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EXHIBIT 10.7
Scanraff Shareholders' Agreement, dated as of May 20, 1999, by and between
Preem Petroleum AB, Hydro R&M Holding AS, and Skandinaviska Raffinaderi
Aktiebolaget Scanraff
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SKANDINAVISKA RAFFINADERI AKTIEBOLAGET SCANRAFF
SHAREHOLDERS' AGREEMENT
Among
Preem Petroleum AB
Hydro R & M Holding a.s.
Skandinaviska Raffinaderi Aktiebolaget Scanraff
Dated May 20, 1999
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SKANDINAVISKA RAFFINADERI AKTIEBOLAGET SCANRAFF
SHAREHOLDERS' AGREEMENT
This is an AGREEMENT dated as of May 20, 1999 among Preem Petroleum AB
(herein called "Preem"), Hydro R & M Holding a.s. (herein called "Hydro"),
Preem and Hydro sometimes individually called a "Shareholder" and
collectively called the "Shareholders", and Skandinaviska Raffinaderi
Aktiebolaget Scanraff (herein called "Scanraff").
WITNESSETH:
WHEREAS, after various assignments and transfers Preem owns 1,570,350 shares
and Hydro owns 429,650 shares of class A stock of Scanraff;
WHEREAS, in a separate document dated as of May 20, 1999 Preem, Hydro, Norsk
Hydro ASA, Svenska Oljegrossister AB (formerly Texaco Oil AB), OK
Marknadsservice AB, as successor to Oljekonsumenternas forbund, ekonomisk
forening and Scanraff have agreed that the Shareholders' Agreement by and
between them dated as of June 30, 1986 shall be terminated.
NOW, THEREFORE each Shareholder agrees with the other Shareholder and
Scanraff agrees with both Shareholders as follows:
PART ONE:
SUBJECT MATTER OF THIS AGREEMENT:
DEFINITION AND RULES OF CONSTRUCTION
1.1 SUBJECT MATTER. The subject matter of this Agreement is the petroleum
refinery owned by Scanraff and located on the Lyse Peninsula in Bohuslan,
north of Lysekil, Sweden, having an authorized capacity to refine ten
million (10,000,000) metric tons of crude oil per annum.
1.2 DEFINITIONS. For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in
this Article 1.2 have the meaning herein assigned to them, the capitalized
terms defined in the Recitals and subsequent Articles by inclusion in
quotation marks and parentheses have the meaning so ascribed to them.
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"Affiliate", with respect to any Shareholder, means:
(i) any other Person which beneficially owns, directly or indirectly, all
of such Shareholder's voting stock, or
(ii) any other Person all of the voting stock of which is beneficially
owned, directly or indirectly, either by such Shareholder or by an
Affiliate of such Shareholder as defined in the preceding clause (i).
"Board of Directors" means the Board of Directors of Scanraff.
"By-Laws" means the duly registered By-Laws of Scanraff as in effect from
time to time.
"Managing Director" means the managing director of Scanraff.
"Person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization, cooperative, or government or any
agency or political subdivision thereof.
"Processing Agreement" means the Processing Agreement of even date herewith
among Preem, Hydro and Scanraff.
"Processing Rights" means the rights of a Shareholder to process its
percentage of capacity of crude oils and feedstocks through the Refinery as
provided for in the Processing Agreement.
"Refinery" means the petroleum refinery and related facilities owned by
Scanraff which is the subject matter of this Agreement as the same may exist
from time to time during the term of this Agreement.
"Share" means a share of One Hundred (100) Kronor per value capital stock of
Scanraff.
"Share Percentage" as applied to each Shareholder means that percentage of
all the Shares at any time issued and outstanding which is owned by such
Shareholder at the time the definition is applied (except that if two (2) or
more Shareholders are Affiliates, their respective percentages as aforesaid
shall be combined, and they shall be treated as a single Shareholder for
purposes of this Agreement).
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"Shareholder" means, at the time the definition is applied, the owner of
one or more issued and outstanding Shares (subject to the definition of
Share Percentage).
1.3 RULES OF CONSTRUCTION. For purposes of this Agreement, unless the
context otherwise requires, (i) all terms defined herein include the plural
as well as the singular and (ii) reference to any Person include successors
of such Person by consolidation, merger and transfer. Reference to Parts
and Articles are, unless otherwise specified, to Parts and Articles of this
Agreement. References to any other agreement or other instrument shall,
unless the context otherwise requires, or the definition thereof otherwise
specifies, be deemed reference to the same as it may from time to time be
changed, amended or extended in accordance with its terms and such other
agreement or instrument when referred to shall be deemed to be
incorporated herein by reference. Neither of the captions to Parts,
Articles or Subdivisions thereof, nor the Index shall be deemed to be a
part of this Agreement.
PART TWO:
SHAREHOLDINGS, RIGHTS OF SHAREHOLDERS
AND FINANCIAL OBLIGATIONS
2.1 SHAREHOLDERS AND SHARE PERCENTAGES. The Shareholders and their Share
Percentages are as follows:
Preem: Seventy-eight and five thousand (78.5175 %)
one hundred and seventy-five
one ten thousandth percent
Hydro: Twenty-one and four thousand (21.4825 %)
eight hundred and twenty-five
one ten thousandth percent
2.2 TRANSFERABILITY OF SHARES BY SHAREHOLDERS.
(a) Except as provided in Article 2.2 (c) no Shareholder may assign,
sell or otherwise transfer any Shares held by it or any other
interest in or obligation under this Agreement without the prior
written consent of all of the Shareholders, unless such transfer is
made to an Affiliate. Such consent to assign, sell or otherwise
transfer Shares shall be given unless the new Shareholder is,
according to reasonable standards, commercially unacceptable.
The Shareholders whose consent to transfer is being sought
shall respond within 3 weeks after such request was received,
provided, however, that such Shareholders may consent to the
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transfer subject to the observance of the procedures applicable
to transfers as specified below.
If at any time during the term of this Agreement, a Shareholder
desires to sell a Share other than to an Affiliate, he shall
offer the other Shareholders to purchase the Share. Such offer
shall be made by written notice which shall specify the number of
Shares to be transferred, the price per Share and other terms of
the transfer. If an agreement with a third party has been entered
into, the name of such party shall be disclosed. The notice may
request those who wish to exercise their option, to notify in
writing the offering Shareholder hereof within two months from
the day they were notified by such Shareholder.
An exercise of rights to purchase hereunder must be made with
respect to all the Shares offered. If an offer has been made for
the shares in Scanraff and Skandinaviska Kracker Aktiebolaget
Scancracker all such shares in both companies must be purchased.
The provisions of this paragraph shall also apply when a
Shareholder in only one of those companies has received an offer
to purchase Shares in both companies. If more than one
Shareholder exercises an option to purchase Shares, the Shares so
offered shall be allocated between the Shareholders exercising
their rights to purchase in proportion to the Shares they already
own.
The option price and other terms and conditions shall be as
stated in the notice. If a Shareholder cannot accept this
purchase price such Shareholder may request that an arbitration
panel shall decide the fair market value of the Shares. The
arbitration proceedings shall follow the procedures of Article
7.3. Such arbitration panel shall be appointed within three weeks
after receipt of the offering notice and the panel shall be
requested to conclude the proceedings and to render their award
within five weeks thereafter.
An offering Shareholder may at any time before signature of a
final transfer agreement with Shareholders who have exercised
their options hereunder, withdraw from his offer, provided,
however, that he shall reimburse the other Shareholder for all
external costs incurred in exercising their option and provided
further that any agreement for a transfer of Shares made between
the offering Shareholder and a third party shall also be deemed
to be terminated as of the date of the withdrawal.
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If the rights to purchase the Shares have not been exercised,
then, subject to such third party not being unacceptable as
stated in the first paragraph of this Article 2.2. (a), the
Shareholder desiring to sell may transfer the Shares to a third
party on such terms and conditions as stated in the notice given
to the other Shareholders.
The content of and the fact that any procedure under this Article
2.2 (a) has been launched shall be kept confidential and the
Shareholders and the arbitrators shall sign a confidentiality
agreement when requested, provided that nothing herein shall
prevent the arbitration panel from establishing the "fair market
value of the Shares" as aforesaid.
(b) If shares or any other interest in this Agreement are transferred
in accordance with this Article 2.2 paragraph (a) or (c) the
transferor shall cause the transferee to agree in writing to
assume all of the obligations of the transferor under this
Agreement and the Processing Agreement.
(c) In the event a Shareholder ("Optionor") is declared a
bankrupt, the other Shareholder ("Optionee") shall have the
option to purchase all of the Optionors' Shares ("Option Shares")
on the terms set forth in this Article 2.2 (c). The price per
Option Share shall be equal to the fair market value, to be
determined by arbitration as provided for in Article 7.4 if the
parties cannot agree as to the fair market value (the "Purchase
Price"). If the Optionee desires to purchase Option Shares it may
within 90 days following the bankruptcy give notice to the receiver
that it is instituting arbitration proceedings to determine the
Purchase Price. The option shall be made within a 30-day period
following the determination of the Purchase Price by giving notice
thereof to the receiver.
2.3 CERTIFICATES FOR SHARES. A certified copy of this Agreement shall be
filed with the Managing Director, and Scanraff shall cause to be placed on
the face of each certificate for Shares hereafter issued an appropriate
legend indicating that ownership thereof is subject to the provisions of
this Agreement and specifically Articles 2.2 and 2.5.
2.4 TERMS OF FINANCING THE REFINERY
The Parties have agreed that, as of July 1, 1991 Scanraff shall be
financed through processing fees, equity and Shareholders' loans in amounts
and on terms as agreed
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from time to time. Except in the case of financing from third party
lenders, all financing shall be provided by the Shareholders (or their
Affiliates) in proportion to each Shareholders' Processing Rights or
ownership shares as the case may be.
2.5 OBLIGATIONS OF SHAREHOLDERS. Each Shareholder shall always hold its
Shares, take action, give its consent or require the Directors
nominated by it to vote in such manner that the provisions of this
Agreement and the Processing Agreement can be satisfied.
PART THREE
MANAGEMENT AND CONTROL OF SCANRAFF
3.1 NUMBER AND REPRESENTATION OF DIRECTORS OF SCANRAFF.
(a) The Board of Directors shall at all times be composed of six (6)
members, four (4) of whom shall be nominees of Preem, and one (1)
of whom shall be a nominee of Hydro. The sixth member of the Board
of Directors shall be the Managing Director of Scanraff. In addition,
there shall also be six (6) Deputy Directors, four (4) nominated by
Preem and two (2) by Hydro. A Deputy Director nominated by a
Shareholder may never act for a Director that was nominated by
another Shareholder.
(b) The Board of Directors shall also include such number of Employee
Directors and Deputy Employee Directors as may be required from time
to time by law.
3.2 CHAIRMAN OF THE BOARD. The Board shall appoint a chairman and a vice
chairman.
3.3 AUTHORITY OF THE BOARD. Without prejudice for the obligations and the
responsibility of the Managing Director, the Management and control of
Scanraff and all aspects of its operations shall be carried out through
the Scanraff Board of Directors and such committees as may be established
by the Board of Directors from time to time. No action may be taken by the
Board of Directors except by majority vote and provided at least one
Director nominated by each of Preem and Hydro agrees to such action.
3.4 EXECUTIVE COMMITTEE.
(a) An Executive Committee (herein called the "Excom") shall be
established by the Board of Directors and
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shall be composed of three (3) members (hereinafter "Member" or "Members")
one (1) to be selected by each Shareholder and the third Member to be the
Managing Director of Scanraff. One Employee Director or Deputy Employee
Director shall have the right to attend meetings. In the event that the
Excom cannot unanimously agree on a matter, or if the Members are unable to
hold a meeting called pursuant to a written notice given as provided
herein, the matter so contemplated shall be referred to the Board of
Directors. Each Shareholder shall notify the Board of Directors from time
to time, in writing, of the name of the individual who it has selected to
be its Member, together with the name of one alternate who shall have
power to act in the absence of its Member.
(b) The Responsibilities of the Excom, in addition to any other matter that
may be delegated to it, shall be to:
(i) review and approve one year production budget, investments,
manpower and expense budgets for submission to the Board of
Directors;
(ii) approve revisions of the following procedures:
Import/Export procedure
Product allocation procedure
Approval schedule
Percentage of capacity entitlement
Service agreement between Scanraff and Scancracker
Percentage for allocation of fixed costs.
(iii) approve rated capacities of units in the Refinery;
(iv) approve new or modifications to standard yields for imported
blendstock and crude oil or crude oils processed;
(v) approve procedures for determining acceptability of grades of
crude oil for processing;
(vi) approve the manner, frequency and form in which customary
operating reports shall be made by Scanraff;
(vii) approve control accounting systems and procedures;
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(viii) approve appropriation requests for investment expenditures
covered by approved capital budget in excess of the Managing
Director's authority as may be in effect from time to time;
(ix) approve additions to or deletions from the refinery product
slate and changes in product specification;
(x) approve conditions for processing hydrocarbon feedstock other
than crude oil;
(xi) approve procedures and conditions for the transfer of capacity
utilization and for economic use of any refinery capacity that
is surplus to any Shareholder;
(xii) approve the appointment, transfer or dismissal of all key
personnel (as defined from time to time in the Approval
schedule) other than the Managing Director;
(xiii) authorize those technical and other services provided for in
Part Four of this Agreement.
(c) Meetings of the Excom shall be held at such times and in such manner
as is necessary to properly carry out its responsibilities, and for
this purpose may be called by any Member upon two weeks' prior
written notice. Matters that are the responsibility of the Excom may
be submitted to it by any Member, for consideration and vote without
holding a meeting, provided such matter is submitted in writing to the
other Members. In such event, the Members may vote by giving written
advice of their vote to the Managing Director. No action may be taken
by the Excom without the affirmative vote of all its Members
appointed by Shareholders.
(d) The Excom shall appoint such technical, financial, accounting, tax,
legal or other subcommittees as it deems appropriate for studies,
analysis, and reports on matters pertaining to the Refinery and its
operation.
3.5 SCANRAFF MANAGEMENT.
(a) The day-to-day management of Scanraff shall be the responsibility
of the Managing Director. In addition, there may be a Vice Managing
Director, and such other officers as the Board of Directors
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shall appoint. The Scanraff management shall be responsible for the
operation of the Refinery and in so doing shall carry out all
programs approved by the Board of Directors or the Excom in a safe,
diligent, good and workmanlike manner.
(b) Scanraff's management shall:
(i) prepare all appropriation requests, propose budgets, and
maintenance and operating programs, including forecasts of
crudes to be processed and products to be manufactured;
(ii) carry out all operating and capital investment programs
within approved budgets;
(iii) keep the Refinery and all petroleum stock free and clear of
all mortgages, pledges, liens or other encumbrances, except as
may be authorized by the Board of Directors; and
(iv) furnish to the Shareholders such financial, statistical and
operational reports and forecasts as any of them shall
reasonably request. Financial reports shall be prepared
consistent with generally accepted accounting principles as may
be in effect in Sweden from time to time but, to the extent
such reports are required by Hydro, the reports shall also be
prepared in accordance with generally accepted accounting
principles in effect in the United States from time to time.
3.6 RIGHT OF INSPECTION.
(a) Each Shareholder shall have the right to inspect the Refinery from
time to time, provided any such inspection does not unreasonably
interfere with day-to-day operations.
(b) Each Shareholder shall have the right to audit, on a periodic
basis, Refinery operating records and all other Scanraff books,
accounts and records.
3.7 SWEDISH AUDITORS. Auditors of Scanraff shall be Swedish authorized
public accountants or accounting firms. Each Shareholder shall have the
right to nominate one (1) Auditor and one (1) Deputy Auditor. The audit
shall be sufficient in scope to meet the requirements of all Shareholders.
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PART FOUR:
TECHNICAL AND OTHER SERVICES
4.1 PROJECT REVIEW AND SHAREHOLDERS' SERVICES.
(a) Each Shareholder shall have the right to review at any time in
detail all design, construction and engineering projects associated
with or undertaken by Scanraff.
(b) To the extent that technical and other services are available in a
Shareholder, Scanraff shall be obligated to call for these services
from such Shareholder in lieu of either (i) setting up facilities
within Scanraff which significantly duplicate services available from
such Shareholder or (ii) contracting for comparable services from
others unless it can be demonstrated that Scanraff will benefit
therefrom.
(c) To the extent Preem or Hydro shall provide technical and other
services requested by Scanraff as contemplated herein, Preem and
Hydro shall, with the approval of the other Shareholder, which
approval shall not be unreasonably withheld, enter into a contract
for such services under terms and conditions which shall give the
providing Shareholder full cost coverage.
(d) (i) Payment for services, including additional technical
assistance, use of research laboratories and engineering
offices, and/or personnel shall be in an amount which would
include all costs and overheads incurred by Preem or Hydro as
the case may be and its Affiliates in connection with making
such services and personnel available. Personnel costs shall
include salaries, related employees benefits (including sick
pay and normal vacation), and all personal and travel expenses
for the full period of time that such personnel are away from
their regular assignments. Such time shall include travel time
to and from their place of regular assignment and cost of home
leave granted in accordance with then existing policies of
Preem or Hydro as the case may be and its Affiliates, as
appropriate, including salary and transportation for the
employee and eligible dependents.
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(ii) Where Hydro provides services and the payments specified in
Subdivision (i) of this Article 4.1 (d) are subject to Swedish
taxes or other fiscal charges, including with-holding and added
value taxes but not corporate taxes of Hydro, such taxes or
charges shall be for Scanraff's account, unless they can be
recovered.
(iii) When requested by Scanraff in writing, Preem or Hydro as the
case may be shall give Scanraff, to the extent possible,
estimates of the cost for services to be rendered pursuant to
Article 4.1. Unless Scanraff shall request otherwise, the
rendering of such services by Preem or Hydro as the case may
be shall not be delayed while the estimate is being prepared
and reviewed.
(iv) On or before the 20th day of the month following the month
in which services are performed, Preem or Hydro as the case may
be will forward to Scanraff a detailed billing statement
reflecting the total amounts due per subdivisions (i) and (ii)
of this Article 4.1 (d) specifying the currencies expended in
providing such agreed services. Payment by Scanraff of such
billing shall be made on or before the 30th day of the same
month to such bank or banks as Preem or Hydro as the case may
be may specify from time to time. At Scanraff's option,
payment may be made in the currency reflected in the billing
statement or in Swedish kronor.
4.2 LIABILITY AND INDEMNITY.
(a) Except in the case of gross negligence, no Shareholder or its
Affiliates, their agents and employees, shall be liable to Scanraff
for any loss or damage of whatsoever nature sustained by Scanraff or
for any third party claims (including another Shareholder) arising
out of, in connection with or related to the performance by or on
behalf of such Shareholder or its Affiliates, their agents and
employees, of their obligations under Part Four of this Agreement.
(b) Scanraff shall keep each Shareholder and its Affiliates, their
agents and employees, fully indemnified against any claim, demand,
action or
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proceeding brought or instituted against such Shareholder and its
Affiliates, their agents and employees, by any third party (including
another Shareholder) in connection with the performance by or on
behalf of such Shareholder or its Affiliates, their agents and
employees, of their obligations under Part Four of this Agreement,
except in the case of gross negligence of such Shareholder and its
Affiliates, their agents and employees.
PART FIVE:
WORKING CAPITAL AND CAPITAL ADDITIONS
5.1 WORKING CAPITAL.
Any deficiency in working capital not provided by the normal processing
fees and required by Scanraff shall be provided by an increase in or a
surcharge on the processing fee unless the Board of Directors shall elect
to finance such deficiency in another way.
5.2 EXPANSION AND ADDITIONS OF THE REFINERY.
(a) The Shareholders agree in principle to participate on a pro rata
basis (in the same percentage as their Processing Rights) in any
Refinery expansion, alteration, addition or improvement (hereinafter
"Modification") which may be required, according to commercial
necessity and in the exercise of good business judgement in order to
enable the Refinery to manufacture and supply on a competitive
basis, petroleum products to meet product and quality requirements.
In such event the Shareholders will make available to Scanraff on a
pro rata basis (on the same percentage as the Shareholders'
Processing Rights) the funds necessary for such Modification to the
extent such funds are not provided for through Scanraff or otherwise.
The method of making such funds available shall be agreed upon by the
Shareholders at the appropriate time.
(b) In the event that a Shareholder does not wish to participate in a
Modification (the "Non-Participating Shareholder"), then PROVIDED
(i) the Shareholder in favour of the Modification (the
"Participating Shareholder") agree to make available to Scanraff
all of the funds necessary for such Modification, (ii) such
Modification is made in a manner such that the Non-Participating
Shareholder's Processing Rights are not adversely affected in
respect of quantity, quality and cost,
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by such Modification, (iii) each Non-Participating Shareholder's
other rights in respect of Scanraff and the Refinery, are
adjusted to reflect such disproportionate investment, and (iv)
the consent of the Non-Participating Shareholder is obtained,
which consent, taking into account the foregoing conditions,
shall not be unreasonably withheld, THEN THE NON-PARTICIPATING
SHAREHOLDER SHALL BE OBLIGATED TO TAKE WHATEVER STEPS ARE
NECESSARY TO EXPRESS ITS AUTHORIZATION TO SCANRAFF FOR THE
MODIFICATION. If the Modification is capable of being utilized
solely by the Participating Shareholder, without affecting the
Processing Rights of the Non-Participating Shareholder, then the
Non-Participating Shareholder shall have no right to process in
or through the Modification nor any obligation with respect to
the maintenance, repair or operating costs of the Modification
and the Modification shall be devoted exclusively to the
Participating Shareholder and to the extent necessary the
Processing Agreement shall be amended to reflect the Modification
and the Participating Shareholder's exclusive right in the same.
Unless the Shareholders should agree otherwise, the Share
Percentage shall not be affected by the foregoing. If the
Non-Participating Shareholder subsequently desires to participate
in the Modification, it may do so provided (x) the participation
does not adversely affect the Modification, in respect of
capacity, quality, cost or completion date, (y) it notifies the
Participating Shareholder 90 days after completion of the
Modification, (z) it pays to the Participating Shareholder a pro
rated amount (in the same percentage as the Non-Participating
Shareholder's Processing Rights) of the funds made available by
the Participating Shareholder to Scanraff, plus interest thereon
calculated on a per annum basis at 6 months STIBOR + 1/2 % during
the period between the advancement of funds by the Participating
Shareholder and the payment by the Non-Participating Shareholder
of its share of the cost of the Modification.
5.3 REPLACEMENT AND RENEWAL OF EQUIPMENT. Notwithstanding the provisions of
Article 5.2, so long as the Shareholders have an interest in Scanraff or
the Refinery, they agree to make available to Scanraff, in proportion to
their Processing Rights such funds as are required from time to time to
operate or maintain the Refinery in an efficient and safe manner. For the
purpose of this Article 5.3, operation and maintenance means such measures
as are necessary to maintain the Refinery in
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working order at basically the same technological level, capacity, yield
structure and product slate.
5.4 STRATEGIC BUSINESS PLAN AND YEARLY PLAN FOR INVESTMENTS AND FINANCING. A
strategic business plan shall be presented to the Board of Directors for
approval on a yearly basis. Before the end of each year the Board of
Directors shall consider and approve an investment budget and a financing
plan covering the following year.
PART SIX:
BUNKERING
6.1 BUNKERING OF VESSELS. Each of the Shareholders and any Affiliate shall
have the right to bunker vessels owned by, time or demise chartered by, or
otherwise under the effective control of such Shareholder or its Affiliate.
In respect of the supply of bunkers at the crude port or product port
servicing the Refinery to other marine vessels, each Shareholder is free to
seek such business for their own respective accounts.
PART SEVEN:
MISCELLANEOUS
7.1 DISSOLUTION.
(a) In the event of liquidation, expropriation, sale or other
dissolution of Scanraff (hereinafter "Dissolution") for any reason,
the assets of Scanraff shall be disposed of as and in the order
listed below:
(i) all secured creditors shall be paid in full to the extent
that the security is sufficient therefor; and
(ii) all other creditors shall be paid in full, including any
ordinary Shareholders' loans; and
(iii) subordinated Shareholders' loans shall be paid in full; and
(iv) the balance of the assets shall be distributed to the
Shareholders in accordance with their Share Percentage at the
time of distribution.
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(b) In the event there has been a modification under Article 5.2 (b)
but the Share Percentage has not been adjusted on account of such
modification, then, as part of the payments contemplated under
Article 7.1 (a), each Shareholder shall be entitled to receive as
a creditor of Scanraff a payment equal to that proportion of the
assets less amounts payable under Article 7.1 (a) (i) - (iii)
prior to the application of this Article 7.1 (b), which the value
of any portion of the Refinery (just prior to Dissolution)
attributable to a Modification, if any, made by the particular
party, under Article 5.2 of this Agreement bears to the total
value of the Refinery just prior to Dissolution.
7.2 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of Sweden.
7.3 ARBITRATION. All disputes arising under or in connection with this
Agreement shall be finally settled by arbitration in Stockholm in
accordance with the Swedish Arbitration Act in force from time to time.
7.4 TERM.
(a) Except as otherwise expressly provided, this Agreement shall
become effective on May 20, 1999 and shall remain in full force and
effect until December 31, 2023, but no termination shall affect any
rights or liabilities, theretofore accrued hereunder or pursuant
hereto.
(b) No later than December 31, 2021, the Shareholders and Scanraff
shall in good faith commence negotiations in order to reach a new
arrangement concerning their respective interests in Scanraff and the
Refinery. Should the Shareholders and Scanraff fail to reach an
arrangement by December 31, 2023, then the Shareholders shall cause
Scanraff to be liquidated in a manner contemplated in Section 7.1 of
this Agreement.
7.6 NOTICES. All notices or communications hereunder shall be given by
letter sent by mail, telex or telefax (important notices to be sent by
registered mail) and shall be deemed given when the letter is sent by
ordinary mail, the telex dispatched or the telex sent, postage or charges
prepaid, and directed to the party or parties for whom intended at the
respective address set forth below in each case until changes by notice
given hereunder:
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To Preem: Preem Petroleum AB
S-115 90 STOCKHOLM Sweden
To Hydro: Hydro R & M Holding a.s. Norway
To Scanraff: Skandinaviska Raffinaderi AB Scanraff
S-453 81 LYSEKIL Sweden
7.7 SEVERABILITY OF OBLIGATIONS. The obligations of the Shareholders
hereunder are not joint but several, and default in performance by any one
of such Shareholders shall in no way affect the obligations of any other
Shareholder.
7.8 BENEFICIARIES. This Agreement shall only inure to the benefit of, and
may only be enforced by, the parties hereto and shall not, in any event,
inure to the benefit of, or be enforceable by, any other Person whatsoever.
7.9 CHANGES IN WRITING. No modification, variation or amendment of this
Agreement, no determination, evaluation, approval, waiver or other action
permitted or taken hereunder and no further agreement contemplated hereby
shall be of any force unless the same is in writing and has been signed by
(i) all the parties in the case of modification, variation or amendment or
(ii) the applicable Person in such other cases.
IN WITNESS WHEREOF, the parties hereto have caused this Shareholders'
Agreement to be executed as of the date first above written, in three
originals, one for each party concerned.
For PREEM PETROLEUM AB For SKANDINAVISKA RAFFINADERI AB SCANRAFF
By /s/ Lars Nelson By /s/ Leif Brinck
-------------------------------- ---------------------------------
Title Title
----------------------------- ------------------------------
For Hydro R & M Holding a.s.
By /s/ John Ottestad
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