EXHIBIT 10.3
DATED [ ] 1998
TIOXIDE EUROPE LIMITED
- and -
NEWCO LIMITED
AGREEMENT
- relating to -
the sale and purchase of part of the
business of TIOXIDE EUROPE LIMITED
AGREED FORM
EVERSHEDS
S O L I C I T O R S
Senator House, 00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 0000 000 0000 Fax: 0000 000 0000
Ref : MTI
I N D E X
CLAUSE DESCRIPTION PAGE NO.
1. INTERPRETATION 1
2. SALE 8
3. CONSIDERATION 9
4. COMPLETION 10
5. TITLE AND SUPPLEMENTARY PROVISIONS 12
6. DEBTORS, MATERIALS BUSINESS DEBTORS, RETAINED
BUSINESS CLAIMS AND MATERIALS BUSINESS CLAIMS 13
7. NEWCO LIABILITIES 15
8. TEL LIABILITIES 15
9. EMPLOYEES 16
10. CONTINUING OBLIGATIONS OF TEL AND NEWCO 16
11. XXX 00
00. AVAILABILITY OF INFORMATION 19
13. INDEPENDENT ACCOUNTANT 19
14. DEFAULT INTEREST 20
15. GENERAL 20
16. WHOLE AGREEMENT 21
17. NON-MERGER AND SURVIVORSHIP 22
18. NOTICES 22
19. GOVERNING LAW 22
Schedule 1 DESCRIPTION OF THE BUSINESS 23
Schedule 2 THE PROPERTIES 24
Schedule 3 EXCLUDED ASSETS AND EXCLUDED LIABILITIES 26
Schedule 4 ALLOCATION OF CONSIDERATION TO BUSINESS ASSETS
PURCHASED 29
Schedule 5 PROVISIONS RELATING TO THE PROPERTIES 30
CLAUSE DESCRIPTION PAGE NO.
Schedule 6 PROVISIONS RELATING TO THE CONTRACTS 33
Schedule 7 PROVISIONS RELATING TO THIRD PARTY CONSENTS 35
Schedule 8 NOTIFICATION, ASSISTANCE AND PROCEEDINGS 39
Schedule 9 SUPPLIER CONTRACTS OF A MATERIAL NATURE 42
Schedule 10 DOCUMENTS IN THE AGREED TERMS 43
Schedule 11 EMPLOYEES AND OTHER PERSONNEL 44
Schedule 12 SHARED SUPPLIER CONTRACTS 47
Schedule 13 TRANSFERRING EMPLOYEES 48
Schedule 14 ESTIMATED CONSIDERATION, FINAL CONSIDERATION AND
FINAL COMPLETION STATEMENT 49
Annex 1 Pharmacopeia
Annex 2 A Form
Annex 3 ICI's Controller's Manuals
Annex 4 ICI's Auditors Report
THIS AGREEMENT is made on 1998
BETWEEN:-
(1) TIOXIDE EUROPE LIMITED (registered in England No. 832447) whose registered
office is at [Lincoln House, 000/000 Xxxxxxxxxxx Xxxx, Xxxxxx X00 OQL]
("TEL"); and
(2) NEWCO LIMITED (registered in England No. [ ]) whose
registered office is at [ ] ("NEWCO").
INTRODUCTION
(A) TEL has agreed to sell and Newco has agreed to purchase the Business as a
going concern and the Business Assets as at the Transfer Time, on the
terms and conditions of this Agreement.
(B) Newco is a wholly owned subsidiary of TEL.
(C) The Business constitutes part of the undertaking of TEL.
IT IS AGREED:-
1. INTERPRETATION
1.1 Definitions
In this Agreement, including its Schedules, the headings shall not affect
its interpretation and, unless the context otherwise requires:-
"AFFILIATES" means with respect to a specified entity, an entity that
directly or indirectly, through one or more intermediaries, Controls, or
is Controlled by, or is under common Control with the entity specified,
provided that, without limiting the generality of the foregoing, the term
"AFFILIATES" shall not include any entity in which a party has a 50 per
cent. or less ownership interest. For the purposes hereof, "CONTROL" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management and operating policies of the entity in
respect of which the determination is being made, through the ownership of
voting securities, contract, voting trust or otherwise but any reference
in this Agreement to an Affiliate of TEL shall exclude Newco;
"AGREED TERMS" means, in relation to any document such document, in the
terms agreed between the parties and for the purposes of identification
signed by or on behalf of the parties, and listed in Schedule 10;
"BUSINESS" means the business shortly described in Schedule 1;
"BUSINESS ASSETS" means the property, assets and rights of and exclusively
relating to or used in the Business as at the Transfer Time as specified
in Clause 2.1 other than the Excluded Assets;
"BUSINESS DATA" means all information, know-how and records (whether or
not confidential and no matter in what form held) of, and relating
exclusively to or used exclusively in, the Business (or otherwise used in
the ordinary course of the operation of the Business) as at the Transfer
Time other than Commercial and Marketing Know-how and Intellectual
Property but, subject thereto, including the Materials Commercial and
Marketing Know-how, all manuals and instructions, all accounting records,
and all correspondence, orders and enquiries whether in hard copy or in
computer held or other electronic form (including for the avoidance of
doubt, such media as microfilm and microfiche) but for the avoidance of
doubt shall exclude any matter relating to the Customer Contracts or
Customers;
"COMMERCIAL AND MARKETING KNOW-HOW" means all commercial and marketing
information of and relating to or used in the Business as at the Transfer
Time, other than the Materials Commercial and Marketing Know-How, but
subject thereto, including all designs, specifications, drawings, lists
and particulars of customers, marketing manuals and procedures,
advertising copy and sales and promotional information;
"CONTRACTS" means the Supplier Contracts and the Materials Customer
Contracts;
"CONTROLLED WATERS" means waters including any ground or surface
waters;
"COSTS" includes all and any penalties, fines, costs, charges and
expenses;
"CUSTOMERS" means the customers of the Business other than customers
who are only customers of the Materials Business;
"CUSTOMER CONTRACTS" means the contracts and commitments with customers
(other than in relation to Intellectual Property) entered into prior to
the Transfer Time by or on behalf of TEL in connection with the Business
for the manufacture of goods, or the supply of goods or services by TEL
which then remain to be performed in whole or in part, other than the
Materials Customer Contracts;
"DEBTORS" means the book and other debtors accruing or owing to TEL as at
the Transfer Time (whether or not due and payable) and arising out of or
in connection with the Business excluding the Materials Business Debtors
and the Employee Loans;
"DEFAULT INTEREST" means LIBOR plus 200 basis points compounded
monthly;
"EMPLOYEE LOANS" means all amounts accruing or owing (whether or not due
and payable) as at the Transfer Time to TEL by Transferring Employees and
Offer Employees in respect of housing assistance loans or season ticket
loans or any other loans or advances to Transferring Employees of a
similar nature;
"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) but including the surface of any river bed, the surface of
any sea bed or any other land covered by water, and flora and fauna and
all other natural resources;
"ENVIRONMENTAL AUTHORISATIONS" means all or any permits, consents,
licences, approvals and other authorisations required under Environmental
Law and all terms and conditions thereof required under any Environmental
Law for the operation of the Business;
"ENVIRONMENTAL LAW" means any and all legislation (whether civil, criminal
or administrative), statutes, treaty, statutory instrument, directive,
bylaw or judgment (including any judgment by the European Court of
Justice), regulations, notices, orders, government circular, code of
practice, and guidance note or decision of any competent regulatory body
or common law relating to pollution or protection of the Environment which
as at the Transfer Time are in effect and capable of enforcement by legal
process in the country in which the Properties are situated;
"EXCLUDED ASSETS" means the assets excluded from the sale and purchase
pursuant to this Agreement and identified in Part I of Schedule 3;
"EXCLUDED LIABILITIES" means any obligations and liabilities of TEL
excluded from the sale and purchase pursuant to this Agreement and
identified in Part II of Schedule 3;
"FINAL COMPLETION STATEMENT" has the meaning set out in paragraph
1.5.2 of Schedule 14;
"FINAL CONSIDERATION" has the meaning given in paragraph 1.5.1 of
Schedule 14;
"FREEHOLD PROPERTIES" means the freehold properties short
particulars of which are set out in Part I of Schedule 2;
"GOODWILL" means the goodwill in relation to the Business (but excluding
any rights relating to the Excluded Assets) and the right for Newco, so
far as TEL can grant the same, to represent itself as carrying on the
Business in succession to TEL in accordance with such terms as may be
agreed between TEL and/or its relevant Affiliate on the one hand and Newco
and/or its relevant Affiliate on the other hand;
"ICI" means Imperial Chemical Industries PLC;
"INTELLECTUAL PROPERTY" means all Technical Information and all rights,
title or interest (including, without limitation, the benefit and burden
of any licences of the same) anywhere in the world in any patents, trade
marks, service marks, registered designs, copyrights and rights to
inventions and applications for and rights to apply for protection or
registrations of any of the same including any continuing reissue,
divisional and re-examination patent application;
"LEASED EQUIPMENT CONTRACTS" means the agreements for the leasing to TEL
of equipment used exclusively in connection with the Business;
"LEASEHOLD PROPERTIES" means the leasehold properties short particulars of
which are set out in Part II of Schedule 2;
"LIBOR" means the rate for deposits in US Dollars for a period of one
month which appears on the Reuters Screen ISDA Page (or such other page as
the parties may agree) at approximately 11.00 am., 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 on the basis of the rates at which deposits in US Dollars are
offered to Midland Bank plc at approximately 11.00 am., London time, on
the Relevant Date to prime banks in London interbank market for a period
of one month commencing on that Relevant Date for amounts of
US$10,000,000;
"MATERIALS BUSINESS" means all or any of the businesses shortly described
in Part II of Schedule 1;
"MATERIALS BUSINESS CLAIMS" means the benefit of all rights and claims of
TEL relating exclusively to the Business Assets or arising exclusively out
of or in connection with the Materials Business as at, or the conduct of
the Materials Business up to, the Transfer Time to the extent that such
rights and claims do not constitute Excluded Assets;
"MATERIALS BUSINESS DEBTORS" means the book and other debtors accruing or
owing to TEL as at the Transfer Time (whether or not due and payable) and
arising exclusively out of or in connection with the Materials Business;
"MATERIALS COMMERCIAL AND MARKETING KNOW-HOW" means all commercial and
marketing information of, and relating exclusively to or used exclusively
in, the Materials Business as at the Transfer Time, other than
Intellectual Property;
"MATERIALS CUSTOMER CONTRACTS" means the contracts and commitments with
customers (other than in relation to any Intellectual Property) entered
into prior to the Transfer Time by or on behalf of TEL exclusively in
connection with the Materials Business for the manufacture of goods, or
the supply of goods or services, by TEL which then remain (in whole or
part) to be performed by TEL;
"NEWCO COMPLETION DATE" has the meaning given in Schedule 14;
"NEWCO'S GROUP" means Newco and its Affiliates from time to time but
excluding any member of TEL's Group;
"NEWCO LIABILITIES" means any liabilities whether actual, prospective or
contingent or liquidated or unliquidated to the extent incurred or owing
by TEL:-
(a) in connection with the Business or the Business Assets as at,
or the conduct of the Business up to, the Transfer Time; or
(b) in respect of events occurring or matters existing before the
Transfer Time which relate to the Business or the Business Assets;
or
(c) which are expressly deemed to constitute Newco Liabilities pursuant
to the terms of this Agreement;
including, without prejudice to the generality of the foregoing, any
Operating Creditors less than 1 year relating exclusively to the operation
of the Business, but for the avoidance of doubt excluding the Excluded
Liabilities;
"NEWCO PATENT AND KNOW-HOW LICENCE" means the licence in the Agreed Terms
to be entered into between E. I. du Pont de Nemours and Company and Newco;
"NON EXEMPT PROPERTY" means any Property notified in writing by TEL to
Newco at least 14 days prior to the Transfer Time;
"OFFER EMPLOYEES" means those employees of TEL and/or ICI and its
Affiliates who have been offered and accepted employment with Newco
pursuant to Schedule 11;
"OPERATING CREDITORS LESS THAN 1 YEAR" has the meaning set out in Schedule
14;
"PERMITS" means all licences, permits, authorisations and approvals issued
or granted by statutory or local authorities to TEL for the purposes of
operation of the Business (but excluding, for the avoidance of doubt,
planning permissions (save for Environmental Authorisations) issued by
relevant planning authorities);
"PLANT AND EQUIPMENT" means the fixed and loose plant and machinery and
all other fixtures and fittings, spare parts, equipment, furniture and
motor vehicles owned by TEL and located at the Properties at the Transfer
Time and used exclusively in the Business;
"PROPERTIES" means the Freehold Properties and the Leasehold Properties;
"REGULATIONS" means the Value Added Tax (General) Regulations 1985 as
amended;
"RETAINED BUSINESS" means all or any of the businesses of TEL's Group
other than the Business;
"RETAINED BUSINESS CLAIMS" means the benefit of all rights and claims of
TEL as at the Transfer Time except for the Materials Business Claims;
"SHARED SUPPLIER CONTRACTS" means contracts and commitments entered into
prior to the Transfer Time by or on behalf of TEL for the supply of goods
or services in connection with both the Business and the Retained Business
(other than in relation to Intellectual Property) which then remain to be
performed in whole or in part and listed in Schedule 12;
"STOCK-IN-TRADE" means the stocks of raw materials, consumables,
work-in-progress and finished products owned by TEL relating exclusively
to the Business and located at any of the Properties at the Transfer Time
but excluding any finished products and work-in-progress which is located
at but has not been manufactured at any of the Properties;
"SUPPLIER CONTRACTS" means contracts and commitments (including the Leased
Equipment Contracts) entered into prior to the Transfer Time by or on
behalf of TEL for the supply to TEL of goods or services exclusively in
connection with the Business (other than in relation to Intellectual
Property) which then remain to be performed in whole or in part, those of
material nature being listed in Schedule 9;
"TAXATION" means all forms of direct and indirect taxation including
statutory, governmental, state, provincial, local governmental or
municipal impositions in each case imposed on net income, profits, gains
or net worth and whether of the United Kingdom or elsewhere in the world
(including interest, costs or penalties relating thereto) and, for the
avoidance of doubt, the term shall include rates or other taxes imposed on
properties, landfill taxes, customs duties, national insurance payments,
taxes imposed on payments to, or income of, third parties (including
employees) or sales or value added taxes;
"TECHNICAL INFORMATION" means all technical data and know-how, industrial
and technical information, trade secrets, confidential information,
drawings, formulations, technical reports, operating and testing
procedures, instruction manuals, raw material or production
specifications, the results of research and development work, whether in
hard copy or in computer held form (including, for the avoidance of doubt,
such media as microfilm and microfiche) and existing computer software the
Intellectual Property in which is owned by TEL (or TEL's Affiliates);
"TEL'S GROUP means TEL and its Affiliates from time to time;
"TEL LIABILITIES" means any liabilities, whether actual, prospective or
contingent or liquidated or unliquidated to the extent incurred or owing
by TEL or any member of TEL's Group:-
(a) in connection with the Retained Business as at, or the conduct of
the Retained Business up to, the Transfer Time; or
(b) in respect of events occurring or matters existing before the
Transfer Time and relating to the Retained Business; or
(c) which constitute Excluded Liabilities; or
(d) which are expressly deemed to constitute TEL Liabilities pursuant to
the terms of this Agreement; or
(e) in respect of any liability to Taxation of TEL;
and, for the avoidance of doubt shall include Operating Creditors less
than 1 year which do not relate exclusively to the Business;
"TRANSFER REGULATIONS" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"TRANSFERRING EMPLOYEES" means those employees of TEL and/or ICI and its
Affiliates who are immediately prior to the Transfer Time employed in the
Business whose names are set out in Schedule 13;
"TRANSFER TIME" means immediately after 00.00 hours London time on
* 1998 [IE FIRST DAY OF THE MONTH];
"ULTRAFINE TITANIUM DIOXIDE" means titanium dioxide being
ultraviolet-attenuating grade having a ratio of absorbance response at 308
nm (A308) to absorbance response at 524 nm (A524) of not less than 5 as
defined in US Pharmacopeia, amendment published in Pharmacopeia Forum,
Volume 22, Number 4, Page 2636 and attached hereto as Annex 1;
"US DOLLARS", "US$" or "$" means the lawful currency of the United States
of America;
"VAT" means value added tax imposed by a Member State of the European
Community pursuant to the Sixth Council Directive (77/338/EEC) and
Supplemental Directives;
"VATA" means the Value Added Tax Xxx 0000;
1.2 Any reference in this Agreement or any other agreement in the Agreed Terms
or in any instrument executed pursuant hereto or thereto to any obligation
assumed by TEL, or any intention of TEL or Newco, to give or vest in Newco
the Business or the Business Assets or the benefit of the Business or the
Business Assets shall be subject to Clause 2.2 and so that TEL shall not,
by virtue of any such provision, be obliged to transfer to Newco any such
right, title or interest in the Business or any Business Asset which is
greater than such right, title or interest as TEL may have in the Business
and the Business Assets.
1.3 Any express reference to an enactment includes references to:-
1.3.1 that enactment as amended, extended or applied by or under any other
enactment before or after this Agreement;
1.3.2 any enactment which that enactment re-enacts (with or without
modification); and
1.3.3 any subordinate legislation made (before or after this Agreement)
under any enactment, including one within Clause 1.3.1 or 1.3.2
above,
except to the extent that any of the matters referred to in Clauses 1.3.1
to 1.3.3 occurring after the date of this Agreement increase or alter the
liability of TEL under this Agreement.
1.4 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 successors or assigns
of such persons.
1.5 Clauses 1.1 to 1.3 apply unless the context otherwise requires.
1.6 The headings in this Agreement do not affect its interpretation.
1.7 Any Schedule or Annex to this Agreement shall take effect as if set out in
this Agreement and references to this Agreement shall include its
Schedules and Annexes.
2. SALE
2.1 THE SALE
Subject to the terms of this Agreement, TEL shall sell and Newco shall
purchase as a going concern as at the Transfer Time the Business
comprising the Business Assets as specified in this Clause 2.1 below so
far as TEL can sell or grant the same:
2.1.1 the Properties;
2.1.2 the Plant and Equipment;
2.1.3 the Stock-in-Trade;
2.1.4 the Employee Loans;
2.1.5 the benefit (so far as the same can lawfully be assigned or
transferred to, or held in trust absolutely for, or can otherwise be
given to, Newco) of the Materials Business Claims;
2.1.6 the Goodwill;
2.1.7 the Materials Commercial and Marketing Know-How;
2.1.8 the benefit, subject to the burden of the Contracts;
2.1.9 the Business Data; and
2.1.10 the Materials Business Debtors;
but excluding the Excluded Assets.
The Excluded Assets and all rights and benefits relating thereto shall be
retained by TEL and are excluded from the sale and purchase of the
Business and the Business Assets to Newco under this Agreement.
2.2 WARRANTIES, INDEMNITIES AND REPRESENTATIONS
Except as otherwise expressly provided in this Agreement (but having
regard to the provisions of Clause 1.2) no warranties, indemnities,
representations or undertakings (in any case, express, implied or
otherwise) with regard to the Business, the Business Assets or the title
of TEL thereto are given by TEL, nor are the same to be implied, by virtue
of TEL entering into this Agreement, or any other agreement in the Agreed
Terms or executing any instrument pursuant hereto or thereto or selling,
conveying or transferring or agreeing to sell, convey or transfer the same
pursuant hereto or thereto. The Business Assets are purchased by Newco
pursuant to this Agreement on an "as seen" and "as is" basis. TEL shall,
and shall be obliged to, transfer, to Newco only such right, title or
interest as it may have subject to all liens, charges, impediments, claims
and encumbrances as may exist thereon. Newco shall accept without enquiry,
requisition or objection such title as TEL may have in the Business and
the Business Assets.
2.3 THE PROPERTIES
The Properties shall be sold and purchased on the terms set out in
Schedule 5.
2.4 POST-TRANSFER TIME LIABILITIES
2.4.1 Save as expressly stated otherwise in this Agreement, Newco
undertakes to indemnify and hold harmless TEL from and against all
liabilities which may be incurred by TEL (or any member of TEL's
Group) or to which TEL (or any member of TEL's Group) may become
subject, and which arise as a result of the operation of the
Business after the Transfer Time (other than any liabilities
expressly retained by TEL under this Agreement) and any and all
actions, suits, proceedings, claims, demands, assessments and
judgments with respect to the foregoing. Any such liability in
respect of which Newco shall be liable to indemnify TEL (and members
of TEL's Group) as aforesaid shall constitute a "Newco Liability"
for the purposes of Clause 7 and Schedule 8.
2.4.2 Save as expressly stated otherwise in this Agreement, TEL undertakes
to indemnify and hold harmless Newco from and against all
liabilities which may be incurred by Newco (or any member of Newco's
Group) or to which Newco (or any member of Newco's Group) may become
subject, and which arise as a result of the operation of the
Retained Business after the Transfer Time (other than any
liabilities expressly assumed by Newco under this Agreement) and any
and all actions, suits, proceedings, claims, demands, assessments
and judgments with respect to the foregoing. Any such liability for
which TEL shall be liable to indemnify Newco (and members of Newco's
Group) as aforesaid shall constitute a "TEL Liability" for the
purposes of Clause 8 and Schedule 8.
3. CONSIDERATION
3.1 THE CONSIDERATION
The consideration for the sale of the Business Assets shall be:-
3.1.1 Subject to adjustment pursuant to sub-clause 3.2 below, US$
118,410,000 ("THE ESTIMATED CONSIDERATION") which sum shall
constitute a debt owed by Newco to TEL, without security and
repayable forthwith upon demand by TEL ("THE ESTIMATED NEWCO
HIVEDOWN DEBT"); and
3.1.2 an obligation on the part of Newco to assume, pay, satisfy,
discharge, fulfil and indemnify TEL against all Newco Liabilities
and Costs in respect thereof in accordance with the provisions of
Clause 7.
3.2 The Final Consideration shall be agreed or finally determined in
accordance with the provisions of Schedule 14 and any adjusting payments
between TEL and Newco shall be made in accordance with the provisions of
Schedule 14.
3.3 ALLOCATION OF THE FINAL CONSIDERATION
The Final Consideration shall be allocated to each of the Business Assets
as specified in Schedule 4.
4. COMPLETION
4.1 TIME OF COMPLETION
Completion of this Agreement shall take place at the Transfer Time.
4.2 DELIVERY BY TEL
Except as otherwise provided in this Agreement and specifically, but
without limitation, without prejudice to Clause 5.3, at or as soon as
practicable after the Transfer Time, TEL shall cause to be delivered or
made available to Newco at such place as Newco may reasonably require:-
4.2.1 such documents as Newco may reasonably require and which TEL has
available to it or under its control to complete the sale and
purchase of the Business Assets (including all documents of title
which TEL has in its possession or control, any requisite consents
or licences which TEL may have obtained, such executed conveyances,
transfers and assignments as Newco may reasonably require to vest in
Newco the benefit of the properties, rights and assets hereby agreed
to be sold) and shall permit Newco to enter into and take possession
of the Business;
4.2.2 possession of the Properties and of the other tangible assets
comprised in the Business Assets including all inventories and
records (whether in computerised or other form) exclusively relating
to the Business (but not those relating to the general affairs of
TEL or to any Excluded Assets or Excluded Liabilities or required by
law to be retained by TEL, but insofar as any such documents relate
to the Business and are reasonably required by Newco, Newco shall
have the right to examine the same at all reasonable times and to
make copies thereof and to take extracts therefrom);
4.2.3 insofar as the same have not already been delivered to Newco, the
documents in Agreed Terms, in the case of any agreement or
instrument to be delivered by TEL, duly executed by TEL or any of
its Affiliates.
4.3 DELIVERY BY NEWCO
Newco shall deliver to TEL the documents in the Agreed Terms duly executed
by Newco.
4.4 DELIVERY OF BUSINESS ASSETS
TEL may at any time prior to the Transfer Time, execute and deliver, or
cause to be, or may have, or may have caused to be, executed and
delivered, to Newco such documents as shall be required to transfer to
Newco (whether or not subject to any necessary formalities such as
stamping, registration in any register, production to any person or
otherwise) legal title to any of the Business Assets which execution and
delivery shall be carried out, in respect of the Business Assets the
subject thereof, in discharge of, and shall accordingly discharge, the
obligations of TEL under Clause 4.2. TEL and Newco agree and undertake
that the execution and delivery by TEL as contemplated in this Clause 4.3
of any conveyance, transfer or assignment in respect of any Property shall
be made on the terms contained in Schedule 5.
4.5 DELIVERY OF CONSIDERATION
Newco shall execute and deliver to TEL such documents as TEL may
reasonably require evidencing the assumption by Newco of the Newco
Liabilities pursuant to Clause 3.1.2.
4.6 PERMITS
To the extent that the same has not been carried out prior to the Transfer
Time, as soon as possible thereafter Newco and/or TEL (as the case may
require) shall apply to the relevant governmental and/or local authorities
to arrange for the transfer or assignment to Newco or the re-issue in the
name of Newco of each of the Permits (insofar as they relate to the
Business) with effect from the Transfer Time in each case upon terms which
will enable Newco to continue to conduct the Business substantially in the
manner in which the Business is currently conducted at the Transfer Time.
Furthermore, each of Newco and/or TEL shall use their respective
reasonable efforts to effect each such transfer, assignment or re-issue as
promptly as practicable after the date of this Agreement. For the
avoidance of doubt nothing in this Clause 4.5 shall give rise to any
liability on the part of TEL for any additional cost as may be required on
the part of Newco in connection with such transfer, assignment or
re-issue.
4.7 Newco hereby accepts and agrees that TEL shall not be liable for any
failure or refusal by any relevant governmental or local authority to
arrange or effect the transfer or assignment to Newco or the re-issue in
the name of Newco of any of the Permits as aforesaid.
4.8 INVESTMENT GRANTS
As soon as practicable after the Transfer Time, Newco shall execute and
deliver such undertakings and indemnities as TEL may reasonably require to
ensure so far as may be possible that:-
4.8.1 TEL will not (by reason of the sale under this Agreement or anything
done or omitted to be done by Newco or its successors in title) be
or become liable to repay any grants from any governmental, local or
public authority received by TEL in relation to the Business; and
4.8.2 TEL will be able to claim and to receive for its own benefit any
additional such grants in respect of expenditure made prior to the
Transfer Time to which it would have become entitled had it
continued to use the relevant assets in the Business.
5. TITLE AND SUPPLEMENTARY PROVISIONS
5.1 TITLE TO THE PROPERTIES
The provisions of Schedule 6 shall apply in respect of the Properties.
5.2 TITLE TO OTHER BUSINESS ASSETS
Unless otherwise agreed between TEL and Newco, title to all Business
Assets which are capable of transfer by delivery shall pass on delivery
thereof and such delivery shall be deemed to have taken place at the
Properties (or such other properties at which the Business is carried on)
at and with effect from the Transfer Time.
5.3 BENEFICIAL OWNERSHIP AND RISK
Save to the extent otherwise provided in this Agreement and specifically,
but without limitation, in Clause 4.3, beneficial ownership and risk in
respect of the Business and the Business Assets shall pass and be deemed
to have passed to Newco at the Transfer Time. TEL shall, subject to being
fully indemnified by Newco, hold the relevant Business Assets on trust for
Newco absolutely as from the Transfer Time until the same shall have been
delivered and/or formally transferred or assigned to Newco and TEL shall
grant to Newco such powers of attorney as Newco may reasonably require to
enable Newco to vest in itself or otherwise to deal with such assets and
shall deliver to Newco forthwith upon receipt any notice or other document
concerning or relating to such assets.
5.4 THIRD PARTY CONSENTS
Subject to Clause 7, the provisions of Schedule 7 shall apply in respect
of the sale and purchase of any Business Asset referred to in such
Schedule and in respect of the assumption by Newco of any Newco Liability
referred to in such Schedule and shall, in respect of any such matters,
override any other provision of this Agreement (other than Clauses 1.3 and
2.2 and 7 which shall override the provisions of such Schedule) .
6. DEBTORS, MATERIALS BUSINESS DEBTORS, RETAINED BUSINESS CLAIMS AND
MATERIALS BUSINESS CLAIMS
6.1 ASSIGNMENT OF PROCEEDS
TEL shall assign or procure that there is assigned to Newco any net
proceeds of recovery of any Materials Business Debtor or Materials
Business Claim for Newco to retain for its own account. Any Materials
Business Debtor received by TEL shall be received by TEL as trustee for
Newco absolutely, TEL shall record such payment separately in its books
and shall account to Newco for the same as soon as reasonably practicable
after receipt. For the avoidance of doubt the net proceeds of recovery to
be assigned shall be calculated after deducting any VAT for which TEL is
liable to account to H M Customs & Excise in respect of the sum payable by
the Materials Business Debtor.
6.2 MATERIALS BUSINESS DEBTORS AND MATERIALS BUSINESS CLAIMS
If any Materials Business Debtor or Materials Business Claim is not, or
gives rise to a cause of action which is not, capable of assignment to
Newco (in such manner as to permit Newco to prosecute such Materials
Business Debtor or Materials Business Claim in its own name) and in the
case of any Materials Business Debtor or Materials Business Claim which is
capable of assignment to Newco in such manner and has not been assigned,
pending such assignment, Newco shall be entitled at its own expense in its
absolute discretion to take such action as Newco shall deem necessary or
desirable to prosecute, settle or compromise such Materials Business
Debtor or Materials Business Claim, or to avoid, dispute, resist, appeal,
compromise or contest any related counter-claim to the extent that such
counter-claim is a Newco Liability, in the name of TEL, and to have the
conduct of any related proceedings, negotiations or appeals.
6.3 INDEMNITY
Newco shall indemnify TEL against all liabilities and Costs which it may
incur in complying with Clauses 6.1 to 6.4 inclusive or otherwise in
connection with any such Materials Business Debtor or Materials Business
Claim or related counter claim to the extent that such counter-claim is a
Newco Liability.
6.4 NOTIFICATION, ASSISTANCE AND PROCEEDINGS
The provisions of Schedule 8 shall apply to:-
6.4.1 the notification by one party to the other party of information with
respect to Materials Business Debtors or Materials Business Claims;
6.4.2 the giving of assistance by TEL to Newco for the purposes of
recovering any amount due in respect of, or compromising, any
Materials Business Debtor or Materials Business Claim or avoiding,
disputing, resisting, appealing, compromising or contesting any
related counter-claim to the extent that such
counter claim is a Newco Liability; and
6.4.3 the conduct of any proceedings in respect of any Materials Business
Debtor or Materials Business Claim or any related counter-claim to
the extent that such counter-claim is a Newco Liability.
6.5 ACCOUNTING BY NEWCO FOR DEBTORS RECEIVED
Any Debtor received by Newco shall be received by Newco as trustee for TEL
absolutely, Newco shall record such payment separately in its books and
shall account to TEL for the same as soon as reasonably practicable after
receipt.
6.6 NOTIFICATION, ASSISTANCE AND PROCEEDINGS
The provisions of Schedule 8 shall apply to:-
6.6.1 the notification by one party to the other party of information with
respect to Debtors or Retained Business Claims;
6.6.2 the giving of assistance by Newco to TEL for the purposes of
receiving any amount due in respect of, or comprising, any Debtor or
Retained Business Claim or avoiding, disputing, resisting,
appealing, compromising or contesting any related counter-claim to
the extent that such counter claim is a TEL Liability; and
6.6.3 the conduct of any proceedings in respect of any Debtor, Retained
Business Claim or any related counter-claim to the extent that such
counter-claim is a TEL Liability.
7. NEWCO LIABILITIES
7.1 ASSUMPTION OF NEWCO LIABILITIES
Newco agrees to assume, pay, satisfy, discharge and fulfil all the Newco
Liabilities and Costs in respect thereof.
7.2 CONDUCT OF NEWCO LIABILITIES
Newco shall be entitled at its own expense in its absolute discretion to
take such action as it shall deem necessary or desirable to avoid,
dispute, defend, resist, appeal, compromise or contest in the name of TEL
any claims of, or proceedings instituted or threatened by, any third party
whether before or after the date hereof, in respect of any Newco Liability
and to have the conduct of any related proceedings, negotiations or
appeals.
7.3 INDEMNITY
Newco shall indemnify:-
7.3.1 TEL against all Newco Liabilities; and
7.3.2 TEL against all liabilities and Costs which it may incur in
complying with this Clause 7 or otherwise in connection with any
Newco Liability.
7.4 NOTIFICATION, ASSISTANCE AND PROCEEDINGS
The provisions of Schedule 8 shall apply to:-
7.4.1 the notification by one party to the other party of information with
respect to Newco Liabilities;
7.4.2 the giving of assistance for the purposes of avoiding, disputing,
resisting, appealing, compromising or contesting any Newco
Liability; and
7.4.3 the conduct of any proceedings in respect of any Newco Liability.
8. TEL LIABILITIES
8.1 TEL LIABILITIES
TEL shall be entitled at its own expense in its absolute discretion to
take such action as it shall deem necessary or desirable to avoid,
dispute, defend, resist, appeal, compromise or contest any claims of, or
proceedings instituted or threatened by, any third party, whether before
or after the date hereof, in respect of any TEL Liability and to have the
conduct of any related proceedings, negotiations or appeals.
8.2 INDEMNITY
TEL shall indemnify:-
8.2.1 Newco against all TEL Liabilities; and
8.2.2 Newco against all liabilities and Costs which it may incur in
complying with this Clause 8 or otherwise in connection with any TEL
Liability.
8.3 NOTIFICATION, ASSISTANCE AND PROCEEDINGS
The provisions of Schedule 8 shall apply to:-
8.3.1 the notification by one party to the other party of information with
respect to TEL Liabilities;
8.3.2 the giving of assistance by Newco to TEL for the purposes of
avoiding, disputing, resisting, appealing, compromising or
contesting any TEL Liability; and
8.3.3 the conduct of any proceedings in respect of any TEL Liability.
9. EMPLOYEES
The provisions of Schedule 11 shall apply in relation to certain
employment and related matters.
10. CONTINUING OBLIGATIONS OF TEL AND NEWCO
10.1 FURTHER ASSURANCES
TEL shall (at Newco's Cost) from time to time execute such further
assurances and afford to Newco such assistance as Newco may reasonably
require which is within TEL's control for the purpose of vesting in Newco
or its nominee the benefit of the Business and the Business Assets
(including, so far as consistent with the terms of this Agreement, the
benefit of any rights accruing against third parties, whether such rights
have or have not accrued or become enforceable as at the Transfer Time)
and of all the provisions of this Agreement.
10.2 SHARED SUPPLIER CONTRACTS
TEL agrees, to the extent that it is able, to make onward supply of those
goods or services provided under Shared Supplier Contracts to the extent
that those goods or services would have been utilised by TEL in the
Business had it not been transferred to Newco pursuant to the terms of
this Agreement on the basis that Newco shall bear its proportionate share
of the net cost and expenses under such Shared Supplier Contracts.
10.3 ENVIRONMENTAL AUTHORISATIONS
TEL shall give all reasonable assistance (other than financial assistance)
to Newco in applying for, or arranging for the transfer of, the
Environmental Authorisations.
10.4 CONTRACTS
The provisions of Schedule 6 shall apply.
10.5 CUSTOMER CONTRACTS
To the extent that payment is made to Newco in respect of any Customer
Contract after the Transfer Time, Newco shall receive the same as trustee
for TEL absolutely, shall record such payment separately in its books and
shall account to TEL for the same as soon as reasonably practicable after
receipt.
10.6 NEWCO TAXATION LIABILITIES
Newco shall be responsible for all liabilities to Taxation incurred or
owing by it (whether or not due and payable) in respect of the Business
following the Transfer Time including any stamp duty arising as a result
of this Agreement or its completion.
11. VAT
11.1 TEL and Newco intend that article 5 of the Value Added Tax (Special
Provisions) Order 1995 ("ARTICLE 5") shall apply to the sale or sales of
the Business under, or procured under, this Agreement, so that the sale or
sales are treated as neither supplies of goods nor supplies of services.
11.2 If nevertheless any VAT is payable on any supply by TEL or any supply
which is procured by TEL under this Agreement, Newco shall pay it the
amount of that VAT in addition to the price (and if Newco delays or
defaults in complying with its obligations under Clause 11.3 pay it an
amount equal to any interest and penalties imposed by HM Customs and
Excise (whether on TEL or another person) arising out of the treatment by
TEL and Newco of the sale as described in Clause 11.1 above).
11.3 Without limiting Clause 11.2, VAT shall be treated as payable if HM
Customs and Excise rule that it is payable after full disclosure of all
material facts. If they have done so before the Transfer Time, the tax
shall be payable by Newco on the Transfer Time against issue of a proper
VAT invoice (issued by TEL or other appropriate person) in respect of such
VAT. If they do so on or after the Transfer Time, the tax shall be payable
by Newco within five days after TEL gives Newco written notice of the
ruling together with a proper VAT invoice (issued by TEL or other
appropriate person) in respect of that VAT.
11.4 If Newco fails to pay the amount of the tax on the due date under Clause
11.3, it shall pay Default Interest on that amount from the due date until
actual payment (excluding any period for which interest indemnified under
Clause 11.2 runs) compounded monthly except to the extent to which TEL is
fully compensated for Newco's delay by reason of the indemnity in Clause
11.2 extending to interest.
11.5 With a view to procuring that article 5 applies, Newco:
11.5.1shall ensure that Newco is registered for VAT not later
than the date of the Transfer Time;
11.5.2warrants that the Business Assets are to be used by Newco in
carrying on the same kind of business as that carried on by TEL's
Group and its Affiliates;
11.5.3warrants that Newco has, or will by the relevant date have,
properly made an election to waive exemption in respect of each
Non-Exempt Property with effect from a day not later than the
relevant date (having obtained the written permission of HM Customs
and Excise if necessary) and has, or will by that date have, duly
given to HM Customs and Excise the written notification of the
election required to make the election effective; and
11.5.4covenants that Newco will not revoke the election within three
months after the relevant date.
In this paragraph "RELEVANT DATE" has the same meaning as in paragraph (2)
of article 5.
11.6 TEL and Newco envisage that s. 49 of the Value Added Tax 1994 will apply
to the sale and purchase of the Business Assets under this Agreement but
intend that TEL should retain the records referred to in that section, and
accordingly:
11.6.1notwithstanding anything in this Agreement TEL shall not be
required to deliver to Newco the records referred to in s.49;
11.6.2TEL shall make a request to HM Customs and Excise under s.49 for
the records to be preserved by TEL;
11.6.3if or for so long as that request is not granted, TEL shall
preserve the records on behalf of Newco for such period as may be
required by law, and shall during that period permit Newco
reasonable access to them to inspect or make copies of them; and
11.6.4TEL may fulfil its obligations under Clause 11.6.3 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 TEL shall notify Newco of the name of
that person.
11.7 In respect of each Non-Exempt Property mentioned in Clause 11.5.1 either:
11.7.1without prejudice to that subclause, Newco shall on or before the
Transfer Time give to TEL evidence reasonably satisfactory to TEL
that the election has been made and written notification duly given
in accordance with that subclause; or
11.7.2if Newco does not give that evidence, it shall be assumed that
those things have not been done and notwithstanding Clause 11.3
Newco shall on the Transfer Time pay to TEL the amount of VAT
chargeable in respect of the relevant Non-Exempt Property on that
assumption but any forbearance of TEL to insist on its rights under
this subclause shall be without prejudice to its rights under the
preceding provisions of this clause.
11.8 References in Clause 11.5 to Newco shall be construed as references to the
transferee within the meaning of the corresponding provision of article 5
if different.
12. AVAILABILITY OF INFORMATION
Each of TEL and Newco shall make available to the other free of charge
upon written request all information (or copies of any information in
writing) which the other may reasonably require relating to the Business
and the Business Assets (including, without limitation, any records
required for the purposes of VATA or the Regulations or relating to
taxation of any kind (including Taxation) but not for the avoidance of
doubt the Customer Contracts or the Commercial and Marketing Know-How).
13. INDEPENDENT ACCOUNTANT
13.1 If either party wishes to refer any matter in dispute in accordance with
the provisions of Clause 3 or Schedule 14 for determination under this
Clause it shall give notice to the other requiring the appointment of an
independent accounting firm of international reputation ("THE INDEPENDENT
ACCOUNTANT") excluding accounting firms who have acted as auditors of
either party or of any of their Affiliates in the last 5 years. 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.
13.2 The Independent Accountant shall act as an expert and not as an arbitrator
and his decision shall (in the absence of manifest error) be final and
binding on the parties. The Independent Accountant shall afford the
parties the opportunity of making written representations to him and shall
make his determination within 40 days of his appointment.
13.3 The fees and expenses of the Independent Accountant shall be borne by the
parties in equal shares unless the Independent Accountant otherwise
determines.
14. DEFAULT INTEREST
Subject as otherwise provided to the contrary in this Agreement, if any
sum due for payment under this Agreement 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.
15. GENERAL
15.1 Unless otherwise expressly stated, all claims made and payments to be made
under this Agreement shall be made in US Dollars. Payments to TEL shall be
made in immediately available funds to the account of TEL at such account
as TEL may notify to Newco and to Newco in immediately available funds to
such account as Newco may notify to TEL. All payments and values under
this Agreement shall be in US Dollars and where an amount is not itself
calculated in US Dollars, it shall be converted into US Dollars at the
mid-market closing exchange rate for that currency into US Dollars as
published in the London Edition of The Financial Times published 2
Business Days prior to the date on which the relevant payment is due or
where no such rate is published, at the rate quoted by Citibank, N.A. at
the close of business in London on that date. This sub-clause shall not
apply to Schedule 14.
15.2 Save as otherwise provided to the contrary in this Agreement, each payment
to be made under this Agreement shall be made in the currency in which the
relevant amount is payable, 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 which is necessary 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.
15.3 None of the rights or obligations under this Agreement may be assigned or
transferred without the written consent of the other party ("the
Non-Assigning Party") other than an assignment of the rights (but not the
obligations) to an Affiliate of the assigning party provided that:
(a) such assignment shall only be permitted if the assignment has no
adverse effect on the Non-Assigning Party;
(b) 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 be re-transferred to the party which originally
assigned those rights or to another Affiliate of that original
assigning party; and
(c) it shall be a condition of any such assignment that reasonable
notice is given in writing to the Non-Assigning 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 Non-Assigning Party may reasonably require).
15.4 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.
15.5 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.
15.6 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 both parties.
16. WHOLE AGREEMENT
16.1 This Agreement (if and when executed) contains the whole agreement between
the parties relating to the transaction contemplated by this Agreement and
supersedes all previous agreements between the parties relating to such
transaction.
16.2 Each of the parties to this Agreement acknowledges on its own behalf that,
in agreeing to enter into this Agreement, it has not relied on any
representation, warranty, collateral contract or other assurance (except
those set out in this Agreement) and waives all rights and remedies which,
but for this Clause, might otherwise be available to it in respect of any
such representation, warranty, collateral contract or other assurance,
provided that nothing in this Clause shall limit or exclude any liability
or fraud.
17. NON-MERGER AND SURVIVORSHIP
Anything contained in this Agreement to which effect has not been given on
or prior to completion of the sale and purchase of the Business and the
Business Assets or which, by its terms is capable of taking effect after
such completion or is a continuing obligation of the relevant party, shall
remain and continue in full force and effect notwithstanding such
completion or otherwise.
18. NOTICES
Any notice, claim or demand requiring to be served under or in connection
with this Agreement shall be in writing and shall be sufficiently given or
served if delivered, in the case of TEL, to TEL, addressed to its
secretary at its registered office and, in the case of Newco, to Newco,
addressed to its secretary at its registered office. Any such notice shall
be delivered by hand or sent by fax or sent by prepaid first class post
and if delivered by hand or sent by fax shall conclusively be deemed to
have been given or served at the time of despatch and if sent by post
shall conclusively be deemed to have been received 48 hours from the time
of posting.
19. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law except in relation to real property located in a territory
outside England and Wales, in which case the governing law shall be the
law of that territory. The parties irrevocably agree that the Courts of
England are to have exclusive jurisdiction to settle any disputes which
may arise out of or in connection with this Agreement.
THIS AGREEMENT was entered into on the date stated on page 1.
SCHEDULE 1
DESCRIPTION OF THE BUSINESS
Part I - Business generally
The manufacture of titanium dioxide pigments and related intermediate products
(including sulphuric acid and zirconia frit), as carried on by TEL from the
Properties but for the avoidance of doubt shall not include:-
(i) the manufacture by way of trade of any organometallic compounds
excepting that manufacture of a pigment which incorporates as an
essential feature of its composition an organometallic compound
shall not be considered to be manufacture of an organometallic
compound as such;
(ii) the manufacture (other than for subsequent transfer to Tioxide
Specialties Limited on agreed terms) by way of trade of any form of
Ultrafine Titanium Dioxide.
Part II - Materials Business
The supply from the Properties of ferric sulphate and copperas manufactured as
co-products from the titanium dioxide process. The supply from the Properties of
white and red Gypsum manufactured as co-products from the titanium dioxide
process.
SCHEDULE 2
THE PROPERTIES
------------------ --------------------------------------- -----------------
PART I
------------------ --------------------------------------- -----------------
Address Title No./Root of Title Present Use
------------------ --------------------------------------- -----------------
Factory at HS40627; HS98246; (conveyance dated Production of
Pyewipe Road 6.4.1946 and between XX Xxxxxx'x titanium dioxide
Grimsby Settled Estates and its Trustees (1)
and British Titan Products Company
Limited (2)
------------------ --------------------------------------- -----------------
Healing Xxxxx Conveyance dated 1.6.1971 made Water
Beds between British Titan Limited (1) and extraction from
British Titan Products Company xxxxx beds
Limited (2)
------------------ --------------------------------------- -----------------
*Xxxxxxxxx Conveyance dated 01.06.78 made Disused quarry
Bottom Quarry between Roade Aggregates Limited (1) -landfill of
and Appollo Site Services Limited (2) neutralised
digester residue
------------------ --------------------------------------- -----------------
*Killingholme Conveyance dated 31.12.1981 made Drying Plant
between Glanford Borough Council (1)
and X X Xxxxxx & Son Limited (2)
------------------ --------------------------------------- -----------------
PART II
------------------ --------------------------------------- -----------------
ADDRESS TITLE NO./ROOT OF TITLE
------------------ --------------------------------------- -----------------
Strip of land on Lease dated 30.5.1989 made between Pipeline site
the banks of the ABP Limited (1) and Tioxide UK
River Humber Limited (2)
------------------ --------------------------------------- -----------------
Gypsum Store of Lease dated 4.9.1996 made between Storage of
Xxxxx Glentworth Bulb Co. Limited (1) and gypsum
TEL (2)
------------------ --------------------------------------- -----------------
* The beneficial interest in these two Properties is owned by TEL. The legal
title to the Property at Xxxxxxxxx Bottom Quarry is held by Broadcount
Properties Limited (an Affiliate of ICI) and the legal title to the Property
at Killingholme is held by XX Xxxxxx Limited (an Affiliate of ICI).
SCHEDULE 3
EXCLUDED ASSETS AND EXCLUDED LIABILITIES
(Clause 1.1)
PART I
EXCLUDED ASSETS
1. All cash of TEL in bank and in hand and the benefit of all bank accounts
of TEL.
2. Amounts due to TEL arising out of any payment (including overpayment) of
Taxation and any and all other rights in respect of or relating to
Taxation.
3. Commercial and Marketing Know-How.
4. Customer Contracts and any rights thereunder.
5. The CO2 Liquefaction plant owned by ICI or any of its Affiliates currently
at the Properties.
6. Any right or action to which TEL may be entitled (whether in contract,
tort or otherwise) relating to the Excluded Liabilities and the Excluded
Assets.
7. Debtors.
8. Intellectual Property relating to the Business and any rights (contractual
or otherwise) relating to Intellectual Property of the Business.
9. Retained Business Claims.
10. The accounting records of TEL in so far as they do not relate to the
Business.
11. Subject to the provisions of Clause 10.2 any rights and benefits under the
Shared Supplier Contracts.
12. Work-in-progress and finished products owned by TEL which is located at
but has not been manufactured at any of the Properties.
13. Any assets, rights or benefits relating to the Business not listed in
Clause 2.1.
14. The shares held by TEL whilst TEL was an Affiliate of ICI in X X Xxxxxx
Limited, E&A West Limited, Maidgold Limited and Broadcount
Properties Limited.
PART II
EXCLUDED LIABILITIES
1 Taxation incurred or owing by TEL (whether or not due and payable) in
respect of the Business up to the Transfer Time.
2 Liabilities relating to Customer Contracts.
3 The following matters:-
Xxxxxxx Transport claim
Personal injury claim (Mr R Xxxxxxx)
SCHEDULE 4
ALLOCATION OF CONSIDERATION TO BUSINESS ASSETS PURCHASED
(Clause 3.3)
Business Asset Allocation of the Final Consideration (US$)
A. Working Capital (1)
B. Materials Commercial and
Marketing Knowhow 1,000,000
C. Land (2)
D. Buildings (2)
E. Plant and Equipment (3)
F. Other Business Assets Nil
------------------
G. Total Consideration Agreed Newco Value
------------------
(1) Actual Net Working Capital (as defined in Schedule 14) plus agreed uplift
to Fair Market Value (US$215,000)
(2) Net Book Value of Land and Buildings as at the Transfer Time in TEL's
A-Forms
(3) G - (A+B+C+D+F)
SCHEDULE 5
PROVISIONS RELATING TO THE PROPERTIES
(Clause 2.3)
PART A
Provisions relating to the Properties
1. Subject to Paragraph 6 below, TEL shall on the date hereof complete an
assurance to Newco of each of the Freehold Properties and the Leasehold
Properties in a form previously approved by the parties (each of which
shall be deemed for the purposes of this Agreement to be an agreement in
Agreed Terms) and shall on the date hereof deliver (or procure the
delivery of) each such assurance or disposition to Newco and shall also
deliver (or procure the delivery of) possession of each of the Properties
and beneficial ownership of each of the Properties shall pass on
completion of any such assurance or disposition.
2. On the date hereof TEL shall either deliver (or procure the delivery of)
to Newco or hold to Newco's order the title deeds to the Properties.
3. With effect on and from the date hereof until the Transfer Time, TEL shall
procure that the interest of Newco is noted on all policies of insurance
with respect to the Properties.
4. In relation to all of the Properties, TEL shall be entitled to remain in
occupation, as licensee only, until but not after the Transfer Time and
Newco shall make no charge in respect of the grant of any such licence.
5. TEL shall co-operate with Newco to facilitate registration of title to any
of the Properties once vested in Newco and, without prejudice to the
generality of the foregoing, shall assist in depositing any relevant land
or other certificates or documents at H M Land Registry or other relevant
registry and in replying to any requisitions raised by H M Land Registry
or other relevant registry.
6. Landlords' Consents for Leasehold Properties
6.1 Failure to Obtain Consents
6.1.1 Where a landlord's consent is required and has not been obtained by
the date hereof in respect of any of the Properties, such Property
will not, unless Newco so elects (an "ELECTED PROPERTY"), be
transferred on the date hereof but will be held in trust for Newco
absolutely from the date hereof until such landlord's consent is
obtained or Newco requires the transfer or assignment of such
Property to it in accordance with paragraph 6.3. TEL shall account
to and be indemnified by Newco accordingly and shall deliver to
Newco forthwith upon receipt any notice or other document concerning
or relating to such Property or, upon request from Newco, a power of
attorney to enable Newco to deal with such Property.
6.1.2 TEL will co-operate in any reasonable arrangements proposed by Newco
designed to provide for Newco the benefits of any such Property.
6.2 Subsequent Consents
After the date hereof, TEL shall continue to use all reasonable endeavours
(assisted if necessary by Newco) to obtain any outstanding landlord's
consent at Newco's cost in respect of any Property (which is not an
Elected Property) and keep Newco informed of progress in obtaining such
consents.
6.3 Notice to Transfer or Assign
Following the date hereof, Newco may serve notice on TEL at any time after
the relevant consent is obtained requiring TEL to execute and deliver any
transfer or assignment to Newco of any such Property which is not an
Elected Property and TEL will arrange for the execution and delivery of
such transfer or assignment (together with the relative documents of
title) to Newco not later than five working days after the receipt either
of such notice or of the engrossment of such transfer or assignment
whichever is the later.
6.4 Occupation by Purchaser
Newco may at any time after the Transfer Time go into or remain in
occupation of any Leasehold Property for which necessary consent has not
been obtained, as licensee of TEL and subject to the following
provisions:-
(a) Newco shall pay, or indemnify TEL against, all outgoings and
expenses relating thereto arising after Newco's occupation begins;
(b) Newco shall be entitled to any income thereof arising after Newco's
occupation begins;
(c) Newco shall indemnify TEL against all losses, liabilities, Costs,
actions, proceedings, claims and demands arising from the possession
or occupation of such Property by Newco and in particular (but
without limitation) will observe and perform all the covenants and
conditions contained or referred to in the leases relating thereto;
and
(d) in the event that the landlord threatens to forfeit the lease
relating to any Leasehold Property or forfeits such lease Newco
shall forthwith vacate such Leasehold Property.
6.5 Terms of purchase
The Properties are sold together with all easements, rights and licences
appurtenant thereto and all buildings and structures thereon but subject
to all easements, rentcharges, covenants, leases, tenancies, licences,
agreements and other matters affecting the same and the Leasehold
Properties are sold subject also to the rents, covenants and conditions
reserved by or contained in the leases under which the same are held.
SCHEDULE 6
PROVISIONS RELATING TO THE CONTRACTS
(Clause 10.4)
1. Newco shall with effect from the Transfer Time carry out and complete for
its own account the Supplier Contracts and the Materials Customer
Contracts to the extent that the same have not been previously performed
(whether due for performance prior to, on or after the Transfer Time).
Newco shall indemnify TEL against all Costs, claims and liabilities
arising prior to, on or after the Transfer Time by reason of or in
connection with the non-performance or the defective or negligent
performance (whether by TEL or Newco) of the Supplier Contracts or the
Materials Customer Contracts.
2. Newco shall be responsible for and shall indemnify TEL against any claim
from customers for repair, replacement, damage or otherwise duly made
before or after the Transfer Time under any guarantees or warranties given
expressly or by implication of law by TEL in respect of any goods sold or
service supplied by TEL prior to the Transfer Time in the Business.
3. To the extent that any payment is made to TEL in respect of Materials
Customer Contracts after the Transfer Time, TEL shall receive the same as
trustee for Newco absolutely, shall record such payment separately in its
books and shall account to Newco for the same as soon as reasonably
practical after receipt. In determining the liability under this paragraph
of TEL to account to Newco for amounts received, regard shall be had to
any liability of TEL to account to HM Customs and Excise for any United
Kingdom VAT in respect of the supply of goods and/or services (made under
any Materials Customer Contract) to which such amounts relate and the
liability of TEL under this paragraph shall be reduced accordingly.
4. In determining the liability of Newco to reimburse TEL for any amounts
paid by TEL to suppliers under Supplier Contracts, regard shall be had to
the extent to which TEL has been or is able to recover payment of input
tax for United Kingdom VAT purposes in respect of supplies of goods and/or
services (under a Supplier Contract) made to TEL to which such amounts
relate and the liability of Newco under this Agreement shall be reduced
accordingly.
5. If TEL has prior to the Transfer Time sub-contracted the performance of
any contracts for the supply of goods or other products to any person,
Newco shall (unless TEL would have been entitled under the contract to
reject the same and Newco determines to reject the same), on behalf of the
relevant customer seek or accept delivery from such person of the goods or
other products in respect of which such contract was made and shall make
the same available for collection by such customer.
SCHEDULE 7
PROVISIONS RELATING TO THIRD PARTY CONSENTS
(Clause 5.4)
1. Where any Business Asset, including any Materials Business Claim,
Materials Business Debtor, Materials Customer Contract, Supplier Contract
and any property or asset leased by TEL relating exclusively to the
Business (but excluding the Leasehold Properties) requires the consent or
agreement of any third party for the same to be assigned or novated to or,
in the case of any leased property, to be sub-leased to, Newco, (a
"RELEVANT BUSINESS ASSET") or any Newco Liability requires the consent or
agreement of any third party for the same to be performed by Newco, and
any such consent has not been obtained prior to the Transfer Time, the
provisions of this Schedule shall apply.
2. In respect of any Relevant Business Asset, this Agreement shall not
constitute an assignment or a purported assignment thereof, or a sub-lease
or a purported sub-lease thereof, to Newco if any such assignment or
sub-lease would constitute a breach of any agreement, contract or
undertaking (a "Relevant Agreement") of TEL with or to the third party
from whom any such consent as is referred to in paragraph 1 is required to
be obtained, pending such consent being obtained.
3. TEL and Newco shall jointly use all reasonable endeavours and render to
each other all reasonable assistance (not being financial) to obtain the
consent of such third party to an assignment, or novation (whichever is
available) or (if neither an assignment or novation is available) a
sub-lease of the Relevant Business Asset. During the period from and after
the Transfer Time until any required consent shall be obtained and the
Relevant Business Asset transferred, or assigned or novated to Newco, any
such Relevant Business Asset shall be held in trust by TEL for Newco
absolutely with effect from the Transfer Time until the same shall have
been delivered and/or formally transferred, assigned or novated to Newco
and TEL shall grant to Newco such powers of attorney as Newco may
reasonably require to enable Newco to vest in itself or otherwise to deal
with such Relevant Business Assets and shall deliver to Newco forthwith
upon receipt any notice or other document containing or relating to such
Relevant Business Assets.
4. This Agreement shall not constitute an assumption or a purported
assumption of any Newco Liability in respect of which performance thereof
by Newco would require the consent or agreement of any third party if such
assumption or purported assumption would constitute a breach of any
Relevant Agreement pursuant to which the obligation arises. Newco shall,
to the extent that the same would not result in any breach of any such
Relevant Agreement perform as TEL's sub-contractor all the obligations of
TEL thereunder and indemnify TEL against all liabilities (and all Costs
reasonably incurred by TEL) arising in connection therewith.
5. Where the performance by Newco of any Relevant Agreement as TEL's
sub-contractor would result in a breach of any agreement, contract or
undertaking with a third party (whether under the Relevant Agreement in
respect of which the obligation arises or under any other agreement with
any other person relevant to the performance of such Relevant Agreement)
Newco shall not perform such obligations as TEL's sub-contractor but TEL
shall continue to perform such obligations on behalf of and at the risk of
Newco and Newco agrees to indemnify TEL against all liabilities (and all
Costs reasonably incurred by TEL) arising in connection therewith.
6. TEL agrees and acknowledges that, insofar as any Relevant Business Asset
is expressed in this Schedule to be held on trust by TEL for Newco
absolutely, any monies received by TEL in respect thereof shall be
accounted for by TEL to Newco and any profit arising out of the conduct of
the Business utilising any such Business Asset shall accrue to Newco and
TEL agrees to pay forthwith to Newco any such amounts, less in each case
an amount equal to the relevant Costs which TEL is entitled to recover and
deduct from any such payment.
7. Newco expressly acknowledges that insofar as any Newco Liability has not
been effectively assumed by Newco and, insofar as the same relates to the
performance of any obligations under any Relevant Agreement and such
obligations are, pursuant to the provisions of this Schedule, to be
performed by Newco as TEL's sub-contractor or by TEL on behalf of Newco,
such performance is at the risk and cost of Newco and any loss and costs
in relation thereto shall be offset against any amounts to be accounted
for to Newco pursuant to paragraph 6. To the extent that any loss or Cost
exceeds any such amount to be accounted for to Newco pursuant to paragraph
6, Newco shall indemnify TEL against or reimburse TEL for any payment in
respect thereof.
8. Insofar as the provisions of this Schedule provide for TEL to perform any
Relevant Agreement or otherwise assume any obligation, Newco agrees to
lease or licence (so far as Newco is able to grant the same) to TEL, for
the period during which any such obligation exists as provided in this
Schedule, any Business Assets acquired by Newco pursuant to this Agreement
and necessary for the purposes of such performance. The consideration for
any such lease or licence shall be TEL's agreement to perform any
obligations expressed to be performed by it in this Schedule in favour of
and for the account of Newco for any monies or profits as described in
paragraph 6 above and so that TEL shall not be required to pay any
additional amount in respect thereof.
9. Newco agrees to make available to TEL the services of any Transferring
Employees or any Offer Employees to enable TEL to perform any obligations
expressed to be performed by it in this Schedule: PROVIDED that any such
employees shall continue to be employees of Newco and Newco shall perform
and observe all the obligations of the employer under or in connection
with the contracts of employment of such persons (including without
limitation holiday entitlement and pay) and Newco shall indemnify TEL
against or reimburse TEL for any payment required to be made or made by
TEL to any such Transferring Employees or Offer Employees.
10. Upon any such consent as is referred to in paragraph 1 being obtained, as
a result of which any assignment, sub-lease or any other transfer of the
benefit of any Relevant Business Asset to Newco or the assumption by Newco
of any Newco Liability would not constitute a breach of any Relevant
Agreement of TEL with or to the third party from whom any such consent is
obtained, such Relevant Business Asset shall pursuant to this paragraph be
assigned, sub-leased or the benefit thereof otherwise vested in Newco, or
Newco shall assume the Newco Liability, as the case may be on the terms of
this Agreement and:-
10.1 any lease or licence for any Business Assets referred to in paragraph 8
shall thereupon automatically terminate; and
10.2 insofar as the services of any Transferring Employees or Offer Employees
have been made available to TEL as provided in paragraph 9 in connection
with such Relevant Business Asset, such services shall thereupon
automatically cease to be made available in any case, without Costs to
TEL, and the provisions of this Schedule shall cease to apply with respect
thereto.
11. Without prejudice to the generality of the foregoing, TEL shall, without
incurring any Cost, take such actions as Newco may reasonably request to
procure that suppliers under the Supplier Contracts and customers under
the Materials Customer Contracts unconditionally consent to the
substitution of Newco as a party thereto with effect from the Transfer
Time but, in any case where such consent is refused or otherwise not
obtained, prior thereto:-
11.1 TEL shall receive any goods delivered to it by the supplier as agent for
Newco and at Newco's cost, taking reasonable care, shall deliver such
goods to such address of Newco as Newco may specify; and
11.2 Newco shall put TEL in funds to enable TEL to pay in due time the supplier
in respect thereof.
12. If, on or before 6 weeks after the Transfer Time, or such later date as
TEL and Newco may agree, any consent or agreement of any third party
referred to in paragraph 1 has not been obtained or if, at any time, the
benefit of any Relevant Business Asset cannot be vested in Newco or
otherwise dealt with by Newco, TEL and Newco shall consider what action,
if any, is to be taken in relation to the Relevant Business Asset.
13. TEL shall not be obliged to take any action pursuant to this Schedule 7 if
such action could not be lawfully undertaken by TEL, or would result in
any breach of any agreement to which TEL is a party which breach would
entitle the other party thereto to terminate such agreement or would
result in TEL incurring any Costs of a material amount against which Newco
has not agreed to indemnify it pursuant to this Agreement or otherwise. In
so far as, pursuant to this Agreement, TEL is a trustee of, or acts as
agent for Newco, TEL shall act with such care and skill as might
reasonably have been expected of TEL in the conduct of the Business
assuming the sale and purchase of the Business and the Business Assets
pursuant to this Agreement had not occurred but, subject thereto, shall
not have any duties or responsibility to Newco in respect of so acting or
have any liability to Newco except to the extent that it is guilty of
wilful default or of acting otherwise than with the care and skill
referred to in this paragraph.
SCHEDULE 8
NOTIFICATION, ASSISTANCE AND PROCEEDINGS
(Clauses 6, 7 and 8)
1. NOTIFICATION
TEL shall notify Newco and Newco shall notify TEL, in either case if the
notifying party reasonably considers the subject matter thereof to
represent a potentially significant right or liability of the other party,
promptly of receipt of any information, in whatever form, relating to any
Debtor, Materials Business Debtor, Retained Business Claim, Materials
Business Claim, Newco Liability or TEL Liability and shall supply copies
of all such information so received on request. Either party may enquire
of the other party if it has received any information referred to in this
paragraph and may request further details in respect thereof including
copies of any materials in respect thereof. Such notification will
describe the information received with sufficient particularity to enable
the recipient to assess its significance in relation to such Debtor,
Materials Business Debtor, Retained Business Claim, Materials Business
Claim, Newco Liability or TEL Liability.
2. ASSISTANCE
2.1 TEL will promptly give or procure that there is given all such information
and assistance as Newco shall reasonably require (including access to any
books, correspondence or other documents or records and the right to copy
the same and to any witnesses or potential witnesses or officials of TEL)
for the purpose of:-
2.1.1 recovering any amount due in respect of, or compromising any
Materials Business Debtor or Materials Business Claim or avoiding,
disputing, resisting, appealing, compromising, or contesting any
related counter-claim; or
2.1.2 avoiding, disputing, resisting, appealing, compromising, or
contesting any Newco Liability.
2.2 Newco shall indemnify the relevant member of TEL's Group against all Costs
and liabilities which it may incur in complying with paragraph 2.1.
2.3 Newco will promptly give or procure that there is given all such
information and assistance as TEL shall reasonably require (including
access to any books, correspondence or other documents or records and the
right to copy the same and to any witnesses or potential witnesses or
officials of Newco) for the purpose of:-
2.3.1 recovering any amount due in respect of, or compromising any Debtor
or Retained Business Claim or avoiding, disputing, resisting,
appealing, compromising, or contesting any related counter-claim; or
2.3.2 avoiding, disputing, resisting, appealing, compromising, or
contesting any TEL Liability.
2.4 TEL shall indemnify Newco against all Costs and liabilities that it may
incur in complying with paragraph 2.3.
2.5 Each of the parties agrees to keep the other informed (to the extent that
party reasonably believes the other party has an interest therein which is
not insignificant or as reasonably requested by the other party) as to the
progress of any Materials Business Claim or Retained Business Claim or of
any claim, demand or action in respect of any Newco Liability or TEL
Liability.
3. CONDUCT OF DISPUTES
3.1 This paragraph applies as to the conduct of any claim made by, or
proceedings instituted or threatened by, any third party, whether before
or after the date hereof (including any counter-claim) ("PROCEEDINGS") in
relation to any Debtor, Materials Business Debtor, Retained Business
Claim, Materials Business Claim, Newco Liability or TEL Liability by the
party (the "CONDUCTING PARTY") specified by this Agreement as being
entitled to conduct such Proceedings. In any case where this Agreement
does not specify which of the parties is to have the conduct of
Proceedings in any particular case, including in circumstances where the
potential responsibility for any liability the subject of any Proceedings
has not been allocated between the parties, the party against whom the
claim has been made, or proceedings instituted or threatened, shall have
conduct of the Proceedings, or, if the claim has been made, or proceedings
instituted or threatened, against both parties, TEL shall have the conduct
of the Proceedings and, in either case, accordingly be the Conducting
Party in respect thereof for the purposes hereof.
3.2 The Conducting Party shall inform the party not having conduct of the
Proceedings (the "OTHER PARTY") promptly of all developments regarding the
Proceedings, shall consult it and have reasonable regard to its interests
before taking any significant step in relation to the Proceedings and
shall not settle the Proceedings without the consent of the Other Party,
such consent not to be unreasonably withheld or delayed. The Conducting
Party shall conduct any Proceedings with reasonable diligence and
competence. The Other Party shall render all assistance reasonably
required in connection with the Proceedings by the Conducting Party, and
shall be entitled to payment in respect of that assistance only in the
event that the assistance it renders is significantly greater in extent
than that provided by the Conducting Party.
3.3 The Conducting Party may instruct legal advisers reasonably satisfactory
to the Other Party to represent any member of the Other Party (or any
member of the Other Party's Group in the case of TEL which is a party to
the Proceedings: PROVIDED that in any Proceedings where the named parties
to any such Proceedings (including any added parties) include both the
Conducting Party (or any member of its Group in the case of TEL) and the
Other Party (or any member of its Group in the case of TEL) and
representation of both parties by the same legal advisers would not, in
the opinion of the legal advisers appointed by the Conducting Party, be
proper due to actual or potential conflict of interest between them, the
Conducting Party shall instruct separate legal advisers reasonably
satisfactory to the Other Party to represent the Other Party (and members
of its Group) in such Proceedings and the Conducting Party shall pay the
fees and disbursements of such legal advisers.
SCHEDULE 9
SUPPLIER CONTRACTS OF A MATERIAL NATURE
(Clause 1.1)
[Details to follow]
SCHEDULE 10
DOCUMENTS IN THE AGREED TERMS
(Clause 1.1)
Newco Patent and Know-how Licence
SCHEDULE 11
EMPLOYEES AND OTHER PERSONNEL
(Clause 9)
1. Newco undertakes to TEL that it will, insofar as it has not done so prior
to the date hereof:-
1.1 deliver to each of the Transferring Employees, a letter confirming that
the employee will transfer employment to Newco by reason of the transfer
of the Business; and
1.2 deliver to each Offer Employee, a letter offering employment with Newco
with effect from the Transfer Time on their terms and conditions of
employment immediately prior to the Transfer Time (other than as to
employer).
2. The parties acknowledge and agree that the sale of the Business from TEL
to Newco is a "relevant transfer" within the meaning of the Transfer
Regulations.
3. The parties further acknowledge and agree that pursuant to the Transfer
Regulations, the contract of employment of each of the Transferring
Employees (save insofar as such contract relates to/includes any
occupational pension scheme as defined for the purposes of Regulation 7 of
the Transfer Regulations) shall be transferred to Newco with effect from
the Transfer Time which shall be the "time of transfer" under the Transfer
Regulations.
4. As from the Transfer Time, Newco shall perform and observe all the
obligations of the employer under or in connection with the contracts of
employment of the Transferring Employees and the Offer Employees
(including without limitation accrued holiday pay, holiday entitlement and
pay) and shall indemnify TEL and keep TEL indemnified, against each and
every action, proceeding, liability, Costs, claim, or loss or demand
arising from Newco's failure to perform and observe the said obligations.
5. Notwithstanding any other provision in this Agreement, Newco shall
indemnify TEL and keep TEL indemnified against all actions, proceedings,
liabilities, Costs, claims, losses, and demands made by or arising from:-
5.1 any Transferring Employees and the Offer Employees in respect of
employment on or prior to the Transfer Time;
5.2 the dismissal (whether express, constructive or otherwise) of any employee
in connection with the transfer of the Business to Newco;
5.3 any change in the working conditions of the Transferring Employees or
Offer Employees or any of them occurring after the Transfer Time;
5.4 the change of employer occurring by virtue of the Transfer Regulations
and/or this Agreement;
5.5 the employment by Newco on or after the Transfer Time of any of the
Transferring Employees or Offer Employees other than on terms (including
terms relating to any occupational pension scheme) at least as good as
those enjoyed immediately prior to the Transfer Time or the termination of
the employment of any of them on or after the Transfer Time;
5.6 any claim by any Transferring Employee or Offer Employee (whether in
contract or in tort or under statute (including the Treaty of Rome and any
directives made under the authority of that Treaty)) for any remedy
including, without limitation, in respect of unfair dismissal, redundancy,
equal pay, sex, race or disability discrimination; or
5.7 any claim by any employee representatives, trade union or affected
employee that there has been a failure to comply with any requirement of
Regulation 10 of the Transfer Regulations, any failure to inform and/or
consult employees imposed by any collective agreement, European Works
Council Agreement or other employee representative agreement.
6. Newco shall, as from the Transfer Time, perform and observe all the
obligations of TEL as employer, or host (where the employee has been
seconded to TEL but is not employed by TEL) under or in connection with:-
6.1 the contracts of employment of the Offer Employees; or
6.2 any contract relating to their secondment to TEL; or
6.3 any undertaking (whether legally binding or not) to employ any such person
after a period of absence (whether by reason of maternity, career break,
education, training or otherwise) and Newco shall indemnify TEL and keep
TEL indemnified against each and every action, proceeding, liability,
Costs, claim, loss, and demands arising from Newco's failure to perform
and observe such obligations or undertakings.
In accordance with its obligations under the Transfer Regulations, Newco
shall provide TEL in writing with such information and at such time as
will enable TEL to carry out its duties under Regulation 10 of the
Transfer Regulations concerning measures envisaged by Newco in relation to
the Transferring Employees or the Offer Employees.
7. Newco shall be entitled at its own expense in its absolute discretion to
take such action as Newco shall deem necessary or desirable to prosecute,
settle or compromise any claims of, or proceedings instituted by any
Transferring Employee or any other person, whether before or after the
date hereof, in respect of the matters expressed in this Schedule to be
obligations of Newco or in respect of which Newco has agreed to indemnify
TEL as provided herein and shall have the conduct of any related
proceedings, negotiations or appeals in accordance with Schedule 8.
8. Any reference in this Schedule to contract of employment, employer or
employee shall, unless the context otherwise requires, include contract of
training and contract of apprenticeship, trainer, and trainee and
apprentice, respectively.
9. Newco agrees that for a period of four years from the Transfer Time:
9.1 the Transferring Employees and Offer Employees will receive and enjoy
contractual remuneration and benefits (including retirement benefits)
which, judged objectively are no less favourable overall than their
contractual remuneration and benefits at the Transfer Time;
9.2 it will not make any unilateral material change to the contractual terms
and conditions of employment of the Transferring Employees and the Offer
Employees, (which includes those terms contained in a letter to employees
dated 19 June 1991 from TEL) without prior consultation where required by
any local laws or agreements with recognised trade unions, appropriate
employee representatives or the Transferring Employees and Offer
Employees.
SCHEDULE 12
SHARED SUPPLIER CONTRACTS
Contract for the supply of ilmenite between (1) Tioxide Group plc as agent for
Tioxide UK Ltd, Tioxide Australia Ltd and Tioxide Espana SA (2) Westralian
Sands.
SCHEDULE 13
TRANSFERRING EMPLOYEES
[Details to follow]
OFFER EMPLOYEES
[Details to follow of those employees currently located at Billingham site in
connection with the Materials Business who are to relocate to Grimsby.]
SCHEDULE 14
ESTIMATED CONSIDERATION, FINAL CONSIDERATION AND FINAL
COMPLETION STATEMENT
1. INTERPRETATION
1.1 In this Schedule:-
"A FORM" means in relation to Newco, a financial
report prepared in the format set forth in
Annex 2 and in accordance with the
accounting policies, practices and other
requirements set out or referred to in ICI's
Controller's Manual and prepared as at the
Newco Completion Date on a basis consistent
with that adopted by TEL for the preparation
of A Forms prior to the Transfer Time;
"ACTUAL NET WORKING means the Net Working Capital as at the Newco
CAPITAL" Completion Date as determined under
paragraphs 1.6 to 1.8 below;
"ICI'S AUDITORS" means KPMG Audit Plc of 0 Xxxxxxxxx Xxxxxx,
Xxxxxx, XX0X 0XX;
"ICI'S CONTROLLER'S means the control manuals in effect as at 14
MANUALS" July 1997 and which are compiled in accordance
with UK GAAP used for accounting purposes
within the ICI Group and which are recorded
on disk form as attached and identified as
Annex 3 to this Agreement (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);
"INTEREST RATE" means LIBOR plus 25 basis points;
"NET WORKING CAPITAL" means:-
(a) Operating Debtors; plus
(b) Stocks; less
(c) Operating Creditors less than 1 year;
For the purposes of (b) the Stocks shall be valued
in accordance with the document headed
"Stocktaking and Valuation Principles" in the
Agreed Terms marked "NWC-S"
"NEWCO'S AUDITORS" means [ ];
"NEWCO COMPLETION DATE" means immediately after completion of this
Agreement;
"OPERATING CREDITORS means, in relation to Newco, the absolute
LESS THAN 1 YEAR" value of the amount reported as
creditors of Newco which are external to
Newco as defined by reference to
"operating creditors less than 1
year" on line 70020 of the A Form for Newco as
described in ICI's Controller's
Manuals;
"OPERATING DEBTORS" means, in relation to Newco, debtors of
Newco which are external to Newco as defined by
reference to "operating debtors" on line 70010 on
the A Form for Newco as described in ICI's
Controller's Manuals;
"STOCKS" means the stock of fuels, raw materials, raw
materials, ingredients, packaging, office
and laboratory supplies, revenue engineering
spares, consumable stores, work in progress
and finished goods owned by Newco as
determined on line 70000 of the A Form for
Newco;
"UK GAAP" means generally accepted accounting
principles in the United Kingdom.
1.2 References to the absolute value of a number X shall be construed as
follows:
1.2.1 if X is greater than or equal to zero, the absolute value of X shall
be equal to X; and
1.2.2 if X is less than zero, the absolute value of X shall be X
multiplied by -1
so that, for the purposes of illustration, the absolute value of 1 is
equal to 1 and the absolute value of -1 is equal to 1.
1.3 The definitions used in this Schedule relate only to this Schedule and,
unless expressly stated to the contrary, shall have no bearing on the
interpretation of any other agreement entered into by TEL, Newco and their
respective Affiliates.
1.4 All payments and values under this Schedule shall be in US Dollars and
where an amount is not itself calculated in US Dollars it shall be
converted into US Dollars at the mid market closing exchange rate in
London for the currency in which that amount is expressed into US Dollars
as published in the London Edition of the Financial Times first published
thereafter, or where the exchange rate is not published in the London
Edition of The Financial Times, at the exchange rate quoted by Citibank
N.A. as at the close of business in London for the currency in which that
amount is expressed on the Newco Completion Date in relation to amounts in
the Final Completion Statement.
1.5 CALCULATION OF THE FINAL CONSIDERATION
In relation to this Agreement:
1.5.1 the Final Consideration for the Business Assets ("THE FINAL
CONSIDERATION") shall be determined by the following formula:-
Final Consideration = US$ 118,410,000 minus [U.S. $ EQUIVALENT OF
GBP3,950,000 (REPRESENTING THE NET WORKING CAPITAL AS AT 28 FEBRUARY
1998) CONVERTED INTO U.S. $ IN ACCORDANCE WITH PARAGRAPH 1.4 OF THIS
SCHEDULE] plus Actual Net Working Capital.
1.5.2 After the Newco Completion Date TEL shall prepare a completion
statement as at the Newco Completion Date which shall contain a
statement of the Final Consideration in accordance with paragraph
1.5.1 above and a schedule of the Actual Net Working Capital based
on TEL's calculations (the "FINAL COMPLETION STATEMENT"). The Final
Completion Statement shall be prepared using ICI's normal accounting
policies and practices as set out or referred to in ICI's
Controller's Manuals and prepared as at the Newco Completion Date on
a basis consistent with that adopted by TEL for the preparation of A
Forms prior to the Hivedown and shall be submitted by TEL to ICI's
Auditors for review.
1.6 Within 50 days of the Newco Completion Date, TEL shall issue the Final
Completion Statement to Newco together with a copy of a report by ICI's
Auditors addressed to TEL and substantially in the form set out in Annex 4
to the effect that the Final Completion Statement has been prepared in
accordance with this Schedule. Although it is TEL's responsibility to
prepare the Final Completion Statement, TEL will require the assistance of
the employees of Newco and its Affiliates to fulfil this responsibility
and Newco shall ensure such assistance is provided promptly and at no
charge. Immediately after delivery of the Final Completion Statement,
Newco's Auditors shall have the right to review the Final Completion
Statement and ICI's Auditors working papers relating to the Final
Completion Statement. Within 30 days of delivery to Newco of the Final
Completion Statement and ICI's Auditors report (each of which shall be in
English) to Newco's designated location, Newco shall give notice to TEL in
writing of any item or items in the Final Completion Statement which it
wishes to dispute and the basis on which it disputes that item or those
items and the changes to the Final Completion Statement which Newco
believes should be made and the parties shall use their reasonable
endeavours to resolve that dispute. Any items in respect of which Newco
does not give such notice will be deemed to have been accepted by Newco.
Any written resolution reached by the parties on any disputed item shall
be final, conclusive and binding on the parties.
1.7 If the parties agree the Final Completion Statement then any adjusting
payments referred to in paragraph 1.9 below shall be made by the paying
party within 7 days of being agreed by the parties.
1.8 If the parties fail to agree on any element of the Final Completion
Statement within 24 days after Newco has given notice in writing to TEL of
any item(s) in the Final Completion Statement which Newco wishes to
dispute (in accordance with paragraph 1.6 above) then any agreed amounts
shall be paid in accordance with the preceding paragraph and any dispute
may be referred by either party for final determination in accordance with
Clause 14 of this Agreement and any amounts thereby found to be due shall
be paid by the relevant party not later than 7 days after such final
determination.
1.9 When the Final Consideration is agreed or otherwise determined in
accordance with the three preceding paragraphs the following adjusting
payments shall be made:-
1.9.1 an amount equal to the difference between (i) the Estimated
Consideration (namely US$ 118,410,000) and (ii) the Final
Consideration; and
1.9.2 interest (compounded monthly) at the Interest Rate on the amount in
paragraph 1.9.1 above from the Newco Completion Date to the date of
payment, calculated on a day to day basis;
which shall be paid by TEL to Newco (or vice versa, if the Final
Consideration exceeds the Estimated Consideration).
1.10 In this Schedule, references to lines of A-Forms have been chosen by TEL
and are believed in good faith to correspond to the matters to which they
refer. If, however, that reference when compared to the matter it
describes or refers to is incorrect then there shall be substituted for
that line reference another line reference (if any) which corresponds to
the matter described or referred to.
SIGNED by [ ]
for and on behalf of
TIOXIDE EUROPE LIMITED in the presence of:
SIGNED by [ ]
for and on behalf of
NEWCO LIMITED
in the presence of:
