EXHIBIT (e)(6)
CROSS INDEMNIFICATION AGREEMENT
THIS CROSS INDEMNITY AGREEMENT made this 1st day of October, 1997.
BETWEEN:
GULF CANADA RESOURCES LIMITED, a corporation governed by the
laws of Canada (hereinafter referred to as "Gulf")
OF THE FIRST PART
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GULF INDONESIA RESOURCES LIMITED, a corporation governed by
the laws of New Brunswick (hereinafter referred to as the
Company")
OF THE SECOND PART
WHEREAS the Company is a wholly-owned subsidiary of Gulf; and
WHEREAS it is anticipated that a portion of the shares of the Company
held by Gulf will be sold to the public in the Offering; and
WHEREAS in anticipation of the Offering, Gulf transferred to the
Company the shares of certain subsidiaries of Gulf; and the Company transferred
to Gulf the shares of certain subsidiaries of the Company which have heretofore
carried on business outside of Indonesia; and
WHEREAS it is the intention of the parties hereto that they not assume
any liabilities which may be associated with the subsidiaries transferred by
each to the other; and
WHEREAS the parties desire to provide certain other assurances relating
to the Offering;
NOW, THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants and promises contained herein and other good and valuable
consideration (the receipt and adequacy whereof is hereby acknowledged), the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS.
For the purpose of this Agreement, the following terms shall have the
meaning ascribed thereto below unless otherwise specified:
"AFFILIATES" means, with respect to a Person, any person that directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with such Person, and the term "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management, activities or policies of any Person or entity,
whether through the ownership of voting securities, by contract, employment or
otherwise.
"AGREEMENT" means this Cross Indemnification Agreement, as amended from time to
time pursuant to the terms hereof.
"COMPANY REORGANIZATION" means, collectively, (i) the transaction pursuant to
which Gulf Canada transferred all of the issued and outstanding shares of Gulf
Resources (Tungkal) Ltd., Gulf Resources (Merangin) Ltd., Gulf Resources (Calik)
Ltd., Gulf Resources (Pangkah) Ltd., Gulf Resources (▇▇▇▇▇▇ ▇▇▇▇▇) Ltd. and Gulf
Resources (South Jambi) Ltd. to the Company in exchange for six fully paid and
non-assessable Shares pursuant to the Share Exchange Agreement listed as Item 2
of Schedule A hereto; (ii) the transaction pursuant to which the Company
purchased from Gulf all of the issued and outstanding shares of ▇▇▇▇▇ Petroleum
Indonesia Ltd. pursuant to the Sale and Purchase of Shares Agreement listed as
Item 1 of Schedule A hereto; and (iii) the transaction pursuant to which a
subsidiary of the Company purchased from a subsidiary of Gulf an interest in a
production sharing contract relating to the Halmahera Block, Indonesia pursuant
to the Share Sale Agreement listed as Item 3 of Schedule A hereto.
"CORRIDOR FINANCING" means the financing and related agreements relating to the
Corridor Block Gas Project, as described under "Business and
Properties--Description of Properties--Corridor Block Gas Project" in the
Prospectus.
"GULF REORGANIZATION" means the transaction pursuant to which Gulf Resources
(NA.) Ltd. purchased all of the issued and outstanding shares of Asamera
Resources Inc. from Asamera Minerals, pursuant to the Purchase and Sale of
Shares Agreement listed as Item 1 of Schedule B hereto.
"OFFERING" means a public offering of Shares pursuant to the Prospectus
following which Gulf will own less than all of the Shares.
"PERSON" includes an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture or
other entity, or a stock exchange, trustee in bankruptcy, receiver or any
government, any political subdivision, any agency and any entity or person
exercising executive, legislative, judicial, regulatory or administrative
functions of government.
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"PROSPECTUS" means the final prospectus of the Company dated September o, 1997
relating to the initial public offering of Shares.
"SHARES" means common shares in the capital of the Company and includes any
shares, however called, having attributes similar to those of common shares.
"TRANSFERRED INDONESIAN ASSETS" means the assets transferred to the Company in
connection with the Company Reorganization.
"TRANSFERRED NON-INDONESIAN ASSETS" means the assets transferred to Gulf or its
subsidiaries in connection with the Gulf Reorganization.
1.2 CONSTRUCTION.
Whenever the context requires, the gender of all words used herein
shall include the masculine, feminine and neuter, and the number of all words
shall include the singular and plural.
1.3 REFERENCES.
Unless otherwise specified, the references herein to "Sections",
"Subsections" or "Articles" refer to the sections, subsections or articles in
this Agreement.
ARTICLE II
INDEMNITIES
2.1 INDEMNIFICATION BY GULF.
(a) Gulf hereby covenants and agrees to protect, indemnify, defend and hold
harmless the Company and its officers, directors, employees, agents,
other representatives and controlled Affiliates (collectively, the
"Company Indemnified Parties") from and against any and all threatened
or actual claims, demands, causes of action, suits, proceedings (formal
or informal), losses, damages, fines, penalties, liabilities, costs and
expenses of any nature, including costs of investigation, attorneys
fees and court costs, sustained or incurred by or asserted against any
Company Indemnified Party, whether under the provisions of any statute
or otherwise, in any way caused by or arising directly or indirectly by
reason, or in consequence, of:
(i) the ownership or operation of the Transferred Non-Indonesian
Assets, whether before or after the date hereof, or the Gulf
Reorganization;
(ii) any tax consequences to the Company of the Gulf Reorganization
or the Company Reorganization, including, without limitation,
any consequences of any determinations by Revenue Canada,
Customs, Excise and Taxation ("Revenue Canada"); provided,
however, that the indemnity herein provided shall not be
deemed to cover any income taxes the Company or its
subsidiaries may be required to pay as a result of the
ownership and operation of the Transferred Indonesian Assets;
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(iii) any untrue statement or alleged untrue statement of a material
fact contained in any Offering registration statement, any
prospectus or preliminary prospectus contained therein or any
amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading but only insofar as the same arise out of or are
based upon an untrue statement or omission or alleged omission
so made based upon information furnished by Gulf about Gulf
(but not the Company) or its subsidiaries;
(iv) any out-of-pocket expenses of the Company incurred in
connection with the Offering;
(v) the liquidation into the Company of Asamera Minerals Inc., a
wholly-owned subsidiary of the Company ("Asamera Minerals"),
or the ownership or operation of Asamera Minerals; and
(vi) the agreements listed as Item 2 and Item 3 of Schedule B
hereto, or the transactions contemplated therein, including
any taxes arising from such transactions.
(b) If any matter or thing contemplated by this Clause 2.1 (any such matter
or thing being hereinafter referred to as a "Claim") is asserted
against any of the Company Indemnified Parties, or if any potential
Claim contemplated by this clause 2.1 shall come to the knowledge of
any Company Indemnified Party, the Company Indemnified Party concerned
shall notify Gulf as soon as possible of the nature of such Claim
(provided that any failure to so notify shall not affect Gulf's
liability under this paragraph except to the extent that it is actually
prejudiced thereby) and Gulf shall, subject as hereinafter provided, be
entitled (but not required) at its expense to assume the defense of any
suit brought to enforce such Claim; provided however, that the defense
shall be conducted through legal counsel reasonably acceptable to the
Company Indemnified Party and that no admission of liability or
settlement of any such Claim may be made by Gulf or the Company
Indemnified Party without, in each case, the prior written consent of
all the other parties hereto, such consent not to be unreasonably
delayed or withheld.
(c) In respect of any such Claim, a Company Indemnified Party shall have
the right to retain separate or additional counsel to act on his or its
behalf and participate in the defense thereof, provided that the fees
and disbursements of such counsel shall be paid by the Company
Indemnified Party unless (i) Gulf fails to assume the defense of such
suit on behalf of the Company Indemnified Party within five Business
Days of receiving notice of such Claim; (ii) Gulf and the Company
Indemnified Party shall have mutually agreed to the retention of the
other counsel, or (iii) the named parties to any such Claim (including
any added third or impleaded party) include both the Company
Indemnified Party, on the one hand, and Gulf, on the other hand, and
the Company Indemnified Party shall have been advised by its counsel
that representation of both parties by the same counsel would be
inappropriate due to the actual or potential differing interest between
them (in which case Gulf shall not have the right to assume the defense
of such Claim but shall be liable to pay the reasonable fees and
expenses of counsel for the Company Indemnified Party).
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(d) With respect to any of its related Company Indemnified Parties who are
not parties to this Agreement, the Company shall obtain and hold the
rights and benefits of Clause 2.1 in trust for and on behalf of such
Company Indemnified Parties and the Company agrees to accept such trust
and to hold the benefit of and enforce performance of such covenants on
behalf of such persons.
2.2 INDEMNIFICATION BY THE COMPANY.
(a) The Company hereby covenants and agrees to indemnify and save harmless
Gulf, each of its officers, directors, employees, agents, other
representatives, shareholders and subsidiaries (other than the Company
and its subsidiaries)(collectively, the "Gulf Indemnified Parties")
from and against any and all threatened or actual claims, demands,
causes of action, suits, proceedings (formal or informal), losses,
damages, fines, penalties, liabilities, costs and expenses of any
nature, including costs of investigation, attorneys' fees and court
costs sustained or incurred by or asserted against any Gulf Indemnified
Party, whether under the provisions of any statute or otherwise, in any
way caused by or arising directly or indirectly by reason, or in
consequence, of:
(i) the ownership or operation of the Transferred Indonesian
Assets, whether before or after the date hereof;
(ii) the Corridor Financing; and
(iii) any untrue statement or alleged untrue statement of a material
fact contained in any Offering registration statement, any
prospectus or preliminary prospectus contained therein or any
amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading except insofar as the same arise out of or are
based upon an untrue statement or omission or alleged omission
so made based upon information furnished by Gulf about Gulf
(but not the Company).
(b) If any matter or thing contemplated by this Clause 2.2 (any such matter
or thing being hereinafter referred to as a "Claim") is asserted
against any of the Gulf Indemnified Parties, or if any potential Claim
contemplated by this Clause 2.2 shall come to the knowledge of any Gulf
Indemnified Party, the Gulf Indemnified Party concerned shall notify
the Company, as soon as possible of the nature of such Claim (provided
that any failure to so notify shall not affect the Company's liability
under this paragraph except to the extent that it is actually
prejudiced thereby) and the Company shall, subject as hereinafter
provided, be entitled (but not required) at its expense to assume the
defense of any suit brought to enforce such Claim; provided however,
that the defense shall be conducted through legal counsel reasonably
acceptable to the Gulf Indemnified Party and that no admission of
liability or settlement of any such Claim may be made by the Company or
the Gulf Indemnified Party without, in each case, the prior written
consent of all the other parties hereto, such consent not to be
unreasonably delayed or withheld.
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(c) In respect of any such Claim, a Gulf Indemnified Party shall have the
right to retain separate or additional counsel to act on his or its
behalf and participate in the defense thereof, provided that the fees
and disbursements of such counsel shall be paid by the Gulf Indemnified
Party unless (i) the Company fails to assume the defense of such suit
on behalf of the Gulf Indemnified Party within five Business Days of
receiving notice of such Claim; (ii) the Company and the Gulf
Indemnified Party shall have mutually agreed to the retention of the
other counsel, or (iii) the named parties to any such Claim (including
any added third or impleaded party) include both the Gulf Indemnified
Party, on the one hand, and the Company, on the other hand, and the
Gulf Indemnified Party shall have been advised by its counsel that
representation of both parties by the same counsel would be
inappropriate due to the actual or potential differing interest between
them (in which case the Company shall not have the right to assume the
defense of such Claim but shall be liable to pay the reasonable fees
and expense of counsel for the Gulf Indemnified Party).
(d) With respect to any of its related Gulf Indemnified Parties who are
not parties to this Agreement, Gulf shall obtain and hold the rights
and benefits of Clause 2.2 in trust for and on behalf of such Gulf
Indemnified Parties and Gulf agrees to accept such trust and to hold
the benefit of and enforce performance of such covenants on behalf of
such persons.
2.3 INDEMNIFICATION PROVISIONS CONTROL.
Gulf and the Company hereby agree that to the extent that
representations, warranties or indemnification provisions contained in any of
the agreements listed in Schedules A and B hereto are inconsistent with the
provisions of Sections 2.1 and 2.2 hereof, as applicable, the provisions of
Sections 2.1 or 2.2 hereof, as the case may be, will be deemed to be controlling
and will supersede such provisions of such other agreement.
2.4 CERTAIN GULF OBLIGATIONS.
Gulf agrees that it will take all action, and enter into such
agreements, contemplated to be taken by Gulf in that certain Commitment Letter
between the Company and The Chase Manhattan Bank of Canada and Chase Securities
Inc. dated September 20, 1997.
ARTICLE III
MISCELLANEOUS
3.1 NO THIRD PARTY BENEFICIARIES.
Except to the extent a third party is expressly given rights herein,
any agreement to pay an amount and any assumption of liability herein contained,
expressed or implied, shall be only for the benefit of the parties and their
respective legal representatives, successors and assigns, and such agreement or
assumption shall not inure to the benefit of the obligors of any indebtedness of
any party whomsoever, if being the intention of the parties hereto that no
person or entity shall be deemed a third party beneficiary of this Agreement
except to the extent a third party is expressly given right herein.
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3.2 NOTICES.
Any notice, demand, or communication required, permitted or desired to
be given hereunder shall be deemed effectively given when personally delivered
or mailed by prepaid certified mail, return receipt requested, address as
follows:
(i) if the Company to:
Gulf Indonesia Resources Limited
21st Floor, Wisma 46, Kota BNI
J1. Jend. ▇▇▇▇▇▇▇▇, ▇▇▇. ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Attn: Chief Operating Officer
(ii) if to Gulf, to:
Gulf Canada Resources Limited
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President
or to such other address and to the attention of such other person or officer as
either Party may designate by written notice pursuant to this Section 3.2.
3.3 GOVERNING LAW.
This agreement has been executed and delivered in and shall be
interpreted, construed and enforced pursuant to and in accordance with the laws
of Alberta.
3.4 ASSIGNMENT.
No assignment of this Agreement or any of the rights of obligations set
forth herein by either party shall be valid without the specific written consent
of the other party.
3.5 WAIVER OF BREACH.
The waiver by either party of a breach or violation of any provision of
this Agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach of the same or any other provision hereof.
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3.6 SEVERABILITY.
In the event any provision of this Agreement is held to be
unenforceable for any reason, such provision shall be severable from this
Agreement if it is capable of being identified with and apportioned to
reciprocal consideration or to the extent that it is a provision that is not
essential and the absence of which would not have prevented the parties from
entering into this Agreement. The unenforceability of a provision that has been
performed shall not be grounds for invalidation of this Agreement under
circumstances in which the true controversy between the parties does not involve
such provision.
3.7 ARTICLE AND SECTION HEADINGS
The article and section headings contained in this Agreement are for
the reference purpose only and shall not effect in any way the meaning or
interpretation of this Agreement.
3.8 AMENDMENTS AND CONTRACT EXECUTION
This Agreement supersedes all previous contracts between the parties
and constitutes the entire Agreement between the parties with respect to the
subject matter of this Agreement. No oral statement or prior written material
not specifically incorporated herein shall be of any force and effect, and no
changes in or additions to this Agreement shall be recognized unless
incorporated herein by amendment, such amendment to become effective on the date
stipulated therein.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized representatives as of the day and
year first above written.
GULF CANADA RESOURCES LIMITED
By: /s/
--------------------------------------
Name:
Title: Senior Vice President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
ASSISTANT SECRETARY
GULF INDONESIA RESOURCES LIMITED
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Pres. & CEO
/s/
CORPORATE SECRETARY
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Schedule "A"
1. Sale and Purchase of Shares Agreement dated as of the 19th day of
August, 1997 between Gulf and the Company relating to the purchase by
the Company from Gulf of the shares of ▇▇▇▇▇ Petroleum Indonesia Ltd.
2. Share Exchange Agreement made effective as of August 19, 1997 between
Gulf and the Company relating to the sale by Gulf to the Company of the
shares of certain subsidiaries of Gulf.
3. Share Sale Agreement made effective as of August 15, 1997 between ▇▇▇▇▇
Expro plc and Gulf Resources (Halmahera) Ltd., a wholly-owned
subsidiary of the Company, pursuant to which ▇▇▇▇▇ Expro plc sold to
Gulf Resources (Halmahera) Ltd. certain assets as described in such
agreement.
Schedule "B"
1. Purchase and Sale of Shares Agreement dated as of the 11th day of July,
1997 between Gulf (N.A.) Limited and Asamera Minerals Inc. pursuant to
which Asamera Minerals Inc. sold to Gulf (N.A.) Limited all of the
shares of Asamera Resources Inc.
2. Agreement of Purchase and Sale made effective the 1st day of January,
1997 between Gulf, the Company and Asamera Minerals Inc. pursuant to
which the Company sold to Asamera Minerals Inc. certain assets as
described in such agreement.
3. Agreement of Purchase and Sale made effective the 1st day of January,
1997 between Gulf, the Company and Asamera Minerals Inc. pursuant to
which Gulf sold to the Company certain assets as described in such
agreement.