25 MARCH
NEW ZEALAND GAZETTE
905

1. Assets and liabilities to be transferred to Waikato SOE

The following assets and liabilities are to be transferred by ECNZ to Waikato SOE:

Assets

The assets as defined in the Draft Waikato Agreement including:

(a) these power stations:

Aratiatia Waipapa
Ohakuri Arapuni
Atiamuri Karapiro
Whakamaru Marsden A
Maraetai A Marsden B site, and
Maraetai B

all the land, plant and equipment, consents and other assets which constitute part of ECNZ’s Northern Generation Group, 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:

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

(ii) for the development of projects associated with the Marsden BOO;

(e) any non-land assets associated with:

(i) the Wayang Windu geothermal power project in Indonesia, including the share in PT ECNZ Services Indonesia and all shares in ECNZ International Limited;

(ii) the Marsden BOO;

(iii) Mokai;

(iv) the development of opportunities in Fiji; and

(v) the development of hydroelectric opportunities in Hawkes Bay and Poverty Bay;

(f) the shares in First Electric Limited;

(g) all shares in the subsidiary used to acquire the assets and liabilities from Mercury Energy Limited; and

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

Liabilities

The assumed obligations as defined in the Draft Waikato 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 Northern Generation Group, the power stations or relating to other assets to be transferred to Waikato SOE; and

(b) all other liabilities relating to the assets to be transferred to Waikato SOE or the operations of the power stations or functions performed by the Northern 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 Waikato SOE’s risk.

3. Settlement

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

4. Consideration

The purchase price for the sale and 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 Waikato 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 Waikato 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 Waikato 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 Waikato SOE with such information and papers (including working papers) as Waikato SOE reasonably requests to support the conclusions reached in the settlement accounts as to the value of the net assets.

(d) Waikato SOE (and its accounting advisers) will be permitted to conduct its own review (in accordance with the procedures agreed from time to time between Waikato 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 Waikato 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 Waikato 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 Waikato 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