EXHIBIT 4.3
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Dated 15 July 2001
E.ON AG
and
BP P.L.C.
GELSENBERG PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT ("PA")
between
BP P.L.C. of Xxxxxxxxx Xxxxx, 0 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX ("BP");
and
E.ON AG of Xxxxxxxxxxxxxx 0, X-00000 Xxxxxxxxxx ("E.ON").
NOW, THEREFORE, the parties agree as follows:
1 DEFINITIONS
"ACCOUNTS" means the audited accounts of Ruhrgas and the unaudited
accounts of Gelsenberg which are attached to the Disclosure Letter in
the Agreed Form;
"AGREED FORM" means in relation to any document the form thereof
initialled by or on behalf of E.ON and BP for the purposes of
identification only;
"BALANCE SHEET DATE" means 31 December 2000;
"BEST OF BP'S KNOWLEDGE" means the actual knowledge of Xx Xxx Xxxxxx,
Xxxxx Xxxxxxx and Dr Horstguenter Xxxxxx;
"BUSINESS DAY" means a day on which banks are open for business in both
London and Dusseldorf (excluding Saturdays, Sundays and public
holidays);
"DEUTSCHE BP" means Deutsche BP Aktiengesellschaft whose registered
office is at Hamburg;
"BP GROUP" means BP and those companies in which BP holds, directly or
indirectly, a majority shareholding;
"DISCLOSURE LETTER" means the letter of even date with this Agreement
from BP to E.ON (together with its attachments) disclosing information
against the warranties in Schedule 1;
"EFFECTIVE DATE" means 31 December 2001, 24:00 hours (German time)/1
January 2002, 00:00 hours (German time) or if later the first calendar
day in the month following the month in which the Required Approvals
are obtained unless otherwise agreed by E.ON and BP;
"EMPLOYEE BENEFITS ARRANGEMENTS" means benefit schemes (other than
mandatory state arrangements and collective bargaining agreements)
including, but not limited to, arrangements on (i) retirement, death,
termination of employment (whether or not voluntary) or during periods
of sickness or disablement or for life assurance, accidental death and
injury including the supplementary systems of pension provision in any
jurisdiction; (ii) medical benefits; (iii) termination indemnity or
redundancy payments; or (iv) employee share option schemes;
"E.ON GROUP" means E.ON and those companies in which E.ON holds,
directly or indirectly, a majority shareholding;
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"GELSENBERG" means Gelsenberg Aktiengesellschaft whose registered
office is in Hamburg;
"GELSENBERG GROUP" or "GELSENBERG GROUP COMPANIES" means Gelsenberg and
those companies in which Gelsenberg holds, directly or indirectly, a
majority shareholding and "GELSENBERG GROUP COMPANY" means any one of
them;
"JOINT VENTURE" means the joint venture to be established by E.ON and
BP pursuant to this PA in relation to Gelsenberg;
"LIBOR" means, in relation to any period (a "RELEVANT LIBOR PERIOD") in
respect of which an interest rate is to be determined pursuant to this
PA:;
(i) the rate per annum of the offered quotation for three-month
deposits in Euros which appears on the Telerate Screen soon
after 11:00 (London time) providing the rate as at 11 a.m. on
the APPLICABLE RATE FIXING DAY; or
(ii) if no such offered quotation appears on the Telerate Screen at
or about such time (or there is then no such Telerate Screen),
such rate as is equal to the arithmetic mean (rounded upwards,
if necessary, to seven decimal places) of the offered
quotations for daily Euro deposits which appear on the Reuters
Screen LIBO page (or such other page(s) as may replace the
LIBO page for the purpose of displaying offered rates of
leading reference banks in London for interbank daily deposits
in Euros) soon after 11:00 (London time) providing the rate as
at 11:00 (London time) on the APPLICABLE RATE FIXING DAY; or
(iii) if no such offered quotation appears on the Telerate Screen
(or there is then no such Telerate Screen) and no such offered
quotations appear on the Reuters Screen LIBO page or such
replacement page(s) as aforesaid (or there is then no such
LIBO page nor any replacement therefore), such rate as is
equal to the arithmetic mean (rounded upwards, if necessary,
to seven decimal places) of the respective rates (as quoted to
the paying party at its request) at which Barclays Bank PLC
and Royal Bank of Scotland plc are offering daily Euro
deposits for the Relevant Libor Period at or about 11:00
(London time) on the APPLICABLE RATE FIXING DAY.
For the purposes of this definition the Telerate Screen means the
display designated as on the Telerate Service such other service as may
be nominated by the British Bankers' Association as the information
vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for daily deposits in Euros), and "APPLICABLE
RATE FIXING DAY" in relation to any Relevant Libor Period means the
second Business Day preceding the first day of such Relevant Libor
Period;
"RUHRGAS" means Ruhrgas Aktiengesellschaft;
"SENIOR EMPLOYEES" means any employees or consultants employed or
engaged in the business of the Gelsenberg Group on an annual
pensionable salary or fee in excess of Euro 125,000 (Euro one hundred
and twenty-five thousand);
"SHAREHOLDERS AGREEMENT" means the Agreement to be entered into by
Deutsche BP and E.ON which reflects the principles set out in Schedule
3;
"SUBSCRIPTION DATE" means the date of subscription by E.ON of such
newly issued shares in Gelsenberg representing 51 per cent. of the
total shares of Veba Oel then in issue.
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"VEBA OEL PARTICIPATION AGREEMENT" means the Agreement so called
between E.ON and BP dated today's date;
2 CONDITIONS
2.1 The completion of this PA is subject to, and conditional upon, the
satisfaction (or waiver by both parties) of each of the following
conditions (the "REQUIRED APPROVALS"):
2.1.1 if notification of the Joint Venture is required pursuant to
Council Regulations (EC) 4064/89 (the "ECMR"), the EC
Commission adopts a decision declaring either that the Joint
Venture falls outside the scope of the ECMR or, alternatively,
that the Joint Venture is compatible with the Common Market,
either unconditionally or subject to the fulfilment of certain
conditions or commitments if the fulfilment of such conditions
or commitments is reasonably acceptable to each of E.ON and
BP, or finally, the EC Commission does not adopt a decision
within the required time periods (the above decisions being
referred to as "ECMR APPROVAL"); and
2.1.2 if competition authorities of individual member states of the
European Community ("NATIONAL AUTHORITIES") have otherwise
jurisdiction to examine the Joint Venture each National
Authority having such jurisdiction adopts a decision of
equivalent effect to any of those set out in Clause 2.1.1
(this clause being interpreted mutatis mutandis) (the
decisions in this Clause 2.1.2 being referred to as "NATIONAL
APPROVALS").
2.2 Each party shall use all reasonable endeavours to procure satisfaction
of the conditions or commitments specified in Clause 2.1.
2.3 If the conditions specified in Clause 2.1 are not satisfied or waived
by E.ON and BP prior to the date which is 18 months following the EC
Commission or the National Authority taking jurisdiction over the
transaction set out in this PA, then each party shall have the right to
terminate this PA on or after such date without prior notice by
notifying the other party in writing.
3 PROHIBITION ON TRANSFER
Subject to this PA being terminated in accordance with clause 2.3 above
BP shall not, and shall procure that no member of the Gelsenberg Group,
does any of the following actions without the prior written consent of
E.ON:
(i) issue, sell, transfer, dispose or otherwise encumber any
interest in the shares of Gelsenberg, any member of the
Gelsenberg Group Companies or in Ruhrgas;
(ii) incur or enter into any agreement or commitment involving in
aggregate any capital expenditure in excess of Euro 10 million
(other than in respect of usual care and maintenance capital
expenditure);
(iii) enter into any agreement or commitment to dispose of any
assets other than in the ordinary course of business;
(iv) incur any additional borrowings or incur any other
indebtedness if any such would not be in the ordinary course
of business;
(v) unless otherwise provided in this PA enter into, terminate or
amend any material agreements, including enterprise agreements
(Unternehmensvertrage), joint
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venture agreements, sales and supply agreements, other than in
the ordinary course of business;
(vi) make any material amendment to the terms and conditions of
employment (including remuneration, pension entitlements,
share option schemes) of any Senior Employee or dismiss any
Senior Employee or appoint any additional Senior Employees;
(vii) except as required by law or in connection with any mandatory
bargaining arrangements, amend any Employee Benefit
Arrangements to any material extent or communicate to any
employee any proposal to amend any such Employee Benefit
Arrangement other than in the ordinary course of business; or
(viii) make any amendment to any of the articles of association,
by-laws of the management or supervisory boards of any of the
Gelsenberg Group Companies.
4 ESTABLISHMENT OF JOINT VENTURE
4.1 Subject to the satisfaction or waiver of the Required Approvals, each
of E.ON and BP agrees that E.ON shall subscribe for new shares in
Gelsenberg within 10 Business Days of the Required Approvals having
been satisfied or waived, but the parties agree that such subscription
shall not be effective before the Effective Date, at such place and a
time as agreed by E.ON and BP (the "SUBSCRIPTION DATE") and that the
following steps shall be taken.
4.2 Subject to BP having satisfied its obligations under and procured the
occurrence of the events pursuant to, Clause 4.2.2, on or prior to the
Subscription Date, each of E.ON and BP agrees that it shall or shall
procure that a member of the BP Group or the E.ON Group, respectively,
carries out the following:
4.2.1 Each of E.ON and Deutsche BP shall enter into the Shareholders
Agreement.
4.2.2 The capital of Gelsenberg shall be increased by DM 104,081,630
to DM 204,081,630 and E.ON shall subscribe for the new shares.
The new shares shall be issued without stipulation of a higher
issue price (Ausgabebetrag) than their nominal value but by
agreement inter partes for a contribution in the aggregate
amount of Euro 2,497,959,184 (Euro two billion and four
hundred ninety-seven million nine hundred fifty-nine thousand
one hundred eighty-four) by combining the contribution of cash
and assets as follows:
(i) Payment of the nominal amount of Euro 53,216,100 in
cash;
(ii) The forgiveness of all shareholder loans of Deutsche
BP to Gelsenberg at the Effective Date to be
purchased by E.ON at face value. To the extent that
short-term shareholder loans should remain for
technical reasons, in particular loans on current
account which are not purchased by E.ON, E.ON and BP
will procure that any cash in the Gelsenberg Group
resulting from its operative income (only) will be
used to repay any such shareholder loan;
(iii) The contribution of participations in E.ON Group
Companies not generating taxable income (the
participations or other assets to be so contributed
to be agreed by BP, such agreement not to be
unreasonably withheld or delayed; in particular,
without limitation, there shall be good reason for
withholding
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the agreement if the earnings resulting from such
contributions are dilutive compared to earnings from
the lending of a cash contribution at market terms);
and
(iv) Cash, if needed, to make up any remaining balance
(provided that E.ON may subsequently procure that
Gelsenberg may use such cash to purchase debt
instruments and/or participations in any E.ON Group
Company on a basis to be agreed by BP, such agreement
not to be unreasonably withheld or delayed).
4.2.3 To the extent that assets are contributed the parties shall
agree on their valuation prior to the signing of the
Shareholders Agreement. If the parties can not agree within
one month after E.ON has notified BP of the assets it wishes
to contribute, then E.ON shall within 2 weeks nominate three
certified accountancy firms of international reputation (the
"ACCOUNTANTS") to BP. BP shall then have two weeks to nominate
one such Accountant to value the assets. Once the Accountant
has been nominated and notified by E.ON and BP, it shall value
the assets within one month. The valuation determined by the
Accountant (acting as an expert and not an arbitrator) shall,
once notified, be binding on E.ON and BP. The cost of this
valuation shall be borne by both parties in equal proportions.
4.2.4 As from January 1, 2002, or, if later, from the Effective
Date, E.ON and Deutsche BP shall share profits in proportion
to their respective participations in the nominal share
capital of Gelsenberg.
4.2.5 If the Effective Date is later than 1 January 2002 each of
E.ON and BP shall procure on a basis and timetable to be
agreed that Gelsenberg's auditors appointed to audit the
Gelsenberg financial statements of 2001 draw up an audited
interim financial statement of the consolidated Gelsenberg
Group (based on German GAAP and consistent with the accounting
policies for the Accounts for the year ended 31 December 2000)
as of the Effective Date.
4.2.6 Unless otherwise agreed by the parties or BP has waived its
rights to rescind this PA, each of E.ON and BP agrees that the
subscription by E.ON for the Gelsenberg shares pursuant to
Clause 4.2 shall be made simultaneously with a subscription by
Deutsche BP for the Veba Oel shares pursuant to the Veba Oel
Participation Agreement.
4.2.7 E.ON and BP hereby agree that E.ON, subject to becoming a
shareholder in Gelsenberg, shall join and be bound by all
obligations of Deutsche BP pursuant to the agreement between
Deutsche BP and Ruhrkohle Aktiengesellschaft dated 4 December
1994 in accordance with Section 5 of that Agreement.
4.2.8 Deutsche BP shall, to the extent legally permissible, procure
that
(i) the majority of the members on the supervisory board
of Gelsenberg (to be nominated by Deutsche BP) shall
resign with effect from the Subscription Date,
(ii) an equal number of E.ON nominees are elected by a
shareholders meeting of Gelsenberg as new members of
the supervisory board of Gelsenberg for the maximum
term permitted by law of which one is elected
chairman of the supervisory board,
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(iii) the supervisory board of Gelsenberg appoints 3 E.ON
nominees as additional members to the management
board of Gelsenberg, one of which will be chairman of
the management board, which will comprise a total of
5 members, such additional members shall have equal
representation powers to the present members, and
(iv) the Gelsenberg representative on the supervisory
board of Ruhrgas shall resign and be replaced by an
E.ON nominee.
4.2.9 As from the Effective Date, to the extent legally permissible,
BP shall procure that, following consultation between E.ON and
Deutsche BP, Gelsenberg exercises its voting rights in
Xxxxxxxxx GmbH and Ruhrgas in accordance with the instructions
of E.ON.
4.2.10 Each of E.ON and BP shall, to the extent legally permissible,
support the appointment of each others nominees to the
supervisory board for the maximum period permitted by law.
4.2.11 The parties shall procure that the by-laws (Geschaftsordnung)
of the supervisory board of Gelsenberg shall be amended in
accordance with Schedule 2.
4.2.12 Each of E.ON, BP and Gelsenberg shall execute the BP Indemnity
Agreement incorporating the basic terms and conditions set out
in Schedule 4 (the "BP INDEMNITY");
4.2.13 Each of E.ON, BP and Gelsenberg shall execute the Health,
Safety and Environmental Deed substantially in the form set
out in Schedule 0 (xxx "XXX XXXX").
5 WARRANTIES
5.1 Prior to entering into this PA, E.ON has only performed a very high
level review of the business of Gelsenberg, the results of which have
been reflected in the determination of the consideration. Between 1
September 2001 and 1 November 2001 E.ON will perform a due diligence
review. This due diligence will cover verification by E.ON's auditors
of the information exchanged as well as the legal basis of ownership or
other rights with respect to major assets, and such other matters as
agreed herein. E.ON shall be given access to the relevant auditors and
senior management personnel (being the persons listed in the definition
of Best of BP's Knowledge) of Gelsenberg in carrying out this review.
5.1.1 BP hereby represents and warrants to E.ON as independent
guarantees (selbstandiges Garantieversprechen) that the
warranty statements in Schedule 1 are true and correct as of
the date hereof and as of the Effective Date. If the due
diligence should reveal or if it should turn out later that
the statements are not completely true and correct, BP shall
take all reasonable steps to ensure within one month that all
its representations and warranties will be correct or, if this
is not possible, shall make such an additional cash
contribution to Gelsenberg or, at the discretion of E.ON,
shall pay such an amount of cash to E.ON, as is necessary to
put Gelsenberg or E.ON, as the case may be, in the same
economic position it would have been in, had the
representations and warranties been true and correct.
5.1.2 The right of E.ON to demand cash compensation to Gelsenberg or
E.ON for the breach or compensation in accordance with clause
5.1.1 shall exist only if the cash payable for breaches of a
representation and warranty (based on the 100 per cent
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payable if paid to Gelsenberg) exceeds an amount of Euro
3,000,000 (Euro three million) per individual item (or Euro
100,000,000 (Euro one hundred million) in the event of Clause
9.2 of Schedule 1) and the sum of the cash that would be
payable for all breaches that individually exceed Euro
3,000,000 (Euro three million) exceeds the amount of Euro
50,000,000 (Euro fifty million). If the thresholds are
exceeded, the full amount, not only the excess shall be
payable.
5.1.3 The total of all claims under representations and warranties
pursuant to Schedule 1 shall be limited
(i) any claims under warranties in Xxxxxx 0, 0, 0 xxx 0
xxxxx xx limited to the aggregate of Euro
2,400,000,000 (Euro two billion and four hundred
million) and the face value of the shareholder loans
purchased by E.ON pursuant to Section 4.2.2 (ii);
(ii) any claims under the other warranties in Schedule 1
shall be limited to Euro 1,200,000,000 (Euro one
billion and two hundred million).
5.1.4 E.ON shall not be entitled to claim any amounts under the
representations or warranties contained in Schedule 1 in
respect of any matter which is fairly and adequately set out
in the Disclosure Letter.
5.1.5 For the avoidance of doubt, Sections 460, 464 of the German
Civil Code shall not apply. The parties agree that the legal
remedy for any breach of the warranties in Schedule 1 shall be
governed by this Clause 5 and not by any other general rule of
German law and there are no other explicit or implied
warranties as to the commercial, legal or financial situation
of the Gelsenberg Group other than as provided for in this PA
and its Annexures.
5.2 The representations and warranties in Schedule 1 shall be subject to a
time limitation of two years from the Effective Date, except for the
title warranties in clauses 1 to 4 of Schedule 1 for which a limitation
period of 30 years shall apply.
5.3 BP agrees that as from the Effective Date Gelsenberg shall have the
right to conduct of any legal proceedings brought by a third party
against Gelsenberg which may result in a warranty claim by E.ON against
BP under this PA (a "RELEVANT CLAIM") Provided That:
(i) E.ON shall procure that Gelsenberg will consult with BP on a
regular basis as to conduct of any Relevant Claim;
(ii) Gelsenberg shall not settle any such Relevant Claim without
the prior written consent of BP (such consent not to be
unreasonably withheld or delayed);
(iii) E.ON shall procure that Gelsenberg, at the reasonable request
of BP, will appeal (to the extent permitted) any first
instance decision which is in favour of a third party which
has brought a Relevant Claim.
5.4 To the extent possible, any payment required by this Clause 5 which is
due after the Gelsenberg Completion Date shall be paid within 5
Business Days of any final determination.
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6 EMPLOYEES
6.1 If the Gelsenberg Put Option is exercised and E.ON merges the
Gelsenberg business with E.ON's business, then E.ON agrees to select
the best people for the available positions subject to legal
obligations with regard to non-managerial staff.
6.2 The cost of redundancies arising from any such merger of the businesses
will be borne by E.ON.
7 E.ON POLICIES AND PRINCIPLES
Save as otherwise provided in this PA, each of E.ON and BP agrees that
as soon as practical following the Effective Date, Gelsenberg shall
adopt the systems and processes, accounts, principles and policies of
the E.ON Group, as from time to time amended.
8 DURATION AND EXIT
8.1 The Joint Venture shall be of unlimited duration and any proposed sale,
transfer, disposal or encumbrance by either of E.ON and Deutsche BP of
any part of its shares in Gelsenberg shall be subject to the prior
written consent of the other shareholders in Gelsenberg.
8.2 Subject to the terms of this PA E.ON agrees that at any time on or
after 1 January 2002 BP shall be entitled to put its entire
shareholding in Gelsenberg consisting of1 million bearer shares with a
nominal value of DM 100 each (the "GELSENBERG SHARES") onto E.ON (the
"GELSENBERG PUT OPTION") in consideration for a fixed price of Euro
2,400,000,000 (Euro two billion and four hundred million) subject to
adjustment referred to in clause 9 below (the "GELSENBERG PUT OPTION
AMOUNT").
8.3 If BP notifies E.ON that it wishes to exercise the Gelsenberg Put
Option by the 10th Business Day of a calendar month then the completion
date for economic transfer of the Gelsenberg Shares shall be the first
calendar day of the month in which such notification is given to E.ON
pursuant to this PA, otherwise the first calendar day of the following
month (the "GELSENBERG ECONOMIC TRANSFER DATE").
8.4 Within 10 Business Days of such notification by BP, each of E.ON and BP
shall procure that completion of the transfer of Deutsche BP's
Gelsenberg Shares to E.ON so that E.ON shall be entitled to 100 per
cent. of the income from the Gelsenberg Economic Transfer Date against
payment by E.ON of the Gelsenberg Put Option Amount plus interest (if
any) at LIBOR from and including the Gelsenberg Economic Transfer Date
until (but excluding) the actual date of the transfer of the Gelsenberg
Shares (such date being the "GELSENBERG COMPLETION DATE").
9 GELSENBERG PUT OPTION AMOUNT ADJUSTMENT
Each of E.ON and BP agrees that the Gelsenberg Put Option Amount shall
be adjusted to reflect the following:
9.1 a deduction of any amount validly claimed by E.ON and agreed by BP in
respect of a breach of warranty by BP pursuant to clause 5.1 above in
the period between signing this PA and the Gelsenberg Economic Transfer
Date. If no agreement is reached, E.ON may still claim such amount as a
breach of warranty pursuant to this Agreement;
9.2 an adjustment in respect of the amount which E.ON and BP shall agree
represents:
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9.2.1 Retained Earnings of the Gelsenberg Group on a consolidated
basis for the period from 1 January 2001 to the Gelsenberg
Economic Transfer Date. Retained Earnings means the earnings
of the Gelsenberg Group generated by its operations after
deduction of net interest, depreciation, amortisation,
taxation, minority interests and distributions.
(i) Retained Earnings shall be calculated in accordance
with German GAAP and following Gelsenberg's existing
accounting policies, procedures and practices
consistently applied in drawing up the Gelsenberg
Group for the financial years ending on 31 December
2000, provided, however, that the actual dividend
paid by Ruhrgas to Gelsenberg in 2002 shall be
allocated pro rata temporis to each month of the
calendar year 2002 irrespective of whether such
dividend is paid before or after the Gelsenberg
Economic Transfer Date.
(ii) Each of E.ON and BP agrees that if the Ruhrgas
dividend payable to Gelsenberg for 2002 has not been
paid at the Gelsenberg Economic Transfer Date, then
the parties shall agree an estimated dividend based
on the dividend paid by Ruhrgas to Gelsenberg for the
year ending 2001 which amount shall be subsequently
adjusted once the actual Ruhrgas dividend for 2002 is
paid.
9.2.2 an agreed proportion of the revenue expenditure incurred by
the Gelsenberg Group in excess of the amount set out in the
Reserved Matters in respect of such revenue expenditure
otherwise than in the ordinary course of business.
9.3 To the extent possible, any payment required by this Clause 9 and due
after the Gelsenberg Completion Date shall be paid within 5 Business
Days of the agreement or determination of such adjustments. Such
payments shall bear interest at LIBOR from (and including) the
Gelsenberg Economic Transfer Date until (but excluding) the date of
payment.
9.4 The relevant amounts as of the Gelsenberg Economic Transfer Date for
calculation of the adjustments pursuant to Clause 9.2.1 shall be
calculated on the basis of audited interim financial statements of the
Gelsenberg Group proposed in accordance with Clause 4.2.5 above.
9.5 In order to reflect the estimated tax burden, each of E.ON and BP
agrees that deductions and adjustments according to 9.1 and 9.2.2
claimed in the period between Effective Date and Gelsenberg Completion
Date on which payment is made as part of the Gelsenberg Put Option
Amount shall be reduced by a lump sum amount of 40 per cent. of the
aforementioned deduction and adjustment.
9.6 BP agrees to indemnify and hold E.ON harmless against any liability,
loss or cost suffered by Gelsenberg as a result of AGIP failing to
comply with its existing contractual obligations to make payments to
Gelsenberg in respect of pensions and related costs of former employees
of RVI.
10 CHANGE OF CONTROL OVER A SHAREHOLDER
BP shall have the right to extraordinarily exercise the Gelsenberg Put
Option pursuant to clause 8.2 effective at any time with a notice
period of one month if there is a Change of Control over the respective
shareholder in E.ON. For the purposes of this provision,
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"CHANGE OF CONTROL" means that a person or company (including
affiliated enterprises and third parties acting in concert with such
person or company) acquires control of thirty per cent (30%) or more of
the shares or voting rights in the company or corporation in question.
11 RESCISSION RIGHT
11.1 BP shall have the right to rescind this PA prior to the Subscription
Date by notice in writing to E.ON if the Veba Oel transaction should
have received a denial of the Required Approvals of the EC Commission
or the National Authority (as the case may be) as defined in and
pursuant to the Veba Oel Participation Agreement.
11.2 E.ON is aware of the pre-emption rights of Xxxxxxxxx GmbH and Ruhrkohle
Aktiengesellschaft pursuant to the two agreements between Deutsche BP
and Ruhrkohle Aktiengesellschaft dated 27 April 1979. If Xxxxxxxxx or
Ruhrkohle Aktiengesellschaft exercise their pre-emption rights, BP
shall have the right to rescind this PA.
12 CHANGE OF TAX LAW
In case of any changes to the tax laws relevant for the transactions
contemplated hereunder, each of E.ON and BP agrees to discuss in good
faith any changes in the transaction's structure provided herein, which
appear to avoid an unforeseeable tax burden, provided that neither BP
nor E.ON shall be obliged to agree to any change detrimental to its tax
or financial position which is not fully compensated.
13 MISCELLANEOUS
13.1 Where this PA or any of its Schedules requires any action to be taken
by a member of the Gelsenberg Group or the E.ON Group, then BP or E.ON
respectively, shall procure, to the extent legally permissible, that
such acts are carried out or performed in accordance with the relevant
provisions hereof.
13.2 E.ON'S AND BP'S LIABILITY
Any reference in this PA (however expressed) to a liability or
obligation of any member of the E.ON Group shall be deemed to
incorporate a reference to an obligation on the part of E.ON to procure
that the relevant liability is discharged or obligation is performed
(notwithstanding that such member of the E.ON Group is not a party to
this PA). Any reference in this PA (however expressed) to a liability
or obligation of any member of the BP Group shall be deemed to
incorporate a reference to an obligation on the part of BP to procure
that the relevant liability is discharged or obligation is performed
(notwithstanding that such member of the BP Group is not a party to
this PA).
13.3 ASSIGNMENT
This PA is personal to the parties to it. Accordingly, neither of BP or
E.ON may, without the prior written consent of the other, assign the
benefit of all or any of the obligations of any other party under this
PA nor any benefit arising under or out of this PA.
13.4 VARIATION ETC.
No variation of this PA shall be effective unless in writing and signed
by or on behalf of each of the parties to this PA.
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13.5 ANNOUNCEMENTS
13.5.1 Subject to sub-clause 13.5.2, no announcement concerning this
PA shall be made by any of the parties without the prior
written approval of the other parties such approval not to be
unreasonably withheld or delayed.
13.5.2 Any party may make an announcement concerning this PA if
required by:
(i) the law of any relevant jurisdiction;
(ii) any securities exchange or regulatory or governmental
body to which either party is subject or submits,
wherever situated, including (without limitation) the
Stock Exchange whether or not the requirement has the
force of law,
in which case the party concerned shall take all such steps as
may be reasonable and practicable in the circumstances to
agree the contents of such announcement with the other parties
before making such announcement.
13.6 CONFIDENTIALITY
13.6.1 Subject to sub-clause 13.6.2, each party shall treat as
strictly confidential all information received or obtained as
a result of entering into or performing this PA which relates
to:
(i) the provisions of this PA or any document referred to
in this PA; or
(ii) the subject matter of this PA or any document
referred to in this PA.
13.6.2 Any party may disclose information which would otherwise be
confidential if and to the extent:
(i) required by the law of any relevant jurisdiction;
(ii) required by any securities exchange or regulatory or
governmental body to which that party is subject or
submits (including on a new listing), wherever
situated, including (without limitation) the Stock
Exchanges, whether or not the requirement for
information has the force of law;
(iii) the information has come into the public domain
through no fault of that party.
13.7 NOTICES
Save to the extent otherwise provided in this PA:-
13.7.1 any notice or other communication requiring to be given or
served under or in connection with this PA shall be in writing
and shall be sufficiently given or served if delivered or
sent:
In the case of E.ON to E.ON at:
E.ON Xxxxx 0,
00000 Xxxxxxxxxx
Fax: (00) 000-0000 446
Attention: Vorstand
In the case of BP to BP at:
-00-
Xxxxxxxxx Xxxxx
0 Xxxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Fax: (00) 00 0000 0000
Attention: Xxxx Xxxxxxxxx
13.7.2 any such notice or other communication shall be delivered by
hand or sent by courier, fax or prepaid first class post. If
sent by courier such notice or communication shall
conclusively be deemed to have been given or served on the
fifth Business Day following despatch. If sent by fax such
notice or communication shall conclusively be deemed to have
been given or served at the time of despatch. If sent by post
such notice or communication shall conclusively be deemed to
have been received seven Business Days from the time of
posting.
13.8 COUNTERPARTS
This PA may be executed in any number of counterparts each of which
shall be deemed an original, but all the counterparts shall together
constitute one and the same instrument.
13.9 GOVERNING LAW AND ARBITRATION
13.9.1 This PA and the Shareholders' Agreement shall be subject to
the substantive law of the Federal Republic of Germany.
13.9.2 Any disputes arising in connection with this PA, the
Schedules, Appendices and Annexes thereto shall be settled by
an amicable effort on the part of E.ON and BP and if necessary
by reference to board members of E.ON and BP. If an attempt
for a settlement has not been successful within three months
from the date it was first requested, the disputes, including
those regarding the validity of the PA, shall be finally
settled in accordance with the arbitration rules of the DIS
with three arbitrators, the place of arbitration in Frankfurt,
and the language being English and all documents being in
English, without recourse to the ordinary courts of law. The
arbiters shall be qualified as judges in Germany.
13.9.3 Unless otherwise agreed, each of E.ON and BP shall pay their
own legal and other fees, costs and expenses in connection
with the negotiation and execution of this PA and the
Shareholders' Agreement.
13.9.4 In the event that any provision of this PA shall be or shall
become invalid, unenforceable or unworkable (undurchfuhrbar)
the remaining provisions shall not be affected thereby. The
invalid, unenforceable or unworkable provision shall be
replaced by a provision coming closest to what had been
intended by E.ON and BP in setting out the invalid,
unenforceable or unworkable provision, or would have been
intended by E.ON and BP had they considered the point. Any
omission shall be filled accordingly. Should the invalidity be
based on a measure of performance or time (time period, limit
or due date) it shall be adapted accordingly.
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15 July 2001 15 July 2001
BP p.l.c.: E.ON AG:
Xxxxx Xxxxxxx Xxxxxx Xxxxxxxx
Xxxxxxx Xxxx
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SCHEDULE 1 - BP WARRANTIES
1 CAPACITY AND AUTHORITY
1.1 INCORPORATION AND EXISTENCE BP, Gelsenberg and Ruhrgas are duly
incorporated, organised and validly existing under their respective
laws of incorporation .
1.2 POWER AND AUTHORITY BP has the legal right and full power and authority
to execute and deliver and to exercise its rights and perform its
obligations under this PA and all the documents which are to be
executed by BP as envisaged by this PA.
1.3 CORPORATE ACTION All corporate action required by BP to authorise the
execution and delivery of and to exercise its rights and perform its
obligations under this PA and all other documents which are to be
executed by BP as envisaged by this PA has been taken.
1.4 BINDING AGREEMENTS This PA constitutes and all other documents which
are to be executed by BP as envisaged by this PA, to the extent that BP
is a party thereto, when executed will constitute valid and binding
agreements enforceable in accordance with their respective terms.
1.5 NO BREACH The execution and delivery of and the performance by BP of
its obligations under this PA and all other documents which are to be
executed by BP as envisaged by this PA will not:
(a) result in a breach of any provision of the constitutional
documents of BP or Gelsenberg; or
(b) (save only as set out in this Disclosure Letter) result in a
breach of or give any third party a right to terminate or
modify, or result in the creation of any encumbrance,
pre-emption or similar right under, any agreement, licence,
permit or other instrument, order, judgement or decree of any
Court, governmental agency or regulatory body to which a
Gelsenberg Group Company or Ruhrgas is a party or by which any
of them is bound.
2 THE INTERESTS IN RUHRGAS, XXXXXXXX KG AND XXXXXXXXX GMBH
(Save only as set out in the Disclosure Letter) at the Gelsenberg
Completion Date, Gelsenberg will be the legal and beneficial owner,
free and clear of any third party rights or encumbrances, of
Gelsenberg's interests in Ruhrgas, Xxxxxxxx KG and Xxxxxxxxx GmbH. The
shares and interests have been properly and validly allotted and issued
and are each fully paid.
3 THE NEW SHARES
(Save only as set out in the Disclosure Letter) upon allotment of the
new shares in Gelsenberg to E.ON in accordance with clause 4.2 of the
PA (the "NEW SHARES"), E.ON will become the legal and beneficial owner,
free and clear of any third party rights or of the New Shares and will
hold 51 per cent of the entire issued and outstanding share capital of
Xxxxxxxxxx.
-00-
0 XXX XXXXXXXXXX SHARES
(Save only as set out in this Disclosure Letter) Deutsche BP is and
upon exercise of the Gelsenberg Put Option pursuant to this PA will be
entitled to sell and transfer to E.ON the full legal and beneficial
ownership to the Gelsenberg Shares on the terms of this PA and all
other documents which are to be executed by the parties as envisaged by
this PA without the consent of any third party free and clear of any
encumbrances or other third party rights. The Gelsenberg Shares have
been properly and validly allotted and issued and are each fully paid.
5 OWNERSHIP OF THE GELSENBERG GROUP COMPANIES
(Save as set out in the Disclosure Letter) Gelsenberg, directly or
indirectly through another Gelsenberg Group Company, is the sole and
beneficial owner of the issued or allotted shares of the companies
listed in Appendix 1 (subject to any changes of a non-material nature
since 31 December 2000) free from all encumbrances or other third party
rights and all such shares are fully paid and non-assessable as set out
in Appendix 1.
6 ACCOUNTS AND RECORDS
6.1 LATEST ACCOUNTS
The Accounts have been prepared in accordance with applicable law and
in accordance with accounting principles, standards and practices
generally accepted at the date of their preparation in Germany and,
subject thereto, on a basis consistent with that adopted in preparing
the audited accounts for the previous two financial periods so as to
fairly present the assets, liabilities and state of affairs of
Gelsenberg and each of the Gelsenberg Group Companies and of the
Gelsenberg Group Companies as a whole at the balance sheet date to
which such Accounts relate and of the profits or losses for the period
concerned, especially such issues as, but not limited to:
6.1.1 full provision for all actual liabilities;
6.1.2 proper provision (or note in accordance with good accountancy
practice) for all contingent liabilities;
6.1.3 provision reasonably regarded as adequate for all bad and
doubtful debts; and
6.1.4 disclosure of non-recurring items.
6.2 ACCOUNTING AND OTHER RECORDS
The statutory books, books of account and other records of whatsoever
kind of each Gelsenberg Group Company and Ruhrgas are up-to-date and
maintained in accordance with all applicable legal requirements on a
proper and consistent basis and contain complete and accurate records
of all matters required to be dealt with in such books and all such
books and records and all other documents (including documents of title
and copies of all subsisting agreements to which any Gelsenberg Group
Company or Ruhrgas is a party) which are the property of any Gelsenberg
Group Company or Ruhrgas or ought to be in their possession are in
their possession (or under their control) and no notice or allegation
that any is incorrect or should be rectified has been received. In
relation to the Gelsenberg Group Companies accounts, documents and
returns required by law to be delivered or made to the Commercial
Register or any other authority have been duly and correctly delivered
or made.
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7 ABSENCE OF UNDISCLOSED LIABILITIES
There are no liabilities of the Gelsenberg Group Companies or Ruhrgas
actual or contingent, conditional or unconditional, due or not due,
present or future capable of being accounted or provided for in annual
accounts related to causes that have accrued prior to the Effective
Date other than those liabilities (i) disclosed or provided for in the
Accounts; (ii) incurred in the ordinary course of business since the
Balance Sheet Date; or (iii) disclosed elsewhere in this PA or the
Disclosure Letter.
8 LICENCES, AUTHORISATIONS AND CONSENTS
All material licences, consents, authorisations, orders, warrants,
confirmations, permissions, certificates, approvals and authorities
("LICENCES") necessary for the carrying on of the businesses and
operations of each of the Gelsenberg Group Companies and Ruhrgas as now
carried on to the best of BP's knowledge have been obtained, are not
limited in duration (except as provided by law or customary for such
Licenses), nor subject to onerous conditions, are in full force and
effect and have been and are being complied with in all material
respects. To the Best of BP's Knowledge there is no investigation,
enquiry or proceeding outstanding or threatened in writing which is
likely to result in the suspension, cancellation, modification or
revocation of any of such Licences. To the Best of BP's Knowledge none
of such Licences has been breached in any material respect or is likely
to be suspended, cancelled, refused, materially modified or revoked
(whether as a result of the entry into or completion of this PA or
otherwise).
9 LITIGATION
9.1 Save as set out in the Disclosure Letter, to the Best of BP's Knowledge
since the Balance Sheet Date no claim for damages or otherwise has been
made against any Gelsenberg Group Company or Ruhrgas.
9.2 Save as set out in the Disclosure Letter, no Gelsenberg Group Company
or Ruhrgas (or any person for whose acts or defaults any Gelsenberg
Group Company or Ruhrgas may be vicariously liable) is involved whether
as plaintiff or defendant or other party in any claim, legal action,
proceeding, suit, litigation, prosecution, investigation, enquiry or
arbitration of material importance (other than as plaintiff in the
collection of debts arising in the ordinary course of its business none
of which exceeds Euro 1,000,000 (Euro one million) and those for which
provisions have been made in the annual accounts) and no such claim,
legal action, proceeding, suit, litigation, prosecution, investigation,
enquiry or arbitration of material importance is pending or threatened
in writing by or against any Gelsenberg Group Company or Ruhrgas (or
any person for whose acts or defaults a Gelsenberg Group Company or
Ruhrgas may be vicariously liable).
10 RUHRGAS
BP's warranties under Clauses 5 to 9 (inclusive) in this Schedule 1 in
relation to Ruhrgas are given subject to the qualification of the Best
of BP's Knowledge.
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SCHEDULE 2 - RESERVED MATTERS OF THE SUPERVISORY BOARD OF GELSENBERG
1 The Managing Board needs the consent of the Supervisory Board to
conclude transactions which are of special economic importance for the
company. Such transactions are in particular:
1.1 Incorporation of enterprises, acquisition and sale of enterprises and
of participations in other enterprises if the value exceeds Euro
10,000,000 (Euro ten million) in any particular case.
1.2 Acquisition, creation and sale of fixed assets (e.g. buildings,
movables, real property) if the value exceeds Euro 10,000,000 (Euro
ten million) in any particular case.
1.3 Taking and letting on lease of real property and equivalent rights as
well as creation of hereditary building rights if the cash value
exceeds Euro 10,000,000 (Euro ten million) in any particular case.
1.4 The following transactions:
(a) issuance of bonds and similar securities
(b) capital increase and participation in capital increase (except
in the case of wholly owned domestic direct or indirect group
companies) if the value (Gelsenberg share) exceeds Euro
10,000,000 (Euro ten million) in any particular case.
1.5 Granting general powers of attorney or "prokura" as well as appointment
of directors.
1.6 Material and extensive changes in the organisational structure and
important measures with respect to employment policy within Gelsenberg
and in such subsidiaries which do not have their own supervisory board
statutory employees' representation.
2 The consent shall always be obtained in advance. In urgent cases prior
consent of the chairman of the Supervisory Board shall be sufficient;
the transaction shall subsequently be presented to the Supervisory
Board for approval.
3 In view of the character of Gelsenberg as a strategic financial holding
the following shall apply with respect to the obligatory consent to
transactions on the level of subsidiaries and holding companies:
The provisions of items 1.1 to 1.3 above shall always be applied, even
if the relevant transactions are concluded by subsidiaries or holding
companies. With respect to investments this means that any investments
of such companies with a value exceeding Euro 10,000,000 (Euro ten
million) in any particular case require the consent of the Supervisory
Board. If such companies are companies whose shares are not exclusively
held by Gelsenberg such obligation of consent shall apply if the share
in the transaction which is -- directly or indirectly -- attributed to
Gelsenberg exceeds Euro 10,000,000 (Euro ten million).
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SCHEDULE 3 - BASIC TERMS OF SHAREHOLDERS AGREEMENT
1 No transfer, encumbrance or other disposition of shares in Gelsenberg
unless other party consents in writing.
2 Financing: Gelsenberg to finance itself by use of third party debt if
required.
3 BP will agree to participate pro rata to its share of Gelsenberg's
capital in any capital increase or shareholder loans to Gelsenberg
after 31 October 2003 up to a maximum of Euro 1 billion (Euro one
billion) for BP's share and will vote for any shareholder resolutions
required for such increases of capital. Any cash proceeds of such
capital increases or shareholder loans may be freely applied by
Gelsenberg including in the making of loans to E.ON. BP agrees and
procures that Deutsche BP will agree to the conversion of Gelsenberg
into a GmbH if requested to do so by E.ON on or after April 1, 2002
(but not before the Effective Date) and to change the Articles of
Association of Gelsenberg to provide for the minimum shareholder rights
for Deutsche BP required by law for a 49% shareholder (including those
set out in Schedule 2 above).
4 RESERVED MATTERS:
4.1 BP and E.ON agree that they both shall make best efforts to ensure - to
the extent legally permissible - that the matters listed in Schedule 2,
supra, only are undertaken or executed by Gelsenberg if both, BP and
E.ON, agree to such acts, transactions or the like.
4.2 E.ON undertakes, on request of BP, to vote in a shareholders meeting in
favour of an amendment of the Articles of Association of Gelsenberg by
which the undertaking and execution of certain or all of the reserved
matters as provided in Schedule 2, supra, by the management board of
Gelsenberg are made subject to approval by the supervisory board of
Gelsenberg in accordance with sect. 111 para 4., 2nd sentence, of the
German Stock Corporation Law (Aktiengesetz).
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SCHEDULE 4 - BP INDEMNITY
1 TAXES
1.1 TAX INDEMNITY
BP shall hold E.ON and the Gelsenberg Group Companies fully harmless
and indemnified from all taxes and ancillary tax duties as defined in
Section 3 German General Tax Code (AO), social charges and other public
dues of Gelsenberg (the "PUBLIC CHARGES"), if both of the following
conditions are fulfilled:
1.1.1 the Public Charges have accrued until the Effective Date; and
1.1.2 the Public Charges have not been paid until the Effective
Date; and
1.1.3 the Public Charges have not been reflected or provided for or
exceed the amounts at which they are reflected or provided for
in the latest Balance Sheets as of or prior to the Effective
Date of the Gelsenberg Group Companies prepared in accordance
with respective applicable local GAAP.
If and to the extent additional Public Charges have to be paid due to
audits of the respective authorities for the period prior to the
Effective Date, the above obligation applies mutatis mutandis. If and
to the extent such audit leads only to a rescheduling of Public
Charges, resulting in subsequent years in a reduction of the burden
with respect to such Public Charges, BP's liability to indemnify and
hold harmless shall be restricted to compensate for interest losses
caused by such rescheduling. The basis for the reductions of burdens
shall be calculated separately on a stand-alone basis for the
Gelsenberg Group Companies. If and to the extent that additional taxes
are to be borne by Deutsche BP because of the existing taxwise
integration of the Gelsenberg Group Companies into the Deutsche BP
(steuerliche Organschaft), E.ON shall ensure that tax-reduction effects
in favour of the Gelsenberg Group Companies are paid out to Deutsche BP
as soon as corresponding tax refunds have been received or are deemed
to have been received from the fiscal authorities by E.ON, E.ON Group
Companies or Gelsenberg Group Companies and disregarding the existence
of corporation tax losses or the use of corporation tax loss carry
forwards.
Indemnification claims pursuant to this provision shall become
time-barred six months after all assessments for all Public Charges for
periods prior to the Effective Date have become final (bestandskraftig)
following all relevant audits of tax and other public authorities.
1.2 In determining indemnification amounts payable pursuant to Clauses 1.1,
supra, the tax reducing or tax increasing effects, respectively, of
such indemnification payments shall be taken into consideration.
2 HANDLING OF TAX MATTERS
With respect to the handling of matters related to Public Charges,
which relate to, or result from a tax audit covering the period prior
to the Effective Date, the following shall apply:
2.1.1 Any matters regarding Public Charges shall be handled by E.ON
and Gelsenberg in co-ordination with Deutsche BP. E.ON shall
notify Deutsche BP in due time of any such matter, in
particular of a tax audit relating to the period prior to the
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Effective Date. Deutsche BP shall be entitled to participate
in any such matter and to comment thereon. Any binding
declaration vis-a-vis public authorities relating to the
period prior to the Effective Date shall only be made if
Deutsche BP has given its prior consent, such consent not to
be unreasonably withheld.
2.1.2 E.ON and Gelsenberg shall grant full access to Deutsche BP and
its representatives to all books and records of Gelsenberg
during regular business hours, to the extent this is necessary
to fend off claims regarding Public Charges asserted by public
authorities for periods prior to the Effective Date.
2.1.3 Upon Deutsche BP's instruction and at its cost Gelsenberg
shall take up any remedy in connection with the foregoing in
co-ordination with Deutsche BP.
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