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EXHIBIT 10.14
SALE AND PURCHASE AGREEMENT
THIS AGREEMENT is made the 31st day of May, 1995.
BETWEEN:
1. UNION TEXAS PETROLEUM LIMITED, a company incorporated in England whose
registered number is 708552 and whose registered office is 5th Floor,
Bowater House, 68-114 Knightsbridge, London SW1X 7LR ("Buyer");
2. ORYX U.K. ENERGY COMPANY, a corporation organized and existing under
the laws of the State of Delaware whose principal place of business is
Charter Place, Vine Street, Uxbridge, Middlesex, England UB8 1EZ,
("Seller").
WHEREAS:
The Seller wishes to sell and Buyer wishes to purchase Seller's undivided
interest under U.K. Continental Shelf Licence P213 encompassing Area A of Block
16/26 (containing Alba Field) and Area C of Block 16/26, all under the terms of
this Agreement.
NOW THEREFORE IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement, including its recitals and schedules, the
following expressions shall, except where expressly stated
otherwise, have the following respective meanings:
"ACCRUALS BASIS" means that basis of accounting under which
costs and benefits are regarded as applicable to the period in
which the liability for the cost is incurred or the rights to
the benefits arise regardless of when invoiced, paid or
received;
"AFFILIATE" means in relation to any Party, any company or
other entity which controls or is controlled by that Party or
is controlled by a company or other entity which controls that
Party. "Control" means the right to exercise, directly or
indirectly, more than 50% of the voting rights of a company or
other entity;
"ASSET" means Seller's undivided interest in and under the
Licence and the Seller's 15.5% interest in and under the Joint
Operating Agreement and, in particular, the Seller's 15.5%
interest in Block 16/26 Area A and Block
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16/26 Area C, (including, without limitation, all equipment, materials,
Production Facilities and associated records and data and the burden of
all corresponding obligations and liabilities), attaching to such
interests, including the corresponding rights and interests in and
under the Asset Documents;
"ASSET DOCUMENTS" means all the agreements relating to the
Asset as listed in Schedule 1;
"BLOCK 16/26 AREA A" means that area defined in the Joint
Operating Agreement as Area A of Block 16/26 (including,
without limitation, the Alba Field, as defined in the Joint
Operating Agreement and as may be defined by the Secretary of
State from time to time);
"BLOCK 16/26 AREA C" means that area defined in the Joint
Operating Agreement as Area C of Block 16/26;
"BUSINESS DAY" means a day other than Saturday or Sunday on
which banks are or, as the context may require, were generally
open for business in the City of London and New York City;
"COMPLETION" means the completion of the sale and purchase of
the Asset as provided for in Clause 6;
"COMPLETION DATE" means the date on which Completion actually
occurs;
"CO-VENTURERS" means the persons (and their respective
successors and assigns) other than Seller having undivided
interests in the Licence and in all agreements, instruments and
documents related to the Licence, including for the avoidance
of doubt the Joint Operating Agreement;
"DATA" means all accounts, books and data relating to the Asset
including, without prejudice to the generality of the
foregoing, contracts, correspondence, information, data and
reports (including petroleum engineering, reservoir
engineering, drilling, geological, geophysical and all other
kinds of technical data and reports, samples, well-logs and
analyses in whatever form the same are maintained) together
with (i) traded data other than the Traded Data; and (ii) so
far as practical, meaningful extracts relating to the Asset of
the accounts, books and data in the possession of the Seller,
which relate partly to the Asset, but excluding information and
data consisting of analysis prepared by
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Seller for its own internal corporate decision making and/or
review process;
"DATA ROOM DOCUMENTS" means the documents relating to the Asset
and made available for the Buyer's inspection in the data rooms
located at Seller's offices together with such other documents
as Seller may have provided to the Buyer prior to the date
hereof, all as set out in Schedule 6 hereto;
"EFFECTIVE DATE" means 00:01 hours GMT on 1st July, 1995;
"ENCUMBRANCE" means any mortgage, charge (whether fixed or
floating), pledge, lien, equity or encumbrance;
"FURTHER DOCUMENTS" means the Working Interest Assignment and
the other documents listed on Schedule 7 in a form reasonably
satisfactory to Buyer and in accordance with this Agreement, to
be executed in accordance with Clause 6.1.3 and 6.1.4, subject
to such amendments required by the Secretary of State and in
respect of documents set out in part 2 of Schedule 7 any
reasonable amendments required by the Co-Venturers, together
with such other documents as are required to effect Completion;
"DTI" means the Department of Trade and Industry;
"INTERIM PERIOD" means the period of time commencing on the
Effective Date and extending up to and including the Completion
Date;
"JOINT OPERATING AGREEMENT" means the Joint Operating Agreement
dated 10 October 1990 as amended and restated;
"LIBOR" for any period means the rate per annum quoted by
National Westminster Bank plc, 53 Threadneedle Street, London
EL2P 2JN for one (1) month deposits and in amounts of at least
U.S. one (1) million dollars ($1,000,000) to leading banks in
the London Interbank market at or about 11:00 a.m. (GMT) on
Monday of each succeeding one (1) week term for the relevant
period;
"LICENCE" means the United Kingdom Petroleum Production Licence
P. 213 granted under the provisions of the Petroleum
(Production) Act 1934, as applied by the Continental Shelf Act
1964 and any extensions, amendments, variations or renewals of,
or substitutions in respect of the whole or any part of, such
licence in effect at the date hereof or hereafter;
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"OPERATOR" shall mean the Operator, as such term is defined in
the Joint Operating Agreement;
"PARTY" means any party to this Agreement;
"PETROLEUM" has the meaning assigned to it under the Licence;
"PRODUCTION FACILITIES" means the Alba Field platform and
floating storage unit as described on schedule 5, and any other
associated facilities, assets and systems related thereto;
"REFERENCE INTEREST RATE" means LIBOR for the period in
question for the sum due but unpaid on such date for the period
in question plus one (1) percentage point;
"SECRETARY OF STATE" means Her Majesty's Secretary of State for
Trade and Industry;
"SUBSIDIARY" has the meaning assigned to it by Section 736 of
the Companies Act 1985;
"TRADED DATA" means, with respect to the Asset, data which
relates to an area unrelated thereto and which has been
acquired by trade, purchase or otherwise by or on behalf of the
Seller as a party to the Joint Operating Agreement from a third
party or parties where such data cannot be provided to the
Buyer because such transfer is prohibited by the Agreement
under which it was acquired;
"WORKING INTEREST ASSIGNMENT" means the assignment of the Asset
in a form reasonably satisfactory to Buyer and in accordance
with this Agreement.
1.2 All references to clauses, recitals and schedules are, unless
otherwise expressly stated, references to clauses of, and
recitals and schedules to, this Agreement.
1.3 The headings in this Agreement are inserted for convenience
only and shall be ignored in construing this Agreement.
1.4 Any reference to any statute or statutory instrument in this
Agreement shall be a reference to the same as amended,
supplemented or re-enacted from time to time.
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1.5 Unless the context otherwise requires, reference to the
singular shall include a reference to the plural and vice-
versa; and reference to any gender shall include a reference to
all other genders.
1.6 The schedules attached hereto form part of this Agreement. In
the event of any conflict between the provisions of this
Agreement and the schedules hereto, the provisions of this
Agreement shall prevail.
1.7 Documents "in the Agreed Terms" shall mean documents in the
form agreed between the Parties and initialled by the Parties
for identification.
2. TRANSFER OF THE ASSET
2.1 Subject as provided in Clause 3, the Seller as legal and
beneficial owner of the Asset hereby agrees for the
consideration provided for herein to transfer to the Buyer at
Completion and the Buyer hereby agrees to accept at Completion
the Asset free from all Encumbrances, rights of pre-emption,
royalty interests, production payments, carried interests,
deferred obligations or any other third party rights or
security interests whatsoever (except as specified in the
Licence or in the Joint Operating Agreement).
2.2 On Completion, the transfer referred to in Clause 2.1 above
shall, as between the Parties, be deemed for all purposes to be
made with effect from the Effective Date.
3. CONDITIONS OF COMPLETION
3.1 Completion is conditioned on:
3.1.1 the receipt of all necessary written consents and
approvals of the Secretary of State;
3.1.2 the receipt of any necessary written consents and
approvals of each of the Co-Venturers;
3.1.3 the receipt of the confirmation by Buyer from each
of the Co-Venturers that the Further Documents are
in a form and content satisfactory to each of them
and will be executed by each of them without further
material amendment;
3.1.4 the Buyer having made the visit to the Production
Facilities referred to in Clause 5.4 and having
given no notice to Seller, within 48 hours from the
return of its representatives to the U.K.
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mainland that, in its reasonable opinion, the
Production Facilities have not been designed,
fabricated, installed or managed in a good,
workmanlike fashion, or are not in conformance with
industry standards in the U.K. North Sea;
3.2 Completion is also conditioned on:
3.2.1 there not occurring before Completion (a) any
casualty, losses or damages (including in either
case, without limitation, curtailment or loss of
production), (b) any mechanical failure or breakdown
of equipment or (c) any event in relation to the
Asset which gives or may give rise to environmental
or pollution liability, and any of (a), (b) or (c),
individually or in the aggregate, having or being
reasonably expected to have an after-tax impact on
Buyer of a monetary value exceeding U.S.
$20,000,000; provided that if any of the same shall
occur the Buyer shall have the option to terminate
this Agreement and, subject to Clause 18.2 and 18.3,
upon said termination no Party shall have any
liability except for a breach of this Agreement
committed before such termination.
3.3 Seller shall use all reasonable endeavours to procure, with
prompt dispatch, the satisfaction of the conditions set out in
Clause 3.1 and give the appropriate notices of transfer in the
Agreed Terms to the Co-Venturers within five (5) Business Days
of the execution of this Agreement and shall keep the Buyer
informed of progress.
4. CONSIDERATION AND OTHER PAYMENTS
4.1 Consideration
The consideration for the transfer of the Asset to the Buyer
shall be Two Hundred Seventy Million ($270,000,000.00) U.S.
dollars, exclusive of Value Added Tax ("VAT").
4.2 Other Payments
The Buyer shall pay to Seller, or Seller shall pay to the Buyer
(as the case may be) such further sums as may be payable
pursuant to Clauses 4.3, 4.4, 4.5, 8.3, 9.1, 10.8, 10.9, 11.1
and 11.2. Subject to Clause 4.4.4, any
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sums that may become payable pursuant to Clause 4.4 shall be an
adjustment to the consideration and shall be added to or
subtracted from the relevant balance of the asset allocation
pursuant to Clause 8.1.
4.3 Working Capital
4.3.1 The Buyer shall pay to Seller or Seller shall pay to
the Buyer (as the case may be) a sum to reflect the
monetary value of the working capital attributable
to the Asset as set forth in Schedule 4. The said
sum shall be set out in a statement to be prepared
and given by Seller to the Buyer within sixty (60)
days after the Completion Date. Such statement shall
be a statement of working capital and a statement of
adjustments made pursuant to Schedule 4.
4.3.2 Working capital balances used for the purposes of
the statement referred to in Clause 4.3.1 shall be
taken from the individual accounts, statements and
records as of June 30, 1995. A copy of the
individual accounts, statements and records shall be
provided by Seller to the Buyer with such statement.
Verification (including the right of audit) of the
aforesaid statement shall be carried out within
sixty (60) days of receipt of such statement, and
subject to the provisions of Clause 4.3.3,
settlement of the sum detailed in the statement, as
varied by any adjustment agreed between Seller and
Buyer, shall be made within the said sixty (60) day
period.
4.3.3 In the event that Seller and Buyer cannot agree upon
any matter to which the statement referred to in
Clause 4.3 relates, the undisputed amount shall be
paid and the disputed amounts shall be referred for
resolution to an independent chartered accountant
appointed by Seller and Buyer or in the event of
Seller and Buyer differing as to such appointment by
the President for the time being of the Institute of
Chartered Accountants of England and Wales. The
accountant shall be afforded such access to books,
records, accounts and documents in the possession of
each of the Parties as he may reasonably request.
For the purposes of this Agreement, the accountant
so appointed shall be deemed to be acting as an
expert and not as an arbitrator, and the decision of
the accountant so appointed shall, in the absence of
manifest error, be final and binding on Seller and
Buyer and
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settlement of any outstanding amount shall be made within (5) Business
Days of such decision. The costs of the accountant shall be borne
equally by Seller and Buyer.
4.3.4 The Buyer shall pay to Seller or Seller shall pay to
the Buyer (as the case may be) interest on such
further sums as may be payable from the date such
sums are due to be paid to the date the sums are
actually paid (both dates inclusive) at a rate per
annum equal to one (1) percentage point above the
Reference Interest Rate calculated on a daily basis
using simple interest.
4.4 Interim Period Adjustment
4.4.1 Buyer shall pay Seller the amount of all obligations
and liabilities pertaining to the Asset and Licence
paid by Seller in respect of the Interim Period.
4.4.2 Seller shall pay to the Buyer the amount of all
receipts pertaining to the Asset and Licence
received by Seller in respect of the Interim Period.
4.4.3 For the purposes of this Clause, obligations and
liabilities will include, inter alia, cash calls for
operating costs and receipts will include, inter
alia, actual proceeds from the sale of Petroleum
produced after the Effective Date. The Buyer will
refund an amount equal to the Petroleum Revenue Tax
("PRT") and Corporation Tax ("CT") at the assumed
rate of twenty-eight percent (28%) incurred by the
Seller relating to the Asset for the period between
the Effective Date and the Completion Date. For
purposes of clarity, the PRT incurred by the Seller
will be that amount of PRT actually paid or accrued
by the Seller and CT incurred by the Seller will be
a notional calculation based on the assumed rate of
twenty-eight percent (28%) times receipts less
revenue expenditures and PRT paid or accrued but
with no capital allowances on any capital
expenditure during the Interim Period.
4.4.4 If the Seller does not incur liability to PRT and CT
relating to the Asset for the period between the
Effective Date and the Completion Date, which
situation shall arise if the Inland Revenue accepts
the Effective Date as the date of transfer
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for tax purposes, then the sums repaid by the Buyer to the Seller and
by the Seller to the Buyer pursuant to the foregoing provisions of this
Clause 4.4 shall be deemed to have been incurred or received (as the
case may be) directly by the Buyer as if the transfer of the Asset had
taken place on the Effective Date for tax purposes. The Buyer may, at
its own costs and expense with such assistance from the Seller as Buyer
may reasonably request, seek to obtain the consent of the Inland
Revenue to accept the Effective Date as the date of transfer for tax
purposes and if such consent is obtained, the Seller agrees to file its
PRT and CT returns accordingly and notwithstanding Clause 4.2 any sums
that become payable pursuant to this Clause 4.4 shall not be an
adjustment to the consideration.
4.4.5 The amounts set out above shall be set out in a
statement to be prepared and given by Seller to the
Buyer within sixty (60) days after Completion.
Verification, including the right of audit of said
statement, shall be carried out within sixty (60)
days of receipt of such statement and subject to the
provisions of Clause 4.4.6, settlement of the
amounts detailed in the statement as varied by any
adjustment agreed between Seller and Buyer shall be
made within the said sixty (60) day period.
4.4.6 In the event that Seller and the Buyer cannot agree
upon any matter to which the statement referred to
in Clause 4.4.5 relates, the undisputed amounts
shall be paid and the disputed amounts shall be
referred for resolution to an independent chartered
accountant appointed by Seller and Buyer or, in the
event of Seller or Buyer differing as to such
appointment, by the President for the time being of
the Institute of Chartered Accountants of England
and Wales. The accountant shall be afforded such
access to books, records, accounts and documents in
the possession of each of the Parties as he may
reasonably request. For the purposes of this
Agreement, the accountant so appointed shall be
deemed to be acting as an expert and not as an
arbitrator, and the decision of the accountant so
appointed shall, in the absence of manifest error,
be final and binding on Seller and the Buyer and
settlement of
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any outstanding amount shall be made within five (5)
business days of such decision. The costs of the
accountant shall be borne equally by Seller and the
Buyer.
4.5 INTEREST
4.5.1 In the event that Completion occurs after the
Effective Date, the consideration shall be treated
as having become due on the Effective Date and the
Buyer shall pay to the Seller on the Completion
Date, in addition to the consideration, interest on
the consideration at a rate per annum equal to the
Reference Interest Rate calculated on a daily basis
using simple interest for the number of days elapsed
between the Effective Date and the day immediately
preceding the Completion Date (both dates
inclusive).
4.5.2 Interest shall be paid on any payments due under
Clause 4.4.1 and Clause 4.4.2 at a rate per annum
equal to the Reference Interest Rate calculated on a
daily basis using simple interest for the number of
days elapsed between the time receipts are received
and payments are made in accordance with Clause
4.4.1 and Clause 4.4.2.
4.6 Any and all amounts to be paid pursuant to this Agreement shall
be paid in same day funds to the Seller's account as the Seller
shall nominate in writing if owed to the Seller, or if owed to
the Buyer in same day funds to such bank account as the Buyer
shall nominate in writing.
5. CONDUCT OF OPERATIONS PRIOR TO THE COMPLETION DATE
5.1 Subject to any obligations of confidentiality by which Seller
is bound, Seller shall in respect of the Asset from the date of
this Agreement to Completion Date:
5.1.1 provide Buyer with copies of all notices and other
information provided by or to Seller under the Joint
Operating Agreement as the same become available;
5.1.2 provide to Buyer (and its authorized employees,
agents and professional advisers) access to all such
technical, legal and financial information in the
possession of Seller which is or has been made
available to Co-Venturers relating to the Asset as
Buyer may from time to time reasonably require;
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5.1.3 not without prior written consent of Buyer (not to
be unreasonably withheld) agree to amend the
Licence, (or to execute a new joint operating
Agreement in respect of the Licence) any of the
Asset Documents or any other project documents;
5.1.4 keep the Buyer informed of and consult with the
Buyer with regard to the marketing of Petroleum and
on all material proposals affecting the Asset and,
prior to any operating committee meeting or any
material decision relating to the Asset, consult
with the Buyer and (in each case) act or vote in
accordance with the instructions of the Buyer
provided that in the opinion of the Seller,
exercised in good faith, the interests of the Seller
are not thereby materially prejudiced;
5.1.5 continue to meet all expenditures, receive all
income, perform all obligations relating to the
Asset and generally conduct all business in relation
to the Asset in a proper and workmanlike manner and
exercise its voting power to ensure that the Asset
is well maintained and fully safeguarded;
5.1.6 wherever practicable consult with Buyer and give due
consideration to the view of Buyer before exercising
its voting rights in connection with any matter or
proposal to be voted upon by the operating committee
established under the Joint Operating Agreement; and
5.1.7 not sell, charge, transfer, assign, encumber in any
manner whatsoever the Asset or purport to seek to do
any of the same.
5.2 Without prejudice to the foregoing, Seller shall (subject to
any confidentiality obligations by which it is bound) ensure
that pending Completion Buyer is kept fully informed of
developments relating to the Asset including but not limited
to:
(a) the making of any cash calls;
(b) the adoption or proposal of any budget; and
(c) the receipt of any significant geological or other
data.
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5.3. Nothing hereunder shall require Seller to consult or obtain the
consent of Buyer in respect of actions taken by the Operator in
cases of emergency under the Joint Operating Agreement.
5.4 Between the date of this Agreement and Completion Date, the
Buyer shall have the right to visit the Production Facilities,
either by itself or, if the Operator refuses consent for such
visit, through Buyer's selected representatives with Seller.
6. COMPLETION
6.1 Completion shall, subject to the provisions of Clauses 3.2 and
18, take place as soon as possible (but in no event prior to
July 1, 1995) within five (5) business days after the
conditions in 3.1 have been satisfied at such location outside
the territory of the U.K. and at such time as is mutually
agreed by the Parties, when all of the following shall occur:
6.1.1 the Buyer shall pay to Seller by wire transfer in
United States dollars the consideration set out in
Clause 4.1 of this Agreement together with any sums
payable in accordance with Clause 4.5.1;
6.1.2 Buyer shall deliver to Seller:
a copy, certified as a true copy and in full force
and effect by a director and the secretary or an
assistant secretary of the Buyer of a resolution of
the Board of Directors of the Buyer approving the
acquisition of the Asset, on the terms of this
Agreement, by the Buyer, and authorizing the
execution on behalf of the Buyer of all the Further
Documents and all other documents contemplated
hereby;
6.1.3 Seller shall deliver to Buyer:
(a) a copy, certified as a true copy and in full
force and effect by a director and the
secretary or an assistant secretary of the
Seller, of a resolution of the Board of
Directors of the Seller approving the disposal
of the Asset, on the terms of this Agreement,
by the Seller, and authorizing the execution
by the Seller of the Further Documents and all
other documents contemplated hereby; and
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(b) the Further Documents (other than the Working
Interest Assignment) duly executed by the
Seller and, as appropriate, by all of the
Co-Venturers; and
(c) signed originals of the Asset Documents or
copies thereof.
6.1.4 The Parties shall execute the Working Interest
Assignment and comply with its terms.
6.1.5 The Parties shall execute all such other documents
and do all acts and things as may be reasonably
required in order to effect the transfer of the
Asset to the Buyer and otherwise carry out the true
intent of this Agreement.
6.2 Seller will deliver to Buyer the Data and copies of the Data
Room Documents and such other documentation relevant to the
Asset as Buyer may reasonably request as soon as practicable
after the Completion Date.
6.3 Without prejudice to the provisions of Clause 6.1.5 the Parties
agree, notwithstanding Completion, to execute and deliver to
each other all such additional instruments and to do all such
further acts and things as may reasonably be required, or as
may be reasonably requested by any Party, to fully vest in, and
assure each Party of, all rights, powers and privileges
intended to be granted to or conferred upon the Parties under
or pursuant to this Agreement and to otherwise give effect to
the transactions contemplated under this Agreement.
7. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
7.1 Subject to the provisions of Clause 7.3, Seller hereby
represents and warrants to Buyer in the terms set out in
Schedule 2 and such representations and warranties shall be
deemed to be repeated immediately prior to Completion on the
basis that all references to "the date hereof" shall be deemed
to refer to the Completion Date.
7.2 Buyer hereby represents and warrants to the Seller in the terms
set out in Schedule 3 and such representations and warranties
shall be deemed to be repeated immediately prior to Completion
on the basis that all references to "the date hereof" shall be
deemed to refer to the Completion Date.
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7.3 Except with regard to the warranties 1, 2, 3 and 21 in Schedule
2, the Buyer shall not be entitled to claim that any fact or
matter constitutes a breach of the representations and
warranties set out in Schedule 2 hereto to the extent that such
fact or matter is fairly disclosed in the Data Room Documents
relating to the Asset.
7.4 Seller shall ensure that the representations and warranties
referred to in Clause 7.1 are true and accurate on the
Completion Date but if notwithstanding such efforts any matter
or thing occurs of which Seller is aware and which would be
inconsistent with any of such representations and warranties on
the Completion Date Seller shall promptly notify Buyer thereof.
7.5 In the event of any matter or thing materially inconsistent
with any of the representations or warranties given by Seller
in or pursuant to this Agreement being notified by Seller to
Buyer prior to Completion (or Buyer otherwise becoming aware of
such matter or thing) and such matter or thing continuing to be
materially inconsistent at the date agreed for Completion,
Buyer shall not be bound to complete the acquisition of the
Asset and Buyer may by notice in writing to Seller prior to
Completion rescind this Agreement. Such right of rescission
shall be Buyer's only remedy, and there shall be no liability
on the part of Buyer or Seller with respect to such matters or
things whether or not this Agreement is rescinded.
7.6 The maximum aggregate liability of Buyer or Seller as the case
may be, for all claims for breach of any representation or
warranty under Clauses 7.1 or 7.2 arising after Completion
shall in no event exceed the aggregate of the amount of
consideration, interest (if any) paid thereon, and any amounts
paid by Buyer pursuant to Clause 4.2.
7.7 If Buyer receives any claim or becomes aware of any fact which
may result in Buyer having a claim against Seller under this
Clause, Buyer shall promptly notify Seller thereof in writing
and Seller shall be entitled to require Buyer to take any
reasonable action it may request to resist such claim and Buyer
will give Seller all co-operation, access and assistance for
the purposes of considering such claim as they may reasonably
require; provided always that Buyer is indemnified to its
reasonable satisfaction by Seller against all claims, costs,
expenses, damages or losses which may thereby be incurred.
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7.8 Where any statement in Schedule 2 is qualified by the
expression "so far as Seller is aware" or any similar
expression, that statement shall be deemed to include an
additional statement that it has been made after due and
careful enquiry.
7.9 The Seller acknowledges that the Buyer has entered into this
Agreement in reliance upon the warranties and has been induced
by the warranties to enter into this Agreement.
7.10 The benefit of the warranties may be assigned in whole or in
part to any assignee of the Purchaser permitted in accordance
with Clause 17.
7.11 No claim may be made by either Party for a breach of any
representation or warranty made by Seller or Buyer, in the case
of a claim relating to taxes following the seventh anniversary
of the Completion Date and in the case of any other claim
following the second anniversary of the Completion Date, and no
liability shall attach to Seller or Buyer, as the case may be,
in respect of any such claim until the aggregate amount of all
such claims against Seller or Buyer, as the case may be,
exceeds one million (1,000,000 pounds sterling) U.K. pounds
sterling in which event Buyer or Seller, as the case may be,
shall be liable for the whole of such amount and not merely
the excess.
7.12 Any claim for breach of warranty under Schedule 2, including
but not limited to lost production or loss of profits shall be
limited in any recovery to the economic impact on Buyer based
on Buyer's economic assumptions used to develop the
consideration paid for the Asset.
8. TAXATION
8.1 Seller and Buyer acknowledge that:
(a) the consideration represents expenditure incurred by
Buyer in acquiring plant and machinery relating to
the Asset to the extent of the amount of the
Seller's gross expenditure incurred with respect to
the Asset in acquiring plant and machinery less any
relevant disposal proceeds up to but not including
the Completion Date, and the remainder of the
consideration relates to the balance of the Asset
including the Licence. Seller covenants that it
will treat the said allocated expenditures on
plant and machinery as disposal proceeds for the
purposes of Section 24(6) Capital Allowance Act
1990, and Buyer covenants that it will treat
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such amount as capital expenditure incurred for the
purposes of the Capital Allowance Act 1990, and the
Seller will provide details of such amount to the
Buyer as soon as reasonably practicable after
Completion.
(b) subject to Clause 4.4.4 any sums that may become
payable pursuant to Clause 4.4 and shall be added to
or subtracted from the balance of the Asset;
(c) no part of the consideration or other payments
pursuant to Clause 4.2 whether or not attributed to
the balance of the Asset, shall be treated as a
reimbursement of expenditure which the Seller has
incurred whether comprising intangible drilling
expenditure or otherwise; and
(d) they will each present their returns for tax
purposes on the basis stated above and that they
will use all reasonable endeavors to agree with the
Oil Taxation Office the figures so presented.
8.2 The Seller shall prepare and the Seller and the Buyer shall
deliver to the Board of Inland Revenue in a timely fashion a
notice in accordance with paragraph 3 of Schedule 17 to the
Finance Act 1980 and shall not make an application under
paragraph 4 of the said Schedule for the provisions of Parts II
and III of the said Schedule not to apply to the transfer of
the Asset.
8.3 Buyer confirms that it is registered for VAT in the UK and that
it intends to use the assets acquired for its own trade of
exploration/exploitation. Seller and Buyer confirm that neither
of them has elected to waive exemption under section 51 and
paragraphs 2-4 Schedule 10 Value Added Tax Act 1994 in relation
to the Asset and they each intend that the sale shall be
treated as a transfer of part of the business of the Seller as
a going concern within the terms of Section 49 of the Value
Added Tax Act 1994 and of Article 5 Value Added Tax (Special
Provisions) Order 1992, hereinafter referred to as "Article 5".
In the event that Seller is advised in writing by H.M. Customs
and Excise that the transaction is subject to VAT and if called
upon to do so by Seller, Buyer agrees to pay to Seller, on
presentation of a valid VAT invoice, any amounts due in respect
of VAT relating to this transaction set out in such invoice and
within thirty (30) days of demand.
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8.4 It is agreed that:
(a) the Seller shall cooperate with any reasonable
request by the Buyer who may, at its own cost and
expense, send to HM Customs & Excise a letter
seeking a ruling as to whether the sale of the Asset
is to be treated as a transfer of part of the
business of the Seller as a going concern and the
Seller will assist the Buyer with all reasonable
endeavours to obtain such a ruling as soon as
reasonably practicable;
(b) if the sale is to be so treated the Seller shall
send to HM Customs & Excise a letter seeking
confirmation that Seller be permitted to keep and
preserve the records for the period prior to the
date of Completion referred to in Section 49 of the
Value Added Tax Act 1994 relating to the Asset and
if such confirmation is not given, the Seller shall
transfer to the Buyer all such records as relate to
the Asset;
(c) if HM Customs & Excise state in writing that the
sale of the Asset does not fall within the
provisions of Article 5 the Seller shall cooperate
with any reasonable request by the Buyer who may, at
its own cost and expense, seek a ruling from HM
Customs & Excise that the sale is outside the scope
of VAT being a supply of services in relation to
land situated outside the UK and that no VAT will
become due on this transaction;
(d) if HM Customs & Excise state in writing that the
sale of the Asset is taxable, the Seller shall
cooperate with any reasonable request by the Buyer
who may, at its own cost and expense, promptly take
all steps to dispute such statement. In the event
that it is subsequently held or decided that no VAT
is payable in respect of the sale of the Asset and
the Seller receives any repayment or credit in
respect of an amount which had been paid by the
Buyer as VAT to the Seller, the Seller shall
promptly reimburse such amount to the Buyer; and
(e) the Seller and Buyer shall copy each to the other
all relevant correspondence between either of them
and HM Customs and Excise.
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9. AUDIT CLAIMS
9.1 Notwithstanding any other provision of this Agreement, in the
event that any audit in respect of any period prior to the
Effective Date is made under the Joint Operating Agreement
prior to the third anniversary of Completion or any request is
made for an adjustment to any joint account relating to the
Asset under the Joint Operating Agreement the Buyer shall,
subject to it being reimbursed for all its reasonable expenses
in so doing, give the Seller access to the results of such
audit or request to the extent that they relate to periods
prior to the Effective Date; and (a) to the extent that any
payment in respect thereof is made by the Operator such payment
shall be made to Seller and (b) to the extent that any payment
is required to be made in respect thereof to the Operator, such
payment shall be made by Seller to Buyer.
9.2 To the extent that the Seller shall have any information,
records or data in respect of the Asset or the Asset Documents
for periods prior to the Effective Date that it has not made
available to the Buyer on or after Completion and/or to the
extent that the Buyer shall request the assistance of the
Seller in the interpretation and construction of the same and
for any information, records or data that have been delivered
to it by the Seller hereunder, the Seller shall, subject to it
being reimbursed for all its reasonable expenses in so doing,
make the same available to the Buyer promptly after receipt of
said request.
10. INSURANCE
10.1 Neither Buyer nor Seller shall be obligated to arrange for
insurance coverage on the Asset protecting the other party for
any loss, damage, liability or expense for which such party may
have responsibility under this Agreement, except as may be
provided in Clauses 10.4, 10.5, 10.6 and 10.7 herein. Both
Buyer and Seller shall be free to arrange such insurance
coverage on the Asset protecting their respective interests as
each may deem advisable for their own account and at their own
expense and shall cooperate with each other to ensure, as far
as practicable, that the insurance coverage held by either
party is appropriately coordinated and does not conflict.
10.2 Upon execution of this Agreement, Seller shall furnish all such
information as Buyer may reasonably request in order to enable
Buyer to arrange for its own insurance coverage during and
after the Interim Period, including
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information in respect of Seller's insurance coverage on the
Asset.
10.3 Seller shall use reasonable efforts to ensure its policies
providing insurance coverage on the Asset are endorsed such
that the underwriters and/or insurers thereof shall have no
right of contribution from the Buyer's insurance, and Buyer
shall use reasonable efforts to ensure its policies providing
insurance coverage on the Asset are endorsed such that the
underwriters and/or insurers thereof shall have no right of
contribution from the Seller's insurance.
10.4 During the Interim Period, Seller shall maintain or obtain or
cause to be obtained in respect of the Asset all such insurance
coverage as may be necessary to comply with applicable laws,
rules and regulations and as may be required by any Asset
Document. Buyer shall be named as an additional insured and
loss payee on all such insurance wherever possible.
10.5 At the request of the Buyer, Seller shall, as soon as
reasonably practicable following such request, have Buyer
joined wherever possible on any insurance policy effected by
the Seller in respect of the Asset, other than any business
interruption insurance effected by the Seller, as an additional
assured and loss payee during the Interim Period, in respect of
Buyer's rights and interest under this Agreement. Seller shall
provide certification or other documentation evidencing that
the Buyer has been included as an additional insured and loss
payee as soon as reasonably practicable.
10.6 In respect of the Gard Protection and Indemnity Entry on the
Floating Storage Unit and the CRISTAL Entry on the shuttle
tanker(s), Seller and Buyer shall endeavour as soon as
reasonably practicable, at the request of Buyer, to have the
Buyer protected thereunder.
10.7 In respect of any Operator arranged insurance in respect of the
Asset, Seller and Buyer shall endeavor to have the Buyer
protected thereunder.
10.8 In respect of the insurance coverage which may be afforded to
the Buyer pursuant to the terms of Clauses 10.4, 10.5, 10.6,
and 10.7, at the Completion Date or on the 10th Business Day
after their receipt by Seller (whichever occurs later), Seller
shall pay to Buyer the sum of any proceeds of such insurance
coverage received against loss or damage suffered or liability
or expense incurred in relation to the Asset during the Interim
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Period, less any amount which has been applied (or represents
sums which have been applied)
10.8.1 in rectifying or remedying such loss or damage or
meeting such liability or expense; and
10.8.2 in reimbursing Seller for expenditure incurred prior
to the Effective Date for rectifying or remedying
such loss or damage or meeting such liability of
expense.
Seller shall use reasonable endeavours to pursue (or assist and
cooperate with Buyer to pursue, if Buyer is able to do so in
its own name) any claim against insurers for loss or damage,
liability or expense relating to the Asset suffered during the
Interim Period. If the insurers dispute or resist any claim
Seller shall promptly notify Buyer who shall be entitled to
require Seller to pursue (or assist and cooperate with Buyer to
pursue, if Buyer is able to do so in its own name) the claim
provided that it shall indemnify Seller against any reasonable
and verifiable costs and expenses Seller may thereby incur in
pursuing such claim.
10.9 In respect of the insurance coverage which may be afforded to
the Buyer pursuant to the terms of Clauses 10.4, 10.5, 10.6,
and 10.7, Buyer shall pay to Seller the insurance premiums
relative to such insurance during the Interim Period, at the
time of the interim period adjustment as provided in Clause
4.4. Any premiums due to Seller hereunder shall not exceed
reasonable commercial market rates.
11. INDEMNITY
11.1 Seller shall be liable for all costs, charges, expenses,
liabilities and obligations in respect of the Asset which
accrue or relate to any period before the Effective Date.
Seller shall reimburse and indemnify Buyer against any such
costs, charges, expenses, liabilities and obligations which are
paid by Buyer and have not been reimbursed to Buyer pursuant to
the other provisions of this Agreement, including Clauses 4.3
and 4.4.
11.2 Buyer shall be liable for all costs, charges, expenses,
liabilities and obligations in respect of the Asset which
accrue or relate to any period on and after the Effective Date.
Buyer shall reimburse and indemnify Seller against any such
costs, charges, expenses, liabilities and obligations which are
paid by Seller and have not been reimbursed to Seller pursuant
to the other provisions of
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this Agreement, including Clauses 4.3 and 4.4. Without
prejudice to the generality of the foregoing Buyer shall
indemnify and hold Seller harmless against any costs, charges,
expenses, liabilities and obligations incurred in abandoning
any field property (including but not limited to wells) or
facilities acquired pursuant to this Agreement or held or
brought into being with respect to the Asset to the extent
that such costs, charges, expenses, liabilities and
obligations are attributable to the Asset and accrue and
relate to any period on or after the Effective Date.
11.3 Notwithstanding any other provision of this Agreement Seller
shall not under any circumstances be liable to Buyer and Buyer
shall not under any circumstances be liable to Seller under,
arising out of or in any way connected with this Agreement or
the Further Documents for any punitive loss or damages however
imposed.
11.4 No claim may be made by either Party under Clause 11.1 or 11.2
by the Buyer or Seller as the case may be, until the aggregate
amount of all such claims against Seller or Buyer, as the case
may be, exceeds Fifty Thousand (pound sterling 50,000) U.K.
pounds sterling, in which event Buyer or Seller, as the case
may be, shall be liable for the whole of such amount and not
merely the excess.
12. ANNOUNCEMENTS
12.1 Any Party shall be entitled to make a public announcement or
statement regarding the Asset except that the prior approval of
all other Parties shall be required where such announcement or
statement relates to:
a. the negotiation and/or execution of this Agreement
or the Further Documents or Completion;
b. subject to Clause 15 hereof, the terms of this
Agreement.
12.2 Each party shall submit any proposed releases referred to in
Clause 12(a) and 12(b) above to the other for comment and will
give due consideration to any comments received.
12.3 Nothwithstanding the foregoing, neither Party shall be
precluded from making any public announcement or release
regarding the Asset or the transaction hereunder if the same is
required by applicable law, the U.S. Securities and Exchange
Commission or any recognized stock exchange on which the shares
of the Parties or their respective Affiliates are traded.
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13. NOTICES
13.1 Any notice pursuant to this Agreement may be given by telex,
facsimile transmission or letter to the Party to be served at
the address stated in Clause 13.3 or such other address as may
be given for the purposes of this Agreement by written notice
to the other Parties.
13.2 A notice given by telex or facsimile transmission shall be
deemed to be served on the first Business Day following the
date of dispatch, but a notice sent by post or delivered
personally shall not be deemed to be delivered until received.
13.3 The respective addresses for service are:
Seller: Oryx U.K. Energy Company
Charter Place, Vine Street, Uxbridge,
Middlesex, England UB8 1EZ
Facsimile No.: 01 895-270-208
With copy to:
Oryx Energy Company
13155 Noel Road
Dallas, Texas 75240-5067
Attention: Director Commercial
Transactions
Buyer: Union Texas Petroleum Limited
Bowater House, 5th Floor
68/114 Knightsbridge
London, SW1X 7LR
Facsimile: 01-44-171-584-7785
Attention: Ms. Carol Boyd
With copy to:
Union Texas Petroleum Holdings, Inc.
1330 Post Oak Blvd.
Houston, Texas 77056
Facsimile: (713) 968-2725
Attention: General Counsel
14. COSTS AND EXPENSES
14.1 The Parties shall each pay their own costs and expenses in
relation to the preparation and execution of this Agreement and
the documents contemplated hereby or executed pursuant hereto.
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14.2 Buyer shall be responsible for payment in a timely fashion of
any and all United Kingdom stamp duties and any other charges
payable on or in respect of this Agreement, the Further
Documents and all transfers and/or documents contemplated
hereby or executed pursuant hereto.
15. CONFIDENTIALITY
The terms of this Agreement shall be held confidential by the Parties
and shall not be divulged in any way to any third party by either Party
provided that either Party may, without such approval, disclose such
terms to:
15.1 any outside professional consultants, upon obtaining a similar
undertaking of confidentiality (but excluding this proviso)
from such consultants; or
15.2 any bank or financial institution from whom such Party is
seeking or obtaining finance, upon obtaining a similar
undertaking of confidentiality (but excluding this proviso)
from such bank or institution; or
15.3 the extent required by any applicable laws, the Licence, or the
requirements of any recognized stock exchange in compliance
with its rules and regulations; or
15.4 any government agency lawfully requesting such information; or
15.5 any court of competent jurisdiction acting in pursuance of its
powers; or
15.6 any Affiliate upon obtaining a similar undertaking of
confidentiality.
16. VARIANCE
The terms and conditions of this Agreement shall only be varied by an
agreement in writing signed by each of the Parties and specifically
referring to this Agreement.
17. ASSIGNMENT
None of the rights, liabilities or obligations of either of the Parties
under this Agreement are assignable except with the prior written
consent of the other Party, such consent not to be unreasonably
withheld; provided, however, that Buyer shall be free to assign its
rights under this Agreement to any Affiliate but only on terms that all
such rights should ipso facto lapse if for any reason whatsoever any
such assignee
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ceases to be an Affiliate unless said Assignee shall, before ceasing to
be an Affiliate, reassign said rights to Buyer.
18. TERMINATION
18.1 Subject to Clause 18.2, this Agreement shall terminate if
Completion does not occur due to failure to fulfill the
conditions set out in Clause 3.1 on or before 30 November 1995.
Upon such termination, no Party shall have any liability
hereunder except for a breach of this Agreement committed
before such termination.
18.2 Notwithstanding termination of this Agreement pursuant to
Clause 18.1, the provisions of Clause 15 shall continue to
apply for a period of two years from the date hereof.
18.3 Termination of this Agreement pursuant to Clause 18.1 shall be
without cost to any Party except where a Party has failed to
use all reasonable endeavours to effect Completion in
accordance with its obligations hereunder in which event the
other Party shall be entitled to all costs and expenses
reasonably incurred in seeking to effect such Completion in
accordance with the provisions hereof.
19. GENERAL
19.1 This Agreement constitutes the entire agreement between the
Parties and supersedes all warranties and representations
previously made and all previous agreements, arrangements or
understandings between the Parties relating to the matters
contained herein whether oral or in writing made or dated prior
to the date hereof. Buyer hereby confirms to Seller that they
have not relied on any representation save those referred to in
this Agreement.
19.2 No waiver by any Party of any breach of a provision of this
Agreement shall be binding unless made expressly in writing.
Further, any such waiver shall relate only to the breach to
which it expressly relates and shall not apply to any
subsequent or other breach.
19.3 Time shall be of the essence of this Agreement.
19.4 This Agreement shall enure to the benefit of and be binding
upon the respective successors and permitted assigns of the
Parties.
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20. GOVERNING LAW JURISDICTION
The construction, validity and performance of this Agreement shall be
governed by English Law and the Parties hereby submit to the
jurisdiction of the High Court in London.
21. COUNTERPARTS
This Agreement may be executed in counterparts by the parties hereto on
separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one
and the same instrument.
IN WITNESS WHEREOF, the Parties have caused their duly authorized signatories to
execute and deliver this Agreement on the day and year first above written.
UNION TEXAS PETROLEUM LIMITED )
)
By:/s/ W.M. Krips )
--------------------------- )
)
Name: W.M. Krips )
------------------------- )
)
Title: Director )
----------------------- )
)
in the presence of: )
/s/ Luis H. Derrota )
--------------------------- )
)
Name: Luis H. Derrota )
------------------------- )
ORYX U.K. ENERGY COMPANY )
)
By:/s/ Andrew B. Derman )
--------------------------- )
)
Name: Andrew B. Derman )
------------------------- )
)
Title: Authorized Signatory )
------------------------ )
)
in the presence of: )
/s/ William C. Lemmer )
---------------------------- )
)
Name: William C. Lemmer )
------------------------ )
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SCHEDULES
The following schedules to the Sale and Purchase Agreement have been omitted,
but will be furnished upon request:
Schedule 1: List of Asset Documents
- ----------
Schedule 2: Representations and Warranties of the Seller
- ----------
Schedule 3: Representations and Warranties of the Buyer
- ----------
Schedule 4: Working Capital
- ----------
Schedule 5: Description of Alba Field Platform and Floating Storage Unit
- ----------
Schedule 6: List of Data Room Documents
- ----------
Schedule 7: List of Further Documents
- ----------