25 MARCH
NEW ZEALAND GAZETTE
899

all the land, plant and equipment, consents and other assets which constitute part of ECNZ’s Thermal/Tongariro Generation Group or the power stations at Kaitawa, Tuai and Piripaua, including those necessary for use in or at, or for the operation of the power stations, but not any funds held;

(b) Intellectual property (subject to the Intellectual Property Agreement);

(c) the rights of ECNZ under all the material agreements (see item 6 of this Schedule) and the commercial contracts;

(d) the Land and associated assets held for future development purposes that is:

(i) associated with any of the power stations or functions performed by the Thermal/Tongariro Generation Group; and

(ii) the Meremere A and B land;

(e) any non-land assets associated with:

(i) Meremere A (including the potentially refundable sum of $2 million held by ECNZ as option fees);

(ii) the Kinleith co-generation plant, including all the shares in Kinleith Cogeneration Limited;

(iii) the Te Awamutu co-generation plant;

(iv) the development of cogeneration opportunities associated with Northland Dairy; and

(v) the development of biomass opportunities;

(f) all the shares in ECNZ Energy Limited;

(g) subject to the prior approval of Huntly SOE, assets associated with any retail business purchases which have not been allocated to either Waikato SOE or South Island SOE; and

(h) any other assets agreed in writing between ECNZ and Huntly SOE.

Liabilities
The assumed obligations as defined in the Draft Huntly Agreement being:

(a) the obligations of ECNZ under the agreements of ECNZ (including, without limitation, the agreements listed in item 6 of this Schedule) relating to the operation or anticipated operation of the Thermal/Tongariro Generation Group, the power stations or relating to other assets to be transferred to Huntly SOE; and

(b) all other liabilities relating to the assets to be transferred to Huntly SOE or the operations of the power stations or functions performed by the Thermal/Tongariro Generation Group, arising or derived or caused by a transaction or event occurring during the period before the settlement time.

2. Risk
The assets are solely at ECNZ’s risk until the settlement time and thereafter solely at Huntly SOE’s risk.

3. Settlement
Settlement is to occur on 1 April 1999 or such other time as ECNZ and Huntly SOE may agree.

4. Consideration
The purchase price for the transfer of the assets and liabilities is to be calculated according to the following clauses 4.1, 4.2, 4.3, 4.4 and 4.6 of the Draft Huntly Agreement:

4.1 Consideration
The purchase price for the sale and transfer of the assets and the transfer or novation of the assumed obligations will be the book value of the net assets as shown in the settlement accounts. The purchase price will be allocated to the assets and the assumed obligations in the same amounts as the book values of those assets and assumed obligations. It is agreed that the purchase price equates to market value for the purpose of section EG19 of the Income Tax Act 1994.

4.2 Settlement Accounts

(a) Forthwith after the settlement date, ECNZ (with the assistance of such employees of [Huntly SOE] as may be necessary) will procure the preparation of the settlement accounts. The settlement accounts will show the book value of the net assets at the settlement time and will be prepared in accordance with:

(i) the Companies Act 1993;

(ii) the Financial Reporting Act 1993;

(iii) the accounting policies and principles adopted for ECNZ’s audited published accounts for the year ended 30 June 1998 consistently applied; and

(iv) the transition rules.

(b) In the event of any inconsistency between the transition rules and this agreement, the terms of this agreement will prevail.

(c) ECNZ will ensure that it keeps [Huntly SOE] (and its accounting advisers) reasonably informed as to the progress of the preparation of the settlement accounts and, from time to time but in any event on completion of each significant section of them, will provide [Huntly SOE] with such information and papers (including working papers) as [Huntly SOE] reasonably requests to support the conclusions reached in the settlement accounts as to the value of the net assets.

(d) [Huntly SOE] (and its accounting advisers) will be permitted to conduct its own review (in accordance with the procedures agreed from time to time between [Huntly SOE] and ECNZ, both parties acting reasonably) of the settlement accounts and, within 10 business days of the later of the date on which the final draft settlement accounts and the certification by ECNZ’s external auditors referred to in the definition of ‘‘settlement accounts’’ are delivered to [Huntly SOE] and the date on which the procedures referred to in this clause are agreed between the parties, to raise any queries it may have as a result of that review with ECNZ. If any dispute arises in connection with those queries between ECNZ and [Huntly SOE], the matter will be resolved under clause 17.

(e) The settlement accounts will be deemed final and binding on the parties on the date that all queries (if any) arising from [Huntly SOE’s] review under paragraph (d) are settled or resolved.

(f) Each party agrees that, as a priority, it will use all reasonable endeavours to complete, without undue delay, all work and documentation required of it in connection with the preparation of the settlement accounts and further agrees that it will give effect to the close-off procedures developed, or to be developed, in accordance with the transition rules within the required timeframes.

4.3 Deficit in Asset value
If the settlement accounts disclose that the book value of the net assets is less than the estimated consideration, ECNZ will pay an amount equivalent to that deficit to [Huntly SOE] under clause 7.2 as an adjustment to the purchase price for the assets and the assumed obligations.

4.4 Excess in Asset value
If the settlement accounts disclose that the book value of the net assets is more than the estimated consideration, [Huntly SOE] will pay an amount equivalent to that excess