DATED 26 JUNE 1998
THE BOC GROUP plc
THE BOC GROUP
PHILIPP BROTHERS CHEMICALS INC
AGREEMENT
FOR THE SALE AND PURCHASE
OF THE SHARES OF
ODDA SMELTEVERK A/S
AND
OF THE BUSINESS
AND CERTAIN ASSETS
OF BOC CARBIDE INDUSTRIES,
A DIVISION OF BOC LIMITED
BOC Group ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Fax: ▇▇▇▇▇ ▇▇▇▇▇▇
TABLE OF CONTENTS
Clause Page
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1. INTERPRETATION 3
2. SALE OF SHARES AND ASSETS 5
3. CONSIDERATION 6
4. CONDITIONS AM) COMPLETION 6
5. ACTIONS PENDING COMPLETION 8
6. CHANGE OF NAME 11
7. PROVISIONS RELATING TO THE BUSINESS 11
8. NON-COMPETE UNDERTAKINGS 13
9. WARRANTIES 14
10. TAX INDEMNITY 15
11. ENVIRONMENTAL INDEMNITY 15
12. LIMITS OF BOC LIABILITY 19
13. OTHER PROVISIONS 20
Schedule
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1. DETAILS OF THE COMPANY
2. DETAILS OF TYSSEFALDENE A/S
3. THE WARRANTIES
4. BOC CARBIDE INDUSTRIES
5. INSURANCE POLICIES
Documents in the agreed form
1. BOC Carbide Supply Agreement
THIS AGREEMENT is made the 26th day of June 1998 BETWEEN
1) THE BOC GROUP plc, a limited company incorporated in England (registered
no. 22096) whose registered office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ("BOC"); and
2) PHILIPP BROTHERS CHEMICALS INC, a company incorporated under the laws of
the State of New York, USA whose principal office is at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ ("Philipps").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement:
"Agreement" means this agreement and any schedules and attachments hereto, and
any amendments agreed in writing between the parties;
"Audited Accounts" means the audited balance sheet of the Company made up as
at the Balance Sheet Date and the audited profit and loss account of the
Company for the year ended on the Balance Sheet Date;
"Balance Sheet Date" means 30 September 1997;
"BOG Carbide Supply Agreement" means an agreement substantially in the agreed
form to be executed on Completion for the supply of carbide products by
Philipps (or its Connected Company) to BOC Limited and BOC Gases Ireland
Limited after Completion;
"Book Debts" means the debts owed to BOC Limited in respect of the Business as
at the Effective Date;
"Business" means the business of supplying calcium carbide products and
dicyandiamide and related products carried on as a division of BOC Limited
under the name "BOC Carbide Industries";
"Business Accounts" means the unaudited pro forma profit and loss account and
balance sheet of the Business as at and for the year ended on the Balance
Sheet Date;
"Business Day" means a day on which banks are open for business in both London
and New York;
"Company" means Odda Smelteverk A/S, details of which are given in Schedule 1;
"Completion" means completion of the sale and purchase of the Sale Shares, the
Business and the Sale Assets;
"Completion Date" means the date of Completion;
"Connected Company" means in relation to BOC or Philipps as the case may be, a
company which is a subsidiary or holding company thereof or a subsidiary of
such holding company;
"Contracts" means the contracts with BOC Limited in respect of the Business as
listed in part 1 of Schedule 4 and "Contract" means any one of them;
"Disclosure Letter" means the letter dated the date hereof written by or on
behalf of BOC to Philipps disclosing information constituting exceptions to
the Warranties and details of other matters referred to in this Agreement;
"Effective Date" means the Completion Date or such other date as the parties
may agree;
"Encumbrance" means any claim, charge, mortgage, security, lien, option,
equity, power of sale, hypothecation or other third party right;
"Employees" means the employees of BOC Limited engaged in the Business as
listed in part 2 of Schedule 4;
"Fixed Assets" means all plant, machinery, tools, equipment and other chattels
at the Site used or owned by BOC Limited for the purposes of the Business as
listed in Section 113 of the Disclosure Letter, but not including the Stocks;
"Goodwill" means the goodwill of BOC Limited in relation to the Business
together with the exclusive right for Philipps to represent itself as carrying
on the Business in succession to BOC Limited;
"License" means the license granted to BOC Carbide Industries by ▇▇▇▇▇▇▇ Wharf
Limited in relation to the Site pursuant to a licensing agreement dated 28
January 1980 (as amended);
"Losses" means all losses, liabilities, costs, charges, claims and damages;
"NOK" means Norwegian Krone;
"Properties" means the real property owned, leased or occupied by the Company
as referred to in paragraph 6. 1 of the Disclosure Letter;
"Retained Assets" means the Book Debts and all the property, assets, rights
and receivables (less payables) of the Business other than the Sale Assets;
"Sale Assets" means the assets of the Business to be purchased by Philipps
pursuant to clause 2.2, namely the Fixed Assets, the benefit of the Contracts,
the Goodwill and the Stocks;
"Sale Shares" means the entire issued share capital of the Company, details of
which are set out in Schedule 1;
"Site" means the site occupied by the Business under the Licence at ▇▇▇▇▇▇▇
Wharf, Aithorpe;
"Stocks" means all stocks of calcium carbide, dicyandianilde, flame coal,
packaging and other raw materials of the Business;
"Taxation" means all forms of taxation (whether direct or indirect), levies,
imposts, duties, or other similar assessments of or imposed by the government
of Norway or any taxing authority thereof or therein, on or in respect
of the Company including penal duties and taxes, interest charges and other
extraordinary assessments;
"Tax Indemnity" means the indemnity in respect of certain Taxation matters
referred to in clause 10;
"Transfer Regulations" means the Transfer of Undertakings (Protection of
Employment) Regulations, 1981, as amended;
"VAT" means United Kingdom Value Added Tax;
"Warranties" means the warranties of BOC set out in this Agreement, including
those in Schedule 3;
"Warranty Claim" means any claim made by Philipps for breach of any of the
Warranties.
1.2 The headings to clauses and schedules, and the index of contents are for
convenience only and shall not affect the interpretation of this Agreement.
1.3 Documents expressed to be "in the agreed form" mean documents in a form
approved by, and signed for the purposes of identification by or on behalf of
BOC and Philipps.
2. SALE OF SHARES AND ASSETS
2. 1 Subject to the terms and conditions of this Agreement BOC shall sell the
Sale Shares (or procure the sale of the Sale Shares by BOC Holdings) and
Philipps, relying on the Warranties, shall purchase the Sale Shares, free from
all Encumbrances and together with all rights now and hereafter attaching to
them.
2.2 Subject to the terms and conditions of this Agreement BOC shall procure
the sale by BOC Limited with full title guarantee of the Business as a going
concern and of the Sale Assets (but excluding the Retained Assets), and
Philipps, relying on the Warranties, shall purchase the Business as a going
concern and the Sale Assets (but excluding the Retained Assets) free from all
Encumbrances and together with all rights now and hereafter attaching to them.
3. CONSIDERATION
3.1 The total consideration for the Sale Shares shall be the sum of
(pound)8,500,000 (eight million five hundred thousand pounds sterling).
3.2 The total consideration for the purchase of the Business and the Sale
Assets shall be the sum of (pound)3,000,000 (three million pounds sterling),
comprising:
3.2.1 (pound)70,000 in respect of the Fixed Assets;
3.2.2 in respect of the Stocks, the amount agreed under clause 7.1;
3.2.3 in respect of the Goodwill and the benefit of the Contracts,
the amount calculated by subtracting from (pound)3,000,000 the aggregate of
the amounts referred to in clauses 3.2.1 and 3.2.2.
3.3 The aggregate consideration referred to in clauses 3.1 and 3.2, namely
(pound)11,500,000 (eleven million five hundred thousand pounds sterling),
shall be paid by Philipps to BOC in cash at Completion by bank transfer in
same day funds, subject to clause 4.5.3, to the following account:
Account Name: The BOC Group plc
Bank: Midland Bank plc
Branch: ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ONJ
Sort Code: 40.07.13
Account Number: ▇▇▇▇▇▇▇▇.
4. CONDITIONS AND COMPLETION
4.1 The obligations of the parties to proceed to Completion shall be
conditional upon satisfaction of the following conditions:
4.1.1 receipt of approval ("concession") to the purchase of the Sale
Shares from the Norwegian Ministry of Oil and Energy under the Industrial
Concessions and Licenses Act, 1917 of Norway (such approval being given
unconditionally or with such conditions as may be acceptable to Philipps,
acting reasonably); and
4.1.2 receipt of approval to the purchase of the Sale Shares from the
Norwegian Ministry of Trade and Industry under the Business Acquisitions ▇▇▇
▇▇▇▇ of Norway (such approval being given unconditionally or with such
conditions as may be acceptable to Philipps, acting reasonably), or the expiry
of any waiting period (and any extension thereof) under such Act, whichever
shall occur sooner.
4.2 Each party undertakes to the other to use its best endeavors to procure
satisfaction of the conditions referred to in clause 4.1 as soon as reasonably
practicable following execution of this Agreement, provided that Philipps
shall be entitled at any time by written notice to BOC to waive in whole or
part any or all of such conditions. Without prejudice to the generality of the
foregoing, Philipps shall promptly after the date hereof submit to the
Ministries referred to in clause 4.1 duly completed applications for approval
under the Acts referred to therein, and will promptly supply to the Ministries
all such information as they may lawfully request in respect of such
applications. BOC shall assist, and shall cause the Company to assist, by
procuring such information relating to the Company as Philipps may reasonably
require.
4.3 Subject to satisfaction of such conditions, or waiver thereof by
Philipps, Completion shall take place at the office of Messrs ▇▇▇▇ & Co, Oslo,
on the date which is 3 business days after satisfaction or waiver of all such
conditions, or on such other date as the parties may agree.
4.4 On Completion BOC shall:
4.4.1 deliver or procure delivery of, or make available, the
following to Philipps:
a) share certificates for all the Sale Shares endorsed to
effect the sale of the Sale Shares to Philipps;
b) share certificates in the name of the Company in respect
of its holding of shares in Tyssefaldene A/S and the other companies listed at
the end of Schedule 1;
c) the certificate of incorporation (if any), cheque books
and material records of the Company;
d) all the financial and accounting books and records of the
Company and all documents of title relating to the Properties;
e) the written resignations of each of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ (if he has by then been appointed a director under clause 5.5.5) and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ from his office as director of the Company;
f) (if required by Philipps) assignments of the benefit of
the Contracts duly executed by BOC Limited;
g) (at the principal place of business of the Business) such
of the Sale Assets as are capable of being transferred by delivery;
h) a certified true copy of a resolution of a duly
authorized committee of the board of
directors of BOC authorizing BOC to enter into this Agreement and to fulfil its
obligations hereunder;
i) if required by Philipps, a certified true copy of a
resolution of the board of directors of Tyssefaldene A/S approving the
purchase by Philipps of the Sale Shares.
4.4.2 procure the passing of a resolution of the board of directors
of the Company resolving to approve and register the transfer of the Sale
Shares referred to in clause 4.4.1(a) and appointing such persons as Philipps
may nominate (not more than three) as additional directors of the Company and
accepting the resignations referred to in clause 4.4.1(e); and
4.4.3 procure that BOC Limited and BOC Gases Ireland Limited shall
enter into the BOC Carbide Supply Agreement.
4.5 On Completion Philipps shall:
4.5.1 enter into (or procure that a Connected Company of Philipps
enters into) the BOC Carbide Supply Agreement and deliver a duly executed
counterpart thereof to BOC;
4.5.2 deliver to BOC a certified true copy of a resolution of the
board of directors of Philipps authorizing Philipps to enter into this
Agreement and to fulfil its obligations hereunder; and
4.5.3 pay to BOC in accordance with clause 3.3 the aggregate
consideration referred to in clauses 3.1 and 3.2.
4.6 If any of the conditions set out in clause 4.1 have not been fulfilled (or
waived) on or before 31 December 1998, this Agreement shall (unless the
parties agree otherwise) automatically terminate and neither party shall have
any claim hereunder of any nature whatsoever against the other party (save in
respect of their accrued rights and/or liabilities arising from any prior
breach of this Agreement).
4.7 If any of the provisions of clauses 4.4 or 4.5, being material, are not
fully complied with by BOC or Philipps as the case may be, by or on the
Completion Date, Philipps, in the case of non-compliance by BOC, or BOC, in
the case of non compliance by Philipps, shall be entitled (in addition to and
without prejudice to all other rights or remedies available to it including
the right to claim damages) by written notice to BOC or, as the case may be,
Philipps served on such date:
4.7.1 to elect to terminate this Agreement; or
4.7.2 to effect Completion so far as practicable having regard to the
defaults which have occurred; or
4.7.3 to fix a new date for Completion (not being more than 20
Business Days after the agreed date for Completion) in which case the
foregoing provisions of clauses 4.4 and 4.5 shall apply to Completion as so
deferred but provided such deferral may occur only once.
5. ACTIONS PENDING COMPLETION
5.1 From the date hereof until Completion, on reasonable notice and during
normal business hours, Philipps and its accountants and agents shall be
allowed access to all the premises, books of account and other records of the
Company and (subject to the terms of the License) shall be allowed access to
the Site and to the books of account and other records of the Business, and
BOC shall supply any information reasonably required by Philipps relating to
the Company and the Business.
5.2 BOC undertakes to Philipps that, pending Completion, both the Business and
the business of the Company will continue to be carried on in the ordinary
course so as to maintain the business of the Company and the Business as a
going concern pending Completion.
5.3 Pending Completion all insurance policies normally kept in force in
relation to the Company and the Business will be maintained.
5.4 Pending Completion, such representatives and advisers as Philipps may
reasonably request may be designated to work with BOC (or BOC Limited in the
case of the Business) with regard to the management and operations of the
Company and the Business respectively. BOC (or BOC Limited) will consult with
such representatives and advisers with respect to any action which may
materially affect the Company or the Business as the case may be. BOC (or BOC
Limited) will furnish to such representatives and advisers such information as
they may reasonably request for this purpose.
5.5 Without prejudice to the generality of the foregoing provisions of this
clause 5, BOC shall collaborate fully with Philipps in relation to the running
of the Business and the Company between the date hereof and Completion and
during that period shall procure that in relation to the Business and/or the
Company, as the case may be, BOC shall not without the prior consent of
Philipps, such consent not to be unreasonably withheld or delayed:
5.5.1 (other than pursuant to any agreement or approval existing at
the date hereof, details of which are disclosed in the Disclosure Letter)
incur or enter into any agreement or commitment involving any capital
expenditure exceeding NOK500,000;
5.5.2 incur or enter into or materially amend any material contract
or commitment which is not capable of being terminated without compensation at
any time with three months' notice or less or which is not in the ordinary
course of business (Philipps hereby consents to execution of a carbide supply
agreement between the Company and NCI, substantially in the form of the draft
attached to the Disclosure Letter);
5.5.3 incur or enter into or amend any Encumbrance relating to any of
the Properties or their management or the rents payable therefor other than
Encumbrances which would not have a material adverse effect on the value of
any of such Properties;
5.5.4 incur any additional borrowings not disclosed in the Disclosure
Letter or incur any other material indebtedness otherwise than in the ordinary
course of business;
5.5.5 make any amendment to the terms and conditions of employment
(including, without limitation, remuneration, pension entitlements and other
benefits) of any director, provide or agree to provide any gratuitous payment
or benefit to any such person or any of his dependants, or dismiss any
director or (except for ▇▇▇▇▇ ▇▇▇▇▇▇ as a replacement for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
engage or appoint any additional director;
5.5.6 discontinue or amend any of the Company pension schemes listed
in the Disclosure Letter;
5.5.7 acquire or agree to acquire or dispose of or agree to dispose
of any material asset or material stocks or enter into or amend any material
contract or arrangement other than in the ordinary course of business;
5.5.8 acquire or agree to acquire any share, shares or other interest
in any company, partnership or other venture;
5.5.9 delay making payment to any trade creditors generally beyond
the date on which payment of the relevant trade debt should be paid in
accordance with the credit period authorized by the relevant creditors (or (if
different) the period extended by the relevant creditors in which to make
payment);
5.5.10 amend any insurance contract (other than any BOC group policy
to reflect that it is to be terminated at Completion) or fail to notify any
insurance claim in accordance with the provisions of the relevant policy or
settle any such claim below the amount claimed;
5.5.11 create, allot or issue any share or loan capital of the
Company;
5.5.12 declare, make or pay any dividend or other distribution to
shareholders of the Company.
5.6 BOC and Philipps shall use their respective best endeavors to obtain, on
or prior to Completion, the consent of any party to any Contract whose consent
is required in order for the assignment of such Contract to Philipps to become
effective. Philipps shall supply to BOC such information and references
regarding the financial position of Pbilipps as may reasonably be requested by
BOC or any relevant third party in connection therewith.
5.7 If in respect of the Licence agreement dated 4 March 1992 between BOC
Limited and SKW AG (the "SKW License"), the necessary consent to the
assignment of the SKW Licence has not been obtained from SKW AG on or before
Completion, despite each party using its best endeavors to obtain the same,
Philipps may by written notice to BOC on or before the Completion Date elect
that the Business and the Sale Assets be excluded from this Agreement,
whereupon BOC shall be released from its obligations to sell and Philipps
shall be released from its obligations to purchase the Business and the Sale
Assets, and neither party shall have any liability to the other under this
Agreement in respect of any such obligations (save for prior breaches of
clause 5.6). For the avoidance of doubt, nothing in this clause shall affect
the obligation of the parties to proceed to Completion of the sale and
purchase of the Sale Shares, in respect of which Philipps shall pay to BOC at
Completion the consideration referred to in clause 3.1.
5.8 If Philipps elects pursuant to clause 5.7 not to purchase the Business and
the Sale Assets:
5.8.1 BOC shall retain the Business and the Sale Assets;
5.8.2 BOC shall be immediately released from such of the undertakings
in clause 5 and clause 8 as would otherwise restrict or inhibit BOC (or any of
its subsidiaries or subsidiary undertakings) from carrying on the Business
before or after Completion;
5.8.3 BOC shall be immediately released from any past, current or
future liability in respect of any of the Warranties and any indemnity
contained herein in so far as such liability relates to the Business or the
Site or the Sale Assets (or any of them);
5.8.4 all other provisions of this Agreement (except clause 5.7 and
this clause 5.8) insofar only as they relate to the sale and purchase of the
Business or the Sale Assets shall immediately cease to be of any effect;
5.8.5 at the request of either party, the distributor arrangements
referred to in Schedule 4 will be formalized;
5.8.6 BOC will continue to run the Business for at least two years
from the Completion Date substantially in the same manner in which it is
currently carried on, with the intention of preserving the Business as a going
concern at least up to such date. If, at any time in the period of two years
commencing on the Completion Date, BOC offers for sale, or enters into any
negotiations or discussions concerning the sale of, all or a substantial part
of the Sale Assets and the Business, Philipps shall have the right to elect to
purchase the same in priority to any third party on terms no more
disadvantageous to Philipps than any which may have been agreed between BOC
and any third party. For the avoidance of doubt BOC shall not be required to
(and shall not be liable for any failure to) continue to run the Business
under this clause if BOC notifies Philipps in its absolute discretion at any
time that BOC no longer wishes to carry on the Business and subsequently
ceases to do so, provided that on receiving such notification Philipps may
elect to purchase the Business and the Sale Assets on terms to be agreed
between the parties at that time.
6. CHANGE OF NAME
6.1 Notwithstanding any other provision of this Agreement, no interest in or
right to use the name "BOC", or the zeta device shown on the cover sheet of
this Agreement, is being sold or transferred to Philipps hereunder.
6.2 Philipps undertakes:
6.2.1 as soon as practicable after Completion to change the name of
the Business so as to exclude the name "BOC",
6.2.2 not to use the name or letters "BOC" at any time after
Completion as part of the name of the Business or the Company or in connection
therewith; and
6.2.3 not to hold out any continuing association between BOC or any
member of the BOC group of companies and the Business or the Company after
Completion
Provided that, with respect to clauses 6.2.2 and 6.2.3, the Company and the
Business shall be entitled to use any existing stocks of packaging materials
for a period of up to six months from Completion.
7. PROVISIONS RELATING TO THE BUSINESS
7.1 BOC and Philipps shall jointly procure that on or as soon as practicable
after the Completion Date:
7.1.1 the value of the Stocks as at the Completion Date is determined
on the same basis as used in preparation of the Business Accounts; and
7.1.2 the Book Debts are identified, agreed and itemized.
7.2 BOC (or BOC Limited), shall collect and retain the Book Debts for its own
account. Philipps shall account to BOC for any money received by Philipps from
any debtor in discharge of any of the Book Debts.
7.3 Notwithstanding Completion, BOC shall procure that BOC Limited be
responsible for all debts and other payments payable by and claims outstanding
against BOC Limited in respect of the Business at Completion, including claims
by third parties in respect of any service supplied by BOC Limited in respect
of the Business or any act or omission thereof in respect of the Business
prior to Completion; and BOC shall indemnity Philipps in respect of all Losses
which Philipps may incur as a result of any such indebtedness or claim or as a
result of anything happening, done or omitted to be done by BOC Limited in
respect of the Business prior to Completion.
7.4 Philipps shall perform and discharge after Completion the obligations and
liabilities of BOC Limited outstanding under each of the Contracts (so far as
it is lawfully able to do so and subject to it receiving the benefit of any
such Contract, whether by means of assignment or otherwise) as at Completion,
except for any obligations or liabilities attributable to a breach of any of
the Contracts on the part of BOC Limited and Philipps shall indemnity BOC
against all Losses incurred by BOC Limited by reason of or in connection with
the non-performance or the negligent performance after Completion by Philipps
of the Contracts or any of them.
7.5 All rents, rates, gas, water, electricity, telephone and other charges and
outgoing relating to or payable in respect of the Business, and all salaries,
wages and other emoluments, including holiday pay, tax, PAYE and national
insurance payments and contributions to retirement benefit schemes, if any,
relating to the Employees or any former employee of the Business, shall be
borne and paid by HOC up to Completion and by Philipps thereafter.
7.6 BOC and Philipps acknowledge that the provisions of the Transfer
Regulations shall apply to this Agreement and to the transfer of the Business
as regards the Employees and that on Completion the contracts of employment of
each of the Employees will be transferred to the employment of Philipps by
operation of law. Philipps shall indemnity BOC Limited against all Losses in
relation to the contracts of employment of those Employees arising on or after
Completion in respect of matters, events and liabilities arising on or after
Completion. BOC shall indemnity Philipps against all Losses in relation to the
contracts of employment of those Employees arising prior to Completion where
such Employees are or will be transferred to Philipps with effect from
Completion in accordance with the Transfer Regulations.
7.7 With respect to VAT the parties intend that the Business shall be sold as
a going concern for VAT purposes and, accordingly, the parties agree:
7.7.1 that they shall use all reasonable endeavors to procure that
the sale of the Business is deemed to be a transfer of a business as a going
concern with effect from Completion and that the provisions of Article 5 of
the Value Added Tax (Special Provisions) Order 1995 ("Article 5") shall apply
thereto, and to this end the parties shall promptly agree the form of a letter
to be sent by BOC to H M Customs & Excise seeking confirmation that the sale
is to be so treated and Philipps (or any Connected Company of Philipps to
which Philipps assigns all or part of the benefits of this Agreement under
clause 13.1) undertakes to procure that it is duly registered as a taxable
person (as defined in section 3 of the Value Added Tax Act 1994) within 14
days hereof;
7.7.2 that if the sale of the Business is treated as a supply of
goods or services under Article 5 the consideration referred to in clause 3.2
shall where applicable be deemed to be exclusive of any value added tax, and
that Philipps shall pay all value added tax due thereon within 14 days of
presentation to Philipps by BOC Limited of a VAT invoice therefor;
7.7.3 that BOC shall procure BOC Limited to apply to HM Customs and
Excise for permission for BOC Limited to continue holding all the records of
the Business for value added tax purposes which are currently required by
Section 49 of the VAT ▇▇▇ ▇▇▇▇ to be preserved by BOC Limited and BOC
undertakes to procure that BOC Limited preserve these records in such a manner
and for such periods as may be required by law and to give Philipps as from
Completion access to such records;
7.7.4 that if BOC or BOC Limited delivers any such VAT records to
Philipps, Philipps shall for such periods as may be required by law from the
Completion Date preserve such records and, upon reasonable notice during
normal business hours, make them available to BOC or its agents.
8. NON-COMPETE UNDERTAKINGS
8.1 BOC undertakes to Philipps that, without Philipps' written consent, it
will not, and none of its subsidiaries or subsidiary undertakings will:
8.1.1 for a period of 3 years from Completion, either solely or
jointly with any other person, firm or company, directly or indirectly engage,
carry on or be interested in the production or supply of calcium carbide
within a radius of 1,000 miles from either the Site or any of the Properties;
or
8.1.2 for a period of 3 years from Completion, either solely or
jointly with any other person, firm or company, directly or indirectly engage,
carry on or be interested in the production or supply of dicyandiamide; or
8.1.3 in competition with the business of the Company or the Business
as carried on at the date hereof canvass or solicit the custom of any person,
firm or company who has within two years prior to Completion been a regular
customer of the business of the Company or the Business.
8.2 BOC acknowledges that the duration, extent and application of the
restrictions contained in clause 8.1 are no greater than is reasonable and
necessary for the protection of the interests of Philipps as purchaser
hereunder; but that if any such restriction is adjudged by any court or
authority of competent jurisdiction to be void or unenforceable but would be
valid if part of the wording thereof were to be deleted and/or the period or
radius thereof reduced, that restriction shall apply within the jurisdiction
of that court or competent authority with such modifications as are necessary
to make it valid and enforceable.
9. WARRANTIES
9.1 BOC warrants and represents to and undertakes to and for the benefit of
Philipps in the terms of the Warranties set out in Schedule 3, with the
intention that Philipps should enter into this Agreement in reliance on
them, and acknowledges that Philipps has entered into this Agreement in
reliance on them. Save as expressly otherwise provided, the Warranties shall
be separate and independent.
9.2 The Warranties are given subject to any matter adequately disclosed in or
attached to the Disclosure Letter.
9.3 Philipps acknowledges and agrees that in entering into this Agreement,
Philipps does not rely on, and shall have no remedy in respect of, any
statements, warranties or representations (whether negligently or innocently
made) of any person, whether a party hereto or not, except where expressly set
out in this Agreement and except for the Warranties. The only remedy available
to Philipps for breach of the Warranties shall be for breach of contract under
the terms of this Agreement. Nothing in this sub-clause 9.3 shall, however,
operate to limit or exclude any
liability for fraud or fraudulent misrepresentation.
9.4 The Warranties shall remain in fill force and effect notwithstanding
Completion.
9.5 BOC farther warrants to Philipps that:
9.5.1 subject to clause 9.2, and subject to any further disclosures
made by or on behalf of BOC in a supplement to the Disclosure Letter at any
time prior to Completion, the Warranties will be true and not misleading at
Completion as if they had been given again at Completion; and
9.5.2 if after the signing of this Agreement and before Completion,
any event shall occur or matter arise which results or may result in any of
the Warranties being untrue or inaccurate at Completion, BOC shall as soon as
practicable upon becoming aware thereof notify Philipps in writing thereof
prior to Completion.
9.6 Philipps warrants to and for the benefit of BOC, with the intention that
BOC should enter into this Agreement in reliance thereon (and Philipps
acknowledges that BOC has entered into this Agreement in reliance thereon),
that
9.6.1 Philipps is a corporation duly incorporated and validly
existing under the laws of the state of New York;
9.6.2 Philipps has on the date hereof and will have at Completion
sufficient immediately available funds to pay the aggregate consideration due
to BOC in accordance with clause 4.5.3 and to effect the transactions
contemplated hereunder; and
9.6.3 Philipps has the legal right and full power and authority to
enter into this Agreement and any other documents to be executed by Philipps
pursuant to this Agreement and to fulfil its obligations hereunder and
thereunder.
10. TAX INDEMNITY
10.1 Subject to clause 10.2, BOC hereby covenants with Philipps in respect of
the Company (but not the Business) to indemnify Philipps against any liability
to Taxation of the Company (including, for the avoidance of doubt, any
liability to Taxation arising as a consequence of the Company's dispute with
the Norwegian tax authorities as disclosed in paragraph 4.1/4.2 of the
Disclosure Letter) arising in respect of, by reference to or in consequence
of:
10.1.1 any income, profits or gains of the Company earned, accrued or
received on or before Completion; and
10.1.2 any transaction, act, event or omission of whatever nature
effected or deemed to have been effected which occurs on or before Completion.
10.2 The indemnity contained in clause 10.1 shall not cover any liability to
Taxation to the extent that:
10.2.1 provision or reserve in respect thereof has been made in the
Audited Accounts; or
10.2.2 the liability to Taxation arises in respect of or by reference
to any income, profits or gains earned in respect of the period, or any event
occurring, between the Balance Sheet Date and Completion and which arises in
the ordinary course of business of the Company; or
10.2.3 the liability to Taxation would not have arisen but for a
voluntary transaction, action or omission carried out or effected by the
Company on or at any time after Completion (unless carried out in the ordinary
course of business or pursuant to a legally binding commitment created before
Completion); or
10.2.4 a claim has not been made against BOC on or before the seventh
anniversary of the Completion
Date.
11. ENVIRONMENTAL INDEMNITY
11.1 For the purposes of this clause and the Warranties contained in paragraph
9 of Schedule 3 the following words and expressions have the following
meanings:
11.1.1 "Environment" means ecological systems including living
organisms and the following media (alone or in combination): air (including
the air within buildings and the air within other natural or man-made
structures whether above or below ground); water (including water under or
within land or in drains or sewers and coastal and inland waters); and land
(including land under water); and in the case of man includes his property;
11.1.2 "Environmental Authority" means any legal person (including
any government department or government agency) having regulatory authority
under Environmental Laws and/or any court of law or tribunal which has
jurisdiction to determine any matter arising under Environmental Laws and/or
relating to the Environment;
11.1.3 "Environmental Laws" means the following to the extent the
same have force of law in the applicable jurisdiction at Completion:
(a) any international, national or local statutes or other laws or
legislation;
(b) all rules, regulations, orders, ordinances, notices, guidelines,
directives, codes of practice, circulars, guidance notes, Permits, decrees,
demands, injunctions, judgments or plans made or issued under (a) above;
(c) the common law, equity or any civil code; and
(d) judgments, decisions, notices, orders, directions, consent
agreements, instructions or awards by, with or of any Environmental Authority
which relate to pollution or protection of the Environment or which otherwise
compensate damage to the Environment or which relate to public health and
safety matters (but not including laws relating primarily to workers' health
and safety matters or hygiene), including without limitation laws relating to
emissions, discharges or threatened releases of Hazardous Substances into the
Environment or to the production, processing, distribution, management, use,
treatment, storage, burial, disposal, transport or handling of any Hazardous
Substances;
11.1.4 "Environmental Liability" means any liability of Philipps (or
any Connected Company) or the Company under Environmental Laws (including,
without limitation, liability under Environmental Laws to undertake Remedial
Action);
11.1.5 "Environmental Loss" means any loss, damages, liabilities,
costs and expenses (including fines, penalties, the reasonable cost of
Remedial Action and reasonable legal and other professional fees) suffered or
reasonably incurred by Philipps (or any Connected Company) or the Company in
respect of(i) any Environmental Liability, or (ii) (subject to the proviso in
clause 11.7) any reasonable action taken by Philipps (or any Connected
Company) or the Company to prevent, eliminate, reduce, limit or mitigate any
Environmental Liability;
11.1.6 "Hazardous Substances" means
(i) wastes, pollutants or contaminants; and
(ii) other substances that are regulated as hazardous, toxic,
radioactive, noxious, flammable, corrosive or caustic under applicable
Environmental Laws, in each case whether in the form of solids, liquids, gases
or ions;
11.1.7 "Permits" means any permits, permissions, licenses, consents
or authorizations (and any conditions or requirements thereof) required on or
before Completion by the Company or the Business under Environmental Laws;
11.1.8 "Remedial Action" means any steps reasonably necessary for
investigating, limiting, removing, remedying, cleaning up, abating,
containing, preventing, monitoring, or ameliorating damage to the Environment.
11.2 Subject to the following provisions of this clause 11, BOC agrees and
covenants with Philipps to pay to Philipps the amount of any Environmental
Loss suffered or incurred by Philipps (or any Connected Company) or the
Company to the extent such Environmental Loss arises out of or relates to:
11.2.1 any discharge, spillage, leak, escape or release of any
Hazardous Substance while such Hazardous Substance was in the ownership or
possession or under the control of BOC or the Company (whether at the Site or
the Properties or any former site or property or elsewhere) into the
Environment (including, for the avoidance of doubt, the Environment at the
Site or any of the Properties) before Completion; and/or
11.2.2 the presence of(or any direct consequence of the presence of)
any Hazardous Substance in or under the land at any of the Properties, being a
Hazardous Substance that is (i) present in or under such land at Completion or
(ii) derives from a Hazardous Substance that is so present (but not to the
extent that any derivative Hazardous Substance is created by or attributable
to or exacerbated by a Hazardous Substance which is not present at
Completion);
11.2.3 any material failure on the part of the Company or the
Business on or before Completion to hold and/or to comply with any Permit.
11.3 The limitations in clause 12.3 shall apply to claims under clause 11.2
and, furthermore, BOC shall not be liable in relation to any claim under
Clause 11.2:
11.3.1 unless notice of such claim is given in writing by Philipps to
BOC setting out such details as are available of the specific matter in
respect of which the claim is made within 7 years of Completion;
11.3.2 if and to the extent that a deduction or provision therefor
has been made in respect of the claim in the Audited Accounts; and
11.3.3 to the extent that the Environmental Loss which is the subject
of the claim is covered by a policy of insurance in force on Completion and
payment is made under such policy by the insurer and received by Philipps or
the Company.
11.4 In the event that any claim under clause 11 arises out of or relates to
any pre-Completion acts or omissions of BOC or the Company which are continued
by Philipps (or any Connected Company) or the Company after Completion in the
knowledge or expectation that they may give rise to an Environmental Loss,
(including for the avoidance of doubt the Company's discharge of filter cake
to the fiord), BOC's liability under this clause 11 shall be limited to such
proportion of any resulting Environmental Loss as is equivalent to the
proportion which the acts or omissions before Completion causing such
Environmental Loss bears to all the acts and omissions occurring before and
after Completion causing such Environmental Loss.
11.5 Subject to clauses 11.4 above and 11.6 below, BOC shall not be liable
for that proportion of any claim under clause 11.2 which is caused or
exacerbated by an act or omission of Philipps (or any Connected Company) or
the Company after Completion except where:
11.5.1 such act or omission was done or omitted in the ordinary
course of business of the Company or the Business and with insufficient
knowledge of the surrounding circumstances to enable a reasonable person in
the position of Philipps (or any Connected Company) or the Company to
appreciate that such act or omission was reasonably likely to give rise to a
claim under clause 11.2; or
11.5.2 such act is to enter into an agreement with the relevant
Environmental Authority or any other party to undertake Remedial Action in
connection with a particular issue (thereby incurring Environmental Loss)
either (i) on the understanding that such Environmental Authority or other
person shall take no further action or shall require less onerous Remedial
Action or (ii) in circumstances where it is reasonable to expect that such
Remedial Action will reduce the amount of any loss, damages or liabilities
which might otherwise be incurred;
provided that BOC consents to any such agreement (such consent not to
be unreasonably withheld or delayed) or that the quantum of BOC's liability
under clause 11.2 is not actually increased as a result of such agreement when
compared to BOC's liability in the absence of such agreement.
11.6 Subject to clause 11.4 and notwithstanding clause 11.5 above, if Philipps
or the Company is required to take Remedial Action under Environmental Law in
respect of any matter falling outside clause 11.2 and at the same time or as a
result thereof it is required by an Environmental Authority to take Remedial
Action in respect of any matter which falls within clause 11.2, Philipps shall
be liable for that part of any Environmental Loss which falls outside clause
11.2, and BOC shall be liable for such portion of the Environmental Loss which
falls within clause 11.2.
11.7 Philipps agrees in respect of matters which come to its knowledge that it
shall (and shall procure that the Company shall) use its reasonable endeavors
to mitigate any Environmental Loss which may arise under Clause 11.2 and BOC
agrees that it shall indemnify Philipps against any costs, charges or expenses
that Philipps or the Company may incur in the performance of their obligations
under this sub-Clause, provided that the amount of such costs, charges or
expenses shall not exceed the amount for which BOC would otherwise be liable
under Clause 11.2.
11.8 To the extent that any claim in respect of Environmental Loss under this
Clause 11 relates to Remedial Action, BOC shall (unless otherwise agreed by
the parties) only be liable for Remedial Action which is required by an
Environmental Authority, and where such Environmental Authority grants
Philipps (or any Connected Company) or the Company discretion as to the method
or level of Remedial Action, BOC shall only be liable for the least expensive
method or minimum level of Remedial Action which is acceptable to the
Environmental Authority. Philipps shall consult with BOC concerning any
Remedial Action, including the method or level thereof
11.9 If Philipps becomes aware of any claim relevant for the purposes of this
clause 11, Philipps shall within 21 days thereof procure that notice of that
claim is given to BOC in writing.
11.10 Where BOC has or may have a claim or a defense against a third party in
relation to a matter which has given or may give rise to a claim under clause
11.2, Philipps shall afford BOC all such assistance as may be reasonably
necessary in relation to such claim or defense, including access to and copies
of any documents or other information in the possession of Philipps (or any
Connected Company or the Company) (other than documents or information which
are legally privileged) subject to Philipps being indemnified to its
reasonable satisfaction against all reasonable costs, expenses and liabilities
incurred as a result of so doing.
11.11 Where Philipps (or any Connected Company) or the Company has or may have
a claim against a third party in relation to a matter which has given or may
give rise to a claim under this clause, Philipps or the Company shall procure
that all reasonable endeavor are used to recover any amounts due from any such
third party. If BOC pays an amount in discharge of any claim under clause 11
and Philipps (or any Connected Company) or the Company subsequently recovers
from a third party a sum in respect of the subject matter of the claim,
Philipps shall pay to BOC an amount equal to (i) the sum recovered from the
third party less any reasonable costs and expenses incurred in relation to
such recovery and any tax payable or (ii) if the sum recovered (less
reasonable costs and expenses) is more than the amount paid by BOC, the amount
previously paid by BOC in respect of such claim.
11.12 If a claim under clause 11 is a result of or in connection with any
claim by or liability to a third party then the Company or Philipps shall be
entitled to avoid, dispute, deny, defend, resist, appeal, compromise or
contest such claim or liability (including, without limitation, making
counterclaims or other claims against third parties in its own name) and to
have the conduct of any related proceedings, negotiation or appeals provided
always that it shall make no admission of liability in respect of, and shall
not compromise, dispose of or settle, any claim without first consulting BOC.
If any such claim is compromised, disposed of or settled or liability is
admitted by Philipps or the Company against the wishes of BOC and Philipps
then seeks to claim under this clause 11 in respect thereof, the burden of
proof shall be on Philipps to establish that the terms on which the claim or
liability was compromised, settled or admitted were reasonable in all the
circumstances.
12. LIMITS OF BOC LIABILITY
12.1 The liability of BOC in relation to the Warranties shall cease 24 months
from Completion save as regards any Warranty Claim of which notice in writing
has been given to BOC prior to that date, containing to the extent possible
such details as are available of the event or circumstance giving rise to the
breach, the basis upon which Philipps is making a claim against BOC and the
total amount of liability which results (or Philipps' estimate thereof).
12.2 BOC shall not be liable for any individual Warranty Claim unless it
exceeds (pound)25,000 or for any one or more Warranty Claims unless BOC's
aggregate liability exceeds (pound)300,000 (in which case all Warranty Claims,
including those previously notified, shall accrue against and be recoverable
from BOC and Philipps shall be entitled to the whole amount thereof and not
merely the excess).
12.3 The total aggregate liability of BOC under the Warranties, the Tax
Indemnity and any other indemnity given by BOC hereunder (including the
indemnity in clause 11) shall not in any event exceed (pound)9,000,000 (nine
million pounds sterling) in respect of claims relating to the Company or its
business or any of its assets (including the Properties) and (pound)2,500,000
(two million five hundred thousand pounds sterling) in respect of claims
relating to the Business and the Sale Assets and accordingly shall not exceed
in aggregate the total consideration of (pound)11,500,000 (eleven million five
hundred thousand pounds sterling) payable in respect of the Sale Shares, the
Business and the Sale Assets in accordance with clause 3.
12.4 If any payment is made by BOC to Philipps pursuant to a claim made by
Philipps for any breach of this Agreement (including, without limitation, any
Warranty Claim or any indemnity contained in this Agreement), the payment
shall so far as possible be made by way of reduction of the consideration paid
for the Sale Shares (if it relates to the Company) or the Goodwill (if it
relates to the Business) and such consideration shall accordingly be deemed to
have been reduced by the amount of such payment.
12.5 BOC shall be entitled to set off its liability to Philipps for any
Warranty Claim, or any other claim made hereunder (whether such claim is for
breach of warranty, breach of contract, under any indemnity or otherwise),
against any liability of Philipps to BOC in respect of any breach or failure
by Philipps under this Agreement or under any of the Contracts to which
Philipps is a party as anticipated in clause 7.4.
12.6 None of the limitations contained in this clause 12 shall apply to any
claim or Warranty Claim to the extent that such claim arises or is increased
or is delayed as a result of fraud or willful misconduct by BOC or any of its
officers or employees.
13. OTHER PROVISIONS
13.1 If, prior to Completion, any event occurs (not being an event affecting
generally companies carrying on business in Norway or the United Kingdom or an
event affecting generally companies carrying on business of a kind similar to
the Business or the business of the Company), which materially and adversely
affects the financial position of the Company or the Business, Philipps shall
be entitled (without prejudice to all other rights and
remedies available to it) by notice in writing prior to the Completion Date to
terminate this Agreement, but failure to exercise this right shall not
constitute a waiver of any other rights of Philipps arising out of any breach
of Warranty or otherwise.
13.2 Either Philipps or BOC may, with the prior written consent of the other
(such consent not to be unreasonably withheld), assign to a Connected Company
all its rights and benefits under this Agreement, provided that the original
contracting party shall unconditionally guarantee and remain liable for the
timely performance by the Connected Company of any obligations assumed by any
such Connected Company. under this Agreement. For the purposes of this clause
13.2 BOC agrees that, following Completion, Philipps may assign to its
wholly-owned subsidiary Ferro Metal & Chemical Corporation, a company
incorporated in England and Wales, all rights and benefits of Philipps under
this Agreement relating to the Business and the Sale Assets and may assign to
a wholly-owned subsidiary to be incorporated in Norway, all rights and
benefits of Philipps under this Agreement relating to the Company. Except as
referred to in this clause 13.2, no assignment shall be permitted without the
prior written consent of the other party.
13.3 No variations to this Agreement shall be effective unless made in writing
and signed by or on behalf of the
parties hereto.
13.4 If Completion falls on or after the fifteenth day of the month, Philipps
agrees to procure that the unaudited monthly management accounts of the
Company and of the Business for that month are prepared in a manner consistent
with the preparation of the respective management accounts for the previous
twelve months and that a copy is provided to BOC within ten days after the end
of the relevant month or as soon as possible thereafter.
13.5 Philipps acknowledges that, with effect from Completion, the insurance
policies listed in schedule 5 shall cease to apply to the Company, the
Business and the Sale Assets (except as referred to below), and that Philipps
shall be responsible for insuring the Company (including its business and
assets and the Properties), the Business and the Sale Assets with effect from
Completion. In addition, Philipps undertakes that, with effect from
Completion, it will not make, and will procure that neither the Company nor
the Business will make, any claim under the insurance policy listed in part 2
of schedule 5. Notwithstanding the foregoing, the Company shall be entitled to
make claims after Completion under the policy listed in part 3 of schedule 5
being claims arising wholly out of acts, omissions or events occurring prior
to Completion, and BOC shall provide such assistance (not involving material
expenditure) as the Company may reasonably request in respect thereof (the
policy listed in part 3 of schedule 5 being the "Vesta-Liability II" policy
described in the overview of insurances (revised at 25 June 1998) attached to
the Disclosure Letter, as enhanced by the policies referred to in the footnote
to such overview).
13.6 This Agreement (together with any documents referred to herein)
constitutes the whole agreement and understanding between the parties hereto,
and supersedes any previous agreement or understanding between them or their
respective agents, and all prior representations and expressions of opinion by
either party or its agent to the other party or its agent, relating to the
subject matter hereof. Nothing in this sub-clause 13.6 shall, however, operate
to limit or exclude any liability for fraud or fraudulent misrepresentation.
13.7 BOC agrees and covenants with Philipps to indemnify Philipps in respect
of any Losses arising out of or in connection with the Company's limestone
quarrying activities prior to Completion in the municipality of Osteroy at the
Properties listed on the final page of the list of Properties (revised at 25
June 1998) attached to the Disclosure Letter. The limitations in clause 12.3
shall apply to any claims under this clause 13.7 and BOC shall not be liable
in relation to any claim under this clause unless notice of such claim is
given to BOC within 7 years of Completion.
13.8 At any time after the date hereof BOC shall, and shall use its best
endeavors to ensure that any necessary third party shall, at the request of
Philipps execute such documents and do such acts and things as Philipps may
reasonably require for the purpose of vesting the Sale Shares, the Business
and the Sale Assets in Philipps or its nominees and giving to Philipps the
full benefit of the provisions of this Agreement.
13.9 If any provision of this Agreement shall be held to be illegal or
unenforceable in whole or in part such provision shall be deemed not to form
part of this Agreement and the enforceability of the remainder of this
Agreement shall not be affected.
13.10 All costs and expenses incurred by or on behalf of the parties hereto,
including fees of professional advisers, in connection with the preparation,
negotiation or execution of this Agreement shall be borne by and remain the
responsibility of the party incurring the same. In particular, Philipps shall
pay any VAT and stamp duty due in the United Kingdom on the sale of the Sale
Assets.
13.11 No announcement shall be made in respect of the subject matter of this
Agreement, and each party will keep confidential the terms of this Agreement,
except with the prior consent of both parties to this Agreement, or except as
required by law or The London Stock Exchange.
13.12 Any notice required to be given or served hereunder shall be in writing
in the English language and shall be served by sending the same by prepaid
first class post or fax or by delivering the same by hand to the addresses of
the parties given at the beginning of this Agreement, or such other address as
may be notified. Any notice sent by post shall be deemed to have been served
two Business Days from the time of posting in the case of inland mail in the
United Kingdom or four Business Days from the time of posting in the case of
international mail and any notice sent by fax shall be deemed to have been
served upon despatch at the time then prevailing in the location of the
addressee and in proving the service of the same it will be sufficient to
prove, in the case of a letter, that such letter
was properly stamped, addressed and placed in the post and, in the
case of a fax, that it was duly despatched to a current fax number of the
addressee.
13.13 This Agreement and, unless otherwise stated, the documents to be entered
into pursuant to it shall be governed by, and construed in all respects in
accordance with, English law. Each of the parties agrees for the benefit of
the other that the courts of England are to have exclusive jurisdiction to
settle any dispute arising in connection with this Agreement and irrevocably
waives any objection on the grounds of forum non conveniens to the
jurisdiction of the courts of England.
13.14 Philipps shall at all times maintain an agent for service of process in
England. The first such agent shall be Ferro Metal and Chemical Corporation of
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇. Philipps undertakes not to revoke the
authority of such agent and forthwith to appoint another agent with an address
in England and to notify BOC thereof should the agent cease to act or to be
able to act as agent for service of process.
13.15 This Agreement may be executed in any number of counterparts each of
which shall be deemed an original, but all the counterparts shall together
constitute one and the same instrument.
IN WITNESS whereof this Agreement has been duly executed on the first date
written on page 3.
Signed by /s/
For and on behalf of THE BOC GROUP plc
Signed by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------
For and on behalf of PHILIPP BROTHERS CHEMICALS INC
SCHEDULE 1
DETAILS OF THE COMPANY
Name Odda Smelteverk A/S
Registration No. 914896819, Norway
Registered Office ▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Date of Incorporation 1924
Share Capital 35m NOK
Issues Shares 35,000 shares of 1,000 NOK each
Registered holder of the Sale Shares BOC Holdings - 35,000 shares
Members of the Board ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Chairman)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Managing Director)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Geir Sekse
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Company Secretary Per Oeyvind Saaevartveit
Auditors Coopers & ▇▇▇▇▇▇▇
Accounting Reference Date 30 September
Shareholdings in other companies 10,652 shares (20.29%) in
Aktiesekskabet Tyssefaldene
80 shares (26.6%) in ▇▇▇▇▇▇▇ ▇▇▇▇ A/S
168 shares (9.28%) in Odda Recycling
SCHEDULE 2
DETAILS OF TYSSEFALDENE A/S
Name Aktieselskabet Tyssefaldene
Registration No.
Registered Office Tyssedal, Norway
Date of Incorporation 28.9.1924
Share Capital 5,250,000 NOK
Issued Shares 52,500 shares of 100 NOK each
Shareholders Odda Smelteverk A/S - 10,652 (20.29%)
Norzink A/S - 20,938 (3 9.88%)
DNN Industrier A/S - 20,910 (3 9.83%)
Members of the Board L ▇▇▇▇▇▇▇ (DNN) (Chairman)
R Sandsta (Managing Director)
▇ ▇ ▇▇▇▇▇▇▇ (DND)
E Guldbrandsen (NZ)
▇ ▇ ▇▇▇▇▇▇▇▇ (NZ)
R ▇▇▇▇▇▇▇▇▇ (OS)
P O Saevartveit (OS)
A Brettvik (Employee Rep)
K Skar (Employee Rep)
Company Secretary Karstein Brumnes
Auditors Coopers & ▇▇▇▇▇▇▇ (Oslo)
Accounting Reference Date 31 December
SCHEDULE 3
THE WARRANTIES
1. CORPORATE MATTERS
1.1 The information relating to the Company and Tyssefaldene A/S
contained in Schedules 1 and 2 is true and complete.
1.2 There are no agreements or arrangements in force which grant to
any person the right (whether exercisable now or in the future and whether
contingent or not) to call for the issue, allotment, conversion or transfer of
any share or loan capital of the Company or Tyssefaldene A/S.
1.3 BOC and the Company are companies duly incorporated and validly
existing under the laws of their respective places of incorporation.
1.4 BOC has the legal right and full power and authority to enter
into and fulfil its obligations under this Agreement, and any other documents
to be executed by BOC pursuant to this Agreement.
1.5 The Sale Shares constitute the whole of the issued and allotted
share capital of the Company.
1.6 The Sale Shares are fully paid and are beneficially owned by BOC
free from any Encumbrance and (other than under this Agreement) there is no
agreement or arrangement to give or create any such Encumbrance.
1.7 The Company is the beneficial owner of 10,652 shares in
Tyssefaldene A/S, comprising 20.29% of the issued and allotted share capital
of Tyssefaldene A/S. All such shares are fully paid.
1.8 Since the Balance Sheet Date the Company has not paid or declared
any dividend.
1.9 The documents attached to the Disclosure Letter are true,
complete and accurate copies of the originals thereof (where such originals
exist) and so far as BOC is aware all material information relating to the
Company or the Business contained in those documents (but not including any
statements of opinion or belief and not including any forecast or budget) was,
at the time such documents were drawn up, accurate in all material respects
and is not at the date hereof misleading in any material respect; and so far
as BOC is aware, having made all reasonable enquiries, the statements of fact
contained in section (B) "Specific Disclosures" of the Disclosure Letter (but
not including any statements of opinion or belief and not including any
forecast or budget) are accurate in all material respects and not misleading.
2. ACCOUNTING MATTERS
2.1 The Audited Accounts were prepared based on the historical cost accounting
convention including the revaluation of certain land and buildings and, except
as stated therein, the bases and policies of accounting adopted in preparing
the Audited Accounts are the same as those adopted in preparing the audited
accounts of the Company in respect of the three last preceding accounting
periods.
2.2 The Audited Accounts:
2.2.1 give a true and fair view of the assets, liabilities and state of
affairs of the Company at the Balance Sheet Date and of the results thereof
for the financial period ended on that date;
2.2.2 comply with the requirements of any applicable Norwegian statutes and
with all statements of standard accounting practice and generally accepted
accounting principles of Norway then in force;
2.2.3 make full provision for or disclose all liabilities, whether actual,
contingent or disputed, of the Company at
the Balance Sheet Date.
2.3 The unaudited monthly management accounts of the Company and of the
Business for each month in the period from the Balance Sheet Date until 31 May
1998 were prepared in a manner consistent with the preparation of their
respective management accounts for the previous 12 months.
2.4 The copies of the Audited Accounts delivered to Philipps are complete and
accurate in all respects. The books of account of the Company and the Business
and their other material records are up-to-date and have been maintained in
accordance with all applicable laws and contain complete and accurate records
of all matters required to be dealt with in such books.
3. FINANCIAL MATTERS
3.1 The Company has not, since the Balance Sheet Date, repaid, or become
liable to repay, any indebtedness in advance of its stated maturity.
3.2 None of the debts receivable or due to the Company which are included in
the Audited Accounts or which have subsequently arisen has been outstanding
for more than six months from its due date for payment or has been released on
terms that the debtor has paid less than the full value of his debt.
3.3 None of the banking or loan facilities available to the Company is
dependent on the guarantee of, or any security provided by BOC or any
affiliate of BOC.
3.4 Since the Balance Sheet Date:
3.4.1 there has been no material adverse change in the financial
position or turnover of the Business or the Company;
3.4.2 the business of the Company and the Business have each been
carried on in the ordinary course so as to maintain the same as a going
concern;
3.4.3 the business of the Company and the Business have not been
materially and adversely affected by the loss of any important customer or
source of supply and there has been no unusual increase or decrease in the
level of the Stocks of the Business;
3.4.4 the Company has not entered into any transaction or assumed or
incurred any material liabilities (including contingent liabilities) or made
any payment not provided for in the Audited Accounts otherwise than in the
ordinary course of carrying on its business;
3.5 There are no debts owed by the Company to BOC or any Connected Company of
BOC, or vice versa, other than debts which have arisen in the ordinary course
of business.
3.6 Save as disclosed in the Audited Accounts or except in the ordinary course
of business, there is not outstanding any guarantee or indemnity given by the
Company.
4. TAXATION, VAT AND RELATED MATTERS
4.1 The Audited Accounts make full provision or reserve for all Taxation
(including deferred Taxation) which is liable to be assessed on the Company,
or for which it may be accountable, in respect of all events up to and
including the Balance Sheet Date.
4.2 All returns, computations and payments which should be, or should have
been, made by the Company for any Taxation purpose have been made within the
requisite periods and are up-to-date, correct and on a proper basis and none
of them is the subject of any dispute with the Taxation authorities.
4.3 The Company has no branch, agency, place of business or permanent
establishment outside Norway.
4.4 All proper records have been kept and all proper returns and payments have
been made as required by law for the purposes of VAT in connection with the
Business.
4.5 None of the Sale Assets are the subject of any security in favor of HIM
Customs & Excise under paragraph 4 of Schedule 11 to Value Added Tax ▇▇▇ ▇▇▇▇
or Section 157 Customs & Excise Management ▇▇▇ ▇▇▇▇.
4.6 The Sale Assets do not include any items to which Part XV of the Value
Added Tax (General) Regulations 1995 applies and in respect of which the
period of adjustment will not have expired by Completion.
4.7 None of the Sale Assets are the subject of any charge, power of sale or
mortgage in favor of the Inland Revenue for the purposes of inheritance tax in
the United Kingdom, nor are there any circumstances which may give rise to the
same.
5. TRADING MATTERS
5.1 Except as disclosed in the Disclosure Letter, there is no material
contract between the Company and BOC or any Connected Company of BOC Each such
contract is on terms no less favorable to the Company than could be obtained
on an arm's length transaction with a person or legal entity that is not a
Connected Company of BOC.
5.2 Neither the acquisition of the Sale Shares (or the acquisition of the
Business or the Sale Assets) by Philipps nor compliance with the terms of this
Agreement will relieve any person of any obligation to the Company (or to BOC
Limited in respect of the Business) or enable any person to terminate any such
obligation or any right or benefit enjoyed by the Company (or by BOC Limited
in respect of the Business).
5.3 The Company is not (and BOC Limited is not in respect of the Business)
engaged in any litigation or arbitration proceedings, as plaintiff or
defendant, in respect of which the amount claimed is more than (pound)25,000
and BOC is not aware, after making reasonable enquiries, of any such
proceedings pending or being threatened by or against the Company or BOC
Limited.
5.4 There are no outstanding claims by or disputes with customers of the
Company or the Business in respect of goods supplied by the Company or the
Business, other than claims of less than (pound)25,000 arising in the normal
course of trade.
5.5 So far as BOC is aware, the Company has conducted its business and BOC
Limited has conducted the Business in all material respects in accordance with
all applicable laws and regulations in each jurisdiction in which the Company
and the Business conduct their operations.
5.6 All necessary licenses, consents, permits, concessions and authorizations
have been obtained by the Company to enable it to carry on its business, and
by BOC Limited to enable it to carry on the Business, in each case in the
places and in the manner in which such business is now carried on, and all
such licenses, consents, permits, concessions and authorizations are valid and
subsisting and are being complied with in all material respects.
5.7 So far as BOC is aware, after making reasonable enquiries, BOC Limited is
not materially in default under any of the Contracts and the Company is not
materially in default under any material contract to which it is a party.
5.8 So far as BOC is aware, after making reasonable enquiry's, no step has
been taken for the winding up, administration or receivership or other
analogous proceeding of the Company.
6. PROPERTY MATTERS
6.1 The Properties listed in the Disclosure Letter comprise all of the
premises and land owned, occupied or used by the Company in connection with
the business of the Company.
6.2 So far as BOC is aware, the Company has good title to all the Properties
owned by it and used in its business and so far as BOC is aware, except as
disclosed in the Disclosure Letter:
(a) there exist no liens on the Properties for Taxation, assessments
(both general and special) or other governmental charges which are due and
payable;
(b) the current uses of the Properties are substantially in
accordance with all building codes and zoning ordinances and other laws,
regulations, rules, orders or determinations of national or local governmental
authority applicable thereto;
(c) there are no easements, rights-of-way, covenants, conditions,
restrictions, reservations, licenses, agreements or other similar matters
materially and adversely affecting the Properties;
(d) there are no encroachments, overlaps or boundary line disputes
materially and adversely affecting the Properties, and no cemeteries or burial
grounds thereon;
(e) there are no material licenses, easements or rights-of-way in
favor of third parties relating to roads or to electric power lines, telephone
lines, gas pipes, sanitary sewer pipes, storm sewer pipes or water pipes
located on, over or under any of the Properties, other than those granted in
the ordinary course of business;
(f) there is no other lien that materially detracts from, or
materially interferes with, the present use of the Properties, or otherwise
materially impairs the operations conducted thereon.
7. EMPLOYMENT MATTERS
7.1 Full particulars of the terms and conditions of employment of the
Employees and of all the Company's employees are set out in or attached to the
Disclosure Letter.
7.2 The Employee named in schedule 4 will be the only employee transferred to
Philipps by reason of Philipps acquiring the Business or in respect of whom
Philipps will inherit liabilities pursuant to the Transfer Regulations.
7.3 There is not in existence any written contract of employment with any
director or employee of the Company, which cannot be terminated by three
months' notice or less without giving rise to any claim for damages or
compensation.
7.4 Since the Balance Sheet Date:
7.4.1 no change has been made in the remuneration (including bonuses)
payable, other benefits provided, or terms and conditions of employment of any
Employee or any employee or director of the Company, which would increase
total staff costs of the Company by more than (pound)100,000 or of the
Business by more than (pound)10,000 or the remuneration of any one employee or
director of the Business or the Company by more than (pound)10,000; and
7.4.2 no employee engaged in the Business has left the employment of
BOC Limited and no employee has left the employment of the Company, or given
or been given notice of termination of such employment.
7.5 The Disclosure Letter lists all pension funds and similar arrangements
providing for pensions and other payments relating to the past employment of
any past or present employee of the Company to which the Company is under an
obligation to make contributions (the "Employee Benefit Plans"). With the
exception of the Employee Benefit Plans, the Company is under no legal or
moral liability or obligation, and is a party to no ex-gratia arrangement or
promise, to pay pensions, gratuities, superannuation allowances or the like to
or for any of its past or present officers or employees or their dependants.
The assets of each Employee Benefit Plan are at least equal to the liabilities
of each such plan as assessed by generally accepted actuarial principles.
7.6 There are no outstanding claims against the Company by any current or past
director, officer or employee of the Company or by the Company against any
current or past director, officer or employee of the Company.
7.7 No Employee and no employee of the Company is involved in any current
industrial dispute and, in relation to the Company, there are no circumstances
likely to give rise to any such dispute.
8. ASSET MATTERS
8.1 The licence agreement dated 4 March 1992 between BOC Limited and SKW is in
full force and effect and no notice of termination has been given or received
by BOC Limited thereunder. With the exception of such licence, the Company is
not (and BOC Limited is not in respect of the Business) the beneficial owner,
registered proprietor, user or licensee of any intellectual property rights
except ordinary business software, nor are there any outstanding claims
against the Company (or BOC Limited in respect of the Business) for
infringement of any intellectual property used by it under such licence or
otherwise.
8.2 BOC Limited owns absolutely all the Sale Assets free from any Encumbrance.
The Company owns absolutely all material assets used in its business free from
any Encumbrance.
8.3 With the exception of the Retained Assets, the Sale Assets comprise all
assets now used in the Business which are necessary for the continuation of
the Business as now carried on.
8.4 Those of the Fixed Assets which are material to the Business, and the
material assets used in the business of the Company, are in satisfactory
working order and have been regularly and properly maintained.
9. ENVIRONMENTAL MATTERS
9.1 Each of the Company and the Business has all Permits required for the
operation of its business and all such Permits are valid and subsisting.
9.2 So far as BOC is aware the Company and the Business in carrying on their
respective businesses have each complied in all material respects and at all
material times within the period of six years immediately preceding the date
hereof with:
9.2.1 all the material terms of their Permits; and
9.2.2 applicable Environmental Laws.
9.3 So far as BOC is aware the execution and/or performance of this Agreement
and all other documents which are to be executed at Completion will not result
in any Permit being varied, modified, revoked, suspended, cancelled or not
renewed.
9.4 In the last six years neither BOC nor the Company has received in relation
to either the Company or the Business:
9.4.1 any written communication from any Environmental Authority in
respect of:
9.4.1.1 any material Environmental Liability (whether actual
or potential);
9.4.1.2 the closure of any pan of its operations;
9.4.1.3 the variation, modification, revocation, suspension
or cancellation of any Permit or an indication of a serious intention or
threat to do so; or
9.4.1.4 any Remedial Action; or
9.4.2 any material complaints in writing from employees,
subcontractors, neighbors or other third parties which relate to or are likely
to give rise to any Environmental Liability.
9.5 No material discharge, release, leaching, emission or escape into the
Environment of any Hazardous Substance has occurred or is occurring on or from
the Site or any of the Properties in breach of any Permit or Environmental
Law.
9.6 Neither BOC (in respect of the Business), nor the Company is or has been
within the period of six years
immediately preceding the date hereof engaged in any material action,
litigation, arbitration, dispute resolution or proceedings relating to or
concerning any actual or potential Environment Liability and so far as BOC is
aware there are no such matters pending or threatened.
10. MILLENNIUM COMPLIANCE
10.1 So far as BOC is aware, after making reasonable enquiries, all hardware
and software used by the Company is or will be capable of dealing with the
problems generally associated with the arrival of the year 2000 and perceived
to afflict computer systems generally.
11. INSURANCE
11.1 Details of the insurances relating to the Business and the Company are
contained in the Disclosure Letter.
11.2 In respect of all such insurances:
11.2.1 all premiums have been duly paid to date;
11.2.2 all the policies are in full force and effect and no act or
omission by or on behalf of BOC has occurred which makes any of these policies
voidable;
11.2.3 at the date of the Agreement, no claim is outstanding and no
circumstances exist which are likely to give rise to any claim.
SCHEDULE 4
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BOC CARBIDE INDUSTRIES
----------------------
Part 1 - Contracts
------------------
Carbide supply agreement with ▇▇▇▇▇▇▇ Plc, 28 April 1998
Carbide supply agreement with British Steel Plc, 4 March 1997 (as amended)
Licensing agreement with ▇▇▇▇▇▇▇ Wharf Ltd, 28 January 1980 (as amended)
Management agreement with ▇▇▇▇▇▇▇ Wharf Ltd, 28 January 1980
Patent license from SKW AG, 4 March 1992
BOC Limited carbide storage licenses dated respectively 12 January 1996, 12
January 1996 and 28 February 1996
Liquid nitrogen supply agreement with BOC Limited, 23 June 1998
Distributor arrangements with the Company as summarized in Section IG of the
Disclosure Letter
Part 2 - Employees
------------------
R ▇▇▇▇▇▇▇▇▇ -resident engineer, Althorpe (part-time)
SCHEDULE 5
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INSURANCE POLICIES
------------------
Part I
INSURER
Royal and Sun Alliance (on behalf of Royal and Sun Alliance Group, AIG, Zurich
International UK Ltd and others)
COVERAGE
Property damage and business interruption
Part 2
INSURER
▇▇▇▇▇▇▇▇▇ Insurance Company Limited
COVERAGE
World-wide public/products liability insurance
Part 3
INSURER
Vesta (on behalf of Royal and Sun Alliance, AIG, Zurich International UK Ltd
and others)
COVERAGE
World-wide public/products liability insurance
