CONFORMED COPY
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EXHIBIT 10.14
DATED 20TH NOVEMBER, 1997
ICI CHEMICALS & POLYMERS LIMITED
IMPERIAL CHEMICAL INDUSTRIES PLC
TERRA INDUSTRIES LIMITED
and
TERRA INDUSTRIES INC.
------------------------------------
SALE OF BUSINESS AGREEMENT
RELATING TO
THE ICI FERTILIZER BUSINESS
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▇▇▇▇▇ & ▇▇▇▇▇
London
CONTENTS
Clause Page
1. Interpretation............................................................1
2. Sale Of Business..........................................................7
3. Excluded Assets...........................................................9
4. Consideration And Stocks.................................................10
5. Conditions Precedent.....................................................11
6. Contracts................................................................15
7. Debts And Creditors......................................................17
8. Apportionments, Prepayments And Discounts................................17
9. Liabilities..............................................................19
10. Purchaser's Warranties...................................................21
11. Seller's Warranties......................................................22
12. Environmental............................................................26
13. Completion...............................................................26
14. Records, Assistance And Accounts.........................................27
15. Defunct Plant............................................................28
16. Employees................................................................29
17. Pensions.................................................................29
18. Guarantees...............................................................29
19. Protective Covenants.....................................................30
20. ICI Roundel..............................................................32
21. Confidentiality..........................................................32
22. Independent Accountant...................................................34
23. Announcements............................................................34
24. Value Added Tax And Capital Allowances...................................34
25. Computer Systems.........................................................36
26. Default Interest.........................................................37
27. Notices..................................................................37
28. General..................................................................37
29. Whole Agreement..........................................................39
30. Governing Law............................................................40
31. Jurisdiction.............................................................40
Schedules
1. Properties...............................................................41
2. Plant and Equipment......................................................42
3. Intellectual Property....................................................43
4. ICI and Terra Individuals................................................45
5. Excluded Assets..........................................................46
6. Implementation Agreements................................................47
7. Warranties...............................................................51
8. Employees................................................................62
9. Pensions.................................................................66
10. Stock Valuation..........................................................79
11. Environmental............................................................84
12. Conduct of Business up to Completion.....................................93
Signatories..................................................................122
Annexes
1. Implementation Agreements (not in agreed form)
2. Property Schedule
3. Property Warranties
Agreed Form Documents
A. Completion Certificate
B. Disclosure Letter
C. Property Documents
D. Ammonium Nitrate Hedging Agreement
E. Put Agreement
F. Guarantee relating to D and E above
G. Implementation Agreements (Schedule 6)
H. Employee Notice (Schedule 8, paragraph (1))
THIS AGREEMENT is made on 20th November, 1997 BETWEEN:
(1) ICI CHEMICALS & POLYMERS LIMITED (registered number 358535), a company
incorporated under the laws of England, whose registered office is at ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the "Seller");
(2) TERRA INDUSTRIES LIMITED (registered number 3455690), a company
incorporated under the laws of England, whose registered office is at ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the "Purchaser");
(3) IMPERIAL CHEMICAL INDUSTRIES PLC (registered number 218019), a company
incorporated under the laws of England, whose registered office is at
Imperial ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("ICI"); and
(4) TERRA INDUSTRIES INC., a corporation incorporated under the laws of the
state of Maryland, USA whose principal executive office is at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ("Terra").
WHEREAS:
(A) The Seller carries on the Business (as defined below).
(B) The Seller wishes to sell and the Purchaser wishes to purchase the Business
with a view to carrying on the Business as a going concern in succession to
the Seller on the terms set out in this agreement.
(C) The Seller is a wholly owned subsidiary of ICI.
(D) The Purchaser is a wholly owned subsidiary of Terra.
IT IS AGREED as follows:
1. INTERPRETATION
(1) In this agreement:
"Accounts" means the audited accounts relating to the Business for the
twelve month periods ended 31st December, 1995 and 31st December, 1996 and
the unaudited accounts relating to the Business for the nine months ended
30th September, 1997 (comprising in each case a balance sheet, profit and
loss account and cash flow statement and related notes), copies of which
are annexed to the Disclosure Letter and, for the purpose of clause 14(5)
only, the audited accounts relating to the Business for the twelve months
ending on 31st December, 1997;
"Acquired Intellectual Property" means the Business Intellectual Property,
Licensed Intellectual Property, Non-Exclusive Information and Exclusive
Information;
"Affiliate" means in relation to any party, any subsidiary undertaking or
parent undertaking of that party and any other subsidiary undertaking of
that parent undertaking for the time being;
"Agreed Form" means, in relation to any document, the form of that document
which has been initialled for the purpose of identification by or on behalf
of the parties to this agreement;
"Assets" means the several assets relating exclusively or primarily to the
Business to be sold to the Purchaser under this agreement and described in
clause 2(1) but excluding the Excluded Assets;
"Billingham Site Services" means those services which the Seller or any
relevant member of the Seller's Group supply from the Properties before
Completion and which the Purchaser or its Affiliates will provide from the
Properties following Completion pursuant to the Implementation Agreements;
"Business" means the business carried on by the Seller and any relevant
member of the Seller's Group at or from the Properties comprising:
(1) the production, distribution and sale of:
(a) ammonia;
(b) nitric acid;
(c) ammonium nitrate fertilizers;
(d) sodium nitrite;
(e) liquid carbon dioxide; and
(2) the supply of the Billingham Site Services;
"Business Day" means a day (other than a Saturday or Sunday) on which banks
are generally open for normal business in both London and New York;
"Business Intellectual Property" means all Intellectual Property (other
than Licensed Intellectual Property) owned by the Seller or any relevant
member of the Seller's Group and used exclusively in connection with the
Business together with goodwill relating thereto including, without
limitation, those shortly described in Part 1 of Schedule 3;
"Completion" means completion of the sale and purchase of the Assets in
accordance with clause 13 which shall be deemed to occur at 12 midnight
London time on the Completion Date;
"Completion Certificate" means a certificate in the Agreed Form confirming
the matters described in clause 5(9);
"Completion Date" has the meaning given in clause 13;
"Computer Systems" means all computer systems and shall include, but not be
limited to, computer processors, computer programmes, technical or other
documentation,
telecommunication systems and equipment data entered into,
created or stored by such computer systems and all other computer related
hardware, software, or peripherals;
"Contracts" means all contracts and engagements (other than (i) any leases
or licences in relation to the Properties and (ii) the contracts relating
to the Employees) relating exclusively or primarily to the Business entered
into before Completion, including orders made before Completion, by or on
behalf of the Seller or any relevant member of the Seller's Group with
third parties in connection with the Business which remain (in whole or in
part) to be performed at Completion including, without limitation, all
orders and contracts for the manufacture, sale or purchase of goods or
provision or supply of services or for the hire purchase, credit sale,
leasing or licence of goods or services, or the licensing of Intellectual
Property and Information and including, without limitation, the Material
Contracts;
"Creditors" means all book, trade and other debts (including without
limitation financial debt) or sums (including credit notes granted) due,
owing, accrued or payable by the Seller or any of its Affiliates in respect
of the Business (whether or not then invoiced and whether or not then due
and payable) which are in respect of the period up to Completion;
"Customs" means HM Customs & Excise;
"Debts" means all book, trade and other debts or sums (including suppliers'
credit notes) due, owing, accrued or payable to the Seller or its
Affiliates in respect of the Business (whether or not then invoiced and
whether or not then due and payable) which are in respect of the period up
to Completion;
"Default Interest" means LIBOR plus 2 per cent.;
"Defunct Plant" has the meaning given in clause 15;
"Disclosure Letter" means the letter to be dated the date of this agreement
from the Seller to the Purchaser in the Agreed Form and, as the context may
require, the letter together with additional specific disclosures made
pursuant to clause 5 which shall be incorporated into the Disclosure Letter
with effect from the Completion Date;
"Employees" means those individuals employed by the Seller in the Business
as set out in the Disclosure Letter;
"Employment Regulations" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"Encumbrance" means any debenture, mortgage, charge, lien, deposit by way
of security, ▇▇▇▇ of sale, option or right of pre-emption or other third
party right (legal or equitable) but excluding licences of Intellectual
Property or Information;
"Environmental Claims" means any claims under the environmental warranties
in paragraph A.6 of Schedule 7 or under the provisions of Schedule 11;
"Excluded Assets" means the assets or rights referred to in clause 3;
"Excluded Technologies" means those technologies set out in Part 3 of
Schedule 3;
"Exclusive Information" means all Information relating exclusively to the
Business at Completion including, without limitation, the Information
listed in Part 4 of Schedule 3;
"Field of Activity" means the business of sale and manufacture of the
Products;
"Goodwill" means the goodwill of the Business with the right to carry on
the Business in succession to the Seller and any relevant member of the
Seller's Group but excludes any goodwill or other right in the ICI Roundel;
"Hedging Agreements" has the meaning given in clause 13(2)(j);
"ICI Controller's Manuals" means the control manuals which are recorded on
disk which accompanies the Disclosure Letter or any printed copy made from
that disk (as more fully described in Schedule 10);
"Implementation Agreements" means the documents in Agreed Form listed in
Schedule 6 and those other documents listed in Annex 1 to be entered into
on the Completion Date;
"Independent Accountant" has the meaning given in clause 22;
"Information" means all information owned by the Seller or any other member
of the Seller's Group relating to the Business including (but without
limitation) know-how, trade secret, industrial and commercial information
and techniques including (but not limited to) drawings, formulae, test
reports, operating and testing procedures, shop practices, instruction
manuals and tables of operating conditions and including all information
owned by the Seller or any other member of the Seller's Group relating to
the supply of any materials to the Business and to the marketing of any
products or services supplied by the Business, including customer names and
lists, sales targets, sales statistics, market share statistics, marketing
surveys and reports, marketing research and any advertising or other
promotional materials;
"Intellectual Property Assignment" means the proforma assignment of
Business Intellectual Property in Agreed Form;
"Intellectual Property Consent" means the written consents executed by NWS
Bank plc to the assignment to the Purchaser of the Seller's jointly held
ownership in the marks "TALISMAN", "TALISMAN GOLD CARD", "CLASSIC" and
"CLASSIC GOLD";
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions, and re-examinations thereof, (b) all trademarks,
service marks, trade dress, logos and trade names, together with all
translations, adaptations, derivations and combinations thereof and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights and all applications, registrations,
and renewals in connection therewith, (d) all intellectual property rights
in all computer software (including data and related documentation), (e)
all other proprietary rights of a similar nature, and (f) all intellectual
property rights in all copies and tangible embodiments thereof (in whatever
form or medium);
"LIBOR" means the rate for deposits in Pounds Sterling for a period of one
month which appears on the Reuters Screen ISDA Page at approximately 11.00
a.m., London time, on the first day of the period to which any interest
period relates (the "Relevant Date"). If such rate does not appear on the
Reuters Screen ISDA Page on the Relevant Date, the rate for that Relevant
Date will be determined as if the parties had specified that the rate for
the Relevant Date will be determined on the basis of the rates at which
deposits in Pounds Sterling are offered by Midland Bank plc at
approximately 11.00 a.m., London time, on the Relevant Date to prime banks
in the London interbank market for a period of one month commencing on that
Relevant Date;
"Licensed Intellectual Property" means Intellectual Property owned by the
Seller or any member of the Seller's Group and used non-exclusively in
connection with the Business which is to be licensed by the Seller or the
relevant member of the Seller's Group to the Purchaser but excluding the
Excluded Technologies;
"Material Contracts" has the meaning given in paragraph D(1) of Schedule 7;
"Non-Exclusive Information" means Information owned by the Seller or any
member of the Seller's Group and used non-exclusively in connection with
the Business but excluding the Excluded Technologies;
"Plant and Equipment" means the plant, machinery, desk top computers, spare
parts, tools, equipment, tangible chattels, motor vehicles, trailers,
furniture, fixtures and fittings (to the extent they are not included in
the Properties) owned by the Seller or any member of the Seller's Group and
used exclusively or primarily in connection with the Business as at
Completion including, without limitation, those shortly described in
Schedule 2;
"Pounds Sterling", "Pounds" and "(Pounds)" means the lawful currency of the
United Kingdom;
"Premises" and "Premises Agreements" has the meaning given in Schedule 1;
"Products" means ammonia, nitric acid, ammonium nitrate fertilizers, sodium
nitrite and liquid carbon dioxide;
"Properties" means the properties short particulars of which are set out in
Schedule 1 and "Property" means any of them and includes every part of each
of them;
"Property Purchase Price" means, in respect of each Property, the
consideration attributed to that Property as set out in Schedule 1;
"Property Rights" has the meaning given in Schedule 1;
"Property Documents" has the meaning given in Schedule 1;
"Purchaser's Auditors" means Deloitte & Touche, Stonecutter Court, ▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"Purchaser's Group" means the Purchaser's ultimate parent undertaking and
that parent undertaking's Affiliates;
"Purchaser's Solicitors" means Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"Records" means:
(a) supplier records (but not the records referred to in clause 24(7))
excluding specific price, rebate and discount information relating in
large part to supplies procured as part of an arrangement relating to
any business other than the Business;
(b) employee records;
(c) management accounting records; and
(d) all documents of title to the Assets (but excluding those relating to
the Properties),
in each case to the extent that the items are owned by the Seller or any
relevant member of the Seller's Group at the Completion Date and relate
exclusively or primarily to the Business;
"Seller's Auditors" means KPMG Audit plc of ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇;
"Seller's Group" means the Seller's ultimate parent undertaking and that
parent undertaking's Affiliates;
"Seller's Solicitors" means ▇▇▇▇▇ & ▇▇▇▇▇ of ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇;
"Shared IT Services Agreement" means the IT Services Agreement of even date
herewith made between ICI and Terra;
"Stock Location" has the meaning given in Schedule 10;
"Stocktake" has the meaning given in Schedule 10;
"Stocks" means the stocks of fuels, raw materials, ingredients, packaging,
office and laboratory supplies, revenue engineering spares, consumable
stores, work in progress and finished goods at Completion belonging to the
Seller's Group held exclusively or primarily for the purposes of the
Business;
"subsidiary" shall have the meaning given in section 736 of the Companies
▇▇▇ ▇▇▇▇;
"subsidiary undertaking" and "parent undertaking" shall have the meanings
given in section 258 of the Companies ▇▇▇ ▇▇▇▇;
"Taxation" means all taxes, levies, charges, imposts and withholdings
wheresoever imposed and having the character of taxation and all penalties,
charges and interest relating thereto;
"Terra Individuals" has the meaning given in clause 11(2)(d);
"Territory" means those countries which at the date of this agreement are
part of the European Economic Area;
"VAT" means value added tax; and
"VAT Element" means the amount of the consideration for any supply of goods
or services which is attributable to VAT chargeable on that supply.
(2) Any express reference to an enactment includes references to:
(a) that enactment as amended, extended or applied by or under any other
enactment before or after this agreement;
(b) any enactment which that enactment re-enacts (with or without
modification); and
(c) any subordinate legislation made (before or after this agreement)
under any enactment, including one within (a) or (b) above,
except to the extent that any of the matters referred to in (a) to (c)
occurring after the date of this agreement increase or alter the liability
of any party under this agreement.
(3) The singular shall include the plural and vice versa and words denoting
persons shall include bodies corporate and unincorporated associations of
persons and, unless otherwise stated, shall include the permitted
successors or assigns of such persons.
(4) Subclauses (1) to (3) apply unless the contrary intention appears.
(5) The headings in this agreement do not affect its interpretation.
(6) Any Schedule, Appendix or Annex to this agreement shall take effect as if
set out in this agreement and references to this agreement shall include
its Schedules, Appendices and Annexes.
(7) Where any statement is qualified by the expression "so far as the Seller is
aware" or "to the Seller's knowledge, information and belief" or any
similar statement, that statement shall, unless otherwise provided in this
agreement, be deemed to mean such knowledge which those officers and
operational and functional managers of the Seller listed in Part 1 of
Schedule 4 (and no other persons) had in relation to the matter for which
they have responsibility or ought to have had in relation to such matter.
(8) For the purposes of clauses 7(1), 11(6)(b), 11(14), 14(1) and 14(4), where
the statement "at the Seller's expense" or any similar statement is used
and for the purpose of clauses 14(3) and 24(8) where the statement "at the
Purchaser's expense" or any similar statement is used, that statement shall
be deemed to mean the reimbursement by the Seller or Purchaser (as
appropriate) of any reasonable out-of-pocket cost by the other party (or
another member of such party's group) but shall not include any internal
management time or attributable internal cost of the party to be reimbursed
(or any other member of the such party's group).
2. SALE OF BUSINESS
(1) The Seller shall sell or shall procure the sale by any relevant member of
the Seller's Group in each case and the Purchaser shall purchase from
Completion:
(a) the Properties (together with the Property Rights);
(b) the Plant and Equipment;
(c) the Stocks;
(d) the benefit (subject to the burden) of the Contracts;
(e) the Goodwill;
(f) the Business Intellectual Property;
(g) to the extent they are capable of transfer to the Purchaser,
franchises, approvals, permits, governmental licences, orders,
registrations, certificates, variances, and similar rights obtained
from governments and governmental agencies which relate exclusively or
primarily to the Business;
(h) the Exclusive Information;
(i) all records, books, letters, files, correspondence, lists, plans,
architectural plans, drawings, specifications, creative materials,
studies, reports and other documents (or copies or extracts thereof if
such records or documents do not relate exclusively or primarily to
the Business) relating to the Business (excluding the VAT records
referred to in clause 24(7)); and
(j) all other assets of the Seller or any relevant member of the Seller's
Group used, in the case of Business Intellectual Property and
Exclusive Information, exclusively or, in the case of any other asset,
exclusively or primarily, in connection with the Business,
but excluding the assets referred to in clause 3.
(2) Subject to subclauses (3) and (4), the Seller (or the relevant member of
the Seller's Group) shall sell the Assets (except the Properties, the
unregistered Business Intellectual Property and the Exclusive Information)
with full title guarantee with effect from Completion free from all
Encumbrances and together with all rights attaching thereto; provided that
this shall be qualified to the extent that there has been specifically
disclosed in the Disclosure Letter any Encumbrance or any other matter the
existence of which reveals that the sale of the relevant Asset cannot be so
made, in which event the Seller shall sell that Asset (except the
Properties) with such rights, title and interest as the Seller has in that
Asset and, for the avoidance of doubt, Part 1 of the Law of Property
(Miscellaneous Provisions) ▇▇▇ ▇▇▇▇ shall not apply to the extent of such
disclosure.
(3) The Properties shall be sold on and subject to the conditions contained in
Schedule 1.
(4) The unregistered Business Intellectual Property and the Exclusive
Information shall be sold with such rights, title and interest as the
Seller or the relevant member of the Seller's Group has in such Business
Intellectual Property.
(5) The Seller and ICI grant to the Purchaser, effective from Completion, an
irrevocable, perpetual, non-exclusive, royalty free licence to use the
Licensed Intellectual Property and the Non-Exclusive Information in and for
the purposes of the Business as carried on by the Seller at Completion. The
Purchaser may appoint a sub-contractor to carry out, perform and discharge
some or all of the rights and obligations granted under the licence without
relieving the Purchaser of primary liability thereunder.
Further, such licence shall be assignable in whole or in part if the
assignment forms part of a sale of the whole or part of the Business by the
Purchaser and the Intellectual Property and Information which is the
subject of such assignment will be used by the assignee only in and for the
purpose of the Business, or that part of it, provided that the Purchaser
will remain primarily liable to the Seller under such licence unless the
Seller, the Purchaser and any such assignee consent to a novation (or
partial novation as the case may be) of such licence (or part thereof) such
consent not to be unreasonably withheld or delayed by the Seller whose
reasonable legal costs of entering into such novation or partial novation
as the case may be, will be payable by the Purchaser.
(6) The Seller undertakes that, if at any time after the date of this
agreement, the Seller or the relevant member of the Seller's Group executes
any assignment of all or any part of the Licensed Intellectual Property or
Non-Exclusive Information, the Seller will or will procure that the
relevant member of the Seller's Group will notify such assignee (as the
case may be) of the Purchaser's rights in the same.
(7) The Seller shall supply to the Purchaser a copy of such of the Non-
Exclusive Information as the Purchaser may reasonably request.
(8) Pending Completion the Seller shall, and shall procure that any relevant
member of the Seller's Group shall, observe the provisions of Schedule 12.
3. EXCLUDED ASSETS
Nothing in this agreement shall operate to transfer any assets or rights of
the Seller, or any of its Affiliates other than those referred to in clause
2(1) and without limiting the generality of the foregoing there shall be
expressly excluded and excepted from the sale and purchase and nothing in
this agreement shall operate to transfer:
(a) the statutory books and records of the Seller and the benefit to the
Seller of this agreement;
(b) any cash in hand or at bank (including uncleared cheques received at
or before Completion to the extent the same relate to the period up
to Completion) or bills receivable;
(c) the Licensed Intellectual Property (provided that the Purchaser shall
have the right to use and deal with the Licensed Intellectual Property
in accordance with clause 2(5));
(d) subject to the provisions of clause 5, the benefit of any insurance
effected by or on behalf of the Seller;
(e) those assets listed in Schedule 5;
(f) Non-Exclusive Information excluding the goodwill relating thereto;
(g) any Debts and all charges, bills, notes and securities, receivable
therefor;
(h) any balances in respect of Taxation relating to the period up to
Completion;
(i) the Defunct Plant; and
(j) the Excluded Technologies.
4. CONSIDERATION AND STOCKS
(1) Subject to subclause (3), the consideration payable by the Purchaser for
the sale of the Assets (under or procured under this agreement) shall be
(Pounds)200,000,000, allocated as follows:
(a) for the Properties and the Property Rights the sum of
(Pounds)8,000,000 to be apportioned as provided in Schedule 1;
(b) for the Plant and Equipment, the sum of (Pounds)170,000,000;
(c) for the benefit (subject to the burden) of the Contracts, the
Purchaser's covenant in clause 6;
(d) for the Stocks, the sum of (Pounds)12,000,000 adjusted in accordance
with the provisions of subclause (3);
(e) for the Goodwill, the sum of (Pounds)7,000,000;
(f) for the Business Intellectual Property, the sum of (Pounds)3,000,000;
and
(g) for the remaining items in clause 2(1), the sum of (Pounds)0.
(2) The amount of (Pounds)200,000,000 shall be paid in full on Completion.
(3) (a) The final purchase price to be paid hereunder for the Stocks shall be
an amount equal to the value of the Stocks at the Completion Date
calculated in accordance with the Stocktaking and valuation method set
out in Schedule 10 (the "Stock Valuation").
(b) If the value of the Stocks exceeds (Pounds)12,000,000, the amount of
such excess shall be due and payable by the Purchaser to the Seller
within 15 days of the Stock Valuation.
(c) If the value of the Stocks is less than (Pounds)12,000,000, the amount
of such deficit shall be due and payable by the Seller to the
Purchaser within 15 days of the Stock Valuation.
(d) Any amounts due under this subclause (3) shall bear interest at the
rate of LIBOR plus one per cent. from Completion to the date of
receipt by the relevant party.
(e) Each party shall bear its own costs in connection with the said
Stocktaking and Stock Valuation. The fees of the Independent
Accountant instructed in accordance with Schedule 10 shall be borne
equally between the Seller and the Purchaser.
(4) Subject to any express provisions in this agreement to the contrary, the
consideration for the Business and the Assets and any other sum payable
hereunder is exclusive of any stamp duty or transfer fees, which, if
payable, shall be borne by the Purchaser.
5. CONDITIONS PRECEDENT
(1) The sale and purchase of the Business is conditional on:
(a) the Purchaser not having exercised its right to withdraw from the
acquisition pursuant to subclause (6) below;
(b) the Seller having delivered to the Purchaser confirmation of the
matters referred to in subclause (5) below; and
(c) satisfaction of subclause (2) below.
(2) Insofar as the proposed acquisition constitutes a concentration with a
community dimension within the scope of Council Regulation (EEC) 4064/89
(the "Regulation") the Seller and the Purchaser agree to comply with the
requirements of the Regulation and not to enter into the proposed
acquisition until the requirements of the Regulation have been satisfied
which will be achieved by the occurrence of any of the following events:
(a) if the European Commission issues a decision under Article 6(1)(b) of
the Regulation (or is deemed to have done so under Article 10(6) of
the Regulation) declaring that the proposed transaction is compatible
with the common market without imposing any conditions on either the
Seller's Group or the Purchaser's Group which are deemed by the Seller
or the Purchaser, as the case may be, in their reasonable opinion to
be unacceptable; or
(b) if the European Commission initiates proceedings pursuant to Article
6(1)(c) of the Regulation and issues a decision declaring that the
proposed transaction is compatible with the common market (or is
deemed to have done so under Article 10(6) of the Regulation) without
imposing any conditions on either the Seller's Group or the
Purchaser's Group which are deemed by the Seller or the Purchaser, as
the case may be, in their reasonable opinion to be unacceptable; or
(c) if the proposed transaction has been referred to a competent authority
of one or more EEA States, such competent authority or authorities
having issued all authorisations, consents, clearances and approvals
in respect of the proposed transaction as may reasonably be deemed
necessary or appropriate by the Seller's Group and the Purchaser's
Group; or
(d) if the European Commission grants a derogation to Article 7(1) of the
Regulation in respect of the proposed transaction pursuant to Article
7(4) of the Regulation; or
(e) if the European Commission decides not to continue the suspension of
the proposed transaction pursuant to Article 7(2) of the Regulation.
(3) Each of the parties shall use reasonable endeavours to procure that the
conditions in subclause (l) are fulfilled on or before 31st March, 1998
provided that if subclause (2)(b) is applicable each of the parties shall
use reasonable endeavours to procure that subclause (2)(b) is fulfilled on
or before 30th June, 1998.
(4) If the conditions in subclause (l) are not fulfilled or waived on or before
the relevant date specified in subclause (3) none of the parties (provided
it shall have used reasonable endeavours as aforesaid) will have any rights
or liabilities under this agreement except under clauses 1, 18, 21, 23, 27,
28(2), 28(5), 29, 30 and 31 which shall survive termination of this
agreement.
(5) Not later than 15 Business Days and five Business Days before the
anticipated Completion Date and also immediately prior to Completion, the
Seller shall provide the Purchaser with additional specific disclosures
relating to the matters (if any) between the date of this agreement and the
Completion Date, the absence of which would make the Warranties untrue (or
incomplete) as at the Completion Date.
(6) If there has been a Material Adverse Change (as defined below), the
Purchaser shall be entitled either to agree to proceed to Completion or to
withdraw from the acquisition in which latter case the provisions of
subclause (4) shall apply (as if the conditions in subclause (1) had not
been fulfilled before the relevant date referred to in subclause (3)).
(7) If there arises or occurs between the time of execution of this agreement
on the date hereof and Completion any fact, matter, event or circumstance
in relation or pertaining to or giving rise to physical loss or damage to
the Properties or Plant and Equipment which is or might reasonably be
anticipated to be insured by or otherwise within the ambit of material
damage Policy P450141/97/0/00 (the "Policy") under which the Seller or any
member of the Seller's Group is an insured or otherwise has an insurable
interest or any actual or contingent right of benefit, indemnity or payment
from the insurer of that policy (the "Insurer"), then the Seller will use
(and will procure that the relevant members of the Seller's Group use) its
(and their) best endeavours to make all insurance recoveries (including any
reinsurance recoveries) and to secure for the Purchaser all available
benefits and indemnities in respect of the said physical loss or damage
under the Policy and, subject to Completion, shall transfer all such
insurance recoveries to the Purchaser and to the extent reasonably
practicable give the Purchaser the benefit of or a benefit equal to all
said available benefits and indemnities (in any case net of the reasonable
costs of recovery from the Insurer and/or reinsurers).
(8) (a) The Seller undertakes to the Purchaser that with reference to clause
5(7), the Seller will (and will procure that the relevant members of
the Seller's Group will) furthermore:
(i) as soon as reasonably practicable (and in any event within any
time limit set down in the Policy) notify the Insurer in writing
of the occurrence of an event, fact, matter or circumstance
giving rise to a claim for physical loss or damage to the
Properties, Plant and Equipment under the Policy, (at the same
time delivering to the Purchaser a copy of such written
notification to the Insurer) and keep the Purchaser regularly and
fully advised as to the progress
of such claim and allow the Purchaser at its election (but
without obligation) to be consulted in any loss adjustment,
claims handling and settlement;
(ii) in the event that and to the extent that any payment is made or
indemnity or benefit is given by the Insurer to the Seller or any
member of the Seller's Group in relation to such claim under the
Policy, forthwith pay to the Purchaser a sum equal to the payment
received (net of the reasonable costs of recovery from the
Insurer and/or reinsurers) or utilise, apply or secure for the
benefit of the Purchaser any such benefit or indemnity.
(b) The Seller further irrevocably undertakes to the Purchaser that the
Seller will forthwith upon execution of this agreement notify the
Insurer of the provisions of clause 5(7) and of this clause 5(8) and
will procure that the interest of the Purchaser is noted by the
Insurer on the Policy.
(c) The Seller warrants and represents to the Purchaser that there is no
impediment or prohibition (legal or otherwise) according to the terms
of the Policy or according to the terms of any statute or regulation
applicable to the Insurer or according to any licence or consent
possessed or required by the Insurer that would prevent or restrict
the operation of clause 5(7) and this clause 5(8) for the benefit of
the Purchaser in accordance with the terms hereof including without
limitation:
(i) any restriction or prohibition on the ability of the Seller or
any relevant of member the Seller's Group to procure the noting
of the Purchaser's interest; or
(ii) any restriction or prohibition on the Insurer making any payment
or giving any benefit or indemnity to the Seller or any member of
the Seller's Group pursuant to clauses 5(7) and 5(8)(b).
(d) The provisions of this clause 5(8) shall only be of effect in respect
of an event, fact, matter or circumstance occurring during the period
commencing from the time of execution of this agreement on the date
hereof until the provisions of clause 13 are satisfied on the
Completion Date save in respect of any claims or events notified, (or
of which the Seller was aware but did not notify) to the Insurer on or
prior to the satisfaction of the provisions of clause 13 on the
Completion Date.
(e) The Seller undertakes to maintain in full force and effect the Policy
until the satisfaction of the provisions of clause 13 on the
Completion Date and in the event of any prior renewal or replacement
of the Policy shall effect such renewal or replacement on at least the
same terms and conditions of coverage as the Policy with the same
Insurer and with equivalent reinsurance protections and further
undertakes that the provisions of 5(8)(b) and 5(8)(c) shall apply to
any such policy as if it were the Policy.
(9) If there has been a breach of Warranty, by reference to the facts
subsisting at the date of this agreement or at Completion or a breach of
Schedule 12 but there has not been a Material Adverse Change (as defined
below), then:
(a) in the case of a breach of Warranty arising only upon its repetition
at Completion and by reason of matters outside the Seller's control,
the Seller, if it elects to remedy the breach of Warranty by reference
to insurance recoveries, will use (and will procure that the relevant
members of the Seller's Group use) its (and their) best endeavours to
make all insurance recoveries (including any reinsurance recoveries)
and to secure for the Purchaser all available benefits and indemnities
in respect of the physical loss or damage to the Properties, Plant and
Equipment under the Policy and, subject to Completion, shall transfer
such insurance recoveries to the Purchaser and to the extent
reasonably practicable give the Purchaser the benefit of or a benefit
equal to all said available benefits and indemnities (in any case net
of the reasonable costs of recovery from the Insurer and/or
reinsurers). The Seller further undertakes that the Seller will (and
will procure that the relevant members of the Seller's Group will)
comply with the provisions of clause 5(8)(a) above. This provision
shall only apply to insurance proceeds recoverable in respect of
physical loss or damage to the Properties, Plant and Equipment
occurring in the period between the time of execution of this
agreement on the date hereof and Completion; and
(b) in any other case the Seller shall, in respect of a breach of Warranty
at the date of this of agreement or such a breach which arises between
the date of this agreement and the Completion Date, remedy the matter
or, if the matter is not remediable prior to Completion or is in
respect of a breach of Warranty at Completion or breach of Schedule 12
prior to Completion, be liable in damages for breach of Warranty or
for failing to comply with Schedule 12 (if applicable).
(10) The Purchaser's right to withdraw under subclause (6) is its sole remedy
under this agreement in the event of a Material Adverse Change.
(11) The Seller shall provide a Completion Certificate in the Agreed Form to the
Purchaser at Completion confirming, as appropriate, that:
(a) the Warranties are true as at the Completion Date subject to the
matters disclosed pursuant to subclause (5) above (which shall be
incorporated into the Disclosure Letter);
(b) the covenants given under Schedule 12 have been complied with or, if
they have not been complied with, details of such non-compliance; and
(c) there has been no Material Adverse Change.
(12) For the purposes of this clause a "Material Adverse Change" means a change,
whether inside or outside the Seller's control, whether relating to the
Business or generally, which shows a deterioration in the aggregate value
of the Business in the period from the date of signature of this agreement
(on the assumption that the Warranties were, subject to the Disclosure
Letter at the date hereof, correct at the date of this agreement) to the
(scheduled) Completion Date of 10 per cent or more. In the event of dispute
as to whether there has been a Material Adverse Change, either party may
refer the matter for resolution by the courts of England pursuant to the
provisions of clause 31.
(13) If the matter is referred to the courts pursuant to subclause (10), the
Seller will continue to perform the covenants in Schedule 12 pending final
determination. If the final determination
is that a Material Adverse Change did occur, the Purchaser's sole remedy
shall be to withdraw in accordance with subclause (6) subject to any award
for costs which the court may make. If the final determination is that a
Material Adverse Change did not occur then Completion shall take place 30
Business Days following the final determination and the Warranties and
Disclosure Letter will be treated as having been given as at the original
scheduled Completion Date and shall not be repeated or speak from the
actual later Completion Date. This shall be the Seller's sole remedy
subject to any award for costs which the court may make.
6. CONTRACTS
(1) As part of the consideration for the sale and purchase of the Assets the
Purchaser shall from Completion:
(a) accept assignments from the Seller (or other members of the Seller's
Group, or both, as the case may be) of the Contracts or join with the
Seller in procuring a novation of the Contracts;
(b) carry out, perform and discharge all the obligations and liabilities
created by or arising under the Contracts and which, under the terms
of the relevant Contract, are (in whole or in part) to be performed
after Completion; and
(c) indemnify the Seller against all actions, proceedings, costs, damages,
claims and demands in respect of any failure on the part of the
Purchaser to carry out, perform and discharge those obligations and
liabilities.
(2) The Seller shall from Completion indemnify the Purchaser against all
actions, proceedings, costs, damages, claims and demands in respect of any
failure on the part of the Seller to carry out, perform and discharge all
the obligations and liabilities created by or arising under the Contracts
and which, under the terms of the relevant Contract, should have been
carried out, performed or discharged prior to Completion.
(3) Insofar as the benefit or burden of any of the Contracts cannot effectively
be assigned to the Purchaser as set out in subclause (1) except by an
agreement or novation with or consent to the assignment from the person,
firm or company concerned:
(a) the Seller shall at the Purchaser's request use all reasonable
endeavours with the co-operation of the Purchaser to procure such
novation or assignment;
(b) until the Contract is novated or assigned the Seller shall hold it in
trust for the Purchaser absolutely and the Purchaser shall (if such
sub-contracting is permissible and lawful under the Contract), as the
Seller's sub-contractor, carry out, perform and discharge all the
obligations and liabilities of the Seller under the Contract to be
carried out, performed or discharged after Completion (subject to
receiving the benefit of such Contract) and shall indemnify the Seller
against all actions, proceedings, costs, damages, claims and demands
in respect of any failure on the part of the Purchaser to perform
those obligations; and
(c) until the Contract is novated or assigned the Seller shall (so far as
it lawfully may) give all reasonable assistance to the Purchaser (at
the Purchaser's request) to enable
the Purchaser to enforce its rights under the Contract. If the
Contract prohibits the Purchaser from acting as the Seller's sub-
contractor (as referred to in paragraph (b) above) or the Purchaser
cannot be permitted to act as sub-contractor because of
confidentiality obligations, the Seller shall, at the cost of the
Purchaser and to the extent that the Seller is reasonably able, do all
such acts and things as the Purchaser may reasonably require to enable
due performance of the Contract and to provide for the Purchaser the
benefit, subject to the burden, of the Contract. For the purpose of
this paragraph and paragraph (b) above, it shall not be reasonable to
require the Seller to make any payment unless the Purchaser has first
paid the Seller sufficient cleared funds to make such payment. For the
purpose of complying with this paragraph (c) the parties shall bear
their own costs except that the Seller shall pay any reasonable out of
pocket expenses of the Purchaser.
(4) Insofar as the benefit or burden of any licence of Intellectual Property
(other than copyright in computer programmes which shall be dealt with
under the provisions of clause 25) or Information (including without
limitation a part of such licence as the case may be) that is not, nor
forms part of, a Contract and that is necessary for the Business as
performed by the Seller at Completion (a "Necessary Licence") cannot
effectively be assigned to the Purchaser except by an agreement or novation
with or consent to the assignment from the person, firm or company
concerned:
(a) the Seller shall at the Purchaser's request use all reasonable
endeavours with the co-operation of the Purchaser to procure such
novation or assignment;
(b) until the Necessary Licence is novated or assigned the Seller shall
hold it in trust for the Purchaser absolutely and the Purchaser shall
(if such sub-contracting is permissible and lawful under the terms and
conditions of the Necessary Licence), as the Seller's sub-contractor,
carry out, perform and discharge all the obligations and liabilities
of the Seller under the Necessary Licence to be carried out, performed
or discharged after Completion (subject to receiving the benefit of
such Necessary Licence) and shall indemnify the Seller against all
actions, proceedings, costs, damages, claims and demands in respect of
any failure on the part of the Purchaser to perform those obligations;
and
(c) until the Necessary Licence is novated or assigned the Seller shall
(so far as it lawfully may) give all reasonable assistance to the
Purchaser (at the Purchaser's request) to enable the Purchaser to
enforce its rights under the Necessary Licence. If the Necessary
Licence prohibits the Purchaser from acting as the Seller's sub-
contractor (as referred to in paragraph (b) above) or the Purchaser
cannot be permitted to act as sub-contractor because of
confidentiality obligations, the Seller shall, at the cost of the
Purchaser and to the extent that the Seller is reasonably able, do all
such acts and things as the Purchaser may reasonably require to enable
due performance of the Necessary Licence and to provide for the
Purchaser the benefit, subject to the burden, of the Necessary
Licence. For the purpose of this paragraph and paragraph (b) above,
it shall not be reasonable to require the Seller to make any payment
unless the Purchaser has first paid the Seller sufficient cleared
funds to make such payment. For the purpose of complying with this
paragraph (c) the parties shall bear their own costs except that the
Seller shall pay any reasonable out of pocket expenses of the
Purchaser.
7. DEBTS AND CREDITORS
(1) The Seller shall collect the Debts for its own account and the Purchaser
shall give reasonable assistance at the Seller's expense to the Seller to
enable the Seller to collect the Debts. The Parties shall co-operate to
ensure that in all aspects, including the application of payments and
dealing with defaulting debtors, debtors are treated in a manner which is
consistent with the Seller's previous practice.
(2) The Purchaser shall account to the Seller for any Debts paid to it within
14 days of receipt. If a payment is received by the Purchaser from a
person who owes any of the Debts and who is also a debtor of the Purchaser,
it shall be applied (notwithstanding any direction of the debtor) in
discharge of the earliest undischarged debt due from that person to the
Seller or the Purchaser.
(3) Any sums received by the Purchaser in respect of any of the Debts shall be
held on trust by the Purchaser for the Seller on the terms of this clause.
(4) If a payment is received by the Seller from a person who is a debtor of the
Purchaser in respect of the Business carried on after the Completion Date,
the Seller shall account to the Purchaser in respect of such amount within
14 days of receipt. Any such sums received by the Seller shall be held on
trust by the Seller for the Purchaser.
(5) The Seller shall discharge the Creditors and shall indemnify the Purchaser
against all costs, claims, demands, proceedings, expenses and liabilities
in respect of them.
(6) The Purchaser shall discharge all creditors (as defined in the next
sentence) and shall indemnify the Seller against all costs, claims,
demands, proceedings, expenses and liabilities in respect of them. In this
subclause (6) "creditors" means all book, trade and other debts (including
without limitation financial debt) or sums (including credit notes granted)
in respect of the Business which arise in respect of the period from
Completion.
8. APPORTIONMENTS, PREPAYMENTS AND DISCOUNTS
(1) For the avoidance of doubt all periodical charges and periodical outgoings
of the Business including but not limited to rents, rates, non-customer
rebates, gas, electricity, telephone and water charges and all liabilities
in relation to salaries, wages, employee bonus entitlements, national
insurance and pension contributions and accrued holiday pay and holiday
entitlements (but for the avoidance of doubt this shall not include any
entitlement to redundancy payments or any other obligation in respect of an
Employee's period of continuous service) shall be apportioned on a time
basis so that such part of the relevant charges attributable to the period
ending on Completion shall be borne by the Seller and such part of the
relevant charges attributable to the period commencing on the day
immediately following Completion shall be borne by the Purchaser. All
rents, licence fees, royalties and other periodical receipts of the
Business shall be apportioned between the Seller and the Purchaser on a
like basis.
(2) As soon as practicable after Completion (and in any event not later than 45
Business Days after Completion) the Purchaser (with the assistance of the
Seller as the Purchaser may reasonably request) shall prepare a schedule of
the apportionment of costs and outgoings described in subclause (1) above
(excluding employee bonus entitlements) and either the
Seller or the Purchaser (as the case may require) shall (within 15 Business
Days of such schedule being prepared) pay to the other an amount equal to
the net liability shown in such schedule; in the case of employee bonus
entitlements the Purchaser shall prepare schedules of the apportionment of
the employee bonus payments as soon as reasonably practicable after the
period in which the employee bonus entitlements accrue and the bonus
entitlements have been calculated and the Seller shall (within 15 Business
Days of such schedules being prepared) pay to the Purchaser the amounts
payable by the Seller shown in such schedules.
(3) All prepayments and payments in advance (excluding the amount of any VAT
Element thereof to the extent that the Seller or the representative member
of any VAT group of which the Seller is a member is required to account to
Customs for such VAT) made to the Seller in the ordinary course of business
prior to the Completion Date in respect of goods which are to be supplied
or services which are to be provided by the Purchaser after the Completion
Date, liability for which is to be assumed by the Purchaser under this
agreement, shall be paid by the Seller to the Purchaser and a schedule of
all such prepayments and payments in advance shall, as soon as practicable
on or after the Completion Date and in any event not later than 45 Business
Days after the Completion Date, be prepared by the Seller (with such
assistance of the Purchaser as the Seller shall reasonably request) as at
the Completion Date and the Seller shall, subject to the provisions of
subclause (5) below, on the Completion Date or as soon as practicable
thereafter pay to the Purchaser an amount equal to the amount of the
liability shown in such schedule.
(4) All prepayments and payments in advance (excluding any VAT Element thereof
which is recovered by the Seller or the representative member of any VAT
group of which the Seller is a member) made by the Seller in the ordinary
course of business prior to the Completion Date in respect of goods to be
supplied or services to be provided to the Purchaser after the Completion
Date, the benefit of which the Purchaser shall receive under this
agreement, shall be reimbursed to the Seller by the Purchaser and a
schedule of such prepayments and payments in advance shall, as soon as
practicable on or after the Completion Date (and in any event not later
than 45 Business Days after the Completion Date), be prepared by the Seller
(with such assistance of the Purchaser as the Seller shall reasonably
request) as at the Completion Date, and the Purchaser shall, subject to the
provisions of subclause (5) below, on the Completion Date or as soon as
practicable thereafter pay to the Seller an amount equal to the amount of
the liability shown in such schedule.
(5) In the event that the Purchaser disputes the accuracy of the schedule(s)
prepared by the Seller in accordance with subclauses (2), (3) or (4) above
it shall pay or require the Seller to pay, as the case may be, the amount
which is not in dispute forthwith and in the event that the Seller and
Purchaser are unable to agree to such schedule(s) within fifteen (15)
Business Days of the receipt of the relevant schedule(s) the Purchaser may
refer the matter to an Independent Accountant in accordance with clause 22
and the Independent Accountant shall be instructed to make such
determination as soon as practicable and in any event within 45 Business
Days of being instructed) and the Seller or the Purchaser (as appropriate)
shall pay the balance so determined within 15 Business Days of such
determination. In the event that any such dispute is so referred to such
Independent Accountant each of the Seller and the Purchaser shall bear 50
per cent. of the costs of such referral unless the Independent Accountant
determines otherwise.
(6) Notwithstanding anything suggesting the contrary contained in this
agreement, the Seller shall remain responsible for paying customer
discounts (on the basis set out below) which
accrue in respect of sales made in the period up to Completion and the
Purchaser shall be responsible for paying customer discounts which accrue
in respect of sales made in the period after Completion.
(7) In respect of any discounts (including, for this purpose, any volume
related payments) which apply in respect of sales made both before
Completion by the Seller and after Completion by the Purchaser, the
Purchaser shall promptly following the expiry of the period to which they
relate inform the Seller of the same and shall provide the Seller with a
calculation of how much of such discount is payable by the Seller and how
much by the Purchaser. Such calculation shall be made according to the
discount structure by applying the ratio of volume of the Seller's sales
pre-Completion to the volume of the Purchaser's sales post-Completion to
the total discount due therefor. The total discount due in respect of the
total discount period shall be calculated in line with the contract
conditions existing at Completion and shall be pro-rated between the
Purchaser and Seller according to the said ratio notwithstanding that the
discount is expressed on a differential basis (e.g. even though a higher
discount may be payable once sales pass a certain figure the parties shall
assume that the total discount due is evenly spread across the total volume
to which the discount pertains). Unless the Seller questions the accuracy
of such calculation (in which case they shall be entitled to receive
sufficient information to enable them to verify the same) such calculation
shall be used by the Seller and the Purchaser for the purposes of settling
the discount due in each case. The Seller shall pay to the Purchaser the
discount payable by the Seller in accordance with the above calculation
prior to the date on which it is payable by the Purchaser.
(8) In the event that the Purchaser wishes to change an existing discount
scheme it shall first bring to an end the existing scheme and make the
calculations under subclause (7) in respect of the period up to the date on
which the scheme is ended.
(9) Disputes under subclauses (6), (7) or (8) may be referred by either party
to the Independent Accountant pursuant to the provisions of clause 22.
9. LIABILITIES
(1) The Seller undertakes to indemnify and keep indemnified the Purchaser
against all claims by third parties giving rise to losses, costs,
liabilities, proceedings, claims, demands and expenses (including
reasonable legal fees) (together "Liabilities") which may be incurred by
the Purchaser, or to which the Purchaser may become subject, and which
arise as a result of the operation of the Business by the Seller (or any of
its Affiliates) prior to Completion (whether the Liabilities are accrued,
absolute, contingent, known or unknown at the Completion Date) other than
as provided in clause 9(2) or the Implementation Agreements, but including
without limitation Liabilities arising as a result of:
(a) the Seller's failure (or that of any of its Affiliates) to comply with
any relevant and legally enforceable corporate or other laws, rules,
ordinances, regulations with respect to the operation of the Business
by the Seller (or any of its Affiliates) prior to Completion;
(b) any liability to Taxation in respect of the period prior to
Completion;
(c) the Seller's failure (or that of any of its Affiliates) to obtain any
required relevant governmental or regulatory permit, licence, consent
or other authorisation or renewal or variation thereof with respect to
the operation of the Business by the Seller (or any of its Affiliates)
prior to Completion;
(d) any breach of contract, tort, product liability or other claim arising
from or with respect to, the operation of the Business by the Seller
(or any of its Affiliates) prior to Completion;
(e) any suit, action, arbitration, charge, governmental investigation,
claim, litigation or proceedings arising as a result of the operation
of the Business prior to Completion;
(f) any liabilities of the Business arising in connection with any
Excluded Assets;
(g) any fines and/or penalties and/or damages which are imposed by the
Commission of the European Communities (the "Commission") and/or the
EFTA Surveillance Authority (the "ESA") or which result from any
judgement, order or direction (including without limitation any
interlocutory, injunctive or other relief) made by any court, tribunal
or other regulatory body (including the Commission and the ESA) in
respect of any infringements by the Business of Articles 85 and/or 86
of the Treaty establishing the European Community and/or their
equivalent provisions under the European Economic Area Agreement,
which arise from the entry into of agreements by the Business prior to
Completion and/or any conduct or omissions on the part of the Business
prior to Completion in connection with such agreements, and all
reasonable costs and expenses which the Purchaser or any member of the
Purchaser's Group may incur in responding to or defending any
Commission and/or ESA inquiry or proceeding or any other proceedings
before a court, tribunal or other regulatory body in relation to such
infringements or alleged infringements; and
(h) any amount owing to any member of the Seller's Group.
(2) The indemnity in subclause (1) shall not apply:
(a) in relation to Contracts, to which the provisions of clause 6 shall
apply;
(b) in relation to Debts and Creditors, to which the provisions of clause
7 shall apply;
(c) in relation to VAT, to which the provisions of clause 24 shall apply;
(d) in relation to Employees, to which the provisions of Schedule 8 shall
apply;
(e) in relation to pensions, to which the provisions of Schedule 9 shall
apply; or
(f) in relation to Environmental Liabilities (as defined in Schedule 11),
to which the provisions of Schedule 11 shall apply.
(3) Save as expressly stated otherwise in this agreement the Purchaser
undertakes to indemnify and hold harmless the Seller from and against all
Liabilities which may be incurred by the Seller (or any of its Affiliates),
or to which the Seller (or any of its Affiliates) may become subject, and
which arise as a result of the operation of the Business after Completion
(other
than Liabilities expressly retained by the Seller under this agreement) and
any and all actions suits, proceedings, claims, demands, assessments and
judgements with respect to the foregoing.
10. PURCHASER'S WARRANTIES
The Purchaser and Terra each warrants to the Seller that:
(a) it (and each of its Affiliates, in respect of the Implementation
Agreements and the other agreements entered into pursuant to this
agreement to which it is a party) has the requisite power and
authority to enter into and to perform this agreement, such
Implementation Agreements and the other agreements entered into
pursuant to this agreement;
(b) it (and each of its Affiliates, in respect of the Implementation
Agreements and the other agreements entered into pursuant to this
agreement to which it is a party) has obtained or satisfied all
corporate, regulatory and other approvals, or any other significant
conditions, necessary to execute and perform this agreement, such
Implementation Agreements and the other agreements entered into
pursuant to this agreement;
(c) this agreement, the Implementation Agreements and the other agreements
entered into pursuant to this agreement constitute (or, when executed,
will constitute) valid and binding obligations of the Purchaser (and
each of its Affiliates, in respect of the Implementation Agreements
and the other agreements entered into pursuant to this agreement to
which it is a party) enforceable in accordance with their terms;
(d) compliance with the terms of this agreement, the Implementation
Agreements and the other agreements entered into pursuant to this
agreement by the Purchaser or its Affiliates (as appropriate) will:
(i) not constitute a breach of any agreement or contract to which
the Purchaser or such Affiliate is a party or by which it is
bound;
(ii) be in compliance with the Purchaser's or such Affiliate's
memorandum and articles of association or other constitutional
documents; and
(iii) not contravene any order, judgement, decree or regulation or any
other restriction of any kind by which the Purchaser or such
Affiliate is bound; and
(e) each of the Purchaser and Terra:
(i) is a company, duly incorporated and subsisting under the laws of
England and Wales and the State of Maryland, USA, respectively;
and
(ii) is not in liquidation, administration or administrative
receivership, nor has any resolution been passed by the
shareholders or creditors to put either of the companies into
liquidation, administration or administrative receivership (and
has not done or suffered in any jurisdiction other than England
and Wales, anything equivalent to the things referred to in this
subparagraph (ii)).
11. SELLER'S WARRANTIES
(1) The Seller warrants to the Purchaser that, save as otherwise stated in this
agreement and subject to all matters and circumstances disclosed in the
Disclosure Letter, each of the statements set out in Schedule 7 to this
agreement (the "Warranties") are true and accurate as at the date of this
agreement and at Completion (by reference to the facts and circumstances
then subsisting).
(2) The Purchaser acknowledges and agrees that:
(a) no representations, warranties, collateral contracts or other
assurances of any kind (express or implied) have been given by or on
behalf of the Seller or any member of the Seller's Group and on which
the Purchaser may rely in entering into this agreement except for the
Warranties and, in particular, but without prejudice to the generality
of the foregoing, no member of the Seller's Group makes any express or
implied representation or warranty (other than the Warranties) as to
the physical condition or suitability for any particular purpose of
any of the Assets, individually or collectively, which are otherwise
being purchased "as is, where is" at the time of Completion;
(b) no other statement, promise or forecast made by or on behalf of the
Seller or any member of the Seller's Group (except in instances of
fraud) may form the basis of, or be pleaded in connection with, any
claim by the Purchaser under or in connection with this agreement or
the Implementation Agreements (save as set out in such agreements);
(c) any claim by the Purchaser or any person deriving title from it in
connection with the Warranties (a "Warranty Claim") shall be subject
to the following provisions of this clause; and
(d) at the time of entering into this agreement none of the individuals
set out in Part 2 of Schedule 4 (the "Terra Individuals") are aware
that the Purchaser will at the date of this agreement or at Completion
be entitled to bring a Warranty Claim.
(3) The liability of the Seller under or in respect of the Warranties or under
Schedule 11 shall be limited as follows:
(a) there shall be disregarded for all purposes any breach of the
Warranties or liability under Schedule 11 in respect of which the
amount of the damages (or other payment) to which the Purchaser would
otherwise be entitled is less than (Pounds)50,000 (excluding interest,
costs and expenses) provided that any series of claims arising from
the same or similar circumstances shall be treated as a single claim
for these purposes and to the extent that the claim(s) is satisfied by
the Seller from insurance proceeds a series of claims or events or a
single claim or event shall be interpreted in accordance with the
terms and conditions of the Policy referred to in 5(7);
(b) the Purchaser shall not be entitled to recover any damages (or other
payment) in respect of any breach or breaches of the Warranties until
the amount of damages in respect of such breach or breaches (together
with any liability on the part of the
Seller and all members of the Seller's Group under Schedule 11)
exceeds in aggregate the sum of (Pounds)1,000,000 in which event the
Purchaser shall be entitled to recover the whole of such amount and
not just the excess;
(c) the maximum aggregate liability of the Seller and all members of the
Seller's Group in respect of all and any Warranty Claims (other than
Environmental Claims) shall not exceed (Pounds)100,000,000;
(d) the maximum aggregate liability of the Seller and all members of the
Seller's Group in respect of all and any Environmental Claims shall
not exceed (Pounds)100,000,000;
(e) in respect of any liability which is contingent, unless and until such
liability becomes an actual liability and is due and payable provided
that recovery for claims associated with a contingent liability in
existence prior to the Expiration Date shall still be permitted when
actual liability does not become due and payable until after the
Expiration Date if notice of the contingent liability has been given
in accordance with subclauses (6) and (7) below.
(4) The Purchaser acknowledges and agrees that:
(a) no liability shall attach to the Seller by reason of any breach of any
of the Warranties to the extent that the loss has been recovered by
the Purchaser under Schedule 11 or any other term of this agreement or
any other document referred to herein and accordingly the Purchaser
may only recover once in respect of the same loss;
(b) the Seller shall not be liable for breach of any Warranties or under
Schedule 11 or any other term of this agreement to the extent that the
subject of the claim has been or is made good or is otherwise
compensated for without cost, expense or loss to the Purchaser in a
manner reasonably acceptable to the Purchaser; and
(c) in calculating the liability of the Seller for any breach of the
Warranties or under Schedule 11 there shall be taken into account the
amount by which any taxation for which the Purchaser is now or will in
the future be accountable or liable to be assessed is or will be
reduced or extinguished as a result of the matter giving rise to such
liability.
(5) The Purchaser shall not be entitled to make any Warranty Claim:
(a) to the extent that provision or allowance for the matter or liability
which would otherwise give rise to the claim in question is taken
account of or reflected in the determination of the Stock Valuation;
(b) in respect of anything fairly disclosed in the Disclosure Letter
(which, with respect to the Warranties given as at the date of this
agreement, shall, for the avoidance of doubt, exclude any additional
specific disclosures after the date of this agreement and, with
respect to the Warranties given at the date of Completion, will
include the benefit of additional specific disclosures made pursuant
to clause 5);
(c) if the claim would not have arisen but for a change in (or in the
judicial interpretation of) or an enactment or repeal of legislation
or regulation, or the introduction, change
in or cessation of the published practice of any taxation authority
taking effect after the date of this agreement;
(d) to the extent that the claim arises as a result only of any change
after Completion in the accounting bases upon which the Business
values its assets or computes its profits or arises as a result of the
taxation or accounting policies, bases or practices of the Purchaser
being different to those adopted or used in preparing the Accounts
(except to the extent that such change is made as a result of the
Accounts not being as warranted in paragraph B(1) of Schedule 7); or
(e) to the extent that the claim arises as a result of a circumstance
which arose:
(i) prior to Completion with the written consent of the Purchaser; or
(ii) due to any voluntary act or omission of the Purchaser after
Completion which was outside the ordinary course of business,
which the Purchaser knew would result in a breach of Warranty and
the primary intention of which was to create a claim for breach
of Warranty.
Notwithstanding any other provision of this agreement, the Purchaser
shall be deemed not to have any notice of any matters which might be
disclosed in any fire certificates or planning provisions which may
have been available to the Purchaser or its advisers.
(6) If any of the directors of the Purchaser or senior management of Terra
become aware that the Purchaser is entitled to make a Warranty Claim or a
claim in respect of any indemnity by the Seller under this agreement
(except in relation to claims under the indemnities set out in Schedule 11)
the Purchaser shall give notice to the Seller within 30 days of such
person or persons becoming aware of any such matter specifying (in
reasonable detail) the matter which gives rise to the claim, the nature of
the claim and the amount claimed in respect thereof (including the
Purchaser's calculation of the loss thereby alleged to have been suffered
by it) provided that the Purchaser shall not lose any rights to bring a
Warranty Claim or a claim in respect of any indemnity by reason of failing
to give such a notice unless and except to the extent that the Seller's
liability is increased as a result of such failure. If the Warranty Claim
or claim in respect of an indemnity in question is as a result of or in
connection with a liability or alleged liability to a third party:
(a) the Purchaser shall make no admission of liability, agreement,
settlement or compromise with any third party in relation to any such
liability or alleged liability without the prior written consent of
the Seller (such consent not to be unreasonably withheld or delayed),
and the Purchaser shall (subject to being indemnified by the Seller
against all reasonable costs, claims and liabilities arising in
connection therewith) take such action to avoid, mitigate, dispute,
resist, appeal, settle, compromise or contest the liability as may be
reasonably requested by the Seller (provided any such actions would
not be prejudicial to its ongoing business interests in a material
respect);
(b) the Purchaser shall make available to the Seller, at the Seller's
expense, such persons and all such access and information as the
Seller may reasonably require for
avoiding, disputing, resisting, appealing, compromising or contesting
any such liability.
(7) The Seller shall cease to have any liability under or in respect of the
Warranties (other than the Warranties in respect of environmental matters
to which the time limitations in Schedule 11 shall apply) on the date two
years from Completion (the "Expiration Date") in respect of any Warranties
except in respect of a Warranty Claim of which the Purchaser gives notice
to the Seller before the relevant date and in accordance with subclause (6)
above but the liability of the Seller in respect of any Warranty Claim
shall absolutely terminate if proceedings in respect of it have not been
commenced within 12 months of service of notice of that Warranty Claim (and
for this purpose proceedings shall not be deemed to have been commenced
unless they have been properly issued and validly served upon the Seller);
provided, however, that such limitation on liability shall not apply with
respect to Warranties relating to the ownership of assets and due
authorisation of this agreement, the Implementation Agreements and
transactions contemplated thereby.
(8) Without prejudice to the Purchaser's duty to mitigate any loss in respect
of any breach of the Warranties or in respect of any claim under Schedule
11 if in respect of any matter which would otherwise give rise to a breach
of the Warranties or a claim under Schedule 11 the Purchaser is entitled to
claim under any policy of insurance then the Purchaser shall use all
reasonable endeavours to pursue such insurance claim and the amount of any
insurance monies recovered by the Purchaser (net of taxes and costs of
recovery and excluding returns of premium (if any)) shall reduce to that
extent or extinguish the claim for breach of the Warranties or the amount
indemnified under Schedule 11.
(9) If the Seller or any member of the Seller's Group makes any payment by way
of damages for breach of the Warranties (the "Damages Payment") and the
Purchaser receives any benefit otherwise than from the Seller or that
member which would not have been received but for the circumstance giving
rise to the claim in respect of which the Damages Payment was made the
Purchaser shall, once it has received such benefit, forthwith repay to that
Seller or member an amount equal to the lower of the amount of such benefit
and the Damages Payment net of taxes and the cost of recovery.
(10) The Purchaser shall not be entitled to rescind or terminate this agreement
after Completion in any circumstances provided that nothing in this
subclause shall exclude or limit any liability for fraud.
(11) Any payment made by the Seller in respect of a breach of the Warranties or
under any indemnity shall be deemed to be a reduction in the consideration
for the sale of the Business.
(12) References to the Seller shall include any member of the Seller's Group
which might have any liability with respect to the Warranties or under any
indemnity.
(13) The Purchaser shall not be entitled to claim for punitive damages in
respect of any Warranty Claim or in respect of a claim in respect of any
indemnity by the Seller under this agreement.
(14) The Purchaser shall take reasonable steps at the Seller's expense (provided
such expenses are taken into account when calculating damages) to avoid or
mitigate any loss or damage which may give rise to a claim under or in
connection with this agreement, whether arising in contract, tort
(including, without limitation, negligence) or otherwise howsoever arising.
(15) The Seller shall have no liability under or in connection with this
agreement whether arising in contract, tort (including, without limitation,
negligence or otherwise howsoever arising) save in relation to the
Warranties and as otherwise expressed in this agreement.
(16) The Seller and ICI, on behalf of themselves and each member of the Seller's
Group, waive any and all claims which they or any member of the Seller's
Group might otherwise have against any of the Employees, to the intent that
this subclause (16) shall be for the benefit of, and enforceable against
the Seller, ICI and each member of the Seller's Group by, the Employees and
each member of the Purchaser's Group in connection with the sale of the
Assets and the Business, this agreement and any document ancillary to it
and any information supplied or omitted to be supplied by them and any act
or omission by them or any of them in connection with the preparation of
and the contents of this agreement and any document ancillary to it
(including, without limitation, the Disclosure Letter) except that this
clause shall not result in the Seller, ICI or any member of the Seller's
Group waiving claims for wilful default or fraud by the Employees.
(17) The Purchaser shall not be deemed to have any specific knowledge except as
specifically disclosed in the Disclosure Letter.
(18) The provisions of this clause shall have effect notwithstanding any other
provisions of this agreement.
(19) Subject to the Terra Individuals not being aware of the Purchaser being
entitled to bring a Warranty Claim at the date of this agreement or at
Completion (as provided for in (2)(d) above), the Purchaser shall be
entitled to claim after Completion that any of the Warranties is or was
untrue or has or had been breached even if the Purchaser knew or could have
discovered on or before Completion that the Warranty in question was untrue
or had been breached and Completion shall not in any way constitute a
waiver of any of the Purchaser's rights in respect of any such claim
(provided that subclause (2)(d) shall take precedence over the provisions
of this subclause (19)).
12. ENVIRONMENTAL
The Seller and the Purchaser shall observe and perform the provisions of
Schedule 11 expressed to be observed and performed by each of them
respectively.
13. COMPLETION
(1) Completion shall take place on the later of 31st December, 1997 and the
tenth Business Day following the satisfaction or, with the agreement of all
the parties, waiver of the conditions precedent set out in clause 5 (other
than conditions with respect to actions the respective parties will take at
Completion itself) or such other date as the parties hereto may mutually
determine (the "Completion Date").
(2) Completion shall take place at the offices of the Seller's Solicitors on
the Completion Date, at which time:
(a) each party shall provide to the other evidence in a form reasonably
satisfactory to the other that it (and each Affiliate entering into an
Implementation Agreement) has all
necessary corporate approvals and its signatories have the necessary
authority to enter into this agreement and the other agreements
referred to herein;
(b) the Seller shall execute and deliver to the Purchaser the Property
Documents in the Agreed Form;
(c) the Seller shall execute and deliver the Completion Certificate as
described in clause 5(11);
(d) each party shall (or shall procure that its relevant Affiliates) duly
execute, deliver and, to the extent applicable, complete the
Implementation Agreements;
(e) the Purchaser shall pay to the Seller the sum of (Pounds)200,000,000
in respect of the Consideration by telegraphic transfer to such
account as the Seller may specify;
(f) the Seller shall let the Purchaser into possession of the Assets and
occupation of the Properties;
(g) the Seller shall make available at the Properties the Records and
other documents relating exclusively to the operation of the Business
(the "Business Records") to the Purchaser (but delivery at the place
where the Records are currently kept shall be a sufficient discharge
of this obligation provided that such place is included with the
Properties);
(h) the Seller shall execute and deliver the Disclosure Letter (as amended
pursuant to clause 5) which the Purchaser shall acknowledge and return
the duly executed copy;
(i) the Seller shall deliver the Intellectual Property Consent;
(j) the Seller or the relevant member of the Seller's Group shall, in
respect of the Business Intellectual Property, execute and deliver to
the Purchaser the Intellectual Property Assignment in the Agreed Form;
and
(k) the parties shall procure the execution and delivery by their
respective Affiliates of the Ammonium Nitrate Hedging Agreement, the
Put Agreement and the related Guarantee (the "Hedging Agreements")
each in the Agreed Form and, if the Seller so requires, corporate
resolutions, approvals and legal opinions in a form satisfactory to
the Seller in respect of the Hedging Agreements.
14. RECORDS, ASSISTANCE AND ACCOUNTS
(1) The Purchaser shall retain all the Business Records (including, without
limitation, those documents pertaining to research, development and testing
of products, sales, marketing and regulatory compliance of products) for a
period of at least six years following the Completion Date and during that
period shall allow the Seller and its advisers to inspect and (at the
Seller's expense) to copy the same at reasonable times on reasonable notice
for reasonable purposes. For a period of six years following the expiry of
that period the Purchaser shall not dispose of or destroy any of the
Business Records without first giving the Seller at least six months'
notice of its intention to do so and giving the Seller the opportunity to
remove and retain any of them (at the Seller's expense).
(2) Prior to any disposal of the Business by the Purchaser or any member of the
Purchaser's Group (whether or not the disposal is part of some larger
transaction and whether or not it forms part of a sale of shares or assets)
during the twelve year period following Completion, the Purchaser shall
give written notice of such sale to the Seller in sufficient time for the
Seller to pursue its rights to inspect, copy, remove or retain
documentation pursuant to this clause 14.
(3) For a period of at least six years following the Completion Date, the
Seller shall retain all the records relating to the Business owned by and
in the possession of the Seller other than the Business Records or (at the
Seller's option) shall retain extracts from the same. During that period,
the Purchaser shall be entitled to inspect the same and, in so far as they
relate to the Business, the Purchaser shall be entitled (at the Purchaser's
cost) to copy such extracts at reasonable times on reasonable notice. For
a period of six years following the expiry of that period the Seller shall
not dispose of or destroy any of such records without first giving the
Purchaser at least six months' notice of its intention to do so and giving
the Purchaser the opportunity to remove and retain any of them (at the
Purchaser's expense). Following the expiry of that further period the
Seller shall be at liberty to destroy any of such records or extracts.
(4) The Purchaser shall, at the Seller's expense and on reasonable notice from
the Seller for reasonable purposes, give such assistance to the Seller as
the Seller may reasonably require in relation to completing accounts of the
Seller for the year ending 31st December, 1997 or any proceedings by or
against the Seller or any of its Affiliates (other than proceedings
involving the Purchaser or its Affiliates), including, without limitation,
proceedings relating to employees' claims, product liability or taxation.
Such assistance shall include, without limitation, access to personnel and
records of the Purchaser after Completion and access to the Properties
(insofar as the Purchaser or its Affiliates can grant such access) except
to the extent that access relates to litigation between the Seller and the
Purchaser.
(5) The Seller shall as soon as reasonably practicable and in any event within
60 days after the Completion Date provide to the Purchaser copies of the
Accounts for the year ended 31st December, 1997.
15. DEFUNCT PLANT
(1) The Seller shall at its expense remove the following plant (the "Defunct
Plant") within the periods stated:
(a) the 1A ammonia plant at Severnside within 42 months of Completion;
(b) the LP1 plant at Billingham within 42 months of Completion;
(c) the LP2 plant at Billingham within 42 months of Completion; and
(d) the LP3 ammonia plant at Billingham within 42 months of Completion.
(2) The removal of the Defunct Plant shall be conducted in accordance with the
terms of the letter dated 13th November, 1997 (LP Ammonia Arrangements) and
an internal ICI e-mail dated 15th November, 1997 which are attached as
annex 9 to the Disclosure Letter.
(3) In removing the Defunct Plant the Seller shall ensure that there is no
breach of Environmental Law, that no contamination is created and that the
area from which the Defunct Plant has been removed is in a safe condition.
(4) The Seller further undertakes to ensure that the removal is carried out in
such a way so as not to interfere to any material degree with the normal
running of the Business or damage to the Business.
(5) The Seller shall be liable for all loss or liability caused to the
Purchaser as a result of the breach by the Seller of its obligations under
this clause.
16. EMPLOYEES
The Seller and the Purchaser shall observe and perform the provisions of
Schedule 8 expressed to be observed and performed by each of them
respectively.
17. PENSIONS
The Seller and the Purchaser shall observe and perform the provisions of
Schedule 9 expressed to be observed and performed by each of them
respectively.
18. GUARANTEES
(1) Each of ICI and Terra (the "Guarantor") as primary obligor unconditionally
and irrevocably:
(a) guarantees by way of continuing guarantee to the other and its
Affiliates (the "Beneficiary") the payment when due of all amounts
payable by it and its Affiliate which is party to this agreement (the
"Obligor") to the Beneficiary under this agreement;
(b) undertakes to ensure that the Obligor will perform when due all its
obligations under this agreement;
(c) agrees to indemnify and keep indemnified the Beneficiary against all
losses and damages sustained by it flowing from any non-payment or
default of any kind by the Obligor under this agreement; and
(d) agrees that if and each time that the Obligor fails to make any
payment to the Beneficiary when it is due under this agreement, the
Guarantor shall on demand (without requiring the Beneficiary first to
take steps against the Obligor or any other person) pay that amount to
the Beneficiary (and the certificate of the Beneficiary shall in the
absence of manifest error be conclusive evidence of the Seller's
failure to make the payment).
(2) The Guarantor's obligations under this clause shall not be affected by any
matter or thing which but for this provision might operate to affect or
prejudice those obligations, including without limitation:
(a) any time or indulgence granted to, or composition with, the Obligor or
any other person;
(b) the taking, variation, renewal or release of, or neglect to perfect or
enforce this agreement or any right, guarantee, remedy or security
from or against the Obligor or any other person; or
(c) any unenforceability or invalidity of any obligation of the Obligor,
so that this clause shall be construed as if there were no such
unenforceability or invalidity.
(3) The Beneficiary may appropriate any sum paid by the Obligor, the Guarantor
or any other person or recovered or received on account of the obligations
the subject of this clause as the Beneficiary sees fit, whether or not
towards those obligations.
(4) Until all amounts which may be or become payable under this agreement have
been irrevocably paid in full, the Guarantor shall not as a result of this
clause or any payment or performance under this clause be subrogated to any
right or security of the Beneficiary or claim or prove in competition with
the Beneficiary against the Obligor or any other person or claim any right
of contribution, set-off or indemnity.
(5) The Guarantor will not hold any security from the Obligor in respect of
this guarantee and any such security which is held in breach of this
provision will be held by the Guarantor in trust for the Beneficiary.
(6) Subject to subclause (7) below, the Guarantor will reimburse the
Beneficiary for all legal and other costs (including VAT) incurred by the
Purchaser in connection with the enforcement of this guarantee.
(7) The liability of the Guarantor under the Guarantee in this clause shall
under no circumstances exceed the liability of the Obligor and shall be
subject to any limitations on liability contained in this agreement
(including, without limitation, the provisions of clause 11).
19. PROTECTIVE COVENANTS
(1) The Seller covenants with the Purchaser that no member of the Seller's
Group will:
(a) for a period of four years from Completion within the Territory carry
on or be engaged or involved in the Field of Activity (save as the
owner for investment purposes only of securities traded on a
recognised stock exchange and not exceeding ten per cent. of the
securities of that class);
(b) without prior approval from the Purchaser, for a period of two years
from Completion, solicit or endeavour to entice away from the
Purchaser or its Affiliates any of the Employees whether or not such
person would commit any breach of his/her contract of employment by
reason of leaving the service of that member of the Purchaser's Group;
(c) disclose to any third party (except as otherwise required by law or
any competent regulatory body or Stock Exchange) any information of a
secret or confidential nature in the possession of the Seller's Group
relating to the Business; or
(d) attempt or knowingly assist or procure any person to do any of the
foregoing things.
(2) The Purchaser covenants with the Seller that no member of the Purchaser's
Group will disclose to any third party (except as otherwise required by law
or any competent regulatory body or Stock Exchange), any Non-Exclusive
Information of a secret or confidential nature in the possession of the
Purchaser's Group.
(3) Each of the restrictions in subclause (1) above shall be enforceable
independently and its validity shall not be affected if the other is
invalid.
(4) The parties acknowledge that the provisions of this clause are no more
extensive than are reasonable to protect the Purchaser and the Seller (as
the case may be).
(5) Nothing in this clause 19 or in this agreement shall prevent the Seller or
its Affiliates from:
(a) purchasing shares in any company or any business which has an interest
in the Field of Activity (the ownership of which would otherwise
contravene subclause (1)) unless more than 20 per cent. of the
turnover of such company or business in its last accounting year was
generated by its interest in the Field of Activity; provided, however,
that if the Seller or its Affiliates acquire any such shares or
business which it wishes to sell at any time during the period of four
years from Completion, the Seller or its Affiliates (as applicable)
will first offer such shares or business to the Purchaser. If the
Purchaser does not buy such shares or business within a reasonable
period of time following such offer and in any event (provided the
Seller or the Purchaser has not unreasonably delayed) within six
months of such offer being made, the Seller and its Affiliates may
sell such shares or business to any third party at not less than the
price so offered and declined;
(b) carrying on or being engaged, involved or having any interest in:
(i) any business it currently carries on (other than the Business)
substantially as conducted in the previous 12 months;
(ii) any business after such time as the Purchaser or its Affiliates
have ceased to carry on or be engaged or involved in such
business;
(iii) shares of Irish Fertilizer Industries Limited (or its
successor) and the business carried on by that company;
(iv) sales of ammonium nitrate by the ICI explosives business
provided that such sales are not knowingly made by the Seller's
Group for use in fertilizers in the Territory; or
(v) nitric acid as an intermediate for industrial use by the
Seller's Group or a joint venture to which a member of the
Seller's Group is a party;
(c) being involved in the Field of Activity only insofar as it relates to
process licensing, technical assistance or the manufacture, sale or
lease of catalysts, absorbents and adsorbents to any person which is
itself involved in the Field of Activity.
(6) Each of the parties to this agreement confirms that if by virtue of any
provision of this agreement or of any other agreement or arrangement of
which this agreement forms part any such agreement or arrangement is
subject to registration under the Restrictive Trade Practices Act 1976 (the
"RTPA") none of the parties to any such agreement or arrangement who
carries on business within the United Kingdom shall give effect to, or
enforce or purport to enforce the agreement or arrangement in respect of
any such provision until the day after particulars of the agreement or
arrangement have been furnished to the Director General of Fair Trading
under section 24 of the RTPA.
20. ICI ROUNDEL
(1) Nothing contained in this agreement shall entitle the Purchaser to any
rights to carry on business in the names of ICI or of the Seller, or
otherwise to use any trademark, service ▇▇▇▇, trade name or logo
(including but not limited to the ICI trade ▇▇▇▇ known as the ICI Roundel)
or to use any name, ▇▇▇▇ or logo confusingly similar thereto, other than
those comprised in the Business Intellectual Property and the Licensed
Intellectual Property subject to the terms and conditions of this
agreement.
(2) To the extent that any such name or trademark is displayed on any Asset or
is displayed on any sign or otherwise at the Properties the Purchaser shall
delete or cover the same as soon as practicable after Completion.
(3) To the extent that any such name or trademark appears on any Stock, the
Purchaser shall delete or cover the same before such Stock is sold, passed
to or otherwise disclosed to any third party, except where it is displayed
on packaging or labelling materials which are included in the Stock and
used for the packaging or labelling of products passed to customers of the
Business within the period of six months from the Completion Date or if
such supplies existing at Completion are unused at the expiry of six months
from the Completion Date, at the earlier of the date on which such supplies
are used or 12 months from the Completion Date.
(4) The Purchaser shall indemnify the Seller (for itself and on behalf of its
Affiliates) against all costs, claims, demands and liabilities which result
from a breach by the Purchaser or any of its Affiliates of the provisions
of this clause.
21. CONFIDENTIALITY
(1) For the purposes of this clause:
(a) "Confidential Information" means all information received by the
Purchaser's Group from the Seller's Group relating to the Seller, its
Affiliates and the businesses conducted by the Seller's Group (whether
pursuant to, or in relation to, this agreement or any of the
Implementation Agreements) and all information received by the
Seller's Group from the Purchaser's Group relating to the Purchaser,
its Affiliates and the businesses conducted by the Purchaser's Group
(whether pursuant to, or in relation to, this agreement or any of the
Implementation Agreements), including not only written information but
information transferred orally, visually, electronically, or by any
other means. For the avoidance of doubt, the term Confidential
Information shall not include:
(i) information that is in the public domain at the date of this
agreement;
(ii) information that subsequently comes into the public domain,
otherwise than as a result of a breach of this agreement, but
only after it has come into the public domain;
(iii) information which the receiving party or its Representatives
obtain from a third party not under any confidentiality
obligation to the disclosing party respecting such information;
(iv) information which the receiving party or its Representatives at
the time of disclosure already has in its possession and which
is not subject to any obligation of secrecy on its part to the
other party; or
(v) information which is independently developed by employees of
the receiving party or its Representatives who had no access to
the information disclosed by the disclosing party.
(b) "Representatives" means Affiliates, directors, officers, employees,
agents or representatives of either party or its Affiliates and also
the funders of any member of the Purchaser's Group in connection with
the funding of the acquisition under this agreement at Completion or
any refinancing thereof, and their respective solicitors, accountants,
consultants and financial or other advisers (provided that any
entities or persons are subject to an obligation or duty of
confidentiality).
(2) Each party undertakes, for a period of 10 years from the date of this
agreement (subject to such other period specified in an Implementation
Agreement in relation to particular information), to maintain Confidential
Information received by it or its Representatives relating to the other
party or the other party's Affiliates (or their respective businesses) in
confidence and not disclose that Confidential Information to any person
other than its Representatives except with the prior written approval of
the other party.
(3) Each party undertakes only to disclose to Representatives such Confidential
Information relating to the other party or the other party's Affiliates as
is reasonably required for the purposes of performing the obligations under
this agreement and the Implementation Agreements and only to
Representatives whom it has informed of the confidential nature of the
Confidential Information and who undertake to keep it confidential. Each
party shall be responsible for breach of such confidentiality undertaking
by it or its Representatives and undertakes to indemnify and hold harmless
the other party, its Affiliates or any successor to such business against
all actions, proceedings, costs, claims, demands, liabilities, losses or
expenses (including legal expenses) arising from such breach.
(4) In the event that, after receipt of Confidential Information, either party,
or any person or Representative to whom it has transmitted Confidential
Information, becomes legally required (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigation,
demand or similar process, or otherwise) to disclose any of the
Confidential Information received, the legally compelled party shall
provide the other party with prompt written notice of that requirement so
that the other party may seek a protective order or other appropriate
remedy but shall not be obliged to delay disclosure if to do so
would be in breach of any conditions for such disclosure imposed by the
authority compelling disclosure and in any event should the other party not
be successful in seeking or obtaining a protective order or other
appropriate remedy, the other party shall waive compliance with the
provisions of this agreement for such particular case to enable the legally
compelled party or its Representative to comply with any such legal
requirement.
(5) Each party will only use (or permit the use by its Representatives of) the
Confidential Information received by it or its Representatives for the
purposes of the transactions contemplated by this agreement.
(6) Notwithstanding any provision to the contrary, the provisions of this
clause shall survive termination of this agreement.
22. INDEPENDENT ACCOUNTANT
(1) Where this agreement expressly so provides or if either party wishes to
refer any matter in dispute in accordance with the provisions of Schedule
10 for determination under this clause 22 it shall give notice to the
other requiring the appointment of an independent accounting firm of
international reputation (the "Independent Accountant"). If the parties
are unable to agree upon the Independent Accountant within 14 days of such
notice, then the Independent Accountant shall be appointed by the President
for the time being of the Institute of Chartered Accountants in England and
Wales on the application of either party.
(2) If the Independent Accountant delays or becomes unwilling or incapable of
acting or if for any other reason the President for the time being of the
Institute of Chartered Accountants in England and Wales thinks fit he may
discharge the Independent Accountant and, in the absence of agreement
between the parties, appoint another in his place.
(3) The Independent Accountant shall act as an expert and not as an arbitrator
and his decision shall (in the absence of manifest error or material
departure from instructions) be final and binding on the parties. The
Independent Accountant shall afford the parties the opportunity of making
written representations to him.
(4) The fees and expenses of the Independent Accountant shall be borne by the
parties in equal shares unless the Independent Accountant otherwise
determines or as otherwise stated in this agreement.
23. ANNOUNCEMENTS
Neither party shall make or permit any member of the Seller's Group or the
Purchaser's Group, as the case may be, to make any announcement concerning
this agreement, the fact or status of the transaction to which this
agreement relates or any ancillary matter except as required by law or any
competent regulatory body or with the prior written approval of the other
party, the Seller or ICI such approval not to be unreasonably withheld or
delayed.
24. VALUE ADDED TAX AND CAPITAL ALLOWANCES
(1) All amounts expressed in this agreement as being payable by the Purchaser
are expressed exclusive of any Value Added Tax which may be chargeable on
any supply for which such amounts form the consideration and the amount of
any such Value Added Tax shall be payable in addition thereto subject as
hereinafter provided.
(2) The Seller, ICI and the Purchaser intend that article 5 of the Value Added
Tax (Special Provisions) Order 1995 ("article 5") shall apply to the sale
of the Assets under, or procured under, this agreement, so that the sale is
treated as neither a supply of goods nor a supply of services.
(3) If nevertheless any VAT is payable on any supply by the Seller or ICI under
this agreement or any supply procured pursuant to this agreement, the
Purchaser shall pay the Seller or ICI the amount of that VAT in addition to
the price and the Seller, or, as the case may be, ICI shall issue (or
procure the issue) to the Purchaser a proper VAT invoice in respect of that
VAT, but any such payments shall be without prejudice to the rights of the
Purchaser under clause 24(4).
(4) If any VAT is payable as mentioned in subclause (3) above and such VAT
would not have been payable:
(a) had the Purchaser complied with its obligations under subclause (6)(a)
or continued to use the Assets as mentioned in subclause (6)(b); or
(b) had any matter or circumstance notified in writing by the Purchaser to
the Seller or ICI (as the case may be) in relation to the application
by the Seller or ICI (as the case may be) to Customs for a ruling as
to the application of article 5 to the sale of the Assets under this
Agreement been correct,
then
(aa) such VAT shall be payable by the Purchaser to the Seller or ICI (as
the case may be) on the later of (i) five working days before the
Seller or ICI (as the case may be) is obliged to account to Customs
for such VAT and (ii) five working days after the Seller or ICI (as
the case may be) gives the Purchaser written notice that such VAT is
payable and of the amount of such VAT; and
(bb) the Purchaser shall indemnify the Seller or ICI (as the case may be)
against any interest or penalties imposed by Customs arising out of
the treatment by the Seller, ICI and the Purchaser of the sale as
described in subclause (2) above except to the extent that any such
interest or penalties are referable to any period after the Seller or
ICI (as the case may be) has received cleared funds equal to such VAT
from the Purchaser.
In all other circumstances the Purchaser shall pay such VAT to the Seller
or ICI (as the case may be) within five working days of recovery of such
VAT by the Purchaser (or by the representative member of any VAT group of
which the Purchaser is a member) pursuant to sections 25 or 26 of the Value
Added Tax Act 1994 (and the Purchaser shall use reasonable endeavours to
procure such recovery as soon as lawfully possible) provided that if such
VAT has not been so recovered in full on the expiration of three months
after Completion the Purchaser shall be deemed for the purposes of this
sub-clause to have recovered such VAT in full on that date.
(5) If the Purchaser fails to pay the amount of the tax on the due date under
subclause (3), it shall pay Default Interest on that amount from the due
date until actual payment (excluding any period for which interest
indemnified under subclause (2) runs) compounded monthly.
(6) With a view to procuring that article 5 applies, the Purchaser:
(a) shall ensure that the Purchaser is registered for VAT not later than
the date of Completion; and
(b) warrants that the Assets are to be used by the Purchaser in carrying
on the same kind of business as that carried on by the Seller and ICI.
(7) The Seller and the Purchaser envisage that section 49 of the Value Added
Tax Act 1994 will apply to the sale and purchase of the Assets under this
agreement but intend that the Seller should retain the records referred to
in that section, and accordingly:
(a) notwithstanding anything in this agreement the Seller shall not be
required to deliver to the Purchaser the records referred to in
section 49;
(b) the Seller shall make a request to Customs under section 49 for the
records to be preserved by the Seller;
(c) if or for so long as that request is not granted, the Seller shall
preserve the records on behalf of the Purchaser for such period as may
be required by law, and shall during that period permit the Purchaser
reasonable access to them to inspect or make copies of them; and
(d) the Seller may fulfil its obligations under paragraph (c) by procuring
that a future transferee of its business or any other person preserves
the records and permits reasonable access as mentioned in that
paragraph, in which case the Seller shall notify the Purchaser of the
name of that person to the contrary in this agreement.
(8) The Seller shall if so requested by the Purchaser and at the Purchaser's
expense supply the Purchaser with all information which is in the Seller's
possession and which is reasonably necessary to enable the Purchaser to
claim any capital allowances which may be available to the Purchaser in
respect of any Asset, fixture, property or any other item or asset of any
description being acquired by the Purchaser.
25. COMPUTER SYSTEMS
(1) To the extent that defined terms are used in this clause 25 they shall bear
the meaning given to them in this agreement but in the absence of any
definition they shall bear the meaning given to them in the Shared IT
Services Agreement.
(2) On condition that the Purchaser and ICI enter into the Shared IT Services
Agreement on or before the Completion Date, each of the Seller and ICI
shall use its reasonable endeavours to ensure that the Purchaser will for a
period of 18 months from and including Completion be able to use and/or
obtain the benefit of the Computer Systems necessary for the conduct of the
Business as the Business was carried on by the Seller during the Comparison
Period.
26. DEFAULT INTEREST
Subject as otherwise provided to the contrary in this agreement, if any sum
due for payment under or in accordance with this agreement is not paid on
the due date the party in default shall pay Default Interest on that sum
from the due date until the date of actual payment calculated on a day to
day basis.
27. NOTICES
(1) Any notice or other document to be served under this agreement shall be in
writing and may be delivered by hand or sent by post or overnight courier
service to the party to be served at its address appearing in this
agreement (and marked for the attention of the person whose name is
referred to in subclause (3) below) or at such other address (or marked for
the attention of such other person) as it may have notified to the other
party in accordance with this clause. Any notice or other document sent by
post shall be sent by registered post (if both posted and for delivery
within the same jurisdiction) or by registered airmail (if posted for
delivery outside the jurisdiction in which it is posted).
(2) Any notice or document shall be deemed to have been served:
(a) if delivered by hand, at the time of delivery; or
(b) if posted or if sent by overnight courier service, at 10.00 a.m. on
the second Business Day after it was sent for delivery within the same
jurisdiction, or at 10.00 a.m. (local time at the place of
destination) on the fifth Business Day after it was put in the post if
sent by registered airmail.
(3) The person to whom notices or documents should be addressed for the
purposes of subclause (1) is:
(a) if to be served on the Seller or ICI:
the Company Secretary;
(b) if to be served on the Purchaser or Terra:
▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇.
(4) In proving service of a notice or document it shall be sufficient to prove
that delivery was made by hand or that the envelope containing the notice
or document was properly addressed and provided to the overnight courier or
posted (either by registered post or by registered airmail, as the case may
be, in accordance with the requirements of this clause).
28. GENERAL
(1) Each of the obligations, warranties and undertakings set out in this
agreement which is not fully performed at Completion will continue in force
after Completion.
(2) Unless otherwise expressly stated all payments to be made under this
agreement shall be made in Pounds Sterling to the Seller in immediately
available funds to the account of the
Seller at such account as the Seller may notify to the Purchaser and to the
Purchaser in immediately available funds to such account as the Purchaser
may notify to the Seller.
(3) Save as otherwise provided to the contrary in this agreement, each payment
to be made under this agreement shall be made free and clear of all
deductions or withholdings of any kind, except for those required by law,
and if any deduction or withholding must be made by law, an additional
amount will be paid sufficient to ensure that the recipient receives a net
amount equal to the full amount which it would have received if the payment
had been made without the deduction or withholding. If and when the
recipient of the payment (the "recipient") obtains a relief or refund
attributable to the deduction or withholding, it will pay to the maker of
the payment (the "payer") an amount equal to the relief or refund, less:
(a) any external costs of the recipient in obtaining the relief or refund
and in paying the said amount to the payer;
(b) any additional Taxation liability of the recipient arising on such
relief or refund; and
(c) any deduction or withholding required by law on such payment of such
amount by the recipient to the payer.
(4) None of the rights or obligations under this agreement may be assigned or
transferred without the written consent of the other party provided,
however, that either party may:
(a) assign any or all of its rights and interests hereunder to one or more
of its Affiliates provided that:
(i) such assignment shall only be permitted if the assignment has no
adverse effect on the non-assigning party;
(ii) if the Affiliate to which the rights have been assigned ceases
to be an Affiliate of the assigning party, the rights which have
been transferred shall, prior to it ceasing to be an Affiliate,
be re-transferred to the party which originally assigned those
rights or to another Affiliate of that original assigning party;
and
(iii) it shall be a condition of any such assignment that reasonable
notice is given in writing to the other party of the proposal to
assign (identifying the rights proposed to be assigned, the
identity of the proposed assignee and such other details
relating thereto as the other party may reasonably require);
(b) designate one or more of its Affiliates to perform its obligations
under this agreement (in any or all of which cases the Seller or the
Purchaser, as the case may be, nonetheless shall remain responsible
for the performance of all of its obligations hereunder); or
(c) (in respect of the Purchaser only) assign its rights and interests
under this agreement for the benefit of the funders of any member of
the Purchaser's Group in connection with the funding of the
acquisition under this agreement at Completion or any refinancing
thereof.
(5) Save as otherwise provided in this agreement, each party shall pay the
costs and expenses incurred by it in connection with the entering into and
completion of this agreement.
(6) This agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same agreement and any party
may enter into this agreement by executing a counterpart.
(7) No amendment, variation or waiver of this agreement or any provision of
this agreement shall be effective unless it is in writing and duly executed
by or on behalf of each of the parties.
(8) Both parties shall and shall procure that their Affiliates shall at their
own expense at all times from the date of this agreement do all things as
may be reasonably required to give effect to this agreement including,
without limitation, the execution of all deeds and documents, procuring the
convening of all meetings, the giving and obtaining of all necessary
waivers and consents and the passing of all resolutions and otherwise
exercising all powers and rights available to them. For the avoidance of
doubt, the Seller shall be responsible for all costs that have been or may
be incurred as a result of any assignment of Business Intellectual Property
executed between members of the Seller's Group prior to Completion
including the costs of recording of such assignment.
(9) The Purchaser hereby waives and relinquishes any right of set-off or
counterclaim, deduction or retention which the Purchaser might otherwise
have in respect of sums due to the Seller under the Hedging Agreements.
(10) Each of the parties hereto acknowledges and agrees that the other parties
would be damaged irreparably in the event any of the provisions of this
agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the parties hereto agrees
that the other parties shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this agreement and to enforce
specifically this agreement and the terms and provisions of this agreement
in addition to any other remedy to which it may be entitled, at law or in
equity.
(11) The Seller's Group will, prior to the Completion Date, permit
representatives of the Purchaser to have reasonable access at all
reasonable times and on reasonable notice, and in a manner which, in the
reasonable opinion of the Seller, will not unduly interfere with the normal
business operations of the Seller or any member of the Seller's Group, to
all premises, properties, personnel, books, records (including tax
records), contracts, and documents of or pertaining to the Business,
subject to appropriate undertakings of confidentiality and subject to
obligations of confidentiality to third parties.
29. WHOLE AGREEMENT
(1) Subject to subclause (2) below, this agreement, the Implementation
Agreements and the other agreements to be entered into pursuant to this
agreement (if and when executed) contain the whole agreement between the
parties and their respective Affiliates relating to the transactions
contemplated by this agreement and the Implementation Agreements and
supersede all previous agreements (including the Data Room Rules dated 19th
August, 1997) between the parties and their respective Affiliates relating
to such transactions.
(2) A provision in another agreement between the parties to this agreement or
between the respective parent undertakings of the parties (and whether made
before or after the date of this agreement) which refers to this agreement
and which extends or supplements any provision in this agreement will be
deemed for the purposes of subclause (1) above to form part of the whole
agreement between the parties as referred to in that subclause.
(3) Each of the parties to this agreement acknowledges on its own behalf and on
behalf of each of its Affiliates that, in agreeing to enter into this
agreement and the Implementation Agreements, it has not relied on any
representation, warranty, collateral contract or other assurance (except
those set out in this agreement and the Implementation Agreements) and
waives all rights and remedies which, but for this subclause, might
otherwise be available to it in respect of any such representation,
warranty, collateral contract or other assurance, provided that nothing in
this subclause shall limit or exclude any liability for fraud.
30. GOVERNING LAW
This agreement is governed by and shall be construed in accordance with
English law.
31. JURISDICTION
The parties submit to the non-exclusive jurisdiction of the English courts
for all purposes relating to this agreement. Terra irrevocably appoints
the Purchaser as its agent for service of process.
AS WITNESS the hands of the duly authorised representatives of the parties on
the date which first appears on page 1.
SCHEDULE 1
See Annex 2
SCHEDULE 2
PLANT AND EQUIPMENT
BILLINGHAM
Ammonia 4 Production Plant (NH3)
Ammonia Storage Facilities (NH3 Sto)
Sphere and loading facilities for Road Tankers
Dilution plant and storage and Road Tanker Loading
Nitric Acid Plants, Nos 1,8,3 and 4
Ammonium Nitrate Prilling Tower
Sodium Nitrate Plant
Storage facilities for finished product fertilizer, nitric acid and sodium
nitrate
CO\\2\\ liquefaction plants (Nos 2 and 3) and storage bullets
Pipe bridges with pipes and cables; buried pipelines; auxiliary boilers and; de-
mineralised water plant
SEVERNSIDE
Two leading concept ammonia plants
Two nitric acid plants
One ammonium nitrate prilling tower
Storage for finished product fertilizer
CO\\2\\ liquefaction plant
Utilities infrastructure
STANLOW
CO\\2\\ liquefaction plant and storage
SCHEDULE 3
INTELLECTUAL PROPERTY AND EXCLUDED TECHNOLOGIES
Part 1: Business Intellectual Property
Registered Trade Marks
See annex 6 of the Disclosure Letter
Unregistered Trade Marks
Classic
Classic Gold
Number 8
Super 8
Sulphur Gold
Blue Bag
Part : Licensed Intellectual Property
Designs
1054749
1054750
Patents
EP 0080839 (UK)
EP 0320153 (UK)
Copyright relating to the following Software:
QSA
Modifications to SAP/R2 order processing system dedicated to the Business
Developments as at Completion of Modifications to SAP/R3 order processing system
dedicated to the Business
Part 3: Excluded Technologies
Patents
EP 0080270 (UK)
EP 0124228 (UK)
EP 0157480 (UK)
EP 0180412 (UK)
EP 0194067 (UK)
EP 0254395 (UK)
EP 0287238 (UK)
Part 4: Exclusive Information
Information relating to the manufacture of Sodium Nitrite
Information relating to the abatement of NOx from Nitric Acid
Manufacture using caustic soda
SCHEDULE 4
Part 1
ICI Individuals
▇.▇. ▇▇▇▇▇▇
G.M. Fish
▇. ▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇
C. Lock
▇. ▇▇▇▇
▇.▇. ▇▇▇▇▇
▇.▇. ▇▇▇▇▇
▇. ▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇
▇. ▇▇▇▇
▇. ▇▇▇▇
C.A. ▇▇▇▇▇▇
▇.▇. Beer
▇. ▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
Part 2
Terra Individuals
▇.▇. ▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇▇▇
L.S. Hlobek
E.L. Slockers
▇. ▇▇▇▇▇▇
SCHEDULE 5
EXCLUDED ASSETS
1. All assets required by the Seller or its Affiliates for the supply or
receipt of utilities, services or products to be supplied by the Seller or
its Affiliates to the Purchaser or its Affiliates pursuant to the
Implementation Agreements which are located either outside the Properties
and are not subject to the Property Rights or identified in the
Implementation Agreements as being retained by the Seller or its
Affiliates.
2. Any interest in the Wilton site except as set out in the Implementation
Agreements or the Property Documents and/or Premises Agreements.
SCHEDULE 6
IMPLEMENTATION AGREEMENTS
-------------------------------------------------------------------------------------
AGREEMENT SUPPLIER PURCHASER
-------------------------------------------------------------------------------------
1. UTILITIES The Business Methanol
Nitrogen
Potable Water
Fire Water (Raw Water)
▇▇▇▇▇▇ Water
Demin Water
Effluent
IP Steam
LP Steam
-------------------------------------------------------------------------------------
2. ELECTRICITY The Business Methanol
50Hz Elec
-------------------------------------------------------------------------------------
3. MATERIALS The Business Methanol
Carbon Dioxide
-------------------------------------------------------------------------------------
4. SERVICES The Business Methanol
Site Road System
Interface Ops
Process Pipes
-------------------------------------------------------------------------------------
5. UTILITIES The Business Amines
▇▇▇▇▇▇ Water
Fire Water
Potable Water
Effluent
HP Steam
IP Steam
LP Steam
Condensate
Nitrogen (by pipeline)
-------------------------------------------------------------------------------------
6. ELECTRICITY The Business Amines
Elec 40Hz
Elec 50Hz
-------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
AGREEMENT SUPPLIER PURCHASER
----------------------------------------------------------------------------------------
7. MATERIALS The Business Amines
Ammonia
----------------------------------------------------------------------------------------
8. UTILITIES The Business Acrylics
LP Steam
Demin Water
Raw Water (Fire Water)
Raw Water (▇▇▇▇▇▇ Water)
Potable Water
Nitrogen (by pipeline)
Effluent
IP Steam (includes supply and
purchase)
----------------------------------------------------------------------------------------
9. ELECTRICITY The Business Acrylics
50 Hz Elec
----------------------------------------------------------------------------------------
10. MATERIAL The Business Acrylics
Ammonia
----------------------------------------------------------------------------------------
11. UTILITIES The Business Katalco
Potable Water
Fire Water (Raw Water)
Effluent
LP Steam
▇▇▇▇▇▇ Water (Raw Water)
Nitrogen
----------------------------------------------------------------------------------------
12. ELECTRICITY The Business Katalco
50 Hz Electricity
----------------------------------------------------------------------------------------
13. MATERIAL The Business Katalco
Weak Nitric Acid
----------------------------------------------------------------------------------------
14. MATERIALS The Business Polyurethanes
Weak Nitric Acid
----------------------------------------------------------------------------------------
15. MATERIALS The Business Explosives
Weak Nitric Acid
----------------------------------------------------------------------------------------
16. UTILITIES ICI Tubs The Business
Raw Water
Nitrogen
Nitrogen
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
AGREEMENT SUPPLIER PURCHASER
-----------------------------------------------------------------------------------------
17. SERVICES Plymouth Tubs The Business
Pay Roll Services
Jetty Services
-----------------------------------------------------------------------------------------
18. MATERIALS
Hydrogen
-----------------------------------------------------------------------------------------
19. MATERIALS Katalco The Business
Catalysts
-----------------------------------------------------------------------------------------
20. MATERIALS Methanol The Business
Instrument Air
LP Steam
-----------------------------------------------------------------------------------------
21. UTILITIES Acrylics The Business
IP Steam (includes supply and
purchase)
-----------------------------------------------------------------------------------------
22. GAS-SUPPLY Seller Purchaser
BGT (No. 1)
-----------------------------------------------------------------------------------------
23. GAS-SUPPLY Seller Purchaser
BGT (No. 2)
-----------------------------------------------------------------------------------------
24. GAS-SUPPLY Seller Purchaser
Mobil
-----------------------------------------------------------------------------------------
25. GAS-SUPPLY Purchaser Acrylics
-----------------------------------------------------------------------------------------
26. GAS-SUPPLY Purchaser Amines
-----------------------------------------------------------------------------------------
27. GAS-TRANSPORTATION Purchaser ---
Master
-----------------------------------------------------------------------------------------
28. GAS-TRANSPORTATION Purchaser Methanol
Methanol
-----------------------------------------------------------------------------------------
29. Terra and ICI parent
guarantees relating to the
agreements
-----------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
AGREEMENT SUPPLIER PURCHASER
-------------------------------------------------------------------------------------------
30. The Shared IT Services
Agreement between ICI and the
Purchaser
-------------------------------------------------------------------------------------------
31. Assignment of Business
Intellectual Property
-------------------------------------------------------------------------------------------
32. Ammonia facilities
access agreement (Amines)
-------------------------------------------------------------------------------------------
33. Ammonia facilities access
agreement (Acrylics)
-------------------------------------------------------------------------------------------
SCHEDULE 7
WARRANTIES
In this Schedule 7 "material adverse effect" means an adverse effect upon the
Business which might reasonably be expected to result in a diminution in the
value of the Business in the hands of the Purchaser following Completion in
excess of (Pounds)100,000.
A. GENERAL
A.1 Capacity and conduct of business
(1) Each of the Seller and ICI (and each of its Affiliates, in respect of the
Implementation Agreements and the other agreements entered into pursuant to
this agreement to which it is a party) has the requisite power and
authority to enter into and to perform this agreement, such Implementation
Agreements and the other agreements entered into pursuant to this
agreement.
(2) Each of the Seller and ICI (and each of its Affiliates, in respect of the
Implementation Agreements and the other agreements entered into pursuant to
this agreement to which it is a party) has obtained or satisfied all
corporate, regulatory and other approvals, or any other significant
conditions, necessary to execute and perform this agreement, such
Implementation Agreements and the other agreements entered into pursuant to
this agreement.
(3) This agreement, the Implementation Agreements and the other agreements
entered into pursuant to this agreement constitute (or when executed, will
constitute) valid and binding obligations of the Seller and ICI (and each
of its Affiliates, in respect of Implementation Agreements and the other
agreements entered into pursuant to this agreement to which it is a party)
enforceable in accordance with their terms.
(4) Compliance with the terms of this agreement by the Seller and ICI and the
other agreements entered into pursuant to this agreement and the
Implementation Agreements by the Seller or its Affiliates (as appropriate)
will:
(a) not constitute a breach of any agreement or contract to which the
Seller, ICI or such Affiliate is a party or by which it is bound; or
(b) be in compliance with the Seller's, ICI's or such Affiliate's
memorandum and articles of association or other constitutional
documents; or
(c) not contravene any order, judgment, decree or regulation or any other
restriction of any kind by which the Seller, ICI or such Affiliate is
bound.
(5) Each of the Seller and ICI is a company, duly incorporated and subsisting
under the laws of England and Wales and is not in liquidation,
administration or administrative receivership, nor has any resolution been
passed by the shareholders or creditors to put either of the companies into
liquidation, administration or administrative receivership.
(6) The Seller does not act or carry on business in partnership with any other
person in relation to the Business.
(7) The Seller does not have any branch, agency, place of business or permanent
establishment outside England and Wales in relation to the Business.
A.2 The assets
(1) Save in respect of Business Intellectual Property, Exclusive Information
and those Assets that are leased and are identified as such in the
Disclosure Letter, the Seller has full legal and beneficial title to each
of the Assets.
(2) None of the Assets is subject to any Encumbrance except those which arise
in the ordinary course of business and do not have a material adverse
effect on the Business.
(3) The Assets together with the rights conferred under or pursuant to this
agreement will enable the Purchaser to continue to run the Business after
Completion in all material respects in the same way as it was run by the
Seller as at 30th September, 1997 and as at the date of this agreement.
(4) All significant items of plant and equipment used in the Business have been
adequately maintained and are in reasonable working order having regard to
their age and use.
A.3 Compliance with statutes
(1) The Seller, its officers, agents and employees are not in contravention of
any statute, order or regulation which is likely to result in a fine or
penalty which would have a material adverse effect on the Business.
(2) There is no order, decree or judgment or any court or governmental agency
outstanding in relation to the Business other than in relation to routine
debt collection.
A.4 Licences, consents and permits
(1) The Seller has all governmental and regulatory authorisations, licences,
permits and consents necessary to own and operate the Assets and to carry
on the Business, except where the failure to obtain such authorisations,
licences, permits or consents individually or in aggregate would not have a
material adverse effect on the Business. For the avoidance of doubt the
Seller provides no warranty or undertaking that any such authorisations,
licences, permits or consents will be available to the Purchaser.
(2) All authorisations, licences, permits and consents of the type referred to
in (1) have been identified in the Disclosure Letter.
A.5 Litigation
The Seller's Group is not engaged in any litigation or arbitration
proceedings which would have a material adverse effect on the Business
except as plaintiff for collection of debts in the ordinary course of
business and there are no such proceedings, in existence or, so far as the
Seller is aware, threatened against the Seller and, so far as the
Seller is aware, there are no claims, facts or events which are likely to
give rise to any such proceedings.
A.6 Environmental matters
(1) Notwithstanding the provisions of any other Warranty the provisions of this
paragraph A.6 are the only Warranties given in relation to the Environment,
Environmental Laws, Environmental Permits and Dangerous Substances.
(2) In this paragraph:
(a) "Environmental Law" has the meaning given in Schedule 11;
(b) "Environmental Permits" means any governmental authorisations,
permits, licences and consents required under or in relation to any
Environmental Law;
(c) "Environmental Contamination" has the meaning given in Schedule 11
provided that, for the purposes of this warranty A.6 such
contamination must be present prior to Completion and cause or be
likely to cause material harm to human health or pollution of the
environment;
(d) "Dangerous Substance" means any natural or artificial substance
(whether in the form of solid, liquid, gas or vapour) capable of
causing significant harm to man or the environment.
(e) "Material Upgrades" means in relation to any plant or process all
material changes under current written conditions contained in
existing Environmental Permits which are required either now or in the
future including for the avoidance of doubt any upgrades required
under improvement programmes.
(3) The Seller, its agents, officers and employees are not in contravention of
any Environmental Law which is likely to result in a fine or penalty which
would have a material adverse effect on the Business.
(4) There is no written notice, order, decree or judgment of any court or
regulatory or governmental agency of the United Kingdom outstanding, nor
agreements to which the Seller is a party or by which the Seller is bound,
in relation to the Business which arises as a result of or, in the case of
agreements, concern Environmental Law or liabilities thereunder which would
have a material adverse effect on the Business.
(5) The Seller has all Environmental Permits necessary to own and operate the
Assets and to carry on the Business, except where the failure to obtain
such Environmental Permits individually or in aggregate would not have a
material adverse affect on the Business. For the avoidance of doubt, the
Seller provides no warranty or undertaking that any such Environmental
Permits will be available to the Purchaser.(6) A list of all material
Environmental Permits has been identified in the Disclosure Letter.
(7) The Seller is not engaged in any litigation or arbitration proceedings
concerning Environmental Law or Dangerous Substances solely in relation to
and affecting the Business and, so far as the Seller is aware, there are no
such proceedings pending nor any
circumstances likely to give rise to such proceedings against the Seller in
its capacity as owner of the Business, in each case which would have a
material adverse effect.
(8) So far as Seller is aware, there is no Environmental Contamination present
at any adjoining sites which has led or is likely to lead to on site
Environmental Contamination at the Billingham and/or Severnside sites. For
the purposes of this warranty A.6(8) only, the Seller's awareness shall be
judged by reference solely to the actual knowledge, without any
documentary, oral or other investigation enquiry or consultation of any
kind, of ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ in the case of the
Billingham site and ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ in the case of
the Severnside site.
(9) A list of all Material Upgrades of which the Seller is aware is provided in
the Disclosure Letter.
A.7 Title retention
Other than in the ordinary course of trading, the Seller has not acquired
or agreed to acquire any of the Assets on terms that the property therein
does not pass until full payment is made.
A.8 Customers and suppliers
The Disclosure Letter sets out details of the ten principal customers and
ten principal suppliers of materials (by value) of the Business.
A.9 Condition of Stock
All products manufactured by the Seller prior to Completion and included
within the Stocks conform with the specifications against which those
products would have been sold by the Seller to customers of the Business if
the Seller had continued to carry on the Business after Completion as it
was carried on by the Seller prior to Completion, provided always that the
Seller's liability for breach of this warranty shall not exceed the costs
which the Seller would have suffered had the Seller's policy in relation to
out of specification product which applied prior to Completion, been
continued following Completion.
B. ACCOUNTS
(1) The Accounts have been prepared in accordance with UK generally accepted
accounting principles and present fairly the financial position of the
Business as at the end of the periods for which they were prepared and the
results of operations and changes in financial position and cash flows for
the period in respect of which they were prepared have been prepared in
conformity with the ICI Controller's Manual applied on a basis consistent
with the previous twelve months save for changes made in the ICI
Controller's Manual to reflect changes in UK accounting practice from time
to time (save as noted therein).
(2) Save as noted therein, the Accounts have not been affected by any
extraordinary, exceptional or non-recurring item or by any other fact or
circumstance rendering the profit or loss for the relevant period unusually
high or low.
(3) Particulars of all grants, subsidies, payments or allowances received or
receivable by the Seller or any of its Affiliates in relation to the
Business from any governmental authority,
body or agency (whether supranational regional or local) (but always
excluding any relating to Taxation) the loss of which would have a material
adverse effect are identified in the Disclosure Letter.
(4) The amounts of raw materials, work in progress, finished goods and
packaging and promotional material comprised in the Stock are at a level
which is consistent with the trading requirements of the Business.
C. ANTI COMPETITIVE ARRANGEMENTS
(1) In relation to the Business, the Seller is not a party to any agreement,
arrangement, concerted practice or course of conduct (whether by omission
or otherwise) which:
(a) is subject to registration under the Restrictive Trade Practices Acts
1976 but is not so registered;
(b) infringes Article 85 or 86 of the Treaty establishing the European
Community and/or Articles 53 and/or 54 of the European Economic Area
Agreement or any other anti-trust or similar legislation in any
jurisdiction in which the Seller carries on the Business;
(c) is an "anti-competitive practice" within the meaning of the
Competition ▇▇▇ ▇▇▇▇;
(d) contravenes the provisions of the Resale Prices ▇▇▇ ▇▇▇▇ or an
undertaking which has been given by, or an order which has been made
against, the Seller pursuant to that Act;
(e) so far as the Seller is aware, could give rise to the imposition of
any anti-dumping duty on the Seller or the Purchaser or other sanction
against the Seller or the Purchaser under any EU trade legislation,
and the effect of which would have a material adverse effect on the
Business.
(2) The Seller has not received in the last three years any process, notice or
communication, formal or informal, from the Office of Fair Trading or
Directorate General IV of the European Commission or the EFTA Surveillance
Authority or any relevant local or national anti-trust regulatory
authority, relating to any aspect of the Business which alleges any illegal
practices, course of conduct, agreements or arrangements in relation to the
Business and so far as the Seller is aware no such process, notice or
communication is likely to be received.
D. MATERIAL CONTRACTS
(1) All Material Contracts relating to the Business are referred to in the
Disclosure Letter. For the purpose of this warranty "Material Contracts"
means contracts or commitments to enter into contracts (with third parties
not within the Seller's Group):
(a) of a duration from the date of this agreement of more than 12 months;
(b) which are for a duration from the date of this agreement of less than
12 months but which can reasonably be expected to involve aggregate
income or expenditure in respect of the Business in excess of
(Pounds)300,000; or
(c) which are agency, distributorship or management agreements.
(2) So far as the Seller is aware, it is not in breach of, or in default under,
any of the Material Contracts, the consequence of which would have a
material adverse effect on the Business.
(3) The Seller is not a party to any contract or arrangement, other than to the
extent that they relate to Intellectual Property, which restricts its
freedom to carry on the Business in any part of the world in such manner as
it thinks fit.
(4) Save as set out in the Disclosure Letter there is not, and there has not at
any time during the last two years been, any contract or arrangement
between the Seller and a party which was not part of the Seller's Group in
relation to the Business which was not of an arm's length nature and was
material to the Business.
(5) So far as senior management of the Seller is aware (without having made any
enquiry of third parties), after Completion (whether by reason of an
existing agreement or arrangement or as a result of the proposed
acquisition of the Business and Assets by the Purchaser):
(a) no supplier of the Business will cease supplying the Business or will
substantially reduce its supplies to the Business;
(b) no customer of the Business will cease to deal with the Business or
will substantially reduce its existing level of business with the
Business;
(c) the Business will not lose the benefit of any right or privilege which
it enjoys; and
(d) no officer or Employee will leave,
in each case, which he is aware would have a material adverse effect.
(6) There will be no material agreements between the Businesses and any member
of the Seller's Group immediately following Completion (save for the
Implementation Agreements, any other agreements to be entered into pursuant
to this agreement and any other arrangements to be entered into pursuant or
ancillary thereto) which is not in the ordinary course of business or other
than on an arm's length basis.
E. EMPLOYEES
(1) The Employees are all the persons employed in the Business. The Disclosure
Letter contains details of each Employee's name, age, salary, period of
continuous employment, grade and any allowances the Employee is entitled to
and the particulars of the Employees in the Disclosure Letter are accurate
in all respects.
(2) No Employee has given, or has been given, notice of termination of his
employment.
(3) Specimen terms of employment of all Employees are included in the
Disclosure Letter.
(4) The collective agreements included in the Disclosure Letter are all the
agreements between the Seller and the trade unions representing the
Employees.
(5) So far as the Seller is aware, there is no industrial action pending in
relation to the Business which would have a material adverse effect on the
Business.
(6) Since 30th September, 1997 there has been no change in the rates of
remuneration or other benefits or other terms of employment of the
Employees and no person will be entitled to receive any benefit as a direct
consequence of the Sale of Business. The Seller is not a party to any
contractual arrangement to make changes to remuneration or other benefits
or other terms of employment or to establish any new bonus arrangements for
the Employees.
(7) There are no sums owing to any present or former Employees or officers in
the Business apart from salary for the month in which Completion takes
place and any business expenses.
(8) The Seller has not in relation to the Business in the last three years been
the subject of any adverse report, complaint or investigation of the Health
and Safety Executive in relation to the Assets or been prosecuted, formally
cautioned or warned for any violation of any applicable laws or regulations
including the Health and Safety at Work etc. ▇▇▇ ▇▇▇▇ and the Control of
Substances Hazardous to Health Regulations 1987. So far as the Seller is
aware, the Seller has fully complied with all health and safety statutes
and regulations in relation to the Business.
(9) The terms of the Employees are such that their employment may be terminated
by not less than three months' notice without liability for any contractual
payments in excess of three months' salary including by way of compensation
or damages (except for unfair dismissal or a statutory redundancy payment).
F. PENSION SCHEMES
(1) This sub-paragraph applies to the ICI Pension Fund governed by a deed dated
5th March, 1996 (the "Scheme").
(2) Except pursuant to the Scheme, the Seller has not paid, provided or
contributed towards, and is not under any obligation or commitment (whether
or not legally enforceable) to pay, provide or contribute towards, any
retirement/death/disability benefit for or in respect of any Employee or
any person previously employed in the Business (or any spouse, child or
dependant of any of them). For this purpose "retirement/death/disability
benefit" means any pension, lump sum, gratuity or other like benefit given
or to be given on retirement or on death, or in anticipation of retirement,
or, in connection with past service, after retirement or death, or to be
given on or in anticipation of or in connection with any change in the
nature of the service of the employee in question or given or to be given
on or in connection with the sickness or disability of an employee.
(3) The Seller has included the following in the Disclosure Letter:
(a) copies of the documents constituting and governing the Scheme
(including notices, announcements and explanatory literature of
current effect);
(b) a copy of the Trustees' report to members and the audited accounts of
the Scheme (including the auditor's report) for the last scheme year
and any short form report issued to members;
(c) all material particulars relating to the Employees relevant to
establish their entitlement to benefits;
(d) all material particulars of any discretionary practice of the Scheme
in the two years before the date of this agreement and of any proposal
to operate any discretionary practice in the future (including,
without limitation, pension increases and early retirement benefits).
(4) The documents disclosed contain particulars of all the benefits provided by
and the terms of the Scheme, including (but without limitation) any
enhancement of or addition to the benefits or terms in respect of any
person.
(5) The Scheme is approved by the Board of the Inland Revenue as an exempt
approved scheme within the meaning of section 592 of the Income and
Corporation Taxes Act 1988 and so far as the Seller is aware there is no
reason why such approval might be withdrawn or cease to apply.
(6) The active members of the Scheme are contracted-out of the State Earnings-
Related Pension Scheme by reference to the Scheme and so far as the Seller
is aware there are no circumstances which might cause such certificate to
be withdrawn or cease to apply.
(7) Each Employee who is entitled to membership of the Scheme (whether under
the Scheme Documents or any applicable law) has been invited to join the
Scheme as of the date on which he became entitled.
(8) There are no legal proceedings with regard to the benefits payable in
respect of any Employee under the Scheme which are pending or threatened in
writing.
(9) No power has been exercised under the Scheme to grant or augment any
benefit under the Scheme for or in respect of an Employee which would not
otherwise have been provided under the Scheme Documents and no assurance
has been given that such a power will be exercised.
(10) All contributions due from Employees who are members of the Scheme have
been duly made.
(11) No claim has been made, or threatened in writing, by any of the Employees
against the trustees or administrator of the Scheme, the Seller or any
person the Seller is or may be liable to indemnify or compensate (including
any complaint under the internal dispute resolution procedure or to the
Pensions Ombudsman or the Occupational Pensions Regulatory Authority) in
respect of any act, event, omission or other matter arising out of or in
connection with the Scheme (other than routine claims for benefits) and so
far as the Seller is aware there are no circumstances which may give rise
to any such claim.
G. PROPERTIES
See Annex 3
H. INTELLECTUAL PROPERTY
To the extent that any warranty in this Section H is qualified by the words "so
far as the Seller is aware" or any similar statement, this statement shall be
deemed to mean such knowledge which any of those persons listed in Part 1 of
Schedule 4, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇ (and no other persons) had
or ought reasonably to have had at Completion in relation to the matter for
which they have responsibility.
(1) The Seller or a member of the Seller's Group is the legal and beneficial
owner of the Acquired Intellectual Property.
(2) Short particulars of all registrations (or applications for registration)
of Business Intellectual Property and material Licensed Intellectual
Property are provided in the Disclosure Letter.
(3) Following Completion the Purchaser will own or have licensed to it all
Material Intellectual Property and have the right to use all Material
Information necessary for the conduct of the Business as such Business was
carried on by the Seller at Completion.
(4) The Seller has not received notice that any Intellectual Property or
Information used in the Business infringes any third party rights.
(5) The Seller is not currently aware of attacks by others on the validity of
any Business Intellectual Property.
(6) All material agreements relating to the Business Intellectual Property and
Exclusive Information to which the Seller or a member of the Seller's Group
is a party are listed in the Disclosure Letter.
(7) Neither the Seller nor any member of the Seller's Group is in breach or is
aware of a breach by any third parties of any of the agreements referred to
in paragraph (6) above which would have a material adverse effect.
(8) So far as the Seller is aware, no third party is infringing or misusing or
threatening to infringe or misuse any Business Intellectual Property or
Exclusive Information.
I. TAX
I.1 Duties etc.
None of the Assets is liable to distraint, sale, mortgage, confiscation or
forfeiture by virtue of non-payment or underpayment of any Taxation or duty
or by virtue of non-compliance by the Seller with any legislation or
regulation relating to any Taxation or duty.
I.2 Capital Goods Scheme
All Assets which are or have been subject to the provisions of Part XV of
The Value Added Tax Regulations 1995 are listed in the Disclosure Letter
and all adjustments required to be made pursuant to the said part on or
before the date hereof have been properly made and properly declared to
H.M. Customs and Excise.
I.3 Elections to waive exemption from VAT
The Seller has not made any elections to waive exemption from VAT under
paragraph 2 of Schedule 10 to the Value Added Tax ▇▇▇ ▇▇▇▇ in relation to
any Property or any part of any Property which are in force.
I.4 Capital allowances
(1) None of the Assets is leased within the meaning of section 50 of the
Capital Allowances ▇▇▇ ▇▇▇▇.
(2) In respect of any Assets which are plant and machinery for the purposes of
Part II of the Capital Allowances Act 1990 and which are fixtures (as
defined in section 51(2) of that Act) at Completion either (i) no person
has been or will have become entitled to allowances in respect of any
expenditure incurred on the provision of the fixture or, (ii) if any person
has become so entitled that person has been, is or will be required to
bring the disposal value of the fixture into account under section 24 of
that Act otherwise than by virtue of sub-section (7) of that section.
(3) No person other than the Seller has an interest in any Asset which is a
fixture (by virtue of such person holding an interest in the land to which
that fixture is attached) where such person is entitled to claim allowance
pursuant to Part II Capital Allowances Act 1990 in respect of the fixture.
(4) The Seller has claimed allowances pursuant to Part II Capital Allowances
Act 1990 in respect of any machinery and plant which has become a fixture
and which is an Asset, or where the Seller has not claimed such allowances
the Disclosure Letter contains particulars of the disposal value (as
defined in section 26 Capital Allowances Act 1990) brought into account by
the last person (if any) disposing of such fixtures on or after 24 July
1997 to claim such allowances.
I.5 Stamp Duty
All documents in the possession or under the control of the Seller or to
the production of which the Seller is entitled and which are necessary to
establish the title of the Seller to any of the Assets and which attract
stamp duty in the United Kingdom or elsewhere which would need to be paid
in order rely on any such document before a competent court have been
properly stamped, and, if United Kingdom stamp duty has not been paid
because the documents have been executed and retained outside the United
Kingdom, would not attract United Kingdom stamp duty if brought into the
United Kingdom.
J. CONDUCT OF BUSINESS SINCE 30TH SEPTEMBER, 1997
(1) Except for the purposes of giving effect to the transactions contemplated
by this agreement the Business has since 30th September, 1997 been
conducted and carried out only in the ordinary course consistent with its
past practices.
(2) Except for Plant and Equipment purchased, sold or leased in the ordinary
course of business the Seller has not since 30th September, 1997 purchased,
sold, leased, mortgaged, pledged or otherwise hired or disposed of any
material Asset and without limiting the generality of the foregoing has not
terminated, entered into or modified any contract, lease, sub-lease,
licence or sub-licence which at Completion can reasonably be expected to
involve income or expenditure in respect of the Business in excess of
(Pounds)1,000,000 per annum.
(3) Since 30th September, 1997:
(a) there has been no material adverse change in the Business taken as a
whole; and
(b) no customer or supplier of the Business has ceased purchasing from, or
supplying to, the Seller in connection with the Business which would
have a material adverse effect on the Business.
K. GENERAL
The slides given at the presentations made by representatives of the Seller to
representatives of the Purchaser and the written responses to written questions
copies of both of which are included in the Disclosure Letter, the information
contained in Part 2 of annex 3 of the Disclosure Letter and the historical
pensions information contained in annex [ ] to the Disclosure Letter were
given in good faith and at the time they were given fairly presented the
historical data and facts contained therein and the Seller is not aware of any
fact which renders any such information untrue or inaccurate in any material
respect. All such information has been given in good faith by the Seller to the
Purchaser but nothing in this agreement shall constitute a warranty in respect
of matters in the future, including any forecast of future performance of the
Business or any aspect thereof, or of any expression of opinion or judgement or
of the accuracy of any estimate.
L. INSURANCE
(1) The Seller has produced to the Purchaser summaries of insurance policies in
effect in relation to the Plant and Equipment and Properties which are
relevant for the purposes of clause 5(7) and all such policies are in full
force and effect.
(2) The policies of insurance referred to in (1) afford the Seller adequate
cover against such risks as companies carrying on the same type of business
as the Business commonly cover by such insurance and in particular insure
the Plant and Equipment and Properties against fire in their full
replacement value.
(3) So far as the Seller is aware, there are no circumstances which might lead
to any liability under such insurance as referred to in (1) being avoided
by the insurers.
SCHEDULE 8
EMPLOYEES
(1) The Seller and the Purchaser acknowledge and agree that under the
Employment Regulations the contracts of employment between the Seller and
the Employees and the collective agreements annexed to the Disclosure
Letter will have effect after Completion as if originally made between the
Purchaser and the Employees or between the Purchaser and the relevant trade
union (as the case may be). On or as soon as practicable after Completion
the Seller and the Purchaser shall jointly issue to each Employee a notice
in the Agreed Form.
(2) Without prejudice to paragraph (1) above, if the contract of employment of
any of the Employees is found or alleged not to have effect after
Completion as if originally made with the Purchaser as a consequence of the
application of the Employment Regulations to the transaction the Purchaser
agrees that it will:
(a) in consultation with the Seller and within seven days of being so
requested by the Seller, make to that Employee an offer in writing to
employ him under a new contract of employment to take effect on the
termination referred to below; and
(b) the offer to be made will be such that none of the terms and
conditions of the new contract will differ materially from the
corresponding provision of that Employee's contract of employment
immediately before Completion.
Upon that offer being made the Seller shall terminate the contract of
employment of the Employee concerned acting lawfully in accordance with the
terms of the contract of employment. If such offer were not made the
Seller may, at any time after the expiry of seven days from the request by
the Seller, terminate the contract of employment of the Employee. In
either event the Purchaser shall indemnify the Seller against all
liabilities arising out of or in connection with the termination of the
employment of that Employee and against any such sum payable to it or in
respect of that Employee under his contract of employment after Completion
until such termination, including the costs of such termination.
(3) If any contract or employment of any employee of the Seller who is not an
Employee is found or alleged to have effect after as if originally made
with the Purchaser as a consequence of the application of the Employment
Regulations to the transaction the Seller agrees that it will:
(a) in consultation with the Purchaser and within seven days of being so
requested by the Purchaser, make to that employee an offer in writing
to employ him under a new contract of employment to take effect on the
termination referred to below; and
(b) the offer to be made will be such that none of the terms and
conditions of the new contract will differ materially from the
corresponding provision of that employee's contract of employment
immediately before Completion.
Upon that offer being made the Purchaser shall terminate the contract of
employment of the employee concerned acting lawfully in accordance with the
terms of the contract of employment. If such offer were not made the
Purchaser may, at any time after the expiry of
seven days from the request by the Purchaser, terminate the contract of
employment of the employee. In either event the Seller shall indemnify the
Purchaser against all liabilities arising out of or in connection with the
termination of the employment of that employee and against any sum payable
to it or in respect of that employee under his contract of employment.
(4) The Seller shall discharge all its obligations in respect of the Employees
up to Completion and shall indemnify the Purchaser against all liabilities
arising from the Seller's failure to do so.
(5) The Purchaser shall on and from Completion discharge all the obligations of
the employer in relation to the Employees and shall indemnify the Seller
against all liabilities arising from the Purchaser's failure to do so.
(6) The Purchaser shall provide the Seller with such information and assistance
at such times as the Seller may reasonably request or as may be necessary
for the Seller to comply with the requirements of Regulation 10 of the
Employment Regulations or any other requirement to consult with the
Employees a relevant trade union or any other employee representative.
(7) The Seller shall indemnify the Purchaser against any liability relating to
an Employee which arises out of any act or omission by the Seller or any
other event, matter or circumstance occurring before Completion excluding:
(a) any obligation in respect of the Employee's period of continuous
employment;
(b) any liabilities which arise out of a failure by the Purchaser to
comply with (4) above;
(c) any liability referred to in (6) below.
(8) The Purchaser shall indemnify the Seller against any liability relating to
an Employee which arises out of or in connection with:
(a) any provision of this agreement including (without limitation) the
change of employer occurring by virtue of the Employment Regulations
and/or this agreement;
(b) the termination of his employment, a change to a term of his
employment or working conditions (including, without limitation, any
term under an occupational pension scheme), any act or omission by the
Purchaser or any other event, matter or circumstance occurring at or
after Completion.
(9) The Purchaser agrees that for a period of two years from the Completion
Date:
(a) the Employees will receive contractual remuneration and benefits
(including retirement benefits) which in aggregate, judged
objectively, are no less favourable than their contractual
remuneration and benefits at the Completion Date; and
(b) it will not make any unilateral material change to the contractual
terms and conditions of employment of the Employees (which would
include as an example those contained in the 1991 Staff Agreement
Manual) without prior consultation,
where required, by any local laws or agreements, with recognised trade
unions, appropriate employee representatives, or the Employees.
(10) In this Schedule:
"Beneficiary" means, in relation to an indemnity, the person receiving the
benefit of the indemnity;
"claim" includes a claim by any person (including a trade union, a
governmental or statutory or local authority or commission);
"Covenantor" means, in relation to an indemnity, the person undertaking to
indemnify the Beneficiary; and
"liability" and "liabilities" includes any award, compensation, damages,
fine, loss, order, payment made by way of settlement, costs and expenses
(including legal expenses on an indemnity basis) properly incurred in
connection with a claim and also includes the costs and expenses of any
investigation by the Equal Opportunities Commission, the Commission for
Racial Equality or any health and safety enforcement body and of
implementing any requirements which may arise from any such investigation.
(11) If the Beneficiary becomes aware of any matter which might give rise to a
claim for an indemnity from the Covenantor, the following provisions shall
apply:
(a) the Beneficiary shall, within seven days of becoming aware of the
matter, give written notice to the Covenantor of the matter in respect
of which the indemnity is being claimed (stating in reasonable detail
the nature of the matter and, so far as practicable, the amount
claimed) and shall consult with the Covenantor with respect to the
matter. If the matter has become the subject of any proceedings the
Beneficiary shall give the notice within sufficient time to enable the
Covenantor time to contest the proceedings before any first instance
judgement in respect of such proceedings is given;
(b) the Beneficiary shall:
(i) take such action and institute such proceedings, and give such
information and assistance, as the Covenantor or its insurers may
reasonably request to dispute, resist, appeal, compromise,
defend, remedy or mitigate the matter or enforce against any
person (other than the Covenantor) the rights of the Beneficiary
or its insurers in relation to the matter;
(ii) in connection with any proceedings related to the matter (other
than against the Covenantor) use professional advisers nominated
by the Covenantor or its insurers and, if the Covenantor or its
insurers so requests, allow the Covenantor or its insurers the
exclusive conduct of the proceedings in each case on the basis
that the Covenantor shall fully indemnify the Beneficiary for all
costs incurred as a result of any request or nomination by the
Covenantor or its insurers; and
(iii) not admit liability in respect of or settle the matter without
the prior written consent of the Covenantor, such consent not
to be unreasonably withheld or delayed; and
(c) if the Covenantor has conduct of any litigation and negotiations in
connection with a claim, the Covenantor shall promptly take all proper
action to deal with the claim so as not, by any act or omission in
connection with the claim, to cause the Beneficiary to be in breach of
its obligations to its current or past employees or to cause the
Beneficiary's business interests to be materially prejudiced.
(12) If the Covenantor does not elect to have conduct of any litigation and
negotiations in connection with a claim by notice in writing to the
Beneficiary within seven days of the Beneficiary giving notice of the
matter which might give rise to a claim for an indemnity under this clause
the Beneficiary shall be at liberty to take such action in relation to that
matter as it considers expedient.
(13) If the Inland Revenue brings into any charge to taxation any sum payable
under any of the indemnities contained in this clause, the amount so
payable shall be grossed up by such amount (such amount being referred to
as the "gross-up amount") as will ensure that after deduction of the tax so
chargeable there shall remain a sum equal to the amount that would
otherwise have been payable under such indemnity. To the extent that the
Beneficiary subsequently obtains any tax credit, allowance, repayment or
relief as a result of the Covenantor paying to it the gross-up amount, it
shall pay to the Covenantor so much of the economic benefit from that tax
credit, allowance, repayment or relief which it has received as does not
exceed the gross-up amount (any question as to the accrual or amount of any
such economic benefit, the order and manner of making any claim for any tax
credit, allowance, repayment or relief, and the timing of any payment,
being determined by the Beneficiary's auditors).
(14) Any failure by any party to exercise any rights under this clause will not
operate as a waiver by that party of any such rights nor should it prevent
that party from exercising the same right. The liability of any party
under this clause shall not be released, impaired or affected by anything
done by or arrangements or alterations of terms made with any of the
parties to this agreement.
(15) The indemnities given by the Covenantor in this clause are in addition to
any rights which the Beneficiary may have at law or otherwise including,
but not limited to, any right of contribution.
(16) The indemnities contained in this clause shall, for the avoidance of doubt,
extend to include all costs and expenses suffered or reasonably incurred by
the Beneficiary in connection with enforcing its rights under this clause.
(17) No statement in the Disclosure Letter shall affect any of the indemnities
in this clause.
SCHEDULE 9
PENSIONS
1. Interpretation
(A) In addition to the provisions of clause 1 of this agreement, this schedule
is construed as set out in this paragraph.
(B) The following expressions and related expressions have the same meanings as
in the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇: "cash equivalent", "contracted-out",
"guaranteed minimum pension" and "money purchase benefits".
(C) The following expressions have the same meanings as in the Rules:
"Pensionable Service" and "Normal Retirement Age".
(D) The following expressions have the following meanings:
"Actual Payment Date" means the date on which the Transfer Amount is
actually transferred to the Purchaser's Scheme.
"Actuary" means a Fellow of the Institute or Faculty of Actuaries or a firm
of those Fellows or a body making available the advice of one of those
Fellows.
"Actuary's Letter" means the letter from the Seller's Actuary to the
Purchaser's Actuary relating to this schedule dated 17th November, 1997, a
copy of which appears as annex 10 to the Disclosure Letter.
"AVCs" means additional voluntary contributions paid by Members to the
Seller's Scheme.
"Consenting Member" means a person:
(a) who is an Employee and a Member at Completion;
(b) who begins to accrue retirement benefits as stated in paragraph 2(B)
under the Purchaser's Scheme as of Completion and who continues to
accrue those benefits at the Due Payment Date; and
(c) in respect of whom the Seller's Scheme receives within one month of
the distribution of election forms to Members, a signed election that
a transfer payment be made from the Seller's Scheme to the Purchaser's
Scheme and who does not withdraw his election.
"Due Payment Date" means a date notified by the Seller to the Purchaser
which is not later than one month after all the Transfer Conditions have
been satisfied provided they then remain satisfied.
"Exempt Approved Scheme" has the same meaning as in section 592 of the
Income and Corporation Taxes Act 1988 and "Exempt Approved" is construed
accordingly.
"Investment Adjustment" has the meaning as defined in the Actuary's Letter.
"Member" means, at any time or during any period specified in this
schedule, an active member of the Seller's Scheme (including a member who
is temporarily absent under the Rules on maternity leave).
"Purchaser's Actuary" means an Actuary appointed by the Purchaser and
notified to the Seller for the purpose of this schedule. Until further
notice, the Purchaser's Actuary is ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇ Associates,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇.
"Purchaser's Scheme" means the occupational pension scheme or schemes
described in paragraph 2 and, where the context requires, includes its or
their trustees.
"Rules" means, in relation to the Seller's Scheme, the trust deeds, rules
and other documents governing the Seller's Scheme as identified in the
Disclosure Letter.
"Seller's Actuary" means an Actuary appointed by the Seller and notified to
the Purchaser for the purpose of this schedule. Until further notice, the
Seller's Actuary is Mr R T G Hails of ▇▇▇▇▇▇ ▇▇▇▇▇ Partners.
"Seller's Scheme" means the retirement benefit scheme established by deed
dated 22nd July, 1927 and governed by a deed dated 5th March, 1996 known as
the ICI Pension Fund. Where the context requires, the "Seller's Scheme"
includes its trustees.
"Transfer Conditions" means all of the following:
(a) The Board of the Inland Revenue has given written approval to the
transfer of assets from the Seller's Scheme and to the Purchaser's
Scheme in respect of the Consenting Members and any condition to which
that approval is subject is satisfied.
(b) The Purchaser's Scheme is as described in paragraph 2, the invitation
to join and the notices have been issued and the Purchaser's Scheme
provides the benefits referred to in that paragraph and neither the
Purchaser nor any member of the Purchaser's Group has made any
statement to the effect that any such benefit will be reduced or
discontinued in respect of any Employees.
(c) The Seller's Scheme has received the written elections that a transfer
payment be made from the Seller's Scheme to the Purchaser's Scheme
completed and signed by the Consenting Members.
(d) The calculation referred to in paragraph 3(C) has become final and
binding as mentioned in that paragraph.
(e) The Seller's Scheme has received the confirmation, undertakings and
appendices (which includes a copy of the contracting-out certificate
in relation to the Purchaser's Scheme) set out in appendix B executed
by the Purchaser's Scheme and those confirmations and undertakings
remain true and effective in all material respects.
"Transfer Amount" and "unadjusted Transfer Amount" have the meanings given
in paragraph 3.
2. Purchaser's Scheme
(A) The Purchaser will procure that the Purchaser's Scheme:
(i) is an Exempt Approved Scheme at Completion or is designed to be
capable of approval by the Board of the Inland Revenue as an Exempt
Approved Scheme with effect from Completion and at the Due Payment
Date will be a scheme to which the Seller's Scheme can by law, and in
accordance with Inland Revenue practice relating to Exempt Approved
Schemes, make a transfer payment in respect of the Consenting
Members' entire rights under the Seller's Scheme (including rights to
guaranteed minimum pensions);
(ii) is contracted-out by virtue of section 9(2B) of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ with effect from Completion;
(iii) provides the benefits which are offered and accepted as mentioned
below, subject, in the case of benefits under (C), to receipt of the
Transfer Amount and, before the full Transfer Amount has been
transferred, those benefits must be paid by the Purchaser's Scheme to
the extent of the assets which have been received.
(B) The Purchaser will offer to each person who is an Employee and a Member at
Completion, in relation to employment from and after Completion, benefits
which are of final salary type, are in accordance with the benefit
structure set out in Appendix A, and in the opinion of the Seller's Actuary
are as at Completion, no less valuable than those which would prospectively
have been provided by the Seller's Scheme for and in respect of him if he
had continued in membership of the Seller's Scheme after Completion. The
Purchaser's Scheme will include in the benefits offered, an equivalent
benefit to that provided by Rule 13(A)(iii) and (iv) of the 1949 section of
the Rules and Rules 17 and 19 of the 1967 section of the Rules.
(C) The Purchaser will offer to each person who is both an Employee and a
Member at Completion for his Pensionable Service under the Seller's Scheme
up to Completion, benefits which are of final salary type, are in
accordance with the benefit structure set out in Appendix A, and in the
opinion of the Seller's Actuary are, as at Completion, no less valuable
than those which would prospectively have been provided by the Seller's
Scheme for an in respect of him if he had continued in membership of the
Seller's Scheme after Completion. The Purchaser's Scheme will include in
the benefits offered, an equivalent benefit to that provided by Rule
13(A)(iii) and (iv) of the 1949 section of the Rules and Rules 17 and 19 of
the 1967 section of the Rules.
(D) The Purchaser will offer arrangements for additional voluntary
contributions of similar type to those available under the Seller's Scheme
at Completion. The Purchaser will procure that the Purchaser's Scheme will
provide under those arrangements, in respect of any Consenting Members'
AVCs transferred to the Purchaser's Scheme, benefits which are at least
equal in value at the date of transfer to the value of the AVCs so
transferred.
(E) Not later than one week after Completion the Purchaser will invite in
writing Employees who are members of the Seller's Scheme who are still
employed in the Business and who have not
reached their Normal Retirement Age to become members of the Purchaser's
Scheme with effect from Completion with benefits in accordance with
paragraph 2(B), such offer not being conditional on such Employees agreeing
to transfer their benefits in respect of past service to the Purchaser's
Scheme. The forms of invitation referred to in this paragraph will be
submitted to the Seller in advance of their issue, and will not be issued
until the Seller has approved them, such approval not to be unreasonably
withheld or delayed.
(F) Before Completion the Purchaser will supply the Seller with a draft of a
notice (the "notice") to be issued to Employees who were members of the
Seller's Scheme and have joined the Purchaser's Scheme pursuant to the
invitation referred to in paragraph 2(E) above explaining the options
available to them in relation to their accrued rights under the Seller's
Scheme. Within 10 working days after receipt of the notice, the Seller
will inform the Purchaser in writing whether the Seller agrees that the
notice adequately explains the options and accrued rights under the
Seller's Scheme, or of any objection thereto. As soon as practicable after
the notice, or any revised notice following an objection by the Seller, has
been agreed (or, in the event of a dispute, the determination of the issue
concerned pursuant to paragraph 8), the Purchaser will issue the notice in
the agreed form to each person referred to in this paragraph and confirm
such issue, with a copy of the notice, to the Seller.
(G) In this paragraph "benefits" includes all options under the Rules and the
rate of contributions required to be paid by Members.
3. Calculation of Transfer Amount
(A) The Purchaser will provide the Seller promptly with the documents and
information necessary for the calculation of the unadjusted Transfer Amount
and both the Seller and the Purchaser will answer any questions which the
Seller's Actuary may reasonably have on the documents and information
provided. The Seller will procure that the Seller's Actuary will calculate
the Transfer Amount within 6 weeks of receiving those documents,
information and answers.
The unadjusted Transfer Amount shall be calculated in accordance with the
Actuary's Letter. Any liability which there may be in respect of any
difference as between a man and a woman relating to the guaranteed minimum
pension shall not be included in the calculation.
If any Consenting Member has more than one period of Pensionable Service
any period before the last (the "previous periods") is ignored in that
calculation but the unadjusted Transfer Amount includes the cash
equivalents at Completion of the benefits (as set out in the Rules) which
have accrued in respect of those Consenting Members for the previous
periods.
The Transfer Amount shall be the unadjusted Transfer Amount adjusted in
line with the Investment Adjustment in accordance with the Actuary's
letter.
In calculating the Transfer Amount any benefits under the Seller's Scheme
which are attributable to AVCs paid by the Consenting Members and in
respect of which the Consenting Members are not entitled to benefits based
on their final pensionable earnings, and the AVCs themselves, are
disregarded.
(B) Within 14 days after the Seller's Actuary has calculated the unadjusted
Transfer Amount the Seller (or the Seller's Actuary) will notify the
Purchaser (or the Purchaser's Actuary) in writing of the result of that
calculation and supply to him the particulars of the calculation (excluding
the amount of the Investment Adjustment but including particulars of the
precise manner in which they are calculated) and the data on which the
calculation is based which the Purchaser's Actuary reasonably requires to
enable him to check that the calculation is mathematically correct and in
accordance with the terms of this schedule. The Purchaser's Actuary has 6
weeks from the date on which those particulars and data have been supplied
to him in which he may raise any objection in writing that the calculation
is incorrect or not in accordance with the terms of this schedule.
(C) The calculation referred to above is final and binding on the Seller and
the Purchaser on the later of (i) if the Purchaser's Actuary raises no
objection within the terms of (B) above, the expiry of the period mentioned
above in which he may raise an objection, and (ii) if the Purchaser's
Actuary raises an objection within the terms of (B) above, the date of a
subsequent written agreement between the Seller's Actuary and the
Purchaser's Actuary that the calculation (or revised calculation) is
mathematically correct.
4. Transfer of Transfer Amount and AVCs
(A) The Seller will use all reasonable endeavours to procure that on the Due
Payment Date the Seller's Scheme transfers to the Purchaser's Scheme
equities representing the Transfer Amount and, as at the date of transfer,
the AVCs paid by the Consenting Members.
(B) The Seller and the Purchaser will use all reasonable endeavours to secure
agreement between the Seller's Scheme and the Purchaser's Scheme
respectively as to the particular equities to be transferred representing
the Transfer Amount. If agreement is not reached by the Due Payment Date,
the transfer will be in the form of equities of the Seller's Scheme
selected by the Seller's Scheme as a representative selection held by the
Seller's Scheme. Any equities to be transferred will be valued at the mid-
market price at the close of business on The London Stock Exchange on the
day before the date of transfer.
(C) The Purchaser will seek promptly from the Board of Inland Revenue approval
to the transfer of assets from the Seller's Scheme to the Purchaser's
Scheme in respect of the Consenting Members and, at the Seller's request,
will supply promptly to the Seller the documents and information which the
Seller reasonably requires to enable the Seller's Scheme to obtain a
corresponding approval.
5. Payments by Seller and Purchaser
(A) If the Transfer Amount is not transferred in full to the Purchaser's Scheme
within one month after the Due Payment Date as provided for in paragraph 4,
the Seller shall, subject to (B) and (C) below, not later than one month
after receipt of a written demand from the Purchaser, pay to the Purchaser,
by way of an adjustment of the consideration for the Shares, the following
amount:
(i) if some assets have been transferred from the Seller's Scheme to the
Purchaser's Scheme (whether before or after that written demand is
received) - the amount by which the Transfer Amount (calculated as at
the date on which those assets were transferred) exceeds the value so
transferred but the excess for this purpose shall:
(a) be the excess adjusted by the Investment Adjustment as provided
for by the Actuary's Letter; and
(b) be reduced (after the adjustment in (a)) if, despite some assets
having been transferred to the Purchaser's Scheme, any benefit
remains payable to or in respect of a Consenting Member under the
Seller's Scheme; the reduction will be by the aggregate of the
cash equivalents of these benefits;
(ii) if no assets have been transferred - the amount by which the Transfer
Amount (calculated as at the date on which payment is made to the
Purchaser in accordance with this sub-paragraph) exceeds the aggregate
of the cash equivalents of the benefits remaining payable to or in
respect of the Consenting Members under the Seller's Scheme when
payment is made in accordance with this sub-paragraph.
For the purpose of this sub-paragraph each of the Consenting Members in
respect of whom benefits are so payable shall be deemed to have a right to
a cash equivalent.
The amount derived under (i) and (ii) above is referred to below as the
"Shortfall".
(B) If any of the Transfer Conditions ceases to be fulfilled or effective, the
Purchaser shall not demand payment pursuant to (A) above and the time limit
referred to in (A) above will not commence, or (if any of the Transfer
Conditions cease to be fulfilled or effective after the time limit has
started to run) will be suspended, until all those conditions are again
fulfilled and effective.
(C) No payment shall be due from the Seller pursuant to (A) above:
(i) if the reason for the Transfer Amount (or part of it) not having been
transferred to the Purchaser's Scheme by the expiry of the time limit
referred to above is the failure of the Purchaser's Scheme for
whatever reason to accept the whole or any part of the Transfer Amount
or if the reason is any other reason within the control of the
Purchaser or the Purchaser's Scheme;
(ii) unless the Purchaser undertakes in writing to the Seller to pay any
amount received pursuant to (A) above forthwith to the Purchaser's
Scheme.
(D) If payment is made by the Seller in accordance with (A) above the amount of
that payment, will be deducted from the amount otherwise payable under
paragraph 4(A).
(E) If the Seller pays to the Purchaser an amount under paragraph 5(A), the
Purchaser shall forthwith make a contribution of an equal amount to the
Purchaser's Scheme.
(F) If the Purchaser or any member of the Purchaser's Group obtains for the
accounting period in which the Shortfall is paid by the Seller under this
paragraph or in any of the four succeeding accounting periods a Tax
Benefit, the Purchaser shall pay to the Seller an amount equal to the
amount of the Tax Benefit. Payment shall be made by the Purchaser
forthwith upon the later of (i) the date on which corporation tax would
otherwise have been paid if it had not been for the Tax Benefit or the date
of receipt of any repayment of corporation tax and (ii) the amount of the
Tax Benefit being certified by the auditor to the Purchaser or the
applicable member of
the Purchaser's Group, which certification the Purchaser shall procure is
made at the earliest reasonably practicable opportunity, each accounting
period being dealt with separately. For this purpose Tax Benefit means the
aggregate of the amount by which a company's liability to pay corporation
tax is reduced and the amount of any repayment of corporation tax to which
the company is entitled which, in either case, arises as a result of the
contribution referred to in paragraph 5(E), including any such reduction or
entitlement attributable to a surrender by way of group relief or
consortium relief in accordance with the provisions of sections 402 to 413
of the Taxes ▇▇▇ ▇▇▇▇ to a member of the Purchaser's Group. The Purchaser
shall use all reasonable endeavours to procure that a Tax Benefit is
obtained in the earliest possible accounting period.
6. Discontinuance of Purchaser's Scheme
The Purchaser shall not exercise any power to terminate its liability to
contribute to the Purchaser's Scheme before the expiry of two years from
Completion.
7. No assistance
The Purchaser agrees that it will not, and will procure that the
Purchaser's Scheme and the Purchaser's Group will not, take any action or
provide any assistance to any person (direct or indirect) which might
result in the Seller's Scheme transferring a smaller or a larger amount
than the Transfer Amount and the assets representing Consenting Members'
AVCs to the Purchaser's Scheme.
8. Disputes
Any dispute between the Seller and the Purchaser or between the Seller's
Actuary and the Purchaser's Actuary concerning the calculation of the
Transfer Amount or compliance with paragraph 3 shall, in the absence of
agreement between them within one month of the party concerned having
notified the other of the dispute, be referred to an independent actuary
chosen by agreement between the parties or, failing agreement, appointed by
the President for the time being of the Institute of Actuaries at the
instance of either party. The independent actuary shall determine the
disputed matter in accordance with this schedule (including the Actuary's
Letter) acting as an expert and not as an arbitrator and his decision shall
be final and binding. The fees and expenses of the independent Actuary and
of the President shall be borne equally between the parties, except that
the independent Actuary shall have power to determine, at the request of
either party, that the fees and expenses shall be borne exclusively by the
other party or in such proportions as the Actuary may determine and any
such determination shall be final and binding.
APPENDIX A
SUMMARY OF BENEFITS
The intention of this appendix is to summarise the main provisions of the
Seller's Scheme as at the date of this agreement. If there is an error in that
description the provisions of the Seller's Scheme (as set out in the Rules) will
replace the appropriate provision of this appendix.
Relationship with SERPS
Contracted-out
Normal Retirement Age
Last day of the month in which the member attains age 62.
Eligibility
All Employees who elect to join the Purchaser's Scheme.
Pensionable Service
Years and months as a member of the Seller's Scheme and the Purchaser's Scheme
prior to retirement.
Pensionable Pay
Basic annual salary plus overtime, and bonuses treated as pensionable but
excludes profit related pay bonus and holiday bonus.
Final Pensionable Pay
The greater of either final 12 months' pensionable pay or highest pensionable
pay during any tax year in the last 10 years.
State Pension Element
The pension will be reduced to take account of the State pensions earned while
the member has contributed to the Seller's Scheme under the 1967 Rules and the
Purchaser's Scheme. This will include any graduated National Insurance pension
earned after joining under the 1967 Rules in respect of contributions to the
State Graduated Pension Scheme before April 1975 and the State Pension Element
including Graduated Pension will be calculated at leaving or retirement as:
State Single Person's Pension (averaged over 12 months) x 1967 Rules/Service
with the Buyer
x 1/50 plus Graduated Pension
The State Pension Element including Graduated Pension will be paid as a
temporary supplement from the later of age 50 and retirement date until State
Pension Age. For service after 5th April,
1997, the State Pension Element will be subject to the same increase guarantee
as applies to pensions in payment (in excess of GMP).
Member's contributions
Members will pay contributions as a percentage of Pensionable Pay at the
difference between employee's Contracted-in and employee's Contracted-out rates
on earning between the Lower Earnings Limit and the Upper Earnings Limit and at
the rate of 6.5% above the Upper Earnings Limit. Members may also pay
Additional Voluntary Contributions.
Member's Pension
Retirement at Normal Retirement Date
1.47% x Final Pensionable Pay x Service under the 1948 Rules of the Seller's
Scheme plus
2.2% x (Final Pensionable Pay up to and including (Pounds)11,250 non
adjustable) x Service under the 1967 Rules of the ICI Scheme/Service
with the Purchaser plus
1.83% x (Final Pensionable Pay - (Pounds)11,250 non adjustable) x Service
under the 1967 Rules of the ICI Scheme/Service with the Buyer minus
the State Pension Element including the Graduated Pension Scheme
element.
A temporary supplement is also paid until State Pension Age equal to State
Pension Element, including the Graduated Pension Scheme element, subject to
Inland Revenue maxima.
Women employed by the Seller before 1st January, 1986 as monthly staff may
choose, on leaving, to be Special Category Members. In this case their pension
percentages for the purposes of the above formulae will be increased as follows:
1.47% becomes 1.69%
2.2% becomes 2.31%
1.83% becomes 1.93%
This pension is available from age 60.
Men in the same circumstances may choose to have their service after 17th May,
1990 calculated on the Special Category Member basis.
If a Member chooses to receive Special Category Member's benefits, no spouse's
or children's pensions will be payable in respect of those benefits.
Early Retirement
Employee initiated:
Available from age 57 without actuarial abatement with Company consent subject
to 10 years' Pensionable Service. Pension calculated as for retirement at
Normal Retirement Date but based on Final Pensionable Pay and Pensionable
Service completed at date of retirement. The pensionable service requirement
reduces on early retirement after the age of 57.
Employer initiated:
Available from age 50 subject to 10 years' Pensionable Service. Pension
calculated as above.
Ill-health Retirement
A failure of health pension is payable either:
a) on retirement due to permanent incapacity (as certified by the Company
Medical Officer) subject to the completion of 10 or more years' Pensionable
Service or
b) on retirement at any time if the Company Medical Officer certifies that
employment is ceasing by reason of serious and permanent incapacity arising
from injury or ill-health. The pension is calculated in the normal manner
except that credit is given for part of the additional service the member
could have completed if he had continued in the Company's employment until
Normal Retirement Date. In the case of a) above, the special credit is
half the member's potential service up to a maximum of 10 years. In the
case of b) above the special credit shall be equal to half the additional
service the member could have completed.
Cash Option
Up to 25% of the basic pension (excluding the temporary supplement to the
pension) may be exchanged for a sum, subject to such Inland Revenue rates as are
applicable, including any maximum.
Benefits on Death while a Contributing Member
Cash 4 times the member's Pensionable Pay
(excluding overtime) or Final Pensionable
Pay if higher is paid as a lump sum.
Spouse's and Children's pension A prospective pension (calculated on the
same basis as for serious ill-health
retirement) is payable to the Member's
spouse during the first five years after
death. Thereafter the pension reduces to
52.5% of the full pension but children's
pensions are payable.
Benefits on Death after Retirement
Cash on death within 5 years of retirement and
if no spouse's or children's pension is
payable the balance of 5 years' pension
payments is payable.
Spouse's pension during the balance (if any) of the 5 year
period after the member's retirement:
a pension calculated by reference to the
amount of the pension before commutation
(and including any increases granted
since the pension commenced) is payable
to the member's spouse.
Thereafter:
the pension payable to the spouse will
reduce to 52.5% of the full pension but
children's pensions will become payable.
Leaving membership
A deferred pension is payable from age 62 calculated on Final Pensionable Pay
and Pensionable Service to date of leaving. A deferred pension may be taken at
the member's request on or after age 50 at a reduced rate (as advised by the
independent actuary).
1. A female member may opt to receive a deferred pension at age 60 without
reduction.
2. A male member who opts to take his deferred pension at age 60 will have no
reduction applied to that part of his pension attributable to his
Pensionable Service after 17th May, 1990.
For 1. and 2. above, if Special Category Membership is adopted, they will not be
entitled to any spouse's pension earned by female members for all service and
male members for service post 17th May, 1990, apart from that required by
legislation.
A member with less than 2 years' Pensionable Service may opt for a refund of
contributions as an alternative to a deferred pension.
Pension Increases
In deferment increases at the statutory rate of 5% per
annum or the increase in the Retail
Prices Index, if less, on pension in
excess of the Guaranteed Minimum Pension
(GMP). Fixed rate increases on the GMP.
In payment guaranteed increases at the rate of 5 per
cent. per annum or the increase in the
Retail Prices Index, if less, on pension
in excess of the GMP. Statutory increases
on the GMP.
Maximum Benefits Rule
The benefits payable will continue to be subject to the limits set out in the
Seller's Maximum Benefits Rule and the maximum laid down from time to time by
the Inland Revenue.
Seller's Supplementary Fund Benefits
Those Employees who are entitled to additional benefits under the Rules of the
Seller's Supplementary Pension Fund (which Rules form part of the Seller's
Scheme) will be entitled to additional benefits in the Purchaser's Scheme as
advised by Seller's Actuary to the Purchaser's Actuary.
APPENDIX B
TRANSFER AGREEMENT
Date:
To: The trustees of the [ ] Scheme
From: The trustees of the [ ] Scheme
(the "Receiving Scheme")
Re: Employees of [ ] Limited
We request the transfer to us of the sum and/or assets referred to in Appendix 2
hereto equal in value to the Transfer Amount calculated in accordance with the
letter from [ ] to [ ] dated [ ] 1997 in respect
of the members listed in Appendix 1 hereto (the "Consenting Members") and, in
consideration of that transfer, we hereby confirm and undertake as follows:
1. The Consenting Members have been offered membership of the Receiving Scheme
as of [ ], 1997 with the benefits and members' contribution rate
described in the notice issued to them on [ ] 1997, a copy of which
is Appendix 3 hereto (the "Notice").
2. Each Consenting Member who has accepted that offer has been admitted to
membership of the Receiving Scheme and has entered employment with an
employer which participates in the Receiving Scheme and that employment is
contracted-out by reference to the Receiving Scheme by virtue of section
9(2B) of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (a copy of the appropriate
contracting-out certificate(s) is Appendix 4 hereto). Each Consenting
Member will be entitled in respect of the Transfer Amount to benefits from
the Receiving Scheme which are as described in the Notice and, on receipt
of the Transfer Amount, we relieve you of all liabilities to or in respect
of the Consenting Members.
3. We undertake to treat the amounts previously advised as Consenting Members'
contributions for the purposes of the Receiving Scheme and not to allow a
refund of contributions on subsequent cessation of service or membership
except where a refund is not prohibited by Inland Revenue restrictions or
the preservation requirements in force under the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇.
4. We confirm that the Receiving Scheme is established and administered wholly
in the United Kingdom and is an exempt approved scheme (within the meaning
of section 592 of the Income and Corporation Taxes Act 1988) or is designed
to be capable of approval as an exempt approved Scheme with effect from [ ]
and that we are permitted under the documents governing the scheme and by
the Inland Revenue to receive the Transfer Value (a copy of the appropriate
letter of consent from the Inland Revenue is Appendix 5).
5. We enter into this agreement as the trustees of the Receiving Scheme so as
to bind us and our successors as trustee(s) of the Receiving Scheme.
Add names and signatures of trustees of Receiving Scheme.
SCHEDULE 10
STOCK VALUATION
STOCK VALUATION PROCEDURES
In this Schedule references in brackets (for example (Ref. AP 144)) are
references to ICI's Controller's Manual.
1. Stock Taking Procedure
(1) This stocktaking procedure shall be followed to carry out a physical
stocktake pursuant to Clause 4 of this agreement in order to quantify the
Stock (the "Stocktake"). The Stock quantified will be valued in accordance
with the provisions of paragraph 2 of this Schedule 10.
(2) The Seller shall provide to the Purchaser at least 21 days before the
Completion Date for the purposes of this Schedule 10 the following
information relating to the Stock:
(a) details of each location where the Stock is stored ("Stock Location");
(b) details of the type, by unit and/or item, of Stock held;
(c) details of the estimated quantities and value (by unit and/or item) of
Stock; and
(d) details of the Seller's existing stocktaking procedures.
(3) For all Stock, the Stocktake shall commence at each Location at the
Completion Date (unless otherwise agreed between the parties) commencing at
a time to be agreed (unless otherwise agreed between the parties).
(4) At each Stock Location:
(a) separate serially pre-numbered stock sheets (the "Stock Sheets") shall
be used to record all quantities of Stock (an original and a duplicate
copy of each);
(b) the Stock Sheets shall record:
(i) the physical location of the Stock;
(ii) a detailed description of the Stock;
(iii)the total quantity, by unit and/or item, of the Stock;
(iv) the date of the Stocktake;
(v) the time at which the Stocktake commenced and terminated;
(vi) the identity of the persons undertaking the Stocktake;
(c) the persons undertaking the Stocktake at each Stock Location shall
sign each Stock Sheet;
(d) any potentially damaged or out of specification quantities of the
Stock with a brief description of the nature of the potential damage
or deviation from specification shall be recorded on separate Stock
Sheets from those referred to in sub-paragraph (b) above;
(e) for the Stock, where book records are available, they shall be
reconciled to the Stock counted at the Stocktake and any discrepancies
between the two sets of figures up to 90% of the total value of
discrepancies shall be checked and the actual quantities shall be
confirmed;
(f) procedures shall be agreed between the parties (if appropriate) to
avoid omission or double counting of Stock;
(g) where necessary, meters at each Stock Location shall be read at the
Completion Date or as close as is practicable to that time and, if
appropriate, adjusted back to the Completion Date by applying the
relevant production/consumption rates; and
(h) the Purchaser and the Purchaser's Auditors shall have the right to
attend the Stocktake and to perform tests.
(5) The Stocktake at each Stock Location shall be deemed to have been completed
when the Seller shall have received all of the Stock Sheets (including
those in sub-paragraph (4)(a) above) for each Stock Location and shall have
signed the Actual Values Certificate (as defined in this Schedule 10)
confirming the quantities of the Stock recorded on the Stock Sheets and
shall have provided the Purchaser with true copies of such Stock Sheets and
the Actual Values Certificate as defined in paragraph 3(1) below.
(6) The Seller shall retain the original Stock Sheets and the duplicate of the
same shall be retained by the Purchaser.
(7) The Seller and the Purchaser shall use all reasonable endeavours to ensure
that no deliveries to or despatches from any of the Stock Locations shall
take place during the Stocktake provided that this shall not restrict the
right of the Seller or the Purchaser to continue production, deliveries or
despatches at any Stock Location.
(8) Although it is the Seller's responsibility to undertake the Stocktake, the
Seller shall require the assistance of the Purchaser's employees to fulfil
this responsibility and the Purchaser shall ensure such assistance is
provided at no charge.
2. Valuation of Stock
The valuation shall be made in accordance with principles laid down in
ICI's Controller's Manuals as consistently applied by the Business. "ICI
Controller's Manuals" means the control manuals in existence as at the date
of this agreement which are compiled in accordance with UK GAAP and used
for accounting purposes within the ICI Group and which are recorded on disk
form as attached and identified as Annex 8 of the Disclosure Letter (and
which consists of an introduction to the Group Controller's Manual,
Bulletin
Board Accounting Language, Bulletin Board Reporting, Accounting
Definitions and Conventions, Accounting Policies and Procedures, Controls,
Reporting). The following are key extracts relevant to this agreement.
(1) Valuation of the Stock (to be quantified in accordance with the provisions
of Clause 1 of this Schedule 10) shall be conducted by the Seller. In this
paragraph 2 of Schedule 10 the valuation of the Stock shall be calculated
by reference to the Cost (as hereinafter defined) of the Stock unless
otherwise indicated herein.
(2) Subject to the provisions of paragraph 2(3), "Cost" for the purposes of the
valuation of the Stock shall be calculated in accordance with the Seller's
usual accounting conventions as applied in the past and shall have the
following meanings:
(a) in respect of raw materials and ingredients and packaging which are
purchased by the Seller (and any other member of the Seller's Group)
from sources external to the Seller's Group, Cost shall be the lower
of the unit rate recorded in the Seller records at the Completion Date
which will include the purchase price, including non-recoverable
duties, transport and handling costs and any other directly
attributable costs, less trade discounts, rebates and subsidies
incurred to acquire the same (Ref. AP 143 2.2.1) and net realisable
value (as defined below);
(b) in respect of raw materials and ingredients and packaging which are
purchased by the Seller (or another member of the Seller's Group) from
another business owned by a member of the Seller's Group, Cost shall
be the lower of the unit rate recorded in the Seller stock records at
the Completion Date which will include the internal transfer price
charged by that other business together with any duties, transport and
handling costs and any other directly attributable costs incurred to
acquire the same and net realisable value (as defined below);
(c) in respect of each Manufactured Products (Ref AD 12123), Cost shall be
the lower of either:
(i) the variable production cost as recorded in the Seller stock
records at the Completion Date plus the unit rate of fixed cost
of production (including depreciation and plant and work's
overheads) for 1997, the unit rate of fixed cost of production
being the budgeted fixed costs of production divided by the
budgeted production (Ref. AP 142); or
(ii) net realisable value, being Sales Value less Variable Selling
Expenses as defined in (Ref. AP 144);
(d) in respect of each of the scrap quality Manufactured Products, Cost
shall be zero;
(e) in respect of Purchased Products (Ref. AD 1213), Cost shall be the
lower of:
(i) the unit rate recorded in the Seller records at the Completion
Date which will include the purchase price together with any non-
recoverable duties, transport and handling costs and any other
directly attributable costs to acquire the same; or
(ii) the net realisable value, as defined in sub-paragraph
2(2)(c)(ii) of this Schedule;
(f) in respect of work-in-progress, Cost shall be the lower of the cost of
issues of materials (including intermediaries and finished product)
input to the process (Ref. AD 12121/AP 143) and net realisable value
(as defined above).
(3) At the completion of the valuation of Stock within the period as defined in
paragraph 3(1) below, the Seller shall issue the Actual Values Certificate.
The Seller shall provide to the Purchaser copies of the supporting working
papers, if requested to do so.
3. Certification and Resolution Disputes
(1) At the Completion Date or as soon as reasonably practicable thereafter and
in any event no later than twenty one days after the Completion Date, the
Seller shall prepare and issue to the Purchaser a detailed schedule showing
the calculation of the values of Stock. Such schedule shall be the Actual
Values Certificate and shall be expressed in Pounds Sterling (or in local
currency of the Business if it is not located in the UK).
(2) The Purchaser shall within a period of twenty one days from receipt of the
Actual Values Certificate from the Seller either issue its confirmation
thereof or shall state in writing if it disagrees (providing reasons and
reasonable details of the areas of dispute and quantifying the amount
thereof) in default of which it shall be deemed to have confirmed the
Actual Values Certificate. During the said period the Seller shall supply
to the Purchaser such information as it may reasonably require to show how
the Seller has arrived at the values contained in the Actual Values
Certificate and will allow them full access to their working papers
supporting the calculation of such values.
(3) If the Purchaser shall disagree with any element or elements of the
calculation of the values in the Actual Values Certificates then the
parties shall attempt to resolve the issues between them. Any such
resolution shall be expressed in a joint report (the "Joint Resolution")
signed by both the Seller and the Purchaser stating the values agreed upon.
(4) If no Joint Resolution has been signed by both parties within a period of
thirty-nine days from the issue of the Actual Values Certificate the
element or elements within the calculation of the values in the Actual
Values Certificate with which the Purchaser disagrees (the "area of
dispute") may be referred by either party to an Independent Accountant in
accordance with clause 22 of this agreement.
(5) The Seller and the Purchaser shall procure that all records, working papers
and other information as may be reasonably required by the Independent
Accountant for the purposes of this Schedule shall be made available upon
request therefore and they shall generally render all assistance reasonably
necessary for the preparation of the Confirmed Actual Values Certificate.
(6) For the purposes of this Agreement the Confirmed Actual Values Certificate
shall mean:
(i) the Actual Values Certificate (if such certificate is confirmed by the
Purchaser pursuant to paragraph 3(2) above);
(ii) the Joint Resolution (if a disagreement shall have been resolved
pursuant to paragraph 3(3) above); or
(iii) the Actual Values Certificate as amended by the Independent
Accountant (if any matters shall be referred to them pursuant to
paragraph 3(4) above).
SCHEDULE 11
ENVIRONMENTAL
1. INTERPRETATION
For the purposes of this Schedule, words and expressions defined in the
Sale of Business Agreement to which this Schedule is attached shall have
the same meaning in this Schedule and, in addition, the following terms
shall have the following meanings:
"Commercially Reasonable Expenses" are those costs and expenses which a
reasonable person acting in a commercially prudent manner taking into
account the need to minimise his expenditure would expend to meet any
Environmental Liabilities. For the avoidance of doubt Commercially
Reasonable Expenses shall not include any cost or expenses incurred as a
result of the adoption or imposition of standards of clean-up more
stringent than those which are provided for under Environmental Law which,
in the event of a dispute, shall be determined solely by the Expert under
subparagraph 11(iii);
"Controlled Waters" means any ground or surface waters to which
Environmental Law applies;
"Environment" means air, Controlled Waters, land (whether on, in or below
such land, excluding any buildings or other permanent structures on, in or
below the land), and flora and fauna including man;
"Environmental Contamination" means any discharge, release, leakage,
spillage, escape or disposal or presence of Hazardous Material at, in, on
or under the Properties;
"Environmental Laws" means any and all legislation, regulations, orders or
common law relating to protection of the Environment which as at the
Completion Date are in effect and capable of enforcement by legal process
in the U.K., including, for the avoidance of doubt, Part IIA of the
Environmental Protection Act 1990 and the first set of statutory guidance
which is brought into force thereunder, and any subsequent set to the
extent that they do not impose materially more onerous obligations, as if
such provisions and guidance were in full force and effect at the date
hereof;
"Environmental Liabilities" means:
(i) all claims, costs, expenses (including reasonable professional fees
incurred), losses, liabilities, fines or penalties necessarily
suffered or incurred by the Purchaser (or the Seller or any member of
the Seller's Group in the case of the Counter Indemnity) pursuant to
any Environmental Proceedings;
(ii) for the purposes only of an Environmental Remediation Agreement, all
claims, costs, expenses (including reasonable professional fees
incurred), losses or liabilities (including the cost of carrying out
remediation of Environmental Contamination) to the extent necessarily
suffered or incurred by the Purchaser (or the Seller or any member of
the Seller's Group in the case of the Counter Indemnity) in order to
avoid an environmental authority bringing an Environmental Proceeding
which, in the
event of a dispute, shall be determined solely by the Expert under
subparagraph 11(ii);
BUT EXCLUDING any claims, costs, damages, expenses, losses, liabilities or
penalties to the extent that they are not Commercially Reasonable Expenses;
"Environmental Proceeding" means any writ and/or interim or final judicial
or administrative decree, judgment, injunction, order or notice brought or
served on or against the Purchaser (or the Seller or any member of the
Seller's Group in the case of the Counter Indemnity) under which it is
obliged due to action taken by any regulatory authority pursuant to
Environmental Laws to undertake or pay the cost of clean-up of
Environmental Contamination and/or fines or penalties arising as a result
of Environmental Contamination;
"Environmental Remediation Agreement" means any agreement between the
Seller and the Purchaser that it is reasonably necessary to undertake
remediation of Environmental Contamination or, in the event of
disagreement, any determination by the Expert that:
(i) Environmental Contamination is present in circumstances where an
environmental authority has the power to issue an Environmental
Proceeding against the Purchaser or the Seller which would, if so
issued, result in a requirement to carry out remediation; and
(ii) the environmental authority would, but for the fact that it is
unaware of the Environmental Contamination concerned, be more likely
than not to bring such an Environmental Proceeding in relation to such
Environmental Contamination;
PROVIDED THAT for the purposes of the determinations in both (i) and (ii)
above;
(i) it is to be assumed that the party or parties against whom such an
Environmental Proceeding would be brought have not reached and would
not reach agreement regarding voluntary clean-up with the relevant
environmental authority; and
(ii) the Expert is to take no account of Environmental Contamination
and/or circumstances existing to the extent that either would not be
present had the Purchaser complied with its duty to mitigate under
paragraph 5;
"Hazardous Material" means hazardous or harmful or toxic substances,
pollutants or wastes;
"Indemnity" means the indemnity contained in paragraph 2 below;
"Site(s)" means the Properties as defined in the agreement of which this
Schedule forms part;
2. INDEMNITY
(1) The Seller undertakes to the Purchaser that, subject to the provisions of
this agreement, it will indemnify and hold harmless the Purchaser against
all Environmental Liabilities arising at or from the Site(s), to the extent
that such Environmental Liabilities are a direct result of Environmental
Contamination occurring on or before the Completion Date.
(2) Notwithstanding paragraph 2(1) above neither the Seller nor any member of
the Seller's Group shall be liable under the Indemnity or otherwise to the
extent that such liability arises from or is attributable to the failure of
the Purchaser to comply with the provisions of paragraphs 4(1), 4(4) and 5
to 14.
3. THE COUNTER INDEMNITY
(1) The Purchaser undertakes to the Seller (for the benefit of the Seller and
any member of the Seller's Group) that, subject to the provisions of this
agreement, it will indemnify and hold harmless (the "Counter Indemnity")
the Seller and any member of the Seller's Group from and against all
Environmental Liabilities arising at or from the Site(s) after the
Completion Date save to the extent that such Environmental Liabilities fall
within the Indemnity.
(2) Notwithstanding subparagraph 3(1) above, the Purchaser shall not be liable
to the Seller under the Counter Indemnity or otherwise to the extent that
such liability arises from or is attributable to the failure of the Seller
to comply with the provisions of paragraphs 6-8, 10, 11, 13 and 14 of this
Schedule.
4. LIMITATIONS
(1) Neither the Seller nor any member of the Seller's Group shall be liable
under the Indemnity to the extent that Environmental Liabilities have
arisen:
(a) due to any act or omission of the Purchaser or any employee, agent,
contractor or Affiliate thereof which is outside the normal course of
business and which the Purchaser knew or ought reasonably to have
known could give rise to a claim under the Indemnity, provided, for
the avoidance of doubt and subject to the duty to mitigate in
paragraph 5, that the Purchaser shall not be considered to have made
such an omission solely by a non-negligent failure to undertake
precautionary investigatory or remediatory work in relation to
Environmental Contamination; or
(b) as a result of a change in use of the Site(s) to a use which is more
sensitive to Environmental Contamination; or
(c) due to any negligent act or omission of the Purchaser or any employee,
agent, contractor or Affiliate thereof.
(2) No claim against the Seller or any member of the Seller's Group under the
terms of the Indemnity for any Environmental Liabilities shall be valid
unless notice has been served on the Seller in accordance with the
provisions of paragraph 7 within 10 years of the Completion Date.
(3) The maximum aggregate liability of the Seller and all members of the
Seller's Group in respect of all and any claims under the Indemnity and
warranties in paragraph A.6 of Schedule 7 shall not exceed (Pounds)100
million.
(4) The Seller shall not be liable in respect of any Environmental Liability to
the extent that such Environmental Liability arises:
(a) as a result directly or indirectly of information voluntarily given by
or on behalf of the Purchaser to a regulatory authority in
circumstances other than where there is a mandatory reporting
requirement under Environmental Law or where the Seller has previously
proposed or approved this course of action in writing, such approval
not to be unreasonably withheld or delayed; and/or
(b) from any admission of liability by the Purchaser in respect of any
clean-up which needs to be done, except where the Seller has approved
such admission in writing, such approval not to be unreasonably
withheld or delayed.
(5) If the Indemnitor (as defined in paragraph 6(1)) makes any payment in
respect of any Environmental Liabilities under the Indemnity or Counter
Indemnity, as the case may be, (the "Indemnity Payment") and the Claimant
(as defined in paragraph 6(1)) receives any benefit otherwise than from the
Indemnitor which would not have been received but for the circumstances
giving rise to the claim in respect of which the Indemnity Payment was
made, the Claimant shall, once it has received such benefit, forthwith
repay to the Indemnitor an amount equal to the lower of the amount of such
benefit and the Indemnity Payment.
(6) In the event that the Indemnitor (as defined in paragraph 6(1)) either
incurs external charges, costs and expenses for environmental services or
internal charges for its own environmental services, in either case
including but not limited to testing and/or analytical services and/or
contaminated soil disposal facilities, in connection with or in relation to
any actual or potential Environmental Liabilities under the Indemnity or
Counter Indemnity (as appropriate) then such external charges, costs and
expenses shall be deemed to be payments made under the Indemnity or Counter
Indemnity (as appropriate). Any internal charges shall be made on the same
basis as the Indemnitor charges to its own business or its Affiliates.
(7) It is hereby expressly agreed that, save where the Seller has accepted
liability or is otherwise liable under the terms of the Indemnity, all
costs incurred by the Purchaser in carrying out environmental analyses and
tests of the Site(s) (and its (or their) surrounds) shall be borne by the
Purchaser.
5. MITIGATION
The Purchaser shall take all reasonable steps to avoid or mitigate any
Environmental Liabilities and/or potential Environmental Liabilities which
may give rise to a claim under or in connection with this Indemnity
howsoever arising. Where and to the extent such steps require expenditure,
the costs will be borne by the Seller provided that, except in the case of
emergency or imminent danger to public health or safety, the Seller has
agreed in advance to the performance of the steps by the Purchaser, such
agreement not to be unreasonably withheld or delayed. In the event such
steps would involve any substantive clean-up, any dispute as to whether
such agreement is unreasonably withheld or delayed shall be referred to the
Expert for determination, who shall have regard to the matters set out in
subparagraphs 11(i) to (iv). Such steps may include but shall not be
limited to:
(a) carrying out soil tests before taking any action which is likely to
cause a material disturbance to soil;
(b) carrying on its activities on the Site(s) so as to minimise
disturbance to known areas of existing or probable contamination and
take all necessary steps to protect human health;
(c) the Purchaser (with the approval of the Seller) settling a claim which
will or may fall within the terms of the Indemnity, the costs and
expenses associated with such settlement (so approved by the Sellers)
being deemed to be Environmental Liabilities for the purposes of this
agreement;
(d) making reasonable and timely efforts to pursue claims against any
third parties (including insurers) who may have some liability to the
Purchaser in respect of the matter in question; and
(e) avoiding acts or omissions of the nature described in paragraph 4(1).
6. NOTIFICATION
(1) As soon as reasonably practicable after either party (the "Claimant")
becomes aware of any actual or potential Environmental Liabilities which
may give rise to a claim by it under the Indemnity or Counter Indemnity
(whether or not the Claimant is of the opinion that it has a valid claim
against the other party (the "Indemnitor") under the Indemnity or Counter
Indemnity or, in the case of any potential Environmental Liabilities, that
no liability will in fact arise), the Claimant shall give written notice
thereof to the Indemnitor (and thereafter will keep the Indemnitor fully
informed of all material developments relating thereto). Such written
notice shall include all material details of any actual or potential
Environmental Liabilities (including the Claimant's reasonable estimate of
the extent of and cost of clean-up of the Environmental Liabilities as a
result thereof).
(2) Neither party shall admit, settle compromise or discharge any claim or
liability or make any proposal which might constitute or lead to a claim
against the other under the Indemnity or Counter Indemnity (as appropriate)
without having first served a notice under this paragraph 6 and given the
other a reasonable opportunity to consider the circumstances referred to in
the said notice.
7. CLAIMS
(1) In the event that the Claimant wishes to make a claim against the
Indemnitor under the Indemnity or Counter Indemnity (as appropriate) in
relation to any Environmental Liabilities (whether or not suffered or
incurred) then, subject to paragraph 7(2), it shall do so by giving notice
in writing of the same to the Indemnitor.
(2) The Claimant shall not be entitled to claim under this Schedule for any
actual or potential Environmental Liabilities in relation to either an
Environmental Proceeding or Environmental Remediation Agreement unless, in
each case, the Claimant has properly served a written notice on the
Indemnitor which specifies reasonable details of the nature, extent and
location of the Environmental Contamination concerned and specifies the
claim with sufficient particularity, including, without limitation, the
circumstances giving rise to the Claimants' view that such Environmental
Contamination gives rise to an Environmental Liability.
8. CONDUCT
If any notice is received by either party under paragraphs 6 or 7 the
Claimant shall if so requested by the Indemnitor take all steps which are
necessary and reasonable to avoid, mitigate, dispute, resist, appeal,
settle, compromise, contest or defend any claim and any adjudication in
respect thereof and reasonable costs incurred by the Claimant due to its
taking such steps will be borne by the Indemnitor. Subject to consultation
with the Claimant, the Indemnitor shall, at its request and its cost, be
allowed to conduct any negotiations, proceedings or appeals relating to
any claim or potential claim.
9. SITE ACCESS
If any notice is received by the Seller under paragraphs 6 or 7, subject,
except in the case of emergencies, to the Seller giving written notice
three days prior to any site access and the Seller agreeing to comply with
all reasonable instructions of the Purchaser's site engineers:
(a) the Seller and/or its agents and contractors shall be free to have
access to the Site(s) during normal business hours to assess
(including but not limited to assessment by soil sampling and testing)
the extent of the Environmental Liabilities and/or potential
Environmental Liabilities and to determine the action required in
order to clean-up such liabilities; and
(b) the Purchaser shall (during normal business hours) allow the Seller or
its agents access to inspect and take copies of such books and records
of the Business of the Purchaser relating to the Site(s) as may be
necessary in connection with any Environmental Liabilities and/or
potential Environmental Liabilities.
10. DISCUSSIONS
Upon either party having given a notice under paragraphs 6 or 7, either the
Seller or the Purchaser may request a meeting as soon as practicable to
discuss the matter (and if either does so the other party shall comply
promptly with such request) and, irrespective of whether there has been any
agreement on liability, each party shall be fully involved in any
discussions and/or negotiations with any party imposing or seeking to
impose any Environmental Liabilities including reaching agreement with any
regulatory authority on measures required to avoid such Environmental
Liabilities.
11. DISPUTE RESOLUTION
Upon either party giving a notice in accordance with paragraph 7, for the
purposes of a determination under the definition of Environmental
Remediation Agreement and/or in the event that the Seller and Purchaser are
unable to agree promptly the issues set out in subparagraphs (i), (ii),
(iii) and (iv) below:
(i) the remediation measures required to comply with an Environmental
Proceeding; or
(ii) the remediation measures required and/or the costs which it is
necessary to suffer or incur to avoid in either case an
environmental authority bringing an Environmental Proceeding; or
(iii) whether any costs or expenses incurred in cleaning up Environmental
Contamination pursuant to Environmental Law are incurred or suffered
as a result of the adoption of standards of clean up more stringent
than those which are provided for under Environmental Law; or
(iv) any factual matter relevant to a claim under this Indemnity or
Counter Indemnity (as appropriate);
the following provisions of this paragraph 11 shall apply:
(a) a reputable independent firm of experts (the "Experts") (who shall act
as experts and not arbitrators) in respect of the Environment relevant
to the claim or potential claim (having at least 10 years relevant
experience) shall be appointed by mutual agreement of the parties
hereto (and the parties shall each be obliged to use their respective
best endeavours to reach agreement as soon as practicable) to resolve
any factual matter in dispute between the parties but not including
any interpretation of laws or regulations as they apply to such
factual matters, except where such is necessary for the purpose of
making the determinations or agreements referred to in paragraphs 11,
11(i), (ii) and (iii) above, or any conclusions regarding
responsibility or liability for or in relation to any factual matters.
The Experts shall be offered the appointment within fifteen (15)
Business Days of the parties reaching such mutual agreement and shall
be notified in writing of the provision of subparagraph (g) below.
Failing such mutual agreement on the appointment of Experts, the
parties shall promptly refer the issue, at their joint cost, to the
President for the time being of the Royal Institute of Chartered
Surveyors in the United Kingdom with instructions to appoint suitable
Experts within seven (7) days of receipt of such instructions;
(b) the said Experts shall only be dismissed by the mutual agreement of
the parties hereto;
(c) both parties shall promptly and simultaneously, exchange with each
other and submit to the Experts, and in any event in accordance with
the Experts' written directions, their arguments and submissions in
connection with any matter of fact referred to the Experts in
accordance with this paragraph 11;
(d) following receipt by the Experts of the written arguments and other
submissions of the parties pursuant to paragraph 11(c), the parties
shall instruct the Experts to issue, as soon as reasonably
practicable, a formal written opinion pertaining to the matter of fact
referred to them. In any event the Experts shall be instructed to
present the said opinion within two months of receiving the written
arguments and other submissions of the parties pursuant to paragraph
11(c);
(e) the formal written opinion of the Experts issued pursuant to paragraph
11(d) shall be conclusive in any proceedings between the parties
hereto as to the question of fact so determined;
(f) the fees and expenses of the Experts, shall be borne equally by the
Seller and the Purchaser (unless otherwise directed by the Expert or
recoverable pursuant to a claim under the Indemnity or Counter
Indemnity as the case may be); and
(g) the Experts, and any company, firm, partnership or other organisation
with which the Experts are connected shall not be eligible to be
considered to undertake any clean-up work in respect of the claim for
which they have so acted on or around the Site(s) save where the
parties hereto mutually agree to waive this provisions. For the
avoidance of doubt, either party may withhold such consent in any
event.
12. ACCEPTANCE OF LIABILITY
In the event that the Seller admits that it has any liability to the
Purchaser under the Indemnity relating to clean up (or where the Seller
agrees to accept the Purchaser's claim as falling within the Indemnity
notwithstanding the fact that no Environmental Liability may at that point
in time have arisen):
(a) the Seller shall have the right independently to carry out the clean-
up of the Environmental Contamination which is the subject matter of
the claim itself (or through suitable third party agents or
contractors) provided that in so doing (i) the Seller shall procure
that any such clean-up is to carried out to such standard as is
reasonably necessary in the circumstances to comply with the
requirements of Environmental Law having regard to the nature and
extent of the Environmental Contamination, and (ii) there shall be
full consultation with the Purchaser and (iii) the Seller and its
agents or contractors shall accede to any reasonable requests from the
Purchaser as to the conduct of remediation;
(b) the Seller and/or its agents and contractors shall, in addition to the
rights of access provided for in paragraph 9 above, be free to have
access to the Site(s) during normal business hours to carry out the
clean-up referred to in paragraph 12(a) above;
PROVIDED THAT in relation to both subparagraphs (a) and (b) above, if the
carrying out of such clean-up operations would be likely to cause material
disruption to the carrying on of the Business at any Site(s), the parties
shall agree the appropriate and reasonable means of avoiding such
disruption in the circumstances.
13. STATEMENTS
In the event of any circumstances arising which do or may give rise to
Environmental Liabilities which may fall within the terms of the Indemnity
or the Counter Indemnity (as appropriate) neither the Purchaser nor the
Seller (nor any of their respective Affiliates) shall make any public
statements (including, for the avoidance of doubt, any statement to any
regulatory authority, unless required by law or in an emergency) regarding
such circumstances without first discussing with the other party and
reaching written agreement on the text of any such public statement before
it is made.
14. GENERAL
(1) Any information, records, or other material of one party shall be treated
as strictly confidential by the other party except when it is required to
be used in order to comply with an order of the court or regulatory
authority or it is used by the other party to enforce its rights under this
Schedule 11 or so as to make an insurance claim.
(2) The Purchaser's and its Affiliates' exclusive remedies in respect of
Environmental Claims shall be in accordance with the provisions of this
Schedule 11 and the environmental
warranties in paragraph A.6 of Schedule 7 (the "Environmental Warranties"),
and the Purchaser on behalf of itself and its Affiliates hereby waives all
other remedies whether in contract, tort (including, for the avoidance of
doubt, negligence) but without prejudice to its rights under clauses 5(6)
and 15, or howsoever otherwise arising which it may have against the Seller
or any member of the Seller's Group at law or in equity in respect of the
matters which fall within the scope of the Indemnity or the Environmental
Warranties and, for the avoidance of doubt, if such an Environmental Claim
could also give rise to a claim under any other provision of this
agreement, the Purchaser may only bring a claim under this Schedule or the
Environmental Warranties or clauses 5(6) or 15.
(3) Nothing in the preceding paragraph shall permit the Purchaser any double
recovery in respect of the same loss.
SCHEDULE 12
CONDUCT OF BUSINESS UP TO COMPLETION
(1) In the period from the date of this agreement until the Completion Date,
the Seller shall (in so far as it is within its power to do so) procure
that except with the prior consent of the Purchaser:
(a) the Business is not carried on other than other than in the ordinary
course consistent with past practice over the 12 months prior to the
date of this agreement;
(b) projects which the Seller has commenced to implement within the
Business are not discontinued or progressed other than pursuant to
their respective project plans; and
(c) except as required by law or by any governmental, administrative or
judicial authority of competent jurisdiction or pursuant to any
existing agreement it will not;
(i) dispose of, or grant any security over or any interest in, any
material property or plant and equipment used in the Business
otherwise than in the normal course of business; or
(ii) terminate, enter into or amend to any material extent any
material contract or arrangement or commitment (whether
conditional or unconditional) the term of which will extend more
than six months beyond the Completion Date or which would oblige
the Purchaser to expend capital of (Pounds)300,000 or more
(provided that this subparagraph (ii) shall not apply to any
such contract, arrangement or commitment which is in the normal
course of business which shall include, but not be limited to,
the extension or replacement of existing contracts, arrangements
or commitments); or
(iii) appoint any new Senior Employee or terminate the employment of
any Senior Employee (other than for breach of his or her
employment contract) (for the purposes of this subclause a
Senior Employee shall mean an employee in ICI's Grade 40 or
above) or make a change in the terms of employment or pensions
benefits of any employees except in the ordinary course of
business; or
(iv) increase or reduce the number of employees engaged in Business
other than in accordance with plans which have been disclosed to
the Purchaser prior to this agreement.
(2) Prior consent requested from the Purchaser by the Seller under (1) shall
not be unreasonably withheld or delayed by the Purchaser.
(3) The requirement for consent under this Schedule 12 shall be overridden and
this Schedule 12 shall not be breached in the event that the Seller can
demonstrate that it was necessary for it to take the relevant action
without the prior written consent of the Purchaser due to emergency
operational requirements which would have caused significant operational
difficulties if not remedied before it was practicable to consult with and
obtain the consent of
the Purchaser and provided further that the Purchaser is notified by the
Seller of such step as soon as the Seller is reasonably able to do so.
(4) In the period from the date of this agreement until the Completion Date
each of the Seller and the Purchaser shall use all reasonable endeavours in
obtaining any third party consents necessary for the transfer of the
Contracts pursuant to clause 6 of this agreement and to transfer or obtain
any permits, consents, licences and authorisations of the Business and,
without prejudice to the generality of the foregoing, the Purchaser and the
Seller shall make all relevant notifications and applications in respect of
such permits, consents, licences and authorisations.
ANNEX 1
IMPLEMENTATION AGREEMENTS
(not in Agreed Form)
------------------------------------------------------------------------------------------------------
SUPPLIER PURCHASER AGREEMENT
(Schedule)
------------------------------------------------------------------------------------------------------
GOOSE ALPHA SERVICES
Process Pipes
Interface Ops
Site Road System
------------------------------------------------------------------------------------------------------
GOOSE ACRYLICS SERVICES
Process Pipes
------------------------------------------------------------------------------------------------------
GOOSE KATALCO SERVICES
Site Road System
Process Pipes
------------------------------------------------------------------------------------------------------
PLYMOUTH GOOSE UTILITIES
Compressed Air Supply
------------------------------------------------------------------------------------------------------
PLYMOUTH GOOSE SERVICES
Pay Roll Services
Jetty Services
------------------------------------------------------------------------------------------------------
GANDER GOOSE MATERIALS
Instrument Air
------------------------------------------------------------------------------------------------------
GOOSE HALOCHEMICALS UTILITIES
Potable Water
▇▇▇▇▇▇ Water/Fire Water
------------------------------------------------------------------------------------------------------
GOOSE HALOCHEMICALS SERVICES
Transport of process pipes and cabling via
pipebridges
------------------------------------------------------------------------------------------------------
GOOSE HALOCHEMICALS ELECTRICITY
50 Hz Electricity
------------------------------------------------------------------------------------------------------
GOOSE TIOXIDE UTILITIES
IP Steam
------------------------------------------------------------------------------------------------------
GOOSE TRACERCO UTILITIES
Potable Water
LP Steam
------------------------------------------------------------------------------------------------------
GOOSE TRACERCO ELECTRICITY
50 Hz Electricity
------------------------------------------------------------------------------------------------------
GOOSE EUTECH UTILITIES
LP Steam
Potable Water
Effluent
------------------------------------------------------------------------------------------------------
GOOSE EUTECH ELECTRICITY
50 Hz
------------------------------------------------------------------------------------------------------
GOOSE* EUTECH SERVICES
Site Road System
Transport of Communications via pipebridges
------------------------------------------------------------------------------------------------------
Goose = The Business
Alpha = Amines
Plymouth = ICI
*Plymouth Tabs (Supplier)/The Business (Purchaser): Electricity (Electricity
50Hz)
ANNEX 2
PROPERTY SCHEDULE
SCHEDULE 1
PROPERTIES
Plymouth = ICI
Tango = The Purchaser
PART 1: DEFINITIONS
In this Schedule the following expressions are used with the following meanings,
namely:-
"Ancillary Property Documents" means the documents listed in Table A
(relating to the Billingham Property)
Table B (relating to the Severnside
Property) and Table C (relating to the
Stanlow Property)
"Assignment Properties" means the leasehold properties in respect
of which the Reversioner's consent to
assign is required namely:-
(a) the Stanlow Property
(b) the HOC Corridor
(c) the Frequency Changer House
"Billingham Documents" means the Billingham Transfer and such
of the Ancillary Property Documents as
are listed in Table A
"Billingham Property" means the Seller's Billingham Property
and Plymouth's Billingham Property
"Billingham Transfer" means a transfer of the Billingham
Property in the form of a draft thereof
which is in Agreed Form
"Frequency Changer House" means the premises demised by a Lease
dated 6th August 1984 made between (1)
North Eastern Electricity Board and (2)
Plymouth
"HOC Corridor" means that part of the Billingham
Property comprising the pipe corridor
known as the HOC Corridor (which
comprises the pipe corridor shown edged
red on Plan V4)
"Lease Completion Date" means the later of:-
(a) the tenth working day after the
date of the last of the two
Reversioner's licence permitting
the assignment or underletting (as
the case may be) of the relevant
Lease has been granted and a copy
thereof is supplied to the
Purchaser or its Solicitors
(b) the Completion Date
"Link Corridor" means that part of the Billingham
Property comprising part of the
Seller's/Plymouth's Billingham/Wilton
Link being the part edged red on Plan 1.6
attached to the Billingham Transfer
"Plymouth's Billingham Property" means that part of the property comprised
in the Billingham Transfer which is to be
transferred by Plymouth
"Premises" means the premises forming the subject
matter of the Premises Agreements
"Premises Agreements" means the aggregate of the following (all
of even date herewith):
(a) an Agreement for Lease made between
the Seller (1) and Tango (2)
relating to the grant by the Seller
to Tango of a Lease of the Ammonia
Storage Facilities at North Tees;
(b) an Agreement made between the Seller
and Plymouth (1) and Tango (2)
relating to the grant by the Seller
and Plymouth to Tango of a Licence
to occupy premises at Wilton Centre;
(c) an Agreement made between Plymouth
(1) and Tango (2) relating to the
grant by Plymouth to Tango of two
Leases at Severnside
"Properties" means the aggregate of the Billingham
Property the Severnside Property and the
Stanlow Property
"Property Documents" means the aggregate of:-
(a) the Property Transfers; and
(b) the Ancillary Property Documents
"Property Rights" means the rights appurtenant (or to be
granted as appurtenant) to the
Properties and Premises to be granted by
the Property Documents
"Property Transfers" means the aggregate of:-
(a) the Billingham Transfer;
(b) the Severnside Transfer; and
(c) the Stanlow Assignment
"Reversioner" means all persons entitled to the
reversion expectant on the termination of
the relevant Leases under which the
Seller holds the property/premises and
where reference is made in this Agreement
to any licence required from or by the
Reversioner it shall be deemed to mean
all and any such licences where more than
one is required
"Seller's Billingham Property" means that part of the property comprised
in the Billingham Transfer which is to be
transferred by the Seller
"Severnside Property" means the land at Severn Road Severnside
as more particularly described in the
Severnside Transfer
"Severnside Transfer" means a Transfer of the Severnside
Property in the form of a draft thereof
which is in Agreed Form
"Stanlow Assignment" means the two assignments of the Stanlow
Property in the form of drafts thereof
which are in Agreed Form (including a
Supplemental Deed of Covenant also in
Agreed Form)
"Stanlow Leases" means
(a) a Lease dated 4th January 1995 made
between (1) Manchester Ship Canal
Company and (2) the Seller and
(b) a Lease dated 10th November 1993
made between (1) Moorish Holdings
Limited and (2) the Seller
"Stanlow Property" means the premises at Oil Sites Road
Stanlow Cheshire as more particularly
described in the Stanlow Leases together
with the appurtenant rights
"Table A" to "Table E" (inclusive) means the Tables at the foot of this
Schedule and respectively so lettered
"Underlet Properties" means the No. 1 Tees Tunnel demised by a
Lease dated 21st September 1955 made
between (1) The Commissioner for Crown
Lands and (2) Plymouth and any other part
of the Seller's No. 1 Billingham/Wilton
Link over which rights are to be granted
to the Purchaser and a reversioner's
consent thereto is needed
"Volume of Plans" means a volume containing various plans
in Agreed Form and reference to a plan by
the letter V followed by a number means
the plan in such Volume so numbered
PART II: PROVISIONS RELATING TO PROPERTIES
1. Completion
(1) On Completion the Seller and Plymouth (to the extent of their respective
interests therein) will subject to as stated in this Schedule transfer the
Properties to the Purchaser by means of assurances which (subject as
hereinafter provided) will be in the form of the Property Transfers
(2) The price to be paid for the Properties shall be as stated in Clause 4 of
this Agreement and apportioned between the several parts of the Properties
as follows:-
(a) to the Seller's Billingham Property FIVE MILLION NINE HUNDRED AND
NINETY FIVE THOUSAND POUNDS ((Pounds)5,995,000)
(b) to the Plymouth Billingham Property FOUR THOUSAND POUNDS
((Pounds)4,000)
(c) to the Severnside Property TWO MILLION POUNDS ((Pounds)2,000,000)
(d) to the Stanlow Property ONE THOUSAND POUNDS ((Pounds)1,000)
(3) The Seller and Plymouth shall not be required or compelled to execute any
of the Property Transfers:-
(a) for a consideration greater than that shown in the foregoing paragraph
1(2); or
(b) otherwise than in favour of the Purchaser as herein named; or
(c) in such manner as to transfer any of the Properties otherwise than as a
single lot
(4) On Completion the Seller Plymouth and the Purchaser will also enter into
the Ancillary Property Documents other than the Ancillary Property
Documents which relate to the Assignment Properties and/or the Underlet
Properties which will be completed on the Lease Completion Date
(5) The Property Documents will be entered into in duplicate
(6) Save in the case of Deeds of Grant in favour of the Seller or Plymouth all
stamp duty payable in respect of all Property Documents (including the
duplicates thereof) will be payable by the Purchaser and the Purchaser will
deliver the duly stamped and denoted duplicates thereof to the Seller
within 30 days of Completion
(7) All stamp duty (if any) payable in respect of Deeds of Grant in favour of
the Seller or Plymouth (including the duplicates thereof) will be payable
by the Seller or Plymouth and the Seller or Plymouth will deliver the duly
stamped and denoted duplicates thereof to the Purchaser within 30 days of
Completion
(8) If it is not possible to complete any one or more of the Property Documents
at Completion (other than the Billingham Transfer and the Severnside
Transfer which shall be completed at Completion in any event) Completion
shall none the less occur and any of the Ancillary Property Documents
outstanding at Completion will be completed as soon as reasonably
practicable thereafter
2. Form of Billingham Documents
(1) The agreed forms of the Billingham Documents are based on the assumption
that:-
(a) the Billingham Documents will be completed at Completion; and
(b) that at Completion the Seller and Plymouth will collectively own the
whole of the Retained Land (as so defined in the Billingham Transfer)
(2) The Purchaser agrees that the Seller and Plymouth shall be entitled to deal
with any part of the Retained Land (as so defined) prior to Completion
PROVIDED THAT any such dealings will take effect subject to the rights of
the Purchaser as comprised in this Schedule and in the Billingham Documents
(3) The Seller and Plymouth shall only be entitled to require that the
Billingham Documents be amended such as to secure to the Purchaser the
Seller and Plymouth the same rights benefits and obligations as would have
applied had the Billingham Documents been completed in accordance with the
assumption in paragraph 2(1) above to the intent that matters excepted and
reserved in the Agreed Form Billingham Transfer may become matters to which
the Property is subject but that the Billingham Transfer shall otherwise
remain unamended and such amendments shall be agreed between the respective
parties or their Solicitors acting reasonably and in default of agreement
settled by Conveyancing Counsel agreed upon between the parties or (in
default of such agreement) nominated by the President of the Law Society
(or his deputy or other person nominated by him to make appointments on his
behalf) such Counsel to act as an expert and not as an arbitrator PROVIDED
THAT if any amendment shall not have been agreed or settled by the
Completion Date the Billingham Transfer shall be completed without such
amendments in the Agreed Form and in that event the Seller and Plymouth
will procure that any third parties with whom dealings have taken place
join in the Billingham Transfer to confirm the grant of any rights or
otherwise as may be requisite
3. Adverse Rights
The Properties are to be transferred and the Ancillary Property Documents
entered into subject so far as thereby affected to but with the benefit (so
far as applicable) of all those matters specified contained or referred to
in the Property Transfers and the Ancillary Property Documents but
otherwise free from encumbrances and the Purchaser shall be deemed to take
the Property Transfers and enter into the Ancillary Property Documents with
full knowledge and notice of such matters and shall not raise any objection
or requisition whatsoever in relation thereto save for any matters revealed
by searches of H.M. Land Registry H.M. Land Charges Registry and Companies
House
4. Title
The Seller and Plymouth shall sell the Properties with full title guarantee
and the Ancillary Property Documents shall be entered into with full title
guarantee save where otherwise stated in the relevant Agreed Form
5. Local Land Charges etc.
The Properties are to be transferred and the Ancillary Property Documents
entered into subject to such of the following matters as relate thereto:-
(a) all Local Land Charges whether registered or not before the date of
this Agreement and all matters capable of registration as Local Land
Charges whether or not actually so registered;
(b) all notices served and orders, demands, proposals or requirements made
by any local, public or other competent authority whether before or
after the date of this Agreement; and
(c) all actual or proposed orders, directions, notices or charges,
restrictions, conditions, agreements, consents, permissions or other
matters of any kind arising under any legislation including delegated
legislation;
PROVIDED THAT this Clause shall not in anyway prejudice the Warranties given by
the Seller or Plymouth
6. Vacant Possession
The Properties will be transferred with vacant possession save (a) as
specified in the Property Transfers (b) as regards the Stanlow Property
which will be transferred subject to the rights of occupation of Air
Products Limited (c) as regards the occupation by Eutech Engineering
Solutions Limited at Severnside and Billingham (d) as to huts and compounds
at Billingham and Severnside used by contractors in relation to current and
ongoing contracts on the Completion Date and (e) as otherwise disclosed in
the Disclosure Letter
7. Insurance
(1) The Properties shall be at the Seller's and/or Plymouth's risk for
insurance purposes until Completion
(2) From the date of this Agreement until Completion ("the said period") the
Seller and/or Plymouth shall maintain in force (at levels applicable at the
date hereof) the Seller's and/or Plymouth's existing insurance policies in
relation to the Properties
8. Non-merger
The provisions of this Schedule shall remain in full force and effect
notwithstanding Completion insofar as they remain to be implemented after
the date of Completion
9. National Conditions of Sale
The National Conditions of Sale (20th Edition) ("National Conditions") as
published by The Solicitors' Law Stationery Society plc in December 1981
shall apply (except for Conditions 2,3,4,5,7,9,10, 11(5), 15, 17, 20, 21,
and 22) insofar as the same are not inconsistent with the terms of this
Agreement PROVIDED THAT:-
(a) references to "vendor" and "purchaser" shall be deemed to be
references to the Seller and the Purchaser respectively and where any
rights to be granted affect or benefit
the Plymouth Billingham Property or other Property of Plymouth and the
Purchaser respectively
(b) the "prescribed rate" shall be the rate of default interest prevailing
under this Agreement
(c) in National Condition 13(1) the words after the words "such muniments"
shall be deemed to be deleted
(d) in National Condition 16 the reference to the "date of the contract"
shall be deemed to be a reference to the date when this Agreement
becomes unconditional
10. Billingham Transfer
(1) Paragraph 2 in each of Parts 1 and 2 of Schedules 2 and 3 to the Billingham
Transfer remain to be completed with details of the:-
Transferee's C & P Apparatus
Transferee's ICI Apparatus
C & P Apparatus
ICI Apparatus
(all as defined in the Billingham Transfer) which as at the date of this
Agreement have yet to be fully identified)
(2) Prior to Completion and following Completion the Seller and Plymouth and
the Purchaser (acting reasonably and with the utmost good faith) will meet
and agree:-
(a) as to the matters referred to in paragraph 10(1) above ("Reserved
Matters");
(b) as to the adjustments to the form of the Billingham Transfer (and the
plans to be annexed to it) required in the light of the agreement on
Reserved Matters
(3) The agreement to be reached on Reserved Matters shall be reached on the
basis of the apparatus and equipment which belongs to and serves (i) the
Business (which will comprise Transferee's C & P Apparatus and Transferee's
ICI Apparatus) and (ii) the businesses of the Seller and Plymouth on the
Retained Land as defined in the Billingham Transfer (which will comprise
the C & P Apparatus and the ICI Apparatus) and will be such as to permit:-
(a) the Purchaser to make and receive the services necessary to comply
with the Implementation Agreements (for this purpose construed as
excluding the clause headed and/or relating to Easements and
Wayleaves) and the services listed in Table D and Table E; and
(b) the Seller and/or Plymouth to maintain supplies required for the
conduct of its retained business as carried on on the date hereof
(4) The Billingham Transfer shall be completed on Completion and shall grant
rights and reserve rights in respect of the Reserved Matters which have
been agreed as set out in paragraph 10
(2) not less than three working days prior to Completion Insofar as the
Reserved Matters have not been identified prior to the date being three
working days before Completion the Seller and Plymouth and the Purchaser
shall continue to act with the utmost good faith in identifying the
Reserved Matters and in the event that any Reserved Matters are agreed or
determined under paragraph 12 within the period of one year from the date
of Completion (time to be of the essence) the parties shall as soon as
reasonably practicable but not later than two months after the date such
manner is agreed or determined enter into a Deed whereby the Billingham
Transfer shall be varied to take account of the Reserved Matters so agreed
and determined as if they had been so agreed or determined three working
day before completion
(5) Where apparatus which would otherwise be C&P Apparatus and/or ICI Apparatus
is located in the Link Corridor such apparatus shall not be listed in
Schedule 3 to the Billingham Transfer but will form the "Existing
Apparatus" for the purposes of the Deeds of Grant which comprise the items
numbered 1 and 2 in Table A
11. Determination of Disputes
(1) Any dispute or difference between the Seller and Plymouth on the one hand
and the Purchaser on the other hand as to the Reserved Matters and any
amendments required to the Billingham Transfer and the plans to be attached
to it in connection with the Reserved Matters shall be resolved by means of
a reference to an independent person ("Independent Person") appointed in
accordance with paragraph 11(2) below and either party at any time by
giving written notice to the other ("Determination Notice") may refer the
dispute or difference for determination to an Independent Person
(2) The Independent Person shall be appointed by agreement between the Seller
and Plymouth on the one hand and the Purchaser on the other hand or if
within five working days after the service of the Determination Notice they
are unable to agree then on the application of any of the parties by the
President for the time being of the Royal Institution of Chartered
Surveyors or the duly appointed deputy of such President or any other
person authorised by him to make appointments on his behalf
(3) The Independent Person to be appointed under this paragraph 11 shall act as
an expert and the following provisions shall have effect:-
(a) the Independent Person shall act as an expert and not as an arbitrator
and his decision shall be final and binding upon the parties;
(b) the Independent Person shall consider (inter alia) any written
representations and cross-representations and supporting evidence made
on behalf of the parties (if made reasonably promptly) but shall not
be bound thereby;
(c) the parties shall use all reasonable endeavours to procure that the
Independent Person shall give his decision as speedily as possible;
(d) the costs of appointing the Independent Person and his costs and
disbursements in connection with his duties hereunder shall be shared
between the parties in such proportions as the Independent Person
shall determine or, in the absence of such determination, equally
between the parties; and
(e) if the Independent Person shall be or become unable or unwilling to
act then the procedure contained in this paragraph 12 for the
appointment of an Independent Person may be repeated as often as
necessary until a decision is obtained
12. Leases and other Documents where Licence to Assign or Sub-let is needed
(1) Wherever a Licence to Assign or sub-let is required under the terms of a
Lease or other documents vested in the Seller or Plymouth in order to
complete the Property Documents the Seller or Plymouth (as the case may be)
will use all reasonable endeavours to obtain the same as soon as reasonably
practicable
(2) The Purchaser will provide such assistance as the Seller or Plymouth may
reasonably require in regard to such Licences including:-
(a) providing such references information and accounts as may be
reasonably required by the Reversioner; and
(b) entering into a direct covenant with and giving or procuring such
guarantees in favour of the relevant Reversioner to pay the rents
reserved by the relevant lease and to perform the covenants and other
obligation of the Tenant therein as the Reversioner shall reasonably
require but not otherwise
(3) The Purchaser shall on and from the Completion Date be permitted to enter
into occupation of the Assignment Properties and to enjoy the rights to be
demised in respect of the Underlet Properties as licensee of the Seller
and/or Plymouth and shall be entitled to receive all profit and other
profit and income from it pending completion of the relevant Property
Documents and the Seller shall from the Completion Date until the relevant
Lease Completion Date hold the Assignment Properties on trust for the
Purchaser
(4) From the Completion Date until the relevant Lease Completion Date the
Purchaser shall be responsible for the payment of all outgoings (save for
any rent or sums payable to the landlord which the Seller and/or Plymouth
shall continue to pay) for the Assignment Properties and the Seller and/or
Plymouth shall observe and perform the covenants agreements conditions and
stipulations on its part to be observed and performed in relation to the
Assignment Properties
(5) The following further provisions shall apply in relation to any period of
occupation of the Assignment Properties prior to completion of the relevant
assignment/demise to the Purchaser:-
(a) the Purchaser shall pay to the Seller a licence fee at the same annual
rate and on the same date as specified in the document relating to the
Assignment Properties save in respect of the Stanlow Property where
the licence fee shall be the sum of (Pounds)23,570 (plus VAT) per
annum
(b) the Purchaser shall not carry out any activity which would constitute
a breach or non-observance of the covenants and conditions contained
in the document relating to the Assignment Properties and shall not
carry out any alterations or other work thereto
(c) the Seller and/or Plymouth so far as it is lawfully able to as so
shall permit the Purchaser to remain in occupation of the Assignment
Properties
(6) If any landlord lawfully requested the Seller and/or Plymouth to terminate
the Purchaser's occupation or serves a writ or summons for possession of
an Assignment Property upon the Seller and/or Plymouth (as the case may
be) or the Purchaser on the ground that the Purchaser's occupation
constitutes a breach of covenant the Purchaser shall vacate the Assignment
Property and the Seller and/or Plymouth shall operate the Business as
agent for the Purchaser and shall comply entirely with the Purchaser's
requirements and instructions
(7) If the Reversioner's consent to an assignment of the Assignment Properties
has not been obtained within three months of the Completion Date the
Seller shall where requested by the Purchaser:-
(a) make application to the relevant landlord for a licence to underlet
the Assignment Property and/or
(b) apply to a court of competent jurisdiction for a declaration that the
landlord is acting unreasonably
(8) Completion of the assignment/underlease of the Assignment Property shall
take place on the Lease Completion Date and if the parties shall enter
into an underlease such underlease shall be for a term equal to the
unexpired residue of the term of the lease relating to the Assignment
Property (less 3 days) and shall be on the same terms mutatis mutandis as
the said lease
13. Special Conditions of Sale
[(1)] Where any of the Ancillary Property Documents relating to the Billingham
Property contain a Schedule which remains to be completed as to the
matters to which the grant is subject there shall be listed therein such
of the documents referred to in the Disclosure Letter as relate to the
land identified on the relevant plan
[(2)] In Table A to the Schedule a note is to be inserted to preserve for 5
years the right to build a 16" gas line referred to the proviso to
paragraph 1 of Schedule 2 to the draft Deed of Grant (Corridor Deed -
Existing and New pipelines) on the same terms as in such draft deed
(3) In Schedule 1 to Business Sale Agreement Tables D & E to be verified by
Purchaser as comprising requirements of Implementation Agreements and
receipt of supplies
A: AS TO BILLINGHAM PROPERTY
1. Licences from THPA and Crown
-- ----------------------------
(1) In this paragraph 1 "Licences" means:-
(i) a Licence dated 16th June 1997 made between The Tees and Hartlepool
Port Authority ("THPA") (1) and the Seller (2)
(ii) a Licence dated 17th June 1977 made between The Queen's Most Excellent
Majesty (1) the Crown Estate Commissioners ("CEC") (2) THPA (3) and
Imperial Chemical Industries Limited (4) (as varied by Deed dated 17th
November 1986 not affecting the Business)
(iii) a Licence dated 15th October 1990 made between CEC (1) THPA (2) and
Plymouth (3)
(2) The Licences relate to (inter alia):-
(a) a 78" and a 66" Outfall at Billingham Reach; and
(b) Bamletts Wharf
("the Facilities") and are non-assignable.
(3) Plymouth the Seller and the Purchaser will use all reasonable endeavours to
obtain prior to completion new Licences (from CEC and THPA) in relation to
the Facilities ("New Licences") whereupon the Seller and Plymouth will
surrender the Licences in so far as (and only in so far as) they relate to
the Facilities. The Seller will provide such information as it is able to
assist the Purchaser in negotiating the Licence fees payable to CEC and
THPA in respect of the Facilities but settlement of the amount thereof (and
its subsequent payment) shall be agreed between the Purchaser CEC and THPA
(as to which the Purchaser will act reasonably)
(4) If the New Licences have not been obtained prior to completion Plymouth and
the Seller will hold the Licences on trust for the Purchaser (as regards
the Facilities) and Plymouth and the Seller (as regards all other works
affected thereby) shall jointly permit the Purchaser to use the Facilities
as sub-licensee of the Seller or Plymouth (as the case may be)
(5) The Purchaser will comply with the terms of the Licence so far as they
relate to the Facilities and not do anything (other than using the
Facilities) which may expose Plymouth or the Seller to liability for breach
thereof
(6) If CEC or THPA require the Purchaser to cease using the Facilities the
Seller and/or Plymouth will operate the same (at the Purchaser's cost and
as the Purchaser's agent) pending grant of the New Licences
(7) If the New Licences have not been granted within one year of the Date of
Completion the Seller will (if so required by the Purchaser) repurchase
from the Purchaser the property secondly described in Part 1 of Schedule 1
to the Billingham Transfer and operate Bamletts Wharf and the above
mentioned Outfalls in like manner as heretofore and the Purchaser and the
Seller will enter into a Services Agreement whereby the Seller undertakes
to operate the Facilities on the same terms as the relevant Implementation
Agreement relating to the Facilities with the Seller and/or Plymouth named
as the service provider and the Purchaser as the customer The price to be
paid by the Seller for the said land shall be:-
A
(Pounds)--x (Pounds)6,000,000
B
where
A is the acreage of the land repurchased and
B is the total acreage comprised in the Billingham Transfer
3. Street Works Consents
(1) The Seller confirms that all licences required from any relevant Highway
Authority with regard to any pipelines or cables crossing public highways
have been obtained. So far as permissible the Seller will:-
(a) where the licence or permit concerned relates solely to apparatus to
be vested in the Purchaser assign such Licences to the Purchaser; and
(b) where such licences relate to apparatus to be vested in the Purchaser
and to be retained by the Seller/Plymouth either grant a sub-licence
of the relevant rights to the Purchaser or (if that is not possible)
hold the relevant licence or permit upon trust for the Seller and/or
Plymouth and the Purchaser jointly
(2) The arrangement set out in sub-paragraph (1) will apply until such times as
the Purchaser obtains new licences or permits from the relevant Highway
Authority.
4. Statutory Declarations
(1) The Seller will provide (in a form reasonably acceptable to the Purchaser
and prior to Completion) two Statutory Declarations as follows:-
(a) a Statutory Declaration to the effect that the Billingham Property has
been owned by the Seller or Plymouth (as the case may be) and occupied
by them for a period in excess of 12 years without payment to any
third party of any rent or other acknowledgement and otherwise than
pursuant to any consent issued by a third party;
(b) a Statutory Declaration to the effect that the various parcels of land
so identified in the Deeds referred to in the Disclosure Letter and
relate to the pipe corridor running between the Billingham Property
and the Nylon Plant at Wilton owned by DuPont plc form a continuous
corridor broken only by road and rail crossings
5. Land Registry Requirements
(1) The Seller and/or Plymouth will use all reasonable endeavours to locate and
supply to the Purchaser copies of:-
(a) any conveyances or other documents referred to in the title
documentation relating to the Billingham Property where copies of such
documents have not already been provided to the Purchaser; and
(b) the conveyances and other documents Memoranda whereof are endorsed
upon the Seller's/Plymouth's title deeds.
(2) The Seller and/or Plymouth will provide to the Purchaser at their own cost
and expense all reasonable assistance required by the Purchaser in securing
registration with Title Absolute at H M Land Registry of the Purchaser's
freehold interest in the Billingham Property.
(3) On Completion the Seller and Plymouth will provide to the Purchaser at
their own cost a certified copy of a letter dated 22nd February 1988 from
H.M. Land Registry together with the written confirmation referred to
therein
6. Railtrack Plc
In respect of such of the apparatus of the Purchaser as crosses railways vested
in Railtrack Plc the Seller will grant by sub-demise to the Purchaser such
rights as the Seller is able to demise pursuant to the combined effect of a
Lease dated 13th March 1951 made between British Transport Commission (1) and
Imperial Chemical Industries (2) and a further Lease dated 7th July 1966 made
between British Railways Board (1) and Imperial Chemical Industries Limited (2)
7. Lorry Park adjoining Portrack Site
At Completion (if so requested) the Seller will grant to the Purchaser for a
period not exceeding one year a non-exclusive licence free of charge for the
parking of lorries in the lorry park adjoining the entrance to Portrack Site
(edged red on Plan 3 attached to the Billingham Transfer)
B: AS TO SEVERNSIDE PROPERTY
1. New Leases from Zeneca
As soon as practicable following the date of this Agreement Plymouth will call
upon ZENECA Limited ("ZENECA") to grant to the Purchaser Leases in favour of the
Purchaser in accordance with the Clauses numbered 8 contained in two Leases each
dated 18th December 1992 and made between ZENECA (1) and Plymouth (2) and
Plymouth and the Purchaser will:-
(a) procure that such Leases are granted to the Purchaser; and
(b) use all reasonable endeavours to procure that such Leases are granted on
Completion
and if such Leases have not been granted at Completion then Purchaser shall be
entitled to occupy the premises concerned on like terms (mutatis mutandis) to
those set out at paragraph 13 above
2. 1962 Bridge Lease
The parties will following the date of this Agreement use their reasonable
endeavours to obtain the consent of the Landlord of a Lease ("the Lease") dated
5th April 1962 made between the British Transport Commission (1) Imperial
Chemical Industries Limited (2) (relating to an easement to construct a bridge
under a railway) to a subletting in favour of the Purchaser in the following
terms. If consent is received the format of the sublease will be:-
(1) The sublessee will be granted a right to use the roadway (as referred to in
the Lease) in common with Plymouth and all persons thereafter authorised so
to do by Plymouth with or without vehicles for the purposes only (insofar
as the sublessee is concerned) of gaining access to the foreshore to
undertake repairs, maintenance and renewal of the effluent pipelines (such
pipelines being the subject of a Deed of Grant to be entered into between
Plymouth (1) the Purchaser (2) on Completion)
(2) The sublessee will be granted a right to maintain in position the bridge
(as referred to in the Lease)
(3) The term of the sublease will be for the residue of the unexpired term of
the Lease less the last three days thereof
(4) The sublessee will take all necessary steps to prevent the acquisition of
any public or private rights of way or easements
(5) The sublessee will contribute to all costs incurred by Plymouth pursuant to
Plymouth's obligations under the Lease (for the avoidance of doubt to
include sums incurred pursuant to clauses 2(6) and 3(5) but not any costs
relating to or consequent upon the construction of the bridge and roadway)
such proportion to be established by Plymouth (as lessor) acting reasonably
on a user basis
(6) The sublessee will permit inspection of the bridge over the roadway by
Plymouth (as lessor)
(7) The sublessee will not make any alterations or additions whatsoever
(8) The sublessee will covenant to repair and maintain the bridge and roadway
(both as referred to in the Lease) in a good and substantial condition and
Plymouth (as lessor) will contribute to the balance of the proper costs
thereby incurred on a user basis as determined by the sublessee (acting
reasonably), after any contribution by the landlord of the Lease has been
taken into account (which shall be due to the sublessee)
(9) The sublessee will contribute a proportion of all costs which are to be met
by the lessee of the Lease (including for the avoidance of doubt rent due
and sums due pursuant to clauses 2(5), 2(8), 2(9), 3(1) and 3(2) but not
any costs relating to or consequent upon the construction of the bridge and
roadway) such proportion to be established by Plymouth (acting reasonably)
on a user basis
(10) The sublessee will indemnify Plymouth (as lessor) against any claim or
demand by the Head Lessor pursuant to the Lease arising out of any act
omission or negligence of the sublessee or any breach of the sublessee's
obligations in this sublease and will observe and perform all the covenants
and conditions of the Lease (save as to payment of sums due thereunder)
(11) Not to assign charge sublet or deal with the sublease in any way save for
an assignment of the whole to a party taking a simultaneous transfer of the
Property under the Transfer and then only with the prior written consent of
the landlord under the Lease and of Plymouth
(12) The sublease shall contain provisos in the form of clauses 3(3) and 3(5) of
the Lease (mutatis mutandis)
(13) The sublease shall contain on the part of the sublessee a covenant with
Plymouth in the form (mutatis mutandis) of clause 2(10) of the Lease.
(14) The sublease shall contain provisions for reference to an arbitrator if the
parties cannot agree the proportion payable under any of the forgoing
provisions, the decision of such arbitrator to be final and binding on the
parties and his costs shall be within his award
3. Schedule of Condition re Main Stores
The parties will act reasonably in agreeing a photographic schedule of condition
detailing the present condition of the building known as Main Stores, Central
Avenue which is to be the subject of a lease between Plymouth and the Purchaser
on Completion. Such schedule shall be agreed within a reasonable time of the
date of this Agreement (and in any event before Completion) Provided that in the
event of disagreement all photographs taken shall be included in the Schedule
4. Statutory Declaration
Plymouth will provide to the Purchaser a Statutory Declaration (in a form
reasonably acceptable to the Purchaser) in respect of Plymouth's use of the
southern access road under the A403 (used in connection with access to the
foreshore) and in relation to the effluent mains which lie under the Severn
Road. Both Statutory Declarations to relate to a period in excess of twelve
years
5. ▇▇▇▇▇▇ Tankers Limited Occupation
(1) Plymouth will use its reasonable endeavours opposite ▇▇▇▇▇▇ Tankers
Limited, company number 2295236, (previously known as Chemic-Haul Limited)
before Completion either to:-
(i) obtain vacant possession of the premises currently occupied by ▇▇▇▇▇▇
Tankers Limited; or
(ii) enter into a new lease with ▇▇▇▇▇▇ Tankers Limited for a term of three
years (being contracted out of the provisions of sections 24 to 28
inclusive of the Landlord and Tenant ▇▇▇ ▇▇▇▇, (as amended) and such
contractual provision being authorised by Court order) such lease to
be on terms approved by the Purchaser (such approval not to be
unreasonably withheld) and to include a break clause in favour of the
Landlord on six months' notice given at any time
PROVIDED THAT Plymouth's reasonable endeavours will not involve payment of
a sum exceeding FORTY-TWO THOUSAND POUNDS ((Pounds)42,000)
(2) If on Completion Plymouth have not achieved either vacant possession or a
new lease as detailed in 5(1) above Plymouth will pay to the Purchaser on
Completion the sum of FORTY-TWO THOUSAND POUNDS ((Pounds)42,000) by way of
compensation
C: AS TO STANLOW PROPERTY
1. Occupation Pending Completion
The Purchaser shall be entitled to enter into occupation of the Stanlow Property
from the Completion Date until the Lease Completion Date (if later)
2. Dispute re Lease
(1) The Seller shall diligently pursue to determination the proceedings issued
by ▇▇▇▇▇▇ ▇▇▇▇ in the High Court of Justice Chancery Division Case Number
CH1996 W5659 and shall use all reasonable endeavours to procure the dispute
referred to therein is determined as soon as reasonably practicable
(2) If the Purchaser shall be joined as a third party into the proceedings
referred to in Clause 2(1) above or any proceedings shall be issued or
threatened against it arising out of such
proceedings or the non-payment of rent under the Stanlow Lease dated 10th
November 1993 the Seller will indemnify the Purchaser in respect of all
costs claims and expenses incurred by the Purchaser in connection therewith
(including interest on rent paid after the due date)
3. 6" Water Main
The Seller will use all reasonable endeavours prior to Completion (but not
thereafter) to procure:-
(a) the grant from the Manchester Ship Canal Company ("MSC") and Ellesmere Port
and Neston Borough Council of a demise of the 6" water main and associated
rights for a term of 21 years from 25th December 1989 in a form reasonably
acceptable to the Purchaser; and
(b) a statutory declaration from MSC as to the title to grant such demise in a
form reasonably acceptable to the Purchaser
and will also deliver at Completion a statutory declaration by the Seller (as to
the maintenance in position and use of the said 6" water main for a period in
excess of twenty years) in a form reasonably acceptable to the Purchaser
4. Agreement dated 23rd December 1993
The Purchaser will co-operate with the Seller at the Seller's cost in connection
with the Seller's discussions with Shell UK Limited concerning the payment of
rates to Shell UK Limited under an Agreement dated 23rd December 1993 made
between (1) Shell UK Limited and (2) the Seller and in the event that any sum is
payable to the Purchaser in respect of rates for the period prior to the
Completion Date the Purchaser shall pay such sum to the Seller
5. Air Products plc
The Seller shall not without the consent of the Purchaser grant a lease/licence
or other property right to Air Products plc
113
TABLE A
Ancillary Property Documents re Billingham
------------------------------------------------------------------------------------------------------------------------------------
No. Document Parties Description Comment
------------------------------------------------------------------------------------------------------------------------------------
1. Deed of Grant Purchaser (1) Deed of Grant to Seller of easements over (1) Agreed Form
Seller (2) the Link Corridor (2) Plan per Plan 1 in Volume of
Plans
------------------------------------------------------------------------------------------------------------------------------------
2. Deed of Grant Purchaser (1) Deed of Grant to Plymouth of easements (1) In like form to 1 above (mutatis
Plymouth (2) over the Link Corridor mutandis but for new pipes etc
only (not existing pipes)
(2) Plan per Plan 2 in Volume of
Plans
------------------------------------------------------------------------------------------------------------------------------------
3. Deed of Grant Purchaser (1) Deed of Grant to Seller of easements over (1) In like form to 1 above (mutatis
Seller (2) the HOC Corridor mutandis)
(2) Plan per Plan 3 in Volume of
Plans
------------------------------------------------------------------------------------------------------------------------------------
4. Deed of Grant Purchaser (1) Deed of Grant to Plymouth of easements (1) In like form to 1 above (mutatis
Plymouth (2) over the HOC Corridor mutandis)
(2) Plan per Plan 4 in Volume of
Plans
------------------------------------------------------------------------------------------------------------------------------------
5. Deed of Grant Seller (1) Deed of Grant to Purchaser of easements (1) In like form to 1 above (but
Purchaser (2) for ammonia pipelines to North Tees excluding the right to lay new
pipes etc.)
(2) Plan per Plan 5 in Volume of
Plans
------------------------------------------------------------------------------------------------------------------------------------
6. Deed of Grant Seller (1) Deed of Grant to Purchaser of easements (1) In like form to 1 above (but
Purchaser (2) for ammonia pipeline to Wilton excluding the right to lay new
pipes etc.)
(2) Easements to be demised where
the Seller/Plymouth has a
term of years
------------------------------------------------------------------------------------------------------------------------------------
114
====================================================================================================================================
7. Deed of Grant Seller (1) Deed of Grant to Purchaser of easements
Purchaser (2) for that part of the Nitrogen Pipeline (to
BOC at Teesport) lying in the Seller's
retained land at Billingham
------------------------------------------------------------------------------------------------------------------------------------
8. Assignment Seller (1) Assignment of Pipe Corridor Easements in
Purchaser (2) Deed dated 10th March 1970 above
referred to
------------------------------------------------------------------------------------------------------------------------------------
9. Assignment Seller(1) Assignment of Lease of Frequency
Purchaser (2) Changer House dated 6th August 1984
above referred to
------------------------------------------------------------------------------------------------------------------------------------
10. Deed of Grant Seller (1) Deed of Grant to Purchaser of `De-
Purchaser (2) Landlock' Corridor Easements
------------------------------------------------------------------------------------------------------------------------------------
11. Deed of Grant Purchaser (1) Deed of Grant to Seller of `De-Landlock'
Seller (2) Corridor Easements
------------------------------------------------------------------------------------------------------------------------------------
12. Deed of Grant Purchaser (1) Deed of Grant to Plymouth of `De-
Plymouth (2) Landlock' Corridor Easements
------------------------------------------------------------------------------------------------------------------------------------
13. Deed of Grant Seller (1) Deed of Grant to Purchaser of rights for:-
Purchaser (2)
(a) a natural gas pipeline (max 12"
external diameter); and
(b) a liquids pipeline (max 6" external
diameter)
from the Link Corridor to (but not to
====================================================================================================================================
=============================================
only)
(3) Plan per Plan 6 in Volume of Plans
---------------------------------------------
(1) Per 1 above
(2) Plan per Plan 7 in Volume of Plans
---------------------------------------------
Agreed Form
---------------------------------------------
Agreed Form
---------------------------------------------
(1) Agreed Form
(2) Plan per Plan 8 in Volume of Plans
---------------------------------------------
(1) In like form to 10 above (mutatis
mutandis)
(2) Plan per Plan 10 in Volume of Plans
---------------------------------------------
(1) In like form to 10 above (mutatis
mutandis)
(2) Plan per Plan 11 in Volume of Plans
---------------------------------------------
(1) Like form to 5 above - but for new
(as opposed to existing pipelines)
(2) Grant to the extent of Seller's rights
only in BASF and THPA pipe
corridor where easements only are
held by Seller) In BASF Land the
Seller's rights expire 27/10/70
=============================================
115
====================================================================================================================================
include) Seller's ▇▇. ▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ on North Bank of Tees via
Billingham/Wilton Link
====================================================================================================================================
TABLE B
Ancillary Property Documents re Severnside
====================================================================================================================================
No. Document Parties Description
------------------------------------------------------------------------------------------------------------------------------------
1. Licence Plymouth (1) Licence for Lighting Tower
Purchaser (2)
------------------------------------------------------------------------------------------------------------------------------------
2. Agreement Plymouth (1) Agreement re Railway Sidings
Purchaser (2)
------------------------------------------------------------------------------------------------------------------------------------
3. Six Deeds of Grant Plymouth (1) Deeds of Grant to Purchaser for rights re pipelines for IP Steam,
Purchaser (2) Firefighting Water, Sharpness Water, Potable Water, Gas and Effluent
------------------------------------------------------------------------------------------------------------------------------------
4. Deed of Grant Plymouth (1) Deed of Grant for Cables
Purchaser (2)
====================================================================================================================================
TABLE C
ANCILLARY PROPERTY DOCUMENTS
re STANLOW
------------------------------------------------------------------------------------------------------------------------------------
1. Assignment Seller (1) Assignment of rights re CO2 Pipeline
Purchaser (2)
------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
2. Assignment Seller (1) Assignment of Agreement with Briti`sh Railways Board
Purchaser (2) dated 20th December 1976
--------------------------------------------------------------------------------------------
NOTE: All of the documents in Tables B and C above are in Agreed Form
-------------------------------------------------------------------------------------
TABLE D
TERRA TO SUPPLY
=================================================================================================
Product Amines & Acrylics Methanol
Derivatives Business
-------------------------------------------------------------------------------------------------
LP Steam X X X
-------------------------------------------------------------------------------------------------
IP Steam X X
-------------------------------------------------------------------------------------------------
HP Steam X
-------------------------------------------------------------------------------------------------
Tees Valley Water X X X
-------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Water X X X
-------------------------------------------------------------------------------------------------
Fire Water X X X
-------------------------------------------------------------------------------------------------
Demineralised Water X X
-------------------------------------------------------------------------------------------------
Nitrogen X X X
-------------------------------------------------------------------------------------------------
Effluent X X X
-------------------------------------------------------------------------------------------------
Natural Gas X X X
-------------------------------------------------------------------------------------------------
Propane X
-------------------------------------------------------------------------------------------------
50Hz Electricity X X
-------------------------------------------------------------------------------------------------
40Hz Electricity X
-------------------------------------------------------------------------------------------------
Condensate X
=================================================================================================
TABLE E
TERRA OBTAIN FROM
Teeside Utilities Business
Raw Water
Nitrogen
Methanol Business
LP Steam
IP Steam
Instrument Air
Acrylics (▇▇▇▇▇▇ Works)
IP Steam Grade 1 and 2
SUPPLIED TO AMONIA STORAGE AT NORTH TEES
Nitrogen
Electricity
Compressed Air
ANNEX 3
PROPERTY WARRANTIES
G. PROPERTIES
(1) The Properties the Premises and the Property Rights together constitute all
the freehold or leasehold or other immovable property and rights in
immovable property owned or occupied or used by the Seller for the purposes
of the Business.
(2) The Seller has good and marketable title to the Properties the Premises and
the Property Rights.
(3) The Property Rights comprise all the easements rights and licences owned
occupied or used by the Seller or the Seller's Group on the date hereof in
connection with the Business and/or necessary in order to enable the
Purchaser to comply with its obligations in the Implementation Agreements
(construed for the purposes of this paragraph (3) only as if the Clause
headed Easements and Wayleaves were excluded therefrom). No further
easements rights and licences are required in order to conduct the Business
in the manner in which it has heretofore been conducted and in accordance
with statutory requirements and all subsisting governmental and regulatory
authorisations licences permits and consents.
(4) Where any pipelines run under over or through any public highways waterways
or rivers or any property owned by Railtrack plc the pipelines are lawfully
in such positions and the Seller has the benefit of a lease or
licence/consent not involving excessive payment or onerous obligations from
Railtrack plc, any local highway authority, British Waterways Board or any
River Authority or their predecessors in title.
(5) The Seller and/or Plymouth have duly performed, observed and complied with
all material covenants, restrictions, reservations, conditions, agreements,
statutory and common law requirements, by-laws, orders, building
regulations and other stipulations and regulations affecting the Properties
and the Premises and the uses of the Properties and the Premises and no
lease is liable to be forfeited and all rent and other sums due are paid up
to date.
(6) The existing use of each of the Properties the Premises and the Property
Rights is the lawful permitted use whether under the current Town and
County Planning legislation and is not a temporary use and all necessary
consents to such existing use have been obtained.
(7) All development carried out on the Properties the Premises and the Property
Rights has been and is lawful and all necessary consents and permissions
have been or are being obtained for such development.
(8) The consents and permissions referred to in paragraphs (6) and (7) are
valid, subsisting and unimpeachable and are not temporary or suspended and
are also either unconditional or subject only to conditions which have been
satisfied and no planning permission remains unimplemented (whether in
whole or in part) nor has any planning application been submitted which
awaits determination.
(9) Neither the Properties the Premises or the Property Rights are subject to
or affected by any Agreements made pursuant to S.106 of the Town and
Country ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ Section 33
of the Local Government (Miscellaneous Provisions) ▇▇▇ ▇▇▇▇ Section 278 of
the ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ Section 104 of the Water Industry Act 1991 or any
similar legislation whether or not currently in force.
(10) All relevant matters affecting the Properties the Premises and the Property
Rights or the use or value thereof or any proposals relating thereto and
full details of all leases have been disclosed in writing to the Purchaser
or its Solicitors prior to the date hereof.
(11) The replies given to the enquiries and requisitions concerning the
Properties the Premises and the Property Rights made by the Purchaser's
Solicitors and all disclosures are true and accurate in all material
respects.
(12) All the information produced to or given in writing to the Purchaser or the
Purchaser's Solicitors in respect of or relating to the Properties the
Premises and the Property Rights is true and accurate.
(13) The Seller has complied with its obligations under the Fire Precautions ▇▇▇
▇▇▇▇ and has applied for and obtained fire certificates thereunder in
respect of all the Properties the Premises and the Property Rights to the
extent required by such Act.
(14) The Office Copy Entries of Title ▇▇. ▇▇▇▇▇▇▇▇ dated 22nd September 1994
reveal all matters affecting and benefitting the Severnside Property and no
rights or easements have been granted or covenants created which affect the
Severnside Property since 22nd September 1994.
(15) The conveyances and other documents referred to in any memoranda endorsed
on the Billingham Documents (here meaning any conveyance or documents of
title relating to the Billingham Property referred to in the Disclosure
Letter) does not relate to a sale of any part of the Billingham Property.
The Seller and Plymouth are not aware of any rights created or covenants
imposed by such conveyances or documents referred to in the said memoranda
which affect the Billingham Property nor have they received notice of any
claim to any such rights.
(16) Any conveyances deeds or documents referred to in the Billingham Documents
but not comprised in the Billingham Documents do not create any rights or
impose any covenants which affect the Billingham Property and neither the
Seller nor Plymouth are aware of any claims made to any such rights.
(17) The Seller and/or Plymouth has a good and marketable title sufficient to
enable it to grant to the Purchaser a right as to part in perpetuity and as
to the remainder for a period expiring in the year 2070 over the land
between the Billingham Property and the Seller's ▇▇. ▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ of the River Tees (but not including that Head House and other
than which such route crosses public highways or railways) to lay a pipe of
up to 16" diameter and thereafter inspect maintain and repair the same free
from any encumbrances which shall prevent the laying operation maintenance
and repair of the same.
(18) Notwithstanding the disclosure of the title documents relating to the route
of the Ammonia Pipeline the Seller has good and marketable title to the
unregistered part of site ACP No. 616 held by virtue of the conveyance of
easements and facilities dated 1st January 1988 made between Plymouth (1)
the Seller (2) and that Plymouth had good and marketable title
demonstrated by a good root of title at the date of the said conveyance
free from encumbrances other than those disclosed in the Disclosure Letter.
SIGNED by ▇.▇. ▇▇▇▇▇▇▇▇ )
for and on behalf of ) ▇. ▇. ▇▇▇▇▇▇▇▇
ICI CHEMICALS & POLYMERS LIMITED ) ....................................
SIGNED by ▇.▇. ▇▇▇▇▇▇▇▇▇ )
for and on behalf of ) ▇.▇. ▇▇▇▇▇▇▇▇▇
TERRA INDUSTRIES LIMITED ) ....................................
SIGNED by R.W.R. ▇▇▇▇▇▇ )
for and on behalf of ) R.W.R. ▇▇▇▇▇▇
IMPERIAL CHEMICAL INDUSTRIES PLC ) ....................................
SIGNED by ▇.▇. ▇▇▇▇▇ )
for and on behalf of ) ▇.▇. ▇▇▇▇▇
TERRA INDUSTRIES INC. ) ....................................