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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 13, 1998
PIONEER NATURAL RESOURCES COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 001-13245 75-2702753
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
1400 WILLIAMS SQUARE WEST
5205 NORTH O'CONNOR BLVD.
IRVING, TEXAS 75039
(Address of principal executive (Zip code)
offices)
Registrant's telephone number, including area code: (972) 444-9001
NOT APPLICABLE
(former name and former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) None
(B) None
<TABLE>
<CAPTION>
(C) EXHIBITS
<S> <C> <C>
99.1 Share Purchase Agreement, dated February 13, 1998, among
Pioneer Natural Resources Company, Trimac Corporation and
761795 Alberta Ltd.
99.2 Share Purchase Agreement, dated February 13, 1998, among
Pioneer Natural Resources Company, 398215 Alberta Ltd. and Guy
J. Turcotte.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PIONEER NATURAL RESOURCES COMPANY
(Registrant)
By: /s/ MARK L. WITHROW
----------------------------------------------
Name: Mark L. Withrow
Title: Executive Vice President
Date: February 23, 1998
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER PAGE
<S> <C> <C>
99.1 Share Purchase Agreement, dated February 13, 1998, among Pioneer
Natural Resources Company, Trimac Corporation and 761795 Alberta
Ltd.
99.2 Share Purchase Agreement, dated February 13, 1998, among Pioneer
Natural Resources Company, 398215 Alberta Ltd. and Guy J.
Turcotte.
</TABLE>
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EXHIBIT 99.1
SHARE PURCHASE AGREEMENT
February 13, 1998
BETWEEN
PIONEER NATURAL RESOURCES (CANADA) LTD., a body corporate
continued under the laws of Alberta ("PURCHASER")
AND
TRIMAC CORPORATION, a body corporate incorporated under the
laws of the Province of Alberta ("TRIMAC")
AND
761795 ALBERTA LTD., a body corporate incorporated under the
laws of the Province of Alberta ("SUBSIDIARY")
RECITALS
A. The Subsidiary is a wholly owned subsidiary of Trimac;
B. Trimac is the legal and beneficial holder of all outstanding Class A
Shares of 761582 Alberta Ltd. ("Newco"), and Subsidiary is the legal
and beneficial holder of all outstanding Class D Preferred Shares,
Series 1 of Newco, such shares collectively being the only outstanding
shares of any class in the capital of Newco;
C. The Purchaser desires to purchase and the Vendors desire to sell the
Newco Shares on the terms set out in this Agreement;
D. The only asset of Newco is a total of 3,113,624 Exchangeable Shares in
the capital of the Purchaser.
THE PARTIES AGREE AS FOLLOWS.
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ARTICLE 1
INTERPRETATION
1.1 In this Agreement, including the premises hereto and this section,
unless the context otherwise requires, the following terms shall have
the following respective meanings:
"AGREEMENT" means this Agreement and any schedules attached hereto and
any amendments hereof;
"ARRANGEMENT SHARES" means the 3,113,624 Exchangeable Shares held by
Newco;
"CLOSING" means the completion of the transactions contemplated by the
Agreement;
"CLOSING DATE" means February 13, 1998 or such other date as the
parties hereto may agree;
"CLOSING TIME" means 2:00 p.m., Calgary Time, or such other time as
the parties hereto may agree, on the Closing Date;
"NEW EXCHANGEABLE SHARES" means the Exchangeable Shares to be issued
to the Vendors pursuant to this Agreement;
"NEWCO" means 761582 Alberta Ltd., an Alberta corporation;
"NEWCO CLASS A SHARES" means 5,000,000 outstanding Class A Shares of
Newco;
"NEWCO PREFERRED SHARES" means 22,000 Class D Preferred Shares Series
1 of Newco;
"NEWCO SHARES" means the Newco Class A Shares and the Newco Preferred
Shares;
"PURCHASER TAX COST" means any liability for any Tax which (i) is
suffered or incurred, directly or indirectly, by Purchaser, and (ii)
would not have been so suffered or incurred had the transactions
contemplated by this Agreement not taken place or had the Arrangement
Shares not been cancelled in connection with the winding up or
dissolution of Newco. For purposes of the foregoing, a Tax shall be
considered to be suffered or incurred by Purchaser indirectly if such
Tax is suffered or incurred by any
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person related to Purchaser within the meaning of Section 954(d)(3) of
the United States Internal Revenue Code of 1986, as amended, assuming
for such purpose that Purchaser is a "controlled foreign corporation"
within the meaning of Section 957 of said Code.
"TAX" means (i) any Canadian domestic, United States or other foreign
net income, alternative or add-on minimum, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise,
profits, license, withholding, payroll, employment, excise,
production, severance, stamp, occupation, premium, property,
environment, or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest and/or any penalty, addition to
tax or additional amount imposed by any taxing authority, and (ii) any
liability of a person for the payment of any amounts of the type
described in clause (i) as a result of being a member of an affiliated
or consolidated group or arrangement whereby liability of such person
for the payment of such amounts was determined or taken into account
with reference to the liability of any other person for any period.
"VENDORS" means collectively, Trimac and Subsidiary.
1.2 Headings of the articles or sections hereof are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.3 In this Agreement, words importing the singular number only shall
include the plural and vice versa, and words importing the masculine
gender shall include the feminine and neuter gender, and words
importing persons shall include provincial or federal companies,
corporations, partnerships, syndicates, trusts and any number or
aggregate of persons, all as the context may require.
1.4 All dollar amounts in this Agreement are expressed in Canadian
dollars.
1.5 This Agreement and all amendments, modifications, alterations or
supplements thereto shall, in all respects, be subject to and
interpreted, construed and enforced in accordance with the laws of the
Province of Alberta. Each party hereto submits to and accepts the
jurisdiction of the Courts of the Province of Alberta for all purposes
hereof.
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ARTICLE 2
SALE OF SHARES
2.1 Subject to the terms and conditions of this Agreement, the Vendors
agree to sell, assign, transfer and convey to the Purchaser and the
Purchaser agrees to purchase from the Vendors, on the Closing Date,
the Newco Shares.
ARTICLE 3
PURCHASE PRICE
3.1 In consideration for the Newco Shares, the Purchaser shall issue to
the Vendors an aggregate of 3,113,624 New Exchangeable Shares. The
purchase consideration shall be allocated between the Vendors as
follows:
Trimac 2,431,774 New Exchangeable Shares
Subsidiary 681,850 New Exchangeable Shares
ARTICLE 4
VENDOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 Each of the Vendors jointly and severally represents and warrants to
the Purchaser as follows effective on the date hereof and at the
Closing Date:
(a) Newco is a corporation duly incorporated and subsisting under
the laws of the Province of Alberta and has all requisite
corporate power and authority to own the Arrangement Shares.
(b) The authorized and issued share capital of Newco consists of:
(i) an unlimited number of Class A Shares of which
5,000,000 are issued and outstanding as fully paid
and non-assessable shares; and
(ii) an unlimited number of Class B Shares, none of which
have been issued;
(iii) an unlimited number of Class C Preferred Shares none
of which have been issued;
(iv) an unlimited number of Class D Preferred Shares
issuable in series, of which 22,000 shares of the
first series, designated
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Class D Preferred Shares Series 1, are issued and
outstanding as fully-paid and non-assessable.
(c) Trimac is the holder of record and the beneficial owner of the
Newco Class A Shares and the Subsidiary is the holder of
record and beneficial owner of the Newco Preferred Shares,
which collectively represent all of the issued and outstanding
shares in the capital of Newco and the Vendors are and on the
Closing Date will be the owner of all such Newco Shares with
good and marketable title thereto free and clear of any
option, security interest, lien, charge, encumbrance,
hypothecation, claim or right of others (other than the rights
of the Purchaser hereunder).
(d) Trimac is and at the Closing will be, the holder of record and
beneficial owner of all outstanding shares of the Subsidiary.
(e) Each of the Vendors has the legal right, power and authority
to sell, assign and transfer the Newco Shares being sold by it
hereunder free and clear of any option, security interest,
lien, charge, encumbrance, hypothecation, claim or right of
others (other than the rights of the Purchaser hereunder).
(f) There are no outstanding agreements, options, warrants, rights
of conversion or other rights pursuant to which Newco is or
may become obligated to issue any shares, or securities
convertible or exchangeable into shares, and there are no
outstanding obligations, understandings or commitments of
Newco to repurchase, redeem or otherwise acquire any
outstanding shares of its capital or restricting its ability
to issue shares.
(g) Newco is the beneficial owner of the Arrangement Shares, free
and clear of any option, security interest, lien, charge,
encumbrance, claim or right of others.
(h) Effective on the Closing Date, Newco will have no liabilities,
(whether actual, accrued, potential, contingent or otherwise).
(i) From the date of its incorporation until the Closing Date
Newco has not carried on any business or owned any assets,
other than cash and shares of Chauvco Resources Ltd. and the
Arrangement Shares and other securities received in the
arrangement of Chauvco Resources Ltd. which was effected
December 18, 1997.
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(j) The corporate records and minute books of Newco are complete
and accurate in all material aspects.
(k) Each of the Vendors is a corporation validly subsisting under
the laws of the Province of Alberta, with the requisite
corporate power and authority to enter into and perform all of
its obligations under this Agreement and the execution,
delivery and performance of this Agreement and the
transactions contemplated hereby have been duly and validly
authorized by all requisite corporate action on the part of
each of the Vendors.
(l) The entering into of this Agreement by the Vendors and the
completion of the transactions contemplated hereby will not
result in the violation of any of the terms and provisions of
the constating documents or by-laws of any of the Vendors or
Newco or of any indenture or other agreement to which the
Vendors or Newco is a party.
(m) The entering into this Agreement by the Vendors and the
completion of the transactions contemplated hereby will not
result in the violation of any law or regulation of Canada or
of the Province of Alberta.
(n) This Agreement has been duly executed and delivered by the
Vendors and is a valid and binding obligation of each of the
Vendors enforceable against them in accordance with its terms.
(o) There is no action, suit, litigation, arbitration proceeding
or governmental proceeding including appeals and applications
for review, in which Newco is a party, either as plaintiff,
defendant, applicant, respondent or any other capacity
whatsoever. There are no outstanding orders of any court,
governmental agency or instrumentality, to which Newco, Trimac
or the Subsidiary is subject affecting, in any material
respect, the business, prospects, properties or condition
(financial or otherwise) of Newco or the ability of the
Vendors to consummate the transactions contemplated hereby.
(p) Each of the Vendors is not a non-resident of Canada within the
meaning of the Income Tax Act (Canada). None of the Vendors
is a corporation incorporated under the laws of the United
States.
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(q) The only individuals who have been directors or officers of
Newco are Terry Owen, Margaret L. Parr and Robert J. Kennedy.
Newco does not have and has never had any employees.
(r) Newco is not a partner, co-tenant, joint venturer or otherwise
a participant in any partnership, joint venture, co-tenancy or
other similar jointly owned business.
(s) Neither the Vendors nor Newco have previously granted or
agreed to grant any proxy in respect of the Arrangement Shares
or entered into any voting trust, vote pooling or other
agreement in respect of the Arrangement Shares or any rights
attaching thereto.
(t) Except as are released prior to Closing, Newco is not a party
to nor bound or affected by any agreements, commitments or
understandings of any nature whatsoever, written or oral
except for this Agreement under which Newco has any
outstanding obligations. Except as are released prior to
Closing, Newco is not a party to nor bound by any agreement of
guarantee, indemnification, assumption or endorsement or any
other like commitment of the obligations, liabilities
(contingent or otherwise) or indebtedness of any other person,
firm or corporation.
(u) Neither Trimac nor Subsidiary is an underwriter, dealer or
other person who participates, pursuant to a contractual
arrangement, in the distribution of the New Exchangeable
Shares sold in reliance on Regulation S ("Regulation S") of
the United States Securities Act of 1993 (the "Act").
(v) Neither Trimac nor Subsidiary is acquiring the New
Exchangeable Shares for the account or benefit of:
(i) any natural person resident in the United States;
(ii) any partnership or corporation organized or
incorporated under the laws of the United Sates;
(iii) any estate of which any executor or administrator is
a U.S. person;
(iv) any trust of which any trustee is a U.S. person;
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(v) any agency or branch of a foreign entity located in
the United States;
(vi) any non-discretionary account or similar account
(other than an estate or trust) held by a dealer or
other fiduciary for the benefit or account of a U.S.
person;
(vii) any discretionary account or similar account (other
than an estate or trust) held by a dealer or other
fiduciary organized, incorporated or (if an
individual) resident in the United States; and
(viii) any partnership or corporation if:
(A) organized or incorporated under the laws of
any foreign jurisdiction; and
(B) formed by a U.S. person principally for the
purpose of investing in securities not
registered under the Act, unless it is
organized or incorporated, and owned, by
accredited investors (as defined in Rule
501(a) under the Act) who are not natural
persons, estates or trusts.
(w) None of the foregoing representations and statements of fact
contains any untrue statement of material fact or omits to
state any material fact necessary to make any such statement
or representation not misleading to a prospective purchaser of
the Arrangement Shares seeking full information as to Newco,
its respective properties, businesses and affairs.
4.2 The Vendors acknowledge that the certificates representing the New
Exchangeable Shares will bear a legend in substantially the following
form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE (OR ITS
PREDECESSOR) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN
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AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS
USED ABOVE HAVE THE MEANINGS GIVEN THEM IN REGULATIONS UNDER
THE SECURITIES ACT.
PURSUANT TO THAT CERTAIN SHARE PURCHASE AGREEMENT DATED
FEBRUARY 13, 1998 BETWEEN THE HOLDER OF THIS CERTIFICATE AND
PIONEER NATURAL RESOURCES (CANADA) LTD., THE HOLDER OF THIS
CERTIFICATE HAS AGREED THAT IT WILL NOT VOLUNTARILY OFFER,
SELL, PLEDGE (WITH CERTAIN EXCEPTIONS), TRANSFER, ASSIGN OR
OTHERWISE DISPOSE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE; PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL
LIMIT SUCH HOLDER'S RIGHT TO RECEIVE SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, OF PIONEER NATURAL RESOURCES COMPANY
PURSUANT TO THE PROVISIONS OF THE EXCHANGEABLE SHARES AND
RELATED ARRANGEMENTS.
4.3 The Vendors agree that the issuance by Pioneer Canada of New
Exchangeable Shares is exempt from registration under the United
States Securities Act of 1933 (the "Act") pursuant to Regulation S
("Regulation S") of the Act.
4.4 The Vendors agree that they will not voluntarily offer, sell, pledge,
transfer, assign or otherwise dispose of the New Exchangeable Shares;
provided, however, that nothing herein shall limit a Vendor's right to
receive shares of common stock, par value $.01 per share, of Pioneer
Natural Resources Company ("Pioneer Common Stock") pursuant to the
provisions of the New Exchangeable Shares and related arrangements or
pledging or depositing the New Exchangeable Shares with a Pledgee or
other recipient of the New Exchangeable Shares who is bound by the
same restrictions imposed on the Vendors pursuant to this Section 4.4.
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4.5 Subsidiary agrees to comply with the terms of that certain
Shareholders Agreement (the "Shareholders Agreement"), dated as of
September 3, 1997 among Pioneer Natural Resources company, Trimac
Corporation and Gendis Inc. as if Subsidiary had entered into such
agreement. With respect to both Trimac and Subsidiary, to the extent
that there is any inconsistency between the Shareholders Agreement and
this Agreement , the terms of this Agreement shall supersede the terms
of the Shareholders Agreement.
ARTICLE 5
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 The Purchaser represents and warrants to the Vendors that effective on
the date hereof and at the Closing Date:
(a) The Purchaser is a corporation duly continued and subsisting
under the laws of the Province of Alberta, and has all
requisite corporate power and authority to enter into and
perform all of its obligations under this Agreement.
(b) This Agreement has been duly executed and delivered by the
Purchaser, and the provisions hereof constitute legal, valid
and binding obligations of the Purchaser enforceable against
it in accordance with their terms.
(c) The execution, delivery and performance of this Agreement and
the transactions contemplated hereby including the issue of
the New Exchangeable Shares have been duly and validly
authorized by all requisite action on the part of the
Purchaser and the New Exchangeable Shares, when issued
pursuant to the terms hereof, will have been validly issued as
fully-paid and non-assessable.
(d) The consummation of the transactions contemplated herein will
not violate, nor be in conflict with, any provision of the
Purchaser's Articles of Incorporation or bylaws or any
agreement by which it is bound.
5.2 (a) Purchaser agrees that Trimac shall prepare and file all tax
returns, elections or forms which Newco is required to file
relating to transactions or events or other matters occurring
at or before the Closing Time or in respect of fiscal periods
ending at or prior to the Closing Date. The Purchaser shall
cause Newco to provide all necessary powers of attorney,
information and access to books and
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records to enable Trimac to prepare and file the returns,
elections and forms referred to above. Trimac shall prepare
all necessary powers of attorney.
(b) Form T2057 has been executed to make an election pursuant to
Subsection 85(1) of the Income Tax Act (Canada) (the "Act") in
respect of the acquisition by Newco of shares of Chauvco
Resources Ltd., in the form attached as Schedule "A" hereto.
The Purchaser agrees that the Form T2057 shall be filed by
Trimac with Revenue Canada.
(c) The Purchaser agrees with Trimac that a Form T2057 will be
executed by them and filed to make an election pursuant to
Subsection 85(1) of the Act in respect of the acquisition by
the Purchaser of the Chauvco Resources Ltd. shares from Newco
pursuant to the Plan of Arrangement implemented on December
18, 1997, which shall contain the information and be in the
form attached as Schedule "B" hereto. The Purchaser agrees
that the Form T2057 shall be filed by Trimac on behalf of
Newco with Revenue Canada.
(d) The Purchaser agrees with Trimac that a Form T2057 will be
executed by them and filed to make an election pursuant to
Subsection 85(1) of the Act in respect of the acquisition by
the Purchaser of the Newco Class A Shares, which shall contain
the information and be in the form attached as Schedule "C"
hereto. The Purchaser agrees that the Form T2057 shall be
filed by Trimac with Revenue Canada.
(e) The Purchaser agrees with the Subsidiary that a Form T2057
will be executed by them and filed to make an election
pursuant to Subsection 85(1) of the Act in respect of the
acquisition by the Purchaser of the Newco Preferred Shares,
which shall contain the information and be in the form
attached as Schedule "D" hereto. The Purchaser agrees that the
Form T2057 shall be filed by the Subsidiary with Revenue
Canada.
(f) At the Closing Time the Purchaser shall deliver to the Vendors
Forms T2057 in the form attached as Schedules "B", "C" and
"D", each duly executed by the Purchaser.
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ARTICLE 6
SURVIVAL
6.1 The representations and warranties of the Purchaser and the Vendors
shall survive the execution of this Agreement and consummation of the
transactions described herein and shall continue to remain in full
force and effect. The Covenants of the Purchaser and Vendors shall
survive the execution of this Agreement and the consummation of the
transactions described herein and shall continue and remain in full
force and effect until Trimac and Subsidiary no longer own any New
Exchangeable Shares or shares of common stock of Pioneer Natural
Resources Company, into which such New Exchangeable Shares have been
exchanged.
6.2 The Purchaser shall provide Trimac with reasonable access to the books
and records of Newco following the Closing Date and shall preserve
such books and records for a period of seven (7) years from the
Closing Date.
ARTICLE 7
INDEMNIFICATION
7.1 Each of the Vendors jointly and severally covenants and agrees with
the Purchaser to pay, satisfy, discharge, observe, perform, fulfill,
indemnify and save harmless the Purchaser, on an after tax basis, from
and against each of the following (a "Claim"):
(a) any claim, demand, action, cause of action, demand, loss,
cost, liability or expense (including without limitation,
reasonable professional fees and all costs incurred in
investigating or pursuing any of the foregoing or any
proceeding relating to the foregoing) which may be made or
brought against the Purchaser or which it may suffer or incur
as a result of or in connection with any non-fulfillment of
any covenant or agreement on the part of either of the Vendors
under, or any incorrectness in or breach of any representation
or warranty of either of the Vendors in, this Agreement, and
(b) any liabilities, duties or obligations of Newco arising as a
result of or in connection with transactions or events which
occurred prior to the Closing Date, including, without
limitation:
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(i) all debts, obligations, liabilities (including
continent liabilities), leases, contracts,
commitments or engagements whatsoever,
(ii) all liabilities in respect of income, capital and
other taxes and governmental charges and assessments,
and
(iii) reasonable professional fees and all costs incurred
in investigating or pursuing any of the foregoing or
any proceeding relating to the foregoing, and
(c) any Purchaser Tax Cost, and all reasonable professional fees
and costs incurred in investigating, pursuing or defending
against any Purchaser Tax Cost or any proceeding relating
thereto.
7.2 NOTICE OF CLAIM OR COMMENCEMENT OF PROCEEDING
Promptly after receipt by the Purchaser of notice of a Claim or the
commencement of any action, suit or proceeding in respect thereof and
any appeal therefrom ("Proceeding") against which it believes it is
indemnified under this Agreement, the Purchaser shall, if a claim in
respect thereto is to be made against a party under an obligation to
indemnify the Purchaser (the "Indemnifying Party") under this
Agreement, notify the Indemnifying Party in writing of such Claim or
Proceeding, provided, however, that the omission so to notify the
Indemnifying Party shall not relieve it from any liability which it
may have to the Purchaser to the extent that the Indemnifying Party is
not prejudiced by such omission.
7.3 DEFENSE OF CLAIMS.
(a) The Indemnifying Party shall, within 30 days after receipt of
a notice of Claim or Proceeding given pursuant to Section 7.2,
either (1) acknowledge liability, as between the Indemnifying
Party and the Purchaser, for such Claim or the amount in
controversy in such Proceeding and pay the Purchaser the
amount of such Claim or the amount in controversy in such
Proceeding in cash or other immediately available funds (or
establish by agreement with the Purchaser an alternative
payment schedule), (2) acknowledge liability, as between the
Indemnifying Party and the Purchaser, for such Claim or the
amount in controversy in such Proceeding, disavow the validity
of the Claim or Proceeding or the amount thereof and, to the
extent set forth in Section 7.3(b), assume the legal defense
thereof, or (3) object (or reserve the right to object until
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additional information is obtained) to the claim for
indemnification or the amount thereof, setting forth the
grounds therefor in reasonable detail; provided that, if the
Indemnifying Party objects (or reserves its right to object)
within such 30-day period as provided in this Section 7.3,
then the Purchaser may bring suit (in the same Proceeding or
otherwise) to resolve the dispute and, pending final
resolution of such dispute, the Purchaser may proceed as
though the Indemnifying Party had responded in accordance with
clause (1) above. If the Indemnifying Party does not respond
to the Purchaser as provided in this Section 7.3 within such
30-day period, the Indemnifying Party shall be deemed to have
acknowledged its liability for such indemnification claim in
accordance with clause (1) above and the Purchaser may
exercise any and all of its rights under applicable law to
collect such amount.
(b) If any such Proceeding shall be brought against the Purchaser
and it shall notify the Indemnifying Party thereof in
accordance with Section 7.2, the Indemnifying Party shall, if
it shall have responded to such notice in accordance with
clause (a)(2) above, be entitled (1) in the case of a Claim in
respect of a Purchaser Tax Cost arising out of a proceeding
involving other issues for which Purchaser is not indemnified
hereunder, to elect to participate (directly or through
counsel reasonably satisfactory to Purchaser) in the portion
of the Proceedings related to the issue constituting the
Purchaser Tax Cost, subject to the control of Purchaser over
such Proceeding, or (2) in all other cases, to elect to assume
the legal defense thereof with counsel reasonably satisfactory
to the Purchaser. After notice from the Indemnifying Party to
the Purchaser of its election to assume the defense of such
claim or such action described in clause (2) hereof, the
Indemnifying Party shall not be liable to the Purchaser under
this Article for any attorney's fees or other expenses (except
reasonable costs of investigation) subsequently incurred by
the Purchaser in connection with the defense thereof. In all
other cases described in clause (a)(2), the Purchaser may
require the Indemnifying Party to reimburse it on a current
basis for its reasonable expenses of investigation, reasonable
attorneys' and accountants' fees and expenses and reasonable
out-of-pocket expenses incurred in the defense thereof and the
Indemnifying Party shall be bound by the result obtained with
respect thereto by the Purchaser.
(c) An Indemnifying Party will not, without prior written consent
of the Purchaser (which consent shall not be unreasonably
withheld), settle
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or compromise or consent to the entry of any judgment with
respect to any pending or threatened Claim or Proceeding in
respect of which indemnification or contribution may be sought
hereunder (whether or not the Purchaser is an actual or
potential party to such Claim or Proceeding) unless such
settlement, compromise or consent includes an unconditional
release of the Purchaser from all liability arising out of
such Claim or Proceeding. If the Indemnifying Party has
responded to the Purchaser pursuant to clause (a)(1) above
(not including a deemed response under the proviso contained
in 7.3(a)(3)), the Purchaser may settle or compromise or
consent to the entry of any judgment with respect to the Claim
or Proceeding that was the subject of notice to the
Indemnifying Party pursuant to this Article without the
consent of the Indemnifying Party. The Purchaser will not
otherwise, without the prior written consent of the
Indemnifying Party (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened Claim or
Proceeding, but, if such Claim or Proceeding is settled or
compromised or if there is entered any judgment with respect
to any such Claim or Proceeding, in either case with the
consent of the Indemnifying Party, or if there be a final
judgment of the plaintiff in any such Claim or Proceeding, the
Indemnifying Party agrees to indemnify and hold harmless the
Purchaser from and against any loss or liability by reason of
such settlement, compromise or judgment.
7.4 REFUND OF AMOUNTS
If any person becomes entitled to a refund (whether by payment,
credit, offset or otherwise) of all or a portion of any amount
relating to a Claim or Proceeding for which an Indemnifying Party has,
by payment, indemnified the Purchaser, then an amount equal to the
refund, together with any interest received on such refund (net of any
Tax payable on such interest), shall be paid by the Purchaser to the
Indemnifying Party promptly after receipt of payment of the refund or
notice from the relevant governmental authority of such credit, offset
or other refund mechanism, as the case may be.
7.5 LIMITATION OF INDEMNITY
The joint and several indemnity of the Vendors in respect of any
Purchaser Tax Cost shall be limited to the proportion of such
Purchaser Tax Cost that the number of New Exchangeable Shares issued
hereunder is to the total number of New Exchangeable Shares issued
pursuant to this Agreement
<PAGE> 16
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and the similar agreement entered into as of the date hereof with
398215 Alberta Ltd. and Guy J. Turcotte. Notwithstanding anything
contained in this Article 7, the joint and several indemnity of the
Vendors in respect of any Purchaser Tax Cost arising under any
legislation or regulation of a jurisdiction other than Canada or a
province or territory thereof, shall not exceed the sum of $10,112,757
United States dollars.
ARTICLE 8
EXPENSES
8.1 The Vendors jointly and severally agree to reimburse the Purchaser for
all out of pocket expenses incurred by the Purchaser (including fees
and disbursements of counsel and all tax advisors) in connection with
the transaction contemplated herein including without limitation in
connection with the preparation, execution and performance of this
Agreement within 10 business days after receipt of a written invoice
with respect thereto. In respect of expenses which relate to this
Agreement and to other similar agreements entered into with respect to
other holders of Exchangeable Shares, the Vendors shall reimburse
Purchaser in the proportion which the number of Exchangeable Shares
issued hereunder is to the total number of Exchangeable Shares issued
pursuant to all such similar agreements.
ARTICLE 9
CLOSING
9.1 Closing shall take place at the Closing Time on the Closing Date at
the offices of MacKimmie Matthews, 700, 401 - 9th Avenue S.W.,
Calgary, Alberta, or at such other place as the parties hereto may
agree upon.
9.2 At Closing, the Vendors shall deliver to the Purchaser:
(a) a certified copy of the resolution of the directors of Newco
approving the transfer of the Newco Shares;
(b) certificates for the Newco Shares duly endorsed in blank for
transfer;
(c) written resignations from all directors and officers of Newco;
and
(d) a certificate, dated as of the Closing Date, executed by each
of the Vendors, to the effect that the representations and
warranties made in Section 4.1 are true and correct in all
material respects at and as of
<PAGE> 17
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the Closing Date and that Vendors have complied with all
Agreements herein required to be complied with at and as of
the Closing Date.
9.3 At the Closing Time on the Closing Date, the Purchaser shall deliver
to the Vendors certificates representing the New Exchangeable Shares.
ARTICLE 10
CLOSING CONDITIONS
10.1 The obligation of the Purchaser to complete the purchase of the Newco
Shares is subject to the conditions precedent that:
(a) the Vendors shall have performed or complied in all material
respects with each of the terms, covenants and conditions of
this Agreement to be performed or complied with by the Vendors
at or prior to the Closing Date;
(b) the approval of the Toronto Stock Exchange and all other
necessary regulatory approvals for the completion of the
transaction shall have been obtained; and
(c) the registration statement on Form S-3 registering the shares
of Pioneer Common Stock underlying the New Exchangeable Shares
shall have been declared effective by the United States
Securities and Exchange Commission.
The conditions in the Section 10.1 are for the sole benefit of the Purchaser
and may be waived, in whole or in part, by written notice to the Vendors.
10.2 The obligation of the Vendors to complete the sale of the Newco Shares
is subject to the condition precedent that the Purchaser shall have
performed or complied in all material respects with each of the terms,
covenants and conditions of this Agreement to be performed or complied
with by Purchaser at or prior to the Closing Date, which condition is
for the sole benefit of the Vendors and may be waived, in whole or in
part, by written notice to the Purchaser.
10.3 Purchaser shall cause its counsel to apply for all required regulatory
approvals.
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ARTICLE 11
MISCELLANEOUS
11.1 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
11.2 All obligations of the Vendors hereunder shall be joint and several.
11.3 Any direction, notice, request, delivery or demand hereunder shall be
in writing, shall be hand delivered or telecopied and shall be deemed
to have been received on the date of delivery. Either party may change
its address by notice given in the manner aforesaid.
(a) if to the Purchaser, addressed to:
Pioneer Natural Resources (Canada) Ltd.
c/o Pioneer Natural Resources Company
1400 Williams Square West
5205 - N O'Connor Blvd.
Irving, Texas
75039-3746
Attention: General Counsel
(b) if to Trimac, addressed to:
Trimac Corporation
2100, 800 - 5th Avenue S.W.
Calgary, Alberta
T2P 2P9
Attention: T.J. Owen, Vice-President and Chief Financial Officer
(c) if to Subsidiary
761795 Alberta Ltd.
2100, 800 - 5th Avenue S.W.
Calgary, Alberta
T2P 2P9
Attention: T.J. Owen, President
11.4 Time shall be of the essence.
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11.5 No amendment or variation of this Agreement shall be of any force or
effect unless the same be reduced to writing and duly executed by all
parties hereto.
11.6 Each of the parties shall at any time, and from time to time
hereafter, take any and all steps, and execute, acknowledge and
deliver to the other party, any and all further instruments and
assurances that the other party may reasonably require for the purpose
of giving full force and effect to the provisions of this Agreement.
11.7 Neither party may assign in whole or in part any of its interest,
rights or obligations hereunder without the prior written agreement of
the other party hereto except as expressly provided herein.
11.8 This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument, which shall be
sufficiently evidenced by such original counterparts.
EXECUTED AND DELIVERED.
PIONEER NATURAL
RESOURCES (CANADA) LTD.
By: /s/ STEPHEN R. PETTY
---------------------------------
TRIMAC CORPORATION
By: /s/ ROBERT J. KENNEDY
TERRY J. OWEN
---------------------------------
761795 ALBERTA LTD.
By: /s/ ROBERT J. KENNEDY
TERRY J. OWEN
---------------------------------
<PAGE> 1
EXHIBIT 99.2
SHARE PURCHASE AGREEMENT
February 13, 1998
BETWEEN
PIONEER NATURAL RESOURCES (CANADA) LTD., a body corporate
continued under the laws of Alberta ("PURCHASER")
AND
398215 ALBERTA LTD., a body corporate incorporated under the
laws of the Province of Alberta ("398215")
AND
GUY J. TURCOTTE, an individual resident in the Province of
Alberta ("TURCOTTE")
RECITALS
A. 398215 is the legal and beneficial holder of all outstanding shares of
760551 Alberta Ltd. ("Newco"), and Turcotte is the legal and
beneficial holder of certain debt of Newco in the principal amount of
$3,781,300 ("Newco Debt");
B. The Purchaser desires to purchase and the Vendors desire to sell the
Newco Shares and Newco Debt on the terms set out in this Agreement;
C. The only asset of Newco is a total of 581,064 Exchangeable Shares in
the capital of the Purchaser.
THE PARTIES AGREE AS FOLLOWS.
ARTICLE 1
INTERPRETATION
1.1 In this Agreement, including the premises hereto and this section,
unless the context otherwise requires, the following terms shall have
the following respective meanings:
"AGREEMENT" means this Agreement and any schedules attached hereto and
any amendments hereof;
<PAGE> 2
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"ARRANGEMENT SHARES" means the 581,064 Exchangeable Shares held by
Newco;
"CLOSING" means the completion of the transactions contemplated by the
Agreement;
"CLOSING DATE" means February 13, 1998 or such other date as the
parties hereto may agree;
"CLOSING TIME" means 2:00 p.m., Calgary Time, or such other time as
the parties hereto may agree, on the Closing Date;
"NEW EXCHANGEABLE SHARES" means the Exchangeable Shares to be issued
to the Vendors pursuant to this Agreement;
"NEWCO" means 760551 Alberta Ltd., an Alberta corporation;
"NEWCO DEBT" means $3,781,300 principal amount of debt owing by Newco
to Turcotte;
"NEWCO SHARES" means 1,100 Newco Class A Common Shares;
"PURCHASER TAX COST" means any liability for any Tax which (i) is
suffered or incurred, directly or indirectly, by Purchaser, and (ii)
would not have been so suffered or incurred had the transactions
contemplated by this Agreement not taken place or had the Arrangement
Shares not been cancelled in connection with the winding up or
dissolution of Newco. For purposes of the foregoing, a Tax shall be
considered to be suffered or incurred by Purchaser indirectly if such
Tax is suffered or incurred by any person related to Purchaser within
the meaning of Section 954(d)(3) of the United States Internal Revenue
Code of 1986, as amended, assuming for such purpose that Purchaser is
a "controlled foreign corporation" within the meaning of Section 957
of said Code.
"TAX" means (i) any Canadian domestic, United States or other foreign
net income, alternative or add-on minimum, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise,
profits, license, withholding, payroll, employment, excise,
production, severance, stamp, occupation, premium, property,
environment, or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest and/or any penalty, addition to
tax or additional amount imposed by any taxing authority, and (ii) any
liability of a person for the payment of any amounts of the type
described in
<PAGE> 3
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clause (i) as a result of being a member of an affiliated or
consolidated group or arrangement whereby liability of such person for
the payment of such amounts was determined or taken into account with
reference to the liability of any other person for any period.
"VENDORS" means collectively, 398215 and Turcotte.
1.2 Headings of the articles or sections hereof are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.3 In this Agreement, words importing the singular number only shall
include the plural and vice versa, and words importing the masculine
gender shall include the feminine and neuter gender, and words
importing persons shall include provincial or federal companies,
corporations, partnerships, syndicates, trusts and any number or
aggregate of persons, all as the context may require.
1.4 All dollar amounts in this Agreement are expressed in Canadian
dollars.
1.5 This Agreement and all amendments, modifications, alterations or
supplements thereto shall, in all respects, be subject to and
interpreted, construed and enforced in accordance with the laws of the
Province of Alberta. Each party hereto submits to and accepts the
jurisdiction of the Courts of the Province of Alberta for all purposes
hereof.
ARTICLE 2
SALE OF SHARES
2.1 Subject to the terms and conditions of this Agreement, the Vendors
agree to sell, assign, transfer and convey to the Purchaser and the
Purchaser agrees to purchase from the Vendors, on the Closing Date,
the Newco Shares and Newco Debt.
ARTICLE 3
PURCHASE PRICE
3.1 In consideration for the Newco Shares and Newco Debt, the Purchaser
shall issue to the Vendors an aggregate of 581,064 New Exchangeable
Shares. The purchase consideration shall be allocated between the
Vendors as follows:
<PAGE> 4
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398215 462,898 New Exchangeable Shares
Turcotte 118,166 New Exchangeable Shares
ARTICLE 4
VENDOR'S REPRESENTATIONS AND WARRANTIES
4.1 Each of the Vendors jointly and severally represents and warrants to
the Purchaser as follows effective on the date hereof and at the
Closing Date:
(a) Newco is a corporation duly incorporated and subsisting under
the laws of the Province of Alberta and has all requisite
corporate power and authority to own the Arrangement Shares.
(b) The authorized and issued share capital of Newco consists of:
(i) an unlimited number of Class A Common Shares of which
1,100 are issued and outstanding as fully paid and
non-assessable shares; and
(ii) an unlimited number of Class B Common Shares, none of
which have been issued;
(iii) an unlimited number of Class A Preferred Shares none
of which have been issued;
(c) 398215 is the holder of record and the beneficial owner of the
Newco Shares and Turcotte is the holder of record and
beneficial owner of the Newco Debt, which collectively
represent all of the issued and outstanding shares in the
capital of Newco and outstanding debt of Newco and the Vendors
are and on the Closing Date will be the owner of all such
Newco Shares and Newco Debt with good and marketable title
thereto free and clear of any option, security interest, lien,
charge, encumbrance, hypothecation, claim or right of others
(other than the rights of the Purchaser hereunder).
(d) Each of the Vendors has the legal right, power and authority
to sell, assign and transfer the Newco Shares and Newco Debt
being sold by it hereunder free and clear of any option,
security interest, lien, charge, encumbrance, hypothecation,
claim or right of others (other than the rights of the
Purchaser hereunder).
<PAGE> 5
- 5 -
(e) There are no outstanding agreements, options, warrants, rights
of conversion or other rights pursuant to which Newco is or
may become obligated to issue any shares, or securities
convertible or exchangeable into shares, and there are no
outstanding obligations, understandings or commitments of
Newco to repurchase, redeem or otherwise acquire any
outstanding shares of its capital or restricting its ability
to issue shares.
(f) Newco is the beneficial owner of the Arrangement Shares, free
and clear of any option, security interest, lien, charge,
encumbrance, claim or right of others.
(g) Effective on the Closing Date, Newco will have no liabilities,
(whether actual, accrued, potential, contingent or otherwise)
other than the Newco Debt.
(h) From the date of its incorporation until the Closing Date
Newco has not carried on any business or owned any assets,
other than the Arrangement Shares and common shares of Chauvco
Resources International Ltd.
(i) The corporate records and minute books of Newco are complete
and accurate in all material aspects.
(j) 398215 is a corporation validly subsisting under the laws of
the Province of Alberta, with the requisite corporate power
and authority to enter into and perform all of its obligations
under this Agreement and the execution, delivery and
performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by
all requisite corporate action on the part of 398215.
(k) The entering into of this Agreement by 398215 and Turcotte and
the completion of the transactions contemplated hereby will
not result in the violation of any of the terms and provisions
of the constating documents or by-laws of 398215 or Newco or
of any indenture or other agreement to which Turcotte, 398215
or Newco is a party.
(l) The entering into this Agreement by the Vendors and the
completion of the transactions contemplated hereby will not
result in the violation of any law or regulation of Canada or
of the Province of Alberta.
<PAGE> 6
- 6 -
(m) This Agreement has been duly executed and delivered by the
Vendors and is a valid and binding obligation of each of the
Vendors enforceable against them in accordance with its terms.
(n) There is no action, suit, litigation, arbitration proceeding
or governmental proceeding including appeals and applications
for review, in which Newco is a party, either as plaintiff,
defendant, applicant, respondent or any other capacity
whatsoever. There are no outstanding orders of any court,
governmental agency or instrumentality, to which Newco, 398215
or Turcotte is subject affecting, in any material respect, the
business, prospects, properties or condition (financial or
otherwise) of Newco or the ability of the Vendors to
consummate the transactions contemplated hereby.
(o) Each of the Vendors is not a non-resident of Canada within the
meaning of the Income Tax Act (Canada). 398215 is not a
corporation incorporated under the laws of the United States.
(p) The only individuals who have been directors or officers of
Newco are Daryl Refuik and Guy Turcotte. Newco does not have
and has never had any employees.
(q) Newco is not a partner, co-tenant, joint venturer or otherwise
a participant in any partnership, joint venture, co-tenancy or
other similar jointly owned business.
(r) Neither the Vendors nor Newco have previously granted or
agreed to grant any proxy in respect of the Arrangement Shares
or entered into any voting trust, vote pooling or other
agreement in respect of the Arrangement Shares or any rights
attaching thereto.
(s) Except as are released prior to Closing, Newco is not a party
to nor bound or affected by any agreements, commitments or
understandings of any nature whatsoever, written or oral
except for this Agreement. Except as are released prior to
Closing, Newco is not a party to nor bound by any agreement of
guarantee, indemnification, assumption or endorsement or any
other like commitment of the obligations, liabilities
(contingent or otherwise) or indebtedness of any other person,
firm or corporation.
(t) Neither 398215 nor Turcotte is an underwriter, dealer or other
person who participates, pursuant to a contractual
arrangement, in the distribution of the New Exchangeable
Shares sold in reliance on
<PAGE> 7
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Regulation S ("Regulation S") of the United States Securities
Act of 1993 (the "Act").
(u) Neither 398215 nor Turcotte is acquiring the New Exchangeable
Shares for the account or benefit of:
(i) any natural person resident in the United States;
(ii) any partnership or corporation organized or
incorporated under the laws of the United Sates;
(iii) any estate of which any executor or administrator is
a U.S. person;
(v) any trust of which any trustee is a U.S. person;
(vi) any agency or branch of a foreign entity located in
the United States;
(vii) any non-discretionary account or similar account
(other than an estate or trust) held by a dealer or
other fiduciary for the benefit or account of a U.S.
person;
(viii) any discretionary account or similar account (other
than an estate or trust) held by a dealer or other
fiduciary organized, incorporated or (if an
individual) resident in the United States; and
(ix) any partnership or corporation if:
(A) organized or incorporated under the laws of
any foreign jurisdiction; and
(B) formed by a U.S. person principally for the
purpose of investing in securities not
registered under the Act, unless it is
organized or incorporated, and owned, by
accredited investors (as defined in Rule
501(a) under the Act) who are not natural
persons, estates or trusts.
(v) None of the foregoing representations and statements of fact
contains any untrue statement of material fact or omits to
state any material fact necessary to make any such statement
or representation not misleading to a prospective purchaser of
the Arrangement Shares
<PAGE> 8
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seeking full information as to Newco, its respective
properties, businesses and affairs.
4.2 The Vendors acknowledge that the certificates representing the New
Exchangeable Shares will bear a legend in substantially the following
form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE (OR ITS
PREDECESSOR) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE
SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN THEM
IN REGULATION S UNDER THE SECURITIES ACT.
PURSUANT TO THAT CERTAIN SHARE PURCHASE AGREEMENT DATED
FEBRUARY 13, 1998 BETWEEN THE HOLDER OF THIS CERTIFICATE AND
PIONEER NATURAL RESOURCES (CANADA) LTD., THE HOLDER OF THIS
CERTIFICATE HAS AGREED THAT IT WILL NOT VOLUNTARILY OFFER,
SELL, PLEDGE (WITH CERTAIN EXCEPTIONS), TRANSFER, ASSIGN OR
OTHERWISE DISPOSE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE; PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL
LIMIT SUCH HOLDER'S RIGHT TO RECEIVE SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, OF PIONEER NATURAL RESOURCES COMPANY
PURSUANT TO THE PROVISIONS OF THE EXCHANGEABLE SHARES AND
RELATED ARRANGEMENTS.
<PAGE> 9
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4.3 The Vendors agree that the issuance by Pioneer Canada of New
Exchangeable Shares is exempt from registration under the United
States Securities Act of 1933 (the "Act") pursuant to Regulation S
("Regulation S") of the Act.
4.4 The Vendors agree that they will not voluntarily offer, sell, pledge,
transfer, assign or otherwise dispose of the New Exchangeable Shares;
provided, however, that nothing herein shall limit a Vendor's right to
receive shares of common stock, par value $.01 per share, of Pioneer
Natural Resources Company ("Pioneer Common Stock") pursuant to the
provisions of the New Exchangeable Shares and related arrangements or
pledging or depositing the New Exchangeable Shares with a Pledgee or
other recipient of the New Exchangeable Shares who is bound by the same
restrictions imposed on the Vendors pursuant to this Section 4.4.
4.5 398215 agrees to comply with the terms of that certain Shareholders
Agreement (the "Shareholders Agreement"), dated as of September 3,
1997 between Pioneer Natural Resources Company, and Turcotte as if
398215 had entered into such agreement. With respect to both Turcotte
and 398215, to the extent that there is any inconsistency between the
Shareholders Agreement and this Agreement, the terms of this Agreement
shall supersede the terms of the Shareholders Agreement
ARTICLE 5
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 The Purchaser represents and warrants to the Vendor that effective on
the date hereof and at the Closing Date:
(a) The Purchaser is a corporation duly continued and subsisting
under the laws of the Province of Alberta, and has all
requisite corporate power and authority to enter into and
perform all of its obligations under this Agreement.
(b) This Agreement has been duly executed and delivered by the
Purchaser, and the provisions hereof constitute legal, valid
and binding obligations of the Purchaser enforceable against
it in accordance with their terms.
(c) The execution, delivery and performance of this Agreement and
the transactions contemplated hereby including the issue of
the New Exchangeable Shares have been duly and validly
authorized by all
<PAGE> 10
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requisite action on the part of the Purchaser and the New
Exchangeable Shares, when issued pursuant to the terms hereof,
will have been validly issued as fully-paid and
non-assessable.
(d) The consummation of the transactions contemplated herein will
not violate, nor be in conflict with, any provision of the
Purchaser's constating documents or bylaws or any agreement by
which it is bound.
5.2 (a) Purchaser agrees that 398215 shall prepare and file all tax
returns, elections or forms which Newco is required to file
relating to transactions or events or other matters occurring
at or before the Closing Time or in respect of fiscal periods
ending at or prior to the Closing Date. The Purchaser shall
cause Newco to provide all necessary powers of attorney,
information and access to books and records to enable 398215
to prepare and file the returns, elections and forms referred
to above. 398215 shall prepare all necessary powers of
attorney.
(b) Form T2057 has been executed to make an election pursuant to
Subsection 85(1) of the Income Tax Act (Canada) (the "Act") in
respect of the acquisition by Newco of shares of Chauvco
Resources Ltd., in the form attached as Schedule "A" hereto.
The Purchaser agrees that the Form T2057 shall be filed by
398215 with Revenue Canada.
(c) The Purchaser agrees with 398215 that a Form T2057 will be
executed by them and filed to make an election pursuant to
Subsection 85(1) of the Act in respect of the acquisition by
the Purchaser of the Chauvco Resources Ltd. shares from Newco
pursuant to the Plan of Arrangement implemented on December
18, 1997, which shall contain the information and be in the
form attached as Schedule "B" hereto. The Purchaser agrees
that the Form T2057 shall be filed by 398215 on behalf of
Newco with Revenue Canada.
(d) The Purchaser agrees with 398215 that a Form T2057 will be
executed by them and filed to make an election pursuant to
Subsection 85(1) of the Act in respect of the acquisition by
the Purchaser of the Newco Shares, which shall contain the
information and be in the form attached as Schedule "C"
hereto. The Purchaser
<PAGE> 11
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agrees that the Form T2057 shall be filed by 398215 with
Revenue Canada.
(f) At the Closing Time the Purchaser shall deliver to the Vendors
Forms T2057 in the form attached as Schedules "B" and "C",
each duly executed by the Purchaser.
ARTICLE 6
SURVIVAL
6.1 The representations and warranties of the Purchaser and the Vendors
shall survive the execution of this Agreement and consummation of the
transactions described herein and shall continue to remain in full
force and effect. The Covenants of the Purchaser and Vendors shall
survive the execution of this Agreement and the consummation of the
transactions described herein and shall continue and remain in full
force and effect until 398215 and Turcotte no longer own any New
Exchangeable Shares or shares of common stock of Pioneer Natural
Resources Company, into which such New Exchangeable Shares have been
exchanged.
6.2 The Purchaser shall provide 398215 with reasonable access to the books
and records of Newco following the Closing Date and shall preserve
such books and records for a period of seven (7) years from the
Closing Date.
ARTICLE 7
INDEMNIFICATION
7.1 Each of the Vendors jointly and severally covenants and agrees with
the Purchaser to pay, satisfy, discharge, observe, perform, fulfill,
indemnify and save harmless the Purchaser, on an after tax basis, from
and against each of the following (a "Claim"):
(a) any claim, demand, action, cause of action, demand, loss,
cost, liability or expense (including without limitation,
reasonable professional fees and all costs incurred in
investigating or pursuing any of the foregoing or any
proceeding relating to the foregoing) which may be made or
brought against the Purchaser or which it may suffer or incur
as a result of or in connection with any non-fulfillment of
any covenant or agreement on the part of either of the
<PAGE> 12
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Vendors under, or any incorrectness in or breach of any
representation or warranty of either of the Vendors in, this
Agreement, and
(b) any liabilities, duties or obligations of Newco arising as a
result of or in connection with transactions or events which
occurred prior to the Closing Date, including, without
limitation:
(i) all debts, obligations, liabilities (including
continent liabilities), leases, contracts,
commitments or engagements whatsoever,
(ii) all liabilities in respect of income, capital and
other taxes and governmental charges and assessments,
and
(iii) reasonable professional fees and all costs incurred
in investigating or pursuing any of the foregoing or
any proceeding relating to the foregoing, and
(c) any Purchaser Tax Cost, and all reasonable professional fees
and costs incurred in investigating, pursuing or defending
against any Purchaser Tax Cost or any proceeding relating
thereto.
7.2 NOTICE OF CLAIM OR COMMENCEMENT OF PROCEEDING Promptly after
receipt by the Purchaser of notice of a Claim or the commencement of
any action, suit or proceeding in respect thereof and any appeal
therefrom ("Proceeding") against which it believes it is indemnified
under this Agreement, the Purchaser shall, if a claim in respect
thereto is to be made against a party under an obligation to indemnify
the Purchaser (the "Indemnifying Party") under this Agreement, notify
the Indemnifying Party in writing of such Claim or Proceeding,
provided, however, that the omission so to notify the Indemnifying
Party shall not relieve it from any liability which it may have to the
Purchaser to the extent that the Indemnifying Party is not prejudiced
by such omission.
7.3 DEFENSE OF CLAIMS.
(a) The Indemnifying Party shall, within 30 days after receipt of
a notice of Claim or Proceeding given pursuant to Section 7.2,
either (1) acknowledge liability, as between the Indemnifying
Party and the Purchaser, for such Claim or the amount in
controversy in such Proceeding and pay the Purchaser the
amount of such Claim or the amount in controversy in such
Proceeding in cash or other
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immediately available funds (or establish by agreement with
the Purchaser an alternative payment schedule), (2)
acknowledge liability, as between the Indemnifying Party and
the Purchaser, for such Claim or the amount in controversy in
such Proceeding, disavow the validity of the Claim or
Proceeding or the amount thereof and, to the extent set forth
in Section 7.3(b), assume the legal defense thereof, or (3)
object (or reserve the right to object until additional
information is obtained) to the claim for indemnification or
the amount thereof, setting forth the grounds therefor in
reasonable detail; provided that, if the Indemnifying Party
objects (or reserves its right to object) within such 30-day
period as provided in this Section 7.3, then the Purchaser may
bring suit (in the same Proceeding or otherwise) to resolve
the dispute and, pending final resolution of such dispute, the
Purchaser may proceed as though the Indemnifying Party had
responded in accordance with clause (1) above. If the
Indemnifying Party does not respond to the Purchaser as
provided in this Section 7.3 within such 30-day period, the
Indemnifying Party shall be deemed to have acknowledged its
liability for such indemnification claim in accordance with
clause (1) above and the Purchaser may exercise any and all of
its rights under applicable law to collect such amount.
(b) If any such Proceeding shall be brought against the Purchaser
and it shall notify the Indemnifying Party thereof in
accordance with Section 7.2, the Indemnifying Party shall, if
it shall have responded to such notice in accordance with
clause (a)(2) above, be entitled (1) in the case of a Claim in
respect of a Purchaser Tax Cost arising out of a proceeding
involving other issues for which Purchaser is not indemnified
hereunder, to elect to participate (directly or through
counsel reasonably satisfactory to Purchaser) in the portion
of the Proceedings related to the issue constituting the
Purchaser Tax Cost, subject to the control of Purchaser over
such Proceeding, or (2) in all other cases, to elect to assume
the legal defense thereof with counsel reasonably satisfactory
to the Purchaser. After notice from the Indemnifying Party to
the Purchaser of its election to assume the defense of such
claim or such action described in clause (2) hereof, the
Indemnifying Party shall not be liable to the Purchaser under
this Article for any attorney's fees or other expenses (except
reasonable costs of investigation) subsequently incurred by
the Purchaser in connection with the defense thereof. In all
other cases described in clause (a)(2), the Purchaser may
require the Indemnifying Party to
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reimburse it on a current basis for its reasonable expenses of
investigation, reasonable attorneys' and accountants' fees and
expenses and reasonable out-of-pocket expenses incurred in the
defense thereof and the Indemnifying Party shall be bound by
the result obtained with respect thereto by the Purchaser.
(c) An Indemnifying Party will not, without prior written consent
of the Purchaser (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened Claim or
Proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the Purchaser is an
actual or potential party to such Claim or Proceeding) unless
such settlement, compromise or consent includes an
unconditional release of the Purchaser from all liability
arising out of such Claim or Proceeding. If the Indemnifying
Party has responded to the Purchaser pursuant to clause (a)(1)
above (not including a deemed response under the proviso
contained in 7.3(a)(3)), the Purchaser may settle or
compromise or consent to the entry of any judgment with
respect to the Claim or Proceeding that was the subject of
notice to the Indemnifying Party pursuant to this Article
without the consent of the Indemnifying Party. The Purchaser
will not otherwise, without the prior written consent of the
Indemnifying Party (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened Claim or
Proceeding, but, if such Claim or Proceeding is settled or
compromised or if there is entered any judgment with respect
to any such Claim or Proceeding, in either case with the
consent of the Indemnifying Party, or if there be a final
judgment of the plaintiff in any such Claim or Proceeding, the
Indemnifying Party agrees to indemnify and hold harmless the
Purchaser from and against any loss or liability by reason of
such settlement, compromise or judgment.
7.4 REFUND OF AMOUNTS
If any person becomes entitled to a refund (whether by payment,
credit, offset or otherwise) of all or a portion of any amount
relating to a Claim or Proceeding for which an Indemnifying Party has,
by payment, indemnified the Purchaser, then an amount equal to the
refund, together with any interest received on such refund (net of any
Tax payable on such interest), shall be paid by the Purchaser to the
Indemnifying Party promptly after receipt of
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payment of the refund or notice from the relevant governmental
authority of such credit, offset or other refund mechanism, as the
case may be.
7.5 LIMITATION OF INDEMNITY
The joint and several indemnity of the Vendors in respect of any
Purchaser Tax Cost shall be limited to the proportion of such
Purchaser Tax Cost that the number of New Exchangeable Shares issued
hereunder is to the total number of New Exchangeable Shares issued
pursuant to this Agreement and the similar agreement entered into as
of the date hereof with Trimac Corporation and 761795 Alberta Ltd.
Notwithstanding anything contained in this Article 7, the joint and
several indemnity of the Vendors in respect of any Purchaser Tax Cost
arising under any legislation or regulation of a jurisdiction other
than Canada or a province or territory thereof, shall not exceed the
sum of $1,887,243 million United States dollars.
ARTICLE 8
EXPENSES
8.1 The Vendors jointly and severally agree to reimburse the Purchaser for
all out of pocket expenses incurred by the Purchaser (including fees
and disbursements of counsel and all tax advisors) in connection with
the transaction contemplated herein including without limitation in
connection with the preparation, execution and performance of this
Agreement within 10 business days after receipt of a written invoice
with respect thereto. In respect of expenses which relate to this
Agreement and to other similar agreements entered into with respect to
other holders of Exchangeable Shares, the Vendors shall reimburse
Purchaser in the proportion which the number of New Exchangeable
Shares issued hereunder is to the total number of New Exchangeable
Shares issued pursuant to all such similar agreements.
ARTICLE 9
CLOSING
9.1 Closing shall take place at the Closing Time on the Closing Date at
the offices of MacKimmie Matthews, 700, 401 - 9th Avenue S.W.,
Calgary, Alberta, or at such other place as the parties hereto may
agree upon.
9.2 At Closing, the Vendors shall deliver to the Purchaser:
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(a) a certified copy of the resolution of the directors of Newco
approving the transfer of the Newco Shares;
(b) certificates for the Newco Shares duly endorsed in blank for
transfer;
(c) Newco promissory note evidencing the Newco Debt endorsed for
payment to the Purchaser;
(d) written resignations from all directors and officers of
Newco; and
(e) a certificate, dated as of the Closing Date, executed by each
of the Vendors, to the effect that the representations and
warranties made in Section 4.1 are true and correct in all
material respects at and as of the Closing Date and that
Vendors have complied with all Agreements herein required to
be complied with at and as of the Closing Date.
9.3 At the Closing Time on the Closing Date, the Purchaser shall deliver
to the Vendors certificates representing the New Exchangeable Shares.
ARTICLE 10
CLOSING CONDITIONS
10.1 The obligation of the Purchaser to complete the purchase of the Newco
Shares is subject to the conditions precedent that:
(a) the Vendors shall have performed or complied in all material
respects with each of the terms, covenants and conditions of
this Agreement to be performed or complied with by the Vendors
at or prior to the Closing Date:
(b) the approval of the Toronto Stock Exchange and all other
necessary regulatory approvals for the completion of the
transaction shall have been obtained; and
(c) the registration statement on Form S-3 registering the shares
of Pioneer Common Stock underlying the New Exchangeable Shares
shall have been declared effective by the United States
Securities and Exchange Commission.
The condition in the Section 10.1 are for the sole benefit of the
Purchaser and may be waived, in whole or in part, by written notice to
the Vendors.
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10.2 The obligation of the Vendors to complete the sale of the Newco Shares
is subject to the condition precedent that the Purchaser shall have
performed or complied in all material respects with each of the terms,
covenants and conditions of this Agreement to be performed or complied
with by Purchaser at or prior to the Closing Date, which condition is
for the sole benefit of the Vendors and may be waived, in whole or in
part, by written notice to the Purchaser.
10.3 Purchaser shall cause its counsel to apply for all required regulatory
approvals.
ARTICLE 11
MISCELLANEOUS
11.1 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
11.2 All obligations of the Vendors hereunder shall be joint and several.
11.3 Any direction, notice, request, delivery or demand hereunder shall be
in writing, shall be hand delivered or telecopied and shall be deemed
to have been received on the date of delivery. Either party may change
its address by notice given in the manner aforesaid.
(a) if to the Purchaser, addressed to:
Pioneer Natural Resources (Canada) Ltd.
c/o Pioneer Natural Resources Company
1400 Williams Square West
5205 - N O'Connor Blvd.
Irving, Texas
75039-3746
Attention: General Counsel
(b) if to 398215, addressed to:
c/o Fort Chicago Energy Partners L.P.
Suite 975, McDougall Place
808 - 4th Avenue S.W.
Calgary, Alberta T2P 3E8
Attention: Guy J. Turcotte
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(c) if to Turcotte
c/o Fort Chicago Energy Partners L.P.
Suite 975, McDougall Place
808 - 4th Avenue S.W.
Calgary, Alberta T2P 3E8
Attention: Guy J. Turcotte
11.4 Time shall be of the essence.
11.5 No amendment or variation of this Agreement shall be of any force or
effect unless the same be reduced to writing and duly executed by all
parties hereto.
11.6 Each of the parties shall at any time, and from time to time
hereafter, take any and all steps, and execute, acknowledge and
deliver to the other party, any and all further instruments and
assurances that the other party may reasonably require for the purpose
of giving full force and effect to the provisions of this Agreement.
11.7 Neither party may assign in whole or in part any of its interest,
rights or obligations hereunder without the prior written agreement of
the other party hereto except as expressly provided herein.
11.8 This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument, which shall be
sufficiently evidenced by such original counterparts.
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EXECUTED AND DELIVERED.
PIONEER NATURAL RESOURCES (CANADA) LTD.
By: /s/ STEPHEN R. PETTY
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398215 ALBERTA LTD.
By: /s/ GUY J. TURCOTTE
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GUY J. TURCOTTE
By: /s/ GUY J. TURCOTTE
------------------------------------
