Document:

Exhibit 4.11

 

 

DATE 29 FEBRUARY 2012

 

 

ESSO PETROLEUM COMPANY, LIMITED

 

 

and

 

 

COSAN S/A INDÚSTRIA E COMÉRCIO

 

 

______________________________________________________________

 

 

Agreement for the sale and purchase

 

of shares in

 

Comma Oil & Chemicals Limited

 

 

______________________________________________________________

 

 

 

  

  

  

 

 

AN AGREEMENT dated 29 February 2012 by and between:

 

	
(1)

	
Esso Petroleum Company, Limited, a company incorporated under the laws of England whose registered office is at ExxonMobil House, Ermyn Way, Leatherhead, Surrey KT22 8UX (the “Vendor”); and

 

	
(2)

	
COSAN S/A INDÚSTRIA E COMÉRCIO, a publicly traded company, duly Incorporated and existing under the laws of the Federative Republic of Brazil, with its headquarters at Avenida Juscelino Kubitscheck, 1327, 4° andar, City of Sao Paulo, State of Sao Paulo, enrolled with the Brazilian Tax Authorities under the number CNPJ 50.746.577/0001-15 (the “Purchaser”),

 

each a "Party" and collectively the "Parties".

 

RECITALS

 

	
A.

	
Comma Oil & Chemicals Limited (the “Company”) is a limited liability company incorporated under the laws of England, with registration number 02075698, and whose registered office is at Dering Way, Gravesend, Kent DA12 2QX.

 

	
B.

	
The Vendor is the owner of 100% of the share capital of the Company.

 

	
C.

	
The Vendor and the Purchaser entered into a Confidentiality Agreement with Cosan Combustíveis e Lubrificantes SA dated 18 April 2011.

 

	
D.

	
A Confidential Information Memorandum regarding the Company dated 31 March 2011 was provided by the Vendor to the Purchaser (or an affiliate of the Purchaser on its behalf) and the Purchaser has completed its due diligence process.

 

	
E.

	
The Vendor wishes to sell and the Purchaser wishes to purchase shares representing 100% of the issued share capital of the Company on the terms and subject to the conditions of this Agreement.

 

IT IS AGREED as follows:

 

	
CLAUSE 1. 

	
DEFINITIONS AND INTERPRETATION

 

	
1.1

	
In this Agreement, unless there is something inconsistent in the subject or the context, the following words and expressions shall have the meanings as set out below:

 

“Accounts” means, for the financial period on and as of the Accounts Date, the audited balance sheet and profit and loss accounts of the Company including the reports, notes and documents annexed to them and together with all documents which are required by law to be attached to them;

 

 

  

2

  

 

 

"Accounts Date" means 31 December 2010;

 

"Affiliate" means:

 

	 	
(i) 

	
with respect to the Vendor:

 

	 	
(a) 

	
Exxon Mobil Corporation;

 

	
  

	
(b)

	
any company or partnership in which Exxon Mobil Corporation now or hereafter owns or controls, directly or indirectly, more than 50% of the ownership interest having the right to vote or appoint its directors/managers or functional equivalents (an “Affiliated Company”);

 

	
  

	
(c)

	
any joint venture in which Exxon Mobil Corporation or an Affiliated Company is the operator,

 

(together the "ExxonMobil Group"); and

 

	
  

	
(ii)

	
with respect to the Purchaser, any company, legal entity or partnership which (a) controls either directly or indirectly the Purchaser or (b) which is controlled directly or indirectly by the Purchaser, or (c) is directly or indirectly controlled by a company, other legal entity or partnership which directly or indirectly controls the Purchaser. “Control” (including the terms “controlled by” and “under common control with”) for the purposes of the immediately preceding sentence and when used with respect to any specified company, partnership or legal entity, means the power to direct or cause the direction of the management and policies of the company, partnership or legal entity, whether through the ownership directly or indirectly of more than 50% of the voting securities, by contract or otherwise.

 

As from Completion the Company shall be considered for this purpose an Affiliate of the Purchaser;

 

"Agreement" means this agreement, including recitals, schedules and annexes;

 

“Applicable Law” means all laws, statutes, rules, regulations, official directives and orders of any Governmental Authority (whether administrative, legislative, executive or otherwise) including judgments, orders and decrees of courts, commissions or bodies exercising similar functions;

 

"Benefits" and "Benefit Plans" means the benefits described in Schedule ‎1;

 

"Business Day" means a day (except Saturdays and Sundays and public holidays) when deposit-taking banks are open in Sao Paulo, London and New York for the business of over-the-counter deposit-taking;

 

“Claims" means any pending or threatened suit, claim, action or litigation with any party or any administrative, arbitration or governmental proceeding, investigation or inquiry affecting the Company;

 

 

  

3

  

 

 

"Company" means Comma Oil & Chemicals Limited;

 

 “Competition Laws” means the antitrust, competition and similar laws of the United Kingdom or of any other applicable jurisdiction, and applicable amendments and regulations to such laws;

 

"Completion" means completion of the sale and purchase of the Sale Shares in accordance with the provisions of this Agreement;

 

"Completion Date" means 00:00 UK time on the date when this Agreement is to be completed as determined under Clauses 4.3 and 4.4;

 

"Conditions Precedent" means the conditions set out in Clause 4.1;

 

"Confidential Information Memorandum" means the confidential information memorandum referred to in Recital D above;

 

"Current Accounts Period" means the period starting 1 January 2011 until and including the Completion Date;

 

"Data Room" means the Project Cinnamon data room hosted by lntralinks, Inc. and containing documents relating to the Company, as indexed in Schedule 2;

 

"Deed of Cessation and Apportionment" means the deed of cessation and apportionment relating to the Defined Benefit Pension Scheme in a form agreed by the Vendor, the Company and the trustees of the Defined Benefit Pension Scheme before the Execution Date, which shall be dated and delivered at Completion, and under which the Company ceases to be an associated employer under the Defined Benefit Pension Scheme and its liabilities under the Pension Trust Deed and Sections 75 and 75A of the Pensions Act 1995 are discharged and apportioned to the Vendor;

 

“Defined Benefit Pension Scheme” means the defined benefit pension scheme of the Company, governed and administered under the Pension Trust Deed;

 

"Disclosure Letter" means the letter of even date from the Vendor delivered to the Purchaser;

 

"Downpayment" means a cash downpayment of £6,000,000, representing an amount equal to 10% of the Purchase Price;

 

“Due Diligence Materials" means the materials and documents disclosed to the Purchaser in the Data Room or otherwise and listed in Schedule 2 and as contained in the DVD that will be provided to the Purchaser on the Execution Date;

 

"Employees" means all employees of the Company at the Completion Date;

 

"Encumbrances" means all encumbrances (whether monetary or not) and any other legally binding arrangement or agreement the effect of which is the creation of security;

 

 

  

4

  

 

 

"Environment" means living organisms (including humans and the ecological systems of which they form a part) and the following media (alone or in combination):

 

	
  

	
(i)

	
air (including without limitation air within buildings and air within other natural or man-made structures, whether above or below ground);

 

	
  

	
(ii)

	
water (including without limitation water on, under or within land, or in drains or sewers, and coastal and inland waters);

 

	 	
(iii) 

	
land (including land under water); and

 

	 	
(iv) 

	
in the case of man includes his property;

 

"Environmental Laws" means all applicable laws and Legislation (including, but not limited to, liabilities pursuant to relevant civil law, common law and all statutes, codes, directives and the like and all rules, regulations, orders or statutory guidance made thereunder) concerning Environmental Matters;

 

"Environmental Liabilities" means losses, costs, expenses (including any irrecoverable value added taxes thereon), actions, proceedings, claims, demands, damages and any liability und.er Environmental Laws in relation to Environmental Matters, including any liability (whether actual or contingent) to investigate, make good, repair, reinstate, treat, clean up or otherwise remediate any of the Property or Hazardous Substances elsewhere which have emanated from the Property or any equipment of the Company which have .arisen .from activities or non-performance of the Company or for which the Company is held responsible, including at any property at any time owned or occupied or made use of by the Company and irrespective whether the cause for the liability has been known or should have been known or understood by the Company or its directors or managers or agents or employees;

 

"Environmental Matters" means pollution of the Environment including, but not limited to noise, emissions, deposits, discharges, spills and releases of Hazardous Substances into air, water, sewage systems and land and the manufacture, processing, distribution, use, treatment, storage, disposal, transport, transmission and handling of Hazardous Substances or matters otherwise relating to the health and safety of any person or damage to the environment, property or assets;

 

"Excluded Information" means the information which is excluded from the sale, including the Vendor's or its Affiliates' manuals, information, programmes and related documentation designated “Restricted Distribution”, “Proprietary”, “ExxonMobil Restricted Distribution”, “ExxonMobil Proprietary” or “ExxonMobil Use Only” and/or manuals, information, programmes and related documentation listed in Schedule 3, as such schedule may be updated by the Vendor prior to the Completion Date (with prior written notice to the Purchaser) to include additional restricted distribution, proprietary and private labelled manuals, information, programmes and related documentation;

 

"Execution Date" means the date of this Agreement;

 

 

  

5

  

 

 

"ExxonMobil Captive Insurers" has the meaning ascribed to it in Clause 10.1(b);

 

"ExxonMobil Policies" has the meaning ascribed to it in Clause 10.1;

 

"ExxonMobil Trademarks" means service marks, trademarks, logos, emblems, trade dress, applications for registration of marks, mark registrations, and other indicia of origin, including the names and marks ESSO, EXXONMOBIL, the Tiger Design, and such other names, domain names, marks, logos, emblems, trade dress, and other indicia of origin as ExxonMobil and its Affiliates (other than the Company) may from time to time own in connection with marketing lubricants and other products and associated services that are used by the Company as of the Completion Date;

 

"Final Contribution" means the contribution due from the Company to the Defined Benefit Pension Scheme under the current schedule of contributions in respect of the calendar month immediately preceding the Completion Date.

 

“Final Purchase Price” means the Purchase Price adjusted in accordance with Clause 13;

 

“Final Values” has the meaning ascribed to it in Clause 3.6(a);

 

"GAAP" means generally accepted accounting principles in the United Kingdom applied consistently with the practices, including reasonable accounting judgments of the Company;

 

"GEMA Contracts" means the GEMA EM Contracts and the GEMA Third Party Contracts;

 

“GEMA EM Contracts” means contracts under which, as at the Execution Date, the Company sells GEMA Products to Affiliates of the Vendor being:

 

	
  

	
(i)

	
a materials outline agreement A2198125 dated 1 June 2009 between (1) ExxonMobil lubricants & Specialties Europe, a division of ExxonMobil Petroleum & Chemical b.v.b.a, and (2) the Company; and

 

	
  

	
ii)

	
a purchase agreement number A2104082 dated 7 August 2007 between (1) ExxonMobil Asia Pacific Private Ltd, and (2) the Company,

 

each as amended from time to time;

 

“GEMA Products” means Mobil-branded products sold under the Global ExxonMobil Ancillary programme;

 

“GEMA Third Party Contracts” means contracts under which the Company sells GEMA Products to companies which are not Affiliates of the Vendor, as amended from time to time;

 

 

  

6

  

 

 

“Governmental Authority” means (a) the European Commission, (b) a federal, provincial or municipal government or a government of any other state or political subdivision thereof and (c) any court of law or government department, commission, autarchic entity agency, board, bureau or arbitration tribunal of such federal, provincial, municipal or other government subdivision;

 

"Gravesend Site" means the freehold land and buildings shown edged with red on the plan of title number K419376 filed at the Land Registry and being Comma Works, Mark Lane, Gravesend, Kent;

 

"Hazardous Substances" means all pollutants, contaminants and hazardous, flammable and toxic, radioactive, corrosive or caustic substances or otherwise hazardous substances, materials and waste whether solid, liquid, gaseous or vapour and whether alone or in combination with any substances and whether or not such pollutant, contaminant, substances, material or waste is referred to specifically in or regulated under any of the Environmental Laws;

 

“Indemnity Claim” means a claim made by the Vendor, the Vendor's Affiliates or the officers, directors or employees of the Vendor and its Affiliates against the Purchaser in respect of the indemnities referred to in Clause 7;

 

"Initial Period" means the period beginning on the Completion Date and ending at the end of the day before the first anniversary of the Completion Date;

 

“Inter-Affiliate Contracts” means contracts or other arrangements or agreements (whether for the supply of goods, services or otherwise) between the Company and the Vendor or any of its Affiliates;

 

"Inter-Affiliate Payables" means any amount, including interest-bearing loans, owing at the Completion Date by the Company to the Vendor or to any Affiliate of the Vendor, however arising, including interest thereon, and whether or not already due for payment;

 

"Inter-Affiliate Receivables" means any amount, including interest-bearing loans, owing at the Completion Date by the Vendor or any Affiliate of the Vendor to the Company, however arising, including interest thereon, and whether or not already due for payment;

 

"Interim Period" means the period from the date of this Agreement up to and including the Completion Date;

 

"Legislation" means any enactment, law, subordinate legislation, rule, regulation, ordinance, order or decree in force, enacted, passed or approved by any Governmental Authority or Public Authority, including those of a territory or country outside the United Kingdom; any permits, codes of practice, circulars, guidance notes and the like; judgments, notices, orders, directions, decisions, instructions or awards of any competent Governmental Authority or Public Authority;

 

 

  

7

  

 

 

"Longstop Date" means the date that is one year from the Execution Date;

 

“Lubricants Distribution Agreement” means an agreement between the Company and ExxonMobil Petroleum & Chemical b.v.b.a in respect of the distribution by Comma of Mobil-branded lubricants in the United Kingdom

 

“Material Contract” has the meaning given to such term in Clause 6.2(f);

 

"Material Supply Arrangements" means:

 

	
  

	
(i)

	
the supply of group I base oils to the Company by ExxonMobil Petroleum & Chemical b.v.b.a;

 

	 	
(ii) 

	
the supply of group Ill base oils to the Company by B & N Oil and Chemicals:

 

	 	
(iii) 

	
the supply of additives to the Company by Chevron Oronite and Lubrizol;

 

	 	
(iv) 

	
the supply of barrels to the Company by Grief;

 

	
  

	
(v)

	
the supply of HDPE to the Company by ExxonMobil Chemical Limited for the purposes of blow-moulding packs; and

 

	
  

	
(vi)

	
the supply of glysantin to the Company by BASF Aktiengesellschaft and BASF SE;

 

"Multi-National EM Contract" means any contract or other arrangement or agreement (whether for the supply of goods, services or otherwise) between the Company and a third party which is multi-national, regional or global in scope and by virtue of this is applicable to, and entered into by the parties thereto in consideration of its applicability to the Vendor’s Affiliates other than just the Company;

 

“Order” means any judgment, order, injunction, decree, writ, permit or licence of any Public Authority or binding arbitration;

 

"Person" includes trusts, natural persons, firms or partnerships, companies, corporations or other entities which are given, or are recognised as having, legal personality by the law of any jurisdiction, country, state or territory, unincorporated bodies and associations (including, without limitation, joint ventures and consortia), any emanation of a sovereign state or government, whether national, provincial, local or otherwise, any international organisation or body (whether or not having legal personality), and any other juridical entity, in each case wherever resident, domiciled, incorporated or formed;

 

"Pension Trust Deed" means the Replacement Definitive Trust Deed (also known as the Second Definitive Deed) for the Comma Oil & Chemicals Ltd Pension and Assurance Scheme dated 27 January 2005 and the rules annexed thereto, as both have been subsequently amended from time to time;

 

 

  

8

  

 

 

"Pensions Regulator" means the body corporate established under Part 1 of the Pensions Act 2004;

 

"Property" means all real property, including land and buildings on the land, owned,  leased, licensed, or otherwise occupied or controlled by the Company at any time;

 

"Public Authority" means any governmental (central, state, provincial, local or other), regulatory, judicial or other competent authority in any part of the world, including without limitation (i) any authority responsible for the administration or collection of any tax; (ii) any body or self-regulating authority with responsibility for any or all parts of the energy sector in the United Kingdom, (iii) any body or other self-regulating authority with responsibility for planning and related legislation in the United Kingdom; and/or (iv) any person appointed by any of the entities referred to in (i) to (iii) to carry out an investigation or an enquiry;

 

"Purchase Price" means £60,000,000;

 

“Purchaser’s Bank Account” means the account held by the Purchaser with the following details:

 

	 	
Account number: 

	
***/**/********

Branch: 2002-B

Account: ****.***.-*

	 	
Beneficiary Bank: 

	
Banco Bradesco SA

            Av. lpiranga, 210, 2SL, República, Sao Pãulo- SP, Brazil

	 	
Swift: 

	
BBDEBRSPSPO

	 	
Correspondent Bank: 

	
National Westminster Bank PLC- London

135 Bishopsgate, London, England

(EC2M 3UR), United Kingdom

	 	
Swift: 

	
NWBKGB2L

 

or such other account as the Purchaser may from time to time designate for the purposes of this Agreement;

 

"Purchaser Warranties" means the warranties set out in Clause 6.14;

 

"Sale Shares" means 100% of the issued share capital of the Company as of the Execution Date, being 679,875 ordinary shares of £1 each;

 

“Special Contributions” means any amount(s) contributed to the Defined Benefit Pension Scheme by the Company solely in order to make up a deficit in the amount of assets compared to the liabilities of the Defined Benefit Pension Scheme which shall exclude, for the avoidance of doubt, regular contributions to the Defined Benefit Pension Scheme in respect of the cost of ongoing service pension accruals of members;

 

 

  

9

  

 

 

"System Information" means all financial and business information of the Company that is held in systems of the Vendor or Affiliates of the Vendor but shall not include Vendor's Technical Information;

 

"Taxes" means any past, present or future taxes, including (without limitation) ‘green’ or environmental taxes, corporation tax, income tax, value added tax and all other transactional or turnover taxes, levies, customs, excise and other duties (including stamp duties), contributions, charges, fees, deductions or withholdings of any nature by any tax agency or other emanation of a sovereign state or government, whether national, federal, regional, provincial, local or otherwise, and wherever imposed, levied, collected, withheld or assumed, and include any interest, penalty, fine or surcharge payable in connection with any of the above, which taxes shall include, without limiting the generality of the foregoing, all income or profits taxes, capital gain taxes, social contribution taxes, payroll taxes and employee withholding taxes, unemployment insurance taxes, payroll and employee withholding taxes, social security taxes, and "tax" and "taxation" are to be construed accordingly;

 

"Tax Liabilities" means losses, costs, expenses, actions, proceedings, claims, demands, damages and any other liability in relation to Taxes, including legal costs and including US taxes due from or in respect of the Company;

 

“Three Months Dollar LIBOR" means in relation to any day in respect of which an interest rate is to be determined, the relevant day being the first Business Day of the relevant period for which an amount of interest is to be calculated:

 

	
  

	
(i)

	
the three month London Interbank offered rate for deposits in sterling, calculated by the British Bankers’ Association and quoted on the "LIBOR01" page on the Reuters Monitor Money Rates Service (or such other page as may replace such page on such service for the purpose of displaying London Interbank offered rates for sterling deposits) at or about 11.00 a.m. London time on the relevant day; or

 

	
  

	
(ii)

	
if no such rate is reported at the relevant time on the relevant day, the arithmetic mean (rounded upwards to four decimal places) of the rates quoted by the principal London offices of Lloyds TSB Bank plc, Barclays Bank plc and HSBC Bank plc to prime banks in the London Interbank market at or about 11.00 a.m. London time on the day for three month sterling deposits; or,

 

	
  

	
(iii)

	
if the rates in (i) and (ii) above are, for any reason, not available on the relevant day, such comparable rate as the Parties may agree.

 

Any interest calculation using this definition shall be based on the number of days for the relevant period divided by 360 for the actual number of days elapsed;

 

"Transaction" means the transaction contemplated by this Agreement;

 

 

  

10

  

 

 

"Vendor's Bank Account" means the bank account held by the Vendor at Bank of America N.A., London, and with the following details:

 

Account number:            **** ********

 

IBAN number: GB65 BOFA 1650 5031 9470 15

 

SWIFT BIC CODE: BOFAGB22

 

or such other account as the Vendor may from time to time designate for the purposes of this Agreement;

 

"Vendor's Technical Information" means technical information used in the Company’s business at the Completion Date, that is owned or controlled (in the sense of having the right to grant licences thereunder without accounting to others) by the Vendor or Affiliates of the Vendor and made available to the Company prior to Completion Date except for technical information that:

 

	 	
(i) 

	
at the Completion Date is in the public domain; or

 

	
  

	
(ii)

	
after the Completion Date becomes a part of the public domain through no fault of the Purchaser or the Company (but only after and only to the extent that it becomes a part of the public domain); or

 

	
  

	
(iii)

	
was in the possession of the Purchaser at the Completion Date and which the Purchaser without breach of any obligation is free to disclose to third parties; or

 

	
  

	
(ii)

	
was received by the Purchaser or the Company after the Completion Date from a third party who had the lawful right to disclose it to third parties.

 

For the purpose of this definition, specific detailed information shall not be deemed to be within the foregoing exceptions merely because they are embraced by more general information in the public domain or in the possession of the Purchaser or received by the Purchaser or the Company after the Completion Date.

 

In addition, any combination of features shall not be deemed to be within the foregoing exceptions merely because information about individual components is separately in the public domain or in the possession of the Purchaser or received by the Purchaser or the Company after the Completion Date but only if the combination itself and its principle of operation are in the public domain or, without restriction on disclosure, in the lawful possession of the Purchaser or received by the Purchaser or the Company after the Completion Date;

 

"Warranties" means the warranties set out in Clauses 6.1 and 6.2 and "Warranty" is to be construed accordingly; and

 

"Warranty Termination Date" means the date that is one year after the Completion Date.

 

 

  

11

  

 

 

	
1.2

	
Except where the context requires otherwise or where there would be a conflict with the express terms of this Agreement, references to any Legislation or provision of any Legislation shall be construed as references to that legislation or provision as re-enacted, amended, extended, consolidated or replaced from time to time before the Execution Date, and includes any order, regulation, instrument or subordinate Legislation made under the relevant Legislation.

 

	
1.3

	
The table of contents and headings in this Agreement are for convenience only and shall not affect the construction of this Agreement.

 

	
1.4

	
Except where the context requires otherwise, or where there would be a conflict with the express terms of this Agreement, references in this Agreement to Clauses, paragraphs and schedules are to Clauses, paragraphs and schedules to this Agreement.

 

	
1.5

	
In this Agreement, the use of one gender shall include the other and the singular number shall include the plural and vice versa. In particular, references to “its Affiliates” with respect to the Vendor and similar terms in the plural shall be understood to include any single Affiliate of the Vendor.

 

	
1.6

	
All periods which are expressed to commence on one date and end on another, or to fall between two dates, are inclusive of the first day and exclusive of the last day.  All dates and periods of time referred to in this Agreement, or which are to be calculated as a result of any provision of this Agreement, are dates and periods by reference to, and are to be calculated by reference to, the Gregorian calendar.

 

	
1.7

	
In this Agreement, references to a time of day are to UK time and references to a day are to a period of 24 hours running from midnight on the previous day.

 

	
1.8

	
Except where the context requires otherwise, or where there would be a conflict with the express terms of this Agreement, in this Agreement "writing" and "written" both include facsimile transmissions, telex, cable, telegrams and all other methods of reproducing or communicating in visible and permanent form including communications by electronic mail.

 

	
1.9

	
The expressions "ordinary course of business" or "business in the ordinary course" mean the ordinary and usual. course of business of the Company, materially consistent (including nature and scope) with the prior practice of the Company.

 

 

  

12

  

 

 

	
CLAUSE 2.

	
SALE AND PURCHASE

 

Subject to the provisions of this Agreement:

 

	
2.1

	
the Vendor shall sell and the Purchaser shall purchase the Sale Shares free from Encumbrances and together with all benefits, rights, liabilities and obligations now or hereafter attaching to them;

 

	
2.2

	
as part of this Transaction, the Purchaser shall pay, or shall procure that the Company shall pay, to the Vendor (or the relevant Affiliate of the Vendor, as the case may be) the value of the Inter-Affiliate Payables in accordance with Applicable Law; and

 

	
2.3

	
as part of this Transaction, the Vendor shall pay or shall procure that its Affiliates shall pay to the Company, as the case may be, the value of the Inter-Affiliate Receivables in accordance with Applicable Law.

 

 

	
CLAUSE 3.

	
CONSIDERATION

 

	
3.1

	
The consideration for the sale of the Sale Shares shall be payment by the Purchaser of the Purchase Price which shall be adjusted in accordance with Clause 13.

 

	
3.2

	
The Purchaser shall pay to the Vendor the Downpayment immediately on signing this Agreement by means of a cash transfer in immediately available funds into the Vendor's Bank Account.

 

	
3.3

	
Subject to the provisions of this Agreement (including without limitation Clauses 4.3 and 4.4), the Vendor shall give the Purchaser at least five Business Days’ notice of the Completion Date and shall provide the Purchaser with:

 

	
  

	
(a)

	
notice of any adjustments to the Purchase Price required pursuant to Clause 13 and the Final Purchase Price due reflecting those adjustments; and

 

	
  

	
(b)

	
a schedule of the provisional values of the Inter-Affiliate Payables and the Inter-Affiliate Receivables at such date, in the form set out in Schedule 5.

 

	
3.4

	
On the Completion Date:

 

	
  

	
(a)

	
the Purchaser shall pay the Final Purchase Price; and

 

	
  

	
(b)

	
the Purchaser shall, or shall procure that the Company shall, pay the provisional value of the Inter-Affiliate Payables,

 

each as notified pursuant to Clause 3.3, to the Vendor's Bank Account by means of a cash transfer in immediately available funds; and

 

	
  

	
(c)

	
the Vendor shall pay, or shall procure that its relevant Affiliates shall pay to the Company the provisional value of the Inter-Affiliate Receivables as per the 

 

 

  

13

  

 

 

	
  

	
 

	
schedule referred to in Clause 3.3(b) by means of a cash transfer in immediately available funds.

 

	
3.5

	
Within 30 Business Days from the Completion Date the Vendor shall:

 

	
  

	
(a)

	
determine the final values at Completion Date of the Inter-Affiliate Payables and Inter-Affiliate Receivables, taking into account any properly and duly documented Inter-Affiliate Payables or Inter-Affiliate Receivables not identified in the provisional schedule provided by the Vendor under Clause 3.3(b) (the "Final Values"); and

 

	
  

	
(b)

	
deliver to the Purchaser a complete list of the Final Values in the form set out in Schedule 5.

 

	
  

	
Within the following 10 Business Days:

 

	
  

	
(i)

	
if the Final Values are not contested by the Purchaser, (A) the Vendor shall (or shall procure its Affiliates shall), or (B) as the case may be, the Purchaser shall (or shall procure the Company shall), make payment to the relevant Party of any difference between the Final Values and the provisional values paid under Clause 3.4(b) and 3.4(c);

 

	
  

	
(ii)

	
if the Final Values are contested by the Purchaser to the extent that such objections represent an aggregate value of no less than £50,000, the Purchaser shall submit its contests and explanations to the Vendor and the Parties shall try to amicably settle their disagreement within the following 10 Business Days. In the event of such settlement, (A) the Vendor shall (or shall procure Its Affiliates shall), or (B) as the case may be, the Purchaser shall (or shall procure the Company shall), within a further 10 Business Days make payment to the relevant party of the agreed difference between the Final Values and the provisional values paid under Clause 3.4(b) and 3.4(c); or

 

	
  

	
(iii)

	
if the Parties are unable to settle all disagreements with respect to the Final Values within the first 10 Business Day period described in paragraph (ii), any such matters remaining in dispute shall be submitted to KPMG LLP in London, and the Parties shall instruct such firm that the determination of such firm with respect to such disagreements and the Final Values shall be completed within 20 Business Days after the submission to such firm. Such determination shall, absent manifest error or fraud, be final and binding upon the Parties, and (A) the Vendor shall (or shall procure its Affiliates shall) or (II) as the case may be, the Purchaser shall (or shall procure that the Company shall) make payment to the relevant Party of any difference between the Final Values as determined by KPMG LLP and the provisional .values paid under Clause 3.4(b) and (c), in each case within 10 Business Days after the making of such determination. The fees, costs arid expenses of KPMG LLP shall be split equally between the Parties. In case the Parties do not reach an agreement as to the scope of work or set of documents to ·be provided to KPMG LLP, the matter shall be referred to arbitration under Clause 16.

 

 

 

  

14

  

 

 

	
3.6

	
If any amount required to be paid under this Agreement is not received by its due date then such amount shall bear interest at the rate per annum of Three Month GBP LIBOR plus 4% for the period from the relevant due date for payment up to but excluding the date of actual payment, after as well as before judgment.

 

	
3.7

	
Payments between the Parties under this Agreement, unless otherwise agreed, shall be made in immediately available funds to and received in the Vendor's Bank Account or the Purchaser's Bank Account, as the case may be, and other payments to be made under this Agreement shall be made in accordance with the payment instructions of the other Party.

 

	
3.8

	
Inter-Affiliate Payables or Inter-Affiliate Receivables for which payment is made pursuant to Clauses 3.4 and/or 3.5 will be considered settled, assumed, discharged or assigned, as the case may be, upon receipt of payment and the relevant Party shall provide written confirmation of such, or shall procure that the Company or their Affiliates, as the case may be, provide such written confirmation.

 

	
3.9

	
The Purchaser shall procure that the Company shall pay the Final Contribution to the Defined Benefit Pension Scheme in accordance with the current schedule of contributions, and no later than 19th of the month in which Completion occurs.

 

 

	
CLAUSE 4.

	
CONDITIONS PRECEDENT AND COMPLETION

 

	
4.1

	
Completion is subject to and conditional on compliance with the following conditions:

 

	
  

	
(a)

	
Execution of a Deed of Cessation and Apportionment by all the parties thereto.

 

	
  

	
(b)

	
No legislation or Order shall have been enacted, entered, promulgated or enforced by any court or other Public Authority which prohibits the Transaction or has the effect of making the Transaction illegal.

 

	
  

	
(c)

	
That the Warranties that are to be made at the Completion Date as determined by Clause 6.4 are true and correct in all material respects as of the Completion Date, (or whether there is a failure for a Warranty or Warranties to be true and correct in all material respects, that such failure does not have or would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets or financial condition of the Company greater than £1 ,000,000), and the Vendor shall have delivered to the Purchaser a certificate of a duly authorised officer of the Vendor, dated the Completion Dale, to such effect.

 

 

  

15

  

 

 

 

	
  

	
(d)

	
That all of the agreements, undertakings and covenants of the Vendor to be performed prior to Completion pursuant to this Agreement shall have been duly performed in all material respects, (or whether there is a failure to duly perform such agreement, undertaking and/or covenant in all material respects, that such failure does not have or would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets or financial condition of the Company greater than £1,000,000), and the Vendor shall have delivered to the Purchaser a certificate of a duly authorised officer of the Vendor, dated the Completion Date, to such effect.

 

	
  

	
(e)

	
That since the Accounts Date, there shall not have occurred any event, circumstance, development, state of facts, occurrence, change or effect that (after taking into account any actions of the Company or the Vendor to mitigate such effects) has had, or would reasonably be expected to have a material adverse effect on the business, assets or financial condition of the Company greater than £1,000,000, (provided that effects of or changes in general political, economic, financial, capital market or industry-wide conditions) including changes in interest rates or applicable foreign exchange rates) shall not be taken into account in determining whether such a material adverse effect has occurred), and the Vendor shall have delivered to the Purchaser a certificate of a duly authorised officer of the Vendor, dated the Completion Date, to such effect.

 

	
4.2

	
The Vendor agrees that it shall keep the Purchaser informed of progress with regard to satisfaction of the Condition Precedent set out at Clause 4.1 (a).

 

	
4.3

	
Completion shall take place:

 

	
  

	
(a)

	
on the first day of the fourth month following the Execution Date, or

 

	
  

	
(b)

	
if (i) the Conditions Precedent are not each satisfied or waived, either by agreement between the Parties or, where a Party has the sole responsibility to provide satisfaction, by the other Party alone, by or on such date, or (ii) the Parties agree that Completion should be delayed in order to allow the Purchaser time to complete activities relating to the continuation of the Company's business and operations on and from Completion, on the first day of the first month following the date on which (A) the Conditions Precedent are each satisfied and (B) the Parties agree that Completion should proceed,

 

	
  

	
provided that

 

	
  

	
(I)

	
in circumstances where Completion has not taken place pursuant to paragraphs (a) or (b) above, and the Conditions Precedent are each satisfied or waived by the first day of the seventh month following the Execution Date, then Completion shall take place on such date; and

 

 

  

16

  

 

 

	
  

	
(II)

	
and in the event that the Conditions Precedent are not satisfied or waived by the first day of the seventh month following the Execution Date, and subject to Clause 4,13 Completion shall take place on the first day of the first month following the date on which the Conditions Precedent are each satisfied or waived.

 

	
4.4

	
If the day on which Completion shall take place pursuant to Clause 4.3 Is not a Business Day, then the Parties agree that all actions to be performed under Clause 4.6, in addition to payment of the amounts provided in Clause 3.4, shall be taken on the Business Day immediately prior to that date and, following the performance of these actions (including payment), title and ownership of the Sale Shares shall be transferred effective on the Completion Date.

 

	
4.5

	
Completion shall take place at a location in the United Kingdom selected by the Vendor in its sole discretion.

 

	
4.6

	
On or before the Completion Date (as provided in Clauses 4.3 and 4.4):

 

	
  

	
(a)

	
the Purchaser shall:

 

	
  

	
(i)

	
comply with its obligations under Clause 3.4(a) and (b);

 

	
  

	
(ii)

	
deliver a certified copy of the resolution adopted by the board of directors of the Purchaser authorising the Transaction and the execution and delivery by the officers specified in the resolution of (A) this Agreement, and (B) any other documents referred to in this Agreement as being required to be delivered by it;

 

	
  

	
(iii)

	
deliver a certified copy of the resolution(s) passed by the shareholders of the Purchaser authorising the Transaction;

 

	
  

	
(iv)

	
deliver if required, a certified copy of any power of attorney under which any document required from the Purchaser under this Clause 4.6 is executed on behalf of the Purchaser; and

 

	
  

	
(v)

	
provide written confirmation for itself and for and on behalf of the Company that the provisional values of all Inter-Affiliate Receivables identified in the provisional schedule provided by the Vendor pursuant to Clause 3.3(b) have been paid in full (together with interest due thereon), with a written release in respect of the final value of the Inter-Affiliate Receivables to be provided on payment thereof pursuant to Clause 3.5; and

 

	
  

	
(b)

	
the Vendor shall, provided it has verified that the Purchaser has complied with its obligations under Clause 3.4(a) and (b):

 

	
  

	
(i)

	
comply with its obligation under Clause 3.4(c);

 

 

  

17

  

 

 

	
  

	
(ii)

	
provide written confirmation for itself and for and on behalf of its relevant Affiliates that the provisional values of all Inter-Affiliate Payables identified in the provisional schedule provided by the Vendor pursuant to Clause 3.3(b) have been paid in full (together with interest due thereon), with a written release in respect of the final value of the Inter-Affiliate Payables to be provided on payment thereof pursuant to Clause 3.5;

 

	
  

	
(iii)

	
deliver transfers of the Sale Shares executed by the registered holder in favour of the Purchaser;

 

	
  

	
(iv)

	
deliver the share certificates in respect of the Sale Shares in the name of the registered holder;

 

	
  

	
(v)

	
deliver the Company’s share register reflecting the Purchaser as the owner of the Sale Shares; and

 

	
  

	
(vi)

	
deliver if required, a certified copy of any power of attorney under which any document required from the Vendor under this Clause 4.6 is executed on behalf of the Vendor.

 

	
4.7

	
The Purchaser shall, or shall procure that the Company shall, act diligently and expeditiously and use its best endeavours in order to procure the registration of the transfer of the Sale Shares as soon as possible after Completion.

 

	
4.8

	
In addition to taking the actions and executing and delivering the documentation set out in Clause 4.6, the Parties agree to cooperate with each other to execute and deliver such other documents (if any) as shall reasonably be necessary or desirable to carry out the sale and purchase of the Sale Shares pursuant to this Agreement and the intent of the Parties as reflected herein.

 

	
4.9

	
The Purchaser agrees that the Vendor may retain copies of all books and corporate records that contain information of the Company and all other copies of accounting books and records prepared in connection with the financial statements of the Company.

 

	
4.10

	
The Vendor shall procure that on or before Completion the Company is released from all rights and obligations under (i) Multi-National EM Contracts, (ii) Inter-Affiliate Contracts, and (iii) GEMA Third Party Contracts, except in relation to:

 

	
  

	
(a)

	
contracts, arrangements or agreements that automatically terminate upon the relevant Company ceasing to be an Affiliate of ExxonMobil;

 

	
  

	
(b)

	
any contract, arrangement or agreement pursuant to which, before Completion, goods and/or services had been ordered but not delivered in which case such contract, arrangement or agreement shall continue only in respect of the obligations which the Company and the Vendor (or the relevant Affiliate of the Vendor) have in respect of such goods and/or services and after fulfilment of 

 

 

 

  

18

  

 

 

 

	
  

	
 

	
such obligations the Company shall be released from all rights and obligations under the relevant contract, arrangement or agreement as applicable; and

 

	
  

	
(c)

	
any Inter-Affiliate Payables and Inter-Affiliate Receivables (which are to be dealt with in accordance with Clause 3.5).

 

	
4.11

	
The Purchaser acknowledges and agrees that all services provided to the Company by the Vendor or any of its Affiliates will be terminated and will stop at Completion and shall be arranged for by the Purchaser at its discretion for the period thereafter.

 

	
4.12

	
If the respective obligations of the Vendor or the Purchaser under Clauses 3.4 and 4.6 are not complied with on the Completion Date, the non-defaulting Party may:

 

	
  

	
(a)

	
defer Completion until a new date of its choice after consultation with the other Party (in which. case this Clause 4,12(a) will apply to Completion as so deferred) but not beyond the Longstop Date; or

 

	
  

	
(b)

	
waive all or any such requirements and proceed to Completion as far as practicable (without limiting its rights, whether under this Agreement or otherwise); or

 

	
  

	
(c)

	
terminate this Agreement by notice in writing to the other Party, but only in circumstances where the other Party has materially failed to comply with the requirements of Clauses 3.4 and 4.6.

 

	
4.13

	
If the Conditions Precedent have not been satisfied or waived, either by agreement between the Parties or, where a Party has the sole responsibility to procure satisfaction, by the other Party alone, by the Longstop Date then this Agreement shall terminate and the provisions of Clause 4.14 shall apply provided however that if, prior to the Longstop Date, either Party has initiated any action or proceeding challenging such termination and/or seeking to exercise any equitable remedies to compel that other Party to perform its obligations under this Agreement, no such termination shall be effective until the later of (i) the Longstop Date and (ii) the date that is 30 days after the date on which any applicable court or arbitration panel shall have finally determined that the other Party is entitled to terminate this Agreement pursuant to its terms.

 

	
4.14

	
If this Agreement is terminated In accordance with Clause 4.12(c), Clause 4.13 or Clause 21:

 

	
  

	
(a)

	
the Vendor shall refund to the Purchaser as soon as reasonably practicable or otherwise as provided in this Agreement the Downpayment provided that if the Purchaser is in breach of any material provisions of this Agreement, the Vendor may retain a portion of the Downpayment equal to the amount of damages incurred by the Vendor as a result of such breach (without prejudice to any other remedies available under this Agreement or under Applicable Law);

 

 

  

19

  

 

 

	
  

	
(b)

	
all obligations of the Parties under this Agreement shall end at the time of termination, except for those expressly stated herein to continue provided all rights and liabilities of the Parties which have accrued before termination shall continue to exist; and

 

	
  

	
(c)

	
Clauses 9.12, 11 (Confidential Information and Vendor's Technical Information), 12 (Software), 15 (Costs), 16 (Applicable Law and Dispute Resolution), 17 (Business Ethics), 18 (Export Controls and Trade Sanctions), 19 (Entire Agreement), 20 (Assignment), 22 (Notifications), 23 (Variations), 24 (Further Assurance), 25 (Remedies and Waivers), 26 (Third Party Beneficiaries) and 28 (Severability) shall survive termination.

 

	
4.15

	
With effect from the Completion Date (or, if later, the relevant release date) and as between the Parties and their Affiliates, none of the Company, the Purchaser, the Vendor or any of their Affiliates shall (other than in respect of adjustments to the value of Inter-Affiliate Payables and Inter-Affiliate Receivables made in accordance with this Agreement) have any right of action or remedy in respect of any moneys owed or pre-Completion matters terminated under Clauses 4.6(a)(v) and 4.10, except for post-Completion obligations of confidentiality and use under Clause 11 (Confidential Information and Vendor's Technical Information).

 

	
4.16

	
The Purchaser agrees that:

 

	
  

	
(a)

	
within a reasonable period after the Execution Date, the Vendor shall procure that the Company issues an announcement in a form agreed between the Vendor and the Purchaser to the Employees who, on the Execution Date, are also active members of the Defined Benefit Pension Scheme and any such announcement shall explain the changes to the Employees' pension arrangements that will take effect on and from the Completion Date; and

 

	
  

	
(b)

	
it shall contribute to any such notice by providing an explanation of the arrangements the Purchaser shall put in place to comply with its obligations under Clauses 9.1, 9.2 and 9.3.

 

 

	
CLAUSE 5. 

	
THE INTERIM PERIOD

 

	
5.1

	
During the Interim Period, the Vendor shall:

 

	
  

	
(a)

	
use its powers as shareholder of the Company (but without prejudice to the fiduciary or other duties of any director of the Company) to cause the Company to operate its businesses in the ordinary and usual course, within ordinary expense limits, provided that the Vendor shall not be in breach of the foregoing provision in respect of any commercially reasonable steps the Company may take during the Interim Period:

 

 

  

20

  

 

 

	
  

	
(i)

	
to reduce in its books the levels of Inter-Affiliate Payables and Inter-Affiliate Receivables; and

 

	
  

	
(ii)

	
to withdraw, on the date of Completion, as a participating employer in the Defined Benefit Pension Scheme and to do all such things as are reasonable (including, but not limited to, making amendments to the Pension Trust Deed) such that, from the date of Completion, the Company no longer has any obligations or liabilities in relation to the Defined Benefit Pension Scheme (apart from the obligation to pay any contributions that have fallen due but remain unpaid as at the date of Completion to the trustees of the Defined Benefit Pension Scheme);

 

	
  

	
(b)

	
use its powers as shareholder of the Company (but without prejudice to the fiduciary or other duties of any director of the Company) to procure as far as possible that that the Company uses its commercially reasonable endeavours to preserve intact its business organisations, keep available the services of its officers and employees, and maintain satisfactory relationships with any and all Governmental Authorities, suppliers, distributors or customers;

 

	
  

	
(c)

	
subject to any relevant confidentiality obligations to third parties, promptly notify the Purchaser in writing of (i) any Claims known to the Vendor; and (ii) any events (other than general events of an economic, political, legal or regulatory nature that should reasonably be known to the Purchaser), in each case that may reasonably be expected by the Vendor to have a significant adverse economic impact on the situation of the Company (being an event which may reasonably be expected by the Vendor to have an adverse economic impact on the Company exceeding £500,000) up to the Completion Date;

 

	
  

	
(d)

	
use its reasonable endeavours to assist the Purchaser in arranging (at the Purchaser’s expense) for appropriate insurance for the Company to become effective on Completion;

 

	
  

	
(e)

	
use its reasonable endeavours to assist the Purchaser in achieving material completion of the material steps necessary to enable transfer of System Information;

 

	
  

	
(f)

	
procure that the Company provides to the Purchaser monthly management financial reports and copies of the quarterly financial statements for the Company and such other aggregate information with respect to the business and properties ·of the Company as the Purchaser may from time to time reasonably request, provided the obligation contained in this paragraph (f) shall only apply to the extent that:

 

	
  

	
(i)

	
such requests by the Purchaser shall not unduly interfere with the business and operations of the Company or the Vendor;

 

 

  

21

  

 

 

	
  

	
(ii)

	
the provision of the information does not contravene any Applicable Law, including without limitation any Competition Laws;

 

	
  

	
(iii)

	
the information requested is in the form normally prepared and maintained by the Company; and

 

	
  

	
(iv)

	
such requests are coordinated through the applicable representatives of the transition committee referred to in Clause 5.4(a).

 

	
  

	
(g)

	
procure that the Company delivers to the Vendor prior to the date of Completion all the documents in its possession or control that relate to the Defined Benefit Pension Scheme, including, but not limited to:

 

	
  

	
(i)

	
the Defined Benefit Pension Scheme's current governing documentation and other documents that have governed the Defined. Benefit Pension Scheme and all other trust documents of the Defined Benefit Pension Scheme (or copies of such documents if the Company is not in possession or control of the originals);

 

	
  

	
(ii)

	
annual reports, accounts and actuarial valuations relating to the Defined Benefit Pension Scheme;

 

	
  

	
(iii)

	
booklets, announcements and other circulars that have at any time been issued to all or some members of the Defined Benefit Pension Scheme;

 

	
  

	
(iv)

	
all records affecting the calculation and payment of benefits to or in respect of the members of the Defined Benefit Pension Scheme (and persons who would be members if still living); and

 

	
  

	
(v)

	
correspondence and documents relating to dealings with Her Majesty's Revenue & Customs, the Inland Revenue, Occupational Pensions Board, Department of Social Security, Contributions Agency, Occupational Pensions Regulatory Authority, Pensions Registry, Pensions Ombudsman, the Pensions Regulator, the Pension Protection Fund, the Department for Work and Pensions or any other regulatory or supervisory body

 

provided that in the event that the Company needs to retain copies of documents that relate to the Defined Benefit Pension Scheme as set out above for a specified purpose it will provide a list of such documents to the Vendor before Completion.

 

	
  

	
(h)

	
not agree with the trustees of the Defined Benefit Pension Scheme any increase in the amounts due from the Company under the schedule of contributions that would have the effect of increasing the amount of the Company's Final Contribution above to more than 21.5% of pensionable pay.

 

 

 

  

22

  

 

	
5.2

	
During the Interim Period, to the extent permitted by Applicable Law and except with the prior written consent of the Purchaser (which shall not be unreasonably withheld or delayed, and in any event which shall be deemed to have been given if the Purchaser has not responded to the Vendor's written request for consent within 15 Business Days after receipt by the Purchaser) the Vendor shall not:

 

	
  

	
(a)

	
dispose of, enter into an agreement to dispose of, grant an option over, or grant any interest in, or encumbrance over, any Sale Shares;

 

	
  

	
(b)

	
increase, reduce or otherwise alter the Company’s corporate capital in any way or allow the Company to buy back or agree to buy back shares or other securities in the corporate capital of the Company;

 

	
  

	
(c)

	
except with respect to the Defined Benefit Pension Scheme, carry out any merger, acquisition, joint venture or dissolution involving the Company;

 

	
  

	
(d)

	
amend or permit the amendment of the memorandum or articles of association of the Company (except for the purposes of implementing this Agreement and the Transaction);

 

	
  

	
(e)

	
adopt any new employee benefits plan or any change to the rules of the Benefits currently in effect or to the labour policies currently enforced by the Company except with respect to the Defined Benefit Pension Scheme; or

 

	
  

	
(f)

	
change in any material respect the Company’s accounting, commercial, treasury and finance practices and/or policies unless required by Applicable Law or by GAAP.

 

	
5.3

	
During the Interim Period, to the extent permitted by Applicable Law and except with the prior written consent of the Purchaser (which shall not be unreasonably withheld or delayed, and in any event which shall be deemed to have been given if the Purchaser has not responded to the Vendor's written request for consent within 15 Business Days after receipt by the Purchaser) the Vendor shall procure that the Company shall not:

 

	
  

	
(a)

	
incur any monetary obligation or monetary liability in excess of £75,000 individually, except (i) taxes payable and trade payables in connection with purchase of goods and services, (ii) in connection with the payment of payroll expenditures of, payments with respect to pension plan contribution obligations made by, or payment of sums due under the Pension Trust Deed and applicable UK pensions legislation to the Defined Benefit Pension Scheme as they come due by, the Company, (iii) in connection with any payment or judicial deposits made in respect of pending litigation or other claims, (iv) capital expenditures for fixed assets which are permitted under paragraph (c) below, and (v) any other category of expenses agreed in writing by the Purchaser, in each case ·in the ordinary course of business;

 

 

  

23

  

 

 

	
  

	
(b)

	
establish any entity, acquire or sell any participation (including silent partnerships) in other entities or incurring the obligation to acquire or sell such participation;

 

	
  

	
(c)

	
undertake any capital expenditures for fixed assets not required by Applicable Law, except for ordinary course capital expenditures not exceeding £100,000 in aggregate;

 

	
  

	
(d)

	
issue, grant or sell any shares, options, rights, warrants or similar instruments with respect to any of the share capital of, or member interests (or other applicable equity interests) in the Company, or enter into any hedging or derivatives;

 

	
  

	
(e)

	
hire, fire or revoke the employment of any Employee whose annual gross compensation exceeds £60,000, except in the ordinary course of business or except if such firing or revocation is for cause;

 

	
  

	
(f)

	
enter into any new contract with a third party for services to be provided to the Company that will have any material impact after the Completion Date;

 

	
  

	
(g)

	
enter into any guarantee of obligations of any Affiliate of the Vendor (other than commercial guarantees by the Company of their own performance obligations to third parties or their businesses) or releasing (except after the payment In full of such obligations) any Affiliate of the Vendor from any obligations payable to the Company;

 

	
  

	
(h)

	
acquire any Person or business, or divest any portion of the business of the Company or enter into any binding agreement, letter of intent or similar arrangement with respect to the foregoing;

 

	
  

	
(i)

	
sell, transfer, lease or otherwise dispose of or acquire any assets exceeding £25,000 in aggregate, except in the ordinary course of business;

 

	
  

	
(j)

	
change, to the detriment of the Company, the terms of any contract that gives rise to Inter-Affiliate Payables or Inter-Affiliate Receivables from those that have been disclosed to the Purchaser prior to the Execution Date;

 

	
  

	
(k)

	
enter into any new contract that gives rise to Inter-Affiliate Payables or Inter-Affiliate Receivables;

 

	
  

	
(l)

	
amend the interest on any interest-bearing inter-company loans except on terms consistent with arm's length loan principles and in line with past practice reasonably applied by the Company and the Affiliates of the Vendor;

 

	
  

	
(m)

	
make any payment of any kind (including, but not limited to, any payment out of a member's account, special interest payment, capital reduction, distribution or payment of any consulting, advisory, management, service, directors, monitoring 

 

 

 

  

24

  

 

 

	
  

	
 

	
or other fee, bonus or payment of any kind) to the Vendor or any of its Affiliates (other than the Company), other than a payment for goods received or actual services rendered at arm's length terms and conditions;

 

	
  

	
(n)

	
assume or incur any Indebtedness with a duration longer than 12 months, or enter into any material indemnity arrangement or material guarantee;

 

	
  

	
(o)

	
make or change any Tax election, make a substantive amendment to any Tax return or enter into any agreement in respect of Taxes, including the settlement of any Tax controversy involving more than £10,000, adopt or change of any accounting method in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;

 

	
  

	
(p)

	
waive any amount owed to the Company by the Vendor or any of its Affiliates;

 

	
  

	
(q)

	
create or suffer to exist any Encumbrance over its assets in favour of the Vendor or any of Its Affiliates;

 

	
  

	
(r)

	
conduct its cash management customs and practices (including the collection of receivables and the payment of payables) other than the ordinary course of business consistent with ·past practice and with prudent cash management practices; or

 

	
  

	
(s)

	
enter into any binding agreement or commitment to do any of things referred to in (a) through (s) above, unless permitted to do so under the described limitation.

 

	
5.4

	
The Vendor and the Purchaser agree that:

 

	
  

	
(a)

	
after the Execution Date, a transition committee comprising representative of the Purchaser and representatives of the Vendor (in consultation with the Company's management) will be established which shall meet on a monthly basis or as otherwise required during the Interim Period in order to facilitate the implementation of the Transaction;

 

	
  

	
(b)

	
the transition committee referred to in paragraph (a) is not intended to take on any functions of management of the Company but will nonetheless provide a forum for the Parties to liaise and, where lawful to do so, coordinate on all appropriate and reasonable matters in order to:

 

	
  

	
(i)

	
provide the Purchaser with an update as to the status of the business of the Company during the Interim Period;

 

	
  

	
(ii)

	
facilitate compliance with the terms of this Agreement during the Interim Period;

 

	
  

	
(iii)

	
subject to Clause .4.1 0, develop a plan with respect to continuing the commercial relationships of the Company (including with respect to the 

 

 

 

  

25

  

 

 

	
  

	
 

	
Material Supply Arrangements) beyond the Completion Date and creating new commercial relationships (if required) and which plan shall include:

 

	
  

	
(A)

	
extending the respective terms of the existing GEMA EM Contracts; and

 

	
  

	
(B)

	
discussions between the Purchaser and the Vendor relating to the future supply by the Company to the Purchaser of certain GEMA Products for resale in countries where the Purchaser is, as of the Execution Date, under contract with Affiliates of the Vendor to sell Mobil-branded lubricants with a view to concluding such discussions and reaching agreement on such future supply by the Completion Date;

 

in each case subject to agreement on terms and conditions of the respective contract or contracts and provided that, other than using its reasonable endeavours to assist the Purchaser in developing such a plan and in entering into such discussions, the vendor shall have no obligation or liability to ensure that any such commercial relationships are commenced, extended or continued and makes no representation with respect thereto; and

 

	
  

	
(iv)

	
facilitate an orderly change of ownership at Completion: and

 

	
  

	
(c)

	
during the Interim Period, the Purchaser shall have the right to discuss the Company's business plan with the Company's management and the Vendor shall, upon three (3) days prior notice, provide the Purchaser with necessary access to the Company's management, provided that such Purchaser's right shall not unduly interfere with the business and operations of the Company.

 

	
  

	
(d)

	
the Vendor shall procure that subject to agreement on its terms and conditions the Lubricants Distribution Agreement is entered into by the parties thereto as soon possible following the Execution Date and, in any case, no later than at Completion.

 

	
5.5

	
During the period from the Execution Date to the earlier of (i) the Completion Date, and (ii) the date this Agreement is terminated in accordance with its terms,

 

	
  

	
(a)

	
the Vendor shall not and shall procure that the Company and their respective Affiliates, officers, directors, employees, agents, representatives, consultants, financial advisors, attorneys, accountants and other agents of the Company and the Vendor shall not take any action to, directly or indirectly, initiate or engage in discussions or negotiations with, or provide any information to, any Person, other than the Purchaser (and its· representatives), concerning any purchase of any equity securities of the Company or any merger, asset sale, recapitalisation or similar transaction involving the Company;

 

 

  

26

  

 

 

	
  

	
(b)

	
the Vendor shall not vote its equity securities in the Company in favour of any purchase of any share capital of the Company, or any merger, asset sale, recapitalisation or similar transaction involving the Company;

 

	
  

	
(c)

	
the Vendor shall notify the Purchaser as soon as practicable if any Person makes any proposal, offer, inquiry to, or contact with, the Vendor or the Company, as the case may be, with respect to paragraph (a) above and shall describe in reasonable detail the identity of any such Person and, the substance and material terms of any such contact and the material terms of any such proposal; and

 

	
  

	
(d)

	
the Vendor shall promptly enforce its rights (or procure that its applicable Affiliates to enforce their rights) under any confidentiality agreements specifically entered into with any Persons· (other than the Purchaser or its Affiliates) with respect to the potential purchase by such Person of the shares of the Company, including, to the extent permitted under such confidentiality agreements, by requesting that any such Persons return (or destroy, and certify such destruction) any confidential information regarding the Company that was provided to such Persons.

 

 

	
CLAUSE 6. 

	
WARRANTIES AND UNDERTAKINGS

 

	
6.1

	
The Vendor warrants that:

 

	
  

	
(a)

	
it (i) is a duly organised and validly existing limited liability company established under the laws of England, and (ii) has full corporate and legal power and authority to enter into and perform its obligations under this Agreement and any other agreement which it is required to enter into hereunder;

 

	
  

	
(b)

	
the Company (i) is a duly organised and validly existing limited liability company established under the laws of England, and (ii) has full corporate and legal power and authority to own its own assets and carry on its business as presently conducted;

 

	
  

	
(c)

	
it has full legal and beneficial ownership of the Sale Shares being sold and transferred to the Purchaser pursuant to this Agreement and that the Sale Shares constitute the whole of the issued, allotted and fully paid up share capital of the Company;

 

	
  

	
(d)

	
it shall be entitled at the Completion Date to transfer the full legal and beneficial ownership of the Sale Shares free of Encumbrances to the Purchaser, subject to the terms of this Agreement;

 

	
  

	
(e)

	
there is no agreement, arrangement or understanding to create or give any Encumbrance of any nature whatsoever over or in respect of the Sale Shares;

 

 

  

27

  

 

 

	
  

	
(f)

	
nobody has the right to call for the allotment, issue, sale or transfer of any share or loan capital of the Company under any option or other agreement (including conversion rights and rights of pre-emption);

 

	
  

	
(g)

	
the execution of this Agreement has been duly and validly approved by the directors of the Vendor and all necessary corporate consents have been, or will be, obtained to enable it to perform its obligations under this Agreement;

 

	
  

	
(h)

	
this Agreement, assuming the due execution and delivery hereof by the Purchaser, has been duly executed and delivered by the Vendor and constitutes a legally binding obligation of the Vendor, enforceable against the Vendor in accordance with its terms, except to the extent that such enforceability may be subject to applicable bankruptcy, insolvency, reorganisation, moratorium or similar laws affecting the enforcement of creditors' rights generally and to general equitable principles;

 

	
  

	
(i)

	
the execution, delivery and performance of this Agreement do not and will not result in a violation or breach of, conflict with, constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, payment or acceleration) under, or result in the creation of any Encumbrances on any of the properties or assets of the Vendor or the Company under:

 

	
  

	
(i)

	
any provision of the certificate of incorporation or by-laws or the comparable organisational documents of the Vendor or the Company; or

 

	
  

	
(ii)

	
any Applicable Law binding upon the Vendor or the Company or by which any of their respective properties or assets may be bound; and

 

	
  

	
(j)

	
The Vendor has timely filed, caused to be timely filed or shall cause to be timely filed on behalf of the Company (taking into account any applicable extension of time within which to file) with the appropriate taxing authorities all Tax returns that are required to be filed by, or with respect to, the Company on or prior to the Completion Date, and all such Tax returns are or will be true, correct and complete in all respects. All Taxes due and payable (i) with respect to taxable periods or portions thereof prior to the Accounts Date, (ii) with respect to taxable periods or portions thereof after the Accounts Date but prior to the Completion Date relating to any activity outside of the ordinary course of business and (iii) so far as the Vendor is aware, with respect to taxable periods or portions thereof after the Accounts Date but prior to the Completion Date relating to any activity in the ordinary course of business, in each case, with respect to the income, assets and operations of the Company, have been timely paid in full (other than corporation tax instalments payments falling under the Vendor's group payment arrangement which will be allocated by the Vendor to the Company following Completion). So far as the Vendor is aware, all other Taxes not yet due and payable by the Company for all taxable years or other taxable periods or portions 

 

 

  

28

  

 

 

	
  

	
 

	
thereof ending on or before the Accounts Date have been accrued in accordance with GAAP and have been identified on the Accounts prepared on a consistent basis in accordance with GAAP .

 

	
6.2

	
The Vendor further warrants that, so far as the Vendor is aware and except as disclosed to the Purchaser:

 

	
  

	
(a)

	
the Accounts have been prepared on a consistent basis in accordance with GAAP and

 

	
  

	
(i)

	
the balance sheet included in the Accounts fairly presents, in all material respects, the financial condition of the Company at the Accounts Date; and

 

	
  

	
(ii)

	
the profit and loss statement included in the Accounts fairly presents, in all material respects, the results of the operations and cash flows of the Company and the changes in its financial condition for the periods indicated;

 

	
  

	
(b)

	
since the Accounts Date, the Company has been managed and operated in the ordinary and usual course;

 

	
  

	
(c)

	
there is no event (other than general events of an economic, political, legal or regulatory nature that should reasonably be known to the Purchaser) that may reasonably be expected by the Vendor to have a material adverse economic impact on the situation of the Company during the Current Accounts Period; for the purposes of this Clause 6.2(c), an event shall be deemed to be material to the Company if it is reasonably expected by the Vendor to have an adverse impact on the Company exceeding £500,000;

 

	
  

	
(d)

	
the Company is not engaged in any material litigation (or series of related litigation) or other material proceedings or hearings which, if found against the Company, might reasonably be expected to have an adverse economic impact on the Company exceeding £500,000 in aggregate;

 

	
  

	
(e)

	
the Company does not have any claims, obligations, liabilities or indebtedness (whether absolute, accrued, contingent or otherwise) that would be required by GAAP to be set forth in the Accounts, except for (i) claims, obligations, liabilities or indebtedness set forth in the Accounts or specifically disclosed in the footnotes thereto, and (ii) accounts payable to trade creditors and accrued expenses incurred subsequent to the Accounts Date in the ordinary course of business consistent with past practice;

 

 

  

29

  

 

 

	
  

	
(f)

	
Schedule 6 sets forth a list of each of the 16 most significant contracts of the Company, measured by way of the aggregate annual amount of payments to or by the Company pursuant to each such contract (each contract a "Material Contract") and each Material Contract is in full force and effect and there exists no default or event of default by the Company or any other party to any such contract with respect to any material term or provision of any Material Contract;

 

	
  

	
(g)

	
the Company is in compliance in all material respects with all Applicable Laws;

 

	
  

	
(h)

	
there is no labour strike, dispute, slowdown or stoppage actually pending or threatened in writing against or involving the Company, no union is currently certified, and there is no union representation question and no union or other organisational activity existing or threatened with respect to the operations of the Company, and the Company has not experienced any material labour difficulty or work stoppage during the last three years, no arbitration proceeding arising out of or under any collective bargaining agreement is pending and no claim therefor has been asserted, and the Company is not subject to or bound by any collective bargaining or labour union agreement applicable to any Person employed by the Company and no collective bargaining or labour union agreement is currently being negotiated by the Company;

 

	
  

	
(i)

	
the Company (i) has not received notice of, or otherwise has not been the subject of, an audit or other examination of Taxes from the tax authorities of any nation, state or locality, (ii) has not received any written notices from any taxing authority relating to any issue which could affect the Tax liability of the Company, (iii) has not entered into (or has been requested to enter into) an agreement extending any statute of limitations relating to the payment or collection of Taxes of the Company that has not expired, and (iv) is not presently contesting the Tax liability of the Company before any court, tribunal or agency;

 

	
  

	
(j)

	
there are no tax sharing, allocation, indemnification or similar agreements in effect as between the Company or any predecessor or affiliate thereof and any other party (including Vendor and any predecessors or affiliates thereof) under which the Purchaser or the Company could be liable for any Taxes or other claims of any party after Completion;

 

	
  

	
(k)

	
the Company has not been included in any "consolidated," "unitary", "group" or "combined" Tax return with respect to Taxes for any taxable period for which the statute of limitations has not expired;

 

	
  

	
(l)

	
the Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after Completion as a result of any accounting method change or agreement with a taxing authority executed on or prior to the Completion Date;

 

 

  

30

  

 

 

	
  

	
(m)

	
The Gravesend Site constitutes the only parcel of real property that is owned, used, leased, licensed or otherwise occupied or controlled by the Company in the conduct of its business and operations. The Company is the sole legal and beneficial owner of the Gravesend Site, and has good and marketable title to the Gravesend Site;

 

	
  

	
(n)

	
Schedule 1 sets forth a complete list of the principal Benefit Plans of the Company. The Vendor has made available to the Purchaser all material details of the Benefit Plans. Each Benefit Plan has been operated in all material respects in compliance with its terms; and

 

	
  

	
(o)

	
all amounts due and payable by the Company into the Defined Benefit Pension Scheme have been fully paid by the Company in accordance with the schedule of contributions other than the Final Contribution.

 

	
6.3

	
The Purchaser agrees that:

 

	
  

	
(a)

	
no warranty, assurance or other commitment by the Vendor is made nor shall be implied in relation to the Sale Shares or this Agreement beyond the Warranties expressly provided in Clauses 6.1 and 6.2; and

 

	
  

	
(b)

	
neither the Vendor nor any of its Affiliates makes or has made any representation, warranty assurance or other commitment to the Purchaser or to any of its representatives with respect to any projections, forecasts, estimates, plans or budgets of future revenue, expenses or expenditures, future results of operations, future cash flows or future financial condition of the Company (or any component thereof).

 

	
6.4

	
The Warranties are given once at the Execution Date and are repeated at the Completion Date, other than the Warranties at Clauses 6.2(f) and 6.2(h) which will be given once at the Execution Date.

 

	
6.5

	
Subject to Clauses 6.9 and 6.10, the Warranties and all other provisions of this Agreement insofar as the same shall not have been performed at Completion shall not be extinguished or affected by Completion, except by a specific and duly authorised written waiver or release by the Purchaser. Save in the case of fraud, the Vendor undertakes to the Purchaser not to make or pursue any claim against the Company or its officers, employees or agents in connection with assisting the Vendor in giving the Warranties and/or entering into this Agreement.

 

	
6.6

	
Each of the Warranties is to be construed as a separate and independent Warranty and is not to be limited or restricted by reference to, or inference from, the provisions of any other Warranty or anything else, whether in this Agreement or otherwise.

 

	
6.7

	
For the purposes of Clause 6.2, a matter shall be treated as being within the awareness of the Vendor if it was within the actual awareness of those employees of the Vendor or its Affiliates listed in Schedule 4 after making such enquiry and investigation as could reasonably be expected given the confidentiality restrictions on each respective employee.

 

 

  

31

  

 

 

	
6.8

	
The maximum aggregate liability of the Vendor:

 

	
  

	
(a)

	
in respect of all claims under the Warranties set out in Clause 6.1 shall be an amount equal to 100% of the Purchase Price; and

 

	
  

	
(b)

	
in respect of all claims under the Warranties set out in Clause 6.2, shall be an amount equal to 10% of the Purchase Price.

 

	
6.9

	
The Purchaser agrees that no Warranty claim shall be made against the Vendor:

 

	
  

	
(a)

	
in respect of any amount less than £100,000;

 

	
  

	
(b)

	
unless the aggregate value of Warranty claims totals at least £1,000,000 in which case all such duly notified claims, including claims previously notified, shall accrue against and be recoverable from the Vendor; and

 

	
  

	
(c)

	
which has not been notified in reasonable detail by the Purchaser to the Vendor on or before the Warranty Termination Date.

 

	
6.10

	
If it is found, on or before the Warranty Termination Date, that any of the Warranties made by the Vendor in this Agreement were in any material respect untrue, misleading, incorrect or unfulfilled, then:

 

	
  

	
(a)

	
the Purchaser shall deliver to the Vendor a notice in writing seeking to recover from the Vendor the amount of damages suffered;

 

	
  

	
(b)

	
the notice referred to in paragraph (a) shall

 

	
  

	
(i)

	
describe in reasonable detail the underlying facts (including, but not limited to, the amount of reasonably anticipated damage) of the claim for breach of Warranty to the extent then known; and

 

	
  

	
(ii)

	
shall be delivered to the Vendor within 30 Business Days after (A) the Purchaser actually became aware of the claim for breach of Warranty, or (B) receipt by the Purchaser of a notice of Claim made or threatened to be made by any third party or authority which may give rise to a claim for breach of Warranty.

 

	
6.11

	
The Purchaser shall have no Claim against the Vendor for any indirect or consequential losses (other than losses in relation to the engagement of advisers) or lost profits suffered by the Purchaser or its Affiliates (including the Company) for breach of warranty or otherwise.

 

	
6.12

	
The Purchaser acknowledges and agrees that:

 

 

  

32

  

 

 

	
  

	
(a)

	
the Vendor has made available to the Purchaser, for purposes of due diligence, the Confidential Information Memorandum and the Due Diligence Materials;

 

	
  

	
(b)

	
it has made its own inquiry and investigation into, and, based thereon, has formed an independent judgment concerning the Company, its activities and the Properties; and

 

	
  

	
(c)

	
the due diligence investigation undertaken by the Purchaser and its experts (including disclosure of the Confidential Information Memorandum and the Due Diligence Materials) shall be taken into account in determining whether there has been any breach of any of the Warranties, to the extent information relating to such breach or inaccuracy was made available prior to signature of this Agreement in the Confidential Information Memorandum or the Due Diligence Materials.

 

	
6.13

	
The Purchaser undertakes that prior to Completion neither it nor any of its Affiliates will enter into any agreement relating to the resale of the Sale Shares or the sale by the Company of any of the Company’s assets.

 

	
6.14

	
The Purchaser warrants that:

 

	
  

	
(a)

	
it is a corporation duly organised and validly existing under the laws of the country of its incorporation as referred to in this Agreement, with power and authority to enter into and perform its obligations under this Agreement;

 

	
  

	
(b)

	
the execution of this Agreement has been duly and validly approved by the directors of the Purchaser and all necessary corporate consents have been, or will be, obtained to enable it to perform its obligations under this Agreement;

 

	
  

	
(c)

	
this Agreement, assuming the due execution and delivery hereof by the Vendor, has been duly executed and delivered by the Purchaser and constitutes a legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except to the extent that such enforceability may be subject to applicable bankruptcy, insolvency, reorganisation, moratorium or similar laws affecting the enforcement of creditors’ rights generally and to general equitable principles;

 

	
  

	
(d)

	
save for the consent(s) required under Clause 4.1, all necessary consents have been, or will be, obtained to enable it to perform its obligations under this Agreement; and

 

	
  

	
(e)

	
the choice of the law of England to govern this Agreement is valid and would be recognised and given effect by the courts of the country of its incorporation.

 

	
6.15

	
The Purchaser Warranties are given once at the Execution Date and are repeated at the Completion Date.

 

 

  

33

  

 

 

	
6.16

	
Notwithstanding any other provision of this Agreement, the Purchaser acknowledges and agrees:

 

	
  

	
(a)

	
that the Property has been used for industrial purposes including processes relating to the manufacture, storage, distribution and marketing of petroleum and petroleum based products and other chemicals, and that the soil and sub-soil of the Property and land and water adjacent thereto and drains, sewers, pipes, water courses and water table at, under or in the vicinity of the Property may have been contaminated by oil or other Hazardous Substances;

 

	
  

	
(b)

	
that the Vendor gives no warranty or representation as to the state and condition of the Property or facilities, or land or water adjacent thereto, or their suitability for any future use;

 

	
  

	
(c)

	
that any obligation (whensoever arising) to investigate or to carry out remedial work on the soil, sub-soil, drains, sewers, pipes, water courses and water table at, under or adjacent to the Property (including in respect of ground water or any property in the vicinity to which any contamination may have spread from the Property) may give rise to an Environmental Liability of the Company and that neither the Vendor nor its Affiliates nor any of their officers, directors, managers, employees, agents or insurers shall have any liability in respect of the same including under this Agreement;

 

	
  

	
(d)

	
not to submit, and to procure that there are not submitted by any of the Purchaser's Affiliates (now or in the future) or by any other Person, to the Vendor or its Affiliates or their directors, managers, employees, agents or insurers any Claims relating in any way to any investigation or to the state and condition of any of the Property and drains, sewers, pipes, water courses and water table at, under or adjacent to the Property (including in respect of ground water or any property in the vicinity to which any contamination may have spread from the Property) against the Vendor or any of the Affiliates of the Vendor, or any of their officers, directors, managers, employees, agents or insurers;

 

	
  

	
(e)

	
that from the Completion Date no insurance cover will be provided to the Purchaser or the Company under any of the ExxonMobil Policies;

 

	
  

	
(f)

	
no Claim shall be made by or through the Purchaser or by any of the Purchaser's Affiliates under any of the ExxonMobil Policies provided by or for the benefit of any of the Affiliates of the Vendor; and

 

	
  

	
(g)

	
that, to the extent permitted by Applicable Law, it will procure that the Company shall not use or convey any Property to be used for residential, hospital or other health care, playground, school or other educational or agricultural uses unless the Property has been remediated to (i) the standards required by Applicable Law for such use or, (ii) in the absence of such standards, generally accepted risk based standards.

 

 

  

34

  

 

 

	
6.17

	
The Vendor agrees to procure that a relevant Affiliate will take part in discussions with the Purchaser and the Company within 90 days of the Completion Date relating to the licencing by such Affiliate of certain GEMA Products with a view to permitting (on terms and conditions to be agreed between the relevant parties) the future supply by the Company to the Vendor and/or Affiliates of the Vendor and/or distributors of the Vendor and/or distributors of Affiliates of the Vendor of such GEMA Products for resale in certain countries where the Purchaser is not, as of the Execution Date, under contract with Affiliates of the Vendor to sell Mobil-branded lubricants.

 

 

	
CLAUSE 7. 

	
INDEMNITY

 

	
7.1

	
Subject to the provisions of Clause 14.1 and the following provisions of this Clause 7, the Purchaser shall indemnify, keep indemnified and hold harmless the Vendor, the Vendor's Affiliates and the officers, directors, managers and employees of the Vendor and its Affiliates (together, the “Indemnitees”) against any claim, liability or loss of whatever nature (including any legal costs relating thereto) arising directly or indirectly out of the Company’s ownership or operation of its businesses or of any of its assets and received or arising prior to, on or after the Completion Date.

 

	
7.2

	
Without prejudice to the generality of the provisions of Clause 7.1, the Purchaser shall indemnify, keep indemnified and hold harmless the Indemnitees from and against all Environmental Liabilities (including any legal costs relating thereto) arising directly or indirectly from, or in connection with, or as a result of any of the following:

 

	
  

	
(a)

	
any Environmental Matter or any Environmental Law relating in any way to the Property, or the activities of the Company, or any act or omission, neglect or default (whether before or after the date of this Agreement) of the Company, the Purchaser or any of the Purchaser's Affiliates relating to the Property, or any officer, director, manager, employee or agent thereof, or any person for whom such company is vicariously liable;

 

	
  

	
(b)

	
the carrying out, or failure to carry out of any investigation or remedial works in relation to Environmental Matters whether before or after the Execution Date; and

 

	
  

	
(c)

	
any claim made by or through the Purchaser, or the Company or any person subrogated to the Purchaser's rights, including its insurer, against any of the ExxonMobil Policies provided by or for the benefit of any of the Vendor and its Affiliates, including any claims for reinsurance, retrospective premium payments or prospective premium increases.

 

	
7.3

	
The Vendor shall inform the Purchaser in writing of any claim (together with full particulars in relation to each such claim, and related information as the Purchaser may reasonably request) by any third party which comes to the notice of the Vendor, or any 

 

 

 

  

35

  

 

 

	
 

	
Affiliate of the Vendor, whereby it appears that the Purchaser is or might reasonably be considered to become liable under an Indemnity Claim (a “Third Party Claim”) within thirty days from the day on which such claim comes to the notice of the Vendor or Affiliate of the Vendor (as the case may be).

 

	
7.4

	
The Purchaser shall have conduct in relation to the legal defence of any Third Party Claim, except in circumstances where the Vendor reasonably believes that its interests or reputation is or could be compromised by such Third Party Claim in which case the Vendor shall have sole conduct in relation to such legal defence.

 

	
7.5

	
No indemnity given by the Purchaser or its Affiliates to the Indemnitees under this Agreement shall become effective unless and until Completion occurs.

 

	
7.6 

	
The Indemnitees shall not be entitled to bring an Indemnity Claim:

 

	
  

	
(a)

	
which arises, in whole or in part, or is increased as a result of any fraudulent act or omission or fraudulent misrepresentation by the Vendor or any of its Affiliates, or by the officers, directors or executive, managerial, professional or technical employees of any of them; or

 

	
  

	
(b)

	
with respect to breaches of Warranties by the Vendor for which notice is given by the Purchaser on or before the Warranty Termination Date.

 

 

	
CLAUSE 8. 

	
TRADEMARKS

 

	
8.1

	
The Purchaser shall procure that the Company shall debrand and phase out the use of any ExxonMobil Trademarks as soon as practicable after the Completion Date and shall in any event ensure that no ExxonMobil Trademark is used by the Company or any of its agents, customers, distributors or other resellers after a period of 30 days from the Completion Date, other than in relation to products sold or distributed under:

 

	 	
(i) 

	
the Lubricants Distribution Agreement; and

 

	 	
(ii) 

	
the GEMA EM Contracts,

 

for each of which the trademark provisions in those contracts shall continue to apply.

 

	
8.2

	
The Purchaser agrees that all ExxonMobil Trademarks will remain the property of the Vendor and/or the Vendor's Affiliates.

 

	
8.3

	
The Purchaser shall indemnify, keep indemnified and hold harmless the Vendor and its Affiliates against any losses, costs, damages and expenses they incur or suffer as a result of the use of the ExxonMobil Trademarks by the Company after Completion.

 

  

36

  

 

 

	
CLAUSE 9. 

	
PERSONNEL

 

	
9.1

	
The Parties recognise, as between them, that the change in ownership of the Company shall not release the Company from:

 

	
  

	
(a)

	
any of its obligations in relation to the continued employment of its Employees (including any Employees of the Company on secondment to another entity on the Completion Date), on their current terms and conditions; and

 

	
  

	
(b)

	
honouring its obligations under or in respect of any existing Benefit Plans,(with the exception of the Defined Benefit Pension Scheme) including obligations in relation to Employees and former Employees.

 

	
9.2 

	
The Purchaser undertakes:

 

	 	
(a) 

	
to ensure that:

 

	
  

	
(i)

	
all Employees will be treated in a professional and fair manner and that the employment terms and conditions (excluding pension benefits, in relation to which .the Purchaser will comply with paragraph 9.2(b)) of all Employees will be no less favourable than the employment terms and conditions of such Employees as at the Execution Date for at least the Initial Period; and

 

	
  

	
(ii)

	
the Company continues to apply in a professional and fair manner all employment policies, guidelines and programmes (including bonus schemes) which .apply to Employees as at the Execution Date and that any discretion reserved to the Company, in such policies, guidelines and programmes will be exercised in a manner consistent with the previous practice of the Company, for at least the Initial Period;

 

	
  

	
(b)

	
to offer to all Employees with effect on and from Completion membership of a scheme which is a registered pension scheme for the purposes of Chapter 2 of Part 4 of the Finance Act 2004. The rates of the Company's and Employees’ contributions to such scheme shall be determined by the Purchaser in accordance with its reasonable assessment of market practice, provided that:

 

	
  

	
(i)

	
the Company's aggregate contributions for each Employee during the Initial Period shall be no less than 15% of the relevant Employee's annual pensionable pay (including without limitation base pay and, where applicable, shift allowance, overtime and sales commission), subject to appropriate pro rata reduction where such Employee leaves service during the Initial Period; and

 

 

  

37

  

 

 

	
  

	
(ii)

	
the maximum monthly contribution that each Employee shall be required to make during the Initial Period shall be 6.5% of his or her monthly pensionable pay (although, for the avoidance of doubt, contributions in excess of 6.5% may be made by each Employee on a voluntary basis, but this shall not affect the contribution of 15% to be made by the Company);

 

	
  

	
(c)

	
in case during the Initial Period the Purchaser will need to implement a selection process for the purposes of redundancy, to ensure that Employees will be given no less favourable an opportunity in respect of and in comparison to any employees of the Purchaser and its Affiliates in the United Kingdom; and:

 

	
  

	
(d)

	
in case the Purchaser enters into any sale agreement(s) during the Initial Period with a third party, or parties, for the sale of some or all of the Property, business and/or the assets of the Company, (each a “Relevant Sale Agreement”) and such Relevant Sale Agreement would at its completion constitute a transfer of an undertaking to a third party either by virtue of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 or otherwise, to ensure that the Relevant Sale Agreement contains terms under which the relevant third party makes the· same undertakings to the Purchaser as are made by the Purchaser to the Vendor under this Clause 9.2 at least for the remainder of the Initial Period. In the case of Clause 9.2(b) only, and in the absence of an undertaking of the relevant third party to make payments pursuant to Clause 9.2(b)(i), the Purchaser may make a payment to the relevant defined contribution scheme prior to the completion of the Relevant Sale Agreement of an amount equivalent to the value of the payments owed under Clause 9.2(b)(i) for the remainder of the Initial Period.

 

	
9.3

	
Subject to Clause 9.1(b), the Purchaser undertakes to cause the Company to make payments when due arising from and after Completion for Benefits and for contributions due under Clause 9.2(b)(i) in respect of Employees.

 

	
9.4

	
The Purchaser undertakes to communicate its commitments relating to Clauses 9.1, 9.2 and 9.3 through a letter to all Employees no later than forty-five (45) days following signature of this Agreement, such letter to be approved in advance by Vendor.

 

	
9.5

	
The Purchaser acknowledges and agrees that the secondments of any employees of the Vendor or its Affiliates (other than the Company) who are at any time prior to the Completion Date on secondment to the Company shall cease at or before Completion.

 

	
9.6

	
The Purchaser undertakes to indemnify and keep the Vendor and its Affiliates indemnified from and against any claim, liability or loss of whatever nature (including reasonable and duly documented legal costs relating thereto) arising out of or in connection with any Benefits (other than in relation to the Defined Benefit Pension Scheme).

 

 

  

38

  

 

 

	
9.7

	
The Vendor undertakes to indemnify and keep the Purchaser and its Affiliates indemnified from and against any claim, liability or loss of whatever nature (including reasonable and duly documented legal costs relation thereto) arising out of or in connection with the Defined Benefit Pension Scheme, including without limitation any liability arising under any financial support direction or contribution notice issued by the Pensions Regulator.

 

	
9.8

	
The Purchaser shall inform the Vendor in writing of any claim (together with full particulars in relation to each such claim, and related information as the Vendor may reasonably request) by any third party which comes to the notice of the Purchaser, or any Affiliate of the Purchaser, whereby it appears that the Vendor is or might reasonably be considered to become liable under Clause 9.7 (a "Pension Claim") within 15 Business Days on and from the day on which such claim comes to the notice of the Purchaser or Affiliate of the Purchaser (as the case may be).

 

	
9.9

	
The Vendor shall have sole conduct in relation to the legal defence of any Pension Claim, except in circumstances where the Purchaser reasonably believes that its interests or reputation is or could be compromised by such Pension Claim in which case the Vendor shall use all reasonable endeavours to ensure the Purchaser's concerns are taken into account in relation to such legal defence.

 

	
9.10

	
Should the Purchaser or any of the Purchaser's Affiliates be required to announce the contemplated sale by the Vendor and purchase by the Purchaser of the Sale Shares (as contemplated in this Agreement) to their employees or employees' representative bodies, then the Purchaser shall agree with the Vendor on the timing of such announcement before such announcement is made, and take into account the Vendor's reasonable requests in relation to the form and content of such announcement.

 

	
9.11

	
For the avoidance of doubt, nothing in this Agreement shall restrict the Company before the Completion Date in informing or communicating with its employees regarding the change in the direct or indirect ownership of the Company as it shall think fit; provided, however, that any formal written communication with all employees shall be consulted with the transition committee.

 

	
9.12

	
The Purchaser agrees that, unless this Agreement is terminated pursuant to Clause 4.13, it shall not, and shall ensure that the Company shall not, for a period of three years from the Completion Date offer a contract of employment or otherwise attempt to recruit any employee of the Vendor or an Affiliate of the Vendor except with the express written permission of the Vendor.

 

	
9.13

	
The Vendor agrees that, unless this Agreement is terminated pursuant to Clause 4.13, it shall not, and shall ensure that its Affiliates shall not, for a period of three years from the Completion Date offer a contract of employment or otherwise attempt to recruit any employee of the Company except with the express written permission of the Purchaser.

 

 

  

39

  

 

 

	
CLAUSE 10.

	
INSURANCE - EXXONMOBIL POLICIES

 

	
10.1

	
The Vendor and the Purchaser acknowledge that ExxonMobil maintains a worldwide programme of property and liability insurance coverage for itself and its Affiliates, including the Vendor and the Company. This programme has been designed to achieve a coordinated risk management package for the entire ExxonMobil Group. The programme consists primarily of four types of insurance:

 

	 	
(a) 

	
policies issued to Exxon Mobil Corporation or its predecessors;

 

	
  

	
(b)

	
policies issued directly to Affiliates by one of ExxonMobil's wholly-owned insurance companies, including without limitation Ancon Insurance Company, Inc., and Bluefield International Insurance Inc., (hereinafter collectively referred to as the "ExxonMobil Captive Insurers");

 

	
  

	
(c)

	
policies issued to Affiliates by locally admitted insurers which are reinsured by one of the ExxonMobil Captive Insurers; and

 

	
  

	
(d)

	
policies issued to Affiliates by locally admitted insurers which are self-insured by way of pre-funding premiums paid by the relevant Affiliate.

 

All of the insurance policies through which the worldwide programme of coverage is presently or has been previously provided by or to Exxon Mobil Corporation, its predecessors or Affiliates are herein referred to collectively as the "ExxonMobil Policies".

 

	
10.2

	
It is understood and agreed by the Purchaser that from and after the Completion Date:

 

	
  

	
(a)

	
no insurance coverage shall be provided under the ExxonMobil Policies to the Purchaser or its Affiliates, including the Company;

 

	
  

	
(b)

	
any and all policies insured or reinsured by any of the ExxonMobil Captive Insurers which, but for this provision would have insured the Company shall be deemed terminated, commuted and cancelled as to the Company;

 

	
  

	
(c)

	
any pre-paid premiums for insurance coverage under the ExxonMobil Policies from and after the Completion Date shall be treated pro-rata as Inter-Affiliate Receivables;

 

	
  

	
(d)

	
any unpaid premiums for insurance coverage provided to the Company until the Completion Date under the ExxonMobil Policies shall be treated pro-rata as Inter-Affiliate Payables; and

 

	
  

	
(e)

	
no claims regarding any matter whatsoever, whether or not arising from events occurring prior to the Completion Date, shall be made by the Purchaser or the Company against or with respect to any of the ExxonMobil Policies regardless of their date of issuance.

 

 

  

40

  

 

 

	
10.3

	
The Purchaser shall indemnify and defend the Vendor and its Affiliates against, and shall hold them harmless from, any claim made after the Completion Date against any of the ExxonMobil Policies by the Purchaser, the Company or any Person claiming to be subrogated to the Purchaser's or the Company's rights, including all costs and expenses (including attorneys' fees) related thereto. Such indemnity shall cover, without limitation, any claim by an insurer for reinsurance, retrospective premium payments or prospective premium increases attributable to any such claim.

 

	
10.4

	
Notwithstanding any provision of this Agreement to the contrary, the Purchaser’s insurance policy or policies shall: (a) cover the Vendor and Affiliates of the Vendor as additional insureds for liabilities arising from or assumed under this Agreement; and (b) be primary as to all other policies (including any deductibles or self-insured retentions). It is further agreed that the Purchaser and its insurer(s) providing coverage shall waive an rights of subrogation and contribution against the Vendor and Affiliates of the Vendor to the extent liabilities are assumed by the .Purchaser.

 

 

	
CLAUSE 11.

	
CONFIDENTIAL INFORMATION AND VENDOR'S TECHNICAL INFORMATION

 

	
11.1

	
The Purchaser shall treat this Agreement as Confidential Information as defined in the Confidentiality Agreement and shall not disclose its existence or its contents to any third party (except for Affiliates of the Purchaser and its or their respective professional advisers and auditors pursuant to the terms of the Confidentiality Agreement).

 

	
11.2

	
Subject to Clauses 4.16 and 9.10, no press release, announcement or statement about this Agreement or the subject matter of, or any matter referred to in, this Agreement shall be made or issued before, on or after the Completion Date by or on behalf of either Party without the prior written approval of the other Party, provided that:

 

	
  

	
(a)

	
nothing shall restrict the making by either Party (even in the absence of agreement by the other Party) of any statement or disclosure which may be required by Applicable Law, regulations (including regulations of a relevant stock exchange) and judicial decisions; and

 

	
  

	
(b)

	
in any event, the Party making such announcement under this Clause 11.2 shall use all commercially reasonable endeavours to agree the form of it with the other Party prior to its release.

 

	
11.3

	
The Vendor will withdraw from the Company by the Completion Date all Excluded Information.

 

	
11.4

	
The Purchaser shall, and shall procure that the Company shall, hold in confidence, and use only in connection with the Company’s business all of the Vendor's Technical Information.

 

 

  

41

  

 

 

	
11.5

	
The Purchaser shall, and shall procure that from the Completion Date the Company shall, hold in confidence, and not use for any purpose any and all technical information (other than the Vendor's Technical Information) in the possession of the Company as of Completion Date or received from the Vendor or Affiliates of the Vendor prior to Completion Date.

 

	
11.6

	
Nothing in this Clause 11 shall prevent the Company, subject to Clause 18 (Export Controls and Trade Sanctions):

 

	
  

	
(a)

	
from disclosing so much of the Vendor's Technical Information as is necessary to their auditors in connection with proper audit of the accounts of the Company, or

 

	
  

	
(b)

	
from disclosing so much of the Vendor's Technical Information as is necessary to enable their customers to use the Company’s products; or

 

	
  

	
(c)

	
from disclosing so much of the Vendor's Technical Information as is necessary under Applicable Law.

 

	
11.7

	
Nothing in this Clause 11 shall prevent the Company, subject to Clause 18 (Export Controls and Trade Sanctions), from disclosing so much of the Vendor's Technical Information as is necessary to permit the sale of shares or assets of the Company to potential purchaser(s) provided that such potential purchaser(s) are obligated in writing:

 

	
  

	
(a)

	
to hold such Vendor's Technical Information in confidence under secrecy obligations no less stringent than the ones hereunder;  and

 

	
  

	
(b)

	
not to use such Vendor's Technical Information for any other purposes than the contemplated purchasing of shares or assets of the Company.

 

	
11.8

	
Subject to Clause 6.13, nothing in this Clause 11 shall prevent the Company, subject to Clause 18, from disclosing to their contractors and/or materials or component suppliers, so much of the Vendor's Technical Information as is necessary to enable the Company to continue its business operations as existing at Completion Date, provided that such contractors and/or material or component suppliers are obligated to the Company in writing:

 

	
  

	
(a)

	
to hold such Vendor's Technical Information in confidence under secrecy obligations no less stringent than the ones hereunder; and

 

	
  

	
(b)

	
not to use such Vendor's Technical Information except as authorised by the Company.

 

	
  

	
It is not intended by the foregoing that the Company obtain written commitments from materials or component suppliers in connection with standard items, e.g. equipment, or where only duty specifications are disclosed to said materials or components suppliers by the Company.

 

  

42

  

 

 

	
CLAUSE 12.

	
SOFTWARE

 

	
12.1

	
The Purchaser shall be responsible for ensuring that it and the Company each have in place licences for software on all workstations, laptops and servers owned or used by the Company from the Completion Date.

 

	
12.2

	
Where the basic operating licences for software on the Company’s workstations, laptops and servers are held in the name of the Vendor or an Affiliate of the Vendor which confers usage rights on the Company, the Vendor will notify the Purchaser of such licence agreements prior to the Completion Date and usage rights will be withdrawn by the Vendor as of the Completion Date with the Purchaser being responsible to provide new licences to ensure licence compliance following the Completion Date unless otherwise agreed.

 

	
12.3

	
Without prejudice to the generality of Clauses 12.1 and 12.2, the Purchaser acknowledges and agrees that the operating licence for SAP software is held in the name of the Vendor or an Affiliate of the Vendor and the Purchaser shall be responsible for providing a SAP licence in respect of all of the Company’s relevant SAP users from the Completion Date.

 

 

	
CLAUSE 13.

	
PURCHASE PRICE ADJUSTMENTS

 

	
13.1

	
The Purchase Price:

 

	
  

	
(a)

	
shall be decreased by the amount of the Down payment; and

 

	
  

	
(b)

	
shall be decreased by an amount equal to all Special Contributions (net of corporation tax relief thereon) made by the Company into the Defined Benefit Pension Scheme .in the Current Accounts Period.

 

	
13.2

	
If a dividend, special interest payment, profit remittance or capital reduction in respect of the Sale Shares is:

 

	
  

	
(a)

	
declared and paid during the Current Accounts Period, then the Purchase Price shall be reduced by the same amount of the dividend, special interest payment, profit remittance or capital reduction; and

 

	
  

	
(b)

	
declared but not paid by the Completion Date, it will be treated as an Inter-Affiliate Payable and dealt with in accordance with Clauses 2.2, 3.4 and 3.5 and the Purchase Price shall be reduced by the same amount of the dividend, special interest payment, profit remittance or capital reduction.

 

	
13.3

	
If the Vendor or any of its Affiliates should during the Current Accounts Period make a cash capital contribution which increases the net worth of the Company then the amount of the Purchase Price shall be increased by the amount of such cash capital contribution, provided that the Vendor shall on or prior to the Completion Date produce evidence to the Purchaser by way of verification of the payment of any such capital contribution.

 

 

  

43

  

 

 

 

	
CLAUSE 14.

	
TAXES AND REGISTRATION AND OTHER DUTIES

 

	
14.1

	
Subject to Clause 6.1(j), and Clause 6.2(i) to (l), the Purchaser undertakes to indemnify and keep Indemnified the Vendor (for itself and as trustee for each of the Affiliates of the Vendor and the officers, directors, managers and employees of the Vendor and of Affiliates of the Vendor) in so far as Taxes incident on legal entities are concerned, from and against all Tax Liabilities due from or in respect of the Company.

 

	
14.2

	
All sums payable by the Vendor or its Affiliates under this Agreement shall be net of any withholding Taxes. If the Vendor or its Affiliates are required by any Applicable Law to deduct Taxes from or in respect of any sum payable under this Agreement to the Company or the Purchaser, the amount paid shall be increased to the extent necessary to ensure that, after making all required deductions, the Company or the Purchaser receives an amount equal to the sum that would have been received had no such deductions been required.  Should the Vendor or its Affiliates be required by Applicable Law to make such payments, such amounts shall be treated as having been paid to the Person in respect of which such deduction and withholding was made, and the Vendor or its Affiliates shall then timely pay the amount due to the relevant tax authority. The Vendor or its Affiliates shall deliver to the Purchaser a certified copy of the tax documents attesting to the collection of such withholding Tax within a 30 day period following the payment date. Should the Purchaser or the Company be held liable for a payment due by the Vendor or its Affiliates pursuant to this Clause 14.2, the Vendor shall defend, hold harmless and indemnify the Purchaser or the Company.

 

	
14.3

	
All sums payable by the Purchaser or the Company under this Agreement shall be net of any withholding Taxes.  If the Purchaser or the Company are required by any Applicable Law to deduct Taxes from or in respect of any sum payable under this Agreement to the Vendor or Affiliates of the Vendor, the amount paid shall be increased to the extent necessary to ensure that, after making all required deductions, the Vendor or Affiliates of the Vendor receive an amount equal to the sum that would have been received had no such deductions been required.  Should the Purchaser or the Company be required by Applicable Law to make such payments, such amounts shall be treated as having been paid to the Person in respect of which such deduction and withholding was made, and the Purchaser or the Company shall then pay the amount due to the relevant tax authority. The Purchaser or the Company shall deliver to the Vendor or Affiliates of the Vendor a certified copy of the tax documents attesting to the collection of such withholding Tax within a 30 day period following the payment date. Should the Vendor or Affiliates of the Vendor be held liable for a payment due by the Purchaser or the Company pursuant to this Clause 14.3, the Purchaser shall defend, hold harmless and indemnify the Vendor or Affiliates of the Vendor.

 

 

 

  

44

  

 

	
14.4

	
The Purchaser agrees that all transactions-related registration taxes and stamp duties and other transfer taxes shall be payable or otherwise borne by the Purchaser.

 

	
14.5

	
The Purchaser acknowledges and agrees that the Vendor and certain Affiliates of the Vendor may require access after the Completion Date to documents of the Company for the purpose of responding to official demands made by authorities of the United States of America or of the United Kingdom.  For the purpose of ensuring that the Vendor and Affiliates of the Vendor can satisfy those requirements, the Purchaser undertakes, upon written request of the Vendor, at the Vendor's cost and expense (other than immaterial internal administrative or service costs) to make available to the Vendor and Affiliates of the Vendor those data and or documents held by the Company at the Completion Date. Nothing in this provision shall prevent the Company from operating in accordance with any policy or practice of the Company with regards to the retention of documents, except that financial records of the Company pertaining to the period from 1 January 2001 up to the Completion Date shall be retained for a minimum period of five years following the Completion Date.

 

	
14.6

	
The assistance obligations set forth in Clause 14.5 shall be timely fulfilled by the Purchaser but should not cause disruption to its normal business activities.

 

 

	
CLAUSE 15.

	
COSTS

 

Except as expressly provided otherwise herein, each Party shall pay its own costs in relation to the negotiations leading up to the sale and purchase of the Sale Shares, and to the preparation, signing and carrying into effect of this Agreement.

 

 

	
CLAUSE 16. 

	
APPLICABLE LAW AND DISPUTE RESOLUTION

 

	
16.1

	
This Agreement (together with all documents to be entered into pursuant to it which are not expressed to be governed by another law) shall be governed by, and construed and take effect in accordance with the laws of England. The UN Convention on the International Sale of Goods shall not be applicable.

 

	
16.2

	
Any dispute, controversy or claim arising out of or relating to this Agreement, including but not limited to its performance or the breach, termination or invalidity thereof as well as the pre- and post- contractual obligations, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators, even if the dispute, controversy or claim is based on other legal grounds than the Agreement.

 

	
16.3 

	
The seat of arbitration shall be London, the language of the arbitration shall be English.

 

 

  

45

  

 

 

	
16.4

	
It is not incompatible with this arbitration agreement for a court to grant, before or during arbitral proceedings, an interim measure of protection relating to the subject-matter of the arbitration upon request of a Party.

 

 

	
CLAUSE 17. 

	
BUSINESS ETHICS

 

	
17.1 

	
For purposes of this Clause 17, "Official" means and includes:

 

	
  

	
(a)

	
any officer or employee of any government or any department, agency or instrumentality (i.e., any legal entity controlled by a government) thereof, or any person acting in an official capacity on behalf of any such government, department, agency or instrumentality;

 

	 	
(b) 

	
any political party;

 

	 	
(c) 

	
any official of a political party;

 

	 	
(d) 

	
any candidate for political office; and/or

 

	
  

	
(e)

	
any officer or employee of a public international organisation (including without limitation, the United Nations, IMF, World Bank).

 

	
17.2

	
Each of the Parties represents that it has not offered, paid, promised to pay, authorised the payment of, or transferred, money or anything of value to an Official to secure any improper advantage or benefit in relation to the matters contemplated by this Agreement, either directly or indirectly through a third party.

 

	
17.3

	
In recognition of the principles of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions which entered into force on 15 February 1999, the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act 2010, each of the Parties further represents and agrees that it will not, directly or indirectly, in connection with this Agreement or its performance thereunder, offer, pay, promise to pay, or authorize the giving of money or anything of value to an Official, or to any other person while knowing or being to the knowledge of the Vendor of a high probability that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly to an Official, for the purpose of influencing the act, decision or omission of such Official with regard to any matters related to this Agreement.

 

	
17.4

	
The Purchaser represents that, except as it has already disclosed to the Vendor, no Official or close relative of an Official has any direct or indirect ownership or other legal or beneficial interest in the Purchaser or any of its Affiliates (other than through ownership of publicly traded securities that is not sufficient to constitute a controlling interest), or in the contractual relationship established by this Agreement, and that no such Official serves as an officer, director, manager or employee of the Purchaser.  This 

 

 

  

46

  

 

 

	
 

	
representation shall be continuing throughout until the Completion Date.  The Purchaser agrees to notify the Vendor promptly and in writing of any changes between now and the Completion Date in its officers, directors, managers or employees or in the direct or indirect ownership in it or its Affiliates that would be inconsistent with the above representations.

 

	
17.5

	
The Vendor and the Purchaser agree that should the Vendor notify the Purchaser of any concern that there has been a breach by the Purchaser of the provisions of this Clause 17, the Purchaser shall co-operate in good faith with the Vendor in determining whether such a breach has occurred and if the Vendor determines in its reasonable opinion that the breach is a material breach it may elect to treat the breach as a repudiation of this Agreement by the Purchaser.

 

 

	
CLAUSE 18. 

	
EXPORT CONTROLS AND TRADE SANCTIONS

 

	
18.1

	
The Purchaser acknowledges that technology, software, services, and commodities provided to the Company by the Vendor or its Affiliates (or products or technology derived from them) may be subject to US laws, regulations or requirements restricting their export, re-export, transfer or release to certain entities or destinations, including to persons within the Company, the Purchaser or its Affiliates or to unrelated third parties.

 

	
18.2

	
To the extent applicable to the Company or the Purchaser or the subject technology, software, services, commodities or any product that the Company or the Purchaser creates with US-origin content that is supplied by the Vendor or its Affiliates, the Purchaser shall act, and shall cause the Company to act, in accordance with all US export control and economic sanctions laws, regulations, and requirements.

 

	
18.3

	
The Purchaser and its Affiliates shall refrain from acting in a manner that would have the effect of causing the Vendor or its Affiliates to violate any such laws, regulations or requirements.

 

	
18.4

	
The Vendor and the Purchaser agree that, should the Vendor notify the Purchaser that the Vendor has knowledge or reason to believe that the Purchaser has acted or intends to act in a manner in connection with the Transaction that could have the effect of causing the Vendor or its Affiliates to be in violation of US export controls or trade sanctions laws, regulations or requirements, the Purchaser shall co-operate in good faith with the Vendor in determining whether such a breach has occurred or is planned to occur and if the Vendor determines in its reasonable opinion that the breach is a material breach it may elect to treat the breach as a repudiation of this Agreement by the Purchaser.

 

  

47

  

 

 

	
CLAUSE 19. 

	
ENTIRE AGREEMENT

 

	
19.1

	
This Agreement (together with any documents referred to herein) contains the entire agreement and understanding of the Parties and supersedes all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter of this Agreement (and any such document).

 

19.2      Each of the Parties acknowledges and agrees that:

 

	
  

	
(a)

	
it does not enter into this Agreement and the documents referred to herein on the basis of and does not rely, and has not relied, upon any statement or representation or warranty or other provision (in any case whether oral, written, express or implied) made, given or agreed to by any Person (whether a Party to this Agreement or not) except those expressly set out or referred to in this Agreement and the documents referred to herein, and the only remedy or remedies available in respect of any misrepresentation or untrue statement made to it shall be a claim for breach of contract under this Agreement;  and

 

	
  

	
(b)

	
this Clause 19.2 shall not apply to any statement, representation or warranty made fraudulently or to any provision of this Agreement which was induced by, or otherwise entered into as a result of, fraud, for which the remedies shall be all those available under the law governing this Agreement.

 

 

	
CLAUSE 20. 

	
ASSIGNMENT

 

Except with the prior written consent of the other Party, neither Party may assign this Agreement or any benefit, interest, light or obligation which arises under, out of, or in connection with this Agreement, provided, however, the Vendor may assign any or all of its rights and obligations under this Agreement to any Affiliate of the Vendor without the consent of the Purchaser, provided that the Vendor shall remain secondarily liable for the performance of the obligations of any such assignee hereunder.

 

 

	
CLAUSE 21.

	
TERMINATION

 

Either Party may terminate this Agreement at any time after the occurrence of any material breach by the other Party of any of its material undertakings or covenants contained in this Agreement, provided:

 

	
21.1

	
such breach is not curable or, if curable, is not cured by earlier of (i) the 30th day after written notice thereof is given by the other Party, and (ii) the day that is five Business Days prior to the Longstop Date; and

 

 

  

48

  

 

 

	
21.2

	
the Party seeking to terminate this Agreement is not itself in material breach of this Agreement.

 

 

	
CLAUSE 22.

	
NOTIFICATIONS

 

	
22.1

	
Any notification required or permitted to be given under this Agreement (a “Notice”) shall be given in writing and under appropriate confidential cover.

 

	
22.2

	
The Notice shall be delivered personally or sent by pre-paid registered airmail, return receipt requested, or by fax to the Party due to receive such notice at the following address (or at such other address as may be notified in writing by the relevant Party to the other):

 

	
  

	
The Vendor:

 

	 	
Address: 

	
ExxonMobil House

Ermyn Way

Leatherhead

Surrey KT22 8UX

	 	
Telephone: 

	
+44 (0)1372 225352

	 	
Fax:· 

	
+44 (0)1372 222560

Addressed to the Company Secretary

plus an additional copy to:

 

Exxon Mobil Corporation

Attention: Vice President

Downstream Business Development and Portfolio Management

3225 Gallows Road

Fairfax, Virginia 22037-0001

USA

Fax: +1 703 846 4723

 

The Purchaser:

 

	 	
Address: 

	
Avenida Juscelino Kubitscheck, 1327, 4° andar,

City of Sao Paulo, State of Sao Paulo,

	 	
Telephone: 

	
+55 11 3897 9797

	 	
Fax: 

	
+55 11 38979799

 

Addressed to the Legal Department/M&A Department

 

 

  

49

  

 

 

	
22.3

	
Any notice delivered personally shall be deemed to be received when delivered. Any notice sent by pre-paid express courier such as DHL or Federal Express shall be deemed (in the absence of evidence of earlier receipt) to be received 96 hours after dispatch. In proving the time of dispatch it shall be sufficient to show that the envelope containing such notice was properly addressed, pre-paid and delivered to the express courier.  Any notice by fax shall be deemed to be received at the moment it is sent, if there is hard copy confirmation by the fax machine that the fax was transmitted satisfactorily and provided that the sender can show that it has sought and received confirmation (by electronic mail or by fax) that the original fax notice has been received and printed out in full at the correct destination under Clause 22.2).

 

 

	
CLAUSE 23.

	
VARIATIONS

 

No variation of this Agreement, including any variation of this Clause 23, shall be effective unless made in writing and signed by or on behalf of each Party.

 

 

	
CLAUSE 24.

	
FURTHER ASSURANCE

 

	
24.1

	
Prior to the Completion Date, the Parties shall take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable (subject to any Applicable Law) to consummate the Transaction in accordance with its terms and as contemplated by this Agreement and any other transaction documents, if any, as promptly as practicable, including the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to give full effect to and fully carry out the purposes of, this Agreement and the other Transaction documents, if any.

 

	
24.2

	
The Parties shall from time to time and at their own respective cost do, execute and deliver or procure to be done, executed and delivered all such further acts, documents and things required by, and in a form satisfactory to the Parties to give full effect to this Agreement and the rights, powers and remedies under this Agreement.

 

 

	
CLAUSE 25.

	
REMEDIES AND WAIVERS

 

	
25.1

	
No waiver of any right under this Agreement shall be effective unless in writing.  Unless expressly stated otherwise a waiver shall be effective only in the circumstances for which it is given.

 

	
25.2

	
No delay or omission by any Party in exercising any right or remedy provided by law or under this Agreement shall constitute a waiver of such right or remedy.

 

 

  

50

  

 

 

	
25.3

	
The single or partial exercise of a right or remedy under this Agreement shall not preclude any other nor restrict any further exercise of any such right or remedy.

 

	
25.4

	
Without limiting the Parties’ rights under this Clause 25, the rights and remedies provided in this Agreement are cumulative and do not exclude any other rights or remedies provided by Applicable Law (including, without limitation, any remedies at law or in equity), provided however, any limitations set forth in this Agreement with respect to the liability of either Party and/or exclusion of other rights or remedies provided by Applicable Law (including, without limitation, any remedies at law or in equity) shall be equally applicable to all the relevant rights and remedies provided under this Agreement and all other available rights and remedies provided by applicable Legislation. There is no right to set-off.

 

 

	
CLAUSE 26.

	
THIRD PARTY BENEFICIARIES

 

Except with respect to any Affiliate of the Vendor or any of its or their officers, directors, employees, agents and contractors, the Parties to this Agreement do not intend that any of its terms will be enforceable by virtue of the Contracts (Rights of Third Parties Act) 1999 by any person not a party to it.

 

 

	
CLAUSE 27.

	
EFFECT OF COMPLETION

 

	
27.1

	
The provisions of this Agreement which remain to be performed following the Completion Date shall continue in full force and effect notwithstanding Completion.

 

	
27.2

	
For the avoidance of doubt

 

	
  

	
(a)

	
any covenant, undertaking or agreement of the Parties that was to be performed at or prior to the Completion Date and was not duly performed in accordance with this Agreement shall, unless such non-performance was waived in writing by the Party entitled to the benefit of such covenant, undertaking or agreement, survive Completion until the date that is one year after the Completion Date;

 

	
  

	
(b)

	
any covenant, undertaking or agreement of the Parties that by its terms is to be performed after the Completion Date shall survive the Completion Date until such covenant shall either have been duly performed in accordance with the terms of this Agreement or formally waived in writing; and

 

	
  

	
(c)

	
the Warranties shall survive as provided in Clause 6.

 

  

51

  

 

 

	
CLAUSE 28.

	
SEVERABILITY

 

If any term, provision, agreement, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, agreements, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party hereto.  Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a reasonably acceptable manner in order that the transactions contemplated hereby may be consummated as originally contemplated to the fullest extent possible.

 

 

AS WITNESS the hands of duly authorised representatives of the Parties effective the day and the year first above written.

 

	
VENDOR

 

 

 

	 	
PURCHASER

 

 

 

	

Signature:

 

/s/ Dr. KJ Dickens

	 	

Signature:

 

/s/ Renato Aparecido Fontana

	
Name:  Dr. KJ Dickens

	 	
Name:     Renato Aparecido Fontana

	
Title:     Executive Director

Fuels Marketing

UK + Ireland

	 	
Title:        Lubrificantes Director

52Exhibit 4.12

 

 

Execution Version

 

 

28 MAY 2012

 

INTEGRAL INVESTMENTS B.V.

 

BG GAS SÃO PAULO INVESTMENTS B.V.

 

BG ENERGY HOLDINGS LIMITED

 

PROVENCE PARTICIPAÇÕES S.A.

 

-and-

 

COSAN S.A. INDÚSTRIA E COMÉRCIO

 

______________________________________________________________

 

 

AGREEMENT

 

 

for the sale and purchase of

shares in Comgás

 

______________________________________________________________

 

 

Freshfields Bruckhaus Deringer

 

Freshfields Bruckhaus Deringer LLP

65 Fleet Street

London EC4Y 1HS

 

 

 

  

  

  

 

	
Clause

	
Page

	 	 
	
1.

	
SALE AND PURCHASE

	
2

	
2.

	
PRICE

	
2

	
3.

	
CONDITIONS TO CLOSING

	
2

	
4.

	
REGULATORY OBLIGATIONS

	
3

	
5.

	
NO LEAKAGE COVENANT

	
5

	
6.

	
PRE-CLOSING UNDERTAKINGS

	
5

	
7.

	
CLOSING

	
6

	
8.

	
INTEGRAL WARRANTIES, BG WARRANTIES AND BG GUARANTOR WARRANTIES

	9
	
9.

	
PURCHASER WARRANTIES AND UNDERTAKINGS

	
10

	
10.

	
BG GUARANTOR GUARANTEE

	
10

	
11.

	
PURCHASER GUARANTOR GUARANTEE

	
11

	
12.

	
CONDUCT OF PURCHASER CLAIMS

	
12

	
13.

	
INDEMNITY

	
13

	
14.

	
TAX

	
14

	
15.

	
UNDERTAKINGS AND SELLER LIABILITY

	
14

	
16.

	
RESTRICTIVE COVENANT

	
15

	
17.

	
NO RIGHTS OF RESCISSION OR TERMINATION

	
15

	
18.

	
INFORMATION, RECORDS AND ASSISTANCE POST CLOSING

	
15

	
19.

	
PAYMENTS

	
15

	
20.

	
ANNOUNCEMENTS

	
17

	
21.

	
CONFIDENTIALITY

	
17

	
22.

	
ASSIGNMENT

	
19

	
23.

	
FURTHER ASSURANCES

	
19

	
24.

	
COSTS

	
19

	
25.

	
NOTICES

	
20

	
26.

	
WHOLE AGREEMENT

	
22

	
27.

	
WAIVERS, RIGHTS AND REMEDIES

	
22

	
28.

	
COUNTERPARTS

	
23

	
29.

	
VARIATIONS

	
23

	
30.

	
INVALIDITY

	
23

	
32.

	
THIRD PARTY ENFORCEMENT RIGHTS

	
23

	
31.

	
GOVERNING LAW AND ARBITRATION

	
23

	
SCHEDULE 1.

	
DETAILS OF COMGÁS

	
26

	
SCHEDULE 2.

	
INTEGRAL WARRANTIES, BG WARRANTIES AND BG GUARANTOR WARRANTIES

	
27

	PART A:	
PART A:  INTEGRAL WARRANTIES

	27
	PART B:	
PART B:  BG WARRANTIES

	38
	PART C:	
PART C:  BG GUARANTOR WARRANTIES

	  
	
SCHEDULE 3.

	
LIMITATIONS ON LIABILITY

	
40

 

 

  

  

  

 

	
SCHEDULE 4.

	
PURCHASER WARRANTIES AND PURCHASER GUARANTOR WARRANTIES

	
44

	
PART A:

	
PURCHASER WARRANTIES

	
44

	
PART B:

	
PURCHASER GUARANTOR WARRANTIES

	
45

	
SCHEDULE 5.

	
CLOSING ARRANGEMENTS

	
46

	
PART A:

	
BG OBLIGATIONS

	
46

	
PART B:

	
PURCHASER OBLIGATIONS

	
47

	
PART B:

	
GENERAL

	
47

	
SCHEDULE 6.

	
RESTRICTED ACTIONS

	
49

	
SCHEDULE 7.

	
DEFINITIONS AND INTERPRETATION

	
51

 

	
AGREED FORM DOCUMENTS REFERRED TO IN THIS AGREEMENT

 

	
Description

	
Clause/Schedule

	  	  
	
ARSESP submission

	
Clause 6.10

	 	 
	
Antitrust Filing

	
Clause 4.1

	 	 
	
Proposed resolutions of the Comgás shareholders

	
Clause 6.10

	 	 
	
Announcements

	
Clause 10

	 	 
	
Agreement Terminating the Commercial Services Agreement

	
Schedule 5

	 	 
	
Deed of Adherence to the Concession Agree

	
Schedule 5

	 	 
	
Tax Deed

	
Schedule 5

	 	 
	
Letter of resignation from BG appointed Comgás director Schedule

	
Schedule 5

	 	 
	
Data Room Index

	
Schedule 7

 

 

  

  

  

AGREEMENT

 

  dated 28 May 2012

 

PARTIES

 

	
1.

	
INTEGRAL INVESTMENTS B.V., a limited liability company incorporated under the laws of The Netherlands, registered with the Commercial Register of the Dutch Chamber of Commerce with registered number 24295655, having its official seat in Rotterdam, The Netherlands and its place of business at Wilhelminaplein 14, 3072 DE Rotterdam, The Netherlands (the Seller);

 

	
2.

	
BG GAS SÃO PAULO INVESTMENTS B.V., a limited liability company incorporated under the laws of The Netherlands, registered with the Commercial Register of the Dutch Chamber of Commerce with registered number 24301034, having its official seat in Rotterdam, The Netherlands and its place of business at Wilhelminaplein 14, 3072 DE Rotterdam, The Netherlands (BG);

 

	
3.

	
BG ENERGY HOLDINGS LIMITED, a limited liability company incorporated under the laws of England with registered number 03763515, having its registered address at 100 Thames Valley Park Drive, Reading, Berkshire, RG6 1PT, United Kingdom (the BG Guarantor);

 

	
4.

	
PROVENCE PARTICIPAÇÕES S.A., a sociedade anônima incorporated under the laws of Brazil, registered with the Brazilian Federal Taxpayers’ Registry (CNPJ/MF) under no. 12.623.886/0001-09, having its place of business at Avenida Presidente Juscelino Kubitschek, 1327, 4° andar, sala 16, CEP 04543-011, Sao Paulo, SP, Brazil (the Purchaser); and

 

	
5.

	
COSAN S.A. INDÚSTRIA E COMÉRCIO, a sociedade anônima incorporated under the laws of Brazil, registered with Brazilian Federal Taxpayers’ Registry (CNPJ/MF) under no. 50.746.577/0001-15, having its place of business at Avenida Presidente Juscelino Kubitschek, 1327, 4° andar, sala 01, CEP 04543-011, Sao Paulo, SP, Brazil (the Purchaser Guarantor),

 

Together the parties and each a party).

 

RECITALS

 

	
(A)

	
The Seller is jointly owned at the date of this Agreement by BG and Shell.

 

	
(B)

	
The Seller and BG propose respectively to sell, and the Purchaser proposes to buy, the Shares and BG Shares on the terms of this Agreement.

 

	
(C)

	
On 2 May 2012, BG and the Purchaser Guarantor entered into a conditional memorandum of understanding in respect of the Proposed Transaction (the MOU) and the conditions set out in clause 2.1 of the MOU have now been satisfied.

 

	
(D)

	
Words and expressions used in this Agreement shall be interpreted in accordance with Schedule 7.

 

 

  

-1-

  

IT IS AGREED:

 

1.           Sale and Purchase

 

	
1.1

	
The Seller shall sell (and BG shall procure that the Seller shall sell) with Full Title Guarantee and free from any Third Party Rights, and the Purchaser shall purchase, the Shares with effect from Closing with all rights then attaching to them including the right to receive all distributions and dividends declared, paid or made in respect of the Shares after Closing. The sale and purchase of the Shares shall be on the terms set out in this Agreement.

 

	
1.2

	
BG shall sell with Full Title Guarantee and free from any Third Party Rights, and the Purchaser shall purchase, the BG Shares with effect from Closing with all rights then attaching to them including the right to receive all distributions and dividends declared, paid or made in respect of the BG Shares after Closing. The sale and purchase of the BG Shares shall be on the terms set out in this Agreement. The price for the BG Shares shall be R$2,362.50. The provisions of clauses 2.3 and 2.4 shall apply to the sale and purchase of the BG Shares, mutatis mutandis.

 

	
1.3

	
Conditional upon and with effect from Closing BG hereby irrevocably and unconditionally waives all rights over, or in relation to, any and all of the Shares (including all rights of pre-emption, tag-along rights and other restrictions on the transfer of the Shares) which may have been conferred under the Integral Shareholders’ Agreement, the Comgás Shareholders' Agreement, the Comgás Articles or otherwise, whether arising, before or after Closing.

 

	
1.4

	
Conditional upon and with effect from Closing, BG hereby irrevocably and unconditionally waives, and will procure that its Affiliates shall irrevocably and unconditionally waive, any rights and claims (current, future, actual or contingent) it may have against Comgás under or in connection with the Comgás Shareholders’ Agreement or the Comgás Articles or otherwise.

 

2.           Price

 

	
2.1

	
The price for the Shares (the Price) shall be:

 

	
(a)

	
the Initial Price; plus

 

	
(b)

	
the Shareholder Proportion of any Capital Contribution Amounts; less

 

	
(c)

	
the Shareholder Proportion of any Dividend Amounts.

 

	
2.2

	
Without prejudice to clause 6.1, BG shall notify the Purchaser in writing at least 5 Business Days prior to Closing of the Capital Contribution Amounts and the Dividend Amounts.

 

	
2.3

	
At Closing, subject to clause 2.4 the Purchaser shall pay the Seller (to such bank account as the Seller may nominate for the purpose at least 5 Business Days prior to Closing) a sum in US dollars equal to the Price divided by the PT AX Ask Rate published by BACEN on the second Business Day prior to the Closing Date (the Dollar Price Equivalent) and BG and the Seller acknowledge that such a payment shall fully discharge and satisfy the Purchaser's obligation to pay the Price on Closing.

 

 

  

-2-

  

 

	
2.4

	
The parties acknowledge that withholding is required under Brazilian law to be made on account of Brazilian tax in respect of the Seller's capital gain arising on disposal of the Shares, and in relation to such, withholding the parties agree as follows:

 

	
(a)

	
the total amount required to be withheld from payment of the Price shall be calculated by BG as 15 per cent. of the capital gain arising to the Seller on disposal of the Shares by reference to the excess of the Price over the acquisition cost in respect of the Shares that is registered with the Brazilian Central Bank;

 

	
(b)

	
BG shall notify the Purchaser in writing immediately prior to Closing of the amount calculated in accordance with clause 2.4(a) above in Brazilian Reais that is required to be withheld from payment of the Price at Closing;

 

	
(c)

	
the Purchaser shall withhold from payment of the Price at Closing the amount notified in accordance with clause 2.4(b) above and shall pay such amount withheld to the Federal Revenue of Brazil within the time period prescribed by law; and

 

	
(d)

	
the Purchaser shall as soon as reasonably practicable (and in any event within 20 days) after payment of the Price at Closing provide evidence in a form reasonably satisfactory to the Seller that the amount notified in accordance with clause 2.4(b) has been paid to the Federal Revenue of Brazil.

 

3.           Conditions to Closing

 

	
3.1

	
Closing shall be conditional on the following Conditions having been fulfilled or waived in accordance with this Agreement:

 

	
(a)

	
the proposed transfer of the Shares to the Purchaser on the terms of this Agreement and the proposed encumbering by the Purchaser post-Closing of the Shares to a third party bank having been approved in writing by the ARSESP in form and substance satisfactory to the Purchaser (acting reasonably); and

 

	
(b)

	
no Material Adverse Change having arisen or occurred.

 

	
  

	
The Condition in clause 3.1(a) is referred to as the Purchaser Condition.

 

	
  

	
Purchaser Condition

 

	
3.2

	
The Purchaser shall, at its own cost, use all reasonable efforts to ensure that the Purchaser Condition is fulfilled as soon as reasonably practicable after the date of this Agreement. The Purchaser shall be responsible for satisfying the Purchaser Condition (including making a submission in the Agreed Form within 15 Business Days after the date of this Agreement). The Purchaser shall for this purpose, subject to clause 3.4:

 

	
(a)

	
promptly provide (subject to reasonable consultation with BG in advance) all information which is reasonably requested or required by the ARSESP and promptly notify BG and the Seller (and provide copies or, in the case of non-written communications, details) of all substantive direct and 

 

 

  

-3-

  

 

 

	 	
indirect communications with the ARSESP relating to the satisfaction of the Purchaser Condition (including all submissions, notifications and filings);

 

	
(b)

	
to the extent in each case permitted and reasonably practicable, allow persons nominated by BG or Comgás to attend all substantive meetings and substantive discussions with the ARSESP (or its representatives, advisers or agents) relating to satisfaction of the Purchaser Condition; and

 

	
(c)

	
regularly review with BG (and its advisers) the progress of notifications, filings and discussions with the ARSESP (or its representatives, advisers or agents) and, in particular, promptly disclose to BG (or its advisers) anything of which the Purchaser is aware which will or may prevent the Purchaser Condition from being satisfied in a timely manner (and, in any event, before the Longstop Date).

 

	
3.3

	
Subject to clause 3.4, BG shall at its own cost for the purpose of satisfying the Purchaser Condition:

 

	
(a)

	
use all reasonable efforts, and procure that the Seller uses all reasonable efforts, to cooperate with the Purchaser in satisfying the Purchaser Condition in accordance with clause 3.2; and

 

	
(b)

	
provide, and procure that the Seller and Comgás provide, the ARSESP and the Purchaser with any information, documents and assistance reasonably required for the purpose of making any submissions, notification and filings required to be made to the ARSESP.

 

	
3.4

	
Unless required in order to satisfy the Purchaser Condition or the Antitrust Approval, neither BG nor the Purchaser shall be obliged to disclose to the other or any of its advisers any confidential or financial information subject to confidentiality restrictions regarding the BG Group or the Purchaser Group (as applicable), provided that the party riot disclosing such information acts reasonably in redacting any such confidential or financial information and provides such redacted material to the other party.

 

	
  

	
General

 

	
3.5

	
The Purchaser Condition may only be waived by the written agreement of BG and the Purchaser. The Condition in clause 3.1(b) may only be waived by the Purchaser.

 

	
3.6

	
BG warrants and undertakes that all actions taken or to be taken in connection with clauses 3 and 4 and the fulfillment of the Conditions by any member of the BG Group (and, up to Closing, the Seller and Comgás) have been and will continue to be in compliance with applicable Anti-Bribery Laws.

 

	
3.7

	
The Purchaser warrants and undertakes that all actions taken or to be taken in connection with clause 3 and 4 and the fulfillment of the Conditions by any member of the Purchaser Group have been and will continue to be in compliance with applicable Anti-Bribery Laws.

 

	
3.8

	
BG and the Purchaser shall each notify the other promptly upon becoming aware that the Purchaser Condition has been fulfilled. The first Business Day on or by which the Purchaser Condition has been fulfilled (or waived in accordance with clause 3.5) is the Unconditional Date.

 

 

  

-4-

  

 

	
3.9

	
If:

 

	
(a)

	
the Unconditional Date has not occurred on or before the Longstop Date, this Agreement (other than the Surviving Provisions) shall automatically terminate; or

 

	
(b)

	
a Material Adverse Change has arisen or occurred at any time prior to Closing, the Purchaser may, by written notice to BG, terminate this Agreement (other than the Surviving Provisions).

 

	
  

	
Upon any such termination, none of the parties (nor any of their Affiliates) shall have any claim under this Agreement of any nature whatsoever against any other party (or any of their Affiliates) except in respect of any rights and liabilities which have accrued before termination or under any of the Surviving Provisions.

 

4.    REGULATORY OBLIGATIONS

 

	
  

	
Antitrust Approval

 

	
4.1

	
BG and the Purchaser shall, as soon as practicable after the date of this Agreement (and in any event within 15 business days in Brazil), jointly submit, the Antitrust Filing to CADE as necessary to obtain antitrust approval for the Proposed Transaction on terms reasonably satisfactory to the Purchaser (acting reasonably) (the Antitrust Approval).

 

	
  

	
4.2 For this purpose, subject to clause 3.4, the Purchaser shall prepare, BG shall review and BG and the Purchaser shall cooperate to make the appropriate submissions, notifications and filings with CADE and they shall each: (i) provide the other and CADE with any necessary information reasonably required for the purpose of making any submissions, notifications and filings; (ii) keep the other informed of any substantive direct- or indirect communication (whether written or oral) with CADE; (iii) take into account any reasonable comments made by the other; and (iv) regularly review with the other the progress of notifications, filings or discussions.

 

	
4.3

	
Closing shall not be delayed by the failure to have obtained the Antitrust Approval by the Closing Date.

 

	
4.4

	
All third party costs and expenses associated with obtaining the Antitrust Approval shall be borne by the Purchaser save that each party shall bear all the costs of its own legal counsel and other advisers.

 

	
  

	
Mandatory Tender Offer

 

	
4.5

	
The Purchaser acknowledges that, following Closing, it shall be required to make a mandatory tender offer for certain of the voting shares of Comgás in accordance with the provisions of Section 254A of Brazilian Law 6404/76.

 

 

  

-5-

  

5.   NO LEAKAGE COVENANT

 

	
5.1

	
BG undertakes to the Purchaser that if, during the period from the Locked Box Date until the Closing Date, any Leakage other than Permitted Leakage has occurred or will occur, then BG shall within 5 Business Days of written demand by the Purchaser, pay to the Purchaser an amount in cash (in the same currency as the Leakage) equal to the amount of such Leakage.

 

	
5.2

	
BG shall notify the Purchaser promptly upon becoming aware of any matter, fact or circumstance which is or could reasonably be expected to constitute Leakage.

 

	
5.3

	
Neither BG nor the BG Guarantor shall be liable for any claim for breach of or in respect of this clause 5 unless BG receives written notice of such claim prior to the date that is 9 months after the Closing Date.

 

6.    PRE-CLOSING UNDERTAKINGS

 

	
  

	
Conduct of Business

 

	
6.1

	
Subject to clause 6.2, BG shall, and shall procure that its Affiliates and the Seller shall, take all actions within their respective power to procure that, during the period from the date of this Agreement to Closing, Comgás shall continue to carry on business in the normal course in compliance with all applicable Anti-Bribery Laws and material compliance with all other laws and regulations applicable to it and, subject thereto, in substantially the same manner as its business has been carried on before the date of this Agreement, except in each case with the prior written consent of the Purchaser. Without limitation to the generality of the foregoing, BG shall (except in each case with the prior written consent of the Purchaser):

 

	
(a)

	
procure that:

 

	
(i)

	
the Seller continues to act as a non-operational holding company that does not undertake any trading activities; and

 

	
(ii)

	
no matters are undertaken by the Seller that would require a waiver, consent or approval from Shell under the Integral Shareholders' Agreement (save for those disclosed in the Disclosure Letter);

 

	
(b)

	
procure that no Restricted Actions are undertaken by Comgás or approved by the Seller;

 

	
(c)

	
procure that Comgás shall not terminate the employment of any Senior Employee other than for just cause or employ any additional person who would be deemed a Senior Employee or hire any additional person who would become a Senior Employee;

 

	
(d)

	
not, and shall procure that the Seller shall not, dispose of any interest in the Shares or any of them or grant any Third Party Right over the Shares or any of them;

 

	
(e)

	
not dispose of any interest in the BG Shares or any of them or grant any Third Party Right over the BG Shares or any of them;

 

 

  

-6-

  

 

	
(f)

	
not breach the terms of the Comgás Shareholders' Agreement or of the Integral Shareholders' Agreement; and

 

	
(g)

	
not agree to any amendment to the terms of the Comgás Shareholders’ Agreement or of the Integral Shareholders' Agreement.

 

	
6.2

	
Clause 6.1 shall not operate so as to restrict or prevent:

 

	
(a)

	
any matter required to be undertaken to ensure compliance with applicable law;

 

	
(b)

	
the completion or performance of any obligations undertaken pursuant to any contract or arrangement entered into by Comgás in good faith and in the ordinary course of business prior to the date of this Agreement;

 

	
  

	
(c) any matter specifically undertaken in order to comply with:

 

	
(i)

	
the provisions, of the Concession Agreement; or

 

	
(ii)

	
applicable law or regulation or required by any stock exchange or Governmental Entity where Comgás or the Seller would be in breach of the applicable law, regulation or requirements of the stock exchange or Governmental Entity if no action was undertaken;

 

	
(d)

	
with the prior written approval of the Purchaser (such approval not to be unreasonably withheld unless it is a matter that requires the Purchaser’s consent under paragraph 1 of Schedule 6), any matter specifically contemplated by the Business and Financing Plan at the applicable time that would otherwise. be outside of the normal course of business;

 

	
(e)

	
any matter reasonably undertaken to ensure the safe operation of Comgás’ business or the health and safety of Comgás’ employees;

 

	
(f)

	
any matter specifically required to be undertaken to comply with the terms of this Agreement or another Transaction Document (excluding, for the avoidance of doubt, any Capital Contribution Amounts, which shall require the prior written approval of the Purchaser (such approval not to be unreasonably withheld or delayed));

 

	
(g)

	
any matter undertaken at the written request of the Purchaser or with its prior written approval;

 

	
(h)

	
the declaration, making or payment of any cash dividend or cash distribution (including payment of dividends planned prior to the date of this Agreement and dividends and distributions in relation to which the declaration and payment of which has not been submitted at the date of this Agreement for approval by the Comgás controlling shareholders or by the Comgás board of directors or by a Comgás general shareholders’ meeting) provided that in all cases either:

 

	
(i)

	
such dividends are contemplated in the Business and Financing Plan; or

 

	
(ii)

	
the payment of such dividends or distributions are paid as a result of Comgás having additional profits available for distribution not contemplated at the time of preparation of the Business and Financing Plan and the payment of such dividends are paid in the ordinary course of 

 

 

  

-7-

  

 

	
(ii)

	
business consistent with past practice and paid from excess cash flow of Comgás with no requirement for Comgás to incur any additional third party indebtedness to fund such payment; or

 

	
(i)

	
any matter undertaken by Comgás; that the Seller can reasonably demonstrate was undertaken in the ordinary course of business consistent with past practice and was specifically contemplated to be undertaken by, and provided for in, the Business and Financing Plan.

 

	
6.3

	
Where any matter set out in this clause 6 requires the prior written approval of the Purchaser, the Purchaser shall be deemed to have given such approval when it has not responded in writing to BG (whether it gives or withholds its approval or otherwise) within 5 Business Days of receiving written notice of the proposed matter, provided that BG has provided the Purchaser with all the relevant information that it reasonably requires to make an informed decision whether to give its prior written approval.

 

	
  

	
Notifications

 

	
6.4

	
BG shall notify the Purchaser immediately of:

 

	
(a)

	
any matter, fact or circumstance which is a breach of clause 6.1; and

 

	
(b)

	
to the extent legally permitted, any action that would be in breach of clause 6.1 but for clause 6.2(c) or clause 6.2(e) applying to such action.

 

	
6.5

	
BG shall as soon as reasonably practicable disclose to the Purchaser any matter or thing which arises or of which any member of the BG Awareness Team becomes aware after entering into this Agreement but prior to Closing which is inconsistent with or a breach of any of the Integral Warranties or which will or may be a .breach of any Integral Warranty when the Integral Warranties are repeated immediately prior to Closing or which could reasonably be expected to render any of the Integral Warranties misleading immediately prior to Closing.

 

	
  

	
SAP Licences

 

	
6.6

	
BG shall, during the period from the date of, this Agreement to Closing, use all reasonable endeavours to procure that SAP (UK) Limited assigns the SAP Licences to Comgás on or before Closing on substantially the same as the current terms (and in any event terms that do not materially increase the annual cost to Comgás for the SAP Licences). If BG is unable to procure such assignment on such terms on or before Closing, it shall (as soon as practicable after Closing and at no cost to Comgás) purchase for Comgás an equivalent number of IT software licences with substantially similar (but no less) capacity to replace the SAP Licences assigned by the BG Guarantor to Comgás.

 

	
  

	
Board and Shareholder Meetings

 

	
6.7

	
Within one Business Day of the Unconditional Date, BG shall procure that the chairman of Comgás board of directors calls a meeting of the board of directors of Comgás to be held at Closing in accordance with the Comgás Articles for the purpose of (i) nominating, ad referendum of the shareholders of Comgás, the directors as may be informed by the Purchaser to BG prior to or on the Unconditional Date and (ii) acknowledging the resignation from the Comgás board of the directors appointed by BG.

 

 

  

-8-

  

 

	
6.8

	
Immediately after the chairman of Comgás calls a meeting of the board of directors of Comgás in accordance with clause 6.7, BG shall procure that its representative appointed in accordance with clause 10.5 of the Comgás Shareholders' Agreement calls a Preliminary Meeting to be held on the Business Day prior to Closing.

 

	
6.9

	
At the Preliminary Meeting called in accordance with clause 6.8, BG shall approve (i) the nomination of the directors indicated by the Purchaser to BG as described in clause 6.7 above; and (ii) the resignation of its directors from the board of directors of Comgás.

 

	
6.10

	
On the Closing Date, BG shall procure that the chairman of Comgás board of directors calls a meeting of the shareholders of Comgás to be held on 15 days’ notice at which the resolutions in the Agreed Form to ratify the nomination of the directors informed by the Purchaser to BG, as per clause 6.7 above, shall be put to the shareholders.

 

	
6.11

	
At the meeting of the board of directors of Comgás called in accordance with clause 6.7, BG shall procure that its appointed directors shall (i) nominate the directors, ad referendum of the shareholders of Comgás, indicated by the Purchaser to BG as described in clause 6.7 and (ii) resign from the board of directors of Comgás.

 

7.   CLOSING

 

	
7.1

	
Closing shall take place at the Sao Paulo offices of BG's lawyers on the fifth Business Day after the Unconditional Date (or at such other place and time as the Purchaser and BG may agree in writing), provided that all the Conditions (other than any Condition waived in accordance with clause 3 .5) remain fulfilled at that date (the Closing Date).

 

	
7.2

	
At Closing each of BG and the Purchaser shall deliver or perform (or ensure that there is delivered or performed) all those documents, items and actions respectively listed in relation to that party or any of its Affiliates (as the case may be) in Schedule 5.

 

	
7.3

	
In the event of a breach of clause 7.2, the Purchaser (in the case of breach by BG) or BG (in the case of breach by the Purchaser), shall be entitled (in addition to and without prejudice to all other rights or remedies available to it,. including the right to claim damages) by written notice to the other, served on such date:

 

	
(a)

	
if it is a breach of paragraph 2(a), 3(a), 3(f), 3(g) or 3(h) of Part A (BG Obligations) of Schedule 5 or paragraph 1(a), 1(d), 1(f) or 1(g) of Part B (Purchaser Obligations). of Schedule 5, to terminate this Agreement (other than the Surviving Provisions) provided that BG shall not be able to exercise any: such power that it may otherwise have had if the Purchaser can reasonably demonstrate that it has arranged the electronic transmission of funds necessary to pay for the Shares;

 

	
(b)

	
to effect Closing so far as practicable having regard to the breach of clause 7.2 that has occurred; or

 

	
(c)

	
to fix a new date for Closing not being later than 5 Business Days after the date of the notice in which case the foregoing provisions of this clause 7.3 shall apply to Closing as so deferred.

 

 

  

-9-

  

 

	
7.4

	
In the event of termination pursuant to clause 7.3(a) above, none of the parties (nor any of their Affiliates) shall have any claim under this Agreement of any nature whatsoever against any other party (or any of their Affiliates) except in respect of any rights and liabilities which have accrued before termination or under any of the Surviving Provisions.

 

8.      INTEGRAL WARRANTIES, BG WARRANTIES AND BG GUARANTOR WARRANTIES

 

	
8.1

	
BG warrants to the Purchaser as at the date of this Agreement in the terms of the Integral Warranties and the BG Warranties. The BG Guarantor warrants to the Purchaser as at the date of this Agreement in the terms of the BG Guarantor Warranties.

 

	
8.2

	
The Integral Warranties, the BG Warranties and the BG Guarantor Warranties shall be deemed to be repeated immediately prior to Closing by reference to the facts and circumstances then subsisting as if any reference in such Integral Warranties, BG Warranties and the BG Guarantor Warranties to the date of this Agreement was a reference to the Closing Date.

 

	
8.3

	
The Integral Warranties, the BG Warranties and the BG Guarantor Warranties are given subject to the limitations set out in Schedule 3.

 

	
8.4

	
Each of the Integral Warranties, the BG Warranties and the BG Guarantor Warranties is separate and independent and is not limited by reference to any other Integral Warranties, BG Warranties or BG Guarantor Warranties.

 

	
8.5

	
None of the limitations in Schedule 3 shall apply to any liability for any Claim which arises (or to the extent that it is increased) as a consequence of fraud or fraudulent misrepresentation.

 

	
8.6

	
Without prejudice to any rights the Purchaser may have against BG under this Agreement, all actions performed, and all warranties and indemnities provided, by BG under this Agreement are performed and provided, respectively, by BG solely in its capacity as shareholder of the Seller and, for the avoidance of doubt, nothing in this clause 8.6 restricts or limits (i) the obligation(s), or (ii) the liability of either BG or the BG Guarantor under any term of this Agreement.

 

9.   PURCHASER WARRANTIES AND UNDERTAKINGS

 

	
9.1

	
The Purchaser warrants to each of BG and the BG Guarantor as at the date of this Agreement in the terms of the Purchaser Warranties and such warranties shall be deemed to be repeated immediately prior to Closing by reference to the facts and circumstances then subsisting as if any reference in such warranties to the date of this Agreement was a reference to the Closing Date.

 

	
9.2

	
The Purchaser Guarantor warrants to each of BG and the BG Guarantor as at the date of this Agreement in the terms of the Purchaser Guarantor Warranties and such warranties shall be deemed to be repeated immediately prior to Closing by reference to the facts and circumstances then subsisting as if any reference in such warranties to the date- of this Agreement was a reference to the Closing Date.

 

	
9.3

	
The Purchaser undertakes to BG that from the date of this Agreement to the Closing Date it will not take any action which would, or might reasonably be expected to, prejudice its ability to pay the amounts payable by it pursuant to this Agreement.

 

 

  

-10-

  

 

10.     BG GUARANTOR GUARANTEE

 

	
10.1

	
In consideration of the Purchaser entering into this Agreement, the BG Guarantor:

 

	
(a)

	
unconditionally and irrevocably guarantees to the Purchaser as a continuing obligation that BG and the Seller will comply properly and punctually with their respective obligations under this Agreement and/or each Transaction Document to which they are a party; and

 

	
(b)

	
agrees that each time BG and/or the Seller fails to make any payment within 10 Business Days of the date it is due under or pursuant to this Agreement (or any other Transaction Document to which it is a party), the BG Guarantor shall on demand (without requiring the Purchaser first to take steps against BG, the Seller or any other person) pay that amount to the Purchaser.

 

	
10.2

	
The BG Guarantor's liability under clause 10.1 shall not be discharged or impaired by:

 

	
(a)

	
any variation or assignment of this Agreement or any Transaction Document or any waiver of its or their terms;

 

	
(b)

	
any release of, or granting of time or other indulgence to BG, the Seller or any third party;

 

	
(c)

	
any winding up, dissolution, reconstruction, legal limitation, incapacity or lack of corporate power or authority or other circumstances affecting BG or the Seller (or any act taken by the Purchaser in relation to any such event); or

 

	
(d)

	
any other act, event, neglect or omission (whether or not known to BG, the Seller, the BG Guarantor or the Purchaser) which would or might (but for this clause) operate to impair or discharge the BG Guarantor's liability or afford BG, the Seller or the BG Guarantor any legal or equitable defence.

 

	
10.3

	
In consideration of the Purchaser entering into this Agreement, as a separate, additional continuing and primary obligation, the BG Guarantor undertakes to indemnify the Purchaser against any costs, losses and/or claims suffered or incurred by it as a result of a failure by BG and/or the Seller to comply properly and punctually with its obligations under this Agreement or any other Transaction Document to which it is a party.

 

11.   PURCHASER GUARANTOR GUARANTEE

 

	
11.1

	
In consideration of BG and the Seller entering into this Agreement, the Purchaser Guarantor:

 

	
(a)

	
unconditionally and irrevocably guarantees to each of BG and the Seller as a continuing obligation that the Purchaser will comply properly and punctually with its obligations under this Agreement and each Transaction Document (other than the Deed of Waiver and Amendment and the Deed of Adherence to the Concession Agreement) to which it is a party; and

 

	
(b)

	
agrees that each time the Purchaser fails to make any payment within 10 Business Days of the date it is due under or pursuant to this Agreement (or any other Transaction Document (other than the Deed of Waiver and Amendment and the Deed of Adherence to the Concession Agreement) 

 

 

  

-11-

  

 

 

	 	
to which it is a party), the Purchaser Guarantor shall on demand (without requiring BG or the Seller first to take steps against the Purchaser or any other person) make such payment.

 

	
11.2

	
The Purchaser Guarantor's liability under clause 11.1 shall not be discharged or impaired by:

 

	
(a)

	
any variation or assignment of this Agreement or any Transaction Document or any waiver of its or their terms;

 

	
(b)

	
any release of, or granting of time or other indulgence to the Purchaser or any third party;

 

	
(c)

	
any winding up, dissolution, reconstruction, legal limitation, incapacity or lack of corporate power or authority or other circumstances affecting the Purchaser (or any act taken by BG or the Seller in relation to any such event); or

 

	
(d)

	
any other act, event, neglect or omission (whether or not known to BG, the Seller, the Purchaser Guarantor or the Purchaser) which would or might (but for this clause) operate to impair or discharge the Purchaser Guarantor's liability or afford the Purchaser or the Purchaser Guarantor any legal or equitable defence.

 

	
11.3

	
In consideration of BG and the Seller entering into this Agreement, as a separate, additional continuing and primary obligation, the Purchaser Guarantor undertakes to indemnify BG and/or the Seller (as applicable) against any costs, losses and/or claims suffered or incurred by it as a result of a failure by the Purchaser to comply properly and punctually with its obligations under this Agreement or any other Transaction Document (other than the Deed of Waiver and Amendment and the Deed of Adherence to the Concession Agreement) to which it is a party.

 

12.    CONDUCT OF PURCHASER CLAIMS

 

	
12.1

	
If the Purchaser becomes aware of any claim or potential claim by a third party after the Closing Date (a Third Party Claim) which is likely to result in a General Warranty Claim being made, then:

 

	
(a)

	
as soon as reasonably practicable (and in any event within 15 Business Days of becoming so aware or, where proceedings have been commenced in respect of such Third Party Claim and a shorter time period than 15 Business Days is provided for by applicable law to respond to such Third Party Claim, within the first half of such shorter time period) it shall give notice of the Third Party Claim to BG (provided that the parties agree that failure by the Purchaser to give notice within such time shall not invalidate any Claim by the Purchaser relating to such Third Party Claim or reduce the amount recoverable by the Purchaser in respect of such Claim);

 

	
(b)

	
subject to their being paid all reasonable costs and expenses and indemnified for any liabilities, the Purchaser shall disclose to BG all material information of which the Purchaser is aware which relates to the Third Party Claim and shall procure that any other relevant member of the Purchaser Group shall, give all such material information and reasonable assistance, including access to premises and personnel, and the right to examine and copy or photograph any assets, accounts, documents and records, as BG or its Representatives may reasonably request subject to BG agreeing in such form as the Purchaser may reasonably require to keep all such information confidential and to use it only for the purpose of investigating and defending the claim in question;

 

 

  

-12-

  

 

 

 

	
(c)

	
the Purchaser shall not (and shall ensure that each member of the Purchaser Group shall not) admit liability or make any agreement or compromise in relation to the Third Party Claim without the prior written approval of BG;

 

	
(d)

	
subject to clause 12.1(e), BG shall be entitled at its own expense and in its absolute discretion, by notice in writing to the Purchaser, to have the conduct of any proceedings, negotiations or appeals relating to the Third Party Claim (including making counterclaims or other claims against third parties with the prior written consent of the Purchaser, such consent not to be unreasonably withheld or delayed) in the name of and on behalf of the Purchaser or other member of the Purchaser Group concerned;

 

	
(e)

	
if BG sends a notice to the Purchaser pursuant to clause 12.1(d):

 

	
i)

	
the Purchaser shall give, and the Purchaser shall procure that any other member of the Purchaser Group shall give, subject to the Purchaser and each member of the Purchaser Group being paid all reasonable costs and expenses and indemnified to its reasonable satisfaction for any liabilities, all such information and assistance, including reasonable access to premises and personnel and the reasonable right to examine and copy or photograph any assets, accounts, documents and records, as BG or its Representatives may reasonably request, including instructing such professional or legal advisers as BG may nominate to act on behalf of the Purchaser or other member of the Purchaser Group concerned but in accordance with BG's instructions; and

 

	
(ii)

	
BG shall keep the Purchaser reasonably informed of the status of the Third Party Claim; and

 

	
(f)

	
the Purchaser may, following any request by 'BG to have sole conduct of a Third Party Claim pursuant to clause 12.1 (d), and where the Third Party Claim is made by a Key Counterparty, notify BG that BG and the Purchaser shall have joint conduct of such Third Party Claim, following which BG and the Purchaser shall co-operate to ensure that the Third Party Claim is conducted in a timely and orderly fashion, and:

 

	
(i)

	
each party shall consult and have regard to the reasonable requests or representations of the other parties as to what action to take in relation to such Third Party Claim, and shall give all such information and assistance, including reasonable access to premises and personnel al)d; the. Reasonable right to examine and copy or photograph any assets, accounts, documents and records, as a party or its Representatives may reasonably request; and

 

	
(ii)

	
no party shall take any action that would be reasonably likely to prejudice the commercial interests of the other parties or any Affiliate thereof.

 

 

  

-13-

  

13.    INDEMNITY

 

	
13.1

	
BG hereby undertakes to indemnify and keep indemnified and covenants to hold harmless the Purchaser and the Purchaser Guarantor against any Costs incurred by the Purchaser or Purchaser Guarantor or 60.05371% of any Costs incurred by Comgás in each case in connection with or arising out of the CVM Administrative Matters (and including all such Costs suffered or incurred in disputing, defending, investigating or providing evidence in connection with establishing its right to be indemnified pursuant to this clause).

 

	
13.2

	
Notwithstanding clause 13.1 neither the Purchaser nor the Purchaser Guarantor will be entitled to any indemnity from BG to the extent that the Costs referred to in clause 13.1 result from, directly or indirectly, the fraud, or wilful default of the Purchaser or the Purchaser Guarantor or the breach by the Purchaser or the Purchaser Guarantor of any of the undertakings and obligations given by the Purchaser under this Agreement.

 

	
13.3

	
Subject to clause 13.4, BG shall be entitled at its own expense and in its absolute discretion, by notice in writing to the Purchaser, to have the conduct of any proceedings, negotiations or appeals relating to the CVM Administrative Matters (including making counterclaims or other claims against third parties with the prior written consent of the Purchaser, such consent not to be unreasonably withheld) in the name of and on behalf of the Purchaser or other member of the Purchaser Group concerned.

 

	
13.4

	
If BG sends a notice to the Purchaser pursuant to clause 13.3:

 

	
(a)

	
the Purchaser shall, and the Purchaser shall procure that any other member of the Purchaser Group shall give, subject to the Purchaser and each member of the Purchaser Group being paid all reasonable costs and expenses and indemnified to its reasonable satisfaction for any liabilities, all such information and assistance, including reasonable access to premises and personnel and the reasonable right to examine and copy or photograph any assets, accounts, documents and records, as BG or its Representatives may reasonably request, including instructing such professional or legal advisers as BG may nominate to act on behalf of the Purchaser or other member of the Purchaser Group concerned but in accordance with BG's instructions; and

 

	
(b)

	
BG shall keep the Purchaser reasonably informed of the status of any proceedings, negotiations or appeals relating to the CVM Administrative Matters.

 

14.    TAX

 

	
  

	
The Tax Deed shall come into effect at Closing.

 

 

  

-14-

  

 

15.    UNDERTAKINGS AND SELLER LIABILITY

 

	
15.1

	
BG agrees with the Purchaser (for itself and as trustee for Comgás) to waive to the greatest extent permissible at law any rights or claims which it may have against Comgás or the present or former Representatives of Comgás in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by Comgás or its Representatives in connection with the giving of the General Warranties and the Fundamental Warranties, this Agreement or the Transaction Documents or the preparation of the Disclosure Letter or the Closing Disclosure Letter.

 

	
15.2

	
The Purchaser agrees to waive to the greatest extent permissible at law any rights or claims which it may have against the BG Awareness Team in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by BG or its Representatives in connection with the giving of the Integral Warranties, the BG Warranties or the BG Guarantor Warranties, this Agreement or the Transaction Documents or the preparation of the Disclosure Letter or the Closing Disclosure Letter.

 

	
15.3

	
BG agrees to waive to the greatest extent permissible at law any rights or claims which it may have against the Purchaser Deal Team in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by the Purchaser or the Purchaser Guarantor or their respective Representatives in connection with the giving of the Purchaser Warranties or the Purchaser Guarantor Warranties, this Agreement or the Transaction Documents.

 

	
15.4

	
The parties agree and acknowledge that:

 

	
(a)

	
no waiver is given by the Seller pursuant to the provisions of clause 15.1 or 15.3;

 

	
(b)

	
the Integral Warranties and BG Warranties shall be given by BG alone and not by the Seller;

 

	
(c)

	
the BG Guarantor Warranties shall be given by the BG Guarantor alone and not by the Seller;

 

	
(d)

	
the Seller shall not have any liability to the Purchaser, BG or the BG Guarantor and no party shall have any right of action, claim or recourse against the Seller in respect of or pursuant to:

 

	
(i)

	
the Integral Warranties, the BG Warranties or the BG Guarantor Warranties;

 

	
(ii)

	
the indemnity set out in clause 13 (Indemnity); or

 

	
(iii)

	
the no Leakage covenant set out in clause 5 (No Leakage Covenant).

 

16.    RESTRICTIVE COVENANT

 

BG covenants with the Purchaser for itself and as trustee for Comgás that it shall not, and shall procure that no member of the BG Group shall, directly or indirectly for a period of 36 months from Closing, induce or attempt to induce any director of the Seller or Comgás (other than a director resigning at Closing) or Senior Employee to leave the employment of (or engagement with) Comgás or enter into any employment or services agreement with BG or an Affiliate of BG (otherwise than in response to a bona fide newspaper or trade advertisement which is not expressly or implicitly directed at one or more individuals or employees of Comgás).

 

  

-15-

  

 

 

17.    NO RIGHTS OF RESCISSION OR TERMINATION

 

No party shall be entitled to rescind or terminate this Agreement in any circumstances whatsoever (whether before, at or after Closing), save as specifically contemplated in this Agreement. This shall not exclude any liability for (or remedy in respect of) fraudulent misrepresentation.

 

18.    INFORMATION, RECORDS AND ASSISTANCE POST CLOSING

 

The Purchaser shall ensure that BG and each member of the BG Group is given reasonable access at reasonable times to (and the right to take copies of) the books, accounts, tax data and all other records and information held by Comgás after Closing to the extent that they relate to the period up to Closing and access to which is reasonably required for BG or a member of the BG Group to comply with their obligations under applicable tax legislation (including the filing of tax returns) or other applicable legislation or regulation. This obligation is subject to the provisions of clause 21 (Confidentiality).

 

19.    PAYMENTS

 

	
19.1

	
Any payment to be made pursuant to this Agreement by the Purchaser (or any member of the Purchaser Group):

 

	
(a)

	
in respect of an obligation to BG shall be made to such bank account as BG may notify the Purchaser in writing five Business Days prior to the due date for such payment; and

 

	
(b)

	
in respect of an obligation to the Seller shall, unless otherwise provided in this Agreement, be made to such bank account as the Seller may notify the Purchaser in writing five Business Days prior to the due date for such payment.

 

	
19.2

	
Any payment to be made pursuant to this Agreement by BG or the BG Guarantor shall be made to the Purchaser's Bank Account.

 

	
19.3

	
Payments under clause 19.1 and 19.2 shall be in immediately available funds by electronic transfer on the due date for payment. Receipt of the amount due shall be an effective discharge of the relevant payment obligation.! Payments shall be made in Brazilian Reais unless otherwise specified in this Agreement or another Transaction Document.

 

	
19.4

	
If any sum due for payment in accordance with this Agreement is not paid on the due date for payment, the person in default shall pay Default Interest on that sum from but excluding the due date to and including the date of actual payment calculated on a daily basis.

 

	
19.5

	
All sums payable under this Agreement shall be paid free and clear of all deductions or withholdings whatsoever, save only as provided in this Agreement or as required by law.

 

	
19.6

	
If any sum paid by Purchaser or Purchaser Guarantor in respect of a Purchaser Obligation (excluding payment of Price) or by BG or BG Guarantor in respect of a BG Obligation (including any payment made under clause 5 or clause 13 of this Agreement) is brought into charge to Tax 

 

 

  

-16-

  

 

 

	 	
by any Tax authority in the hands of the recipient then, except in relation to interest, the payer shall pay such additional amount as shall be required to ensure that the total amount paid, less the Tax chargeable on such amount, is equal to the amount that would otherwise be payable.

 

	
19.7

	
To the extent that any Tax in respect of which an additional amount has been paid under clause 19.6 above results in the recipient obtaining a Relief(all reasonable endeavours having been used to obtain such Relief as soon as reasonably practical and where appropriate in priority to other Reliefs), the recipient shall pay to the payer, within ten Business Days of obtaining the benefit of the Relief, an amount equal to the lesser of the value of the Relief obtained and the additional sum paid under clause 19.6.

 

	
19.8

	
In determining the amount payable in respect of any Purchaser Obligation or BG Obligation (other than, for the avoidance of doubt, amounts payable under the Tax Deed) account shall be taken of any Relief or other benefit available to the recipient or any Affiliate of the recipient (including, in the case of payments to the Purchaser, Comgás) in respect of the matter giving rise to the payment, insofar as not taken into account pursuant to clause 19.7 above.

 

	
19.9

	
Any sum payable under this Agreement is exclusive of any applicable VAT, which shall be paid in addition or, to the extent of any irrecoverable VAT required to be accounted for under the reverse charge mechanism, deducted from the sum payable.

 

20.    ANNOUNCEMENTS

 

	
20.1

	
Save for the Announcements (and any announcement that is consistent in all material respects with the Announcements or any other announcement made in accordance with this clause 20), no party (nor any of their respective Affiliates) shall make any announcement or issue any circular in connection with the Proposed Transaction or the existence or subject matter of this Agreement (or any other Transaction Document) without the prior written approval of the Purchaser (if the party wishing to announce or issue is the Seller, BG, the BG Guarantor or any of BG's Affiliates) or BG (if the party wishing to announce or issue is the Purchaser, the Purchaser Guarantor or any of the Purchaser’s Affiliates), such approval not to be unreasonably withheld or delayed.

 

	
20.2

	
The restriction in clause 20.1 shall not apply if and to the extent that the announcement or circular is required by applicable, law or by· any stock exchange or governmental, regulatory or supervisory body or authority of competent jurisdiction. If this exception applies, the party making the announcement or issuing the circular shall use its reasonable efforts to consult (if practicable in the circumstances) with the Purchaser (if the party wishing to announce or issue is the Seller, BG,. the BG Guarantor or any of BG's Affiliates) or BG (if the party wishing to announce or issue is the Purchaser, the Purchaser Guarantor or any of the Purchaser’s Affiliates) in advance ~s to its form, content and timing.

 

21.    CONFIDENTIALITY

 

	
21.1

	
For the purposes of this clause 21, Confidential Information means:

 

	
(a)

	
(in relation to the obligations of the Purchaser) any information received or held by the Purchaser (or any of its Representatives) in connection with the entry into this Agreement relating to the BG Group or, prior to Closing, the Seller or Comgás (howsoever and whensoever obtained or received in relation to the Proposed Transaction); or

 

 

  

-17-

  

 

 

	
(b)

	
(in relation to the obligations of the Seller, BG and the BG Guarantor) the Comgás Confidential Information and any information received or held by BG (or any of its Representatives) in connection with the entry into this Agreement relating to the Purchaser Group or, after Closing, Comgás (howsoever and whensoever obtained or received in relation to the Proposed Transaction); and

 

	
(c)

	
(in relation to the obligations of the Purchaser, the Seller, BG and the BG Guarantor) any information relating to the provisions of, and negotiations leading to, this Agreement and the other Transaction Documents,

 

and includes written information and information transferred or obtained orally, visually, electronically or by any other means.

 

	
21.2

	
Each party shall (and shall ensure that each of its Representatives shall) maintain Confidential Information in confidence and not disclose Confidential Information to any person except (i) as this clause 21 permits or (ii) (if the disclosing party is the Seller, BG or the BG or any of their respective Representatives) as the Purchaser approves in writing or (if the disclosing party is the Purchaser or any of its Representatives) as BG approves in writing.

 

	
21.3

	
Clause 21.2 shall not prevent disclosure by a party or its Representatives to the extent

 

	
  

	
that:

 

	
(a)

	
disclosure is required by law or by any stock exchange or any regulatory, governmental or antitrust body (including any tax authority) having applicable jurisdiction (provided, that the disclosing party shall (except in relation to disclosure to a tax authority and to the extent practicable in the circumstances) consult with the Purchaser (if the disclosing party is the Seller, BG, the BG Guarantor or any of their respective Representatives) or BG (if the disclosing party is the Purchaser or any of its Representatives) in advance as to the form, content and timing of the disclosure);

 

	
(b)

	
disclosure is of Confidential Information which was lawfully in the possession of that party or any of its Representatives (in either case as evidenced by written records) without any obligation of secrecy prior to its being received or held;

 

	
(c)

	
disclosure is of Confidential Information which has previously become publicly available other than through that party's fault or that of its Representatives);

 

	
(d)

	
disclosure is required for the purpose of any judicial or arbitral proceedings arising out of this Agreement (or any other Transaction Document).

 

	
21.4

	
Each party undertakes that it (and its Affiliates) shall only disclose Confidential Information to Representatives if it is reasonably required for purposes connected with the Proposed Transaction and only if the Representatives are informed of the confidential nature of the Confidential Information.

 

 

  

-18-

  

 

	
21.5

	
Each party agrees that it (and its Affiliates and Representatives) shall not use Confidential Information for any purpose other than in relation to the proper performance of its obligations and exercise of its rights under this Agreement (or any other Transaction Document) or in connection with the business of Comgás (by (i) the BG Group prior to Closing, (ii) the Purchaser after Closing, and (iii) the Seller prior to or after Closing whilst it holds shares in Comgás).

 

	
21.6

	
If this Agreement terminates, the Purchaser shall as soon as practicable on request by BG or the BG Guarantor:

 

	
(a)

	
return to BG or destroy all written documents and other materials relating to BG, the BG Guarantor, the Seller or Comgás or this Agreement (including any Confidential Information) received from BG or its Representatives in connection with the entry into this Agreement and in the possession of the Purchaser (or its Representatives) without keeping any copies thereof;

 

	
(b)

	
destroy (and procure that its Representatives destroy) all information or other documents derived from such Confidential Information referred to in (a) above; and

 

	
(c)

	
so far as it is practicable to do so, expunge such Confidential Information referred to in (a) above from any computer, word processor or other device, save to the extent:

 

	
(i)

	
that the information relates to information disclosed or permitted to be disclosed under clause 21.3 or information to which clause 21.3 applies; or

 

	
(ii)

	
required to comply with applicable laws, regulations or professional rules, and the Purchaser shall confirm to BG and the BG Guarantor in writing (signed by a duly authorised representative of the Purchaser) that the Purchaser has complied in full with its obligations under this clause 21.6.

 

	
21.7

	
Without affecting any other rights or remedies that each party may have, each party acknowledges that another party may be irreparably harmed by any breach of the terms of this clause 21 and that damages alone may not necessarily be an adequate remedy. Accordingly, each party may be entitled to seek, to the extent permitted by law, the remedies of injunction, specific performance and other equitable relief, or any combination of these remedies, for any threatened or actual breach of its terms.

 

22.    ASSIGNMENT

 

	
22.1

	
Except as provided in this clause 22 or unless BG, the BG Guarantor, the Purchaser and the Purchaser Guarantor specifically agree in writing, no person shall assign, transfer, charge or otherwise deal with all or any of its rights under this Agreement nor grant, declare, create or dispose of any right or interest in it. Any purported assignment in contravention of this clause 22 shall be void.

 

	
22.2

	
If an assignment is made in accordance with this clause 22, the liabilities of the parties under this Agreement shall be no greater than such liabilities would have been if the assignment had not occurred.

 

 

  

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23.    FURTHER ASSURANCES

 

	
23.1

	
Each of BG, the Seller and the Purchaser shall and shall procure that their Affiliates shall, upon being requested by another party, execute (or procure the execution of) such further-documents as may be required by law or be reasonably required by another party to implement and give effect to this Agreement and the other Transaction Documents.

 

	
23.2

	
Each of BG and the Purchaser shall procure that its Affiliates comply with all obligations under this Agreement which are expressed to apply to any such Affiliates (save, in the case of BG, for the obligations under this Agreement which are expressed to apply to the BG Guarantor or, in the case of the Purchaser, for the obligations under this Agreement which are expressed to apply to the Purchaser Guarantor).

 

  24.     COSTS

 

	
24.1

	
Subject to clause 24.2 and except as otherwise provided in this Agreement (or any other Transaction Document), the parties shall each be responsible for their own costs, charges and other expenses (including those of its Affiliates) incurred in connection with the Proposed Transaction.

 

	
24.2

	
The Purchaser or its Affiliates shall bear all !OF taxes in relation to the Price, all notarisation fees or other documentary transfer or transaction duties, and any other transfer or remittance taxes including in each case any related interest or penalties arising as a result of this Agreement or of any of the other Transaction Documents (other than the Deed of Waiver and Amendment and the Deed of Adherence to the Concession Agreement).

 

25.   NOTICES

 

	
25.1

	
Any notice in connection with this Agreement shall be in writing in English and delivered by hand, fax, pdf attachment to email, registered post or courier using an internationally recognised courier company to the address, fax number or email address (and marked for the attention of the person) specified in clause 25.2 in relation to each party. A notice shall be effective upon receipt and shall be deemed to have been received (i) at the time of delivery, if delivered by hand, registered post or courier or (ii) at the time of transmission if delivered by fax or email provided that in either case, where delivery occurs outside Working Hours, notice shall be deemed to have been received at the start of Working Hours on the next following Business Day.

 

	
25.2

	
The addresses, fax numbers and email addresses of the parties for the purpose of clause 25.1 are:

 

Seller

 

	
Address:

	
c/o 100 Thames Valley Park Drive

	
 

	
Reading

	
  

	
Berkshire

	
  

	
RG6 1PT

	
  

	
United Kingdom

 

	
Fax:

	
+44 118 929 3791

 

 

  

-20-

  

 

	
Email:

	
vinter@bg-group.com

 

	
For the attention of:

	
The General Counsel

 

and

 

	
Address:

	
Shell Gas B.V.

	
  

	
Carel Van Bylandtlaan 30

	
  

	
The Hague

	
  

	
2596HR

	
  

	
The Netherlands

 

	
Fax:

	
+31 70 377 6790

 

	
For the attention of:

	
General Attorney

 

With a copy to

 

	
Fax:

	
+55 21 3984 7669

 

	
Email:

	
sylvia.figueiredo@shell.com

 

	
For the attention of:

	
Sylvia Figueiredo Sacco

 

BG

 

	
Address:

	
c/o 100 Thames Valley Park Drive

	
  

	
Reading

	
  

	
Berkshire

	
  

	
RG6 1PT

	
  

	
United Kingdom

 

	
Fax:

	
+44 118 929 3791

 

	
Email:

	
vinter@bg-group.com

 

	
For the attention of:

	
The General Counsel

 

BG Guarantor

 

	
Address:

	
c/o 100 Thames Valley Park Drive

	
  

	
Reading

	
  

	
Berkshire

	
  

	
RG6 1PT

	
  

	
United Kingdom

 

	
Fax:

	
+44 118 929 3791

 

	
Email:

	
vinter@bg-group.com

 

	
For the attention of:

	
The General Counsel

 

 

  

-21-

  

 

Purchaser

 

	
Address:

	
Avenida Presidente Juscelino Kubitschek, 1327, 4° andar, sala 01,

	
 

	
CEP 04543-011, São Paulo, SP, Brazil

 

	
Fax:

	
+55 11 3897-9799

 

	
Email:

	
juridico@cosan.com.br

 

	
For the attention of:

	
Diretor Presidente and Diretor Jurídico

 

Purchaser Guarantor

 

	
Address:

	
Avenida Presidente Juscelino Kubitschek, 1327, 4° andar, sala 01,

	
  

	
CEP 04543-011, São Paulo, SP, Brazil

 

	
Fax:

	
+55 11 3897-9799

 

	
Email:

	
juridico@cosan.com.br

 

	
For the attention of:

	
Diretor Presidente and Diretor Jurídico

 

	
25.3

	
Each party undertakes to notify the other parties by notice served in accordance with this clause 25 if the address, fax number, email address and/or person specified in clause 25.2 is no longer the appropriate address, fax number, email address and/or person for the services of notices.

 

26.    WHOLE AGREEMENT

 

This Agreement and the other Transaction Documents together set out the whole agreement between the parties in respect of the Proposed Transaction and supersede any prior agreement (whether oral or written) relating to the Proposed Transaction. It is agreed that:

 

	
(a)

	
no party shall have any claim or remedy in respect of any statement, representation, warranty or undertaking made by or on behalf of another party (or any of its Connected Persons) in relation to the Proposed Transaction which is not expressly set out in this Agreement or any other Transaction Document;

 

	
(b)

	
any terms or conditions implied by law in any jurisdiction in relation to the Proposed Transaction are excluded to the fullest extent permitted by law or, if incapable of exclusion, any right, or remedies in relation to them are irrevocably waived;

 

	
(c)

	
the only right or remedy of a party in relation to any provision of this Agreement or any other Transaction Document shall be for breach of this Agreement or the relevant Transaction Document; and

 

	
(d)

	
except for any liability in respect of a breach . of this Agreement or any other Transaction Document, no party (or any of its Connected Persons) shall owe any duty of care or have any liability in tort or otherwise to another party (or its respective Connected Persons) in relation to the Proposed Transaction,

 

 

  

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provided that this clause shall not exclude any liability for (or remedy in respect of) fraud or fraudulent misrepresentation. Each party agrees to the terms of this clause 26 on its own behalf and as agent for each of its Connected Persons. For the purpose of this clause, Connected Persons means (in relation to a party) the officers, employees, agents and advisers of that party or any of its Affiliates.

 

27.     WAIVERS, RIGHTS AND REMEDIES

 

	
27.1

	
Except as expressly provided in this Agreement, no failure or delay by any party in exercising any right or remedy relating to this Agreement or any of the Transaction Documents shall affect or operate as a waiver or variation of that right or remedy or preclude its exercise at any subsequent time.

 

	
27.2

	
No single or partial exercise of any such right or remedy shall preclude any further exercise of it or the exercise of any other remedy.

 

	
27.3

	
A party may exercise a right or remedy or give or refuse its consent in any way it considers appropriate (including by imposing conditions), unless this Agreement expressly states otherwise.

 

	
27.4

	
By giving its approval or consent a party does not make or give any warranty or representation as to any circumstance relating to the subject matter of the consent or approval.

 

	
27.5

	
The rights and remedies of a party under this Agreement may be exercised even if this involves a conflict of duty or a party has a personal interest in their exercise.

 

	
27.6

	
Rights given to a party under this Agreement and liabilities of a party under it are not affected by anything which might otherwise affect it by applicable law.

 

28.   COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, and by each party on separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument. Delivery of a counterpart of this Agreement by e-mail attachment or telecopy shall be an effective mode of delivery.

 

29.   VARIATIONS

 

No amendment of this Agreement shall be valid unless it is in writing and duly executed by or on behalf of all of the parties to it.

 

30.   INVALIDITY

 

Each of the provisions of this Agreement and the other Transaction Documents is severable. If any such provision is held to be or becomes invalid of unenforceable in any respect under the law of any jurisdiction, it shall have no effect in that respect and the parties shall use all reasonable efforts to replace it in that respect with a valid and enforceable substitute provision the effect of which is as close to its intended effect as possible.

 

 

  

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31.   THIRD PARTY ENFORCEMENT RIGHTS

 

	
31.1

	
The Connected Persons specified in clause 26 (Whole Agreement) shall have the right to enforce the relevant terms of that clause by reason of the Contracts (Rights of Third Parties) Act 1999. The individuals referred to in clause 15.2 and 15.3 shall have the right to enforce clause 15.2 and 15.3 respectively under the Contracts (Rights of Third Parties) Act 1999. These rights are subject to (i) the rights of the parties to amend or vary this Agreement without the consent of any Connected Person or any such individual and (ii) the other terms and conditions of this Agreement.

 

	
31.2

	
Except as provided in clause 31.1, a person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

 

32.    GOVERNING LAW AND ARBITRATION

 

	
32.1

	
This Agreement and any non-contractual obligations arising out of or in connection with this Agreement shall be governed by, and interpreted in accordance with, English law.

 

	
32.2

	
Any dispute, controversy or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination (Dispute), shall be referred to and finally resolved by binding arbitration under the Rules of Arbitration of the International Chamber of Commerce (the ICC Rules), which Rules are deemed to be incorporated by reference into this clause.

 

	
32.3

	
There shall be three arbitrators. Where there are only two parties to a Dispute, one arbitrator shall be nominated by each of those parties for confirmation by the ICC Court in accordance with the ICC Rules. Where there are more than two parties to a Dispute, whether as Claimant or as Respondent, the multiple Claimants, jointly, and the multiple Respondents, jointly, shall nominate an arbitrator for confirmation by the ICC Court in accordance with the ICC Rules (Joint Nominations). The third arbitrator, who shall act as the chairman of the tribunal, shall be nominated by agreement of the two party-appointed arbitrators within 14 days of the confirmation of the appointment of the second arbitrator, or in default of such agreement, shall be appointed by the ICC Court.

 

	
32.4

	
In the absence of Joint Nominations under clause 32.3 and where all parties are unable to agree to a method for the constitution of the arbitral tribunal, the ICC Court may appoint each member of the arbitral tribunal pursuant to Article 12(8) of the ICC Rules.

 

	
32.5

	
The seat, or legal place, of arbitration shall be Geneva, Switzerland. The tribunal may, after consultation with the parties, conduct hearings and meetings at any location it considers appropriate, including London, England.

 

	
32.6

	
The language to be used in the arbitral proceedings shall be English.

 

	
32.7

	
The award shall be final and binding on the parties and may be entered and enforced in any court having jurisdiction.

 

 

  

-24-

  

 

	
32.8

	
In the event that recourse is needed to the English courts in relation to any arbitral proceedings contemplated by this clause 32, the Purchaser shall at all times maintain an agent for service of process. Such agent shall be Law Debenture currently of 5th Floor, 100 Wood Street, London EC2V 7EX and any claim form, judgment or other notice of legal process shall be sufficiently served on the Purchaser if delivered to such agent at its address for the time being. The Purchaser irrevocably undertakes not to revoke the authority of this agent and if, for any reason, BG requests the Purchaser to do so it shall promptly appoint another such agent with au address in England and advise BG. If, following such a request, the Purchaser fails to appoint another agent, BG shall be entitled to appoint one on behalf of the Purchaser at the Purchaser's expense.

 

	
32.9

	
In the event that recourse is needed to the English courts in relation to any arbitral proceedings contemplated by this clause 32, BG shall at all times maintain an agent for service of process. Such agent shall be BG International Limited currently of Thames Valley Park, Reading, Berkshire, RG6 1PT and any claim form, judgment or other notice of legal process shall be sufficiently served on BG if delivered to such agent at its address for the time being. BG irrevocably undertakes not to revoke the authority of this agent and if, for any reason, the Purchaser requests BG to do so it shall promptly appoint another such agent with an address in England and advise the Purchaser. If, following such a request, BG fails to appoint another agent, the Purchaser shall be entitled to appoint one on behalf of BG at BG’s expense.

 

	
32.10

	
In the event that recourse is needed to the English courts in relation to any arbitral proceedings contemplated by this clause 32, the Seller shall at all times maintain an agent for service of process. Such agent shall be BG International Limited currently of Thames Valley Park, Reading, Berkshire, RG6 1PT prior to Closing and Shell International Limited currently of Shell Centre, London SE1 7NA after Closing and any claim form, judgment or other notice of legal process shall be sufficiently served on the Seller if delivered to such agent at its address for the time being. The Seller irrevocably undertakes not to revoke the authority of this agent and if, for any reason, the Purchaser requests the Seller to do so it shall promptly appoint another such agent with an address in England and advise the Purchaser. If, following such a request, the Seller fails to appoint another agent, the Purchaser shall be entitled to appoint one on behalf of the Seller at the Seller's expense.

 

	
32.11

	
In the event that recourse is needed to the English courts in relation to any arbitral proceedings contemplated by this clause 32, the Purchaser Guarantor shall at all times maintain an agent for service of process. Such agent shall be Law Debenture currently of 5th Floor, 100 Wood Street, London EC2V 7EX and any claim form, judgment or other notice of legal process shall be sufficiently served on the Seller if delivered to such agent at its address for the time being. The Purchaser Guarantor irrevocably undertakes not to revoke the authority of this agent and if, for any reason, BG requests the Purchaser Guarantor to do so it shall promptly appoint another such agent with an address in England and advise BG. If, following such a request, the Purchaser Guarantor fails to appoint another agent, BG shall be entitled to appoint one on behalf of the Purchaser Guarantor at the Purchaser Guarantor’s expense.

 

 

  

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SCHEDULE 1

 

DETAILS OF COMGÁS

 

	
1.

	
Name:

	
Companhia de Gás de São Paulo - COMGÁS

	
2.

	
Date of Incorporation:

	
28 August 1872

	
3.

	
Place of Incorporation:

	
São Paulo-SP, Brazil

	
4.

	
Type of Company:

	
Publicly-Held Company (Category A)

	
5.

	
Registered Number:

	
01563-6 (Código CVM)

	
6.

	
Registered Office:

	
Rua das Olimpíadas, 205, 10th floor. São Paulo-SP, Brazil.

	
7.

	
Directors:

(Conselho de Administração)

	
Nelson Luiz Costa Silva

Luis Augusto Domenech

Alexandre Cerqueira da Silva

Fernando Fleury Salek

André Lopes de Araújo

Roberto Schloesser Junior

Fernando José Ferreira da Mouta

Sérgio Fialdini Neto

Jurandilson Carvalho Fernandes

	
8.

	
Officers:

(Diretoria)

	
Luis Augusto Domenech

Carlos Eduardo Freitas Bréscia

José Carlos Broisler Oliver

Leonardo Serra Netto Lerner

Marcus Vinicius Vaz Bonini

Roberto Collares Lage

Sérgio Luiz da Silva

	
9.

	
Authorized Capital

	
R$671,672,500.00

	
10.

	
Issued Capital:

	
R$636,984,619.26

	
11.

	
Registered Shareholders: (shareholders holding more than 5% of any class of shares)

	
Integral Investments B.V.

Shell Brazil Holding B.V.

MCAP Poland Fundo de Investimento em Ações Taef Fund, LLC

	
12.

	
Accounting Reference Date:

	
31 December

	
13.

	
Auditors:

	
Pricewaterhousecoopers Auditores Independentes

	
14.

	
Total shares held by Integral Investments B.V.:

	
82,520,512 voting shares and 3,649,056 preferred shares

 

  

-26-

  

 

SCHEDULE 2

 

INTEGRAL WARRANTIES, BG WARRANTIES AND BG GUARANTOR

 

WARRANTIES

 

Part A: Integral Warranties

 

1. AUTHORISATIONS, VALID OBLIGATIONS, FILINGS AND CONSENTS.

 

1.1           Incorporation. The Seller is validly incorporated, in existence and duly registered under the laws of The Netherlands. The Seller has full power to conduct its business as conducted at the date of this Agreement.

 

1.2           Corporate authorisations. The Seller has obtained all corporate authorisations and (other than to the extent relevant to the Conditions or .the Antitrust Approval) all other governmental, statutory, regulatory or other consents, licenses or authorisations required to empower it to enter into and perform its obligations under this Agreement and each other Transaction Document to which it is a party where failure to obtain them would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

1.3           No breach of constitution or law. Entry into and performance by the Seller of this Agreement and/or any other Transaction Document to which it is a party will not (i) breach any provision of its memorandum and articles of association, by-laws or equivalent constitutional documents (ii) breach any contractual obligation binding on the Seller or (iii) (subject to fulfillment of the Conditions and, to the extent applicable, the Antitrust Approval) result in a breach of any laws or regulations in its jurisdiction of incorporation or of any order, decree or judgment of any court or any governmental or regulatory authority, where (in either case) any such breach would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

1.4           Valid obligations. This Agreement and each Transaction Document to which it is a party constitutes or will, when executed, constitute legally valid and binding obligations on the Seller.

 

1.5           Insolvency etc. The Seller is not insolvent or bankrupt under the laws of its jurisdiction of incorporation, unable to pay its debts as they fall due and has not proposed or is not liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them. There are no proceedings in relation to any compromise or arrangement with creditors or any winding up, bankruptcy or insolvency proceedings concerning the Seller and no events have occurred which would justify such proceedings. No steps have been taken to enforce any security over any assets of the Seller and no event has occurred to give the right to enforce such security.

 

1.6           Orders etc. The Seller is not subject to any order, judgment, direction, investigation or other proceedings by any Governmental Entity which will, or are likely to, prevent or delay the fulfillment of any of the Conditions.

 

 

  

-27-

  

 

2. COMGÁS

 

2.1           Valid incorporation. Comgás is validly incorporated, in existence and duly registered under the laws of Brazil. Comgás has full power (including under its memorandum or articles of association, by-laws or equivalent constitutional documents) to conduct its business as conducted at the date of this Agreement.

 

2.2           Insolvency. Comgás is not insolvent or bankrupt under the laws of its jurisdiction of incorporation, unable to pay its debts as they fall due and has not proposed or is not liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them. There are no proceedings in relation to any compromise or arrangement with creditors or any winding up, bankruptcy or insolvency proceedings concerning Comgás and no events have occurred which would justify such proceedings. No steps have been taken to enforce any security over any assets of Comgás and no event has occurred to give the right to enforce such security.

 

2.3           Data Room items. The Data Room contains complete and accurate copies of:

 

(a)           the Integral Shareholders’ Agreement;

 

(b)           the Comgás Shareholders’ Agreement;

 

(c)           the Comgás Articles; and

 

	
(d)

	
the Comgás Accounts for the financial years ended 31 December 2011, 31 December 2010 and 31 December 2009.

 

2.4           Shareholders’ agreements.

 

	
(a)

	
Each of the Integral Shareholders’ Agreement and the Comgás Shareholders’ Agreement are in full force and effect. Neither BG nor the Seller is in material default under the Comgás Shareholders’ Agreement.

 

	
(b)

	
Neither BG nor the Seller has received written notice in the 24 months prior to the date of this Agreement that it is in material default under either the Integral Shareholders’ Agreement or the Comgás Shareholders’ Agreement and BG is not aware that any other party to the Integral Shareholders’ Agreement or the Comgás Shareholders’ Agreement is or has been in the 24 months prior to the date of this Agreement in material default under either the Integral Shareholders’ Agreement or the Comgás Shareholders’ Agreement.

 

2.5           Shares.

 

	
(a)

	
All the Shares have been validly issued, are fully paid or properly credited as fully paid and (i) the Seller is the sole legal and beneficial owner of the Shares free from all Third Party Rights (other than any Third Party Rights arising under the Concession Agreement, the Comgás Shareholders’ Agreement or the Comgás Articles) and (ii) (subject only to any Third Party Rights arising under the Concession Agreement, the Comgás Shareholders’ Agreement or the Comgás Articles) BG is entitled to procure the transfer of the Shares with Full Title Guarantee and free from Third Party Rights on the terms of this Agreement, provided that, notwithstanding the foregoing, the Shares shall be transferred to the Purchaser on Closing with Full Title Guarantee and free from all Third Party Rights.

 

 

  

-28-

  

 

	
(b)

	
The Seller will be at Closing the sole legal and beneficial owner of the Shares free from all Third Party Rights and BG will be at Closing entitled to procure the transfer of the Shares with Full Title Guarantee and free from all Third Party Rights on the terms of this Agreement.

 

	
(c)

	
There is no agreement or commitment by the Seller or BG to give or create any Third Party Right on or over the Shares and neither BG nor the Seller has received written notice from any person of a claim to be entitled to any right over or affecting the Shares.

 

	
(d)

	
Neither BG nor the Seller has entered into, and BG is not aware of, any agreement (other than the Pre-Emptive Right Agreement) whereby any person has the right (whether exercisable now or in the future and whether contingent or not) to call for the issue, allotment or transfer of any share or loan capital of Comgás under any option or other agreement or otherwise howsoever.

 

	
(e)

	
All the BG Shares have been validly issued, are fully paid or properly credited as fully paid and (i) BG is the sole legal and beneficial owner of the BG Shares free from all Third Party Rights (other than any third Party Rights arising under the Concession Agreement, the Comgás Shareholders’ Agreement or the Comgás Articles) and (ii) (subject only to any Third Party Rights arising under the Concession Agreement, the Comgás Shareholders’ Agreement or the Comgás Articles) BG is entitled to transfer of the BG Shares with Full Title Guarantee and free from Third Party Rights on the terms of this Agreement, provided that, notwithstanding the foregoing, the BG Shares shall be transferred to the Purchaser on Closing with Full Title Guarantee and free from all Third Party Rights.

 

	
(f)

	
BG will be at Closing the sole legal and beneficial owner of the BG Shares free from all Third Party Rights and BG will be at Closing entitled to transfer the BG Shares with Full Title Guarantee and free from all Third Party Rights on the terms of this Agreement.

 

	
(g)

	
There is no agreement or commitment by the Seller or BG to give or create any Third Party Right on or over the BG Shares and neither BG nor the Seller has received written notice from any person of a claim to be entitled to any right over or affecting the BG Shares.

 

	
(h)

	
BG and the Seller’s respective interests in Comgás are fully and correctly reflected in the Foreign Investment registration with the Brazilian Central Bank.

 

2.6           Corporate information.

 

	
(a)

	
The information on Comgás in Schedule 1 is accurate in all material respects.

 

	
(b)

	
Comgás has no subsidiary undertakings and has not had any subsidiary undertakings.

 

2.7           Last Comgás Accounts. The Last Comgás Accounts:

 

	
(a)

	
give a true and fair view of the state of affairs of Comgás and its assets and liabilities as at 31 December 2011 and of the results thereof for the financial year ended on 31 December 2011 and would give such a true and fair view taking into account any liabilities of Comgás not known to its directors at the date of the approval of the Last Comgás Accounts; and

 

	
(b)

	
have been properly prepared in accordance with applicable law and International Financial Reporting Standards in force as at 31 December 2011 as applicable to a company incorporated in Brazil with shares publicly traded on a basis consistent with that adopted in preparing the audited accounts for and during the previous two financial periods for Comgás (subject to any changes in law or applicable accounting standards during the applicable time).

 

 

  

-29-

  

 

2.8           Events since 31 December 2011. Since 31 December 2011, Comgás has not:

 

	
(a)

	
entered into any contract which (i) cannot be terminated on less than 12 month’s notice (excluding any customer contracts with a value below US$30 million); or (ii) involved or may involve any revenue, expenditure or payments in excess of US$30 million;

 

	
(b)

	
conducted its business outside the ordinary course or in a manner inconsistent with past practice;

 

	
(c)

	
assumed or incurred any liabilities in excess of US$20 million (including contingent liabilities) otherwise than in the ordinary course of carrying on its business consistent with past practice;

 

	
(d)

	
acquired or disposed of or agreed to acquire or dispose of any business or any material asset with a value in excess of US$20 million;

 

	
(e)

	
released any debtor on terms that he pays less than the book value of any debt in excess of US$20 million (subject to settlement discounts on the usual terms which have been disclosed to the Purchaser);

 

	
(f)

	
resolved to change its name or to alter its articles of association, by laws or other constitutional documents;

 

	
(g)

	
allotted or issued or agreed to allot or issue any shares or any securities or granted or agreed to grant any right which confers on the holder any right to acquire any shares or other securities;

 

	
(h)

	
declared, paid or made any dividend or other distribution;

 

	
(i)

	
repaid, redeemed or purchased any of its share capital or loan capital or agreed to do so;

 

	
(j)

	
reduced its share capital;

 

(k)           resolved to be voluntarily wound up;

 

	
(1)

	
made, or agreed to make, any material change (including any change by the incorporation, acquisition or disposal of a subsidiary or a business or material assets in any case for a consideration representing open market value) in the nature or extent of its business;

 

	
(m)

	
created or agreed to create any Third Party Right over any assets of Comgás in excess of US$20 million in favor or any third party;

 

	
(n)

	
appointed new auditors;

 

	
(o)

	
made any change in its accounting reference period;

 

	
(p)

	
made any material change in its accounting policies or practices. nor any revaluation of its property or assets; or

 

	
(q)

	
carried out any matter set out in Part I of Exhibit 3 to the Comgás Shareholders’ Agreement or any matter set out in paragraphs 1(a), 1(b) or 1(c) of Schedule 6.

 

2.9           Indebtedness and Guarantees

 

	
(a)

	
Except as disclosed in the Disclosure Letter, Comgás does not have outstanding any borrowings, hedges, overdrafts, loan stocks, bonds, debentures, notes or other liabilities owed to any banking, finance, lending or similar institution nor does it have outstanding any other indebtedness or loans to third parties which have arisen otherwise than trading debts incurred in the normal course of business.

 

 

  

-30-

  

 

 

	
(b)

	
In relation to any agreement, trust deed, instrument or arrangement under which amounts disclosed under paragraph 2.9(a) are outstanding:

 

	
  

	
(i)

	
there has not been any material contravention of or non-compliance with any of its terms by Comgás and as far as BG is aware, no event of default, refinancing event, credit event, default or acceleration of indebtedness has occurred thereunder;

 

	
  

	
(ii)

	
as far as BG is aware, no steps for the enforcement of any Third Party Right have been taken or threatened;

 

	
  

	
(iii)

	
it is not dependent on the guarantee of, or on any security provided by, a third party; and

 

	
  

	
(iv)

	
it is not terminable or subject to any prepayment by reason of the sale of the Shares.

 

	
(c)

	
Save for (i) any amounts (not exceeding R$600,000 in aggregate) owing under the Commercial Services Agreement and (ii) the amount of US$834,000 owing in connection with the SAP Licenses, there is no outstanding indebtedness of any account whatsoever owing by Comgás to the Seller or any member of the BG Group or by the Seller or any member of the BG Group to Comgás.

 

	
(d)

	
There is no agreement or obligation to provide and there is not outstanding any guarantee given by Comgás for the benefit of any third party (including the Seller or any member of the BG Group) in respect of an obligation owed by a third party (including the Seller or a member of the BG Group).

 

	
(e)

	
Neither BG nor any member of the BG Group has entered into any guarantees or indemnities in respect of obligations of Comgás.

 

	
2.10

	
Material Contracts

 

	
(a)

	
Comgás is not a party to any industry agreement which involved or may involve any revenue, expenditure or payments in excess of R$223 million or any material contract (or other contract which is otherwise of operational or strategic importance to it) other than an industry agreement which involved or may involve any revenue, expenditure or payments in excess of R$30 million or which:

 

	
  

	
(i)

	
is not in the ordinary course of its business consistent with past practice; or

 

	
  

	
(ii)

	
is not on arm’s length terms; or

 

	
  

	
(iii)

	
(excluding all normal standard industry agreements entered into in the ordinary course of business consistent with past practice and any customer contracts with a value below R$30 million) is of a long term nature (that is, unlikely to have been fully performed in accordance with its terms more than 12 months after the date it was entered into or undertaken, or incapable of termination by it on 12 months’ notice or less without compensation),

 

	
  

	
each of these being material contracts for the purposes of this paragraph 2.10.

 

 

  

-31-

  

 

	
(b)

	
As far as BG is aware, neither Comgás nor any other party to any material contract is currently in breach of or in default in any material respect under, or has improperly terminated, revoked or accelerated, any material contract, and, as far as BG is aware, there exists no condition or event which, after notice or lapse of time, or both, would constitute any such breach, default, termination, revocation or acceleration.

 

	
(c)

	
As far as BG is aware, the transfer of Shares on the terms of this Agreement will not:

 

	
  

	
(i)

	
constitute a default, or trigger any mandatory payments, under any provision of a material contract;

 

	
  

	
(ii)

	
relieve any counterpart from a material obligation under a material contract or enable such counterpart to terminate its rights or obligations under a material contract or result in the loss of a material benefit under or require any consent under any material contract; or

 

	
  

	
(iii)

	
result in the creation or imposition of any Third Party Right of any nature on any of the material property or material assets of Comgás.

 

	
(d)

	
Each of the Concession Agreement and the Gas Supply Agreements (the Key Contracts) are in full force and effect. Neither BG nor the Seller has received written notice in the 24 months prior to the date of this Agreement that it is in default under either such agreements and BG is not aware that any other party to such agreements is or has been in the 24 months prior to the date of this Agreement in default under such agreements.

 

2.11 Assets

 

	
(a)

	
At the Locked Box Date, all the assets included in the Last Comgás Accounts were owned by Comgás.

 

	
(b)

	
As far as BG is aware, other than in the ordinary course of trading consistent with past practice, none of the material property or material assets of Comgás (other than the Properties) is subject to any Third Party Rights.

 

	
(c)

	
As far as BG is aware, the property, rights and assets owned, leased or licensed by Comgás comprise all the property, rights and assets reasonably necessary for the carrying on of the business of Comgás to the extent to which it is conducted as at the date of this Agreement.

 

	
(d)

	
As far as BG is aware, the machinery and plant of Comgás that is material to Comgás taken as a whole is in reasonably satisfactory working order and in a reasonable state of repair (subject to fair wear and tear).

 

2.12           Real Estate

 

	
(a)

	
The Properties are all the properties owned, controlled, used or occupied by Comgás.

 

	
(b)

	
As far as BG is aware, Comgás has performed and observed all other material obligations under all covenants and conditions affecting any of the Properties.

 

	
(c)

	
BG has not received written notice of nor is it aware of any material dispute, claims, demands, actions, notices or complaints relating to any of the Properties.

 

 

  

-32-

  

 

2.13           Environmental Matters

 

	
(a)

	
As far as BG is aware, Comgás is complying, and has materially complied with, all applicable Environmental Laws and with the terms and conditions of all Environmental Licenses.

 

	
(b)

	
As far as BG is aware, Comgás has not in the 24 months prior to the date of this Agreement received any notice, claim, complaint or other written communication which claims or alleges that Comgás is in material violation of or liable under any Environmental Law or Environmental License.

 

	
(c)

	
All material environmental and health and safety audits, assessment, reports and other reviews in possession or control of the Seller or Comgás relating to Comgás or any of Relevant Properties have been disclosed in section 1.8.4 of the Data Room.

 

2.14           Intellectual Property / IT

 

	
(a)

	
As far as BG is aware, no activities of Comgás infringe or are reasonably likely to infringe any Intellectual Property Rights owned by any third party and no claim has been made or, to BG’s knowledge, threatened in writing against any Comgás in respect of such infringement.

 

	
(b)

	
As far as BG is aware, no person is infringing any Intellectual Property Rights owned by Comgás.

 

	
(c)

	
As far as BG is aware, Comgás owns or is licensed to use all Intellectual Property Rights necessary for the operation of the business of Comgás as carried on at the date of this Agreement and such Intellectual Property Rights will not be adversely affected by reason of the Proposed Transaction.

 

	
(d)

	
As far as BG is aware, the Information Technology systems owned by or licensed to Comgás comprise all material computer hardware and software systems used in the operation of the business of Comgás as carried on at the date of this Agreement and such Information Technology systems will not be adversely affected by reason of the Proposed Transaction.

 

	
(e)

	
As far as BG is aware, Comgás is not in material breach of any material agreement relating to Information Technology.

 

2.15           Employment Matters

 

	
(a)

	
As far as BG is aware, Comgás has complied with its statutory and contractual obligations in all material respects to its employees and former employees.

 

	
(b)

	
Comgás does not have any undischarged liability to pay compensation for loss of office or employment or otherwise to present or former employees in excess of, in aggregate, US$10 million.

 

	
(c)

	
There is no term of employment for any employee of Comgás which provides that a change in control of Comgás entitles the employee to treat the change of control as amounting to a breach of his / her contract or entitling him to any payment, additional period of notice or other benefit whatsoever, or entitling him to treat himself as redundant or otherwise dismissed or released from any obligation.

 

	
(d)

	
Since 31 December 2011, no material change has been made in the rate of the emoluments of any employee of Comgás which would increase the total aggregate remuneration payable to all employees by more than 10% (other than in accordance with past practice or any collective bargaining agreements).

 

 

  

-33-

  

 

	
(e)

	
Comgás is not proposing to introduce any new (i) share incentive, share option, or other share incentive arrangement, or (ii) material bonus or other incentive scheme for any employee of Comgás.

 

	
(f)

	
As far as BG is aware, the aggregate amount of all amounts claim.in relation to existing or threatened (in writing) applications to any employment tribunal or court or any pending appeal from any such tribunal or court, made by an employee or former employee in relation to their employment or former employment by or with Comgás, is less than US$10 million.

 

	
(g)

	
There is not, and during the 18 months prior to the date of this Agreement there has not been, any industrial action adversely affecting Comgás and BG is not aware of any circumstance which might give rise to industrial action against Comgás.

 

	
(h)

	
Comgás has not agreed or announced or provided in its accounts for any redundancies to take effect on any date after 31 December 2011.

 

2.16           Pensions As far as BG is aware:

 

	
(a)

	
Other than the Disclosed Schemes, and any mandatory social security arrangements or industry-wide plans operated under and in accordance with public law, statute or regulation, there is not in operation any agreement (formal or informal) or arrangement for the payment by Comgás of, or payment by Comgás of a contribution towards, a pension, allowance or lump sum on retirement, termination or death for the benefit of an employee, a former employee or a dependent of such a person;

 

	
(b)

	
in respect of the Defined Contribution Scheme, all amounts which are due and payable by Comgás have been paid and no guarantee has been given to any Employee or former employee of a particular level or amount of benefits to be provided for or in respect of him other than coverage of risk benefits as described in the Data Room;

 

(c)           in respect of all the Disclosed Schemes:

 

	
  

	
(i)

	
the Disclosed Schemes have been operated in all material respects in compliance with their terms (including the provisions set down in their governing documentation) and all applicable laws and other relevant requirements of a competent Governmental Entity;

 

	
  

	
(ii)

	
there are no material actions, suits or claims (other than routine claims for benefits) outstanding or so far as BG is aware, threatened in writing against the Disclosed Schemes; and

 

	
  

	
(iii)

	
no material plan or proposal or intention to amend or discontinue in whole or in part has been communicated to any member of the scheme by the scheme or Comgás; and

 

	
(d)

	
Comgás has not at any time participated in or been liable to contribute to any private pension scheme other than the Disclosed Schemes.

 

2.17           Insurance

 

	
(a)

	
All the tangible assets which are material to Comgás and which are capable of being insured (other than those where a third party is liable to insure such assets) are insured and all premiums due on such insurance Policies (the Policies) have been paid. No claim exceeding US$20 million is outstanding either by the insurer or the insured under any of the Policies.

 

 

  

-34-

  

 

	
(b)

	
As far as BG is aware, (i) the Policies are currently in full force and effect, and (ii) nothing has been done or omitted to be done which could make any Policy void or voidable.

 

2.18           Litigation.

 

	
(a)

	
As far as BG is aware, Comgás is not involved as a party or otherwise in any litigation, arbitration, administrative or other dispute resolution proceedings and, as far as BG is aware, no such proceedings have been threatened in writing by or against Comgás that are material to Comgás.

 

	
(b)

	
There is no outstanding judgment, order, decree, arbitral award or decision of any court, tribunal, arbitrator or Governmental Entity against Comgás that is material to it.

 

	
(c)

	
BG is not aware of any matter, fact or circumstance which is likely to give rise to any litigation, arbitration, prosecution or other legal or dispute resolution proceedings by or against Comgás that in each case are or could reasonably be expected to be material to Comgás.

 

2.19           Compliance.

 

	
(a)

	
As far as BG is aware, Comgás is conducting and has in the 6 years prior to the date of this Agreement conducted its business and corporate affairs in all material respects in accordance with (i) its memorandum and articles of association, by-laws or other equivalent constitutional documents; and (ii) all applicable laws and legally binding regulations and by-laws of its country of incorporation and any other in jurisdiction in which it carries out its business.

 

	
(b)

	
There has been no default by Comgás under any order, decree or judgment of any court or any Governmental Entity in its country of incorporation or any other in jurisdiction in which it carries out its business where such default is likely to have a cost of US$20 million or more.

 

	
(c)

	
As far as BG is aware, all registers and minute books required by law to be kept by Comgás have been properly written up and contain a record of the matters which should, by law, be recorded in them.

 

	
(d)

	
As far as BG is aware, all material returns and particulars, resolutions and other documents which Comgás is required by law to file with or deliver for registration in any jurisdiction have been correctly made up and duly filed and delivered.

 

	
(e)

	
Comgás has not been notified that any investigation, enquiry or enforcement proceedings in respect of its affairs is being or has been conducted by any Governmental Entity (excluding any ordinary course or routine investigation or enquiry where the maximum exposure of Comgás is likely to be less than US$20 million) and, as far as BG is aware, there are no circumstances which currently exist and are likely to give rise to any such investigation, enquiry or proceedings, in each case which is material to Comgás.

 

	
(f)

	
As far as BG is aware, there has been no material default by Comgás under any rule or order issued by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliarios CVM) and BM& FBOVESPA.

 

2.20           Permits.

 

	
(a)

	
Comgás has obtained all material licenses, permissions, consents and other approvals (together Comgás Permits) and made all material filings required for or in connection with the carrying on of its business in the places and in the manner in which its business is carried on as at the date of this Agreement.

 

 

  

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(b)

	
No Comgás Permit has been breached in any material respect and, as far as BG is aware, no facts exist that are likely to, and the Proposed Transaction is not reasonably likely to, result in the revocation, suspension, cancellation or modification of any of those Comgás Permits or that might prejudice their renewal.

 

2.21           Public filings. As far as BG is aware, all statements of fact contained in Previous Announcements were at the date of the relevant Previous Announcement true and accurate in all material respects and did not omit to state a material fact and were not misleading in any material respect.

 

3. TAX

 

3.1           General and Compliance Matters.

 

	
(a)

	
As far as BG is aware, all material tax computations and returns have been made by Comgás within relevant time limits to the Federal Revenue of Brazil or other relevant taxation authority (Tax Authority) and were and remain true and accurate in all material respects, are not the subject of any material dispute and are not likely to become the subject of any material dispute with such Tax Authorities.

 

	
(b)

	
As far as BG is aware, Comgás has prepared, kept and preserved all records required by applicable law to be so prepared, kept and preserved and such records are complete, accurate and up-to-date in all material respects.

 

3.2           Investigations. As far as BG is aware, Comgás has not suffered any non-routine investigation, audit or visit by any Tax Authority in the last 3 years and neither BG nor (so far as BG is aware) Comgás is aware of any non-routine investigation, audit or visit planned for the next twelve months.

 

3.3           Residence. As far as BG is aware, Comgás is and always has been resident for all Tax purposes in Brazil and has and has had no permanent establishment in any other jurisdiction.

 

3.4           Liens. As far as BG is aware, Comgás’ assets are not subject to any lien in respect of Taxes which are the primary liability of another person.

 

3.5           Stamp duties and transfer taxes. As far as BG is aware, all registration, documentary or stamp taxes in respect of material documents or assets in which Comgás has a material interest have been duly paid.

 

4. ANTI-BRIBERY LAWS

 

4.1           As far as BG is aware, Comgás has not in the 6 years prior to the date of this Agreement engaged in any activity, practice or conduct which would constitute a breach of any applicable Anti-Bribery Law.

 

4.2           As far as BG is aware, no employee acting in his or her capacity as an employee or officer of Comgás has engaged in any activity, practice or conduct which would constitute a material breach of applicable Anti-Bribery Laws by the employee.

 

4.3           As far as BG is aware, since 1 July 2011 neither Comgás nor any of its directors, officers, employees or associated persons has directly or indirectly made any contribution, gift, bribe, rebate, payoff, influence payment or kickback to any public official, regardless of what form (i) to obtain favorable treatment for Comgás or contracts secured for Comgás, or (ii) to obtain special concessions for Comgás.

 

 

  

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5. RELATIONSHIPS WITH THE SELLER AND BG GROUP

 

5.1           Neither the Seller nor any member of the BG Group owns any property or right, tangible or intangible, used by Comgás.

 

5.2           Save as set out in the Disclosure Letter, Comgás is not a party, directly or indirectly, to any contract, agreement or arrangement (including for the supply of any goods or services or the use by one company of the property, rights or assets of the other) with the Seller or any member of the BG Group or any of their respective directors, officers or employees or (save for contracts of employment) any officer, director or employee of Comgás.

 

Part B: BG Warranties

 

1.1           Incorporation. BG is validly incorporated, in existence and duly registered under the laws of its jurisdiction and has full power to conduct its business as conducted at the date of this Agreement.

 

1.2           Corporate authorisations. BG has obtained all corporate authorisations and (other than to the extent relevant to the Conditions or the Antitrust Approval) all other governmental, statutory, regulatory or other consents, licenses or authorisations required to empower it to enter into and perform its obligations under this Agreement and each other Transaction Document to which it is a party where failure to obtain them would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

1.3           No breach of constitution or law. Entry into and performance by any member of the BG Group of this Agreement and/or any other Transaction Document to which it is a party will not (i) breach any provision of its memorandum and articles of association, by-laws or equivalent constitutional documents (ii) breach any contractual obligation binding on BG or (iii) (subject to fulfillment of the Conditions and, to the extent applicable, the Antitrust Approval) result in a breach of any laws or regulations in its jurisdiction of incorporation or of any order, decree or judgment of any court or any governmental or regulatory authority, where (in either case) any such breach would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

1.4           Valid obligations. This Agreement and each Transaction Document to which it is a party constitutes or will, when executed, constitute legally valid and binding obligations on BG.

 

1.5           Insolvency etc. BG is not insolvent or bankrupt under the laws of its jurisdiction of incorporation, unable to pay its debts as they fall due and has not proposed or is not liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them. There are no proceedings in relation to any compromise or arrangement with creditors or any winding up, bankruptcy or insolvency proceedings concerning BG and no events have occurred which would justify such proceedings. No steps have been taken to enforce any security over any assets of BG and no event has occurred to give the right to enforce such security.

 

1.6           Orders etc. BG is not subject to any order, judgment, direction, investigation or other proceeding by any Governmental Entity which will, or is likely to, prevent or delay the fulfillment of any of the Conditions.

 

 

  

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Part C: BG Guarantor Warranties

 

1.1           Incorporation. The BG Guarantor is validly incorporated, in existence and duly registered under the laws of its jurisdiction and has full power to conduct its business as conducted at the date of this Agreement.

 

1.2           Corporate authorisations. The BG Guarantor has obtained all corporate authorisations and (other than to the extent relevant to the Conditions or the Antitrust Approval) all other governmental, statutory, regulatory or other consents, licenses or authorisations required to empower it to enter into and perform its obligations under this Agreement and each other Transaction Document to which it is a party where failure to obtain them would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

1.3           No breach of constitution or law. Entry into and performance by the BG Guarantor of this Agreement and/or any other Transaction Document to which it is a party will not (i) breach any provision of its memorandum and articles of association, by-laws or equivalent constitutional documents (ii) breach any contractual restriction binding on the BG Guarantor or (iii) (subject to fulfillment of the Conditions and, to the extent applicable, the Antitrust Approval) result in a breach of any laws or regulations in its jurisdiction of incorporation or of any order, decree or judgment of any court or any governmental or regulatory authority, where (in either case) any such breach would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

1.4           Valid obligations. This Agreement constitutes legally valid and binding obligations on the BG Guarantor.

 

1.5           Insolvency. The BG Guarantor is not insolvent .or bankrupt under the laws of its jurisdiction of incorporation, is not unable to pay its debts as they fall due and has not proposed or is not liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them. There are no proceedings in relation to any compromise or arrangement with creditors or any winding up, bankruptcy or insolvency proceedings concerning the BG Guarantor and no events have occurred which would justify such proceedings. No steps have been taken to enforce any security over any assets of the BG Guarantor and no event has occurred to give the right to enforce such security.

 

1.6           Orders etc. The BG Guarantor is not subject to any order, judgment, direction, investigation or other proceeding by any Governmental Entity which will, or is likely to, prevent or delay the fulfillment of any of the Conditions.

 

 

  

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Schedule 3

 

LIMITATIONS ON LIABILITY

 

1.             Time Limits. Subject to paragraph 15 of this Schedule 3, neither BG nor the BG Guarantor shall be liable for any Warranty Claim or Tax Claim unless it receives from the Purchaser written notice containing details of such Warranty Claim or Tax Claim including the Purchaser’s estimate (on a without prejudice basis) of the amount of the Warranty Claim or Tax Claim prior to:

 

	
(a)

	
in the case of a General Warranty Claim (other than a claim for breach of one or more of the Warranties in paragraph 3 of Part A in Schedule 2 to this Agreement), the date that is 21 months after the Closing Date; or

 

	
(b)

	
in the case of a Fundamental Warranty Claim or a Tax Claim, the date that is 6 years after the Closing Date.

 

2.             Thresholds for Claims. Neither BG nor the BG Guarantor shall be liable for any single General Warranty Claim or claim under the Tax Deed (other than a claim under clause 2.4 of the Tax Deed) (where single is deemed to include a series of General Warranty Claims or claims under the Tax Deed based on the same or substantially the same facts):

 

	
(a)

	
unless the amount of the liability pursuant to that single General Warranty Claim or claim under the Tax Deed (other than a claim under clause 2.4 of the Tax Deed) exceeds an amount equal to USD I million (in which case the Purchaser shall be able to claim for the full amount and not just the excess); and

 

	
(b)

	
in relation to General Warranty Claims, unless the aggregate amount of the liability of BG for all General Warranty Claims and claims under the Tax Deed (other than a claim under clause 2.4 of the Tax Deed) not excluded by sub paragraph 2(a) exceeds an amount equal to USD 20 million (in which case the Purchaser shall be able to claim for the full amount and not just the excess); and

 

	
(c)

	
in relation to claims under the Tax Deed (other than a claim under clause 2.4 of the Tax Deed), unless either: (i) the aggregate amount of the liability of BG for all claims under the Tax Deed (other than a claim under clause 2.4 of the Tax Deed) not excluded by sub paragraph 2(a) exceeds an amount equal to USD 10 million; or (ii) the aggregate amount of the liability of BG for all General Warranty Claims and claims under the Tax Deed (other than a claim under clause 2.4 of the Tax Deed) not excluded by sub paragraph 2(a) exceeds an amount equal to USD 20 million (where in either such case the Purchaser shall be able to claim for the full amount and not just the excess).

 

3.             Maximum limit for all Claims. The aggregate amount of the liability of BG and the BG Guarantor for all General Warranty Claims shall not exceed 50 per cent. of the Initial Price provided that under no circumstances shall the aggregate amount of the liability of BG and the BG Guarantor for all Claims (including claims under the Tax Deed but excluding Claims under clauses 5 (No Leakage Covenant) and/or 13 (Indemnity)) exceed 100 per cent. of the Initial Price.

 

4.             Claim to be withdrawn unless litigation commenced. Subject to paragraph 7 of this Schedule 3, any Claim shall (if it has not been previously satisfied, settled or withdrawn) be deemed to have been withdrawn 6 months after the notice is given pursuant to paragraph 1 of this Schedule 3, unless legal proceedings in respect of it have been commenced by being both issued and served. Any Claim deemed to be so withdrawn may not be re-submitted.

 

 

  

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5.             Matters disclosed. BG shall not be liable for any General Warranty Claim for breach of the General Warranties if and to the extent that:

 

	
(a)

	
the fact, matter, event or circumstance giving rise to such General Warranty Claim is fairly disclosed by this Agreement, any other Transaction Document, the Data Room or the Disclosure Letter; or

 

	
(b)

	
all of the following apply:

 

	
  

	
(i)

	
the fact, matter, event or circumstance which is the subject matter of the General Warranty Claim occurs or arises after the date of this Agreement, other than as result of or in connection with a breach of clauses 5 (No Leakage Covenant) and/or 6 (Pre-Closing Undertakings);

 

	
  

	
(ii)

	
the existence or likely occurrence of the relevant fact, matter, event or circumstance was not known by BG at the date of this Agreement;

 

	
  

	
(iii)

	
such relevant fact, matter, event or circumstance is fairly disclosed in the Closing Disclosure Letter; and

 

	
  

	
(iv)

	
the fact, matter, event or circumstances which is the subject letter of the General Warranty Claim does not, and could not be reasonably .expected to, cause or give rise to a General Warranty Claim or series of General Warranty Claims which, when aggregated with any other General Warranty Claims caused by or arising from facts, matters, events or circumstances falling within sub-paragraphs (i) to (iii) above exceed US$40 million.

 

For the avoidance of doubt, any fact, matter, event or circumstance referred to in the Closing Disclosure Letter which does not fall within all of sub-paragraphs (i) to (iv) above shall be deemed for all purposes not to have been disclosed against the General Warranties and the disclosure of such fact, matter, event or circumstance shall not in any way reduce the liability of BG to the Purchaser.

 

6.             Matters provided for or taken into account in adjustments. BG shall not be liable for any Claim for breach of the Integral Warranties if and to the extent that a specific provision for the fact, matter, event or circumstance giving rise to the Claim is made in the Last Comgás Accounts.

 

7.             Contingent liabilities. If and to the extent that any Claim (other than a claim under the Tax Deed) is based upon a liability which is contingent: (i) neither BG nor the BG Guarantor shall be liable to pay unless and until such contingent liability gives rise to an obligation to make a payment (but the Purchaser has the right under paragraph I of this Schedule 3 to give notice of that Claim before such time); and (ii) subject to paragraph I of this Schedule 3, the 6 month period referred to in paragraph 4 of this Schedule 3 shall only start to run in respect of such Claim once the relevant liability has ceased to be contingent.

 

8.             No liability for General Warranty Claims arising from acts or omissions of Purchaser.  Neither BG nor the BG Guarantor shall be liable for any General Warranty Claim to the extent that it would not have arisen but for, or has been increased as a result of, any voluntary act, omission or transaction carried out:

 

	
(a)

	
after Closing by the Purchaser or any member of the Purchaser Group (or its respective directors, employees or agents or successors in title) outside the ordinary and usual course of business of Comgás as at Closing; or

 

 

  

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(b)

	
before Closing by any member of the BG Group, the Seller or Comgás at the written request of the Purchaser or any member of the Purchaser Group.

 

9.             Purchaser’s duty to mitigate. Nothing in this Schedule 3 restricts or limits any general obligation at law on the Purchaser to mitigate any loss or damage which it may suffer in consequence of any breach by BG or the BG Guarantor of the terms of this Agreement.

 

10.           Insured Claims. BG shall not be liable in respect of any Claim to the extent that the amount of such Claim (including all reasonable costs and expense of recovery) is actually recovered by the Purchaser, a member of the Purchaser Group or Comgás under a policy of insurance existing at the date of this Agreement (for the avoidance of doubt, it shall only be to the extent of the Purchaser Proportion of recovery under a Comgás insurance policy).

 

11.           Recovery from third party after payment from BG or BG Guarantor. Where either BG or the BG Guarantor has made a payment to the Purchaser in relation to any Claim and the Purchaser or any member of the Purchaser Group is entitled to recover (whether by insurance, payment, discount, credit, relief or otherwise) from a third party a sum which indemnifies or compensates the Purchaser or any member of the Purchaser Group (in whole or in part) in respect of the liability or loss which is the subject of a Claim, the Purchaser shall

 

	
  

	
(i)

	
promptly notify BG or the BG Guarantor (as appropriate) of the fact and provide such information as BG or the BG Guarantor (as appropriate) may reasonably require (ii) subject to the Purchaser and each member of the Purchaser Group being paid all reasonable costs and expense and indemnified to their reasonable satisfaction for any liabilities, take such reasonable steps as BG or the BG Guarantor (as appropriate) may reasonably request to enforce such right, provided that the Purchaser (or relevant member of the Purchaser Group) shall not be required to initiate any proceedings or take any action that may prejudice its bona fide commercial interests and (iii) pay to BG or the BG Guarantor (as appropriate) as soon as practicable after receipt an amount equal to (x) the amount recovered by the Purchaser from the third party, or (y) the Purchaser Proportion of the amount recovered by Comgás from the third party, in each case net of taxation and less any reasonable costs of recovery.

 

12.           No liability for legislation or changes in rates of tax. Neither BG nor the BG Guarantor shall be liable for any General Warranty Claim if and to the extent it is attributable to, or the amount of such General Warranty Claim is increased as a result of, any (i) legislation not in force at the date of this Agreement (ii) change of law, regulation, directive or administrative practice (iii) change in the rates of taxation (including any withdrawal of relief from taxation) in force at the date of this Agreement or (iv) change in the accounting policies or practice of the Purchaser or any member of the Purchaser Group (including, after Closing, Comgás).

 

13.           No double recovery. The Purchaser shall not be entitled to recover damages or obtain payment, reimbursement, restitution or indemnity in respect of any Claim (a Relevant Claim) to the extent that the Purchaser has already recovered damages or obtained payment, reimbursement, restitution or indemnity pursuant to any other Claim in respect of the same liability, loss, cost, shortfall, damage, deficiency, breach or other set of circumstances giving rise to the Relevant Claim.

 

 

  

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14.           Punitive damages. Neither the Purchaser nor any member of the Purchaser Group shall be entitled to claim for any punitive damages.

 

15.           BG and BG Guarantor to have opportunity to remedy breaches. If a breach of the Integral Warranties (other than (i) Fundamental Warranties and (ii) Integral Warranties that are repeated immediately prior to Closing) is capable of remedy, the Purchaser shall only be entitled to compensation if BG or the BG Guarantor (as appropriate) has not remedied the breach within 30 days after notice in respect of such breach is served on BG or the BG Guarantor (as appropriate). Without prejudice to its duty to mitigate any loss, the Purchaser shall (or shall procure that any relevant member of the Purchaser Group shall) provide, at BG’s cost, reasonable assistance to BG or the BG Guarantor (as appropriate) to remedy any such breach.

 

 

  

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SCHEDULE 4

 

PURCHASER WARRANTIES AND PURCHASER GUARANTOR WARRANTIES

 

Part A: Purchaser Warranties

 

1.           The Purchaser is validly incorporated, in existence and duly registered under the laws of its jurisdiction and has full power to conduct its business as conducted at the date of this Agreement.

 

2.           The Purchaser has obtained all corporate authorisations and (other than to the extent relevant to the Conditions or the Antitrust Approval) all other governmental, statutory, regulatory or other consents, licenses and authorisations required to empower it to enter into and perform its obligations under this Agreement and any other Transaction Document to which it is a party where failure to obtain them would materially and adversely affect its ability to enter into and perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

3.           Entry into and performance by each member of the Purchaser Group of this Agreement and/or any Transaction Document to which it is a party will not (i) breach any provision of its memorandum and articles of association, by-laws or equivalent constitutional documents (ii) any contractual restriction binding on the Purchaser or (iii) (subject to fulfillment of the Conditions and, to the extent applicable, the Antitrust Approval) result in a breach of any laws or regulations in its jurisdiction of incorporation or of any order, decree or judgment of any court or any governmental or regulatory authority, where (in either case) any such breach would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any Transaction Document to which it is a party.

 

4.           This Agreement and each Transaction Document which it is a party constitutes or will, when executed, constitute legally valid and binding obligations on the Purchaser.

 

5.           The Purchaser is not insolvent or bankrupt under the laws of its jurisdiction of incorporation, unable to pay its debts as they fall due and has not proposed or is not liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them. There are no proceedings in relation to any compromise or arrangement with creditors or any winding up, bankruptcy or insolvency proceedings concerning the Purchaser and no events have occurred which would justify such proceedings. No steps have been taken to enforce any security over any assets of the Purchaser and no event has occurred to give the right to enforce such security.

 

6.           The Purchaser is not subject to any order, judgment, direction, investigation or other proceedings by any Governmental Entity which will, or are likely to, prevent or delay the fulfillment of any of the Conditions.

 

7.           The Purchaser has available cash or available loan facilities which will provide in immediately available funds the necessary cash resources to pay, in accordance with this Agreement, the Price and, in the case of loan facilities, the Purchaser reasonably considers that it will be able to satisfy all conditions of drawdown to such loan facilities at or prior to Closing.

 

8.           The Purchaser Deal Team is not aware of a General Warranty Claim that could be successfully made by the Purchaser immediately following, and in any event on the same day as, execution of this Agreement.

 

 

  

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Part B : Purchaser Guarantor Warranties

 

1.1           The Purchaser Guarantor is validly incorporated, in existence and duly registered under the laws of its jurisdiction and has full power to conduct its business as conducted at the date of this Agreement.

 

1.2           The Purchaser Guarantor has obtained all corporate authorisations and (other than to the extent relevant to the Conditions or the Antitrust Approval) all other governmental, statutory, regulatory or other consents, licenses or authorisations required to empower it to enter into and perform its obligations under this Agreement and each other Transaction Document to which it is a party where failure to obtain them would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

1.3           Entry into and performance by the Purchaser Guarantor of this Agreement and/or any other Transaction Document to which it is a party will not (i) breach any provision of its memorandum and articles of association, by-laws or equivalent constitutional documents (ii) breach any contractual restriction binding on the Purchaser Guarantor or (iii) (subject to fulfillment of the Conditions and, to the extent applicable, the Antitrust Approval) result in a breach of any laws or regulations in its jurisdiction of incorporation or of any order, decree or judgment of any court or any governmental or regulatory authority, where (in either case) any such breach would materially and adversely affect its ability to enter into or perform its obligations under this Agreement and/or any other Transaction Document to which it is a party.

 

1.4           This Agreement constitutes legally valid and binding obligations on the Purchaser Guarantor.

 

1.5           The Purchaser Guarantor is not insolvent or bankrupt under the laws of its jurisdiction of incorporation, is not unable to pay its debts as they fall due and has not proposed or is not liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them. There are no proceedings in relation to any compromise or arrangement with creditors or any winding up, bankruptcy or insolvency proceedings concerning the Purchaser Guarantor and no events have occurred which would justify such proceedings. No steps have been taken to enforce any security over any assets of the Purchaser Guarantor and no event has occurred to give the right to enforce such security.

 

1.6           The Purchaser Guarantor is not subject to any order, judgment, direction, investigation or other proceeding by any Governmental Entity which will, or is likely to, prevent or delay the fulfillment of any of the Conditions.

 

  

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SCHEDULE 5

 

CLOSING ARRANGEMENTS

 

Part A: BG Obligations

 

1.           At Closing, BG shall execute any and all documents required by the depositary agent of the BG Shares in order to formalise the transfer of the BG Shares from BG to the Purchaser.

 

2.           At Closing, BG shall procure that the Seller shall:

 

	
(a)

	
duly execute any and all documents required by the depositary agent of the Shares in order to formalise the transfer of the Shares from the Seller to the Purchaser; and

 

	
(b)

	
communicate to Comgás any information necessary to comply with applicable securities regulations.

 

3.           At Closing, BG shall deliver or ensure that there is delivered to the Purchaser (or made available to the Purchaser’s reasonable satisfaction):

 

	
(a)

	
a letter of resignation in the Agreed Form from each director of Comgás appointed by BG (as may be notified by the Purchaser not later than the Unconditional Date) resigning from his office as a member of the board with effect from the transfer of the Shares and acknowledging that he has no claims against the relevant company;

 

	
(b)

	
minutes of a meeting of board of directors of Comgás nominating, ad referendum of the shareholders of Comgás, the directors as informed by the Purchaser to BG prior to or on the Unconditional Date and acknowledging the resignation from the Comgás board of the directors appointed by BG as per clause 6.7;

 

	
(c)

	
a copy (certified by a duly appointed officer as true and correct) of a resolution of the board and/or supervisory board (as necessary to provide valid authorization) of directors of the Seller (or, if required by the law of its jurisdiction or its articles of association, by-laws or equivalent constitutional documents, of its shareholders) authorizing the execution of and the performance by it of its obligations under this Agreement and each of the Transaction Documents to be executed by it;

 

	
(d)

	
a copy (certified by a duly appointed officer as true and correct) of a resolution of the board and/or supervisory board (as necessary to provide valid authorization) of directors of BG (or, if required by the law of its jurisdiction or its articles of association, by-laws or equivalent constitutional documents, of its shareholders) authorizing the execution of and the performance by it of its obligations under this Agreement and each of the Transaction Documents to be executed by it;

 

	
(e)

	
a copy (certified by a duly appointed officer as true and correct) of a resolution of the board of directors of the BG Guarantor authorizing the execution of and the performance by it of its obligations under this Agreement and each of the Transaction Documents to be executed by it;

 

(f)           a duly executed Tax Deed;

 

	
(g)

	
an agreement in the Agreed Form duly executed by Comgás and BG International Services AB terminating the Commercial Services Agreement; and

 

 

  

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(h)

	
an updated statement of the shareholders’ register of Comgás issued by the depositary agent of the Shares and the BG Shares reflecting the transfer of the Shares and the BG Shares from the Seller to the Purchaser.

 

Part B: Purchaser Obligations

 

1.           At Closing, the Purchaser shall:

 

	
(a)

	
duly execute any and all documents required by the depositary agent of the Shares in order to formalise the transfer of the Shares from the Seller to the Purchaser;

 

	
(b)

	
duly execute any and all documents required by the depositary agent of the BG Shares in order to formalise the transfer of the BG Shares from BG to the Purchaser;

 

	
(c)

	
deliver (or ensure that there is delivered to BG) a copy of a resolution (certified by a duly appointed officer as true and correct) of the board and/or supervisory board (as necessary to provide valid authorization) of directors of each of the Purchaser and the Purchaser Guarantor (or, if required by the law of its jurisdiction or its articles of association, by-laws or equivalent constitutional documents, of its shareholders) authorizing the execution of and the performance by the relevant company of its obligations under this Agreement and each of the Transaction Documents to be executed by it;

 

	
(d)

	
deliver (or ensure that there is delivered to the BG) a duly executed Tax Deed;

 

	
(e)

	
deliver (or ensure that there is delivered to BG) a copy (certified by a duly appointed officer as true and correct) of a duly-executed deed of adherence in the Agreed Form to the Concession Agreement;

 

	
(f)

	
subject to clause 2.4, pay the Dollar Price Equivalent to the Seller in full discharge and satisfaction of the Purchaser’s obligation to pay the Price at Closing; and

 

	
(g)

	
subject to clause 2.4, pay the US dollar equivalent of R$2,362.50 to BG for the BG Shares (the BG Shares Dollar Price Equivalent), applying the PTAX Ask Rate published by BACEN on the second Business Day prior to the Closing Date, in full discharge and satisfaction of the Purchaser’s obligation to pay the consideration for the BG Shares at Closing.

 

Part C: General

 

1.           If any document listed in this Schedule 5 is required to be notarized, legalised, apostilled and/or accompanied by an authority statement, the relevant parties shall execute such document at a location in Brazil notified by BG to the Purchaser at least 2 Business Days before Closing where a notary with the required qualification will be present.

 

2.           All documents and items delivered at Closing pursuant to this Schedule 5 shall be held by the recipient to the order of the person delivering the same until such time as Closing shall be deemed to have taken place. Simultaneously with:

 

	
(a)

	
delivery of all documents and all items required to be executed and/or delivered at Closing (or waiver of the delivery of it by the person entitled to receive the relevant document or item); and

 

	
(b)

	
receipt of an electronic funds transfer to such bank account as the Seller (in the case of the Dollar Price Equivalent) and BG (in the case of the BG Shares Dollar Price Equivalent) may nominate for the purpose at least 5 Business Days prior to Closing in immediately available funds of the 

 

 

  

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Dollar Price Equivalent and the BG Shares Dollar Price Equivalent (in each case subject to the withholding made in accordance with clause 2.4),

 

the documents and items delivered in accordance with this Schedule 5 shall cease to be held to the order of the person delivering them and Closing shall be deemed to have taken place.

 

SCHEDULE 6

 

RESTRICTED ACTIONS

 

1.           BG shall procure that Comgás shall not prior to Closing:

 

	
(a)

	
declare, make, or pay (i) any non-cash dividend; or (ii) any other non-cash distribution; or (iii) any cash dividend or distribution;

 

	
(b)

	
enter into or settle any litigation which is material to Comgás;

 

	
(c)

	
fail to comply with, and perform its obligations under all material contracts, all applicable laws, and all permits held by Comgás, except in each case where failure to comply or perform would not, individually or in the aggregate, be reasonably likely to result in a potential liability to Comgás of in excess of USD 20 million;

 

	
(d)

	
amend the Comgás Articles;

 

	
(e)

	
undertake any merger, consolidation, similar amalgamation or other corporate restructuring of Comgás;

 

	
(f)

	
dissolve, liquidate or otherwise wind-up Comgás;

 

	
(g)

	
issue any new or additional shares or other securities convertible into ·equity, debentures or loan stock, options to subscribe for or acquire the same, the creation of any new class of shares or modification of the rights of any class of shares, the modification of the equity capital structure of Comgás or the incorporation or capitalization of any subsidiary of Comgás;

 

	
(h)

	
establish or modify any dividend and/or capital policies of Comgás or take any decision for the approval or ratification of dividend distributions (beyond dividends or distributions contemplated in the Business and Financing Plan) or capital retentions;

 

	
(i)

	
make any decision by Comgás not to apply for a renewal of its Concession Contract upon its expiry;

 

	
(j)

	
enter into any joint venture or partnership involving Comgás;

 

	
(k)

	
grant any guarantee or indemnity or allow Comgás to become surety for any third party (other than in the ordinary course of business of Comgás);

 

	
(1)

	
execute, renew, terminate or materially amend or modify any transaction or agreement or series of related transactions or agreements by Comgás with BG or Shell or an Affiliate of BG or Shell;

 

	
(m)

	
revise the terms of the Concession Contract upon its renewal; or

 

	
(n)

	
approve the annual budget and any deviations thereof greater than the equivalent in Reais of US$10 million or 10% of any budgeted item (provided such deviation is at least the equivalent in Reais of US$10 million); or

 

	
(o)

	
agree, conditionally or otherwise, to do any of the foregoing.

 

 

  

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2.           BG shall procure that Comgás shall not prior to Closing without the consent of the Purchaser (such consent not to unreasonably withheld or delayed):

 

	
(a)

	
approve the financial statements of Comgás for the previous financial year;

 

	
(b)

	
approve the capital expenditure budget of Comgás for the current year;

 

	
(c)

	
undertake any material action or undertaking of any business by Comgás outside the regular course of business of Comgás;

 

	
(d)

	
appoint or remove the independent auditors of Comgás;

 

	
(e)

	
change the responsibilities of any of the officers of Comgás from those stated (if any) in the Comgás Articles;

 

	
(f)

	
create any committee of the Comgás board of directors;

 

	
(g)

	
other than the current Business and Financing Plan, approve any business plans, financing plans and any longer term strategic plans, including any revisions thereto;

 

	
(h)

	
enter into any gas purchase agreements in excess in total value of the equivalent in Reais equivalent of US$150 million;

 

	
(i)

	
undertake or enter into any acquisition or series of related acquisitions by_ Comgás of another business or material part thereof or an interest in another company involving consideration with a value in excess of the equivalent in Reais to US$10 million;

 

	
(j)

	
adopt or amend the business and health, safety and environmental principles by the Comgás board of directors or adopt or ratify a detailed health, safety and environment, procurement, accounting and business control procedures by the Comgás internal audit or HSE committees;

 

	
(k)

	
undertake or enter into any sale or other transfer (or series of related sales or transfers) of assets by Comgás with a value in excess of the US$10 million;

 

	
(l)

	
acquire, construct or lease items of tangible or intangible property exceeding an estimated expenditure of the equivalent in Reais of US$10 million in any single transaction or series of related transactions that (a) are not approved as part of the annual budget and (b) are unable to be re-allocated from expenditure approved under the latest approved annual budget; or

 

	
(m)

	
enter into any loan with a term of more than 1 year.

 

  

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SCHEDULE 7

 

DEFINITIONS AND INTERPRETATION

 

1.           Definitions. In this Agreement, the following words and expressions shall have the following meanings:

 

Accounts Date means 31 December;

 

Affiliate means, in relation to any party, any subsidiary undertaking or parent undertaking of that party and any subsidiary undertaking of any such parent undertaking, in each case from time to time, provided however that;

 

	
(a)

	
neither the Seller or Comgás shall be treated as an Affiliate of BG or the BG Guarantor, before or after Closing; and

 

	
(b)

	
Comgás shall be an Affiliate of the Purchaser with effect from Closing;

 

Agreed Form means, in relation to a document, the form of that document which has been initialled on the date of this Agreement for the purpose of identification by or on behalf of BG and the Purchaser (in each case with such amendments as ·may be agreed in writing by or on behalf of BG and the Purchaser);

 

Announcements means the announcements in the Agreed Form to be released by the Purchaser and BG or their Affiliates immediately after the execution of this Agreement and (subject to any amendments agreed by BG and the Purchaser acting reasonably) immediately after Closing;

 

Antitrust Approval has the meaning given in clause 4.1;

 

Antitrust Filing means the filing in the Agreed Form to obtain Brazilian antitrust approval for the Proposed Transaction;

 

Anti-Bribery Laws means (i) the US Foreign Corrupt Practices Act of 1977; (ii) the UK Bribery Act 2010; (iii) Brazilian Law No. 9.613/98, Brazilian Law No. 8.429/92 and the bribery- and corruption-related provisions from the Brazilian Penal Code; and (iv) any other statute, law, rule, regulation, convention (including the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions) or other legally binding measure of any jurisdiction that relates to bribery or corruption (in the case of each of (i) to (iv), as amended, re-enacted or replaced from time to time and the rules and regulations issued thereunder);

 

ARSESP means the Agencia Reguladora de Saneamento e Energia do Estado de São Paulo, the São Paulo State Sanitation and Power Utility Commission Licensed Public Services Regulatory Agency, or any competent regulatory agency or governmental authority that becomes its successor;

 

BG Awareness Team has the meaning given to that term in paragraph 2(h) of Schedule 7;

 

BG Deal Team means Ben Milner, Howard Landes, Ali ElHage Filho, Roberto Schloesser, Luis Domenech, Nelson Silva, Leonardo Lerner and Roberto Lage;

 

BG Group means BG and its Affiliates from time to time but excludes the Seller and Comgás;

 

BG Guarantor Warranties means the warranties given by the BG Guarantor pursuant to clause 8 and set out in Part C of Schedule 2;

 

 

  

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BG Obligation means any representation, warranty, indemnity or undertaking to pay given by BG to the Purchaser or the Purchaser Guarantor under this Agreement;

 

BG Shares means the 50 voting shares issued by Comgás and registered in the name of BG;

 

BG Shares Dollar Price Equivalent has the meaning given in paragraph I (g) of Part B of Schedule 5;

 

BG Tax Team means Graham Hall, Simon Bishop and Marcello Torres;

 

BG Warranties means the warranties given by BG pursuant to clause 8 and set out in Part B of Schedule 2; 1

 

Brazil means the Federative Republic of Brazil;

 

Business and Financing Plan means the plan set out in section 4.1 of the Data Room;

 

Business Day means a day other than a Saturday or Sunday or public holiday in England, Brazil, the United States of America and The Netherlands on which banks are open London, São Paulo, New York and Amsterdam for general commercial business;

 

CADE means the Conselho Administrativo de Defesa Económica, the administrative antitrust court in Brazil, or any competent regulatory agency or governmental authority that becomes its successor;

 

Capital Contribution Amount means the aggregate amount (if any) contributed by the Seller to the capital of Comgás in the period from (and including) the date of this Agreement to (and including) Closing;

 

CDI means the average rate of interbank deposits in Brazil known as Taxa Dl–operações extra grupo, expressed as an annual percentage and based on a 252-day year, as published daily by CETIP SA.–Mercados Organizados;

 

Claim means any claim under or for breach of this Agreement or a claim under the Tax Deed;

 

Closing means completion of the sale and purchase of the Shares in accordance with the provisions of this Agreement;

 

Closing Date has the meaning given in clause 7.1;

 

Closing Disclosure Letter means the letter from BG to the Purchaser executed and delivered immediately before Closing;

 

Comgás means Companhia de Gás de São Paulo, a corporation organised and existing according to the laws of Brazil, with its principal place of business at Rua das Olimpíadas, 205, 10th floor, São Paulo-SP, Brazil;

 

Comgás Accounts means, in relation to any financial year of Comgás, the audited balance sheet of Comgás and the audited profit and loss account of Comgás, in each case as at and for the period ended on the Accounts Date in respect of that financial year, as set out in the Data Room together with any notes, reports, statements or documents included in or annexed or attached to them;

 

Comgás Articles means the by-laws of Comgás (as amended from time to time);

 

Comgás Shareholders’ Agreement means the shareholders’ agreement dated 26 April 2007 between BG, Shell, the Seller and Comgás;

 

 

  

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Commercial Services Agreement means the commercial services agreement dated 1 November 2000 between Comgás and BG International Services AB;

 

Concession Agreement means the agreement dated 31 May 1999 between the ARSESP, Comgás, BG Investments B.V. and Shell Gas B.V. (as amended from time to time);

 

Conditions means the conditions to Closing set out in clause 3.1, and Condition means any of them;

 

Confidential Information has the meaning given in clause 21.1;

 

Costs means losses, damages, costs (including reasonable legal costs) and expenses (including taxation), in each case of any nature whatsoever;

 

CVM Administrative Matters means:

 

	
(a)

	
the ongoing administrative proceeding (Processo Administrativo Sancianador) number RJ 2011/7923 issued by the Comissão de Valores Mobiliários against Integral (including any appeals) (the CVM Proceedings);

 

(b)           any administrative proceedings relating to the CVM Proceedings;

 

	
(c)

	
any claims in relation to the matters, facts, circumstances or events the subject of the CVM Proceedings, including the “Redemption Mechanism” (as defined in the document set out in section 3.1 of the Data Room); and

 

	
(d)

	
any vicarious liability of Comgás for the actions or inactions of any directors, officers or employees of Comgás in relation to any of the above;

 

Data Room means the electronic data room comprising the documents and other information relating to the Proposed Transaction made available by BG as at 11 a.m. (UK) on 28 May 2012 as listed on the data room index in the Agreed Form attached to the Disclosure Letter;

 

Deed of Waiver and Amendment means the agreement between the Seller, BG, Shell, the Purchaser and Comgás executed on the date of this Agreement pursuant to which, amongst other things, Shell provides its consent to the Proposed Transaction and agrees to amend the Comgás Shareholders’ Agreement;

 

Default Interest means interest at CDI plus 2 per cent;

 

Defined Contribution Scheme means the Comgás Pension Plan, a description of which is set out in the Data Room;

 

Disclosure Letter means the letter from BG to the Purchaser executed and delivered immediately before the signing of this Agreement;

 

Disclosed Schemes means the Defined Contribution Scheme, the Comgás Retiree Medical Plan, the Comgás Lifetime Disabled Assistance Plan and the Comgás Lifetime Medical Assistance Plan, descriptions of which are set out in the Data Room;

 

Dividend Amount means the aggregate amount (if any) paid by Comgás to the Seller in the period from (and including) 31 December 2011 to (and including) Closing for any dividends or distributions (whether in cash or in kind) declared, paid or made by Comgás or any return of capital (whether by reduction of capital or redemption or purchase of shares or otherwise) by Comgás;

 

Dollar Price Equivalent has the meaning given in clause 2.3;

 

 

  

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Environment means all or any part of the following media (alone or in combination): air (including the air within the buildings and the air within other natural or man-made structures whether above or below ground); water (including sea, water under or within land or in drains sewers and coastal and inland waters); land (including land under water);

 

Environmental Laws means all laws, statutes, subordinate legislation, common law, civil codes, criminal codes, bylaws, regulations, judgments, decisions, orders and codes of practice, in each case concerning Environmental Matters and to the extent in force and binding from time to time;

 

Environmental Licenses means any permit, license, authorization, consent or other approval, or any notification, registration or waiver, required for the carrying on of the business of Comgás from time to time, or in relation to any Relevant Property from time to time, under or in relation to any Environmental Laws;

 

Environmental Matters means the pollution, contamination, remediation, restoration or protection of the Environment, or worker health and safety;

 

Exchange Rate means, with respect to a particular currency for a particular day, the spot rate of exchange (the closing mid-point) for that currency into Reais on such date as published in the London edition of the Financial Times first published thereafter;

 

Full Title Guarantee means with the benefit of the implied covenants set out in Part 1 of the Law of Property (Miscellaneous) Provisions) Act 1994 when a disposition is expressed to be made with full title guarantee;

 

Fundamental Warranties means (i) the BG Warranties, (ii) the BG Guarantor Warranties and (iii) the Integral Warranties in paragraphs 1 (Authorisations, valid obligations, filings and consent), 2.1 (Valid incorporation), 2.2 (Insolvency), 2.4(a) (Shareholders’ agreements), 2.5(a), (b), (c) and (d) (Shares), 2.6(b) (Corporate information), and 2.9(c) and (e) (Indebtedness and Guarantees);

 

Fundamental Warranty Claim means a claim for breach of one or more of the Fundamental Warranties under this Agreement;

 

Gas Supply Agreements means:

 

	
(a)

	
the agreement executed between Petroleo Brasileiro S.A. (Petrobras) and Comgás on 18 December 2007, providing the general terms of all gas supply arrangements with Petrobras except for the arrangement at (b) below;

 

	
(b)

	
the agreement executed between Petrobras and Comgás on 29 October 1996, as amended, known as the ‘TCQ’ arrangement;

 

	
(c)

	
the agreement executed between Petrobras and Comgás on 18 December 2007, as amended, known as the ‘Firme’ arrangement;

 

	
(d)

	
the agreement executed between, Petrobras and Comgás on 18 December 2007, known as the ‘Firme Flexivel’ arrangement;

 

	
(e)

	
the agreement executed between Gas Brasiliano Distribuidora S.A and Comgás on 2 July 2007, known as the ‘Tarnbau’ arrangement;

 

	
(f)

	
the agreement executed between Petrobras and Comgás on 19 March 2012, known as the ‘Leilão’ arrangement;

 

 

  

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(g)

	
the agreement executed between Petrobras and Comgás on 21 January 2006, known as the ‘Corn’ arrangement;

 

	
(h)

	
the agreement executed between Piratininga, Petrobras and Comgás on 14 July 2005, as amended, known as the ‘Corn’ arrangement; and.

 

	
(i)

	
the agreement executed between, Petrobras and Comgás on 29 March 2012, known as the ‘Curtissimo Prazo’ arrangement;

 

General Warranties means the Integral Warranties (other than the Fundamental Warranties);

 

General Warranty Claim means a claim for breach of one or more of the General Warranties under this Agreement;

 

Governmental Entity means any supra national, national, state, municipal or local government (including any subdivision, court, tribunal, arbitral body, administrative, trade or regulatory agency or commission or other authority thereof) or any quasi governmental or other body exercising or supervising any regulatory, antitrust, banking, foreign investment, exchange control, merger control, oil & gas, taxing, importing or other governmental or quasi governmental authority including, including the ARSESP;

 

Initial Price means R$3,400,000,000;

 

Information Technology means all material computer systems (including software and hardware) owned by or licensed to Comgás;

 

Integral Shareholders’ Agreement means the shareholders’ agreement dated 26 April 2007 between BG, Shell and the Seller;

 

Integral Warranties means the warranties given by BG pursuant to clause 8 and set out in Part A of Schedule 2;

 

Intellectual Property Rights means:

 

	
(a)

	
copyright, patents, goodwill, know-how, trade secrets, data base rights, trade marks, trade names, business names, domain names, logos, get-up and designs (whether registered or unregistered);

 

	
(b)

	
applications for registration (including all corresponding foreign counterpart applications, re-issues, re-examinations, divisionals, continuations (including part and extensions thereof)) and the right to apply for registration for any of the same; and

 

	
(c)

	
all other intellectual property rights and equivalent or similar forms of protection, howsoever described, existing anywhere in the world;

 

Key Counterparty means any Governmental Entity or Petrobras;

 

Last Comgás Accounts means the Comgás Accounts in respect of its financial year ended 31 December 2011;

 

Leakage means:

 

	
(a)

	
any non-cash dividend or distribution declared, paid, made or agreed or required to be made by Comgás to the Seller;

 

	
(b)

	
the issue or sale of any securities of Comgás to the Seller or BG or any of its Affiliates;

 

 

  

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(c)

	
any assets transferred to the Seller or BG or any or) my of its Affiliates by Comgás at below market value, including any agreement or other obligation to take any such action;

 

	
(d)

	
any liabilities assumed, indemnified or incurred for or to the benefit of the Seller or BG or any or any of its Affiliates by Comgás, including any agreement or other obligation to take any such action (excluding for the avoidance of doubt under any Transaction Document entered into at Closing);

 

	
(e)

	
any fees, bonuses or expenses connected to the Proposed Transaction to the extent paid, payable, assumed, indemnified or incurred by Comgás;

 

	
(f)

	
any payments made, or agreed to be made by Comgás to the Seller or BG or any of its Affiliates in respect of the issue, redemption, repurchase, repayment or acquisition of any share capital or other securities of Comgás, or any other return of capital to the Seller by Comgás;

 

	
(g)

	
the waiver or agreement to waive by Comgás of (i) any amount owed to Comgás by the Seller or BG or by any of its Affiliates, or (ii) any claims by Comgás in respect of any agreement or arrangement with the Seller or BG or any of its Affiliates;

 

	
(h)

	
the entry into by Comgás of any transactions outside the ordinary course of business for the benefit of the Seller or BG or any or any of its Affiliates (excluding for the avoidance of doubt under any Transaction Document entered into at Closing); and

 

	
(i)

	
the payment or agreement to pay by Comgás of any third party fees, third party costs or Tax arising as a result of those matters set out in subsections (a) to (h) above,

 

provided that (i) any Leakage to the Seller shall be deemed to be only the Shareholder Proportion of such Leakage and (ii) any Leakage to the Seller shall not also constitute Leakage to BG or any of its Affiliates and any Leakage to BG or any of its Affiliates shall not also constitute Leakage to the Seller;

 

Locked Box Date means 31 December 2011;

 

Longstop Date means the date that is 180 days after the date of this Agreement;

 

Material Adverse Change means:

 

	
(a)

	
any material breach of any of the Fundamental Warranties when deemed to be repeated immediately prior to Closing;

 

	
(b)

	
the revocation or termination of the Concession Agreement; or

 

	
(c)

	
any event or events which:

 

(i)           first occurred after the date of this Agreement; and

 

(ii)           has or have caused either:

 

	
  

	
(A)

	
a reduction in the value of Comgás’ net assets in excess of US$400 million provided that (x) no profits of Comgás earned or accrued in the period after the date of this Agreement shall be taken into account in determining net assets and (y) no account shall be taken of any loss, damage, costs or liability arising from the event or events to the extent that it has been remedied immediately prior to Closing; or

 

 

  

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(B)

	
a reduction in the market value of Comgás in excess of US$400 million (provided that for the purposes of determining market value of Comgás, no account shall be taken of public market prices of Comgás securities); and

 

(iii)           is (or are) not and was (or were) not caused by:

 

	
  

	
(A)

	
changes in interest rates, exchange rates or securities or commodity prices or in economic, financial, market or political conditions generally;

 

	
  

	
(B)

	
changes in conditions generally affecting the natural gas distribution industry generally, except to the extent such change, effect, event, occurrence or state of facts disproportionately affects the São Paulo State or Comgás;

 

	
  

	
(C)

	
changes in laws, regulations or accounting practices, except to the extent such change, effect, event, occurrence or state of facts disproportionately affects Comgás;

 

	
  

	
(D)

	
any transaction contemplated by any of the Transaction Documents or any change in control resulting from any such transaction;

 

	
  

	
(E)

	
any act or omission of any member of the Purchaser Group; or

 

	
  

	
(F)

	
any act or omission of any member of the BG Group or the Seller or Comgás at the prior written request or with the prior written consent of the Purchaser; and

 

(iv)           is or were not the subject of the indemnity under clause 13 (Indemnity);

 

Permitted Leakage means:

 

	
(a)

	
any payments made by Comgás to BG or any of its Affiliates on arm’s length terms in the ordinary course of trading (including, for the avoidance of doubt, any payments (not exceeding R$600,000) in aggregate made pursuant to the Commercial Services Agreement or the aggregate annual maintenance fees of US$834,000 owed in respect of the SAP Licenses);

 

	
(b)

	
any payments made by Comgás in January 2012 in respect of the R$5.3 million interest on equity owed to its shareholders from the financial year ended 31 December 2011; and

 

	
(c)

	
any dividends comprised in the Dividend Amounts,

 

provided that any Permitted Leakage to the Seller shall be deemed ,to be only the Shareholder Proportion of such Permitted Leakage;

 

Pre-emptive Right Agreement means the agreement between BG and Shell Brazil Holding B.V. dated 30 October 2006 pursuant to which Shell Brazil Holding B.V. granted BG a right of pre-emption over 7,594,007 ordinary shares in Comgás held directly by Shell Brazil Holding B.V.;

 

Preliminary Meeting has the meaning given in the Comgás Shareholders’ Agreement;

 

Price has the meaning given in clause 2.1;

 

Previous Announcements means the following announcements made for the purposes of compliance with Brazilian securities regulations regarding disclosure only in the 18 months prior to the date of this Agreement:

 

  

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(a)

	
Fato Relevante relating to European Investment Bank second tranche financing, dated 25 November 2010;

 

	
(b)

	
Comunicado relating to studies in connection with a potential migration to Novo Mercado, dated 19 October 2011;

 

	
(c)

	
Fato Relevante relating to the conclusion of the studies in connection with the potential migration to Novo Mercado, dated 2 December 2011;

 

	
(d)

	
Fato Relevante relating to the second tranche of commercial promissory notes, dated 15 February 2012; and

 

	
(e)

	
Fato Relevante relating to information provided by the controlling shareholder about discussions of a potential sale of shares to the Purchaser, dated 12 April 2012;

 

Properties means the properties set out in section 11.1 of the Data Room;

 

Proposed Transaction means the transaction contemplated by the Transaction Documents;

 

Purchaser Condition has the meaning given in clause 3.1;

 

Purchaser Deal Team means Ricardo Lewin, Maria Rita Drummond and Marcelo Eduardo Martins;

 

Purchaser Group means the Purchaser and its Affiliates from time to time and shall include Comgás with effect from Closing;

 

Purchaser Guarantor Warranties means the warranties given by the Purchaser Guarantor pursuant to clause 9 and set out in Part A of Schedule 4;

 

Purchaser Obligation means any representation, warranty, indemnity or undertaking to pay given by the Purchaser to BG (on its own account or on behalf of the Seller) under this Agreement;

 

Purchaser Proportion means the proportion of equity interests in Comgás held by the Purchaser at the relevant time as a percentage of the total equity interests in Comgás (and for the purposes of paragraphs 10 and 11 of Schedule 3, the relevant time shall be the date of the recovery referred to in those paragraphs);

 

Purchaser’s Bank Account means the Purchaser’s bank account notified to BG in writing at least 10 Business Days prior to Closing (and/or such other account(s) as BG and the Purchaser may agree in writing);

 

Purchaser Warranties means the warranties given by Purchaser pursuant to clause 9 and set out in Part B of Schedule 4;

 

Relevant Property means the Properties and any premises·now or previously owned, leased, used, occupied or controlled by Comgás;

 

Relief has the meaning given in the Tax Deed;

 

Representatives means, in relation to a party, its respective Affiliates and the directors, officers, employees, agents, advisers, accountants and consultants of that party and/or of its respective Affiliates;

 

Restricted Actions means the matters listed in Schedule 6;

 

 

  

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SAP Licenses means certain IT software licensed by SAP (UK) Limited to the BG Guarantor under the following orders, which the BG Guarantor subsequently assigned to Comgás in return for the payment of an annual maintenance fee:

 

	
(a)

	
Order 10184770 for 176 Professional, 26 Limited Professional and 202 iTutor licenses;

 

	
(b)

	
Order 10298200 for 21 Professional and 21 Limited Professional licenses; and

 

	
(c)

	
Order 10334710 for 10 mobile licenses;

 

Senior Employees means any employee of Comgás whose total remuneration in the 12 months prior to the date of this Agreement exceeded USD 1 million;

 

Shares means 68,308,884 voting shares and 3,649,056 preferred shares issued by Comgás and registered in the name of the Seller;

 

Shell means Shell Gas B.V., a corporation organised and existing according to the laws of The Netherlands, with its principal place of business at 30, Carel van Bylandtlaan, The Hague, The Netherlands;

 

Shareholder Proportion means the proportion of equity interests in the Seller held by BG as at the date of this Agreement as a percentage of the total equity interests in the Seller, being 83.5074 per cent.;

 

Surviving Provisions means clauses 3.6, 3.7 (Conditions), 10 (BG Guarantor Guarantee), II (Purchaser Guarantor Guarantee), 19 (Payments), 20 (Announcements), 21 (Confidentiality), 22 (Assignment), 24 (Costs), 25 (Notices), 26 (Whole Agreement), 27 (Waivers, Rights and Remedies), 28 (Counterparts), 29 (Variations), 30 (Invalidity), 31 (Third Party Enforcement Rights), 32 (Governing Law and Arbitration) and Schedule 7 (Definitions and Interpretation);

 

Tax has the meaning given in the Tax Deed;

 

Tax Claim means a claim for breach of one or more of the Warranties in paragraph 3 of Part A in Schedule 2 to this Agreement or a claim under the Tax Deed;

 

Tax Deed means the tax deed of indemnity in the Agreed Form;

 

Third Party Claim has the meaning given in clause 12.1;

 

Third Party Right means any interest or equity of any person (including any right to acquire, option or right of pre-emption or conversion) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or any other security agreement or arrangement, or any agreement to create any of the above;

 

Transaction Documents means this Agreement, any and all documents required by the depositary agent of the Shares in order to formalise the transfer of the Shares from the Seller to the Purchaser, the Disclosure Letter, the Closing Disclosure Letter, the Deed of Waiver and Amendment and any other documents in Agreed Form;

 

Unconditional Date has the meaning given in clause 3.8;

 

VAT means value added tax and any other sales or turnover tax;

 

Warranty Claim means a Fundamental Warranty Claim or a General Warranty Claim, as the context requires; and

 

 

  

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Working Hours means 9.30am to 5.30pm in the relevant location on a Business Day.

 

	
2.

	
Interpretation. In this Agreement, unless the context otherwise requires:

 

	
(a)

	
references to a person include any individual, firm, body corporate (wherever incorporated), government, state or agency of a state or any joint venture, association, partnership, works council or employee representative body (whether or not having separate legal personality);

 

	
(b)

	
headings do not affect the interpretation of this Agreement; the singular shall include the plural and vice versa; and references to one gender include all genders;

 

	
(c)

	
references to any English legal term or concept shall, in respect of any jurisdiction other than England, be construed as references to the term or concept which most nearly corresponds to it in that jurisdiction;

 

	
(d)

	
the expressions parent undertaking and subsidiary undertaking shall have the meaning given in sections 1162 and 1161 of the Companies Act 2006;

 

	
(e)

	
the parties acknowledge that they have participated jointly in the negotiation and drafting of this Agreement and, in the event that a question of interpretation arises (including as to the intention of the parties), no presumption or burden of proof shall arise in favor or against any party based on the authorship of any provisions;

 

	
(f)

	
references to Reais or R$ are references. to the lawful currency from time to time of Brazil;

 

	
(g)

	
references to US$ or US dollars are references to the lawful currency from time to time of the United States of America;

 

	
(h)

	
any statement in this Agreement qualified by the expression as far as BG is aware or to the best of the BG’s knowledge or to the knowledge of BG or any similar expression shall be deemed only to be made on the basis of the actual knowledge of BG at the date of this Agreement or immediately prior ,to Closing (as applicable) provided that a matter shall be deemed to be within the actual awareness and knowledge of BG if it:

 

	
  

	
(i)

	
is within the knowledge, information or belief of (A) any director of BG, (B) any BG-appointed director of the Seller or (C) any member of the BG Deal Team (or any persons occupying the equivalent positions of members of the BG Deal Team between the date of this Agreement and Closing) or (D) in relation only to the Tax Warranties, the BG Tax Team (or any persons occupying the equivalent positions of members of the BG Tax Team between the date of this Agreement and Closing) (the persons referred to in (A) to (D) together the BG Awareness Team); and

 

	
  

	
(ii)

	
without prejudice to sub-paragraph (i) above, in relation to the Integral Warranties deemed to be repeated immediately prior to Closing, would have been within the knowledge, information or belief of members of the BG Awareness Team if they had made substantially similar preparations and enquiries to those made by the BG Awareness Team prior to signing;

 

	
(i)

	
any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; and

 

(j)           the word “or” is not exclusive.

 

 

  

-58-

  

 

3.           Enactments. Except as otherwise expressly provided in this Agreement, any express reference to an enactment (which includes any legislation in any jurisdiction) includes references to (i) that enactment as amended, consolidated or re-enacted by or under any other enactment before or after the date of this Agreement; (ii) any enactment which that enactment re-enacts (with or without modification); and (iii) any subordinate legislation (including regulations) made (before or after the date of this Agreement) under that enactment, as amended, consolidated or re-enacted as described at (i) or (ii) above, except to the extent that any of the matters referred to in (i) to (iii) occurs after the date of this Agreement and increases or alters the liability of the Seller, BG, the BG Guarantor or the Purchaser under this Agreement.

 

4.           Schedules. The Schedules comprise schedules to this Agreement and form part of this Agreement.

 

5.           Inconsistencies. Where there is any inconsistency between the definitions set out in this Schedule and the definitions set out in any clause or any other Schedule, then, for the purposes of construing such clause or Schedule, the definitions set out in such clause or Schedule shall prevail.

 

 

  

-59-

  

 

SIGNATURE

This Agreement is signed by duly authorised representatives of the parties:

	
SIGNED

for and on behalf of

INTEGRAL

INVESTMENTS B.V.

	
)

	
SIGNATURE:

	

/s/ Ben Miller

	
)

	  
	
)

	  
	
)

	
NAME:

	

Ben Miller

	
SIGNED

for and on behalf of

BG GAS SÃO PAULO

INVESTMENTS B.V.

	
)

	
SIGNATURE:

	

/s/ Ben Miller

	
)

	  
	
)

	  
	
)

	
NAME:

	

Ben Miller

	
SIGNED

for and on behalf of

BG

ENERGY HOLDINGS LIMITED

	
)

	
SIGNATURE:

	

/s/ Ben Miller

	
)

	  
	
)

	  
	
)

	
NAME:

	

Ben Miller

	
SIGNED

for and on behalf of

PROVENCE PARTICIPAÇÕES S.A.

	
)

	
SIGNATURE:

	

/s/Marcos H. Lutz

	
)

	
NAME:

	
Marcos H. Lutz

	
)

	
SIGNATURE:

	

/s/ Marcelo S.S. Portela

	
)

	
NAME:

	
Marcelo S.S. Portela

	
SIGNED

for and on behalf of

COSAN S.A. INDÚSTRIA

E COMÉRCIO

	
)

	
SIGNATURE:

	

/s/Marcos H. Lutz

	
)

	
NAME:

	
Marcos H. Lutz

	
)

	
SIGNATURE:

	

/s/ Marcelo S.S. Portela

	
)

	
NAME:

	
Marcelo S.S. Portela

 

-1-

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