SHARE SALE AND PURCHASE AGREEMENT ________________________________________________ by and among STATOIL ASA and STATPET AS and NORSK TEEKAY AS dated December 15 2002
________________________________________________
SHARE SALE AND PURCHASE AGREEMENT
________________________________________________
by and among
STATOIL ASA and STATPET AS
and
NORSK TEEKAY AS
dated
December 15 2002
THIS SHARE SALE AND PURCHASE AGREEMENT (the “Agreement”) is made and entered into on this 15th day of December 2002, by and among:
| (1) | STATOIL ASA, (“Statoil”) a Norwegian public limited liability company (allmennaksjeselskap),
having its registered office located at ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, registered with
the Norwegian Register of Business Enterprises under number ▇▇▇ ▇▇▇ ▇▇▇, and |
| (2) | STATPET AS, (“Statpet”) a Norwegian private limited liability company (aksjeselskap), having
its registered office located at ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and registered with the
Norwegian Register of Business Enterprises under number 981 363 116, Statpet together with Statoil hereinafter being referred to as the “Sellers”, |
| and |
|
| (3) | NORSK TEEKAY AS, (the “Buyer”) having its postal address at ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ Oslo,
registered with the Norwegian Register of Business Enterprises under number 985 030 235, |
in respect of the Buyer’s purchase of all of the shares in Navion ASA.
WHEREAS:
| (A) | The Sellers own all the issued and outstanding shares and voting rights in NAVION ASA,
(“Navion”) a Norwegian public limited liability company with a share capital of
NOK 1,687,500,000, with its registered office at ▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, and
registered with the Norwegian Register of Business Enterprises under number 979 199 325; and |
| (B) | the Buyer desires to purchase all of the shares in Navion from the Sellers, and the Sellers
desire to sell such shares to the Buyer, subject to the terms and conditions of this
Agreement. |
NOW, THEREFORE, the Sellers and the Buyer agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
The terms defined in this Clause 1.1 shall, for the purpose of this Agreement, have the
following meaning:
“Annual Accounts”: has the meaning set forth in Clause 3.3.2;
“Basic Purchase Price”: means the purchase price set forth in Clause 3.1;
“Business Day”: means a day on which banks are open for business in New York
and Oslo;
“Buyer Parent”: means Teekay Shipping Corporation; a ▇▇▇▇▇▇▇▇ Islands
corporation with its business address at TK House, Bayside
Executive Park, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇
▇▇-▇▇▇▇▇, Nassau, The Bahamas;
“Buyer Parent
Guarantee”: means the irrevocable and unconditional guarantee to be
delivered by the Buyer Parent in favour of the Sellers,
substantially as set out in Schedule 1.1 Buyer Parent
Guarantee;
“COA”: means a contract of affreightment to which a Group Member is
a party;
“Closing”: has the meaning set forth in Clause 10;
“Closing
Disclosure Letter”: has the meaning set forth in Clause 5.3;
“Contracts” means the Frame Agreements, the COAs and the T/Cs;
“Current Auditors”: means Ernst & Young AS, Stavanger;
“Disclosed Information”: means (i) written information disclosed by the Sellers to
the Buyer in the data room as per the list contained in the
Signing Date Disclosure Letter and Closing Disclosure
Letter, (ii) the said two disclosure letters, and (iii)
information disclosed in Schedules to this Agreement;
“Effective Date”: means January 1, 2003;
“Encumbrance”: means any charge, lien, mortgage, or preemption right;
“Frame Agreements”: means the five frame agreements between relevant Group
Members and certain oil companies regarding transportation
of crude oil;
“Financial Statements”: has the meaning set forth in Clause 5.3.1;
“Gas Tanker”: means MT “Navion Dania”;
“Group Member”: means any company within the Navion Group;
“Navion Group”: means Navion and the Navion Subsidiaries;
“Navion Reorganisation”: means the reorganisation contemplated by the Navion
Reorganisation Agreements, the main elements of which are
described in Schedule 1.1 Navion Reorganisation;
“Navion Reorganisation
Agreements”: means the agreements, other than this Agreement, to be
entered into between relevant Group Members and/or a member
of the Statoil Group in respect of the Navion Reorganisation;
“Navion Subsidiaries”: means the companies owned directly or indirectly by Navion
as set out in Schedule 1.1 Navion Subsidiaries;
“Navion Offshore
Loading”: means Navion Offshore Loading AS, a private limited
liability company established as a wholly-owned subsidiary
of Navion, registered with the Norwegian Register of
Business Enterprises under number 984 837 771;
“Net Working Capital”: has the meaning set forth in Clause 3.3.1;
“NGAAP”: means Norwegian Generally Accepted Accounting Principles;
“LIBOR”: means for the relevant currencies, the BBA London Interbank
Offered Rate (BBA LIBOR) as published electronically by
Reuters and sponsored by the British Bankers Association
(BBA), which as at the Signing Date is LIBOR01;
“NOK”: means Norwegian kroner, being the lawful currency of the
Kingdom of Norway;
“Parties”: means the Sellers and the Buyer;
“Party”: means any of the Sellers or the Buyer;
“Performance
Guarantee”: means the performance guarantee to be issued by the Buyer
Parent in favour of the counterparties to the Contracts
(including Statoil, as applicable) in the form of Schedule
1.1 Performance Guarantee;
“Person”: means any individual, firm, corporation, limited liability
company, general or limited partnership, joint venture,
association, joint stock company, trust or unincorporated
business or organization or other entity;
“Purchase Price”: means the purchase price payable by the Buyer to the Sellers
in respect of the Shares, being the aggregate of the Basic
Purchase Price and the adjustments (if any) as determined in
accordance with Clause 3;
“Rate of Exchange”: means the rate of exchange as quoted by the Bank of Norway
as close as possible to 2.15 pm on business days in Norway
and as published electronically by Reuters on page NOCV;
“SDFI”: means the Norwegian State’s Direct Financial Interest in the
petroleum sector;
“Shares”: means the Statoil Shares and the Statpet Shares, together
constituting the 1,687,500 ordinary shares in Navion, each
with a nominal par value of NOK 1,000.-;
“Shuttle/FSO Tankers”: means MT Navion Anglia, MT Navion Hispania, MT Navion
Oceania, MT Navion Britannia, MT Navion Scandia, MT Navion
Norvegia, MT Navion Europa, MT Navion Viking and MT Navion
Clipper, FSO Navion Scotia, and FSO Navion Saga;
“Signing Date”: means the date of this Agreement;
“Signing Date Payment”: means an amount equal to 10 per cent of the Basic Purchase
Price;
“Signing Date
Disclosure Letter”: means the disclosure letter issued by the Sellers to the
Buyer on the date hereof in the form of Schedule 1.1 Signing
Date Disclosure Letter;
“Statoil Group”: means Statoil and its subsidiaries, excluding the Group
Members;
“Statoil Shares”: means the 1,350,000 shares in Navion owned by Statoil,
representing 80 per cent of the Shares;
“Statpet Shares”: means the 337,500 shares in Navion owned by Statpet,
representing 20 per cent of the Shares;
“T/C”: means a time charterparty to which a Group Member is a party;
“Transaction”: means the sale and purchase of the Shares as contemplated by
this Agreement;
“USD”: means the lawful currency of the United States of America;
“Vessels”: means the Shuttle/FSO Tankers and the Gas Tanker;
“VOC”: means volatile organic compounds.
| 1.2 | Interpretation The definitions in Clause 1.1 and elsewhere in this Agreement shall apply equally to both the singular and plural forms of the terms defined herein. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Clauses, Clause and Schedules shall be deemed to be references to Clauses, Clause and Schedules to this Agreement, unless the context shall otherwise require. The words “include”, “includes”, “included” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “or” used in this Agreement shall not be exclusive, unless the context shall otherwise require. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. In case of any conflict or discrepancy between the provisions of this Agreement and any of the Schedules, the latter shall prevail. |
| 2. | AGREEMENT TO SELL AND PURCHASE THE SHARES |
| 2.1 | Sale and Purchase of the Shares Subject to the terms and conditions of this Agreement, the Sellers hereby agree to sell, transfer and deliver to the Buyer, and the Buyer hereby agrees to pay for and purchase from the Sellers, the Shares. Accordingly, Statoil shall sell the Statoil Shares and Statpet shall sell the Statpet Shares. |
| 3. | PURCHASE PRICE AND PAYMENT |
| 3.1 | Basic Purchase Price The Basic Purchase Price for the Shares shall be USD 760,000,000, which price shall be adjusted in accordance with Clauses 3.2 and 3.3. |
| 3.2 | Adjustment of the Basic Purchase Price The Basic Purchase Price shall be adjusted in accordance with this Clause 3.2 and Clause 3.3 below, and shall, to the extent relevant, |
| 3.2.1 | be increased USD for USD with the following items (on a consolidated Navion Group basis): |
| (a) | the book value of VOC investments of any Group Member as of 31 December 2002; and |
|
| (b) | any group contribution net after tax given by a company within the Statoil Group to one or
more Group Members from the Effective Date up to and including the date of Closing
or payable thereafter to the extent not included in Net Working Capital as of
31 December 2002; and |
|
| (c) | if positive, any amount of Net Working Capital determined as of 31 December 2002, and |
|
| (d) | any loans or accounts receivable determined in accordance with NGAAP as of 31
December 2002, or as incurred as a result of the Navion Reorganisation, to the extent
not included in Net Working Capital as of 31 December 2002, |
|
| such items hereinafter referred to as the “Inclusion”; and |
| 3.2.2 | be reduced USD for USD with the following items on a consolidated Navion Group basis: |
| (a) | any liability shown in the Annual Accounts, or as incurred as a result of the Navion
Reorganisation, not included in Net Working Capital as of 31 December 2002 or
otherwise excluded under Clause 3.3.1; and |
|
| (b) | any group contribution net after tax paid by Navion to a company within the Statoil
Group from the Effective Date up to and including the date of Closing, or payable
thereafter, to the extent not included in Net Working Capital as of 31 December 2002;
and |
|
| (c) | any dividend approved to be paid by Navion to the Sellers from the Effective Date and
up to and including the date of Closing to the extent not included in Net Working
Capital as of 31 December 2002; and |
|
| (d) | if negative, any amount of Net Working Capital determined as of 31 December 2002, and |
|
| (e) | any correction income tax (korreksjonsskatt) resulting from (b) or (c) above to the extent
not included in Net Working Capital, as of 31 December 2002; and |
|
| (f) | any difference, net of taxes, between (i) the sum of vested and non-vested pension benefits
earned as of 31 December 2002 by, to the extent relevant, past and present
employees intended to remain with the Navion Group after Closing as determined in
accordance with NGAAP and assumptions generally applied to on-shore personnel
employed by Statoil, and (ii) the net assets held in the pension fund of the Navion
Group pertaining to such employees as of said date; |
|
| such items hereinafter referred to as the “Reduction”. |
| 3.2.3 | Interest shall accrue on the Basic Purchase Price, adjusted in accordance with Clause 3.2.1
and Clause 3.2.2 as appropriate, (less the Signing Date Payment) at a rate of 6 months LIBOR
plus 100 basis points from and including the Effective Date and up to but excluding the date
of Closing, provided, however, that |
| (a) | interest on any Inclusion shall be calculated up to Closing from the Effective Date with
respect to the Net Working Capital and otherwise the later of (i) the Effective
Date, or (ii) from the date such Inclusion was made or received as the case may be
by the relevant Group Member; and |
|
| (b) | the amount of any Reduction shall be increased by interest at the rate stated above computed
from the later of (i) the Effective Date, or (ii) the date such Reduction was paid
or came into existence as the case may be up until Closing. |
| 3.2.4 | Any conversion to US Dollars relating to any Inclusion or Reduction shall be calculated at
the Rate of Exchange as of 31 December 2002, except for adjustments pursuant to Clauses
3.2.1(b) and 3.2.2(b), (c) and (e), which shall be converted to USD at the Rate of Exchange
prevailing on the date of the relevant transaction. |
| 3.3 | Determination of Net Working Capital For the purposes of Clause 3.2 the Net Working Capital shall be determined as follows: |
| 3.3.1 | The Net Working Capital shall be computed in relation to Navion on a Navion Group
consolidated basis, and shall include current assets less current liabilities classified in a
manner consistent with NGAAP and consistent with prior periods with adjustments described
below. Current assets shall include bank deposits, including deposits within the Statoil Group bank account system, accounts receivable, including accounts receivables from Statoil Group companies, inventory, prepaid T/C hire for in-chartered vessels (both short-term and long-term), loans to employees (both short-term and long-term) and other current assets, but shall not include amounts due from surrogates, such as insurance proceeds in respect of a vessel. Current liabilities shall include accounts payable, including accounts payable to Statoil Group companies, prepayments from customers, accrued withholding tax and holiday pay and other current liabilities. Excluded from current liabilities are any (both short-term and long-term) accruals for future dry-dockings, losses on T/Cs and any future pension expenditures. Included in Net Working Capital shall be the market value of any interest swap arrangements and the market value of any forward currency exchange contracts and the market value of any other financial derivatives valued as of 31 December 2002. Indebtedness for borrowed monies and interest bearing receivables, including short term portions of any such loans and receivables, shall not be included in Net Working Capital, nor shall any of the other elements subject to separate adjustment pursuant to sub-clauses 3.2.1 and 3.2.2. |
| 3.3.2 | The Sellers shall use their best efforts to procure that the 2002 annual statutory accounts
for the Navion Group (on a consolidated basis) (the “Annual Accounts”) be prepared as soon as
reasonably practical after the Effective Date, in connection with which a separate statement
reflecting the Net Working Capital in accordance with sub-clause 3.3.1 shall be prepared and,
for the purposes hereof, form part of and be included in the defined term Annual Accounts. |
| 3.3.3 | Immediately following the preparation thereof, Statoil shall instruct the Current Auditors in
writing (with a copy to the Buyer) to review and audit the Annual Accounts and to confirm by
way of a written report (the “Current Auditors’ Report”) whether the Annual Accounts and the
calculation of the Net Working Capital have been prepared in accordance with NGAAP, the
provisions of this Clause 3 and the relevant definitions in Clause 1. The Current Auditors’
Report shall be prepared as soon as reasonably practical, but in any event within 14 Business
Days of the date of the instruction letter from Statoil. If the Current Auditors are of the
opinion that corrections or adjustments should be made to the calculation of the Net Working
Capital in order to comply with the requirements of this Agreement, they shall specify the
relevant discrepancies in their report. |
| 3.3.4 | To enable the Current Auditors to prepare their report on the Net Working Capital calculation
and to audit the Annual Accounts, the Sellers shall procure that all books and records
relating to the Navion Group are kept up-to-date and made available to the Current Auditors.
The Sellers furthermore agree to procure that the Navion Group shall facilitate and make
available the services of its employees, as may reasonably be required by the Current
Auditors to assist the Current Auditors to undertake the matters contemplated by this Clause
3. |
| 3.3.5 | The Current Auditors’ Report shall be distributed to the Parties promptly and simultaneously
upon its completion. The Current Auditors Report in respect of the Net Working Capital shall
be final and binding on the Parties, and be applied for the purpose of determining the
adjustment to the Basic Purchase Price, unless there is an obvious error on the face of the
document, in which case the error shall be corrected by the Current Auditors. |
| 3.4 | Adjustments and cooperation |
| 3.4.1 | The Parties agree that any net temporary differences between tax and accounting values as of
31 December 2002, summarised on a company by company level within the Navion Group, including
tax losses carried forward, shall be off-set by group contributions between the Statoil Group
and the Navion Group. Any differences between the allocation of the Purchase Price to the
different shareholdings within the Navion Group, and the tax values of the same
shareholdings, shall not be compensated between the Parties. The Sellers confirm that, unless otherwise required by the Buyer, no depreciation on the Vessels will be made by Navion Offshore Loading for the fiscal year 2002. |
| 3.4.2 | The Parties agree, that if and to the extent the Navion Reorganisation shall not have been
completed by the Effective Date, the net cash flows as from the Effective Date from any
business and operations which may be carried out by a Statoil Group company, and which are
intended to be part of the Navion Group’s business and operations, shall be for the Navion
Group’s benefit and account, and be allocated and transferred to Navion (or relevant Group
Member) by the relevant Statoil Group company on a monthly basis within 10 Business Days from
the end of each month and until the relevant part of the Navion Reorganisation has been
completed, together with interest thereon at the rate set out in Clause 3.2.3 from the date
the cash flow arises until the date of actual transfer payment to or from the relevant Group
Member. Accordingly, any net cash flows earned by a Group Member as from the Effective Date
from a part of the Navion Group’s business and operations which, as part of the Navion
Reorganisation, is intended to be taken over by a Statoil Group company, shall be for the
Statoil Group’s benefit and account and shall be paid and transferred from the relevant Group
Member to the relevant Statoil Group company pursuant to the principles set out above. The
Parties shall cooperate on a good faith basis to make and agree any adjustments as may be
necessary to effect the above. |
| 3.5 | Payment |
| 3.5.1 | Payment of the Purchase Price by the Buyer together with interest thereon computed in
accordance with Clause 3.2.3, including the release and transfer of the Signing Date Payment
to the Sellers together with any interest accrued thereon for the benefit of the Sellers as
per Clause 3.5.2, shall take place for value on Closing as contemplated in Clause 10 and in
accordance with the Sellers’ payment instructions and account details, which shall be
notified in writing by the Sellers to the Buyer not less than three (3) Business Days prior
to Closing. |
| 3.5.2 | The Signing Date Payment shall be payable by the Buyer to the Sellers on the Signing Date or,
of this is not a Business Day, on the first Business Day thereafter in accordance with the
Sellers’ payment instructions. The Signing Date Payment shall be paid into a separate
interest-bearing account opened jointly in the names of the Buyer and Statoil, with interest
accruing to the benefit of the Buyer from the Signing Date to the Effective Date, and to the
benefit of the ultimate beneficiary of the Signing Date Payment from the Effective Date to
the date of payment out. |
| 3.5.3 | If, for any reason not attributable to the Sellers, the Buyer does not make payment in full
on the relevant due date, default interest shall accrue at a rate of 6 months USD LIBOR + a
margin of 4 percentage points per annum from the due date till the relevant amount has been
received in full. |
| 4. | MUTUAL REPRESENTATIONS AND WARRANTIES |
| 4.1 | Each of Statoil, Statpet and the Buyer represents and warrants to the other Parties that: |
| (a) | (A) in the case of Statoil, Statoil represents and warrants that it is a public
limited liability company duly incorporated and validly existing under the laws of
the Kingdom of Norway, (B) in the case of Statpet, Statpet represents and warrants
that it is a private limited liability company duly incorporated and validly existing
under the laws of the Kingdom of Norway, and (C) in the case of the Buyer, the Buyer
represents and warrants that it is a private limited liability company duly
incorporated and validly existing under the laws of the Kingdom of Norway; |
|
| (b) | the entering into by it of this Agreement has been duly authorized by all necessary
corporate action; |
|
| (c) | the person executing this Agreement on behalf of such Party is duly authorized and
empowered to do so; |
|
| (d) | the entering into by it of this Agreement and the consummation of the Transaction
will not violate or contravene (A) its by-laws or articles of association, nor (B)
any laws, regulations, governmental or judicial decrees, decisions or other public
restrictions applicable to it, or (C) any contractual obligation or limitation by
which it is bound; and |
|
| (e) | this Agreement constitutes (subject only to prohibition by competition and/or any
other relevant regulatory authorities) the valid and binding obligations of such
Party, enforceable against it in accordance with its terms. |
| 5. | REPRESENTATIONS AND WARRANTIES OF STATOIL AND STATPET |
| 5.1 | Statoil representations as of the Signing Date Statoil represents and warrants to the Buyer as of the Signing Date, that: |
| 5.1.1 | Navion Corporate Organization Navion and the Navion Subsidiaries are companies duly organized and validly existing under the laws of the jurisdictions of their respective incorporation. |
| 5.1.2 | Capitalization of Navion. Title to the Shares The Shares constitute all of the share capital of Navion, all of which are fully paid. All the Shares are free and clear of any Encumbrances. Statoil and Statpet are the sole owners of the Statoil Shares and the Statpet Shares, respectively, and (save as contemplated by this Agreement) there are no outstanding option rights or other rights to purchase, subscribe for or otherwise acquire any shares in Navion. |
| 5.1.3 | Navion Subsidiaries All of the shares in the Navion Subsidiaries are owned, directly or indirectly, by Navion, and the share capital of each such Navion Subsidiary is set out in Schedule 5.1.3 hereto. All the shares in the Navion Subsidiaries are issued and fully paid, free and clear of any Encumbrances. There are no outstanding options or other rights to purchase, subscribe for or otherwise acquire any of the shares in any of the Navion Subsidiaries. |
| 5.1.4 | Title to the Vessels Navion Maritime AS, ▇▇▇▇▇▇▇▇▇ Navion KS or Navion Shipping AS owns and has marketable title to all the Vessels, all of which are free and clear of Encumbrances, except for maritime liens incurred in the ordinary course of business and which will be discharged in the ordinary course of business. |
| 5.1.5 | Patents and Trademarks Group Members have title to, ownership of or valid licenses to use, all patents, trademarks, service marks, trade names, copyrights, trade secrets, information and other intellectual and industrial property rights which it uses in the performance of its business. Schedule 5.1.5 sets out a list of patents which will be retained by Group Members or transferred free of charge to Statoil (or subsidiary), respectively, prior to Closing. |
| 5.2 | Representations by the Sellers as of the Effective Date Vessels in Class on Effective Date The Sellers represent and warrant that, as of the Effective Date, the Vessels with everything belonging to them shall be as they were at the time of the Buyer’s inspection, fair wear and tear excepted. However, each of the Vessels shall be maintained in class without any overdue condition/recommendation by Class or other relevant authority, free of average damage affecting the Vessel’s class, and with her classification certificates and national certificates, as well as all other certificates the Vessel had at the time of inspection, valid and unextended. |
| 5.3 | Statoil representations as of the Signing Date and the Effective Date Statoil has presented to the Buyer, prior to the Signing Date, a draft of the Signing Date Disclosure Letter, which letter has been accepted by the Buyer. An updated version of the Signing Date Disclosure Letter, being the Closing Disclosure Letter, shall be provided to the Buyer at least five (5) Business Days prior to Closing. The Closing Disclosure Letter shall be identical to the Signing Date Disclosure Letter in all material respects, except that it shall make reference to the Annual Accounts and reflect changes that have occurred in the ordinary course of business after the Signing Date including, without limitation, circumstances in connection with the Navion Reorganisation which may affect the accuracy of any of the representations and warranties of Statoil set out herein. Subject as aforesaid Statoil represents and warrants that, to the best of its knowledge and belief (after having made reasonable enquiries to satisfy itself as to the accuracy and correctness of the following), as of the Signing Date and the Effective Date: |
| 5.3.1 | Financial Statements The audited balance sheet of Navion and the Navion Group and the related audited statements of profit and loss and cash flow of Navion and the Navion Group, respectively, including any related notes, for the fiscal years ended 31 December 2001, 2000 and 1999 together with the reports thereon from the Current Auditors (the “Financial Statements”) are consistent with the books and records and give a true and fair view of Navion’s and the Navion Group’s financial position, assets and liabilities as of 31 December 2001, 2000 and 1999, respectively, and for the profits and loss and results of operations and the statutory cash flow statements for the periods then ended, have been prepared in accordance with Norwegian laws and regulations and NGAAP as applied on a consistent basis throughout the periods covered thereby. For the purposes of the Closing Disclosure Letter, the above representation and warranty shall be true for the Annual Accounts. |
| 5.3.2 | Books and Accounts All Group Members have properly kept and maintained all necessary books of accounts and other statutory books and records, and prepared (to the extent applicable) all annual reports and accounts in accordance with relevant legislative requirements, and made all reports to and filings in respect thereof with appropriate official authorities as required by law. |
| 5.3.3 | Tax Matters Each Group Member has |
| (a) | duly filed all tax returns required to be filed by it in a timely fashion, which tax returns
are true, correct and complete in all material respects; |
|
| (b) | paid all taxes due and payable by it. There are no proceedings pending or threatened against any Group Member in respect of taxes. |
| 5.3.4 | Assets Each Group Member owns or leases all assets necessary for it to carry on its business as presently conducted, and such assets are in all material respects in good operating condition, except for normal wear and tear, and maintained and serviced on a timely basis in accordance with good industry practice. None of the assets of the Navion Group are pledged as security for the obligations of the Sellers or their affiliates (other than the Navion Group). |
| 5.3.5 | Environmental Matters |
| (a) | The Navion Group is in compliance with all applicable environmental laws, and holds
all applicable environmental permits. |
|
| (b) | There has not been, there is no existing basis for, nor is there currently, any
governmental or other investigation, enquiry or disciplinary proceeding relating to
any alleged breach of any environmental law or environmental permit by the Navion
Group and, as far as Statoil is aware, none is pending or threatened, and which -
individually or in combination with any other such breach(es) – is likely to result
in a cost (exclusive of out-of-pocket expenses and insurance cover, if relevant) to
the Navion Group in excess of NOK 10 million. |
| 5.3.6 | Insurances The Navion Group has taken out, maintains and will maintain to Closing all customary insurance policies covering the Vessels and the operations of the business of the Navion Group, which insurances are placed with reputable insurers in amounts and on terms and conditions believed by Statoil to be on market terms and in accordance with market practice. No Group Member has done or omitted to do anything to render the insurance coverage void or voidable. All events which could justify an insurance claim have been timely declared to each insurance company. At the date of the Agreement, there is no material claim which has arisen and remains outstanding under any of the policies. |
| 5.3.7 | Employees Since 1 January 2000 no Group Member has been involved in any labour dispute of material importance with any employee of the Navion Group, any labour union, staff association or other body representing the employees, and no event has occurred which could reasonably be expected to give rise to any such dispute or action. Statoil and Navion have complied with all legal obligations to inform and consult with the employees and/or their representatives in the Navion Group in connection with the Navion Reorganisation and the Transaction. No employee of any Group Member will receive any additional salary, fee or other benefit as a result of this Agreement or Closing. |
| 5.3.8 | Litigation and investigations Except as disclosed in Schedule 5.3.8, there are no claims, actions, suits, legal or governmental proceedings, labor disputes or investigations pending or threatened before any court, arbitrator or governmental authority, brought by or against any Group Member, and there are no circumstances reasonably likely to give rise to any such suit or proceeding, which – if adversely determined – individually or in the aggregate is likely to result in a final decision with a cost (exclusive of costs and insurance cover, if relevant) to the Navion Group in excess of NOK 10 mill. No investigation or enquiry is being or has been conducted by any fiscal, regulatory or other governmental body in respect of the affairs of the Navion Group, and no such investigation is pending, threatened or expected. |
| 5.3.9 | Consents, licences and permits No consent from any governmental authority is required for the consummation by the Sellers of the Transaction or for the implementation of the Navion Reorganisation. The Group Members have obtained all licences, consents, permits and authorizations required for carrying on the business of the Navion Group as currently conducted, and there are no facts or circumstances in existence which may lead to any such licences, consents, permits or authorizations being revoked, modified or not renewed for any reason attributable to the Sellers or a Group Member. |
| 5.3.10 | The Contracts The Contracts constitute valid and binding agreements. Except to the extent resulting from the transfer of the shares in Navion Maritime AS from Navion to a member of the Statoil Group prior to the Effective Date, no Group Member is |
| (a) | in any default under any Contract to which any Group Member is a party, and no event has
occurred which in relation to a Group Member’s performance thereunder which would
constitute such a default, in either case which would entitle the other party to
cancel or terminate the relevant Contract; |
|
| (b) | a party to any Contract in respect of which the counterparty thereto has breached its
obligations in a manner which would entitle the relevant Group Member to cancel or
terminate the relevant Contract; |
|
| (c) | a party to or bound by any type of contractual agreement or arrangement not made in the
ordinary course of its respective business; or |
|
| (d) | a party to or bound by any agreement or similar arrangement restricting its or the Group’s
ability to enter into or engage in any market or line of business. |
| 5.3.11 | Accuracy of Information To the best of the Sellers’ knowledge, the Sellers’ representations, warranties and statements, as well as the information contained in the Disclosed Information, are true and correct in all material respects, none of which contains any untrue statement of a material fact or omits to state any material fact necessary in order to make any of such representations, warranties or statements not misleading. |
| 5.3.12 | Absence of Certain Changes Other than the transactions undertaken in connection with the Navion Reorganisation as contemplated by Schedule 1.1 Navion Reorganisation, since 1 July 2002, the Navion Group has conducted its business only in the ordinary course consistent with past practices. Since 1 July 2002, with respect to the business of the Navion Group, there has not been: |
| (i) | any event or combination of events affecting the business of the Navion Group,
which will have a negative financial consequence in excess of USD 75 million; |
|
| (ii) | any obligation or liability incurred (including, without limitation, guarantees,
indemnities or similar obligations) other than obligations and liabilities incurred
in the ordinary course of business or reflected in the Annual Accounts; |
|
| (iii) | any purchase or sale or other disposition (or any agreement or other arrangement
thereof) of any substantial property or assets other than in the ordinary course of
business and consistent with past practice of the Navion Group. |
| 5.4 | Statpet representations as of the Signing Date and Closing Statpet represents and warrants to the Buyer that as of the Signing Date and Closing, Statpet is the sole owner of the Statpet Shares and (save as contemplated by this Agreement) there are no outstanding option rights or other rights to purchase, subscribe for or otherwise acquire any Statpet Shares in Navion. |
| 5.5 | No representation regarding SDFI The Sellers make no representation or assurance as to the future relationship between Statoil and SDFI. |
| 6. | REPRESENTATIONS AND WARRANTIES OF BUYER The Buyer represents and warrants to the Sellers as of the Signing Date and Closing that: |
| 6.1 | Financial capability, Acquisition for its own account, No Litigation The Buyer has sufficient funds to undertake the Transaction and is acquiring the Shares for its own account and not as nominee or agent. No action, suit or investigation is pending which could delay, alter or prevent the Buyer’s ability to complete the Transaction and/or fulfill its obligation under the Agreement. |
| 6.2 | Consents and Approvals, Non-violation The execution, delivery and performance by the Buyer and the Buyer Parent of this Agreement and the Buyer Parent Guarantee respectively require no consent or waiver of any governmental, administrative or regulatory authority or any court, domestic or foreign. The entering into and performance by the Buyer of its obligations under this Agreement and the issuance of the Buyer Parent Guarantee by the Buyer Parent does not violate any agreement or contractual undertaking or restriction by which the Buyer and/or the Buyer Parent, respectively, is bound. |
| 7. | COVENANTS OF SELLERS |
| 7.1 | Conduct of business |
| 7.1.1 | As from the Effective Date and until Closing: |
| (A) | the Sellers shall cause the Navion Group to conduct its business and operations in
the ordinary course, exercising all reasonable due care and attention, consistent
with the standard of a prudent operator and materially consistent with past
practices. The Sellers will not without the prior consent of the Buyer (which consent
shall not be unreasonably withheld) permit any Group Member to: |
| (a) | conclude new-building contracts for any type of vessel, or purchase second
hand vessels of whatever nature; |
|
| (b) | materially amend (other than to change the contractual party as contemplated
by the Navion Reorganisation), change the applicable charter rate or
terminate any of the existing T/Cs in respect of any of the Vessels, time
chartered vessels or the COAs or the Frame Agreements in existence at the
Signing Date. Provided, however, that the conclusion of new time charters
and/or COAs of less than 12 months duration in the normal course of business
shall be permitted; |
|
| (c) | sell any of the Vessels, except as contemplated as part of the Navion
Reorganisation; |
|
| (d) | amend any existing employment, severance or consulting agreement, grant any
general increase in the compensation of officers or employees, except in
either case in accordance with pre-existing contractual provisions or
consistent with past practices; |
|
| (e) | fail to keep in full force and effect any insurance comparable in amount and
scope to coverage maintained by it, or on behalf of it, on the Signing Date; |
|
| (f) | take any action that would cause any of the representations and warranties
pertaining to the Navion Group in this Agreement not to remain true and
correct in all material respects; |
|
| (g) | borrow money in excess of USD 10 million (or the equivalent in other
currencies) (except for inter company loans within the Navion Group or
between a Group Member and a member of the Statoil Group for bridge finance
purposes), provided, however, that Navion shall be entitled to draw funds
under the existing credit facility with Den norske Bank ASA (or any
replacement thereof) within the existing limits, and provided further, that
any member of the Navion Group shall be entitled to enter into loan
agreements for the purpose of the Navion Reorganisation and/or the financing
of the VOC investments undertaken by Navion; provided such loan commitments
are for a duration of less than 12 months; |
|
| (h) | make any loan, advance or capital contribution to or investment in any
Person (other than a Group Member) in excess of USD 10 million (or the
equivalent in other currencies), provided that any such permitted payments
shall be in accordance with existing policies within the Navion Group and in
compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act; |
|
| (i) | make any change in any method of accounting or accounting principle, method,
estimate or practice except for any such change required by reason of a
concurrent change in NGAAP; |
|
| (j) | enter into any contracts, arrangements, settlement other than on commercially reasonable
terms consistent with an arm’s length transaction; or |
|
| (k) | make any personnel changes in key positions or alter the number of employees except in the
circumstances identified in Section 8.3(c). |
| (B) | the Sellers shall cause the Navion Group to: |
| (a) | file, when due or required, state, foreign and other tax returns and other
reports required to be filed and pay when due all taxes, assessments, fees
and other charges lawfully levied or assessed against it, unless the
validity thereof is contested in good faith and by appropriate proceedings
diligently conducted; |
|
| (b) | keep its books of account, records and files in the ordinary course and in
accordance with existing practices; |
|
| (c) | continue to maintain existing relationships with suppliers and customers
relating to the Navion Group’s business, to the extent that such
relationships are, at the same time, judged to be economically beneficial to
the Navion Group. |
| (C) | the Sellers shall permit the Buyer to have one or more of its nominated senior
managers present in Navion’s offices, either full time or part time, for the purpose
of becoming familiar with the operation of the business and to be fully exposed to
the day-to-day operations of Navion. |
| 7.1.2 | As from the Signing Date and until Closing, the Sellers undertake to keep the Buyer advised
on a regular basis of material developments, changes or important opportunities which may
present themselves to any Group Member and of which they become aware. |
| 7.2 | Sale of Ownership Shares in Fields Statoil covenants and agrees that if it sells or swaps any ownership share it has in an oil field as of the Signing Date where Navion has a contractual entitlement to carry such oil on behalf of Statoil, it shall use its best endeavours to procure that the buyer of such ownership interest enters into an agreement with Navion to transport such crude oil on the same terms and conditions as applicable between Statoil and Navion. |
| 8. | COVENANTS OF THE BUYER |
| 8.1 | Covenants prior to Closing Within 14 Business Days of Statoil’s written request, the Buyer shall procure that the Buyer Parent provides to Statoil (on behalf of Navion) original Performance Guarantees to the counterparties under the Contracts. The Buyer undertakes to the Sellers that if, prior to Closing, the Buyer is of the opinion that there has been a breach by the Sellers of any of their representations, warranties, covenants or agreements under this Agreement, the Buyer shall notify the Sellers as set out in Clause 11.1 (b), in order to provide the Sellers with the opportunity to cure such breach. While the Parties share the opinion that the Transaction does not create any competition law concerns, the Buyer undertakes to the Sellers that if, prior to Closing, any competent competition authority having jurisdiction in the matter shall request or require any reorganisation of, divestiture from or other adjustment to be made to the business and/or operations of the Navion Group or the Buyer and/or other companies owned directly or indirectly by the Buyer Parent in order to approve of the Transaction, the Buyer shall – and it shall procure the Buyer Parent will - use its best efforts to diligently and constructively enter into negotiations with the relevant authorities with a view to reaching an acceptable solution which will remove any competition concern expressed by the relevant authority, it being understood and agreed, however, that any such dialogue or process with the authorities shall not, other than in case of a preliminary prohibition as set out in Clause 10.2.1 (f), prevent or delay Closing. The Buyer will keep the Sellers promptly advised of any correspondence and/or meetings with any such competition authorities and will, to the extent reasonably practical, consult with the Sellers in advance, it being understood that, subject as stated in Clause 10.2.1 (f), it shall be the risk of the Buyer solely to obtain any relevant clearance, whether before or after Closing. Upon the Buyer’s request, the Sellers undertake to support the Buyer in any dealings with the competition authorities and shall promptly provide the Buyer with all information, analysis and data in the possession of the Sellers or the Navion Group which may be of assistance in the preparation of submissions to the relevant competition authorities. |
| 8.2 | Confidentiality obligations |
| (a) | The Buyer acknowledges that it has received information in respect of the business
and financing of the Navion Group and its dealings, transactions, affairs, plans and
proposals, all of which is, or may be, secret or confidential and important to the
business of the Navion Group (“Confidential Information”) including, without
limitation, confidential or secret information relating to the Navion Group’s trade
secrets, know-how, ideas, business methods, finances, prices, business plans,
marketing plans, development plans, manpower plans, sales targets and statistics,
customer lists and relationships, computer systems and software. The Buyer further
acknowledges that the disclosure of Confidential Information (whether directly or
indirectly) to actual or potential competitors of the Navion Group might place it at
a competitive disadvantage and might do damage to its business. |
|
| (b) | The Buyer accordingly agrees and undertakes that (i) until Closing, or (ii) in the
event that Closing shall not take place or this Agreement is terminated, at any time
after the date hereof, it will not, and it will procure that neither the Buyer Parent
nor any other Person it or the Buyer Parent controls or has engaged, retained or
communicated with in relation to the Transaction will: |
| (1) | disclose Confidential Information to any third party except to those
authorised by the Sellers; |
|
| (2) | use Confidential Information for any other purpose than the preparation and
consummation of the transactions contemplated by this Agreement; or |
|
| (3) | through any failure to exercise all due care and diligence, cause or permit any unauthorised
disclosure of any Confidential Information, provided, however, that these
restrictions on the Buyer will cease to apply to information which
(otherwise than through the default by the Buyer, the Buyer Parent or any
such Person) becomes available to the public generally, or is required to be
disclosed by law, accounting rules or regulations. |
| 8.3 | Covenants after Closing The Buyer undertakes for a period of at least twelve (12) months from Closing to: |
| (a) | maintain the Navion head office in Stavanger; |
|
| (b) | conduct the Navion Group’s business and operations from the head office in its ordinary
course and consistent with past practice; and |
|
| (c) | subject as set out in Schedule 8.3 (c), maintain the present level of employees; provided
however the Buyer shall not be obligated to hire new employees to replace persons
who die, become disabled or otherwise unable to work, voluntarily terminate their
employment or who are terminated for cause in accordance with the laws of the
Kingdom of Norway. |
| 9. | MUTUAL COVENANTS |
| 9.1 | Further Assurances Upon the terms and subject to the conditions of this Agreement, each of the Parties agrees to use its best endeavors to take or cause to be taken all action and to assist and cooperate with the other Party in doing all things necessary, proper or advisable to consummate the Transaction. |
| 10. | CONDITIONS FOR SIGNING AND CLOSING The obligations of the Parties to consummate the Transaction (the “Closing”) are subject to the fulfillment of the following deliveries and conditions: |
| 10.1 | Signing deliveries of the Buyer By signing this Agreement, the Buyer confirms that as of the Signing Date it is not aware of any facts or circumstances that could give rise to a claim against the Sellers under or in connection with the representations and warranties or otherwise under this Agreement and that in particular the Buyer has been given the opportunity to inspect the Vessels and that irrespective of whether such inspection has taken place or not, the Vessels have been accepted “as is”. On signing of this Agreement, the Buyer shall deliver to the Sellers: |
| (a) | the Buyer Parent Guarantee, |
|
| (b) | evidence acceptable to the Sellers that (i) the Signing Date Payment will be
effected on the Signing Date, or if this is not a Business Day, on the first Business
Day thereafter, and (ii) the Buyer has the financial means to pay the Purchase Price
at Closing. |
| 10.2 | Conditions to the Parties’ Obligations on Closing |
| 10.2.1 | The consummation of the Transaction shall be subject only to: |
| (a) | performance by the Parties of their respective obligations under this Agreement on or prior
to Closing; |
|
| (b) | the receipt by the relevant Parties of the documents referred to in Clauses 10.4-10.5; |
|
| (c) | the Navion Reorganisation having been consummated in all material respects, or failing
necessary consent from any third party on terms and conditions acceptable to the
Parties, suitable back-to-back arrangements or alternative acceptable solutions
having been put in place as contemplated in Schedule 1.1 Navion Reorganisation; |
|
| (d) | any adjustment to the Basic Purchase Price shall have been determined in accordance with
Clause 3; |
|
| (e) | all necessary consents from relevant contractual parties regarding the Transaction shall have
been obtained by Navion or the relevant Group Member; and |
|
| (f) | no prohibition against the consummation of the Transaction or order requiring the
divestiture of the Shares or otherwise prohibiting the ownership by the Buyer of
Navion having been imposed by any relevant competition authority having jurisdiction
in the matter. |
| 10.2.2 | For the avoidance of doubt it is agreed that (except as contemplated in Schedule 1.1 Navion
Reorganisation) neither the need to make back-to-back arrangements or other solutions in
connection with the Navion Reorganisation nor the lack of clearance from any competent
competition authority shall per se or otherwise constitute grounds for not consummating the
Transaction. |
| 10.3 | Closing The Parties agree to notify each other in writing as soon as all conditions for Closing set forth in this Clause 10 have been met, whereupon Closing shall take place fourteen (14) days thereafter and no later than 30 June 2003. Closing shall take place at the offices of Statoil, or on such other place and/or date as the Sellers and the Buyer may mutually agree upon in writing. |
| 10.4 | Closing deliveries of the Sellers On Closing, the Sellers shall deliver or make available to the Buyer: |
| (a) | evidence of any consents or waivers required from any third party to consummate the
Transaction; |
|
| (b) | letters of resignation of the members of the Board of Directors of the Group Members
who are not employees of a Group Member, substantially in the form attached hereto in
Schedule 10.4 (b); |
|
| (c) | Certificates of Ownership and Encumbrances dated not more than seven (7) Business
Days prior to Closing in respect of the Vessels from the relevant ship register
evidencing that (i) a Group Member is the registered owner thereof, and (ii) the said
Vessels are free and clear of registered Encumbrances; |
|
| (d) | class certificates in respect of the Vessels dated not more than seven (7) Business
Days prior to Closing evidencing that there are no overdue recommendations by class
on any of the Vessels, it being agreed that notes, if any, which are accepted by the
Classification Society are not to be taken into account. It is agreed that the loss,
or a compromised, arranged or constructive total loss of one or more of the Vessels
or any of the time chartered vessels shall have no consequences whatsoever for the
obligation of the Parties to consummate the Transaction; |
|
| (e) | a statement in writing dated as of Closing confirming (i) the accuracy and correctness of the
representations and warranties of the Sellers set out in Clauses 4 and 5 (as the same
may be qualified in the Closing Disclosure Letter), and (ii) that the Sellers to the
best of their knowledge are not aware of any facts or circumstances that could give
rise to a claim against the Navion Group which could reasonably be deemed to be
material in relation to the Transaction; |
|
| (f) | a statement in writing, dated as of Closing on behalf of each of the Sellers, substantially
in the form attached hereto in Schedule 10.4. (f), certifying that (i) the Navion
Reorganisation has been implemented in accordance with Schedule 1.1 Navion
Reorganisation , (ii) as at the Effective Date, the Vessels were in the same physical
condition as they were at the time of the Buyer’s inspection, fair wear and tear
excepted, and (iii) as at the date of Closing the Vessels are owned by Navion
Offshore Loading or Navion Shipping AS, all of which are free and clear of
Encumbrances, except for maritime liens incurred in the ordinary course of business;
and |
|
| (g) | evidence acceptable to the Buyer that any loan outstanding from Navion (or other
Group Member) to a Statoil Group company will be repaid by the relevant Statoil Group
company on the date of Closing. |
| 10.5 | Closing deliveries of the Buyer On Closing, the Buyer shall deliver or make available to the Sellers: |
| (a) | evidence acceptable to the Sellers confirming that (i) the payment of the Purchase
Price has been made by the Buyer pursuant to the provisions of Clause 3.5, and (ii)
any loan outstanding by Navion (or other Group Member) to a Statoil Group company
will be repaid as contemplated in Clause 10.6 on the date of Closing; |
|
| (b) | a statement in writing dated as of Closing confirming that the Buyer is not aware of
any facts or circumstances that could give rise to a claim against the Sellers under
or in connection with the representations and warranties or otherwise under this
Agreement substantially in the form of Schedule 10.5.(b); and |
|
| (c) | a certificate executed on Closing by a duly authorized senior officer of the Buyer,
substantially in the form attached hereto in Schedule 10.5 (c), certifying the
accuracy and correctness of the representations and warranties set forth in Clauses
4 and 6. |
| 10.6 | Closing Mechanics Subject to the terms and conditions of this Agreement and a detailed closing memorandum to be agreed by the Parties in accordance with and embodying customary procedures and principles, the Sellers shall cause the transfer of ownership to the Shares from the Sellers to the Buyer to be promptly recorded in the share register book of Navion with the Computerised Securities Register (VPS) upon (i) payment by the Buyer of the Purchase Price and (ii) repayment in full of any loan outstanding from Statoil to a Group Member at Closing together with interest accrued thereon at a rate of 3 months USD LIBOR + 17.5 bp per annum (the “Statoil Loan”), in respect of which the following shall apply: The Buyer may elect (i) to cause Navion (or other relevant Group Member) to repay in full the Statoil Loan on the date of Closing, or (ii) to purchase the Statoil Loan and related security from Statoil in consideration of the payment of an amount equal to the Statoil Loan. If Navion (or relevant Group Member) repays the Statoil Loan, Statoil shall provide written confirmation that such loan has been repaid forthwith upon receipt of such funds from Navion (or relevant Group Member), and shall forthwith discharge all security granted in respect thereof. If the Buyer purchases the Statoil Loan from Statoil, Statoil shall concurrent with the payment of the loan amount to it, assign over to the Buyer the Statoil Loan and all related security (if any) granted by any Group Member in connection with the loan. Statoil shall, not less than ten (10) Business Days prior to the date of Closing, advise the Buyer of the amount of the Statoil Loan (such statement to be updated on the date of Closing), and the Buyer shall, not less than seven (7) Business Days prior to the date of Closing, advise Statoil whether it will purchase the Statoil Loan and related security (if any), or whether it shall cause Navion (or relevant Group Member) to repay such loan on Closing. |
| 11. | BREACH OF AGREEMENT |
| 11.1 | Breach by the Sellers |
| (a) | Compensation to be paid by the Sellers The Sellers hereby agree, in case of being in breach of any of their representations and warranties contained in this Agreement, to compensate the Buyer from and against any reasonably foreseeable net losses (after tax) suffered by the Buyer as a consequence thereof in accordance with the following provisions of this Clause 11.1, provided that the Buyer has notified the Sellers in accordance with Clause 11.1 (b). |
|
| (b) | Compensation procedures The Buyer shall promptly (and no later than 60 days after the Buyer becomes aware of facts sufficient to show a claim exists) give the Sellers written notice of any matter which the Buyer has determined may or could (in combination with other current or potential future claims) give rise to a right of compensation under this Agreement. The claim shall, if practicable, include (i) an estimate of the amount of the claim; (ii) a reference to the relevant Clause in this Agreement and a short description of the basis for the claim; and (iii) the documentary evidence which is then available as proof of the claim. |
|
| (c) | Limitations on payments by the Sellers Any compensation as provided for in Clause 11.1 (a) shall be subject to the following limitations: |
| (1) | The Sellers shall have no liability with respect to any single claim which
does not exceed 0.01 per cent of the Purchase Price. |
|
| (2) | The Sellers shall have no liability with respect to any claim until the
total amount of all claims (excluding the claims for which the Sellers have
no liability according to Clause 11.1 (c) (4)) exceeds one (1) per cent of
the Purchase Price, but shall thereafter be liable to the full extent of
such amount. |
|
| (3) | The Sellers shall have no liability whatsoever with respect to claims under
or in relation to this Agreement in excess of the aggregated amount of fifty
(50) per cent of the Purchase Price. |
|
| (4) | The Sellers shall not be liable in respect of a claim from the Buyer: |
| (i) | if and to the extent any disbursement, damages or loss forming the
subject matter of such breach or claim shall be recoverable under any
relevant insurance policy in place or would have been so recoverable
but for a change in law or the terms of its insurance after the
Effective Date; |
|
| (ii) | if and to the extent the Buyer or, if relevant, the relevant Group Member, has failed to take
the necessary steps to mitigate the damage or loss caused by any of
the Sellers’ breach or such breach or claim is attributable to any
act, omission, transaction or arrangement of the Buyer or any Group
Member acting on the instructions of the Buyer; |
|
| (iii) | if and to the extent the loss – even if it is claimed to be caused by a relevant breach – is
too remote a consequence of the alleged breach of the relevant
representation, such as loss of opportunity, loss of oil production
and the like; |
|
| (iv) | if and to the extent the Buyer recovers any damages or loss from a
third party. The Buyer undertakes to make its best efforts to recover as much as possible of its claim for damages or loss under insurance policies referred to in (i) above or from third parties as described in (iv) above. The Buyer shall notify the Sellers to the extent (i) and (iv) above may apply. The Buyer shall keep the Sellers fully informed of the development regarding settlement of these claims. If a claim is recoverable under the Sellers’ insurance policies, the Sellers shall likewise keep the Buyer fully informed of the development regarding settlement of such claim. |
| (5) | The Buyer shall not be entitled to make any claim: |
| (i) | if the claim is based on or caused by any fact or circumstance
which is included in the Disclosed Information or is otherwise
known to the Buyer or its advisors (“advisors” meaning advisors
directly working for the Buyer in this Transaction having obtained
the relevant knowledge in connection therewith) prior to Closing
unless notified by the Buyer to the Sellers prior to Closing; |
|
| (ii) | unless otherwise specifically provided for in this Agreement, to
the extent that sufficient appropriate reserve, provision or
allowance for the matter or liability which would otherwise give
rise to the claim has been made in the Annual Accounts; |
|
| (iii) | if the claim would not have arisen but for a change in legislation or practice relating
thereto made after the Effective Date. |
| (d) | Time limitations The compensation provided for in Clause 11.1 shall be subject to the following time limitations: |
| 1. | claims with respect to taxation and environmental matters set out
in Clause 5.3.3 and Clause 5.3.5 must be made on or before the
expiration of the applicable statute of limitation for such claims; |
|
| 2. | a claim with respect to any other matters must be made within two
(2) years after Closing, except that any claim with respect to
matters set out in Clause 5.3.12 (i) must be made before Closing. |
| (e) | Subrogation Upon payment in full by the Sellers pursuant to the provisions of Clause 11, the Sellers shall be entitled to the full benefit of all rights to reimbursement or indemnification from third parties relating to the amount paid. The Buyer undertakes that it will take all steps as may be reasonably requested by the Sellers to effect such subrogation and, upon request, provide the Sellers with all relevant information and documents in the possession of the Buyer and relevant Group Members to enable the Sellers to pursue any such claim for reimbursement or indemnification. |
|
| (f) | Subrogation Third Party Claims In respect of third party claims which may give rise to a right of compensation under this Agreement (“Third Party Claim”), the Buyer shall consult with the Sellers regarding its conduct of the Third Party Claim and take into account any reasonable requirements of the Sellers in connection with such conduct. The Buyer shall also provide the Sellers with such information and copies of such documents relating to the Third Party Claim as the Sellers may reasonably request. No Third Party Claim may be settled by the Buyer without the prior written consent of the Sellers (which shall not be unreasonably withheld). |
| 11.2 | Breach by the Buyer |
| (a) | The Buyer hereby agrees, subject to Clause 11.2 (b), in case of being in breach of
any of obligations under this Agreement, to compensate the Sellers for any
disbursements, losses or damages resulting therefrom. |
|
| (b) | The Buyer agrees in case of being in material breach of any of its obligations set
out in Clause 8.3 to pay liquidated damages to the Sellers for each and every breach
in an amount equal to two (2) per cent of the Purchase Price. |
| 11.3 | General Clause 11 and/or Clause 12 shall form the only basis upon which any of the Parties or Navion may bring claims for indemnification or breach of representations or warranties (whether based on express or implied representations or warranties of any kind) against the other, and none of the Parties or Navion may take any other action nor invoke other claims or grounds for claims in respect of representations, warranties or indemnifications that it might otherwise be entitled to pursuant to applicable law. For the avoidance of doubt, the foregoing shall not limit the right of the Buyer to claim compensation for any breach by any of the Sellers of any of their other obligations under this Agreement. |
| 12. | LIMITED INDEMNIFICATION |
| 12.1 | Indemnification The Sellers undertake to indemnify Navion against any net losses (after tax) in accordance with the following provisions of this Clause 12, provided that the Buyer has notified the Sellers in accordance with Clause 12.2. This indemnification shall be limited to claims suffered by Navion as a reasonably forseeable consequence of any of the following events: |
| (a) | payment by Navion pursuant to the « Sellers Earnings Guaranty » as set out in Clause 27 in
Memorandum of Agreement dated 31 August 2001 regarding the sale of FPSO « Navion
Munin », it being understood that Statoil shall have the option at any time in its
discretion to request the said guarantee obligation to be transferred by Navion to
and be assumed by Statoil; |
|
| (b) | payment by a Group Member pursuant to the « Overføringsavtale » dated 1 August 2002 regarding
the sale of the LPG business of Navion; |
|
| (c) | tax payable by a Group Member arising from the operations of the Navion Group prior to the
Effective Date, or arising in connection with the Navion Reorganisation, or
triggered by the change of control of the Navion Group in connection with this
Transaction. For the avoidance of doubt, this tax indemnification shall not include
any tax liability which may arise in relation to a deferred capital gain of
approximately NOK 600 million in Navion related to the transfer of the shares in
Navion Shipping AS to Navion Shipping Holding AS in 2001; and |
|
| (d) | tax payable by a Group Member arising as a consequence of any group contribution given by a
company within the Statoil Group to one or more Group Members in the financial year
2002 or later as provided for in Clause 3.2.1 (b). |
| If a tax claim is levied against a Group Member, Statoil shall be entitled to contest such
claim on behalf of Navion at Statoil’s cost and expense, in which case the Buyer shall
procure that Navion and relevant Group Members provide free of charge to Statoil such
assistance and documents as Statoil may reasonably require in connection therewith. |
| 12.2 | Procedure The Buyer shall promptly (and no later than sixty (60) days after the Buyer becomes aware of facts sufficient to show that a claim exists) give the Sellers written notice of any matter which the Buyer has determined may give rise to a right of indemnification under this Clause 12. The claim shall, if practicable, include (i) an estimate of the amount of the claim; (ii) a reference to the relevant Clause in this Agreement and a short description of the basis for the claim; and (iii) the documentary evidence which is then available as proof of the claim. If an indemnification payment is made by the Sellers, Clause 11.1 (e) shall apply accordingly in relation thereto. |
| 12.3 | Limitations on payments by Sellers The Sellers shall not be liable in respect of a claim pursuant to this Clause 12 from Navion or the Buyer: |
| (a) | if and to the extent any disbursement, damages or loss forming the subject matter of
such breach or claim shall be recoverable under any relevant insurance policy of the
Buyer and/or the relevant Group Member in place or would have been so recoverable
but for a change in law or the terms of its insurance after the date of this
Agreement; |
|
| (b) | if and to the extent the Buyer and/or the relevant Group Member has failed to take
the necessary steps to mitigate the loss or such loss is attributable to any act,
omission, transaction or arrangement of the Buyer or any Group Member acting on the
instructions of the Buyer; |
|
| (c) | if and to the extent the loss – even if it is claimed to be caused by a relevant
breach – is too remote a consequence of the alleged breach of the relevant
representation, such as a loss of opportunity, loss of oil production and the like; |
|
| (d) | if and to the extent the Buyer and/or the relevant Group Member recovers any damages
or loss from a third party; |
|
| (e) | to the extent that sufficient appropriate reserve, provision or allowance for the
matter or liability which would otherwise give rise to the claim has been made in
the Annual Accounts. |
| The Buyer undertakes to ensure that the relevant Group Member shall make its best efforts to
recover as much as possible of its claim for damages or loss under insurance policies
referred to in (a) above or from third parties as described in (d) above. The Buyer shall
notify the Sellers to the extent (a) and (d) above may apply. The Buyer shall keep the
Sellers fully informed of the development regarding settlement of these claims. If a claim is
recoverable under the Sellers’ insurance policies, the Sellers shall likewise keep the Buyer
fully informed of the development regarding settlement of such claim. |
|
| 12.4 | Time limitations Clause 11.1 (d) shall apply accordingly to any claim which may be brought under this Clause 12, except in relation to claims under Clause 12.1 (a) and/or (b). |
| 12.5 | Indemnification by the Buyer If it becomes necessary for Statoil and/or Navion Maritime AS to remain responsible towards a relevant third party (whether due to sub-contracting arrangements, guarantee requirements or otherwise) in order to effect the relevant transfer under, and/or the intended economic effects in relation to the Navion Reorganisation, the Buyer and Navion shall hold Statoil and/or Navion Maritime AS (as the case may be) fully indemnified and harmless from any liability or economic consequence whatsoever resulting therefrom (except to the extent due to the gross negligence or wilful misconduct by such party), provided, however, that Statoil shall not be entitled to change any fees in connection with administering such arrangements. |
| 12.6 | Cooperation The Buyer undertakes to ensure that, after Closing, each Group Member shall make such filings in respect of tax, corporate, business and operational matters as shall be required by law or applicable regulations in a timely, correct and complete manner in relation to the fiscal year 2002 and the Navion Reorganisation (including, to the extent required by the Navion Reorganisation, in relation to any fiscal year subsequent to 2002). |
| 13. | TERMINATION |
| 13.1 | Termination before Closing Notwithstanding anything to the contrary contained herein, this Agreement may be terminated at any time before Closing: |
| (a) | by mutual consent of the Sellers and the Buyer; |
|
| (b) | by the Sellers, (i) in the circumstances referred to in Schedule 1.1 Navion
Reorganisation, (ii) if the Buyer makes a claim based on Clause 5.3.12 (i), or (iii)
if the Buyer has materially breached this Agreement and has not cured such breach
within 30 Business Days after written notice to the Buyer, provided that no cure
period shall be required for a breach which by its nature cannot be cured, such that
the conditions set forth in Clause 10 will not be satisfied; |
|
| (c) | by the Buyer, if the Sellers have materially breached this Agreement and have not
cured such breach within 30 Business Days after written notice to the Sellers,
provided that the Buyer is not then in breach of the terms of this Agreement, and
provided further that no cure period shall be required for a breach which by its
nature cannot be cured, such that the conditions set forth in Clause 10 will not be
satisfied; |
|
| (d) | by each of the Parties, if Closing shall not have taken place by 30 June 2003,
provided that the right to terminate this Agreement under this Clause 13 shall not
be available to a Party whose failure to fulfill any material obligation under this
Agreement has been grossly negligent or willful and the cause of, or resulted in,
the failure of Closing to occur on or before such date. |
| 13.2 | Termination after Closing None of the Parties shall be entitled to terminate the Agreement after Closing. |
| 13.3 | Effect of Termination In the event of the termination of this Agreement as provided in Clause 13.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of any of Sellers and the Buyer and their respective representatives, except to the extent that such termination results from the willful or material breach by a Party of any of its representations, warranties, covenants or agreements set forth in this Agreement, and provided that the provisions of Clause 8.2 hereof shall remain in full force and effect and survive any termination of this Agreement. Upon termination, the Signing Date Payment shall be immediately returned to the Buyer, except in the case of termination pursuant to Clause 13.1.b (iii), in which case the Signing Date Payment shall be released by mutual agreement of the Parties or upon the order of a court of competent jurisdiction after the period for appealing such order has expired. |
| 14. | MISCELLANEOUS |
| 14.1 | Expenses The Sellers and the Buyer shall each bear all of their own costs and expenses incurred in connection with the Transaction and its consummation, including, as the case may be, the fees, disbursements and expenses of their financial or legal advisors, auditors or accountants or the representatives retained by them. External expenses reasonably incurred in connection with the Navion Reorganisation shall be for the account of Navion to the extent incurred prior to the Effective Date, and for the account of Statoil to the extent incurred thereafter. |
| 14.2 | Entire Agreement This Agreement constitutes the entire understanding and agreement between the Parties concerning the Transaction and supersedes and replaces all prior agreements and understandings, oral or written, with respect to this Transaction. All Schedules hereto and any documents and instruments delivered pursuant to any provisions hereof are expressly made a part of this Agreement. |
| 14.3 | Public Announcements The Parties agree that after the signing of this Agreement, they shall not make any press release or public announcement concerning this Transaction unless a press release or public disclosure is required by law or regulation or the Parties so agree. Before a Party makes any such announcement or other disclosure, it shall give the other Party prior notice and an opportunity to comment on the proposed disclosure to the extent reasonably practicable. |
| 14.4 | Clause Headings The clause headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. |
| 14.5 | Counterparts This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. |
| 14.6 | Amendments This Agreement may not be amended except by a written instrument duly signed by each Party or their respective duly authorized representatives. |
| 14.7 | Notices All notices, requests, demands and other communications under this Agreement or in connection herewith shall be in writing and shall be delivered personally, telecopied or sent by e-mail and shall be deemed given when so received if delivered personally or received by telecopy or e-mail, as follows: |
| if to the Sellers: Statoil ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Fax Number: + ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ Attention: ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ e-mail address: ▇▇▇@▇▇▇▇▇▇▇.▇▇▇ with copy to: Statoil ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Fax Number: + ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ Attention: Mr. Odd Sollesnes e-mail address: ▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ if to the Buyer: Teekay Shipping Corporation TK House, Bayside Executive Park ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇-▇▇▇▇▇ Nassau, The Bahamas Fax Number: + ▇ ▇▇▇ ▇▇▇ ▇▇▇▇ Attention: Mr. ▇▇▇▇▇ ▇▇▇▇ e-mail address: ▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇ with copies to: Teekay Shipping (Canada) Ltd. Suite 2000, Bentall 5 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ Fax Number: + ▇ ▇▇▇ ▇▇▇ ▇▇▇▇ Attention: General Counsel e-mail address: ▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇ Nordic Shipping ASA Thor ▇▇▇▇▇ ▇▇▇▇ ▇/▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Fax Number: + ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ Attention: Chief Executive Officer e-mail address: ▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇ Any Party may change its address for notices specified above by notice to the other Party in accordance with this Clause 14.7. Statpet hereby confirms that Statoil has been duly authorized to give and receive notices on its behalf in all matters which may arise under or in connection with this Agreement |
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| 14.8 | Non Competition and Non Solicitation The Sellers hereby undertake with the Buyer that they will not, whether for their own account or for the account of any other person, or as agent, consultant or shareholder, during the period from Closing to four (4) years after Closing - or such shorter period as may be permitted under applicable law - carry on or be engaged in any business in the territories in which a Group Member operates as at Closing which is in competition with the offshore loading business of the Navion Group as carried on immediately after Closing, provided that this undertaking shall not affect (i) Statoil’s current and future interests in the offshore loading business of KS Statfjord Transport (KSST) as it relates to the Statfjord field and current practice, and (ii) any offshore loading business or activity which may be acquired by Statoil as a business or activity which is incidental to and an integral part of an enterprise or larger business (the “Enterprise”) which is the primary subject matter of any such acquisition, in which case Statoil undertakes – subject to Statoil having acquired (directly or indirectly) control over the Enterprise – to divest of such offshore loading business within 24 months of having acquired control over same. The Sellers further undertake with the Buyer that neither they, nor any company controlled directly or indirectly by them, will during the period from the date hereof to 24 months after Closing, solicit or endeavour to entice away from or discourage from being employed by any Group Member, any person who is at the date hereof or at Closing an employee in a leading position in any Group Member, or whom any such companies may at the date hereof or at Closing have agreed to engage as such an employee. For the avoidance of doubt, it is acknowledged that the foregoing undertaking shall not prevent Statoil to employ previous or current employees from the Navion Group who apply for jobs within Statoil pursuant to regular advertisements placed by Statoil on its intranet page or otherwise publicly in the ordinary course. |
| 14.9 | Confidentiality Agreement Except as set forth in Clause 14.3 hereof, each of the Parties agrees that the content of this Agreement as well as any and all other information being delivered or disclosed (whether orally or in writing) to the other Parties in connection herewith shall be deemed to be confidential and proprietary, unless specifically designated by the Party disclosing such information to be non-confidential or non-proprietary. The Party receiving confidential information shall treat, and shall cause its officers, directors, employees, advisors and auditors also to treat, such information as strictly confidential and shall not divulge or disclose (directly or indirectly) such information to any other person or entity (other than to its officers, directors, employees, advisors, providers of finance, auditors, investment bankers and their advisors who may assist in future debt or equity transactions, and/or potential bidders for the shares in such Party who reasonably require access to such confidential information for the purpose for which it was disclosed), except when (i) such disclosure is required by law or by any order of any administrative or judicial authority which is (x) final and subject to no appeal, or (y) although not final, is executory pending any appeal, (ii) such information has become public through no fault of the receiving Party, or (iii) such information has been obtained separately by the receiving Party from a third party that is not bound by any confidentiality regarding such information. This Clause 14.9 shall survive the termination date of this Agreement and shall be in full force and effect for a period of three (3) years from the date hereof. |
| 14.10 | Governing Law and Jurisdiction This Agreement is governed by and shall be construed in accordance with the laws of Norway. Any dispute arising out of or in connection with this Agreement shall be referred to the Stavanger City Court (“Tingrett”), Norway. |
IN WITNESS THEREOF, the Parties have executed this Agreement to be effective as of the date set forth above.
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STATOIL ASA By: __________________________ Its: __________________________ NORSK TEEKAY AS By: __________________________ Its: __________________________ |
STATPET ASA By: __________________________ Its: __________________________ |