EXHIBIT 10.7
DATED 1998
TIOXIDE GROUP LIMITED
and
ICI OMICRON BV
and
NL INDUSTRIES, INC.
SHARE SALE AND PURCHASE AGREEMENT
OF
TIOXIDE CANADA INC.
LINKLATERS & PAINES
One Xxxx Xxxxxx
Xxxxxx XX0X 0XX
TEL: (x00) 000 000 0000
Ref: XXX/TDAP
THIS AGREEMENT (this "AGREEMENT") is made on 1998 BETWEEN:
(1) TIOXIDE GROUP LIMITED (registered number 249759), a company
incorporated under the laws of England, whose registered office is
at 000/000 Xxxxxxxxxxx Xxxx, Xxxxxx X00 0XX, Xxxxxxx ("TG");
(2) ICI OMICRON BV (registered number 171649) a company incorporated
under the laws of The Netherlands whose registered office is at
Merseyweg 10, 3197 KB Xxxxxxxxx-Xxxxxx, Xxxxx 0000, xxx Xxxxxxxxxxx
and whose statutory domicile is Rotterdam, the Netherlands
("Omicron" and collectively with TG, the "SELLER"); and
(3) NL INDUSTRIES, INC., a corporation incorporated under the laws of
the State of New Jersey, whose principal place of business is at
00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx 00000, Xxxxx, XXX (the
"PURCHASER").
WHEREAS:
(A) Tioxide Canada Inc. is a company incorporated in Quebec, Canada,
short particulars of which are set out in Schedule 1 (the
"Company").
(B) The Seller holds all of the issued shares in the capital of the
Company (the "SALE SHARES") particulars of which are contained in
Schedule 1.
(C) The Seller has agreed to sell and the Purchaser has agreed to
purchase the Sale Shares on the terms and subject to the conditions
set out in this agreement and the Framework Agreement.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 In this agreement:
"ACCOUNTING DATE" means the date of the audited accounts of the Company
for the year ended 31 December 1997 (the "ACCOUNTS");
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, liabilities, obligations, liens (other than
those arising by operation of law or by statute) losses, expenses and
fees, including court costs and reasonable attorneys' fees and expenses;
"ACCOUNTING STANDARDS" means generally accepted accounting principles as
in effect from time to time in Canada and applied as a basis consistent
with those of previous years;
"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, in
relation to ICI and its subsidiary companies, 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 the Seller or the
Purchaser shall exclude the Company, and references to the Seller's
Group or the Purchaser's Group shall be construed accordingly;
"AGREED FORM" means, in relation to any document, the form of that
document which has been initialled for the purpose of identification by
or on behalf of the parties to this agreement;
"AMERICAS LIABILITY AGREEMENT" means the liability agreement between
ICI and the Purchaser dated [ ];
"ASSETS" means all of the assets and rights of the Company relating to
the Business;
"BUSINESS" means:
(a) the import, export, sale and distribution of titanium dioxide
pigments and co-products and related products; and
(b) the manufacture of finished products from the processes by which
reactor discharge from the chloride process and calciner discharge
from the sulphate process are treated to produce titanium dioxide
pigments
and all other business and operations as carried on by the Company as at
the date hereof but for the avoidance of doubt shall not include:
(i) the manufacture, sale or disposal by way of trade of any
organometallic compounds save the manufacture, sale or
disposal of a pigment which incorporates as an essential
feature of its composition an organometallic compound shall
not be considered to be the manufacture, sale or disposal of
an organometallic compound as such; and
(ii)the manufacture, sale or disposal by way of trade of any
form of titanium dioxide of 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 2; and
(iii) any matter relating to the LPC Business.
"BUSINESS DATA" means the Company's historical and current documents
relating to the Business, including customer lists, product, distributor
and supplier lists, catalogues, literature, employee records, documents
of title to the Assets (but excluding those relating to the Properties),
sales targets, sales statistics, market share statistics, marketing
surveys and reports, marketing research and any advertising or other
promotional materials, production data, safety data and accounting
(including management account records) and other financial data (other
than the Canadian Financial Information), whether in hard copy or in
computer held form (including, for the avoidance of doubt, such media as
microfilm and microfiche);
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are generally open for normal business in each of London, Montreal
and New York;
"CANADIAN FINANCIAL INFORMATION" means the financial information
attached as Schedule 7;
"CANADIAN SCHEMES" means the Company's pension plans described in the
Disclosure Letter;
"CANADIAN TECHNOLOGY AGREEMENTS" means the agreements and licence in
the Agreed Form;
"COMPLETION" means completion of the sale and purchase of the Sale
Shares in accordance with Clause 7 which shall occur immediately
following signature and exchange of this agreement;
"COMPLETION DATE" means [ ] on the date of this
agreement;
"COMPUTER SYSTEMS" means all computer hardware, software,
microprocessors and firmware which in each case are used in the
Business;
"CONTRACTS" means all contracts and arrangements relating to the
Business entered into before Completion by or on behalf of the Company
in connection with the Business which remain (in whole or in part) to be
performed at Completion and, in addition, means any contracts or
arrangements between the Company and the Seller (or any of its
Affiliates);
"DEFAULT INTEREST" means LIBOR plus 200 basis points compounded
monthly;
"DISCLOSURE LETTER" means the letter of the same date as this
agreement from the Seller to the Purchaser;
"DUPONT" means E.I. du Pont de Nemours and Company;
"EMPLOYEES" means all those individuals employed by the Company at
Completion;
"ENVIRONMENT" has the meaning in Schedule 5;
"ENVIRONMENTAL AUTHORISATIONS" means all or any permits, certificates,
consents, licences, approvals, registrations and other authorisations
required under Environmental Laws and all terms and conditions thereof
required under any Environmental Law for the operation of the Business;
"ENVIRONMENTAL LAWS" has the meaning given in Schedule 5;
"ESTIMATED CONSIDERATION" has the meaning given in Clause 3;
"FIELD OF ACTIVITY" means:
(a) the import, export, sale and distribution of titanium dioxide
pigments and co-products and related products; and
(b) the manufacture of finished products from the processes by which
reactor discharge from the chloride process and calciner discharge
from the sulphate process are treated to produce titanium dioxide
pigments
and all other business and operations as carried on by the Company as at
the date hereof but for the avoidance of doubt shall not include:
(i) the manufacture, sale or disposal by way of trade of any
organometallic compounds save the manufacture, sale or
disposal of a pigment which incorporates as an essential
feature of its composition an organometallic compound shall
not be considered to be the manufacture, sale or disposal of
an organometallic compound as such; and
(ii)the manufacture, sale or disposal by way of trade of any
form of titanium dioxide of 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 2.
"FINAL CONSIDERATION" has the meaning given in Schedule 6;
"FRAMEWORK AGREEMENT" means the agreement dated o between ICI, DuPont
and the Purchaser;
"GUARANTEES" means all guarantees and indemnities given by the Seller or
Affiliates of the Seller in respect of obligations of the Company in
relation to the Business, short particulars of which are contained in
the Disclosure Letter;
"HAZARDOUS MATERIAL" has the meaning given in Schedule 5;
"ICI" means Imperial Chemical Industries PLC;
"ICI GROUP" means ICI and its Affiliates as at the Completion Date;
"IMPLEMENTATION AGREEMENTS" means the documents in Schedule 4;
"INDEPENDENT ACCOUNTANT" has the meaning given in Clause 11;
"INTELLECTUAL PROPERTY" shall mean all patents, trademarks, service
marks, trade names and all goodwill associated with the foregoing,
registered designs, copyrights, copyrightable works (including, without
limitation, data, documentation and databases) registered internet
domain names, and rights to inventions and applications for and rights
to apply for protection or registrations of any of the same; including
any continuation, continuation-in-part, provisional, reissue, divisional
and re-examination patent applications and all rights in Technical
Information;
"INTRA-GROUP LOANS" means all Net Debt due from the Company to the
Seller or any Affiliate of the Seller or due to the Company from the
Seller or any Affiliate of the Seller as determined in accordance with
Schedule 6, and in both circumstances relating only to those Affiliates
of the Seller following Completion;
"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 a.m., London time, on
the first day of the period to which any interest period relates (the
"RELEVANT DATE"). If such rate does not appear on the Reuters Screen
ISDA Page on the Relevant Date, the rate for that Relevant Date will be
determined as if the parties had specified that the rate for the
Relevant Date will be determined on the basis of the rates at which
deposits in US Dollars are offered by Midland Bank plc at approximately
11.00 a.m., London time, on the Relevant Date to prime banks in the
London interbank market for a period of one month commencing on that
Relevant Date for amounts of US$10,000,000;
"LPC" means the Louisiana Pigment Company Limited Partnership;
"LPC BUSINESS" means any sales sourced from LPC, any Stocks, Operating
Debtors, Operating Creditors less than one year (the definitions of such
terms in Schedule 6 being applied to LPC) and other assets or
liabilities relating to LPC as determined and distinguished from the
Business in accordance with Schedule 9;
"MATERIAL CONTRACTS" means all Contracts (i) which at Completion have in
excess of 12 months to run and which in that time can reasonably be
expected to involve income or expenditure in respect of the Business in
excess of US$200,000 per annum; or (ii) which at Completion have less
than 12 months to run and which in that time can reasonably be expected
to involve income or expenditure in respect of the Business in excess of
US$500,000; or (iii) which relate to the treatment and/or disposal of
waste; or (iv) which relate to contract manufacturing or processing of
products by third parties; or (v) which relate to third party
distribution or agency in respect of products; or (vi) the absence of
which would have a material negative impact on the conduct of the
Business;
"NET DEBT" has the meaning in Schedule 6;
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice including, without limitation,
quantity and frequency, taking into account the relevance and
reasonableness of the same and with allowance made for the inherently
cyclical nature of the titanium dioxide industry;
"PARENT UNDERTAKING" shall have the meaning given in section 258 of
the United Kingdom Companies Xxx 0000;
"PERMITS" means all licences, permits, authorisations, registrations and
approvals required by law or regulation or issued or granted by
statutory or other authorities to the Company for the operation of the
Business (but excluding, for the avoidance of doubt, planning
permissions issued by relevant planning authorities (save for
Environmental Authorisations) and any licence, permit, authorisation or
approval which falls within the definition of Regulatory Conditions);
"PLANT AND EQUIPMENT" means the plant, machinery, spare parts, tools,
equipment, chattels, motor vehicles, furniture, fixtures and fittings
(to the extent they are not included in the Properties) and all other
tangible personal property located at the Property (including without
limitation office equipment) which in each case is owned and/or used by
the Company in relation to the Business as at Completion;
"PROPERTY" means those properties shown in Schedule 2 Part I;
"PURCHASER'S AUDITORS" means PriceWaterhouseCoopers;
"PURCHASER'S GROUP" means the Purchaser's ultimate parent undertaking
and that parent undertaking's Affiliates;
"REGULATORY CONDITIONS" means the anti-trust or regulatory approvals
(other than Environmental Authorisations) necessary to complete the sale
of the Company on the terms set out in this agreement;
"SELLER'S AUDITORS" means KPMG;
"SELLER'S GROUP" means TG and Omicron's ultimate parent undertakings and
those parent undertakings' Affiliates as at the Completion Date;
"STOCK" means the stocks of fuels, raw materials, ingredients,
packaging, office and laboratory supplies, engineering spares,
consumable stores, work-in-progress and finished goods at Completion
held by the Company for the purposes of the Business;
"TAX" has the meaning given in the Tax Deed of Covenant;
"TAXATION" has the meaning given in the Tax Deed of Covenant;
"TAX AUTHORITY" has the meaning given in the Tax Deed of Covenant;
"TAX DEED OF COVENANT" means the tax deed of covenant in the Agreed
Form;
"TAX LIABILITY" has the meaning given in the Tax Deed of Covenant;
"TECHNICAL INFORMATION" shall mean 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, in such media as microfilm and microfiche);
"TERRITORIES" means the United States of America, Canada, Mexico,
Central and South America;
"XXXXX SITE" means 1690 and 0000 Xxxxx-Xxxxxxxx Xxxxxxxxx, Xxxxx,
Xxxxxx, X0X XX0, Xxxxxx;
"UK GAAP" means generally accepted accounting principles in the United
Kingdom;
"US DOLLARS", or "US$" means the lawful currency of the United States
of America;
"WARRANTIES" has the meaning given in Clause 5.1; and
"WARRANTY CLAIM" has the meaning given in sub-Clause 5.4.
1.2 Unless otherwise stated, any express reference to an enactment includes
references to:
(a) that enactment as amended, extended or applied by or under any
other enactment before or after this agreement;
(b) any enactment which that enactment re-enacts (with or without
modification); and
(c) any subordinate legislation made (before or after this agreement)
under any enactment, including one within (a) or (b) above,
except to the extent that any of the matters referred to in (a) to (c)
occurring after the date of this agreement would increase or alter the
liability of any party under this agreement.
1.3 The singular shall include the plural and vice versa and words denoting
persons shall include bodies corporate and unincorporated associations
of persons and, unless otherwise stated, shall include permitted
successors or assigns of such persons.
1.4 Sub-Clauses 1.1 to 1.3 apply unless the contrary intention appears.
1.5 The headings in this agreement do not affect its interpretation.
1.6 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.
1.7 Where any statement in this agreement (or in the attached Schedules or
Annexes) (other than in Schedule 3 paragraphs H(2) and H(4)) is
qualified by the expression "SO FAR AS THE SELLER IS AWARE," "TO THE
SELLER'S KNOWLEDGE, INFORMATION AND BELIEF," "KNOWN TO THE SELLER" or
any similar statement, that statement shall be deemed to mean the
knowledge, after reasonable investigation, of the officers and
operational and functional managers of ICI and its Affiliates who have
direct responsibility for the subject matter concerned, being those
listed in Schedule 9.
2 SALE AND PURCHASE OF THE SALE SHARES
2.1 The Seller shall with full title guarantee sell and the Purchaser shall
purchase the Sale Shares together with all rights attaching to them.
2.2 The Sale Shares shall be sold free from all liens, charges, equities and
encumbrances and other rights exercisable by third parties or Affiliates
of the Seller.
3 CONSIDERATION AND ADJUSTMENTS
3.1 Subject to sub-Clause 3.3 below, the consideration for the sale of the
Sale Shares shall be US$[o] payable in cash by the Purchaser on
Completion (the "ESTIMATED CONSIDERATION").
3.2 The payment under sub-Clause 3.1 shall be paid to the correspondent bank
named below for credit to the US Dollar account of o (the "ICI ACCOUNT")
referred to below:
Correspondent bank:
Bank account:
Account name:
Account no:
Sort code:
3.3 Any payments to the Purchaser under this agreement shall be paid to the
correspondent bank named below for credit to the US Dollar account of o
(the "PURCHASER ACCOUNT") referred to below:
Correspondent bank:
Bank account:
Account name:
Account no:
Sort code:
3.4 The Final Consideration shall be determined and any difference between
the Estimated Consideration and the Final Consideration shall be paid in
accordance with the provisions of Schedule 6.
4 PURCHASER'S WARRANTIES
The Purchaser represents and warrants to the Seller that:
(a) it (and each of its Affiliates, in respect of the Implementation
Agreements to which such Affiliate is a party) has the requisite
power and authority to enter into and to perform this agreement
and such Implementation Agreements;
(b) it (and each of its Affiliates, in respect of the Implementation
Agreements to which such Affiliate is a party) has obtained or
satisfied all corporate, regulatory and other approvals, or any
other significant conditions, necessary to execute and perform
this agreement and such Implementation Agreements;
(c) this agreement and the Implementation Agreements constitute valid
and binding obligations of the Purchaser (and each of its
Affiliates, in respect of the Implementation Agreements to which
such Affiliate is a party) enforceable in accordance with their
respective terms; and
(d) compliance with the terms of this agreement by the Purchaser and
the Implementation Agreements by the Purchaser or its Affiliates
(as appropriate) will:
(i) not constitute a breach of any agreement or contract to which
the Purchaser or such Affiliate of the Purchaser is a party
or by which it is bound; and
(ii)be in compliance with the Purchaser's or such Affiliate of
the Purchaser's memorandum and articles of association or
other constitutional documents; and
(iii) not contravene:
(a)any order, judgment or decree; or
(b)any statute, rule or regulation; or
(c)any other restriction of any kind by which the Purchaser
or such Affiliate of the Purchaser is bound.
5 SELLER'S WARRANTIES
5.1 The Seller represents and warrants to the Purchaser in the terms set out
in Part A.1 of Schedule 3.1 and that, save as otherwise stated in this
agreement and subject to all matters and circumstances fairly disclosed
in the Disclosure Letter, each of the statements set out in Schedule 3
Part A.2 to N (inclusive) to this agreement (the "Warranties") is true
and accurate as at the date of this agreement and the Seller
acknowledges that the Purchaser has entered into this agreement in
reliance upon the Warranties.
The Purchaser agrees that no warranty, representation, undertaking or
indemnity, or any other contractual obligation or otherwise is made or
given by the Seller to either the Purchaser or its Affiliates in
relation to LPC.
5.2 Each of the Warranties shall be separate and independent and no Warranty
shall limit the scope or construction of any other Warranty or any other
provision of this agreement.
5.3 The Purchaser acknowledges and agrees that:
(i) save as may be set out in this agreement or in the
Implementation Agreements, except for the Warranties and in
relation to an allegation of fraud, no statement, promise or
forecast made by or on behalf of the Seller or any member of
the Seller's Group may form the basis of, or be pleaded in
connection with, any claim by the Purchaser under or in
connection with this agreement or the Implementation
Agreements; and
(ii)any claim by the Purchaser or any person deriving title from
it in connection with the Warranties shall be subject to the
following provisions of this Clause.
5.4 The liability of the Seller in respect of any breach of the Warranties
(a "WARRANTY CLAIM") or the indemnities contained in this agreement
shall be governed by the terms of the Americas Liability Agreement
except as expressly provided therein.
5.5 The liability of the Seller under or in respect of a Warranty Claim
shall also be limited in respect of any liability which is contingent,
unless and until such liability becomes an actual liability and is due
and payable provided that the Purchaser shall not be prohibited from
bringing a Warranty Claim pending such liability becoming due and
payable.
5.6 The Purchaser acknowledges and agrees that:
(i) no liability shall attach to the Seller by reason of any
breach of any of the Warranties or any indemnities contained
in this agreement to the extent that the loss including all
relevant costs and expenses has been recovered by the
Purchaser under Schedule 5 or any other term of this
agreement or any other document referred to herein and
accordingly the Purchaser may only recover once in respect of
the same loss; and
(ii)in calculating the liability of the Seller for any breach of
the Warranties there shall be taken into account the amount
by which any Taxation for which the Purchaser is now or in
the future accountable or liable to be assessed is reduced or
extinguished as a result of the matter giving rise to such
liability.
5.7 The Purchaser shall not be entitled to make any Warranty Claim:
(i) to the extent that the claim arises as a result only of any
change after Completion in the accounting bases upon which
the Company values its assets or computes its profits or
arises as a result of the taxation or accounting policies,
bases or
practices of the Purchaser being different to those adopted
or used in preparing the Accounts; or
(ii)to the extent that the matter which constitutes the claim
was specifically consented to in writing by the Purchaser in
the knowledge that such matter would give rise to such
Warranty Claim.
5.8 The Purchaser shall not be entitled to rescind or terminate this
agreement after Completion in any circumstances provided that nothing in
this sub-Clause shall exclude or limit any right to rescind or terminate
for fraud.
5.9 Save as otherwise provided in this agreement, the Seller shall not be
liable in respect of any Warranty Claim to the extent that the liability
of the Seller in respect thereof is incurred or increased as a result of
any legislation not brought into force at the date of this agreement or
as a result of any change in or repeal of legislation hereafter or as a
result of the introduction or cessation of or change in the published
practice of any taxation authority after the date of this agreement.
5.10 The Purchaser shall not be entitled to make any claim in respect of any
breach or alleged breach of the Warranties to the extent that:
(i) the facts, matters or circumstances giving rise thereto (in
respect of which any such claim or alleged claim arises) have
been fairly disclosed in the Disclosure Letter; or
(ii)such claim arises or is incurred as a result of any
voluntary act or omission of the Purchaser or any Affiliate
of the Purchaser after the date of this agreement other than
any such act or omission which is in the ordinary course of
business or is required by law or is pursuant to a legally
binding commitment of the Company or any member of the
Seller's Group created or entered into before Completion.
5.11 The provisions of this Clause 5 shall have effect notwithstanding any
other provisions of this agreement.
6 SELLER'S INDEMNITY
6.1 The Seller undertakes to indemnify and keep indemnified the Purchaser,
its Affiliates and the Company (the "INDEMNIFIED PARTIES") against all
claims by third parties (other than any subsequent purchaser or
purchasers of either the Sale Shares or the business or assets of the
Company and their successors in title or assigns) giving rise to Adverse
Consequences which may be paid, suffered or incurred by any of the
Indemnified Parties or to which any of the Indemnified Parties may
become subject, and which arise as a result of the operation of the
Business by the Company prior to Completion (unless and to the extent
that the circumstances giving rise to the Adverse Consequences were
fairly disclosed in the Disclosure Letter) and including without
limitation those Adverse Consequences arising:
(a) as a result of the failure by the Company to comply with relevant
and legally enforceable corporate or other laws, rules,
ordinances or regulations with respect to the operations of the
Business prior to Completion;
(b) as a result of the failure by the Company to obtain required
relevant governmental permits, licences, consents or other
authorisations with respect to the operation of the Business
prior to Completion;
(c) from or with respect to any breach of contract, tort or product
liability or otherwise arising from, or with respect to, the
operation of the Business prior to Completion and asserted by any
third party; and
(d) from or with respect to any suit, action, arbitration, charge,
governmental investigation, claim, litigation or proceedings
affecting the Business or the Company.
Provided that the indemnity contained in this Clause 6 shall not
apply to:
(i) liabilities expressly assumed by the Purchaser pursuant to
this agreement or the Implementation Agreements; or
(ii)to the extent that such liabilities have been taken into
account in establishing the Final Consideration; or
(iii) any Environmental Liabilities, any failure or omission to
obtain or comply with Environmental Authorisations, any
failure or omission to comply with any Environmental Laws or
any claim by any person in respect of any matter concerning
the Environment (indemnity for which is provided in
sub-Clause 9.2 and Schedule 5); or
(iv) Taxation (indemnity for which is provided in the Tax
Deed of Covenant); or
(v) LPC.
6.2 The Purchaser agrees to give the Seller notice of any and all claims
asserted against the Purchaser for which indemnification under this
Clause 6 is or may be sought. Such notice shall be given as soon as
reasonably practicable after the Purchaser becomes aware that it has or
may have a claim against the Seller. Under this Clause 6, failure to
give such notice shall not abrogate or diminish the Seller's obligation
under this Clause if the Seller has or receives knowledge of the
existence of any such claim by any other means or if such failure does
not prejudice the Seller's ability to defend such a claim.
7 COMPLETION
7.1 Completion shall take place at the offices of the [ ] immediately
after the signature of this agreement when:
(a) each party shall provide to the others evidence in a form
reasonably satisfactory to the others that it (and each of its
relevant Affiliates entering into an Implementation Agreement)
has all necessary corporate approvals and consents and its
signatories have necessary authority to enter into this agreement
and the other agreements referred to herein;
(b) each party shall (or shall procure that its relevant Affiliates
will) duly execute and, to the extent applicable, complete the
Implementation Agreements and the Tax Deed of Covenant;
(c) the Seller shall deliver to the possession and control of the
Purchaser:
(i) a duly executed transfer or transfers in favour of the
Purchaser (or such Affiliate of the Purchaser as the
Purchaser may nominate) of all the Sale Shares;
(ii)share certificate(s) or other documents of title relating to
the Sale Shares (or an express indemnity in a form reasonably
satisfactory to the Purchaser in the case of any missing
certificates or documents of title);
(iii) the company books relating to the Company, including
certificates of incorporation, common seals, minute books,
statutory registers, shareholders' agreements and share
certificate books (duly written up to date);
(iv) resignations of all the directors and secretary of the
Company;
(v) the written resignation of the auditors of the Company to
take effect on Completion, with acknowledgments signed by
them to the effect that they have no claim against the
Company and to the effect that there are no circumstances
connected with their resignation which they consider should
be brought to the notice of the shareholders or creditors of
the Company;
(vi)bank statements in respect of every account which the
Company has, dated two days prior to the Completion Date and
the relevant reconciliation statements prepared on the
previous Business Day;
(vii)the Business Data;
(viii)the documentation and title deeds to the Property in
accordance with the provisions of Part II of Schedule 2;
(ix)the Implementation Agreements duly executed by the Seller
and/or Affiliates of the Seller as applicable; and
(x) the Disclosure Letter;
(d) the Purchaser shall pay to the Seller the Estimated
Consideration;
(e) the Purchaser or another member of the Purchaser's Group shall
procure that all Intra-group Loans due from the Company to the
Seller or any Affiliate of the Seller are repaid by the Company
and the Seller or another member of the Seller's Group shall
procure that all Intra-group Loans due to the Company from the
Seller or any Affiliate of the Seller are repaid by the Seller or
its relevant Affiliates;
(f) the Seller shall take or shall procure the taking of, such steps
as may be necessary to:
(i) approve the transfers referred to in Clause 7.1(c)(i)
(subject only to the Purchaser arranging and paying any taxes
or duties arising in relation to the transfer); and
(ii)appoint such directors and secretary as the Purchaser may
specify as directors and the secretary of the Company; and
(iii) release the securities, guarantees, claims and indemnities
existing immediately prior to Completion other than those
arising in the Ordinary Course of Business, owed or due to or
claimed by the Seller or any Affiliate (being an Affiliate
after Completion) from the Company, true and complete
particulars of which are set out in Schedule 10;
(g) each party and the Purchaser shall deliver a copy of the Tax Deed
of Covenant duly executed to the other parties.
8 EMPLOYEES
8.1 The Purchaser agrees to procure that the Company for a period of four
years from the Completion Date, will procure that:
(a) the Employees will receive and enjoy contractual remuneration and
benefits (including separation and other benefits described in
the Disclosure Letter) which, judged objectively, are no less
favourable overall than their contractual remuneration and
benefits at the Completion Date; and
(b) it will not make any unilateral material change to the
contractual terms and conditions of employment with the Employees
without prior consultation and concurrence as required by any
local laws or agreements, with recognised trade unions,
appropriate employee representatives, or the Employees.
8.2 The Seller will procure that, on or before Completion, the Company will
discharge its liability to Xx. Xxx Xxxxxxxx in respect of Supplemental
Employment Terms.
8.3 For the purposes of this clause, "SUPPLEMENTAL EMPLOYMENT TERMS" shall
mean:
8.3.1 the period of additional notice (if any) due from the Company at
the date such liability crystallises under the arrangement in
force as at Completion which is in excess of that which he would
have received under the terms of his service agreement dated 25
October 1990;
8.3.2 the supplemental retirement benefits that are in addition to the
benefits to which Xx. Xxxxxxxx is entitled under the TCI Staff
Employees' Pension Plan; and
8.3.3 any other enhancements to his terms and conditions of employment
granted between 25 October 1990 and Completion and which are in
force as at Completion other than those granted in the Ordinary
Course of Business.
8.4 The Seller will indemnify the Purchaser (for itself and as agent and
trustee for the Company) on a continuing basis against any and all
losses or liabilities, costs (including without limitation legal costs),
charges, expenses, actions, proceedings, claims and demands which the
Purchaser or the Company may incur and which relate to or arise out of
the continuation after Completion of the Supplemental Employment Terms.
8.5 The Purchaser acknowledges and agrees that all of the funds set aside
(or due at Completion to be set aside) by the Company (in trust and
including related refundable tax amounts with Revenue Canada) for the
purpose of meeting the liability of the Seller and the Company to
provide supplemental retirement benefits for Xx. Xxxxxxxx will be used
for this purpose. The funds held in trust are held at Royal Trust
Company 1 Place Ville Xxxxx Montreal in account nos. 554114673-001 and
554 831932. If these funds have not been used for this purpose before
Completion, the Purchaser will procure that the Company complies with
any directions given by the Seller as to the use of these funds after
Completion for the purpose of providing such benefits for Xx. Xxxxxxxx.
8.6 The Seller will indemnify the Purchaser (for itself and as agent and
trustee for the Company) on a continuing basis against any and all
losses or liabilities, costs (including without limitation legal costs)
charges, expenses, actions, proceedings, claims and demands which the
Purchaser or the Company may incur as a result of the severance
payments, pension entitlements, accelerated pension entitlements and any
other benefits actually paid to any employee whose employment is
terminated after Completion if and to the extent such payments,
entitlements and/or benefits are in excess of those which would have
applied at any time in the period prior to 10 September 1997 Provided
always that the dismissal which results in the excess costs being
incurred takes effect within four years of Completion and the regular
salary figure used in the calculations is one which has been prevailing
in respect of the relevant employee for at least six months prior to
termination. This indemnity shall not extend to any losses or
liabilities, costs (including without limitation legal costs) charges,
expenses, actions, proceedings, claims and demands which the Purchaser
or the Company may incur as a result of its or their negligence or
default. Any claims under this indemnity must be made within 4 years and
3 months of Completion following which this indemnity shall have no
effect.
8.7 The Seller shall not be required to make any payment under the indemnity
set out in sub clause 8.6 unless a draft certificate shall have been
delivered to it by the Purchaser within 30 days after the date requiring
the Seller to indemnify the Purchaser pursuant to sub-clause 8.6 and
certifying the amount payable thereunder. In order to enable the Seller
to review the certificate, the Purchaser shall (to the extent it is
permitted by law to do so) make available and supply to the Seller and,
at the Seller's request and expense, the Seller's auditors, copies of
all relevant records and other working papers) relating to the subject
matter of the indemnity, during normal office hours.
8.8 If the Seller does not within 30 days after presentation to it of the
draft certificate give notice to the Purchaser that it disagrees with
the certificate or any item thereof, such notice stating the reasons for
the disagreement in reasonable detail, the draft certificate shall
become final and binding on the parties for all purposes.
8.9 If the Seller gives a valid notice within such 30 days, the parties
shall attempt in good faith to reach agreement in respect thereof and,
if they are unable to do so within 21 days of such notification, either
party may by notice to the other refer the certificate to the
Independent Accountants in accordance with the provisions of clause 11
of this agreement which shall apply mutatis mutandis, references to the
"COMPLAINANT" being deemed to be references to the "SELLER" and
references to the "OTHERS" being to the "PURCHASER".
8.10 The Seller shall pay interest at the rate of LIBOR plus 200 basis point
compounded monthly on all payments pursuant to this clause from the date
of delivery of the draft certificate.
9 PROPERTY AND ENVIRONMENTAL
9.1 The Seller and the Purchaser shall observe and perform the provisions of
Schedule 2 expressed to be observed and performed by each of them
respectively.
9.2 The Seller and the Purchaser shall observe the provisions of Schedule 5
expressed to be observed and performed by each of them respectively.
10 PENSIONS
The Purchaser agrees to procure that the Company will, commencing with
the Completion Date, respect and perform the provisions of the Canadian
Schemes.
11 INDEPENDENT ACCOUNTANT
11.1 If either party wishes to refer any matter in dispute in accordance with
the provisions of Clause 3 or Schedule 6 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 five
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.
11.2 If the Independent Accountant delays or becomes unwilling or incapable
of acting or if for any other reason the President for the time being of
the Institute of Chartered Accountants in England and Wales thinks fit
he may discharge the Independent Accountant and, in the absence of
agreement between the parties, appoint another in its place.
11.3 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
them and shall make its determination within 40 days of its appointment.
11.4 The fees and expenses of the Independent Accountant shall be borne by
the parties in equal shares unless the Independent Accountant determines
otherwise.
12 PROTECTIVE COVENANTS
The Seller covenants with the Purchaser that no member of the Seller's
Group will:
(a) for a period of five years from Completion within any part of the
Territories carry on or be engaged or involved in the Field of
Activity (save as provided in sub-Clause 12.4 below and as the
owner for investment purposes only of securities traded on a
recognised stock exchange and not exceeding one per cent. of the
securities of that class); or
(b) without prior approval from the Purchaser, for a period of two
years from Completion, directly or indirectly solicit, or
endeavour to entice away from the Purchaser or its Affiliates any
of the Employees.
12.1 Each of the restrictions in sub-Clause 12.1 above shall be enforceable
independently and its validity shall not be affected if the other is
invalid.
12.2 The Seller acknowledges that the provisions of this Clause 12 are no
more extensive than is reasonable to protect the Company.
12.3 Nothing in this Clause 12 or in this agreement shall prevent:
(a) the Seller or its Affiliates from purchasing shares in any
company or any business which has an interest in the Field of
Activity (the ownership of which would otherwise contravene
sub-Clause 12.1) unless the turnover of such company or
business in its last accounting year generated by its interest
in the Field of Activity was the greater of 10 per cent of the
aggregate turnover of such company or business and US$100
million. In the event that the Seller or any of its Affiliates
within five years from Completion purchases any corporation or
business which does have interests in the Field of Activity,
the Seller or the relevant Affiliate are contractually obliged
to offer for sale such interests to DuPont.
If DuPont does not purchase such interests from the Seller (or
its relevant Affiliate), the Seller (or the relevant Affiliate)
shall, if DuPont shall fail to or does not accept the offer
referred to above within such period to which it is entitled for
such purpose, within 30 days of receipt, from DuPont of notice
that DuPont does not intend to purchase such interests offer for
sale such interests to the Purchaser on terms which are no less
favourable by written notice ("OFFER NOTICE").
If the Purchaser does not unconditionally purchase such interests
from the Seller (or its relevant Affiliates) within a period of
18 months after the date of the Offer Notice, then the Seller (or
the relevant Affiliate) shall be free to retain such interests
with the consent of the Purchaser (such consent not to be
unreasonably withheld or delayed). If such consent is reasonably
withheld, then the Seller (or the relevant Affiliate) shall use
its best endeavours to divest such interests within 12 months of
such consent having been withheld; or
(b) the Seller or its Affiliates from carrying on or being engaged or
involved in:
(i) any business it currently carries on (other than the
Business);
(ii)any business which only supplies other members of the
Seller's Group; or
(iii) any business after such time as the Purchaser or its
Affiliates have ceased to carry on or be engaged or involved
in such business other than by way of trade sale; or
13 ANNOUNCEMENTS
The parties agree that no party shall make or permit any member of the
Seller's Group or the Purchaser's Group, as the case may be, to make any
announcement concerning this agreement or any ancillary matter except as
required by law or any competent regulatory body or with the prior
written approval of the other party which will not be unreasonably
withheld or delayed.
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 NOTICES
15.1 Any notice or other document to be served under this agreement shall be
in writing and may be delivered by hand or by courier, sent by fax or by
post to the party to be served at its address appearing in this
agreement (and marked for the attention of the person whose name is
referred to in sub-Clause 15.3 below) or at such other address (or
marked for the attention of such other person) as it may have notified
to the other party in accordance with this Clause 15. Any notice or
other document sent by post shall be sent by registered post (if both
posted and for delivery within the same jurisdiction) or by registered
airmail (if posted for delivery outside the jurisdiction in which it is
posted), in either case return receipt requested (or any substantially
equivalent service).
15.2 Any notice or document delivered or sent in accordance with sub-Clause
15.1 shall be deemed to have been served:
15.2.1 if delivered by hand or by courier, at the time of delivery; or
15.2.2 if sent by fax, at the time of delivery if sent between 12.01
a.m. and 6.00 p.m. (local time at the destination) or on the
Business Day after transmission, if sent at any other time;
15.2.3 if posted, at 10.00 a.m. on the second Business Day after it was
put into the post if posted for delivery within the same
jurisdiction, or at 10.00 a.m. (local time at the destination) on
the fifth Business Day after it was put in the post if sent by
registered airmail.
15.3 The person to whom notices or documents should be addressed for the
purposes of sub-Clause 15.1 is:
(a) if to be served on TG or on Affiliates of TG:
[ ]
Fax:
copy to the Company Secretary of Imperial Chemical Industries
PLC of Imperial Xxxxxxxx Xxxxx, 0 Xxxxxxxx, Xxxxxx, XX0X 0XX;
Fax: (00) 000 000 0000
(b) if to be served on Omicron or on Affiliates of Omicron:
[ ]
copy to the Company Secretary of Imperial Chemical Industries
PLC of Imperial Xxxxxxxx Xxxxx, 0 Xxxxxxxx, Xxxxxx XX0X 0XX;
Fax: (00) 000 000 0000
(c) if to be served on the Purchaser:
General Counsel
NL Industries, Inc.
00000 Xxxxx Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx XXX XX 00000
Fax: (0) 000 000 0000
15.4 In proving service of a notice or document it shall be sufficient to
prove that delivery was made by hand, courier or fax or that the
envelope containing the notice or document was properly addressed and
posted (either by registered post or by registered airmail, as the case
may be, in accordance with the requirements of this Clause 15).
16 GENERAL
16.1 Each of the obligations, Warranties and undertakings set out in this
agreement which is not fully performed at Completion will continue in
force after Completion.
16.2 Unless otherwise expressly stated all claims made and payments to be
made under this agreement shall be made in US Dollars. Payments to the
Seller shall be made in immediately available funds to the account of
the Seller at such account as the Seller may notify to the Purchaser and
to the Purchaser in immediately available funds to such account as the
Purchaser may notify to the Seller. 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 in US Dollars as
published in the London Edition of The Financial Times published two
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 6.
16.3 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.
16.4 None of the rights or obligations under this agreement may be assigned
or transferred without the written consent of the other parties (the
"NON-ASSIGNING PARTIES") 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 Parties;
(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 Parties 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 Parties may
reasonably require).
16.5 Save as otherwise provided in this agreement, each party shall pay the
costs and expenses incurred by it and its Affiliates in connection with
the entering into and completion of this agreement.
16.6 This agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same agreement and any
party may enter into this agreement by executing a counterpart.
16.7 No amendment, variation or waiver of this agreement or any provision of
this agreement shall be effective unless it is in writing specifically
referring to this agreement and duly executed by or on behalf of each
party.
16.8 Each party shall at their own expense at all times from the date of this
agreement do all things as may be required to give effect to this
agreement including, without limitation, the execution of all deeds and
documents, procuring the convening of all meetings, the giving of all
waivers and consents and the passing of all resolutions and otherwise
exercising all powers and rights available to them.
17 WHOLE AGREEMENT
17.1 Subject to sub-Clause 17.2, below this agreement, the Framework
Agreement and the Implementation Agreements (if and when executed)
contain the whole agreement between the parties and their respective
Affiliates relating to the transactions contemplated by this agreement
and the Implementation Agreements and supersede all previous agreements
between the parties and their respective Affiliates relating to such
transactions.
17.2 A provision in another agreement between the parties to this agreement
or between the respective parent undertakings of the parties (and
whether made before or after the date of this agreement) which refers to
this agreement and which extends or supplements any provision in this
agreement will be deemed for the purposes of sub-Clause 17.1 above to
form part of the whole agreement between the parties as referred to in
that sub-Clause.
17.3 Each of the parties to this agreement acknowledges on its own behalf and
on behalf of each of its Affiliates that, in agreeing to enter into this
agreement and the Implementation Agreements, it has not relied on any
representation, warranty, collateral contract or other assurance (except
those set out in this agreement) and waives all rights and remedies
which, but for this sub-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 for fraud.
18 GOVERNING LAW
This agreement is governed by and shall be construed in accordance with
English law.
19 JURISDICTION
19.1 The parties agree subject to sub-Clause 19.2 to submit to the exclusive
jurisdiction of the courts of the State of Delaware for all purposes
relating to this agreement.
19.2 If the courts of the State of Delaware decline jurisdiction, the English
courts shall have exclusive jurisdiction for all purposes relating to
this agreement.
19.3 In both sub-Clause 19.1 and 19.2, neither party shall take any action to
avoid, dispute or suggest to such court that such jurisdiction is
improper.
19.4 The Seller appoints ICI American Holdings Inc of 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, XXX as its authorised agent upon whom
process may be served in any legal suit, action or proceeding arising
out of or based upon this Agreement which may be instituted in the
courts of the State of Delaware.
19.5 If the English courts have jurisdiction, the Seller irrevocably appoints
Imperial Chemical Industries PLC of Imperial Xxxxxxxx Xxxxx 0, Xxxxxxxx,
Xxxxxx XX0X 0XX as its agent for process in England and the Purchaser
irrevocably appoints Xxxxxxx Xxxxx (Ref 554) of Xxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxx, Xxxxxx, XX0X 0XX as its agent for process in
England.
AS WITNESS the hands of the duly authorised representatives of the
parties on the date which first appears on page 1.
SCHEDULE 1
PARTICULARS OF THE COMPANY
Date and Place of 27 July 1959; Quebec, Canada
Incorporation:
Registered Office: 0000 Xxxxx Xxxxx-Xxxxxxxx,
Xxxxx, Xxxxxx, X0X 0X0
Xxxxxx
Authorised Share Capital: an unlimited number of Common Shares and an
unlimited number of Class A Special Shares both
without nominal or par value which may be issued for
an unlimited consideration
Shareholders and Issued Tioxide Group Limited - 135,000 Common Shares
Share Capital: ICI Omicron BV - 37,000 Class A Special Shares
Directors: Xxxx Xxxxxxxx
Xxx Xxxxxxxx
Xxxx X. Xxxxxxxxxxx
Secretary: Xxxx Xxxxxxxx
SCHEDULE 2
PROPERTIES
(CLAUSE 1)
PART I
NO. ADDRESS ESTATE OR INTEREST USE
1 Factory at 1690 and 1694 Freehold Titanium dioxide
Xxxxx-Xxxxxxxx Boulevard, finishing plant
Xxxxx, Quebec.
2 Land at Lot 708-102 of the Freehold Site for
Official Cadastre of the titanium
Parish of Notre-Dame-de-la- dioxide plant
Nativite-de-Becancour
and Xxx 000-00 of the
Official Cadastre of the
Parish of Saint-Xxxxxxx-
xx-Xxxxxxxx.
3 0000 Xxxxxxxxx Xxxxxxxxx, Leasehold Former offices
Ville St. Laurent. now sub-let
4 000 Xxxxxxxxxxxxx Xxxx West, Leasehold Offices
Suite 210, Mississaga.
PART II
On Completion, the Seller shall deliver up to the Purchaser all title
documentation (and other documentation disclosed to the Purchaser) in
connection with the Properties.
SCHEDULE 3
WARRANTIES
A. GENERAL
A.1 CAPACITY AND CONDUCT OF BUSINESS
(1) The Seller (and each of its Affiliates in respect of the Implementation
Agreements to which they are parties) has the requisite power and
authority to enter into and to (otherwise as provided in this agreement)
perform this agreement and such Implementation Agreements.
(2) The Seller (and each of its Affiliates, in respect of the Implementation
Agreements to which they are parties) has obtained and satisfied all
corporate, regulatory and other approvals, or any other conditions,
necessary to execute and (otherwise as provided in this agreement)
perform this agreement and the Implementation Agreements.
(3) This agreement and the Implementation Agreements constitute (or when
executed will constitute) valid and binding obligations of the Seller
(and each of its Affiliates in respect of the Implementation Agreements
to which they are parties) enforceable in accordance with their terms.
(4) The execution and compliance with the terms of this agreement by the
Seller and the Implementation Agreements by the Seller or its Affiliates
(as appropriate) will:
(a) not constitute a breach of any material contract to which the
Seller (or any of its Affiliates) is a party or by which it
or they are bound or entitle any person to terminate or avoid
any such agreement or contract;
(b) be in compliance with the Seller's and the Company's
memorandum and articles of association or other
constitutional documents (or those of any of its Affiliates);
(c) not contravene:
(i) any order, judgment or decree; or
(ii) any statute, rule or regulation; or
(ii) any other restriction of any kind by which the Seller
or any of its Affiliates or the Company is bound; or
(b) not result in the loss or impairment of or any default under
any licence, authorisation or consent required by the Company
for the purposes of its business.
(5) All factual information contained in this agreement relating to the
Company is true and accurate in all material respects.
(6) There are no outstanding powers of attorney executed on behalf of the
Company.
A.2 THE COMPANY
(1) The information relating to the Company contained in Schedule 1 is
true and accurate.
(2) Compliance has been made with all legal requirements in connection with
the formation of the Company and all issues and grants of shares,
debentures or other securities of the Company.
A.3 OWNERSHIP OF THE SALE SHARES
(1) The Seller is the sole legal and beneficial owner of the Sale Shares.
The Sale Shares constitute the entire issued share capital of the
Company.
(2) The Seller is entitled to sell and procure the transfer of the full
legal and beneficial ownership in the Sale Shares free from any
encumbrance, equity or third party right of any kind or nature
whatsoever, from any agreement or contract to grant the same and from
any claim to any of the same.
(3) The Sale Shares are fully paid up or credited as fully paid up and
constitute the whole of the issued and allotted share capital owned by
the Seller in the Company.
(4) No agreement or contract has been entered into which requires or may
require the Company to allot or issue any share or loan capital and the
Company has not allotted or issued any securities which are convertible
into share or loan capital and there are no voting trusts, proxies or
other agreements or understandings with respect to the voting of the
Sale Shares.
A.4 SUBSIDIARIES
(1) The Company is not the holder or beneficial owner of (nor has agreed to
acquire) any class of any shares or loan capital or other securities of
any other corporation (whether incorporated in Canada or elsewhere).
(2) The Company is not and has not agreed to become a member of any
partnership or other unincorporated association, joint venture or
consortium (other than recognised trade associations).
(3) The Company does not have any place of business or permanent
establishment (as that expression is defined in double taxation
conventions) outside Canada.
A.5 OWNERSHIP OF ASSETS
(1) Except for those Assets that are leased (as described in the Disclosure
Letter), the Company has full legal and beneficial title to all Assets
(whether tangible or intangible) reflected in the Accounts (save for
current assets and fixed assets worth less than US$100,000, both as
defined for the purposes of the Accounts, disposed of by the Company in
the Ordinary Course of its Business since the Accounting Date) and to
all assets acquired by the Company since 28 February 1998.
(2) None of the Assets is subject to any encumbrance (including, without
limitation, any debenture, mortgage, charge, lien (other than any such
lien arising by operation of law or by statute), deposit by way of
security, xxxx of sale, option or right of pre-emption) except those
that arise in the Ordinary Course of Business and do not have a material
adverse effect on the Business. All significant items of Plant and
Equipment have been regularly and adequately maintained where such
maintenance is normally required and are in reasonable working order
having regard to their age and use and taken as a whole are capable of
operating the Business fully and effectively as conducted by the Company
prior to Completion.
(3) Save for fluctuations and variations in Stock due to normal business
factors including, without limitation, production schedules and market
demand (including seasonal factors affecting the same) the Stocks in
aggregate comprise broadly the same mix of products as has been required
and has been maintained at levels sufficient to meet the level of sales
of the Business for the last four quarters. The Stock is owned by the
Company free and clear of all liens, claims, charges and encumbrances
other than any such liens arising by operation of law or by statute. The
Stock is located at the Xxxxx Site and as disclosed in the Disclosure
Letter.
(4) The Company owns or has the right to use all the property rights and
assets necessary for the Company to carry on fully and effectively the
Business in the manner in and to the extent to which it is presently
conducted.
(5) The Business Data taking into account the time, purpose, nature and
context in which it was prepared is in all material respects a bona fide
and accurate record and in the Seller's opinion is collectively
sufficient for the purposes of conducting the Company's business in the
Ordinary Course of Business. The Business Data and the Company's
information, and the means of access to them, are exclusively owned by
it and under its direct control or are under its authority.
(6) The Disclosure Letter contains details of the current insurance
arrangements applicable to the Company. Those arrangements are in full
force and effect, all premiums have been duly paid and, so far as the
Seller is aware, nothing has been done or omitted to be done which would
make any policy of insurance of the Company void or voidable. There is
no claim outstanding under any such arrangement.
A.6 COMPLIANCE WITH STATUTES
The Company has complied with all applicable laws (including rules,
regulations both having the force of law, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of national, local,
and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, claim, demand, or notice has
been filed or commenced against the Company alleging any failure so to
comply.
A.7 LICENCES AND CONSENTS
The Company has all Permits necessary to own and operate its Assets and
to carry on the Business in the manner in which such business is now
carried on. All such Permits are valid and subsisting and have been
complied with in all material respects. The Company has paid all fees
due under the same. A list of material Permits has been disclosed and
identified in the Disclosure Letter and the list identifies those
material Permits which allow for revocation on a change in controlling
shareholder.
A.8 LITIGATION
(1) The Company is not engaged in any litigation or arbitration proceedings
except as plaintiff for collection of debts in the Ordinary Course of
Business which is likely to involve the Company claiming or paying sums
in excess of US$100,000 or which otherwise will have a material effect
on the operation of the Company and the Business and there are no such
proceedings pending and no letter before action has been received by the
Company and so far as the Seller is aware there are no facts likely to
give rise to any such proceedings. The Seller has disclosed in the
Disclosure Letter a list (which is complete and accurate in all material
respects) which includes a description of each pending law suit, claim
(including customer complaints), administrative proceedings,
arbitration, labour dispute or governmental investigation or inspection
to which the Company is a party or involves the operation of the
Business or involves the Sale Shares and in each case which is likely to
involve the Company claiming or paying sums in excess of US$100,000. The
Seller has disclosed all material (individually or in the aggregate)
product liability claims received by the Company or by the Seller during
the last three years. There are no orders, decrees, judgments or
agreements with any court or governmental authority to which the Company
or the Seller (on behalf of the Company) is a party or by which the
Company or the Seller or the Sale Shares are bound and which will have a
material effect on the operation of the Company and its business.
(2) No administrator, receiver or administrative receiver or any other
equivalent officer has been appointed in respect of the Company or in
respect of any parts of the assets or undertakings of the Company.
(3) No petition has been presented, no order has been made, no resolution
has been passed and no meeting has been convened for the winding-up of
the Company or for an administration order to be made in relation to the
Company nor has any such order been made.
(4) No voluntary arrangement has been approved and no compromise or
arrangement has been sanctioned in respect of the Company pursuant to
any applicable bankruptcy or insolvency legislation.
(5) The Company has not become unable to pay its debts.
(6) No distress, distraint, charging order, garnishee order, execution or
other process has been levied or applied for in respect of the whole or
any part of any of the Property, Assets and/or undertaking of the
Company.
A.9 ENVIRONMENTAL MATTERS
(1) Environmental Authorisations
(a) The Company has lawfully obtained all Environmental
Authorisations and each such authorisation is in full force
and effect and the Company has complied at all times with and
can continue to comply in the future with all conditions of
such authorisations.
(b) No works or costs are or will be necessary to obtain or
secure compliance with or maintain any existing Environmental
Authorisations or their conditions or otherwise to comply
with Environmental Laws.
(c) The Company has received no communication in any form in
respect of any Environmental Authorisation varying, modifying
in any material respect, revoking, suspending or cancelling
the same or indicating an intention or threatening so to do
and there are no facts or circumstances which the Seller
knows or ought reasonably to know which will result in any
Environmental Authorisation being so varied, modified,
revoked, suspended or which may prejudice their renewal.
(d) The Seller or the Company has taken all necessary action in
connection with the renewal or extension of all Environmental
Authorisations.
(e) The Company is not engaged in and, so far as the Seller is
aware, there are no facts which make it likely or desirable
that it should be engaged in any appeal in respect of any
Environmental Authorisation or any conditions contained
therein or any refusal of any Environmental Authorisation.
(f) So far as the Seller is aware or ought to be aware, there is
no reason (other than reasons relating to the Purchaser or
its Affiliates) to believe that those Environmental
Authorisations which have been applied for but which have not
yet been granted or are pending will not be granted within a
reasonable period of time and on terms which are acceptable
in order for the Company to continue its current business
operations.
(g) So far as the Seller is aware or ought to be 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 Environmental Authorisations being varied,
modified, revoked, suspended, cancelled or not renewed, other
than for reasons relating to the Purchaser or its Affiliates.
(2) Compliance with Environmental Laws
(a) The Company is in compliance with Environmental Laws and the
state and use of the Property have been at all times in
conformity with Environmental Laws.
(b) The Company has not received any communication in any form
from any competent authority requiring the taking of remedial
or other steps in relation to the pollution or protection of
the Environment or the state or use of the Property. So far
as the Seller is aware there are no circumstances which might
give rise to such communications being received and the
Seller is not aware of any intention on the part of any such
authority to give such notice.
(c) No proceedings or other action, claim or investigation are or
have been in existence or are so far as the Seller is aware
pending or threatened against the Company arising from or in
relation to any Environmental Authorisations or otherwise
concerning Environmental Laws.
(3) Liability
(a) The Company or the Seller, in relation to the Business, has
not received any notice or intimation of any complaint or
claim from any person in respect of any matter concerning the
Environment.
(b) The Company or the Seller, in relation to the Business, are
not and have not been engaged in any action, litigation,
arbitration or dispute resolution proceedings relating to or
concerning any actual or potential liability under
Environmental Laws and the Seller is not aware of any such
matters pending or being threatened or of any circumstances
or facts likely to give rise to any such matters.
(c) The Company or the Seller, in relation to the Business, are
not and have not been subject to any injunction or similar
remedy or order by a court of competent jurisdiction, or to
any undertakings given to such court in respect of any
matters relating to or concerning the Environment.
(4) As far as the Seller is aware, there has not been in relation to the
Business in the last three years any adverse report, complaint or
investigation under an Act Respecting Industrial Accidents and
Occupational Diseases (Quebec) or an Act Respecting Labour Standards
(Quebec) or any prosecution, formal caution or warning for any violation
of any applicable laws or regulations.
A.10 DATA ROOM DOCUMENTS
(1) Save as disclosed in Schedule 7 of the Disclosure Letter, so far
as the Seller is aware, each licence, permit, contract, list and
report set out in Annex 6 and disclosed in the Data Room, and
identified on Annex 6 by reference to the reference number set
out in the Data Room Index annexed to the Disclosure Letter:
(a) other than where redacted, is a true copy of the original;
(b) is the latest version thereof;
(c) is complete; and
(d) has not been altered, amended or varied since the date
thereon.
(2) To the extent that any note, summary or response to questions of
or in respect of the documents set out in Annex 6 referred to in
sub-Paragraph A.10(1) contains any expression of opinion of the
ICI Group (not including the opinion of third parties), such
opinion reflects the current reasonably held opinion of its
author given in good faith taking into account the respective
author's knowledge and understanding.
B. ACCOUNTS
(1) Accounts
(a) The Accounts (true and complete copies of which are enclosed
with the Disclosure Letter):
(i)have been prepared in accordance with the historical
cost convention and with the Accounting Standards;
(ii) have been prepared on bases and principles which are
consistent with those used in the preparation of the
audited statutory accounts of the Company for the three
financial years immediately preceding that which ended on
the Accounting Date; and
(iii)show a true and fair view of the state of affairs of the
Company as at the Accounting Date and of the results of
the Company for the financial year ended on that date;
(b) Without prejudice to the generality of paragraph (a) above,
the Accounts make:
(i)adequate provisions or reserve (or note in accordance with
good accountancy practice) for all actual liabilities and
capital commitments of the Company;
(ii) proper provision or reserve (or note in accordance with
good accountancy practice) for all known contingent
liabilities including unquantified or disputed
liabilities;
(iii)provision or reserve reasonably regarded as adequate
for bad and doubtful debts; and
(iv) provision or reserve for taxation liable to be assessed
on the Company or for which it may be accountable in
respect of the period ended at the Accounting Date.
(c) True and complete copies of the Accounts and of the audited
accounts for each financial year of the Company preceding
that which ended on the Accounting Date have been laid before
the Company in general meeting and the auditors' reports
thereon were unqualified.
(d) The Accounts are not affected by any extraordinary,
exceptional or non-recurring items.
(e) The profits or losses of the Company for the three
consecutive financial years ended on the Accounting Date as
shown by the Accounts (and by the audited accounts of the
Company for previous periods delivered to the Purchaser) and
the trend of profits or losses thereby shown have not (except
as therein disclosed) been affected by inconsistencies of
accounting treatment, by the inclusion of non-recurring items
of income or expenditure, by transactions entered into
otherwise than on normal commercial terms or by any other
factors rendering such profits or losses for all or any of
such periods exceptionally high or low.
(f) Since the Accounting Date:
(i)there have been no material change in any accounting or
stock valuation method used by the Company;
(ii) there have been no write downs or similar reductions to
the book value of any of the Assets of the Company; and
(iii)there have been no upward revaluations of existing
Stocks.
(2) Canadian Financial Information
(a) The Canadian Financial Information has been derived from the
books of the Company, which books have been regularly and
consistently kept and maintained using ICI's normal
accounting policies and practices as set out or referred to
in the ICI's Controller's Manuals (and the policies contained
in these Manuals are in accordance with UK GAAP) as applied
by the relevant business on a consistent basis in accordance
with UK GAAP and, on such basis, represents the Assets and
liabilities of the Business as at 28 February 1998.
(b) The Canadian Financial Information fairly represents the
matters presented therein.
(c) Since 28 February 1998 there has been:
(i)no material change in accounting or inventory valuation
methods used by the Company in connection with the
Assets;
(ii) no upward re-valuations of existing Stocks; and
(iii)no material adverse change in the Business or financial
condition of the Company which for this purpose shall not
include the inherently cyclical nature of the titanium
dioxide industry or economic conditions generally.
(3) Since [date of Framework Agreement] 1998:
(i) the Company has not sold, leased, transferred, or assigned
any of its assets, tangible or intangible, other than for a
fair consideration in the Ordinary Course of Business;
(ii) the Company has not entered into any agreement, contract,
lease, or licence (or series of related agreements,
contracts, leases and licences) either involving more than
US$1,000,000 within a 12 month period or outside the
Ordinary Course of Business;
(iii)no party (including any of the Company's Affiliates) has
accelerated, terminated, modified, or cancelled any
agreement, contract, lease, or licence (or series of related
agreements, contracts, leases, and licences) involving more
than US$250,000 within a 12 month period to which the
Company is a party or is bound;
(iv) the Company has not imposed or permitted another to impose
any encumbrance upon any of its assets, tangible or
intangible other than those arising by operation of law or
statutes;
(v) the Company has not made any capital expenditure (or series
of related capital expenditures) either involving more than
US$250,000 or outside the Ordinary Course of Business;
(vi) the Company has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any
other person (or series of related capital investments,
loans and acquisitions) either involving more than
US$250,000 or outside the Ordinary Course of Business;
(vii)other than to Affiliates of the Seller, the Company has not
issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalised lease obligation either
involving more than US$250,000 singly or US$2,500,000 in the
aggregate;
(viii) the Company has not delayed or postponed the payment of
accounts payable and other liabilities other than in the
Ordinary Course of Business;
(ix) the Company has not cancelled, compromised, waived, or
released any right or claim (or series of related rights and
claims) either involving more than US$250,000;
(x) the Company has not granted any licence or sublicence of any
rights under or with respect to any Intellectual Property;
(xi) there has been no change made or authorised in the
constitutional documents of the Company;
(xii)the Company has not issued, sold, or otherwise disposed of
any of its capital stock, or granted any options, warrants,
or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock;
(xiii) the Company has not declared, set aside, or paid any
dividend or made any distribution with respect to its
capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(xiv)the Company has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to its property
involving sums in excess of US$250,000;
(xv) the Company has not made or pledged to make any charitable
contribution outside the Ordinary Course of Business;
(xvi) the Company has not committed to any of the foregoing.
C. ANTI-COMPETITIVE ARRANGEMENTS
(1) The carrying on of the Business by the Company does not require any
agreement, arrangement, concerted practice or course of conduct which is
material to the Business and which:
(a) is subject to registration under the Competition Act
(Canada) but is not so registered;
(b) is an offence or a reviewable matter within the meaning of
Parts VI and VIII, respectively, of the Competition Act
(Canada).
(2) The Company or the Seller, in relation to the Business, have not
received in the last three years any process, notice or communication,
formal or informal, from the Director of Investigation and Research
appointed under the Competition Act (Canada) or any anti-trust
regulatory authority, relating to any aspect of the Business, which
alleges any illegal practices in relation to the Business and so far as
the Seller is aware no such process, notice or communication is likely
to be received.
D. MATERIAL CONTRACTS
(1) Particulars of all Material Contracts are annexed to the Disclosure
Letter.
(2) The Company is not in breach of, or default under, any of the Material
Contracts or any other Contracts the consequence of which would or may
have a material adverse effect on the Company and, so far as the Seller
is aware, no state of facts exists or event has occurred, is pending or
is threatened which after the giving of notice or the lapse of time
would or may constitute or result in a breach or a default by the Seller
or by the Company or any other person, firm, corporation or entity of or
in relation to any contract the consequences of which would have a
material effect on the operation of the Business. All Material Contracts
are legal, valid and binding obligations of the Company and are
enforceable in accordance with their terms.
E. EMPLOYEES
(1) Particulars of the material terms of employment of all Employees and
officers of the Company are annexed to the Disclosure Letter and such
particulars are true, complete and accurate.
(2) No Employee has given to the Company and the Company has not received
from any Employee, nor has the Company given to any Employee, notice of
termination of any such Employee's employment.
(3) Standard form consultancy agreements, agency or self-employed or
contracted labour agreements or contracts where sums in excess of
US$75,000 per annum are paid or are payable by the Company have been
disclosed in the Disclosure Letter.
(4) So far as the Seller is aware, there is no material industrial action by
the Employees pending or threatened in relation to the Business nor has
there been within the last 12 months.
(5) Particulars of all loans made by the Company to Employees and which
shall remain outstanding at Completion, together with sums owed by the
Company to any Employee (other than remuneration and other contractual
or customary benefits), are disclosed in the Disclosure Letter.
(6) No Employee of Grade 37 or above previously employed by the Company has
a right to return to work or any right to be reinstated or re-engaged by
the Company, whether under statute or otherwise.
(7) No Employees previously employed by the Company have a right to return
to work or any right to be reinstated or re-engaged by the Company,
whether under statute or otherwise.
(8) In relation to the Employees, there are no existing nor, so far as the
Seller is aware, threatened arbitration procedures arising out of or
under any union recognition or works council agreement covering the
Employees nor, so far as the Seller is aware, does any basis therefore
exist nor has the Seller or the Company received any request for
recognition or representation by any trade union not currently
recognised on the Xxxxx Site.
(9) The Company has complied in all material respects with all statutes,
regulations, orders and codes of conduct relating to employment and
relations with Employees and trade unions and has maintained records
required by law regarding the service of each of its Employees.
(10) The Disclosure Letter contains a list of Employees at the Xxxxx Site
together with a list of Employees below Grade 37 and a list of Employees
above Grade 37. The Disclosure Letter also contains a list of Employees
of the Company who are employed at locations other than at the Xxxxx
Site.
(11) So far as the Seller is aware here are no material complaints, disputes
or grievances pending or threatened against the Company of any nature in
relation to its Employees or former Employees.
(12) All of the Employees are employed by the Company.
(13) The Company has discharged such obligations to Employees in respect of
salaries, wages, commissions, bonuses, overtime pay and holidays as have
accrued and become payable to Employees in accordance with the Company's
normal policies, including the normal timing of such payments, as at the
date hereof.
For the purposes of this Part E, "GRADE 37" refers to a particular grade
of employee, as determined by the Company, using the Hay-MSL evaluation
system.
F. PENSIONS
In this Part F, "SCHEME DOCUMENTS" means the documents relating to the
Canadian Schemes identified in the Disclosure Letter.
(1) Except pursuant to the Canadian Schemes, the Company has not paid,
provided or contributed towards, and is not under any obligation
(whether or not legally enforceable) to pay, provide or contribute
towards any relevant benefit payable on death or retirement for or in
respect of any present or past officer or Employee (or any spouse, child
or dependant of any of them) of the Company.
(2) The Scheme Documents comprise all the documents governing the Canadian
Schemes including financial statements for the preceding period of three
years, all explanatory booklets and announcements to the Employees
describing the terms of the Canadian Schemes (other than routine benefit
statements) of current effect and full particulars of any enhancement of
benefit and contributions payable to the Canadian Schemes and there is
no obligation to provide or continue to provide benefits in respect of
Employees or former Employees of the Company under the Canadian Schemes
other than as revealed in the Scheme Documents.
(3) The Canadian Schemes have been registered as required under applicable
legislation.
(4) The Canadian Schemes have at all times complied with the provisions of
all relevant statutes, regulations and requirements and have been
administered in accordance with the trusts, powers and provisions of the
Canadian Schemes and with due regard to the general requirements of
trust law and the advisers to the Canadian Schemes have not had and do
not have any cause to report any matter.
(5) The Company has complied in all material respects with its obligations
under the Canadian Schemes and all amounts due to be paid to the
Canadian Schemes by it and its Employees have been paid.
(6) There are no claims or actions in progress, pending or threatened (other
than routine claims for benefits) against the trustees of the Canadian
Schemes or the Company about benefits payable under the Canadian Schemes
in respect of Employees or former Employees of the Company.
(7) All information of a factual nature made available to the Purchaser or
its advisers in connection with the Canadian Schemes is true and
accurate in all material respects and there is no omission therefrom.
(8) No proposal has been announced to alter or discontinue the Canadian
Schemes nor has any proposal which is legally enforceable been announced
to establish any retirement, death or disability agreement or
arrangement of the nature referred to in paragraph (1) above in respect
of Employees which proposal remains outstanding and has not been
implemented.
(9) There is no amount which is due to the trustees of the Canadian Schemes.
G. PROPERTIES
(1) The Property constitutes all of the freehold or leasehold or other
immovable property currently owned by the Company or in which the
Company has an ownership interest.
(2) The particulars of the Property shown in Schedule 2 are true, complete
and correct. The use of the Property for the purpose stated in Schedule
2 corresponds to the use to which it is in fact put or (where the
Property is not presently in use) to the use to which it was last in
fact put.
(3) The Company has a good and marketable title to the Property for the
estate or interest stated in Schedule 2, free from any defects, and has
in its possession, or under its control, all duly stamped deeds and
documents which are necessary to prove title to the Property, and such
title has already been fully deduced to the Purchasers.
(4) The Company does not require the use and is not in occupation of or
entitled to any estate or interest in any land or premises other than
the Property. The Company is in exclusive occupation of the whole of the
Property and on Completion shall be in exclusive occupation of the whole
of the Property.
(5) The Property is not affected by any of the following matters:
(a) any servitude, easement, reservation, covenant,
restriction, agreement, licence, franchise, hypothec,
mortgage, charge, encumbrance, or third party right;
(b) any notice, order, proposal, dispute or complaint relating to
it or its present use under any legislation, agreement,
covenant, condition, licence or consent; or
(c) outgoings (other than uniform business rates, water charges
and other standard payments to the relevant water company
including, without limitation, insurance premiums and other
usual business expenses), whether of a periodically recurring
nature or otherwise and whether payable by the owner or
occupier of the relevant property.
(6) All obligations, restrictions, conditions and covenants (including any
imposed by or pursuant to any lease but excluding any referred to in
paragraph A.9 above) affecting the Property have been observed and
performed so far as the Seller is aware and there are no subsisting
allegations of a breach of any thereof relating to the Property or its
present use under any legislation, agreement, covenant, condition,
licence or consent other than those referred to in paragraph A.9 above
or so far as the Seller is aware any circumstance which might give rise
to such a breach.
(7) The Property is in a good and substantial state of repair and condition
and fit for the purposes for which they are presently used and the
Company has not used in the Property any substances not in conformity
with relevant standards or codes of practice or which are generally
known to be deleterious to health and safety and there are no
uncompleted works of any description at the Property other than routine
maintenance.
(8) There are no subsisting allegations that the use of the Property for the
purpose stated in Schedule 2 is not the permitted use under the
provisions of all relevant legislation.
(9) The Company has no liabilities or contingent liabilities (but excluding
any matters referred to in paragraph A.9 above) in respect of any
properties (other than the Property) (or any interest therein) whether
by privity of contract or by way of guarantee or surety or otherwise.
(10) The Property has the benefit of all rights, servitudes, easements and
consents required for the occupation and operation of the Property for
their present use and any plant, machinery and processes thereat and
such rights, servitudes, easements and consents are enjoyed on terms
which do not permit them to be determined by any third party or by
effluxion of time.
(11) There are no outstanding liabilities to make payments in respect of
rates, water charges, or any other charges payable in respect of the
Property to any governmental, state, municipal or other similar
authority.
H. INTELLECTUAL PROPERTY
(1) The rights licensed to the Company pursuant to the Canadian Technology
Agreements in combination with all rights owned by the Company in
Intellectual Property constitutes all the Intellectual Property
necessary for the conduct of the Business by the Company as now
conducted.
(2) The Seller does not have actual notice of infringement by others or of
attacks on the validity or enforceability of or on the Company's title
to any Material Intellectual Property used in the Business. The
Disclosure Letter identifies all patents, patent applications,
registrations and applications for registration of Intellectual
Property, all Material unregistered trademarks, service marks, trade
names and copyrights owned by the Company. "MATERIAL" in this Warranty
H(2) means Intellectual Property the absence of which would have a
significant negative impact on either (a) the revenue attributable to or
derived from the Intellectual Property or (b) otherwise on the conduct
of the Company's business. The Disclosure Letter also identifies the
status of the relevant patents and, so far as the Seller is aware,
whether or not such patents are currently being opposed.
(3) The Disclosure Letter identifies all information technology used by the
Company which is defined in the Disclosure Letter as being "MATERIAL
INFORMATION TECHNOLOGY".
(4) The Seller does not have actual knowledge and has not received written
notification that the activities of the Business infringe the
Intellectual Property of any third party (the Seller having no
obligation to conduct investigations in relation to any such potential
infringement).
(5) So far as the Seller is aware or ought to be aware, all Material
agreements relating to Intellectual Property and Technical Information
to which the Seller is a party and which relate to the Business are
listed in the Disclosure Letter. "MATERIAL" in this Warranty H(5) means
agreements relating to Intellectual Property the absence of which would
have a significant negative impact on either (a) the revenue
attributable to or derived from the Intellectual Property or (b)
otherwise on the conduct of the Company's business.
(6) All Intellectual Property material to the conduct of the Business
immediately prior to Completion will be owned or available for use by
the Company immediately after Completion. For the purposes of this
Warranty H(5), Material has the same meaning as in Warranty H(2).
I. BROKERS
Neither the Seller nor the Company has employed any investment banker,
broker or finder or incurred any liability for any brokerage fees,
commissions, finders fees or similar payments in connection with the
transactions contemplated by this agreement for which the Purchaser, the
Purchaser's Affiliates or the Company may be liable.
J. TAXATION
(1) Tax Returns, disputes, records and claims etc.
(a) The Company has made all proper returns required to be made
for any Taxation purpose and has supplied or caused to be
supplied all information required by law to be supplied to
any revenue authority.
(b) There is no dispute or disagreement (not including routine
queries relating to the Taxation returns of the Company)
outstanding at the date of this Agreement with any revenue
authority regarding the proper method of computing the
profits of the Company (or any part of it) for Taxation
purposes or the proper treatment of sales and goods and
services tax of any supplies of goods or services made (or
treated as made) by the Company or in respect of any other
Taxation matter and there are no circumstances of which the
Seller is aware which make it likely that any such dispute or
disagreement will commence. Without prejudice to the
generality of the foregoing, there is no current
investigation being undertaken by any Taxation authority and,
so far as the Seller is aware, there are no existing
circumstances which make it likely, in the event of such an
investigation taking place, that a liability will arise.
(c) The amount of Taxation chargeable on the Company during any
accounting period ending on or within six years before
Completion has not to any material extent depended on any
concession, agreement, dispensation or other formal
arrangement with any revenue authority in circumstances where
either:
(i) the availability of any such arrangement will be
prejudiced as a result of the change of control of the
Company resulting from this agreement; or
(ii)the Company has not acted in accordance with the terms
of the arrangement in question.
(d) The Company has made all Taxation claims, disclaimers and
elections and taken all other action the making or doing of
which was assumed to have been made for the purpose of the
Taxation provisions in the Accounts.
(2) Duties etc.
All customs duties and sales and goods and services taxes payable to any
revenue authority upon the importation of any of the Company's assets
and all excise duties payable to any revenue authority in respect of any
of these assets have been paid in full, and none of these assets is
liable to confiscation or forfeiture (whether by virtue of non-payment
or underpayment of any Taxation or duty or by virtue of non-compliance
with any legislation or regulation relating to any Taxation or duty or
otherwise howsoever).
(3) Stamp Duty
All documents which are in the possession or control of the Company and
which are subject to stamp duty or similar duty and which confer any
right upon the Company have been duly stamped and all stamp duty or
similar duty properly paid thereon. The Company has never incurred any
liability to stamp duty reserve tax.
(4) Contracts
No contracts to which the Company is a party and no obligation to any
present or former director, employee or officer involve any future
liabilities of a revenue nature which when incurred will not be
deductible in computing profits for corporation tax purposes otherwise
than as a result of any future changes in the law or as a result of any
voluntary act after Completion of the Purchaser or of the Company
outside the Ordinary Course of Business of the Company.
(5) Distributions and payments
The Company has deducted and properly operated and accounted to the
appropriate revenue authority for all amounts which it has been obliged
to deduct in respect of Taxation.
(6) Employee benefits
(a) The Company has made all required deductions and withholdings
from all payments made, or treated as made, to its directors,
Employees or officers or former directors, Employees or
officers or any person required to be treated as such, and
accounting to the taxation authorities for all Taxation so
deducted and for all Taxation chargeable on the Company on
benefits provided for its directors, Employees or officers,
or former directors, Employees or officers.
(b) The Disclosure Letter contains full details of all share
incentive schemes, profit sharing schemes and profit related
pay schemes established by the Company.
(7) Residence and offshore interests
(a) The Company is and has at all times been resident in Canada
for the purposes of all Taxation Statutes and has not at any
time been resident outside Canada for the purposes of any
Taxation Statute or any double taxation arrangements.
(b) The Company has not at any time had a branch outside Canada
or any permanent establishment (as that expression is defined
in any applicable double taxation treaties) outside Canada
and the Company has no existing entitlement to receive
royalties, (or any sum treated as royalties for any Taxation
purposes) which are paid subject to deduction of Tax in a
jurisdiction outside Canada.
K. MILLENNIUM COMPLIANCE
(1) For the purposes of this agreement "MILLENNIUM COMPLIANT" means that the
Computer Systems are capable of the following functions before, during
and/or after 1 January 2000:-
(a) handling date information involving all and any dates before,
during and/or after 1 January 2000 including accepting date
input, providing date output and performing date calculations
in whole or part;
(b) operating accurately without interruption on and in respect
of any and all dates before, during and/or after 1 January
2000 and without any change in performance;
(c) responding to and processing two digit year input without
creating any ambiguity as to the century; and
(d) storing and providing date input information without creating
any ambiguity as to the century.
(2) The Disclosure Letter contains material details of the measures that
have been implemented within the Business to determine the extent to
which its Computer Systems are not Millennium Compliant, and material
details of any programme undertaken by the Business with a view to its
Computer Systems achieving Millennium Compliance (or so close to
Millennium Compliance as is practicable).
L. INTRA-GROUP ARRANGEMENTS
(1) There is no indebtedness or liability (actual or contingent) nor any
security owed by the Company to any member of the Seller's Group or
ICI's Group (as constituted following Completion) other than arising in
the Ordinary Course of Business and as conducted on arm's length terms.
(2) There is no agreement or contract to which the Company is a party and to
which any member of the Seller's Group (as constituted following
Completion) is a party or in which any such member is otherwise
interested in any way whatsoever which shall continue beyond the
Completion Date.
M. DEBTORS
(1) The Company has not made, or entered into any contract or agreement to
make any loan to, or other arrangement with, any person as a result of
which it is or may be owed any money other than trade debts incurred in
the Ordinary Course of Business and cash at bank.
(2) The Company is not entitled to the benefit of any debt otherwise than as
the original creditor and has not factored or discounted any debt or
agreed to do so.
(3) All of the debts which will be reflected in the Final Completion
Statement as owing to the Company (apart from bad and doubtful debts to
the extent to which they have been provided for in the Final Completion
Statement (as defined in Schedule 6)) will realise their full value as
included in the Final Completion Statement within the payment terms
agreed with the respective creditors.
N. OTHER OPERATIONS AND ASSETS
(1) During the 8 years prior to the date hereof, neither the Company, nor
any of its downstream Affiliates nor any entity to which the Company has
succeeded through merger or by operation of law, has engaged, directly
or through downstream Affiliates or agents or in partnership, in a
business other than the manufacture, import, export, sale and
distribution of titanium pigments, co-products and related products.
(2) The Seller has disclosed to the Purchaser details of all real property
owned, leased or occupied by the Company or any of its downstream
Affiliates or any entity to which the Company has succeeded through
merger or by operation of law at any time during the 8 years prior to
the date hereof.
(3) The Seller has disclosed to the Purchaser all off-site disposal
locations of Hazardous Materials owned by the Company, its downstream
Affiliates and any entity to which the Company has succeeded through
merger or by operation of law during the 8 years prior to the date
hereof.
(4) Neither the Company, nor any of its downstream Affiliates nor any entity
to which the Company has succeeded through merger or by operation of law
has owned or controlled a business for whose liabilities any of them
could be responsible the business records of which have not been made
available in the Data Room.
SCHEDULE 4
IMPLEMENTATION AGREEMENTS
1 Deed of Indemnity.
SCHEDULE 5
ENVIRONMENT
1 INTERPRETATION
For the purposes of this Schedule, words and expressions defined in the
Share Sale Agreement to which this Schedule is attached shall have the
same respective meanings in this Schedule and, in addition, the
following terms shall have the following respective meanings:
"COMMERCIALLY REASONABLE EXPENSES" are those costs and expenses which a
reasonable person acting in a commercially prudent manner, taking into
account (but without imposing an absolute requirement) the need to
minimise his expenditure, would expend, in the case of any obligation to
carry out the remediation of Environmental Contamination pursuant to
Environmental Laws, to meet that obligation. For the avoidance of doubt,
Commercially Reasonable Expenses shall not include any costs or expenses
to the extent that they are incurred as a result of the adoption or
imposition of standards of clean-up materially more stringent than those
which are provided for under Environmental Laws;
"CONTROLLED WATERS" means waters including any ground or surface
waters;
"COUNTER INDEMNITY" means the indemnity defined in sub-paragraph 3.1
of this Schedule;
"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 CONTAMINATION" means any discharge, transport, emission,
release, leakage, spillage, escape or disposal of Hazardous Material at
or from the Site(s) onto or into any part of the Environment;
"ENVIRONMENTAL LAWS" means any and all legislation (whether civil,
criminal or administrative), statutes, treaty, statutory instrument,
directive, bylaw or judgment, regulations, ordinances, notices, orders,
government circulars, codes of practice, policy and guidance notes or
decisions of any competent regulatory body or common law relating to
pollution or protection of the Environment or harm to human health
arising from Environmental Contamination, which as at Completion are in
effect and legally capable of enforcement by legal process in the
country in which the Site(s) are situated;
"ENVIRONMENTAL LIABILITIES" means all claims, costs, damages, expenses
(including reasonable professional fees incurred), losses, liabilities
(including without limitation liability to third parties), fines or
penalties suffered or incurred by the Company, the Purchaser or its
Affiliates (or the Seller or its Affiliates in the case of the Counter
Indemnity) in relation to the Company (excluding in the case of the
Indemnity but not the Counter Indemnity the LPC Interests and LPC) as a
direct consequence of or in connection with any Environmental
Proceeding;
BUT EXCLUDING any claims, costs, damages, expenses, losses, liabilities:
(i) in respect of capital expenditure on plant and equipment
other than capital to carry out remediation of Environmental
Contamination pursuant to Environmental Laws;
(ii)in respect of loss of anticipated profits, loss of revenue,
or any other loss in respect of business interruption other
than such reasonably foreseeable losses of third parties who
have themselves directly suffered the relevant Environmental
Contamination or whose use of the Environment has been
adversely and directly affected by the relevant Environmental
Contamination;
(iii) where applicable to the extent that they are not
Commercially Reasonable Expenses;
"ENVIRONMENTAL PROCEEDING" means in relation to the Company:
(i) subject to (ii) and (iii) below, any one or more writs,
interim or final judicial or administrative decrees,
judgments, injunctions, orders, or notices:
(a)under which the Company, the Purchaser or its Affiliates
(or the Seller or its Affiliates in the case of the
Counter Indemnity) are obliged by Environmental Laws or
legal process pursuant to Environmental Laws to undertake
or pay the cost of remediation or with which the aforesaid
parties are otherwise obliged to comply; or
(b)in respect of any violation or alleged violation of
Environmental Laws; or
(c)in respect of:
(01) any personal injury to any third party; or
(02) damage to any property of any third party,
both pursuant to Environmental Laws;
Provided that in the case of the Indemnity only:
* the reference to the Company shall exclude the LPC
Interests and LPC; and
* in paragraphs (i) (c) (01) and (02), the reference to
a "THIRD PARTY" shall not include any employee,
contractor or agent of the Company, the Purchaser or
its Affiliates, except when:
- the personal injury other than asbestos-related
personal injury (in the case of paragraph (i) (c)
(01)); and/or
- the damage to property (in the case of (i) (c) (02)),
occurs after Completion and the Purchaser did not know
or reasonably ought not to have known of the
circumstances which gave rise to that personal injury,
or as the case may be, that damage; and
(ii)any agreement between the Seller and Purchaser (or in the
event of disagreement any determination by the Experts) that
it is Reasonably Necessary to undertake remediation of
Environmental Contamination, which would (but for the fact
that an environmental authority is unaware of it) be more
likely than not to result in an environmental authority
bringing an Environmental Proceeding under (i)(a) in the
definition of Environmental Proceeding and which would result
in Environmental Liabilities;
(iii) notwithstanding sub-paragraph 4.1 hereafter, any agreement
by the Purchaser or its Affiliates with an environmental
authority that the Purchaser or its Affiliates will undertake
remediation of Environmental Contamination if such
remediation is required by such environmental authority as a
condition to the granting, surrender or variation of an
Environmental Authorisation relating to the Site, provided
that:
(a)the grant, surrender or variation of the Environmental
Authorisation arises out of the conduct of the Business
by the Purchaser or its Affiliates; and
(b)the subject matter of the agreement with the environmental
authority shall relate to the Site Provided that if the
subject matter of the agreement does not relate to the
Site, the Purchaser shall have taken all such steps as may
be reasonable to contest the relevant environmental
authorities linkage of the subject matter of the agreement
to the Site; and
(c)the remediation is not required because of any proposed
change of use of the Site from the Business of the
Company; and
(d)save in respect of sub-paragraph 4.1.2 relating to any
Site or part thereof, the remediation is not required
because of any proposed closure of all or part of the
Site, other than in relation to:
(I) any material change of process within the existing
plant and/or buildings on such Site; or
(II)any material change to or development of the business
and/or operations carried on at the Site which does
not result in such Site (or any part) ceasing to be
used for general industrial/manufacturing of a type
materially similar to the existing Site operation; and
(e)the Purchaser or its Affiliates has to the extent
practicable consulted in good faith with the Seller on the
agreement or arrangements with the environmental
authority.
"HAZARDOUS MATERIAL" means hazardous, poisonous, dangerous, noxious or
toxic substances, pollutants or wastes including (to the extent they are
hazardous, poisonous, dangerous, noxious or toxic) pesticides,
contaminants, petroleum products, asbestos, polychlorinated biphenyls
and radiation;
"INDEMNITY" means the indemnities contained in paragraph 2 below;
"REASONABLY NECESSARY" means reasonably necessary to avoid or avert or
mitigate the development of substantial adverse and material pollution
of the Environment or harm to human health which will arise within a
period of six months; and
"SITES(S)" means the Properties.
2 INDEMNITY
2.1 Subject to the provisions of this agreement, the Seller undertakes to
the Purchaser (for the benefit of the Company, the Purchaser and each of
its Affiliates) that it will indemnify and hold harmless the Company,
the Purchaser and each of the Purchaser's Affiliates against:
2.1.1 all Environmental Liabilities arising at or from the Site(s), to
the extent that such Environmental Liabilities are a result of
Environmental Contamination occurring on or before Completion;
and
2.1.2 save in respect of the LPC Interests and LPC, all costs,
damages, expenses, losses, fines or penalties suffered or
incurred by the Company or the Purchaser or its Affiliates as a
result of any prosecutions commenced or proceedings taken, or
notices served or other formal enforcement action between [DATE
OF SIGNATURE OF FRAMEWORK AGREEMENT] 1998 and Completion by any
competent regulatory body in connection with the Environment or
health and safety as a result of any breaches of any
Environmental Laws related to the operation of those Sites
which are owned, occupied or used by the Company at [DATE OF
SIGNATURE OF FRAMEWORK AGREEMENT] 1998. "DAMAGES" in this
paragraph 2.1.2 includes any capital expenditure reasonably
required to remedy such breaches; and
2.2 notwithstanding sub-paragraphs 2.1 above and 4.1 below, neither the
Seller nor any of its Affiliates shall be liable under the Indemnity or
otherwise to the extent that such liability arises from or is
attributable to the failure of the Purchaser to comply or procure the
Company's compliance with the provisions of paragraphs 4.2, 6.1, 6.2, 7,
8, 9, 10, 12 and 14 of this Schedule.
3 THE COUNTER INDEMNITY
3.1 The Purchaser undertakes to the Seller (for the benefit of the Seller
and each of its Affiliates) that, subject to the provisions of this
agreement, it will indemnify and hold harmless (the "COUNTER Indemnity")
the Seller and each of its Affiliates against all Environmental
Liabilities arising at or from the Site(s) to the extent that such
Environmental Liabilities are as a result of Environmental Contamination
after Completion.
3.2 Notwithstanding sub-paragraph 3.1 above, the Purchaser and its
Affiliates shall not be liable to the Seller under the Counter Indemnity
or otherwise to the extent that such liability arises from or is
attributable to the failure of the Seller to comply with the provisions
of paragraphs 3.3, 4.2, 6.1, 6.2, 7, 8, 9, 10, 12 and 14 of this
Schedule.
3.3 The Seller shall take all reasonable steps to avoid or mitigate any
Environmental Liabilities and potential Environmental Liabilities which
may give rise to a claim under or in connection with this
Counter Indemnity, howsoever arising.
3.4 The provisions of sub-paragraphs 4.2 and 12.1 shall apply equally
mutatis mutandis in respect of the Seller and the Purchaser's rights or
obligations in respect of the Counter Indemnity.
4 LIMITATIONS
4.1.1 Neither the Seller nor any of its Affiliates shall be liable
under the Indemnity to the extent that Environmental
Liabilities have arisen, been increased, exacerbated, enhanced
or caused as a result of any act or omission (whether direct or
indirect) of the Company, the Purchaser or any Affiliates,
employees, agents or contractors thereof after Completion
(including, without limitation, any change of use of the
Site(s) including closure of all or any part of the Sites but
not including any material change of process within the
existing plant and/or buildings or any material change to or
development of the business and operations carried on at any
Site which does not result in any Site or any part of any Site
ceasing to be used for general industrial/manufacturing of a
type materially similar to the existing Site operation.
4.1.2 In connection with any Site or part thereof, the use of which had
substantially ceased prior to Completion, nothing in the
provisions of paragraph 4.1.1 shall apply to Environmental
Liabilities resulting from the Purchaser's or its Affiliates'
change of activities or demolition or closure thereon, save:
(i) where this was done other than in the conduct of the
Business by the Purchaser or its Affiliates; and
(ii)so long as and to the extent that the Environmental
Liabilities have not otherwise been so increased,
exacerbated, enhanced or caused as a result of any such act
or omission as aforesaid.
4.1.3 The word "OMISSION" as used in this paragraph 4.1 shall not
mean any failure by the Company or Purchaser to carry out
remediation or preventative action in circumstances where it is
not within their power to do so or where the Purchaser is not
aware or could not reasonably have been aware of the
Environmental Liabilities in question or where (without
prejudice to the obligations of the Purchaser under paragraph
5) the rights of the Purchaser to bring a claim under the
Indemnity would be prejudiced as a result thereof.
4.2 No claim may be made for any Environmental Liabilities under the
Indemnity or Counter Indemnity to the extent that any Environmental
Liabilities arise:
4.2.1 as a result directly or indirectly of information voluntarily
given, in the case of the Indemnity by the Purchaser or the
Company (but only post Completion in the case of the Company)
or, in the case of the Counter Indemnity, by the Seller after
Completion to a regulatory authority in circumstances other
than where there is a mandatory reporting requirement under
Environmental Laws or where information is given as required in
the context of applications for or variations to
authorisations, licences and other forms of environmental
consent required by the Business in the course of the Company's
or the Purchaser's or Seller's normal business activities (as
appropriate) or where the other party has previously proposed
or approved this course of action in writing; and
4.2.2 save where compelled by law, from any admission of liability by a
representative of the Purchaser or Seller holding a rank not less
than that of Senior Vice President in respect of any clean-up
which needs to be done, except where the other party has approved
such admission in writing such approval not to be unreasonably
withheld or delayed.
4.3 No claim under the terms of the Indemnity or Counter Indemnity for any
Environmental Liabilities shall be valid unless notice has been served
in accordance with the provisions of paragraph 7 and in the case of
Indemnity, but not the Counter Indemnity, said notice has been served
within 10 years of Completion.
4.4 The Seller's liability under the Indemnity shall be limited in
accordance with the provisions of the Americas Liability Agreement,
except for sub-clauses 4.1.2 (save for the proviso to sub-clause 4.1)
and 4.2 of the Americas Liability Agreement, the subject matter of which
will be governed by the provisions of this Schedule.
4.5 In the event that the Indemnitor (as defined in paragraph 6.1) either
incurs external charges, costs and expenses for environmental services
or internal charges for its own environmental services, in either case
including but not limited to testing and/or analytical services and/or
contaminated soil disposal facilities, in connection with or in relation
to any actual or potential Environmental Liabilities under the Indemnity
or Counter Indemnity (as appropriate) then such external and internal
charges, costs and expenses shall be deemed to be payments made under
the Indemnity or Counter Indemnity (as appropriate). Any internal
charges shall be made on the same basis as the Indemnitor charges to its
own business or its Affiliates.
4.6 It is hereby expressly agreed that, save where the Seller has accepted
liability or becomes otherwise liable under the terms of the Indemnity,
all costs incurred by the Purchaser in carrying out environmental
analyses and tests of the Site(s) (and its (or their) surrounds) shall
be borne by the Purchaser, other than costs in the exercise of the
rights and powers given to the Seller by sub-paragraphs 9.1 and 9.2
which shall be borne by the Seller unless the Purchaser becomes liable
therefor under the terms of the Counter Indemnity or unless the parties
otherwise agree.
4.7 The Seller shall be liable under the Indemnity for any asbestos-related
personal injury unless and to the extent that any works carried out by
the Purchaser or its Affiliates or the Company after Completion, were
not carried out by a reputable contractor or contractors, who were duly
and properly authorised or approved to undertake such works to at least
the standards of the relevant federal, provincial or other regulatory
authorities published by or in operation (in accordance with good
industry practice) at all times during the carrying out of such works.
5 MITIGATION
The Seller and the Purchaser shall take all reasonable steps after
Completion to avoid or mitigate any Environmental Liabilities and/or
potential Environmental Liabilities to the extent it is reasonably
within their respective powers to do so, which may give rise to a claim
under or in connection with this Indemnity or Counter Indemnity, as
appropriate, howsoever arising. Such steps will include but shall not be
limited to:
5.1 in the case of the Purchaser, carrying out (where reasonably
practicable) appropriate soil tests before taking any action which is
likely to cause a material disturbance to soil;
5.2 in the case of the Purchaser, where reasonably practicable carrying on
its activities on the Site(s) so as to minimise disturbance to known
areas of existing or probable soil contamination (other than deliberate
removal of such contaminated soil) without incurring abnormal unusual or
excessive cost in so doing;
5.3 where relevant, (with the approval of the other party not to be
unreasonably withheld or delayed) settling a claim of any party (not
being an Affiliate of the Purchaser in the case of the Indemnity or of
the Seller in the case of the Counter Indemnity) which will or may fall
within the terms of the Indemnity or Counter Indemnity, as appropriate,
the costs and expenses associated with such settlement (so approved by
the other party) being deemed to be Environmental Liabilities for the
purposes of this agreement, provided always that nothing in this
sub-paragraph 5.3 shall oblige the Purchaser or the Seller to enter into
any settlement which it does not, in its sole discretion, consider to be
in the best interests of its operations;
5.4 making reasonable and timely efforts to pursue claims against any third
parties (including insurers) who may have some liability in respect of
the matter in question under the Indemnity or Counter Indemnity as
appropriate provided always that this shall not limit or restrict or
operate in any way as a pre-condition to the rights to make a claim
under this Indemnity or Counter Indemnity, as appropriate; and
5.5 in the case of the Purchaser, using reasonable endeavours to avoid acts
or omissions of the nature described in sub-paragraph 4.1 of this
Schedule.
6 NOTIFICATION
6.1 As soon as reasonably practicable after either party becomes aware of
any actual or potential Environmental Liabilities which may give rise to
a claim by it under the Indemnity or Counter Indemnity (the "CLAIMANT")
(whether or not the Claimant is of the opinion that it has a valid claim
against the other party under the Indemnity or Counter Indemnity (the
"INDEMNITOR")), the Claimant shall give written notice thereof to the
Indemnitor (and thereafter will use all reasonable efforts to keep the
Indemnitor reasonably informed of all material developments relating
thereto). Such written notice shall include reasonable details of all
relevant matters relating to any actual or potential Environmental
Liabilities. Thereafter, the Claimant will promptly advise the
Indemnitor orally of the Claimant's reasonable estimate of the extent of
and, where reasonably practicable, the cost of remediation of the
Environmental Liabilities, as a result thereof), provided that the
Indemnitor shall have given the Claimant written notice of the name of
its representative to whom such oral communication shall be imparted.
6.2 Neither party shall admit, settle or discharge any claim or liability
which might constitute a claim against the other under the Indemnity or
Counter Indemnity (as appropriate) without having first served a notice
under this paragraph 6 and given the other a reasonable opportunity to
consider the circumstances referred to in the said notice.
7 CLAIMS
In the event that the Claimant wishes to make a claim against the
Indemnitor under the Indemnity or Counter Indemnity (as appropriate)
then it shall do so by giving notice in writing of the same to the
Indemnitor giving such details as are then in its possession of the
relevant subject matter of such claim.
8 CONDUCT
If any notice is received by either party under paragraphs 6 or 7, the
Claimant shall, if so requested by the Indemnitor, take all steps which
are necessary and reasonable to avoid, resist, appeal, compromise or
defend any claim and any adjudication in respect thereof (subject to the
Claimant being indemnified against all cost and expenses which may
reasonably and necessarily be incurred in connection therewith), and the
Indemnitor shall (subject to the provisions of this paragraph), at its
request, be allowed to conduct any negotiations, proceedings or appeals
incidental thereto PROVIDED ALWAYS that if the claim relates to or
arises from a Site which at the time is owned, occupied or used by the
Company and which is operational at the date of the notice under
paragraph 7 then the Purchaser shall have conduct of all negotiations,
proceedings or appeals incidental thereto but shall nonetheless keep the
Seller fully informed of all material developments relating to the
subject matter of the claims.
9 SITE ACCESS
If any notice is received by the Seller under paragraphs 6 or 7:
9.1 the Seller and/or its agents and contractors shall be free to have
access to any Site(s) to the extent it is within the power of the
Company, the Purchaser or its Affiliates, during normal business hours,
and after reasonable prior notice, and, if so required by the Purchaser,
in the presence of authorised representatives of the Purchaser to assess
(including but not limited to assessment by soil sampling and testing)
the extent of the Environmental Liabilities and/or potential
Environmental Liabilities and to determine the action required in order
to remediate such liabilities (such actions to be subject to the prior
agreement of the Purchaser (including as to the action to be taken) such
agreement not to be unreasonably withheld); and
9.2 the Purchaser shall (during normal business hours) allow the Seller or
its agents access to inspect and take copies of such books and records
of the business of the Company and/or the Purchaser relating to the
Site(s) as may be necessary in connection with any Environmental
Liabilities and/or potential Environmental Liabilities.
9.3 The Seller shall exercise proper care in the exercise of its powers and
rights pursuant to this paragraph 9 and shall indemnify the Purchaser
for all reasonably incurred losses or liabilities arising from the
Seller's failure to do so.
10 DISCUSSIONS
Upon either party having given a notice under paragraphs 6 or 7, either
the Seller or the Purchaser may request a meeting as soon as practicable
to discuss the matter (and if either does so the other party shall
comply promptly with such request) and, irrespective of whether there
has been any agreement on liability, each party shall be fully involved
but (save as otherwise agreed between the parties) not as to make any
admission or liability not permitted by the other provisions of this
Schedule in any discussions and/or negotiations with any party imposing
or seeking to impose any Environmental Liabilities.
11 DISPUTE RESOLUTION
Upon either party giving a notice in accordance with paragraph 7, in the
event that the Seller and the Purchaser are unable to agree promptly
upon any factual matter relevant to a claim under this Indemnity or
Counter Indemnity (as appropriate) or in the event of any other matter
being referred to the Experts in accordance with this Schedule then the
following provisions of this paragraph 11 shall apply:
11.1 a reputable independent firm of experts (the "EXPERTS") (who shall act
as experts and not arbitrators) in relation to the Environment relevant
to the claim or potential claim (having at least ten years relevant
experience) shall be appointed by mutual agreement of the parties hereto
(and the parties shall each be obliged to use their respective best
endeavours to reach agreement as soon as practicable) to resolve any
factual matter in dispute between the parties but not including any
interpretation of laws or regulations as they apply to such factual
matters or any conclusions regarding responsibility or liability for or
in relation to any factual matters. The Experts shall be offered the
appointment within 15 Business Days of the parties reaching such mutual
agreement and shall be notified in writing of the provisions of
sub-paragraph 11.7 below. Failing such mutual agreement on the
appointment of Experts, the parties shall promptly refer the issue, at
their joint cost, to the President for the time being of the Royal
Institute of Chartered Surveyors in the United Kingdom with instructions
to appoint suitable Experts within 14 days of receipt of such
instructions;
11.2 the said Experts shall only be dismissed by the mutual agreement of the
parties hereto;
11.3 both parties shall promptly and simultaneously exchange with each other
and submit to the Experts, and in any event in accordance with the
Experts' written directions, their arguments and submissions in
connection with any matter of fact referred to them in accordance with
this paragraph 11;
11.4 following receipt by the Experts of the written arguments and other
submissions of the parties pursuant to paragraph 11.3, the parties shall
instruct the Experts to issue, as soon as reasonably practicable, a
formal written opinion pertaining to the matter of fact referred to
them. In any event, the Experts shall be instructed to present the said
opinion within two months after receiving the written arguments and
other submissions of the parties pursuant to sub-paragraph 11.3;
11.5 the formal written opinion of the Experts issued pursuant to
sub-paragraph 11.4 shall be conclusive in any proceedings between the
parties hereto as to the question of fact so determined;
11.6 the fees and expenses of the Experts shall be borne equally by the
Seller and the Purchaser (unless otherwise directed by the Experts); and
11.7 the Experts, and any company, firm, partnership or other organisation
with which the Experts are connected, shall not be eligible to be
considered to undertake any clean-up work in respect of the claim for
which they have so acted on or around the Site(s) save where the parties
hereto mutually agree to waive this provision. For the avoidance of
doubt, either party may withhold such consent in any event.
12 ACCEPTANCE OF LIABILITY
In the event that the Seller admits that it has any liability to the
Purchaser under the Indemnity (or where the Seller agrees to accept the
Purchaser's claim as falling within the Indemnity notwithstanding the
fact that no Environmental Liability may at that point in time have
arisen):
12.1 Subject to consulting with and paying reasonable regard to the views of
the Purchaser, the Seller shall have the right independently to
determine whatever measures are appropriate in order to remediate
pursuant to applicable Environmental Laws the subject matter of the
claim under the Indemnity and furthermore the Seller shall have the
right independently to carry out such remediation itself (or through
suitable third party agents or contractors) provided that in so doing
the Seller (or its said agents or contractors) shall be obliged to use
reasonable endeavours to avoid causing undue interruption to the conduct
of the business of the Company and/or its Affiliates;
12.2 The Seller and/or its agents and contractors shall, in addition to the
rights of access provided for in paragraph 9 above, be free to have
access to the Site(s) if currently owned, leased or, where within the
power of the Company and its Affiliates, during normal business hours
after reasonable prior notice, and if so required, in the presence of
authorised representatives of the Purchaser, to carry out the
remediation referred to in sub-paragraph 12.1 above provided that the
Seller (or its agents or contractors) shall be obliged to use reasonable
endeavours to avoid causing undue interruption to the conduct of the
business of the Company and/or its Affiliates.
12.3 The Seller shall exercise reasonable care in the exercise of its powers
and rights pursuant to this paragraph 12 and shall exercise reasonable
skill, care and diligence in carrying out any works and shall not use
any materials which are not in accordance with the recommendations of
relevant authorities and codes of practice. The Seller shall procure
that the contractors and consultants engaged to carry out and advise on
the works are bound by obligations in the same terms of reasonable
skill, care and diligence as herein before mentioned and otherwise
engaged on market terms at the time and shall procure suitable
warranties in accordance with normal market practice at the time from
the contractors and consultants in favour of the Purchaser. The Seller
shall not carry out the works itself but shall always engage external
contractors and consultants approved by the Purchaser such approval not
to be unreasonably withheld or delayed.
13 STATEMENTS
In the event of any circumstances arising which do or may give rise to
Environmental Liabilities which may fall within the terms of the
Indemnity or the Counter Indemnity (as appropriate) neither the Company,
the Purchaser nor the Seller (nor any of their respective Affiliates) to
the extent practicable shall make any public statements which are not
required by law or the rules of any regulatory authority to make
regarding such circumstances without first discussing with the other
party and reaching written agreement (such agreement not to be
unreasonably withheld or delayed) on the text of any such public
statement before it is made.
14 GENERAL
14.1 Any information, records, or other material of one party shall be
treated as strictly confidential by the other party except when (a) it
is required to be used in order to comply with an order of the court or
regulatory authority or (b) it is used by the other party to enforce its
rights under this Schedule or so as to make an insurance claim provided
that, in the case of either (a) or (b), disclosure is made in accordance
with this sub-paragraph 14.1. If either party becomes legally compelled
(including by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process) to disclose any
of the information, records, or other material referred to in this
sub-paragraph 14.1, the party so compelled shall provide the other with
prompt prior written notice of such requirement so that the other may
seek a protective order or other appropriate remedy. To the extent
lawfully able to do so, each party agrees to cooperate in each other's
efforts to obtain a protective order or other reasonable assurance that
confidential treatment shall be accorded any such information. If such
protective order or other remedy is not obtained, the party so compelled
agrees to disclose only that portion of the information, records, or
other material which it is advised by opinion of outside counsel is
legally required to be disclosed and to take all reasonable steps to
preserve the confidentiality of the information, records, or other
material referred to in this sub-paragraph 14.1. Any other disclosure by
one party of information, records or materials of the other party shall
require the prior written consent of such other party, which shall not
be unreasonably withheld or delayed.
14.2 The Purchaser's and its Affiliates' and the Seller's and its Affiliates'
exclusive remedies in respect of any claims which fall within the scope
of the Indemnity or Counter Indemnity, as appropriate, shall be in
accordance with the provisions of this Schedule, and the Purchaser on
behalf of itself and its Affiliates and the Seller, on behalf of itself
and its Affiliates, hereby waives all other remedies whether in
contract, tort (including, for the avoidance of doubt, negligence) or
howsoever otherwise arising which it may have against the Seller or any
of its Affiliates or the Purchaser or any of its Affiliates as
appropriate at law or in equity in respect of the matters which fall
within the scope of the Indemnity or Counter Indemnities and, for the
avoidance of doubt, if such a claim under this Schedule could also give
rise to a Warranty Claim or a claim under any other provision of this
agreement in respect of the same subject matter, the Purchaser or the
Seller as appropriate may only bring a claim under this Schedule.
14.3 The Seller undertakes to co-operate with the Purchaser and assist the
Purchaser in achieving a transfer to the Purchaser (or as it directs) of
all Environmental Authorisations held by the Seller at Completion.
15 CO-OPERATION
The Purchaser undertakes that wherever co-operation is required by the
Company to ensure compliance with the Purchaser's obligations hereunder,
the Purchaser will use its reasonable endeavours to ensure that the
Company provides the requisite co-operation.
SCHEDULE 6
CONSIDERATION ADJUSTMENT TEXT
(Clause 3.3)
1 Consideration and Adjustment
SECTION 1
(1) In this Schedule 3:
"A FORM" means, in relation to the Company, the quarterly financial
reports in the format set forth in Annex 3 which are prepared in
accordance with the accounting policies, practices and other
requirements set out or referred to in ICI's Controller's Manuals as
applied by the Company (with the exception of pensions liabilities which
are accounted for in accordance with FAS 87) and prepared at the
Completion Date on a basis consistent with that adopted by the Company
in the A Form at 31 December 1997 (with the exception that pensions
liabilities shall be reported in Provisions; and if the Completion Date
does not fall on the due date for the preparation of an A Form, a
financial report prepared on the same basis for the financial period
from the latest date at which an A Form was prepared to the Completion
Date;
"ACTUAL NET DEBT" means Net Debt as agreed or determined in accordance
with paragraphs (4) to (6) below;
"ACTUAL NET WORKING CAPITAL" means Net Working Capital as at the
Completion Date as determined under paragraphs (4) to (6) below;
"ESTIMATED CONSIDERATION" has the meaning given in sub-Clause 3.1;
"ENTERPRISE VALUE" means US$16,733,000;
"FINAL CONSIDERATION" has the meaning given in paragraph (3)(a) below;
"FINAL COMPLETION STATEMENT" has the meaning given in paragraph (3)(b)
below;
"FINAL STOCKS" means the value of Stocks for the Company at Completion;
"ICI'S CONTROLLER'S MANUALS" means the control manuals in existence at
14 July 1997 and which are compiled in accordance with UK GAAP used for
accounting purposes within the Seller's Group, copies of which have been
received by the Purchaser or an Affiliate of the Purchaser (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);
"INITIAL STOCKS" means the value of Stocks for the Company as at 28
February 1998;
"INTEREST RATE" means LIBOR plus 25 basis points;
"NET DEBT" means the amount reported as "NET DEBT" on line 70090 of the
A Form for the Company as described in ICI's Controller's Manuals which,
for the avoidance of doubt, can be either a negative or a non-negative
number;
"NET WORKING CAPITAL" means the aggregate of:
(a) Operating Debtors; plus
(b) Stocks (for the purposes of this definition meaning Initial
Stocks when used for Net Working Capital as at 28 February 1998
and meaning Final Stocks when used for Actual Net Working
Capital); less
(b) 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
Form marked "NWC-S";
"NET WORKING CAPITAL AS AT 28 FEBRUARY 1998" or "NWC28" means, the value
shown in the column headed NWC 28 in Section 2 of this Schedule 3 which
is the amount which the parties have agreed to represent the value of
Net Working Capital at 28 February 1998 of the Company;
"OPERATING CREDITORS LESS THAN 1 YEAR" means the absolute value of the
amount reported as creditors of the Company which are external to the
Company (including without limitation creditors which are members of, or
other business units within, the ICI Group as at the date of the
relevant A Form) as defined by reference to "OPERATING CREDITORS LESS
THAN 1 YEAR" on line 70020 of the A Form for the Company as described in
ICI's Controller's Manuals;
"OPERATING DEBTORS" means debtors of the Company which are external to
the Company (including without limitation debtors which are members of,
or other business units within, the ICI Group as at the date of the
relevant A Form) as defined by reference to "OPERATING DEBTORS" on line
70010 of the A Form for the Company as described in ICI's Controller's
Manuals;
"STOCKS" means the stock of fuels, raw materials, ingredients,
packaging, office and laboratory supplies, revenue engineering spares,
consumable stores, work in progress and finished goods owned by the
Company as determined on line 70000 of the A Form for the Company or
Business as described in ICI's Controller's Manuals;
(2)
(a) 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 in 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 Completion Date in
relation to amounts in the Final Completion Statement.
(b) References to the absolute value of a number X shall be construed
as follows:
(i) if X is greater than or equal to zero, the absolute value of
X shall be equal to X; and
(ii)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.
CALCULATION OF THE FINAL CONSIDERATION
(3) In relation to this agreement:
(a) the Final Consideration for the Company shall be determined by
the following formula:
Final Consideration = EV minus AND minus NWC 28 plus ANWC
Where (in relation to the Company):
EV = Enterprise Value
AND = Actual Net Debt
NWC28 = Net Working Capital as at 28 February 1998
ANWC = Actual Net Working Capital
(b) After the Completion Date, the Seller shall prepare a
completion statement as at the Completion Date which shall
contain a statement of the Final Consideration in accordance
with paragraph 3(a) above based on the Seller's calculations
(the "FINAL COMPLETION STATEMENT"). The Final Completion
Statement shall be prepared using the Seller's normal
accounting policies and practices as set out or referred to in
ICI's Controller's Manuals as applied by the Company on a
consistent basis and shall be submitted by the Seller to the
Seller's Auditors for review.
(4) Within 45 days of the Completion Date, the Seller shall issue the Final
Completion Statement for the Company to the Purchaser together with a
copy of a report by the Seller's Auditors addressed to the Seller and
substantially in the form set out in Annex 3 to the effect that the
Final Completion Statement has been prepared in accordance with this
agreement. Although it is the Seller's responsibility to prepare the
Final Completion Statement, the Seller will require the assistance of
the employees of the relevant Purchaser Affiliates to fulfil this
responsibility and the Purchaser shall ensure such assistance is
provided promptly and at no charge. Immediately after delivery of the
Final Completion Statement, the Purchaser's Auditors shall have the
right, subject to the Purchaser delivering to the Sellers' Auditors a
signed letter in the form set out in Annex 5, to review the Final
Completion Statement and the Seller's Auditors working papers relating
to the Final Completion Statement. Within 45 days of delivery to the
Purchaser of the Final Completion Statement and the Seller's Auditors
report (each of which shall be in English) to the Purchaser's designated
location, the Purchaser shall give notice to the Seller in writing of
any item or items in the Final Completion Statement which they wish to
dispute and the basis on which they dispute that item or those items and
the changes to the Final Completion Statement which the Purchaser
believes should be made and the parties shall use their reasonable
endeavors to resolve that dispute. Any items in respect of which the
Purchaser does not give such notice will be deemed to have been accepted
by the Purchaser. Any written resolution reached by the parties on any
disputed item shall be final, conclusive and binding on the parties.
(5) If the parties agree the Final Completion Statement then any adjusting
payments referred to in paragraph (7) below shall be made by the paying
party within 7 days of being agreed by the parties.
(6) If the parties fail to agree on any element of the Final Completion
Statement within 14 days after the Purchaser has given notice in writing
to the Seller of any item(s) in the Final Completion Statement which the
Purchaser wishes to dispute (in accordance with paragraph (4) 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 sub-Clause 11.1 of this agreement and
any amounts thereby found to be due shall be paid by the relevant
Affiliate not later than 7 days after such final determination.
(7) When the Final Consideration is agreed or otherwise determined in
accordance with the three preceding paragraphs the following adjusting
payments shall be made:
(a) an amount equal to the difference between (i) the Estimated
Consideration and (ii) the Final Consideration; and
(b) interest (compounded monthly) at the Interest Rate on the amount
in paragraph (a) above from the Completion Date to the date of
payment, calculated on a day to day basis;
which shall be paid by the Seller Affiliate to the Purchaser (or vice
versa, as appropriate).
(8) In this Schedule, references to lines of A Forms have been chosen by the
Seller 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 to another line reference (if any)
which corresponds to the matter described or referred to.
SECTION 2
VALUES FOR THE PURPOSE OF
ALLOCATION TO CLASSES OF
ASSET
NET ADDITIONAL
WORKING UPLIFT OF
NWC28 CAPITAL STOCKS TO FAIR
CANADIAN $ US$ MARKET VALUE US$
Americas Business 7,444,000 5,200,000 62,000
LPC Business 2,575,000 2,000,000 Nil
SCHEDULE 7
CANADIAN FINANCIAL INFORMATION
(Clause 1.1)
TCI BALANCE SHEET
AT 28 FEBRUARY
1998
CANADIAN DOLLARS THOUSANDS
AMERICAS
BUSINESS LPC BUSINESS TOTAL
Fixed Assets 12,167 - 12,167
Investments - - -
Stocks 20,342 4,258 24,600
Operating Debtors 7,216 1,425 8,641
TAI Debtor 2,515 - 2,515
Operating
Creditors less
than 1 year (22,629) (1,109) (23,738)
TAI Creditor - (1,999) (1,999)
Non Operating
Debtors - - -
Non Operating
Creditors less
than 1 year (1,043) - (1,043)
18,568 2,575 21,143
-------- -------- --------
Net Debt (20,824) - (20,824)
Provisions - - -
-
Deferred Income
-------- -------- --------
(20,824) 0 (20,824)
Shareholders' 41,967
Equity --------
21,143
--------
Notes:
1. Operating Debtors at 28 Feb 1998 have been split pro rata to sales
in January and February 1998.
2. TAI Debtors/TAI Creditors and TCI Debtors/TCI Creditors net out
SCHEDULE 8
(Clause 1.7)
Xxxx Xxxxxxxxxxx
Xxxx Xxxxxxxx
Xxxx Xxxx
Xxxxxx Xxxxx
Xxx Xxxxxxxx
Xxxxxxx Xxxxxxx
SCHEDULE 9
LPC Business
-----------------------------------------------------------------------
AMERICAS
(SULPHATE)
LPC BUSINESS BUSINESS COMMENTS
-----------------------------------------------------------------------
-----------------------------------------------------------------------
FIXED ASSETS All
-----------------------------------------------------------------------
INVESTMENTS N/A N/A
-----------------------------------------------------------------------
- Based on
actual
Stocks quantities
manufactured by of stocks
LPC and Kronos from each
STOCKS at Varennes All other stocks source
-----------------------------------------------------------------------
- Based on
Sales of detailed
material analysis of
OPERATING DEBTORS manufactured by all open
Trade Debtors} LPC and Kronos All other trade accounts
Intra Group Debtors} at Varennes debtors concerned
-----------------------------------------------------------------------
Other operating
debtors All
-----------------------------------------------------------------------
- Based on
OPERATING CREDITORS Purchases of detailed
LESS THAN 1 YEAR material All other analysis of
Trade Creditors} manufactured by operating all open
Intra Group LPC and Kronos creditors less accounts
Creditors} at Varennes than 1 year concerned
-----------------------------------------------------------------------
Other operating
creditors All
-----------------------------------------------------------------------
NON OPERATING
DEBTORS/CREDITORS All
-----------------------------------------------------------------------
NET DEBT All
-----------------------------------------------------------------------
PROVISIONS All
-----------------------------------------------------------------------
DEFERRED INCOME All
-----------------------------------------------------------------------
- Calculated
NET ASSETS by difference
-----------------------------------------------------------------------
NOTES:
1 Stocks/materials/product manufactured by LPC includes items made
available to LPC under product swap arrangements with Kronos's plant at
Varennes
SCHEDULE 10
(CLAUSE 7.1(F)(III))
SIGNATURES
SIGNED by
for and on behalf of
TIOXIDE GROUP LIMITED }
SIGNED by
for and on behalf of
ICI OMICRON BV }
SIGNED by
for and on behalf of
[PURCHASER] }
ANNEX 1
AGREED FORM DEED OF INDEMNITY
