EXHIBIT 4.30
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STOCK PURCHASE AGREEMENT
among
OCCIDENTAL (EAST SHABWA), LLC ("Buyer"),
INTERCAP YEMEN, INC. ("Seller"),
and
MFC BANCORP LTD. ("Guarantor")
Dated as of July 23, 2002
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TABLE OF CONTENTS
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Page
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ARTICLE I
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DEFINITIONS
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Section 1.1 Specific Definitions.............................................1
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Section 1.2 Other Definitional Provisions....................................5
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ARTICLE II
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PURCHASE AND SALE OF COMPANY SHARES; GUARANTEE
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Section 2.1 Purchase and Sale of Company Shares..............................5
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Section 2.2 Closing; Delivery and Payment; Guarantee; Indemnity..............6
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Section 2.3 Calculation of Adjustment Amount; Post-Closing Adjustment........8
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ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF SELLER AND GUARANTOR
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Section 3.1 Organization of Seller and Guarantor............................10
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Section 3.2 Authority; No Conflicts.........................................10
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Section 3.3 Capitalization of the Company; Organization and
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Qualification; Subsidiaries..................................10
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Section 3.4 Consents and Approvals..........................................12
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Section 3.5 Financial Statements............................................12
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Section 3.6 Brokers' Fees...................................................12
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Section 3.7 Taxes...........................................................13
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Section 3.8 Litigation and Claims...........................................13
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Section 3.9 Employees.......................................................13
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Section 3.10 Contracts.......................................................13
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Section 3.11 Title to Assets.................................................14
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Section 3.12 Corporate Documents.............................................15
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Section 3.13 Compliance with Law and Permits.................................15
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Section 3.14 Absence of Subsequent Actions or Events.........................16
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Section 3.15 Capital Commitments.............................................17
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Section 3.16 Related Party Transactions......................................17
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Section 3.17 Insurance Policies..............................................17
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Section 3.18 Directors and Representatives...................................17
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Section 3.19 Environmental Matters...........................................17
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF BUYER
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Section 4.1 Organization of Buyer...........................................18
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Section 4.2 Authority; No Conflicts.........................................18
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Section 4.3 Consents and Approvals..........................................18
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Section 4.4 Securities Act..................................................19
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Section 4.5 Brokers' Fees...................................................19
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ARTICLE V
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CERTAIN COVENANTS AND
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AGREEMENTS OF SELLER AND BUYER
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Section 5.1 Tax Matters.....................................................19
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Section 5.2 Registrations, Filings and Consents.............................20
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Section 5.3 Confidentiality.................................................20
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Section 5.4 Employee Matters; PYC Assignment, etc...........................21
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Section 5.5 Further Assurances..............................................21
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ARTICLE VI
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CONDITIONS TO CLOSING
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Section 6.1 Conditions to Obligations of Buyer..............................22
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Section 6.2 Conditions to Obligations of Seller.............................23
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ARTICLE VII
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TERMINATION
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Section 7.1 Termination.....................................................24
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Section 7.2 Effect of Termination...........................................25
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ARTICLE VIII
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SURVIVAL AND INDEMNIFICATION
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Section 8.1 Survival of Representations, Warranties, Covenants and
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Agreements...................................................25
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Section 8.2 Indemnification.................................................25
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Section 8.3 Method of Asserting Claims, etc.................................26
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Section 8.4 Subrogation Rights..............................................27
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Section 8.5 Investigation and Due Diligence.................................28
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Section 8.6 Deductible; Insurance; Tax Effect; Maximum Liability............28
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Section 8.7 Sole Remedy.....................................................29
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ARTICLE IX
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MISCELLANEOUS
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Section 9.1 Amendment and Modification; Waiver..............................30
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Section 9.2 Expenses........................................................30
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Section 9.3 Assignment......................................................30
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Section 9.4 Entire Agreement; Assumption Agreement..........................30
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Section 9.5 Parties in Interest; No Third Party Beneficiaries...............30
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Section 9.6 Counterparts....................................................30
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Section 9.7 Interpretation..................................................30
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Section 9.8 Notices.........................................................31
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Section 9.9 Governing Law; Submission To Jurisdiction; Selection Of Forum...32
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Section 9.10 Severability....................................................32
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Section 9.11 Attorney's Fees.................................................33
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Section 9.12 Time of Essence.................................................33
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Section 9.13 Publicity.......................................................33
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Schedules:
Schedule 3.4 Consents and Approvals
Schedule 3.5 Financial Statements
Schedule 3.7 Taxes
Schedule 3.8 Litigation and Claims
Schedule 3.10 Contracts
Schedule 3.14 Subsequent Actions
Schedule 3.15 Capital Commitments
Schedule 3.16 Related Party Transactions
Schedule 3.17 Insurance Policies
Schedule 3.18 Directors and Representatives
Schedule 4.3 Contends and Approvals
Exhibits:
Exhibit I PSC
Exhibit II Form of Waiver Letter
Exhibit III Form of Stockholders' Agreement Amendment
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STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of July 23, 2002,
by and among Occidental (East Shabwa), LLC, a limited liability company
organized under the laws of Nevis ("Buyer"), Intercap Yemen, Inc., a company
organized under the laws of the State of Texas ("Seller"), and MFC Bancorp Ltd.,
a company organized under the laws of the Yukon Territory, Canada ("Guarantor").
W I T N E S S E T H:
WHEREAS, Seller owns 500 shares (the "Company Shares") of the issued
and outstanding Class A Common Stock, par value $.001 per share, of Comeco
Petroleum, Inc., a Delaware corporation (the "Company");
WHEREAS, (i) Seller desires to sell to Buyer the Company Shares, (ii)
Buyer desires to purchase the Company Shares from Seller and (iii) Guarantor
desires to guarantee the obligations of Seller hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.1 Specific Definitions. As used in this Agreement, the
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following terms shall have the meanings set forth or as referenced below:
"Actions" shall have the meaning set forth in Section 3.8 hereof.
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"Adjustment Amount" shall have the meaning set forth in Section 2.3(d)
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hereof.
"Affiliate," with respect to any Person, means any other Person
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directly or indirectly controlling, controlled by or under common control with
that Person. The term "control" as used in the preceding sentence means, with
respect to a corporation, the right to exercise, directly or indirectly, 50% or
more of the voting rights attributable to the shares of the controlled
corporation, and, with respect to any Person other than a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person.
"Agreement" shall mean this Agreement (including the exhibits and
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schedules hereto).
"Assets" means all of the assets (whether real, personal, tangible or
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intangible) used or held for use by the Company in connection with the Yemen
Business including, without limitation, all of the assets reflected on the
Balance Sheet.
"Balance Sheet" shall have the meaning set forth in Section 3.5 hereof.
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"Balance Sheet Date" shall have the meaning set forth in Section 3.5.
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"Business Day" means any day other than a Saturday, a Sunday or a day
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on which banks in California are authorized or obligated by law or executive
order to close.
"Buyer" shall have the meaning set forth in the Preamble hereto.
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"Claims" means any and all fines, liabilities, judgments, losses,
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costs, expenses, or damages, including in each case, interest, penalties,
reasonable attorneys' fees and reasonable costs of investigations and
litigation.
"Closing" shall have the meaning set forth in Section 2.2(a) hereof.
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"Closing Date" shall have the meaning set forth in Section 2.2(a)
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hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and the
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regulations promulgated thereunder.
"Comeco Shares" shall have the meaning set forth in Section 3.3 hereof.
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"Company" shall have the meaning set forth in the Preamble hereto.
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"Company Debt" means any debt, obligation or other arrangement of the
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Company evidencing or relating to any borrowing or loaning or available
borrowing or loaning of money to the Company (or to any other Person for which
the Company has liability), whether secured or unsecured, or which is intended
to provide any guarantee or credit support by the Company with respect to the
obligations of any Person.
"Company Interests" shall have the meaning set forth in Section 3.11(a)
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hereof.
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"Company Shares" shall have the meaning set forth in the Preamble
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hereto.
"CPA Firm" shall have the meaning set forth in Section 2.3(c) hereof.
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"Effective Time" shall mean January 1, 2002.
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"Encumbrances" means any liens, charges, pledges, security interests,
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options, warrants, purchase rights, preemptive rights, adverse claims, levies,
orders of execution, orders of expropriation or written notifications of intent
to expropriate, easements, equitable interests or other encumbrances.
"Environmental Law" means all Laws that are designed to regulate,
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prevent, punish or remedy the consequences of actions (including omissions,
discharges, spills, releases of pollutants, contaminants, hazardous materials or
wastes) that damage, injure or threaten to damage or injure public health or
safety or the environment.
"Financial Statements" shall have the meaning set forth in Section 3.5
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hereof.
"Final Adjustment Amount Calculation" shall have the meaning set forth
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in Section 2.3(b) hereof.
"GAAP" means U.S. generally accepted accounting principles as in effect
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from time to time and as consistently applied.
"Governmental Authority" means any court, government, legislature,
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council, government department, commission, board, bureau, agency,
instrumentality, arbitrator or other authority of a central government or any
jurisdiction therein, together with any company directly or indirectly owned by
any of the foregoing.
"Indemnified Party" shall have the meaning set forth in Section 8.2
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hereof.
"Indemnifying Party" shall have the meaning set forth in Section 8.2
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hereof.
"Law" means any applicable law, statute, ordinance, rule or regulation
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or any ruling, writ, injunction, restriction, order, judgment, decree or other
official written act of any Governmental Authority.
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"Notice Period" shall have the meaning set forth in Section 8.3(b)
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hereof.
"PSC" means the Agreement For Petroleum Exploration and Production for
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the East Shabwa Area, made and entered into on April 22, 1989, as amended on
July 22nd, 1993 (with respect to Exploration Period Extension) and July 2, 1996
(with respect to maximum cost recovery), and attached hereto as Exhibit I.
"Permits" means all licenses, certificates, registrations, approvals,
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authorizations or permits required of or with the applicable Governmental
Authority.
"Person" means any individual, corporation, partnership, limited
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liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental or regulatory body or other entity.
"Preliminary Adjustment Amount Calculation" shall have the meaning set
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forth in Section 2.3(a) hereof.
"Purchase Price" means $16,500,000 plus or minus, as the case may be,
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the Adjustment Amount.
"Securities Act" means the Securities Act of 1933, as amended.
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"Seller" shall have the meaning set forth in the Preamble hereto.
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"Stockholders' Agreement" means the Amended and Restated Stockholders'
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Agreement by and among the Company, Command Petroleum (Overseas) Pty Limited and
Nomeco Oil & Gas Co., dated as of October 1, 1994, and as amended pursuant to
Amendments to the Amended and Restated Stockholders' Agreement by and among SOCO
Yemen Pty Limited (formerly known as Command Petroleum (Overseas) Pty Limited),
the Seller (which succeeded to the interests of Nomeco Oil & Gas Co. in the
Company), and the Company, effective as of July 1, 1999.
"Tax Returns" means any return, declaration, report, form, claim for
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refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendments thereof.
"Taxes" means any federal, state, local, or foreign income, gross
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receipts, license, payroll, business assets, luxury, goods and services,
employment, excise, severance, stamp, occupation, premium, environmental
(including taxes under Section 59A of the Code), customs duties, capital stock,
franchise, profits, gains, withholding, social security, unemployment,
disability, real property, personal property, sales, use,
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wholesale sales, municipal, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever of any
Governmental Authority, including any interest, penalty, or addition thereto,
whether disputed or not.
"Third Party Claim Notice" shall have the meaning set forth in Section
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8.3(b) hereof.
"Yemen Business" means the business and operations of the Company which
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arise under or out of or relate to the PSC, any hydrocarbons attributable
thereto, or any activities or operations in connection with the PSC or any
hydrocarbons attributable thereto.
"Voting Debt" shall have the meaning set forth in Section 3.3(a).
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Section 1.2 Other Definitional Provisions.
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(a) 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. All references in
this Agreement to an "Article", "Section", "subsection", "Exhibit" or "Schedule"
shall be to an Article, Section, subsection, Exhibit or Schedule of or to this
Agreement, unless the context requires otherwise.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States dollars.
ARTICLE II
PURCHASE AND SALE OF COMPANY SHARES; GUARANTEE
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Section 2.1 Purchase and Sale of Company Shares.
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(a) In reliance on the representations, warranties and other terms
hereof and subject to the conditions contained herein, Buyer agrees to purchase
from Seller, and Seller agrees to sell to Buyer, the Company Shares in exchange
for payment of the Purchase Price by Buyer. Seller shall transfer or cause to be
transferred all of the Company Shares to Buyer at Closing. Effective at the
Closing, Seller also hereby assigns to Buyer any rights Seller or its Affiliates
may have to receive moneys from the Company in respect of indebtedness or
otherwise.
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(b) As consideration for the sale by Seller of the Company Shares to
Buyer on the terms and conditions contained herein, Buyer agrees to pay to
Seller the Purchase Price pursuant to Sections 2.2 and 2.3 hereof.
Section 2.2 Closing; Delivery and Payment; Guarantee; Indemnity.
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(a) Subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing ("Closing") shall be held at the offices of
Buyer, 00000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, at 7:00 a.m. on
the date hereof. The date on which the Closing occurs is hereinafter referred to
as the "Closing Date."
(b) At the Closing, (1) Seller shall deliver, or cause to be
delivered, to Buyer an affidavit duly executed by Seller and in a form
reasonably satisfactory to Buyer certifying, inter alia, that the Seller has
lost the certificate representing the Company Shares and instructing the Company
to issue a replacement certificate in the name of Buyer; (2) Buyer shall pay to
Seller for the Company Shares in immediately available funds by wire transfer to
an account designated by Seller an amount equal to the estimated Purchase Price
calculated in accordance with Section 2.3(a).
(c) In addition to the documents and transfers of funds described in
this Section 2.2,
(1) Seller will:
(i) at the Closing deliver to Buyer possession or control of the
following (other than any such materials or information that are
subject to a confidentiality agreement, relate to a valuation prepared
with respect to a previous proposed sale of the Company Shares, or are
protected by solicitor/client privilege and in each case which are
identified in reasonable detail on a written list provided to Buyer
prior to the execution hereof): (A) files, documents, papers,
contracts, agreements, legal descriptions, open books of account or
ledgers and documentation in support thereof used or useful in the
operation of the Yemen Business, and (B) all other information, whether
in writing, on computer diskette or other form or medium, that pertains
to the use or ownership of the Assets, the Company or the Company
Shares, and subject to the right of the Seller and the Guarantor to
retain copies of any of the foregoing solely for the purposes of
complying with or satisfying any filing or disclosure requirements
under any Law or mandated by any Governmental Authority, including, but
not limited to, any securities disclosure or tax filings (and the
Seller and Guarantor hereby covenant that any copies so retained shall
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be used only for the foregoing purposes, which covenant shall survive
the Closing hereunder indefinitely);
(ii) as soon as is reasonably practicable after the Closing
Date, deliver to Buyer possession or control of all items referred to
under Section 2.2(c)(1)(i) hereof that Seller was unable to deliver at
the Closing;
(iii) deliver to Buyer possession of all stock registers, minute
books and corporate books and records for the Company in the possession
of the Seller or any Affiliate of Seller;
(iv) deliver to Buyer all documents required to be furnished by
Seller and its Affiliates to Buyer as conditions precedent under
Section 6.1 hereof; and
(v) deliver to Buyer good standing certificates issued by the
relevant Governmental Authorities, dated as of a recent date and
evidencing the good standing of the Seller and the Company in their
respective jurisdictions of incorporation;
(2) Buyer will deliver to Seller all documents required to be
furnished by Buyer and its Affiliates to Seller as conditions precedent
under Section 6.2 hereof.
(d) Guarantor hereby unconditionally and irrevocably guarantees to
Buyer the performance of all obligations of Seller arising out of or in
connection with this Agreement provided that the maximum aggregate liability of
Guarantor to Buyer hereunder shall be limited to an amount equal to the maximum
aggregate liability of Seller to Buyer hereunder less any amounts recovered or
received by the Buyer from the Seller with respect to a breach of the Seller's
obligations hereunder.
(e) Guarantor and Seller shall be liable for, and agree to defend,
hold harmless and indemnify Buyer and its Affiliates from and against any and
all Claims arising with respect to the lost stock certificate of Seller referred
to in Section 2.2(b)(1) above and representing the 500 Company Shares held by
Seller prior to the Closing. The indemnification obligations in this Section
2.2(e) are not subject to the minimum threshold limitations in Section 8.6(a)
and shall survive for a period of ten years but are otherwise subject to the
provisions of Article VIII.
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Section 2.3 Calculation of Adjustment Amount; Post-Closing
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Adjustment.
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(a) Prior to the date hereof Seller prepared and delivered to Buyer,
using and based upon the best available information to Seller, a statement
setting forth a preliminary calculation of the Adjustment Amount for a Closing
on the date hereof (the "Preliminary Adjustment Amount Calculation"). Such
preliminary calculation shall be used in the calculation of the Purchase Price
payable at Closing (unless the Closing Date is changed by a mutual written
agreement of the parties that contains a revised Preliminary Adjustment Amount
Calculation to reflect the revised Closing Date).
(b) Within 90 calendar days following the Closing Date, Buyer shall
cause the Company to prepare a statement setting forth the Final Calculation of
the Adjustment Amount and showing the calculation of each adjustment, based to
the extent possible, on actual Intragroup Contributions and Intragroup Receipts
(each as defined below) after the Effective Time (the "Final Adjustment Amount
Calculation"). Buyer shall give Seller and its representatives reasonable access
to the books, records and personnel of the Yemen Business, and to all work
papers and other relevant documents and analysis, for the purpose of reviewing
and auditing the Final Adjustment Amount Calculation. Seller shall have a period
of 30 calendar days after the delivery to it of the Final Adjustment Amount
Calculation, to review such calculation and to make any objections to the Final
Adjustment Amount Calculation in writing to Buyer. If no written objections to
the Final Adjustment Amount Calculation are delivered to Buyer within the 30-day
period, the Final Adjustment Amount Calculation shall be deemed to be accepted
and approved by all parties, and the difference between the Preliminary
Adjustment Amount Calculation and the Final Adjustment Amount Calculation, if
any, shall be paid by Seller to Buyer (if the estimated Purchase Price paid at
Closing exceeded the final Purchase Price calculated in accordance herewith) or
by Buyer to Seller (if the estimated Purchase Price paid at Closing was less
than the final Purchase Price calculated in accordance herewith), in either case
not later than five Business Days following the expiration of such 30-day
period, or at such other time and date as may be mutually agreed upon in writing
by Buyer and Seller. If written objections of Seller to the Final Adjustment
Amount Calculation are delivered to Buyer within the 30-day period, then Buyer
and Seller shall attempt to resolve the matter or matters in dispute and, if
such disputes are resolved by Buyer and Seller, the difference between the
Preliminary Adjustment Amount Calculation and the Final Adjustment Amount
Calculation, if any, shall be paid by Seller to Buyer (if the estimated Purchase
Price paid at Closing exceeded the final Purchase Price calculated in accordance
herewith) or by Buyer to Seller (if the estimated Purchase Price paid at Closing
was less than the final Purchase Price calculated in accordance herewith), in
either case not later than five Business Days following the resolution of all
disputes or at such other time and date as may be mutually agreed upon
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in writing by Buyer and Seller. Seller shall quantify its objections to the
extent reasonably practicable in all written objections delivered to Buyer with
respect to the Final Adjustment Amount Calculation. Notwithstanding anything to
the contrary in Section 2.3, nothing in Section 2.3 nor any agreement regarding
the Final Adjustment Amount Calculation shall release, limit or impair any
representations or warranties by the parties in Articles III and IV or the
parties' agreements in Section 5.1.
(c) If such disputes cannot be resolved by Buyer and Seller within
20 calendar days after the delivery of the objections to the Final Adjustment
Amount Calculation, then each of the Buyer and Seller shall prepare and submit a
written statement setting forth the specific matters in dispute to
PriceWaterhouse Coopers (the "CPA Firm") along with any information, supporting
documentation and other materials in respect of each party's determination of
such calculation and the specific matters in dispute, which firm shall render
its opinion as to such matters in accordance with the terms hereof. Based on
that opinion, the CPA Firm shall then send to Buyer and to Seller a written
determination of the matters in dispute and a written determination of the
Adjustment Amount based upon such opinion, whereupon the confirmed or revised
Final Adjustment Amount Calculation shall be final and binding upon Buyer and
Seller. The difference between the Preliminary Adjustment Amount Calculation and
the Final Adjustment Amount Calculation, if any, shall be paid by Seller to
Buyer (if the estimated Purchase Price paid at Closing exceeded the final
Purchase Price calculated in accordance herewith) or by Buyer to Seller (if the
estimated Purchase Price paid at Closing was less than the final Purchase Price
calculated in accordance herewith), in either case not later than five Business
Days following the receipt by Buyer and Seller of those documents prepared by
the CPA Firm and evidencing that opinion or at such other time and date as may
be mutually agreed upon in writing by Buyer and Seller. All costs, fees and
expenses charged or incurred by the CPA Firm, if any, shall be borne equally by
Seller and Buyer.
(d) The "Adjustment Amount" shall equal (i) the amount of any
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Intragroup Contributions from and including the Effective Time to the Closing
(as used herein, "Intragroup Contributions" shall mean any capital contributions
paid by Seller to the Company), minus (ii) any Intragroup Receipts from and
including the Effective Time to the Closing (as used herein, the "Intragroup
Receipts" shall mean any dividends, share redemptions, share purchases or
repurchases, debt repayments or other distributions made by the Company to
Seller or any of its Affiliates, and any other amounts payable to the Company
but received and retained by Seller or any of its Affiliates). For purposes of
clarity in interpreting the definition "Purchase Price", if the Adjustment
Amount is a positive number it shall be added to $16,500,000. If the Adjustment
Amount is a negative number it shall be subtracted from $16,500,000. By way of
example, the Seller has advised the Buyer that the Preliminary Adjustment Amount
will be negative $753,121 with respect to a Closing on July 23, 2002. Therefore,
the estimated Purchase
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Price payable at Closing on July 23, 2002 would be $15,746,879 ($16,500,000 -
$753,121).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND GUARANTOR
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Seller and Guarantor represent and warrant to Buyer as at the Closing
Date as follows with respect to Seller, Guarantor and the Company:
Section 3.1 Organization of Seller and Guarantor. Seller is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Texas and is duly qualified as a foreign corporation and in good
standing in each other jurisdiction, if any, in which such qualification is
required. Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of the Yukon Territory, Canada and is duly
qualified as a foreign corporation and in good standing in each other
jurisdiction, if any, in which such qualification is required.
Section 3.2 Authority; No Conflicts. Seller and Guarantor have full
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power and authority to execute and deliver this Agreement and to perform their
respective obligations hereunder. This Agreement has been duly authorized,
executed and delivered by Seller and constitutes a legal, valid and binding
obligation of Seller and Guarantor, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights (other than
fraudulent transfer) and to general equity principles. Neither the execution and
delivery of this Agreement by Seller and Guarantor nor the consummation of the
transactions contemplated herein by Seller and Guarantor nor the compliance by
Seller and Guarantor with its terms and provisions will (a) violate or conflict
with any provision of the respective charter documents of Seller, Guarantor or
the Company; (b) conflict with or result in the breach of any of the terms,
conditions or provisions of, or constitute a default under (or give rise to any
right of termination, cancellation or acceleration) (whether after the giving of
notice or the lapse of time or both) of any indenture, mortgage, lease or other
material agreement, contract or instrument (including the PSC) to which Seller,
Guarantor or the Company is a party or by which Seller, Guarantor or any of
their respective or the Company's properties or assets may be bound; (c) violate
any existing provision of Law of Yemen or the United States; or (d) result in
the creation of, or give any Person the right to create, any Encumbrance upon
the Company Shares or the Assets.
Section 3.3 Capitalization of the Company; Organization and
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Qualification; Subsidiaries. (a) The entire authorized capital stock of the
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Company
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consists of 1,212 shares of Class A Common Stock, par value $.001 per share, of
which only the 500 Company Shares and 712 shares held by Soco Yemen PTY Limited,
a company organized and existing under the laws of the State of New South Wales,
Australia (together with the Company Shares, the "Comeco Shares"), are issued
and outstanding. The Company Shares have been duly authorized and are validly
issued, fully paid, nonassessable and free of preemptive rights, and were not
issued in violation of the preemptive rights of any Person. Except for the
Comeco Shares, there are outstanding (i) no shares of capital stock, Voting Debt
or other voting securities of the Company; (ii) no securities of the Company
convertible into or exchangeable for shares of capital stock, Voting Debt or
other voting securities of the Company; and (iii) no preemptive or other
outstanding rights, subscriptions, options, warrants, calls, contracts, demands,
commitments, convertible securities or other agreements or arrangements of any
character or nature whatsoever under which the Company or the Seller or any
Affiliate of the Seller is or may become obligated to issue, assign, transfer,
deliver, sell, purchase, redeem or acquire, or cause to be issued, assigned,
transferred, delivered, sold, purchased, redeemed or acquired, any shares of
capital stock or any Voting Debt or other voting securities of the Company, or
obligating the Company, Seller or any Affiliate of Seller to issue, grant,
extend or enter into any such subscription, option, warrant, call, right,
commitment, agreement or other arrangement. The term "Voting Debt" means any
bonds, debentures, notes or other indebtedness having the right to vote (or
convertible into or exchangeable for securities having the right to vote) for
the election of Directors of the Company.
(b) Seller, is, and as of the Closing will be, the sole record and
beneficial owner of the Company Shares. Seller has, and as of the Closing will
have, good and valid title to the Company Shares free and clear of all
Encumbrances other than the security interest of the Company set forth in
Section 7.3(h) of the Stockholders' Agreement. Upon the purchase of the Company
Shares as contemplated by this Agreement, Buyer will obtain good and valid title
to the Company Shares free and clear of all Encumbrances other than the security
interest of the Company set forth in Section 7.3(h) of the Stockholders'
Agreement. Neither Seller nor any Affiliate of Seller is a party to any option,
warrant, purchase right, contract, commitment or other agreement or arrangement
of any character or nature whatsoever (other than this Agreement and the
Stockholders' Agreement) that could require Seller or any such Affiliate of
Seller to sell, transfer, or otherwise dispose of any Company Shares. Except as
created by this Agreement and the Stockholders' Agreement, Seller is not a party
to any voting trust, proxy or other agreement or understanding with respect to
the voting, holding or disposition of any Company Shares. There are no currently
outstanding proxies granted by Seller under or pursuant to the terms of the
Stockholders' Agreement.
- 11 -
(c) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
requisite corporate power and authority to own or lease its properties and carry
on its business as currently owned or conducted. The Company does not do
business in any jurisdiction in which the nature of the properties owned or
leased by it or the business transacted by it requires it to be so registered,
qualified or licensed, other than any such jurisdiction in which the Company is
so registered, qualified or licensed.
(d) The Company does not have any direct or indirect subsidiaries.
The Company does not own any shares, equity interests or other equity securities
in any Person.
(e) The Company does not own or lease (nor has it ever owned or
leased during the period when Seller was a stockholder of the Company) any
assets or properties having a value in excess of $10,000 in the aggregate and
does not conduct (nor has it ever conducted during the period when Seller was a
stockholder of the Company) any business or operations other than assets,
properties, business and operations which are related to or arise out of the
Yemen Business and the PSC. The Company does not have any liabilities with
respect to any business or operations that are unrelated to the Yemen Business
or the PSC.
(f) The Company has, and as of the Closing will have, good and valid
title to its interest in the PSC free and clear of all Encumbrances.
Section 3.4 Consents and Approvals. Except as set forth in Schedule
-----------------------
3.4, the execution, delivery and performance of this Agreement by Seller and
Guarantor and the consummation of the transactions contemplated herein by Seller
and Guarantor will not require Seller, Guarantor or the Company or any of their
respective Affiliates to obtain any consent, waiver, authorization or approval
of, or make any filing with or give notice to, any Person.
Section 3.5 Financial Statements. Attached hereto as Schedule 3.5 is
---------------------
the balance sheet (the "Balance Sheet") of the Company as of December 31, 2001
(the "Balance Sheet Date") and the statement of income of the Company for the
year ended on the Balance Sheet Date (collectively, the "Financial Statements").
The Financial Statements present fairly, in accordance with GAAP, the financial
condition of the Company as of such date and the results of operations of the
Company for such period.
Section 3.6 Brokers' Fees. No action has been taken by Seller,
--------------
Guarantor or any Affiliate of Seller or Guarantor or, to the best of the
knowledge of Seller, the Company that would give rise to any valid claim against
the Company or the
- 12 -
Buyer or any Affiliate of Buyer for a brokerage commission, finder's fee or
other like payment with respect to the transactions contemplated hereby.
Section 3.7 Taxes. (a) All Tax Returns that are required to be filed
------
on or before the Closing Date (taking into account applicable extensions) by or
with respect to the Company have been duly filed and each such Tax Return is or
will be complete and accurate; (b) all Taxes shown to be due on the Tax Returns
referred to in clause (a), all Taxes for periods ending on or before the Closing
Date, whether or not shown as being due on any Tax Return, and all Taxes for
which a demand for payment or assessment has been received by the Company or any
Affiliate of the Company have been timely paid; (c) except as set forth in
Schedule 3.7, the Company has no dual consolidated losses as defined by Code
Regulation Section 1.1503-2(c)(5) and has not prior to Closing experienced a
triggering event as defined by Code Regulation Section 1.1503-2(g)(2); (d)
except as set forth in Schedule 3.7, the Company has no overall foreign loss or
net operating loss carrybacks or carryovers that includes an overall foreign
loss; (e) there are no pending or threatened actions or proceedings for the
assessment or collection of Taxes against or in respect of the Company; (f) as
of the Closing Date, there will be no outstanding waivers or agreements
extending the applicable statute of limitations for any period with respect to
any Taxes of the Company; and (g) as of the date hereof, no taxing authorities
are presently conducting any audits or other examinations of the Company or of
any Tax Returns referred to in clause (a). The Company has no outstanding
liability under the Tax Indemnity Agreement referred to in Schedule 3.10.
Section 3.8 Litigation and Claims. Except as set forth in Schedule
----------------------
3.8 hereto, there are no civil, criminal or administrative actions, suits,
demands, claims, hearings, proceedings, condemnations, expropriations,
arbitrations, audits or investigations (collectively, "Actions") formally
commenced, pending or, to the best of the best of the knowledge of Seller,
threatened by or against the Company or against any of its properties or assets.
The Company, the Yemen Business and the Assets are not subject to any order,
writ, judgment, award, injunction, decree of any Governmental Authority of
competent jurisdiction or any arbitrator or arbitrators.
Section 3.9 Employees. The Company has not had, and as of the
----------
Closing will not have, any employees. The Company has not adopted any employee
plans and has no employee related liabilities, whether contingent or otherwise.
Section 3.10 Contracts. (a) Schedule 3.10 hereto sets forth a list
----------
of every document, contract or agreement (whether written or oral) currently in
effect to which the Company is a party, including all amendments thereto.
Without limiting the generality of the foregoing, other than as included on
Schedule 3.10 there are no such contracts or agreements to which the Company is
a party (i) to or with individual directors or officers of the Company, any
shareholder of the Company, any Affiliate of
- 13 -
any such shareholder or any director or officer of any of the foregoing, (ii)
that contain any covenant not to compete or an area of mutual interest agreement
or that purport to restrict the right of the Company to engage in any line of
business in any geographical location or that conditions such right on the
participation or approval of any third party, (iii) that constitute any unified
extraction, pooling or unitization agreements, including any production
balancing and over/under lift agreements relating thereto, or (iv) relating to
currently existing intercompany payables or receivables between the Company and
any of its shareholders or with their Affiliates which are in effect or will be
in effect following the Closing.
(b) There are no defaults by the Company under any obligation of any
such contracts. Neither the Seller nor the Guarantor nor any Affiliate of the
Seller or Guarantor nor, to the best of the knowledge of Seller, the Company has
received any written notice from any Governmental Authority or any third Person
(i) that the Company or any other party to a contract is (or upon further notice
or the passage of time, or both, with or without cure will be) in a violation,
default or breach of any contract, or (ii) that terminates, rescinds, revokes,
amends or modifies or seeks to terminate, rescind, revoke, amend or modify any
contract.
(c) Except as set forth in Schedule 3.10, as of the date hereof and
as of the Closing (if different), there are and will be no payments owing to
Pecten International Company under the PYC Assignment, made the 8th day of
November 1993, between Pecten Yemen Company and Pecten International Company.
There are no amounts (whether indebtedness for money borrowed or otherwise)
outstanding or otherwise owing now or in the future to Seller or its Affiliates
from the Company. All amounts payable under the Settlement Agreement identified
in Schedule 3.10 have been paid.
(d) To the best of the knowledge of Seller, true, correct and
complete originals or copies of all written contracts (containing all
amendments, corrections or modifications thereof) listed on Schedule 3.10 have
been made available to Buyer.
Section 3.11 Title to Assets. (a) All rights, benefits and interests
----------------
granted to or inuring to the benefit of the Company (or purported to be granted
to or inuring to the benefit of the Company) in or under the PSC (the "Company
Interests"), are owned legally and beneficially by the Company free and clear of
any Encumbrances. No act or omission of the Company or, to the best of the
knowledge of Seller, any other Person has occurred which would allow any party
to the PSC to rescind, revoke, terminate or modify the PSC. The Company is not a
party to or bound by any assignment, contract, agreement or commitment (i) to
assign or transfer any interest in, or to grant or create any
- 14 -
Encumbrance with respect to, the Company Interests or (ii) that could require
the Company to sell, transfer, or otherwise dispose of the Company Interests.
(b) The Company has good and valid title to all the assets reflected
on the Balance Sheet or acquired by the Company after the Balance Sheet Date, in
each case free and clear of any Encumbrances, except as set forth in the
Financial Statements.
Section 3.12 Corporate Documents. True and correct originals or
--------------------
copies of the Company's charter and organizational documents, bylaws, minute
books, stock register books and other corporate books and records (containing
all amendments, corrections or modifications thereto) have been made available
to Buyer.
Section 3.13 Compliance with Law and Permits. (a) Except where such
--------------------------------
compliance would have been penalized by the Code, the Company has complied in
all material respects with all Laws and Permits applicable to the Company, the
Yemen Business or the Assets.
(b) Neither the Company, Seller nor any Affiliate of Seller has
received written notice of any violation of or non-compliance with any Law or
Permit applicable to the Company, the Yemen Business or the Assets.
(c) With respect to any activities undertaken in connection with the
Company, the Yemen Business or the PSC, neither the Seller, nor any of its
Affiliates, nor the Company, nor any of the shareholders, directors, officers
and employees of Seller or any of its Affiliates nor any officers or employees
of the Company nor any other person or entity acting on behalf of any of them
has made an offer or promise to pay, loan or give a payment, a loan or a gift of
money or anything of value; or (ii) has authorized any such offer, promise,
payment, loan or gift, in any event directly or indirectly to or for the use or
benefit of any Official, or any other person while knowing that all or a portion
of such money or thing of value will be offered, given, paid, loaned or
promised, directly or indirectly, to or for the use or benefit of any Official,
for any of the following purposes: (A) influencing any act or decision of such
Official, in his or its official capacity; (B) inducing such Official to do or
omit to do any act in violation of the lawful duty of such Official; (C)
inducing such Official to use his or its influence with any Governmental
Authority, Public International Organization or political party, to affect or
influence any act or decision of such entity, organization or party; or (D)
securing any improper advantage, in any case, in order to assist the Company in
connection with any of its activities. For purposes hereof, "Official" shall
mean (a) any officer or employee of, or any other person acting in an official
capacity for or on behalf of, any Governmental Authority or Public International
Organization; (b) any political party; (c) any candidate for political office;
or (d) any officer or employee of, or any person acting
- 15 -
in an official capacity for or on behalf of, any political party or any
candidate for political office. "Public International Organization" shall mean
an organization designated as such by Executive Order under the laws of the
United States of America.
Section 3.14 Absence of Subsequent Actions or Events. Except as set
----------------------------------------
forth in Schedule 3.14, since the Balance Sheet Date the Company has not:
(a) purchased or redeemed any shares of capital stock or other
equity interests or other securities or declared, paid or set aside for
payment any dividend (or other distribution) in cash or of securities or
property other than cash;
(b) changed its fiscal year end from December 31;
(c) mortgaged or pledged any portion of its Assets;
(d) made any additions to or written down, sold, assigned,
transferred or otherwise disposed of any of its assets other than sales of
inventory in the ordinary course of business or written off or canceled any
debts or claims or receivables, in whole or in part;
(e) made any capital commitment in excess of $50,000, individually,
and not provided for in the Approved Annual Budget under the Stockholders'
Agreement;
(f) suffered any damage, destruction or loss in excess of $100,000
in the aggregate with respect to any assets of the Company;
(g) made any payment or other compensation of any amount to a
director or officer of the Company or any shareholder of the Company;
(h) made or agreed to make any charitable contributions or pledges
therefor or incurred any other non-business expense;
(i) entered into any joint venture, partnership or similar
arrangement;
(j) made any change in its method of accounting or accounting
policies or practices;
(k) leased any properties or assets to any Person, whether by lease,
leveraged lease, lease intended as security, vendor arrangement,
conditional sales agreement or otherwise;
- 16 -
(l) entered into any settlement or made or granted any consent to
any order, decree or judgment relating to or arising out of any Action
relating to the Company; or
(m) paid or incurred any Company Debt.
Since the Balance Sheet Date, there has not been any material adverse change in
or affecting the general affairs, management, financial position or results of
operations of the Company other than changes in commodity prices generally or
global or national economic changes.
Section 3.15 Capital Commitments. Except as shown on Schedule 3.15
--------------------
or as set forth in the most recent Approved Annual Budget (as defined in the
Stockholders' Agreement), as of the date of this Agreement there are no
outstanding Authorizations for Expenditures or other commitments to make capital
expenditures which are binding on the Company.
Section 3.16 Related Party Transactions. Other than the Amended
---------------------------
Technical and Administrative Services Agreement entered into by the Company and
SOCO Yemen Pty. Limited, dated October 1, 1994, and except as set forth on
Schedule 3.16, the Company has not entered into any contracts or other
agreements or transactions (whether written or oral) with either of its
shareholders or their respective Affiliates that create any right or obligation
for the benefit of or binding on the Company that involves $10,000 or more.
Section 3.17 Insurance Policies. To the best of the knowledge of
-------------------
Seller, Schedule 3.17 sets forth a list of all policies of fire, casualty,
liability, burglary, fidelity, worker's compensation, business interruption,
umbrella and other forms of insurance held as of the Balance Sheet Date, by the
Company or any Affiliate of the Company. Except as otherwise set forth on
Schedule 3.17, all premiums due and payable for the insurance in Schedule 3.17
have been duly paid.
Section 3.18 Directors and Representatives. Schedule 3.18 contains a
------------------------------
true and complete list of the names of all of the Company's directors (together
with appointing stockholder) and officers and all Persons holding powers of
attorney.
Section 3.19 Environmental Matters. There are no violations of
----------------------
Environmental Law in effect on the Closing Date relating to activities under the
PSC or
- 17 -
otherwise relating to the Company, the operation of the Yemen Business or the
Company's interest in the PSC which could have a material adverse effect on the
Company, the Assets or the Yemen Business. Neither Seller nor the Company has
received any notice of any pending or threatened investigation with respect to
any Environmental Law relating to the activities under the PSC or otherwise
relating to the Company, the operation of the Yemen Business or the Company's
interest in the PSC. There has been no contamination of groundwater, surface
water or soil resulting from activities under the PSC or otherwise relating to
the Company, the operation of the Yemen Business or the Company's interest in
the PSC that could require remediation under Environmental Law in effect on the
Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents and warrants to Seller as at the Closing Date as
follows:
Section 4.1 Organization of Buyer. Buyer is a corporation duly
----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 4.2 Authority; No Conflicts. Buyer has full power and
------------------------
authority to execute and deliver this Agreement and perform its obligations
hereunder. This Agreement has been duly authorized, executed and delivered by
Buyer and constitutes a legal, valid and binding obligation of Buyer,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights (other than fraudulent transfer) and to general
equity principles. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein by Buyer nor the compliance
by Buyer with its terms and provisions will (a) violate any provision of the
certificate of incorporation or by-laws of Buyer; (b) conflict with or result in
the breach of any of the terms, conditions or provisions of, or constitute a
default under (or give rise to any right of termination, cancellation or
acceleration) (whether after the giving of notice or the lapse of time or both)
of any indenture, mortgage, lease, or other material agreement, contract or
instrument to which Buyer is a party or by which Buyer or any of its properties
or assets may be bound; or (c) violate any existing provision of Law.
Section 4.3 Consents and Approvals. Except as set forth in Schedule
-----------------------
4.3 the execution, delivery and performance of this Agreement by Buyer and the
consummation of the transactions contemplated herein by Buyer will not require
Buyer to obtain any consent, waiver,
- 18 -
authorization or approval of, or make any filing with or give notice to, any
Person.
Section 4.4 Securities Act. Buyer is acquiring the Company Shares
---------------
solely for the purpose of investment and not with a view to, or for sale in
connection with, any distribution thereof in violation of the Securities Act.
Buyer acknowledges that the Company Shares are not registered under the
Securities Act or any applicable state securities law, and that such Company
Shares may not be transferred or sold except pursuant to the registration
provisions of such Securities Act or pursuant to an applicable exemption
therefrom and pursuant to state securities laws and regulations as applicable.
Section 4.5 Brokers' Fees. No action has been taken by the Buyer
--------------
that would give rise to any valid claim against Seller, Guarantor or any
Affiliate of Seller for a brokerage commission, finder's fee or other like
payment with respect to the transactions contemplated by this Agreement.
ARTICLE V
CERTAIN COVENANTS AND
---------------------
AGREEMENTS OF SELLER AND BUYER
------------------------------
Section 5.1 Tax Matters.
(a) Payments. Except as provided for in Section 5.1(b) herein, all
---------
Taxes of or with respect to the Company or incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by and paid to
the appropriate Tax authority by the party that is responsible therefor under
the applicable Tax law.
(b) Sales, Use, VAT and other Transfer Taxes. All sales, use, value
-----------------------------------------
added or other similar transfer taxes, if any, incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by Seller.
Seller shall at its expense file all necessary Tax Returns and other
documentation in respect to any such transfer taxes. All stock transfer taxes,
if any, recording or similar taxes or fees incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by Seller.
(c) Cooperation. Seller and Buyer shall (i) each provide the other,
------------
and Buyer shall cause the Company to provide to Seller, with such assistance as
may reasonably be requested by any of them in connection with the preparation of
any Tax Return, audit or other examination by any taxing authority or judicial
or administrative proceedings relating to liability for Taxes, and (ii) each
provide the other with any
- 19 -
amount required to be shown on any Tax Return of the other for any period.
Without limiting the generality of the foregoing, Buyer shall cause the Company
to retain until the applicable statutes of limitations (including any
extensions) have expired, copies of all Tax Returns, supporting work schedules
and other records or information in its possession which may be relevant to such
returns for all taxable periods from January 1, 1994 to the Closing Date,
inclusive, and shall not destroy or otherwise dispose of any such records
without first providing Seller with an opportunity to review and copy the same.
Following the Closing Date, Seller shall forward to Buyer all Tax statements
received by Seller with respect to the Assets for any period that begins before
and ends after the Closing Date within thirty (30) days after its receipt
thereof.
Any information obtained by a party or its Affiliates from another
party or its Affiliates in connection with any Tax matters to which this
Agreement applies shall be kept confidential, except as may be otherwise
necessary in connection with the filing of Tax Returns or claims for refund or
in conducting an audit or other proceeding.
(d) Survival of Agreements. All covenants and agreements set forth
-----------------------
in this Section 5.1 shall survive the Closing Date until 30 calendar days after
the expiration of all applicable statutes of limitation (including any and all
extensions thereof).
(e) Indemnity. Seller shall be liable for, and agrees to defend,
----------
hold harmless and indemnify Buyer and its Affiliates (including, after the
Closing Date, the Company) from and against any and all Claims with respect to
any Taxes of any corporation or other Person, other than the Company, that is or
was a member or parent of any affiliated group of corporations or other Persons
that included Seller, including any Taxes for which the Company is or may be or
become liable for under any successor or transferee liability law or other
similar law.
The indemnification obligations of Seller contained in this Section
5.1(e) are not subject to the minimum threshold contained in Section 8.6(a) but
are otherwise subject to Article VIII.
Section 5.2 Registrations, Filings and Consents. Seller and Buyer
------------------------------------
shall cooperate and use their respective reasonable best efforts to fulfill the
conditions precedent to the other party's obligations hereunder, including but
not limited to, securing as promptly as practicable all consents, approvals,
waivers and authorizations required, necessary or desirable in connection with
the transactions contemplated hereby.
Section 5.3 Confidentiality. Neither party hereto shall disclose to
----------------
any Person any information relating to this Agreement, the negotiations leading
to this Agreement or the transactions contemplated hereby or any information
obtained from the other party hereto in connection with this Agreement, the
negotiations leading to this Agreement or the transactions contemplated hereby,
unless such information at the time
- 20 -
of disclosure (i) is or was in the public domain, (ii) was known to either party
prior to its disclosure by the other party, (iii) is disclosed to either party
by a third Person who did not receive such information on a confidential basis
or (iv) is required to be disclosed by either party or by its Affiliates,
directors, officers, employees or other agents in connection with legal or
governmental proceedings or filing or disclosure requirements arising under Law
or rules of the New York Stock Exchange, the NASDAQ National Market System or
other public securities exchange on which the securities of the parties or their
Affiliates are listed. Each party hereto may disclose such information to its
Affiliates, directors, officers, employees, counsel, insurance brokers,
accountants or other agents or representatives provided such party causes such
persons to keep such information confidential. Notwithstanding the foregoing, in
the event that (i) Buyer sells, transfers or otherwise disposes of Comeco Shares
or (ii) causes the Company to sell, transfer or otherwise dispose of all or
substantially all of the assets of the Company or the Yemen Business or sells,
assigns or allows other Persons to participate in its rights and obligations
under the PSC, Buyer shall have the right to disclose such information as it
reasonably considers appropriate and necessary without Seller's consent;
provided, however, that in such event prior to disclosing such information Buyer
shall cause the proposed recipient of such information to enter into a
confidentiality agreement with respect to such information.
Section 5.4 Employee Matters; PYC Assignment, etc. Seller shall
--------------------------------------
indemnify the Buyer, its Affiliates and the Company against and in respect of
all Claims sustained or incurred arising out of any breaches of the Seller's
representations, warranties and covenants set forth in Section 3.9 and Section
3.10(c) of this Agreement. The indemnification obligations of Buyer contained in
this Section 5.4 are not subject to the minimum threshold contained in Section
8.6(a) but are otherwise subject to Article VIII.
Section 5.5 Further Assurances. At any time after the Closing Date,
-------------------
each of Seller and Buyer shall promptly execute, acknowledge and deliver any
other assurances or documents reasonably requested by Seller or Buyer, as the
case may be, and necessary for each of Seller and Buyer, as the case may be, to
satisfy its obligations hereunder or obtain the benefits contemplated hereby.
- 21 -
ARTICLE VI
CONDITIONS TO CLOSING
---------------------
Section 6.1 Conditions to Obligations of Buyer. The obligation of
-----------------------------------
Buyer to consummate the transactions contemplated hereby shall be subject to the
satisfaction or waiver by Buyer in writing on or prior to the Closing Date of
each of the following conditions:
(a) Each of the representations and warranties of Seller and
Guarantor contained in this Agreement shall be true in all material
respects when made and as of the Closing Date, with the same effect as
though such representations and warranties had been made on and as of the
Closing Date (except representations and warranties that are made as of a
specific date need be true in all material respects only as of such date);
each of the covenants and agreements of Seller and Guarantor to be
performed on or prior to the Closing Date shall have been duly performed in
all material respects; and Buyer shall have received at Closing a
certificate to that effect dated as of the Closing Date and executed on
behalf of Seller by its President or any of its Vice Presidents and its
Secretary or any of its Assistant Secretaries.
(b) All approvals, authorizations and consents of any Governmental
Authority or any other Person necessary for the consummation by Seller and
its Affiliates or, as contemplated by Section 4.3 hereof, by Buyer and its
Affiliates of the transactions contemplated herein shall have been obtained
in form and substance reasonably satisfactory to Buyer.
(c) No action, suit, proceeding or investigation (excluding any such
matter initiated by Buyer or any of its Affiliates) by or before any court
or other Governmental Authority shall have been taken, instituted or, to
the knowledge of Seller, Buyer or any of their respective Affiliates,
threatened against Seller, Buyer or any of their respective Affiliates, to
restrain, prohibit, invalidate or delay any of the transactions
contemplated hereby.
(d) There shall not be any injunction, judgment, order, decree or
ruling in effect preventing consummation of any of the transactions
contemplated by this Agreement.
(e) Buyer shall have received from Seller resignations of all
directors of the Company appointed and elected by Seller.
(f) Buyer shall have received from Seller (i) a release of all
contracts or agreements between the Company and the Seller or any Affiliate
of the Seller and (ii) an Affidavit of Non-Foreign Status in form necessary
to avoid any withholding requirement under Section 1445 of the Code.
- 22 -
(g) Buyer shall have received a copy of the resolutions of the Board
of Directors of Seller and Guarantor, certified by appropriate officers of
Seller and Guarantor, authorizing the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
(h) Since the Balance Sheet Date, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position or results of operations of the Company.
(i) Buyer shall have received a duly executed written waiver from
SOCO Yemen Pty. Limited in respect of its rights of first refusal under
Article XII of the Stockholders' Agreement relating to the Company Shares
to be sold pursuant to the terms of this Agreement, in the form attached
hereto as Exhibit II.
(j) Seller shall have entered into an Assumption Agreement pursuant
to the Stockholders' Agreement.
(k) SOCO Yemen Pty Limited shall have executed and delivered to
Buyer contemporaneously with the Closing, an amendment to the Stockholders'
Agreement in the form attached hereto as Exhibit III.
Section 6.2 Conditions to Obligations of Seller. The obligation of
------------------------------------
Seller to consummate the transactions contemplated hereby shall be subject to
the satisfaction or waiver by Seller in writing on or prior to the Closing Date
of each of the following conditions:
(a) Each of the representations and warranties of Buyer contained in
this Agreement shall be true in all material respects when made and as of
the Closing Date, with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except
representations and warranties that are made as of a specific date need be
true in all material respects only as of such date); each of the covenants
and agreements of Buyer to be performed on or prior to the Closing Date
shall have been duly performed in all material respects; and Seller shall
have received at the Closing a certificate to that effect dated as of the
Closing Date and executed on behalf of Buyer by its President or any of its
Vice Presidents and its Secretary or any of its Assistant Secretaries.
- 23 -
(b) All approvals, authorizations and consents of any Governmental
Authority or any other Person necessary for the consummation by Buyer and
its Affiliates, or as contemplated by Section 3.4 hereof, by Seller and its
Affiliates of the transactions contemplated herein shall have been
obtained.
(c) No action, suit, proceeding or investigation (excluding any such
matter initiated by Seller or any of its Affiliates) by or before any court
or other Governmental Authority shall have been taken, instituted or, to
the knowledge of Seller, Buyer or any of their respective Affiliates,
threatened against Seller, Buyer or any of their respective Affiliates, to
restrain, prohibit or invalidate or delay any of the transactions
contemplated hereby.
(d) There shall not be any injunction, judgment, order, decree or
ruling in effect preventing consummation of any of the transactions
contemplated by this Agreement.
(e) Seller shall have received a copy of the resolutions of the
Board of Directors of Buyer, certified by an appropriate officer of Buyer,
authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
(f) Seller shall have received a duly executed written waiver from
SOCO Yemen Pty. Limited in respect of its rights of first refusal under
Article XII of the Stockholders' Agreement relating to the Company Shares
to be sold pursuant to the terms of this Agreement, in the form attached
hereto as Exhibit II.
(g) Buyer shall have entered into an Assumption Agreement pursuant
to the Stockholders' Agreement.
ARTICLE VII
TERMINATION
-----------
Section 7.1 Termination. This Agreement may be terminated at any
------------
time prior to Closing:
(a) by the mutual written agreement of Seller and Buyer;
(b) by Seller or Buyer, by giving written notice of such termination
to the other party hereto, if the Closing shall not have occurred on the
date hereof;
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provided that the terminating party is not in material breach of its
obligations under this Agreement;
(c) by Buyer or Seller if there has been a material breach of any
representation, warranty, covenant or agreement made to or for the benefit
of the terminating party in this Agreement, which breach cannot be or has
not been cured within 15 days after the giving of written notice to the
breaching party of such breach (assuming that, by mutual agreement of the
parties, the Closing has not yet occurred).
Section 7.2 Effect of Termination. In the event of the termination
of this Agreement in accordance with Section 7.1 hereof, this Agreement shall
thereafter become void and have no effect, and no party hereto (or any of their
respective Affiliates, representatives, directors, officers or employees) shall
have any liability to the other party hereto, provided that nothing herein will
--------
relieve any party from liability for any breach of this Agreement prior to such
termination.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
----------------------------
Section 8.1 Survival of Representations, Warranties, Covenants and
------------------------------------------------------
Agreements. Notwithstanding any otherwise applicable statute of limitations, the
-----------
representations, warranties, covenants and agreements included or provided for
herein shall survive Closing until three years after the Closing Date; provided,
however, that any covenant or agreement that by its express terms cannot be
performed within such time period shall survive Closing until the date or time
specified therein; provided, further that any representation or warranty
-------- -------
contained in Section 3.7 shall survive Closing until the expiration of the
applicable statute of limitations (including any waivers or extensions thereof)
with respect to such matters.
Section 8.2 Indemnification.
----------------
For a period commencing on the Closing Date and ending, as the case may
be, upon the expiration of the periods specified in Section 8.1 hereof, Seller,
on the one hand, or Buyer, on the other hand (the "Indemnifying Party"), shall,
subject to the limitations set forth in Section 8.6 hereof, indemnify
respectively Buyer and each of its Affiliates and their respective officers,
directors, employees and agents, on the one hand, or Seller and each of its
Affiliates, officers, directors, employees and agents, on the other hand, as the
case may be (each of such persons and entities, an "Indemnified Party"), against
and in respect of all Claims sustained or incurred arising out of any breaches
of
- 25 -
the Indemnifying Party's representations, warranties, covenants and agreements
set forth in this Agreement; provided, however, that the foregoing indemnity not
be limited to the period specified in Section 8.1 if the Claim involves the
willful misconduct of the Indemnifying Party. For purposes of clarity, any
Claims of Buyer that relate to the breach of representations and warranties
respecting the Company, the Yemen Business or the Assets and the resulting
incurrence of Claims relating to the Company, the Yemen Business or the Assets
shall only be recoverable in an amount that reflects the 41.25% economic
interest that Buyer is acquiring in the Company as at the Closing Date.
Section 8.3 Method of Asserting Claims, etc.
--------------------------------
(a) All claims for indemnification by any Indemnified Party
hereunder shall be asserted and resolved as set forth in this Section 8.3.
(b) In the event that any written claim or demand for which an
Indemnifying Party would be liable to any Indemnified Party hereunder is
asserted against or sought to be collected from any Indemnified Party by a third
party, such Indemnified Party shall promptly, but in no event later than the
30th day after receipt by the Indemnified Party of such claim or demand, notify
the Indemnifying Party of such claim or demand and the amount or the estimated
amount thereof to the extent then feasible (which estimate shall not in any
manner prejudice the right of the Indemnified Party to indemnification to the
fullest extent provided hereunder) (the "Third Party Claim Notice") and in the
event that an Indemnified Party shall assert a claim for indemnity under this
Article VIII, not including a third party claim, the Indemnified Party shall,
within 30 days of the discovery of the facts or circumstances giving rise
thereto, notify the Indemnifying Party following its discovery of such facts or
circumstances; provided that the failure to notify on the part of the
Indemnified Party in the manner set forth herein shall not foreclose any rights
otherwise available to such Indemnified Party hereunder, except to the extent
that the Indemnifying Party is prejudiced by such failure to notify in the
manner set forth herein. The Indemnifying Party shall have thirty (30) days from
the personal delivery or mailing of the Third Party Claim Notice or the notice
relating to a claim for indemnity under this Article VIII other than a third
party claim (the "Notice Period") to notify the Indemnified Party (i) whether or
not the Indemnifying Party disputes the liability of the Indemnifying Party to
the Indemnified Party hereunder with respect to such claim or demand and (ii)
whether or not it desires to defend the Indemnified Party against such claim or
demand. In the event that the Indemnifying Party notifies the Indemnified Party
that it does not desire to defend the Indemnified Party against such claim or
demand, the Indemnified Party shall have all rights and remedies at law or in
equity against the Indemnifying Party for any breach of the
- 26 -
Indemnifying Party's indemnification obligations hereunder. In the event that
the Indemnifying Party notifies the Indemnified Party within the Notice Period
that it desires to defend the Indemnified Party against such claim or demand,
the Indemnifying Party shall have the right to defend the Indemnified Party by
appropriate proceedings. If any Indemnified Party desires to participate in, but
not control, any such defense or settlement it may do so at its sole cost and
expense. The Indemnified Party shall not settle a claim or demand without the
consent of the Indemnifying Party. The Indemnifying Party shall not, without the
prior written consent of the Indemnified Party, settle, compromise or offer to
settle or compromise any such claim or demand on a basis which provide for a
finding or acknowledgment of responsibility or liability on the part of the
Indemnified Party or which provides for or would result in any sanction or
restriction or in the imposition of a consent order, injunction or decree which
would restrict the future activity or conduct of, or which would otherwise have
a material adverse effect on the financial condition or results of operations
of, the Indemnified Party or any Affiliate thereof. To the extent the
Indemnifying Party shall control or participate in the defense or settlement of
any third party claim or demand, the Indemnified Party will give to the
Indemnifying Party and its counsel reasonable access to all business records and
other documents relevant to such defense or settlement, and shall permit them to
consult with the employees and counsel of the Indemnified Party. The Indemnified
Party shall use its commercially reasonable efforts as may be requested by the
Indemnifying Party in the defense of all such claims, and in connection
therewith shall be entitled to reimbursement by the Indemnifying Party of
expenses related to such efforts undertaken.
(c) Payments of all amounts owing by an Indemnifying Party as a
result of a third party claim shall be made within five Business Days after the
earlier of (i) the settlement of the third party claim and (ii) the expiration
of the period of appeal of a final adjudication of the third party claim.
Payments of all amounts owing by an Indemnifying Party other than as a result of
a third party claim shall be made within five Business Days after the later of
(i) the expiration of the Notice Period or (ii) if contested through dispute
resolution proceedings, the expiration of the period for appeal of a final
adjudication of the Indemnifying Party's liability to the Indemnified Party
under this Agreement. Notwithstanding the above, if the Indemnifying Party has
not contested its indemnity obligations hereunder and has not elected to assume
the defense of a third party claim, the Indemnifying Party shall reimburse
(promptly after the receipt of each invoice therefor together with reasonable
support for such expenditures) the Indemnified Party for the reasonable costs
and expenses incurred by the Indemnified Party in contesting the third party
claim.
Section 8.4 Subrogation Rights. If the Indemnified Party is one of
-------------------
the parties to be Indemnified by the Buyer and the Indemnified Party has a right
against a Person (other than one of the other parties to be Indemnified by the
Buyer) with respect to any damages or other amounts paid to the Indemnified
Party by the Buyer, then the
- 27 -
Buyer shall, to the extent of such payment, be subrogated to the right of such
Indemnified Party. If the Indemnified Party has a right against a Person (other
than one of the other parties to be Indemnified by the Seller) with respect to
any damages or other amounts paid to such Indemnified Party by the Seller, then
the Seller shall, to the extent of such payment, be subrogated to the right of
such Indemnified Party. Notwithstanding anything herein to the contrary, no
Indemnifying Party shall be subrogated to any insurance rights of any
Indemnified Party.
Section 8.5 Investigation and Due Diligence. No investigation,
--------------------------------
examination, audit, inspection or other due diligence prior to the Closing shall
affect the parties' respective rights to indemnity pursuant to this Agreement.
Section 8.6 Threshold; Insurance; Tax Effect; Maximum Liability
---------------------------------------------------
(a) No claim for indemnification shall be brought under this Article
VIII against an Indemnifying Party unless and until the aggregate amount of all
claims for indemnification under this Article VIII against such Indemnifying
Party exceeds an amount equal to 10% of the Purchase Price, and then for all
such claims (including, without limitation, such initial claims that aggregate
to the 10% threshold referred to above in this Section 8.6(a)).
(b) Any payment required to be made to an Indemnified Party under
this Agreement in respect of a Claim shall be made by the Indemnifying Party net
of or giving effect to any insurance proceeds received by the Indemnified Party
or the Company in respect of such Claim.
(c) In the event that, as a result of a Claim, an Indemnified Party
or the Company claims on a Tax Return a currently realizable Tax Benefit, the
indemnity payment shall be reduced by: (i) the amount of the currently
realizable Tax Benefit available to the Indemnified Party; or (ii) 41.25% of the
currently realizable Tax Benefit available to Company. For purposes of this
paragraph, a "Tax Benefit" means an amount by which the Tax liability of the
party (or consolidated group of corporations including the party) is reduced or
becomes entitled to a Tax refund. Where the party (or consolidated group of
corporations including the party) has other losses, deduction, credits or items
available to it, the Tax Benefit from any losses, deductions, credits or items
relating to the Claims shall be deemed to be realized only after the utilization
of such other losses, deductions, credits or items. For purposes of this
paragraph (c), a Tax Benefit is "currently realizable" to the extent it can be
reasonably anticipated that such Tax Benefit will be realized in the current
taxable period or year or in any tax return with respect thereto (including
through a carryback to a prior taxable period) or in any taxable period or year
prior to the date of the Claim. In the event that there should be a
- 28 -
determination disallowing the Tax Benefit, the Indemnifying Party shall be
liable to the Indemnified Party for the amount of any related reduction
previously allowed or made to the Indemnifying Party in the calculation of
indemnifiable Claims pursuant to this Section 8.6(c).
(d) Any indemnification payments made (and/or any payments or
adjustments) made pursuant to this Agreement shall be treated for all Tax
purposes as an adjustment to the Purchase Price, unless otherwise required by
applicable law, in which event such payments shall be made in an amount
sufficient to indemnify the party on a net after-Tax basis.
(e) Any Claim for indemnification hereunder arising out a breach of
a representation or warranty contained in Section 3.19 (Environmental Matters)
and involving remediation shall be the result of (i) a requirement of any
Environmental Law in effect as at the Closing Date; or (ii) the resolution of a
third party claim which has not been stayed and which has not been initiated by
the Buyer, the Company or any of their Affiliates, officers, directors,
employees or agents after the Closing; provided, that any such Claim shall not
exceed, in either case, the amount that a reasonable person in the conduct of
its own business would spend to remediate such condition in order to meet but
not exceed the requirements of applicable Environmental Law in effect on the
Closing Date; provided, further, that if the Buyer or the Company or any of
their Affiliates, officers, directors, employees or agents shall have performed
any act after the Closing that is contrary to any Environmental Law to worsen
such Claim the Seller shall have no indemnification obligation for such
increased Claims resulting from such actions of the Buyer or the Company or any
of their Affiliates, officers, directors, employees or agents. Buyer will use
its reasonable efforts to keep the Seller informed with respect to work plans
regarding any remediation efforts for which indemnification is being sought
hereunder.
(f) Unless otherwise expressly stated in this Agreement and except
with respect to any Claim that arises out of the willful misconduct of the
Indemnifying Party, the indemnification obligations of either party under this
Article VIII shall be limited to a maximum aggregate liability equal to the
amount of the Purchase Price.
Section 8.7 Sole Remedy. Following the Closing, the indemnification
------------
obligations provided in this Agreement shall be the sole remedy of the parties
for a breach of this Agreement.
- 29 -
ARTICLE IX
MISCELLANEOUS
-------------
Section 9.1 Amendment and Modification; Waiver. This Agreement may
----------------------------------
be amended or modified only in writing, signed by Seller and Buyer.
Section 9.2 Expenses. Except as otherwise expressly provided herein,
--------
whether or not the transactions contemplated hereby are consummated, the parties
shall bear their own respective expenses (including, but not limited to, all
compensation and expenses of counsel, financial advisors, consultants, actuaries
and independent accountants) incurred in connection with this Agreement and the
transactions contemplated hereby.
Section 9.3 Assignment. No party to this Agreement may assign any of
----------
its rights or obligations under this Agreement without the prior written consent
of the other party hereto.
Section 9.4 Entire Agreement; Assumption Agreement. This Agreement
--------------------------------------
including the exhibits and schedules hereto contains the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters. For purposes of clarity, no provision of the Assumption
Agreement referred to in Section 6.2(g) shall in any way limit the ability of
the Buyer to make claims for breach of representations, warranties, covenants or
agreements contained in this Agreement.
Section 9.5 Parties in Interest; No Third Party Beneficiaries. This
-------------------------------------------------
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Except with respect to
the beneficiaries of the indemnification obligations contained in this
Agreement, nothing in this Agreement is intended to confer upon any Person other
than Seller or Buyer or their successors or permitted assigns any rights or
remedies under or by reason of this Agreement.
Section 9.6 Counterparts. This Agreement and any amendments hereto
------------
may be executed in one or more counterparts, each of which shall be deemed to be
an original by the parties executing such counterpart, but all of which shall be
considered one and the same instrument.
Section 9.7 Interpretation. It is expressly agreed that this
--------------
Agreement shall not be construed against any party, and no consideration shall
be given or presumption made, on the basis of who drafted this Agreement or any
particular provision hereof or who supplied the form of Agreement. Each party
agrees that it has been purposefully drawn and correctly reflects their
understanding of the transaction that it contemplates. In construing this
Agreement:
- 30 -
(a) examples shall not be construed to limit, expressly or by
implication, the matter they illustrate;
(b) the word "includes" and its derivatives means "includes, but is
not limited to" and corresponding derivative expressions;
(c) a defined term has its defined meaning throughout this Agreement
and each Appendix, Exhibit and Schedule to this Agreement, regardless of
whether it appears before or after the place where it is defined;
(d) each Exhibit and Schedule to this Agreement is a part of this
Agreement, but if there is any conflict or inconsistency between the main
body of this Agreement and any Exhibit or Schedule, the provisions of the
main body of this Agreement shall prevail; and
(e) the section and paragraph headings and table of contents
contained in this Agreement are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.
Section 9.8 Notices. All notices hereunder shall be deemed given if
-------
in writing and delivered personally or sent by telecopy or by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other addresses as shall be specified by like notice):
(a) if to Seller, to:
Intercap Yemen, Inc.
c/o 0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: H.S. Sangra
(b) if to Guarantor, to:
MFC Bancorp Ltd.
c/o 0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: H.S. Sangra
- 31 -
(c) if to Buyer, to:
Occidental (East Shabwa), LLC
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
Any notice given by mail or facsimile shall be effective when received.
SECTION 9.9 GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF
-------------------------------------------------------
FORUM. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
-----
THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REFERENCE TO THE CHOICE OF LAW
PRINCIPLES THEREOF. EACH PARTY HERETO AGREES THAT IT SHALL BRING ANY ACTION OR
PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTAINED HEREIN OR CONTEMPLATED HEREBY, WHETHER IN TORT OR
CONTRACT OR AT LAW OR IN EQUITY, EXCLUSIVELY IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA OR THE SUPERIOR COURT OF THE STATE OF
CALIFORNIA FOR THE COUNTY OF LOS ANGELES (THE "CHOSEN COURTS") AND (I)
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE CHOSEN COURTS, (II)
WAIVES ANY OBJECTION TO LAYING VENUE IN ANY SUCH ACTION OR PROCEEDING IN THE
CHOSEN COURTS, (III) WAIVES ANY OBJECTION THAT THE CHOSEN COURTS ARE AN
INCONVENIENT FORUM OR DO NOT HAVE JURISDICTION OVER ANY PARTY HERETO AND (IV)
AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN ANY SUCH ACTION OR PROCEEDING
SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE WITH SECTION 9.8 OF THIS
AGREEMENT.
Section 9.10 Severability. The provisions of this Agreement shall be
------------
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or
- 32 -
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.
Section 9.11 Attorney's Fees. The prevailing party in any legal
---------------
proceeding brought under or to enforce this Agreement shall be additionally
entitled to recover court costs, reasonable costs of arbitration and reasonable
attorneys' fees from the nonprevailing party.
Section 9.12 Time of Essence. Time is of the essence in this
---------------
Agreement. If the date specified in this Agreement for giving any notice or
taking any action is not a Business Day (or if the period during which any
notice is required to be given or any action taken expires on a date which is
not a Business Day), then the date for giving such notice or taking such action
(and the expiration date of such period during which notice is required to be
given or action taken) shall be the next day which is a Business Day.
Section 9.13 Publicity. All media releases and public announcements
---------
or disclosures by any Party relating to this Agreement and the transactions
contemplated hereby shall be coordinated with and approved by the other Parties
in writing prior to the release thereof.
* * *
- 33 -
IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of
the parties hereto as of the date first written above.
OCCIDENTAL (EAST SHABWA), LLC
By /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
-------------------------------
Title: Vice President
-------------------------------
INTERCAP YEMEN, INC.
By /s/ X. Xxxxxxx
-----------------------------------
Name: X. Xxxxxxx
-------------------------------
Title: Secretary
-------------------------------
MFC BANCORP LTD.
By /s/ X. Xxxxxxx
-----------------------------------
Name: X. Xxxxxxx
-------------------------------
Title: Secretary
-------------------------------
