contracts, the
EENZL Assets, the EENZL Agreement and the TAWN
Land arrangements;
(v) future matters, including future or forecast costs
(including but not limited to, Abandonment Costs),
revenues, profits, or environmental remediation or
rehabilitation costs; or
terms or availability of markets for Petroleum,
(vi) pipeline access, transportation, storage or
wharfage rights whether through Seller, Affiliates
of Seller or otherwise (except as may be
specifically provided for in the Commercial
Contracts;
in so far as they relate to any of the Ngaere Assets, the
Waihapa Assets, or the EENZL Assets or any interest of
Seller in the Commercial Contracts, Gas Export
24
Pipeline, Ngatoro Spur Line, Oil Export Pipeline, TAWN Joint
Venture, TAWN Land, the TAWN Deep Option Reservoirs and the
Waihapa Production Facilities.
9.4 Knowledge
Where any warranty is qualified by any reference to the knowledge or
awareness or belief of Seller, this shall mean the knowledge or
awareness of the directors of Seller and its New Zealand incorporated
Affiliates, and there shall be implied in that warranty or
representation a warranty that such individual has made reasonable
enquiries within the professional organisation of Seller and its New
Zealand incorporated Affiliates concerning the subject matter of that
knowledge, awareness or belief.
9.5 Duration
The warranties set forth in Schedules 4 and 5 shall survive the
Completion Date for a period of 18 months and then terminate except
that any warranties provided in Clause 10 of Schedule 5 shall survive
for the period ending the sooner of:
(a) the date after which the Inland Revenue or other relevant
public body is no longer able to issue an assessment or
similar notice in respect of the period or event giving rise
to the claim; and
(b) eight years after the Execution Date.
10 PROPERTY
On Completion, property in the Shares and all entitlements and
obligations associated with ownership of the Shares passes to Buyer.
11 COSTS, EXPENSES AND DELAYED PAYMENT
11.1 Costs and Expenses
Each Party shall pay its own costs and expenses in respect of the
negotiation, preparation, execution, delivery and registration of this
Agreement, the Documents or other agreements or instruments entered
into or signed in order to effect the transactions contemplated by
this Agreement.
11.2 Late Interest
Without prejudice to any other rights under this Agreement, if any
amount payable under this Agreement is not paid when due, the
defaulting Party shall pay interest on a daily basis on such amount
from the due date of payment (after as well as before judgement) until
and including the date of payment at a rate equal to two percent (2%)
per annum over the Agreed Rate.
12 TAX
12.1 Indemnity
(a) Notwithstanding any other provisions in this Agreement,
including (without limitation) Clauses 8.3 and 9, but
subject to clause 12.5, Seller indemnifies Buyer and
25
undertakes to keep Buyer at all times fully and effectively
indemnified from and against any Taxation or Taxation claim,
whether made against Buyer or the Company or any other
person in respect of the Company, which:
(i) wholly or partly (in which event the liability of
Seller shall be limited to that part) arises from
or relates to any actual or deemed income, profits
or gains earned, received or arising on or before
the Execution Date; or
(ii) is wholly or partly (in which event the liability
of Seller shall be limited to that part)
attributable to any event occurring on or before
the Execution Date,
(iii) wholly or partly (in which event the liability of
Seller shall be limited to that part) relates to
any period ending on or before the Execution Date;
except to the extent that the Taxation has been paid by the
Company on or prior to the Completion Date.
(b) Notwithstanding any other provisions in this Agreement,
including (without limitation) Clauses 8.3 and 9, but
subject to clause 12.5, Seller indemnifies Buyer and
undertakes to keep Buyer at all times fully and effectively
indemnified from and against any income tax or income tax
claim (including items referred to in subclause (c) of the
Tax definition insofar as it relates to any income tax or
income tax claim) made against the Company which:
(i) wholly or partly (in which event the liability of
Seller shall be limited to that part) arises from
or relates to any actual or deemed income, profits
or gains earned, received or arising in the period
from the Execution Date to and including 31
December 2001 ; or
(ii) is wholly or partly (in which event the liability
of Seller shall be limited to that part)
attributable to any event occurring from the
Execution Date to and including 31 December 2001;
(iii) wholly or partly (in which event the liability of
Seller shall be limited to that part) relates to
the period from the Execution Date to and
including 31 December 2001;
except to the extent that the income tax has been paid by
the Company on or prior to the Completion Date.
(c) Seller will not be required to meet any claim under clause
12.1(a) or 12.1(b) to the extent that:
(i) the Taxation would not have arisen, or would have
been reduced or eliminated but for a failure by
the Company after the Completion Date to make a
claim or election or to give any notice or
consent, the making or giving of which was
notified by Seller in writing to Buyer five
Business Days prior to the Execution Date, or
where the making or giving of which will not
adversely affect the Company is notified by Seller
in writing to Buyer ten Business Days prior to the
date the claim or election or notice of consent
was required to be made or given;
26
(ii) Buyer or the Company will receive or has received
a reduction in Tax payable after the Completion
Date in relation to the matters giving rise to the
claim, however only the net present value to the
Company or Buyer of the reduction in Tax payable
as at the date the Tax giving rise to the claim is
payable shall be taken into account;
(iii) the Taxation relates to an amount of income or an
asset that was not taken into account in the
calculation of the Purchase Price where the
benefit of the income or asset arising after the
Effective Date is equal to or in excess of the
amount of the claim;
(iv) any relief available to the Company in relation to
a period ended on or before 31 December 2001 which
has not been taken into account in the calculation
of the Purchase Price and which is able to relieve
or mitigate that Taxation liability;
(v) it is for any Tax loss or memorandum account
balance of the Company which is eliminated as a
result of the transfer of Shares pursuant to this
Agreement;
(vi) the Company or Buyer, without the written consent
of Seller has made a payment (except to the extent
required by law) or admission of liability in
respect of a Taxation claim or has taken other
steps (including failing to notify Seller) which
may in any way prejudice any objection to it or
defence to that Taxation claim;
(vii) the Company, without the written consent of Seller
after the Completion Date amends or requests an
amendment to any return filed prior to Completion
by the Company with the Inland Revenue Department
or other relevant revenue authority, other than an
amendment required by law.
(d) Any payment Seller is required to make in relation to any
claim under this clause 12.1:
(i) subject to clause 12.1(d)(ii), must be made at
least 3 Business Days before the date on which the
Taxation in respect of which the payment is
required to be made is due for payment;
(ii) where the amount of Taxation is payable
immediately, is to be paid to Buyer on demand
being made by Buyer; and
(iii) is to be made to Buyer in reduction and refund of
the Purchase Price.
Provided however that in any case Seller may satisfy a claim
for an income tax liability by way of offsetting tax losses
of Seller or its Affiliates with the net income of the
Company to the extent the requirements of the Tax Act are
satisfied.
(e) Buyer may not make a claim under this clause 12.1 after the
sooner of the following:
(i) the date after which the Inland Revenue Department
or other relevant public body is no longer able to
issue an assessment or similar notice in respect
of the period or event giving rise to the claim;
and
(ii) 8 years after the Execution Date.
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(f) Seller shall have the right to control all aspects of any
Taxation claim giving rise to a claim under clause 12.1,
including whether and how a Taxation claim is disputed and
the appointment of counsel provided that Seller shall
consult with the Company in respect of the decisions made by
Seller and will take into account all reasonable concerns
and issues raised by Buyer in all action that is taken by
Seller following consultation.
(g) For the purposes of any claim by Buyer under this clause
12.1, Taxation will be deemed to be suffered or incurred by
or arise in respect of Buyer to the extent that Taxation is
suffered or incurred by the Company. It will not be
necessary for Buyer to establish loss or damage to itself
whether by way of diminution of the Shares or otherwise, and
the amount of the Taxation suffered or incurred by or
arising in respect of Buyer will be deemed to be equal to
the Taxation suffered or incurred by the Company.
(h) Seller's aggregate liability under clause 12.1 is limited to
the net overall increased liability for Taxation incurred by
the Company in respect of the period prior to and including
31 December 2001 (not taking into account non-income tax
amounts in relation to the period from the Execution Date).
12.2 Refunds
Buyer acknowledges that the Company may be entitled to receive refunds
of Taxes for operations before the Execution Date or in respect of
supplies made pursuant to the EENZL Agreement or Southern Petroleum
(Ohanga) Share Sale Agreement and that to the extent that these
refunds have not been taken into account pursuant to Clause 12.1(c)
that these refunds are for the benefit of Seller and agrees to
co-operate and procure the Company to co-operate with Seller to obtain
the refunds and reimburse refunds obtained to Seller forthwith upon
receipt by Buyer or the Company.
12.3 Gross Up
(a) If Seller is required by New Zealand law to make any
deduction or withholding from any sum payable by it to Buyer
under clause 8.1 or 12.1; or
(b) Buyer is required by New Zealand law to characterise any
amount received or receivable from Seller under clause 8.1
or 12.1 other than as an adjustment to the Purchase Price
and is required by New Zealand law to make any payment of
income tax in the income year of receipt on or in relation
to such amount;
then the sum payable by Seller will be increased to the extent
necessary to ensure that after Seller has made the deduction,
withholding or payment, or Buyer has paid the income tax, Buyer
receives and retains (free of any liability for any such deduction,
withholding or payment) a net sum equal to the sum that Buyer would
have received and so retained had no such deduction, withholding or
payment been made.
12.4 Refund of Gross Up
Where any additional amount is payable by Seller under clause 12.3,
Buyer shall refund to Seller any payment made under that clause 12.3
to the extent Buyer itself obtains a refund, set-off, deduction or
credit in respect of any deduction, withholding or payment referred to
in clause 12.3 and the refund by Buyer shall be made within 5 Business
days of the date on
28
which Buyer receives the benefit of that refund, set-off, deduction or
credit in respect of the deduction, withholding or payment.
12.5 Limitation on Claims
In the event that Buyer is entitled to make a claim under clause 8.1
for a breach by Seller of the warranties given under clause 9.1, and
when any such act, failure or omission by Seller giving rise to
Buyer's claim, simultaneously or consequently amounts to a breach of
Seller's indemnity under clause 12.1, then rather than being entitled
to make further or additional claim against Seller, Buyer shall be
entitled to make claim against Seller under either clause 8.1 or
clause 12.1, but not both, and any such claim made by Buyer shall
constitute Buyer's entire claim against Seller in terms of such
breach.
13 CONFIDENTIALITY AND ANNOUNCEMENTS
13.1 Agreed Announcements
Subject to Clause 13.2, no Party shall, without the written consent of
the other Party, issue or make any public announcement or statement
regarding this Agreement.
13.2 Legal Requirements
(a) If a Party is required to issue or make an announcement or
statement in respect of this Agreement in order to comply
with:
(i) applicable law; or
(ii) the requirements of any recognised stock exchange
on which the securities of a Party or any of its
Affiliates are listed;
then the Parties shall agree on the form and substance of
such announcement or statement and a copy of the same shall
be furnished to the other Party prior to publication or
release. Each Party agrees to use its reasonable endeavours
to approve the form and substance of a required announcement
or statement as soon as possible so that Parties are able to
comply with statutory and stock exchange requirements.
(b) If a Party is required to issue or make an announcement or
statement as contemplated by sub-clause (a) and, despite
using its best endeavours, has been unable to agree the form
and substance of the announcement or statement with the
other Party prior to the latest time by which such
announcement or statement must be made, the Party required
to do so may then issue or make the announcement or
statement provided that:
(i) the other Party is first notified and furnished
with a copy of the announcement or statement; and
(ii) to the maximum extent possible, the announcement
or statement minimises the disclosure relating to
this Agreement.
13.3 Parties to Keep Confidential
Subject to Clauses 13.1 and 13.2, the Parties agree that the
Information and all information and documents which have been
disclosed or provided to them or any person acting on their behalf in
accordance with this Agreement or in the course of communications or
negotiations
29
in connection with the evaluation or sale of the Shares or any of the
other former Fletcher Challenge Energy assets, including, without
limitation, this Agreement and all documents and information disclosed
pursuant to the Confidentiality Agreement (which information and
documents are, for the purposes of this Clause 13, deemed to be
included in the definition of Information) or the Rimu Confidentiality
Agreement must be kept strictly confidential, must not be sold,
traded, published or otherwise disclosed to anyone in any manner
whatsoever, or photocopied or reproduced in any way without either
Seller's or Buyer's prior written consent as the case may require,
except as provided in Clauses 13.4 and 13.5.
13.4 Permitted Disclosure
Buyer may disclose the Information without Seller's prior written
consent only to the extent such Information:
(a) was already known to Buyer as of the date of disclosure
under the Confidentiality Agreement or this Agreement;
(b) is already in the possession of the public or becomes
available to the public other than through the act or
omission of Buyer or any Affiliate or any of their
directors, employees, agents or advisers in contravention of
this Agreement;
(c) is required to be disclosed under applicable law, by order
of a court of competent jurisdiction or by a governmental
order, decree, regulation or rule, including, without
limitation, any regulation or rule of any regulatory agency,
securities commission or stock exchange on which the
securities of Buyer or its Affiliate are quoted;
(d) is acquired independently from a third party whom Buyer
reasonably believed was under no obligation of
confidentiality to Seller related thereto; or
(e) is Information as defined in Clause 1.2 and all information
and documents which have been disclosed by Seller to Buyer,
provided Completion has occurred.
13.5 Advisers
Prior to Completion Buyer is entitled to disclose the Information
without Seller's prior written consent to such of the following
persons who have a clear need to know in order to give effect to the
provisions of this Agreement provided that the disclosure is limited
to the extent strictly required by each such person:
(a) employees, officers and directors of Buyer;
(b) employees, officers and directors of an Affiliate;
(c) any professional adviser or auditor;
(d) any bank financing Buyer's acquisition of the Shares.
Prior to making any such disclosure under sub-clause (d), however,
Buyer shall obtain an undertaking of strict confidentiality from each
person to whom disclosure of the Information is to be made expressly
conferring the right to enforce such undertaking directly on Seller
and each of the parties to the TAWN Joint Venture Operating Agreement
and the Commercial Contracts.
30
13.6 Responsibility for Third Parties
Buyer is responsible for ensuring that all persons to whom the
Information was disclosed under the Confidentiality Agreement or is
disclosed under this Agreement will keep such information confidential
and will not disclose or divulge the same to any unauthorised persons
and Buyer indemnifies Seller and its Affiliates against any and all
damages, losses or expenses suffered or incurred as a result of
unauthorised disclosure by such persons.
13.7 Responsibility for Affiliate
When Buyer discloses the Information to employees, officers and
directors of a Affiliate Buyer is responsible for the adherence of
such employees, officers and directors of the Affiliate to the terms
of this Agreement and Buyer indemnifies Seller and its Affiliates
against any and all damages, losses or expenses suffered or incurred
as a result of unauthorised disclosure by such persons.
13.8 Termination
If this Agreement is terminated or the Shares are not transferred in
accordance with Clause 7 or the Shares are re-transferred to Seller,
Buyer shall cease using the Information and Seller may demand the
return thereof upon giving written notice to Buyer. Upon receipt of
such notice, Buyer shall as soon as practicable and within a period
not exceeding 30 days from the date of receipt of such notice:
(a) retrieve all Information disseminated to persons and other
third parties pursuant to Clause 13.5;
(b) return to Seller all of the Information disclosed;
(c) destroy or return, as directed by Seller, to Seller all
copies and reproductions of the Information made by Buyer
and any persons and other third parties pursuant to Clauses
13.5; and
(d) purge all computer data banks of the Information.
13.9 Survival of Clause 13
The provisions of this Clause 13 will survive any
termination of this Agreement until 6 years from 1 May 2001
or from the date of Completion of this Agreement, whichever
first occurs provided that any information relating to the
other former Fletcher Challenge Energy assets shall continue
to be governed by the Confidentiality Agreement or the Rimu
Confidentiality Agreement as the case may require.
14 GENERAL
14.1 Notices
Any notice or other communication, including, but not limited to, any
request, demand, consent or approval, to or by a Party:
(a) must be legible and in English addressed as shown below:
31
(i) if to Seller or Seller Guarantor:
Address: c/o Southern Petroleum No Liability
3 Queens Wharf
Wellington
New Zealand
Attention: David Llewellyn/Alan Bewley
Facsimile: (04) 463 4039
(ii) if to Buyer or Buyer Guarantor:
Address: 113-119 The Terrace
Level 19
PWC Tower
Wellington
Attention: James P Mitchell
Facsimile: (04) 472 7401
or as specified to the sender by any Party by notice;
(b) must be signed by a Director or duly authorised signatory;
(c) is regarded as being given by the sender and received by the
addressee:
(i) if by delivery in person - a notice delivered
personally or by courier is deemed to have been
received by the Party to which it is addressed at
the time and on the date that the notice is handed
to an authorised officer, representative or
employee of the Party to which it is addressed;
(ii) if by post - a notice sent by registered mail, in
the absence of proof to the contrary, is deemed to
have been received by the Party to which it is
sent at the time when the letter is shown by the
return receipt to have been delivered to that
Party's address;
(iii) if by facsimile transmission - subject to
paragraph (e), in the absence of proof to the
contrary, on the date of despatch if the
recipient's acknowledgment of receipt appears on
the sender's copy of the notice or on the activity
record printout of the sender's machine, or the
activity record printout of the sender's machine
shows a successful transmission to the recipient's
facsimile machine on the date indicated on the
printout, but if the time of despatch is after
4:00pm in the place to which the facsimile is
sent, it is deemed to have been received at the
commencement of business on the next business day
in the place to which it is sent;
(d) for the purposes of this Clause, if the date of deemed
receipt is a Saturday or Sunday or a public or bank holiday
in the place of receipt, the notice is deemed to have been
received at the commencement of the next Business Day in
that place; and
32
(e) in the case of indecipherable facsimiles which are
identifiable as having been sent by a Party, the notice is
deemed not to have been received by the addressee if the
addressee notifies the sender within twenty-four (24) hours
after receipt that the facsimile has been received in that
form and despatches a copy of the facsimile received to the
sender.
14.2 Governing Law and Jurisdiction
(a) This Agreement is governed by the laws in force from time to
time in New Zealand.
(b) Each Party irrevocably submits to the non-exclusive
jurisdiction of the courts of New Zealand.
14.3 Arbitration
(a) If a dispute arises between the Parties out of or in
connection with any matter set out in this Agreement
(including any dispute as to its existence or validity)
("the Dispute") any Party may give written notice to the
others stating the subject matter and details of the Dispute
and requiring that the Dispute be referred to arbitration.
The arbitrator shall be appointed by the Parties, or failing
agreement within ten Business Days after, and exclusive of,
the date of service of the written notice shall be appointed
at the request either Party by the president for the time
being of the Arbitrators' and Mediators' Institute of New
Zealand or his or her nominee. The arbitration shall be
conducted as soon as possible, at Wellington, in accordance
with the provisions of the Arbitration Act 1996.
(b) The award of the arbitrator shall be an award with reasons,
which reasons shall form part of the award. The award of the
arbitrator shall be final and binding on the Parties and, to
the extent that it is lawful to do so, the Parties waive any
right of appeal or review.
(c) The Parties shall bear their own costs and an equal share
(as between Buyer and Seller) of the costs of the award in
relation to the arbitration, unless the arbitrator
determines that a Party shall bear some proportion of, or
all of, the costs of any other Party because of impropriety,
lack of cooperation or unreasonable conduct by that Party.
14.4 Waivers
No failure to exercise and no delay in exercising any right, power or
remedy under this Agreement will operate as a waiver nor will any
single or partial exercise of any right, power or remedy preclude any
other or further exercise of that or any other right, power or remedy.
14.5 Variation
A variation of any term of this Agreement must be in writing and
signed by each Party.
14.6 Assignment
No Party may assign its rights under this Agreement prior to
Completion and settlement of all Accounts herein. This Agreement binds
each Party and its successors.
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14.7 Entire Agreement
This Agreement and the Confidentiality Agreement embodies the entire
agreement between the Parties with respect to the subject matter of
this Agreement and the Parties acknowledge that these two agreements
supersede and cancel any prior agreement, arrangement or
understanding, whether formal or informal, or whether express or
implied with respect to the subject matter or any provision of this
Agreement.
14.8 Further Actions
Following the Completion Date, at the request of Buyer, Seller will
deliver any further instrument as reasonably required and take all
other reasonable actions as may be necessary to vest in Buyer good
title to the Shares and to give effect to the provisions of this
Agreement.
14.9 Privity
The provisions of this Agreement are also for the benefit of, and are
intended to be enforceable by, Affiliates of Seller against Buyer
under the Contracts (Privity) Act 1982.
15. SELLER GUARANTOR
15.1 Guarantee
In consideration of Buyer entering into this Agreement and each of the
Documents at the request of Seller Guarntor, Seller Guarantor:
(a) unconditionally and irrevocably guarantees to Buyer on
demand the due and punctual performance by Seller of all its
obligations under this Agreement and each of the Documents;
and
(b) separately indemnifies Buyer against any claim, action,
damages, loss, expense, liability or obligation which may be
incurred or sustained by Buyer in connection with any
default or delay by Seller in the due and punctual
performance of any of its obligations under this Agreement
and each of the Documents.
15.2 Liability unaffected by other events
The liability of Seller Guarantor under this Clause 15 is not affected
by any act, omission or thing which, but for this Clause 15, might in
any way operate to release or otherwise exonerate or discharge Seller
Guarantor from any of its obligations including without limitation,
the entry into any of the Documents in a form not approved by Seller
Guarantor, the grant to Seller or any other person of any time, waiver
or other indulgence, or the discharge or release of Seller or any
other person from any obligation.
15.3 Continuing guarantee and indemnity
The guarantee and indemnity constituted by this Clause 15:
(a) extends to cover Seller's obligations under this Agreement
and each of the Documents, all as may be amended, varied or
replaced, whether with or without the consent of Seller
Guarantor; and
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(b) is a continuing guarantee and indemnity and, despite
Completion, re-transfer of the Shares to Buyer, transfer of
any part or all of the Shares or termination of this
Agreement, remains in full force and effect for so long as
Seller or any successor or permitted assignee of Seller has
any actual or contingent liability or obligation to Buyer or
its Affiliates, sucessors or assigns under this Agreement.
15.4 Warranties by Seller Guarantor
Seller Guarantor makes the warranties set forth in Schedule 5 (as if
each reference therein to Buyer were to Seller Guarantor) in favour of
Buyer as at the Execution Date and as at the Completion Date.
16. NO CONFLICT
In each and every event where:
(a) there is a conflict between the provisions of this Agreement
and the provisions of the EENZL Agreement; or
(b) this Agreement does not contain a provision dealing with a
specific point,
the provisions of this Agreement shall, in each and every event,
prevail to the intent that as among the Parties and their Affiliates,
the rights and obligations in respect of the EENZL Assets shall be
deemed to be governed by the provisions of this Agreement and not the
EENZL Agreement.
THE PARTIES HAVE EXECUTED THIS AGREEMENT:
EXECUTED UNDER THE NAME AND SEAL OF BY SOUTHERN PETROLEUM NO LIABILITY by its
undersigned Attorney who has not received any notice of revocation of the Power
of Attorney under which this Instrument is signed:
/s/ D.J. Llewellyn /s/ A.L. Bewley
- ------------------------------- -------------------------------
Signature of Attorney Signature of Witness
David James Llewellyn Alan Leonard Bewley
- ------------------------------- -------------------------------
Name of Attorney Name of Witness
EXECUTED UNDER THE NAME AND SEAL OF BY ENERGY EXPLORATION NZ LIMITED by its
undersigned Attorney who has not received any notice of revocation of the Power
of Attorney under which this Instrument is signed:
/s/ D.J. Llewellyn /s/ A.L. Bewley
- ------------------------------- -------------------------------
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Signature of Attorney Signature of Witness
David James Llewellyn Alan Leonard Bewley
- ------------------------------- -------------------------------
Name of Attorney Name of Witness
EXECUTED BY SWIFT ENERGY NEW ZEALAND LIMITED by:
/s/ Don Morgan /s/ James P. Mitchell
- ------------------------------ -------------------------------
Signature of Director Signature of Director
Don Morgan James P. Mitchell
- ------------------------------ -------------------------------
Name of Director Name of Director
EXECUTED BY SWIFT ENERGY COMPANY by:
/s/ Terry E. Swift
- -------------------------------
Signature of Director
Terry E. Swift
- -------------------------------
Name of Director
EXECUTED BY ENERGY EXPLORATION NZ LIMITED by its undersigned Attorney who has
not received any notice of revocation of the Power of Attorney under which this
Instrument is signed.
/s/ D.J. Llewellyn /s/ A.L. Bewley
- ------------------------------- -------------------------------
Signature of Attorney Signature of Witness
David James Llewellyn Alan Leonard Bewley
- ------------------------------- -------------------------------
Name of Attorney Name of Witness
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