EXHIBIT 10.1
Dated 24 July 1998
IMPERIAL CHEMICAL INDUSTRIES PLC
and
E.I. DU PONT DE NEMOURS AND COMPANY
and
N L INDUSTRIES, INC.
1998
FRAMEWORK AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is made on 24 July 1998 between:
(1) IMPERIAL CHEMICAL INDUSTRIES PLC, a company incorporated under the
laws of England, whose registered office is at Imperial Xxxxxxxx
Xxxxx, 0 Xxxxxxxx, Xxxxxx, XX0X 0XX ("ICI");
(2) E.I. DU PONT DE NEMOURS AND COMPANY, a corporation incorporated
under the laws of the State of Delaware, USA, having its principal
office at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000 XXX
("DUPONT"); and
(3) N L INDUSTRIES, INC., a corporation incorporated under the laws of
the State of New Jersey, USA, whose principal place of business is
at 00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, 00000 XXX
(the "PURCHASER").
WHEREAS:
(A) ICI or Affiliates of ICI are the holders of the Americas Shares.
TEL is the owner of the Newco Business. ICI and DuPont have agreed
that Tioxide Group Limited will sell the TEL Shares to DuPont
(U.K.) Limited.
(B) ICI, DuPont and the Purchaser have agreed that, subject to the
terms and conditions contained in this agreement, the transactions
described in recitals (C), (D) and (E) shall occur.
(C) The Americas Shares will be sold by ICI or its Affiliates and
purchased for cash by the Purchaser or an Affiliate of the
Purchaser (or both).
(D) Immediately following completion of the TEL Sale, the Newco
Business will be sold to Newco by TEL pursuant to the terms of the
Hivedown Agreement. Under the terms of the Hivedown Agreement, the
Newco Patent and Know-How Licence is to be entered into providing
Newco with rights necessary for the operation of the Newco
Business as it will have been conducted immediately prior to the
completion of the Newco Share Sale Agreement. The Newco Shares
will immediately thereafter be sold by TEL and purchased for cash
by the Purchaser or an Affiliate of the Purchaser (or both).
(E) The parties have agreed to enter into this agreement to set out,
among other things, the terms and conditions on which each will
enter into agreements and cause their Affiliates to enter into
agreements and to take all other necessary steps in order to
implement the matters described in (C) and (D) above.
(F) The parties have agreed to guarantee the obligations of their
respective Affiliates referred to above.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 In this agreement:
"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 DuPont and their respective
subsidiary companies, the term "AFFILIATES" shall not include any
entity in which a party has a fifty 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;
"AGREED FORM" means, in relation to any document, the form of that
document which has been initialled on the date this agreement is
signed for the purpose of identification by or on behalf of the
parties to this agreement or, in relation to a document that only
concerns certain parties, by such parties;
"AMERICAS BUSINESS" means the whole of the issued share capital of TAI
and the whole of the issued share capital of TCI incorporating the
entire business and operations of those companies as of the date of
this agreement but excluding from either any matter or item
attributable to the LPC Business;
"AMERICAS IMPLEMENTATION AGREEMENTS" means the Americas Sale
Agreements and those other agreements to be entered into on the
Completion Date by ICI or Affiliates of ICI as at the Completion Date
(or both) and the Purchaser or Affiliates of the Purchaser as at the
Completion Date (or both) under this agreement which are listed in
Schedule 2 Part II and are in Agreed Form, unless otherwise stated in
such Schedule;
"AMERICAS SALE" means the sale of the Americas Shares pursuant to the
Americas Sale Agreements;
"AMERICAS SALE AGREEMENTS" means the share sale agreements relating to
TAI and TCI ("AMERICAS SHARE SALE AGREEMENTS") to be entered into on
the Completion Date between ICI and/or Affiliates of ICI, as the case
may be, and the relevant Purchaser Affiliate and the Americas
Technology Agreements and an "AMERICAS SALE AGREEMENT" means any of
them;
"AMERICAS SHARES" means:
135,000 common shares of TCI legally and beneficially held at
the date hereof by Tioxide Group Limited and 37,000 Class A
Special Shares of TCI legally and beneficially held at the
date hereof by ICI Omicron BV, together constituting the
entire issued share capital of TCI; and 10,750 shares of
common stock of US$1 each in TAI legally and beneficially held
at the date hereof by ICI American Holdings Inc, constituting
the entire issued share capital of TAI;
"AMERICAS TECHNOLOGY AGREEMENTS" means the agreements listed as 3.1 to
3.5, 5 and 6 in Schedule 2 Part II;
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are generally open for normal business in both London and New
York and (where any action is required by this agreement to be taken
in Canada) Montreal;
"BUSINESSES" means the Newco Business, the Americas Business and the
LPC Business and a reference to "BUSINESS" means any one of them as
the context may require;
"COMPANIES" means TAI, TCI and Newco;
"COMPLETION DATE" has the meaning given to it in sub-Clause 2.7;
"CONDITIONS PRECEDENT" means the conditions precedent set out in
Schedule 1;
"CONSENTS" means all such licenses, consents, approvals and
permissions of third parties as may be necessary, in order to enable
the Businesses to be carried on following the Completion Date in the
same manner as they are or shall be carried on at the date of this
agreement or the Completion Date (excluding any Permit);
"Data Rooms" means the room or rooms at the offices of Linklaters, in
relation to the Newco Business, the Americas Business and the LPC
Business (other than the LPC Interests), containing information made
available to the Purchaser and indexed in the Agreed Form;
"DEFAULT INTEREST" means interest at the rate equal to LIBOR plus 200
basis points compounded monthly;
"DUPONT GROUP" means DuPont and its Affiliates at the Completion Date;
"ENTERPRISE VALUE" has the meaning ascribed thereto in Schedule 3;
"FINAL DISCLOSURE LETTERS" means the disclosure letters from ICI in
relation to the Newco Sale Agreements and from ICI in relation to the
Americas Sale Agreements to be delivered to the Purchaser in
accordance respectively with Clauses 6 and 9;
"HIVEDOWN AGREEMENT" means the agreement in the Agreed Form between
TEL and Newco relating to the sale of the Newco Business;
"HSR ACT" means the US Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 (as amended) and the rules and regulations thereunder;
"HSR CONDITION" has the meaning given in Schedule 1;
"ICI'S AUDITORS" means KPMG Audit Plc of 0 Xxxxxxxxx Xxxxxx, Xxxxxx,
XX0X 0XX;
"ICI GROUP" means ICI and its Affiliates from time to time;
"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 ICI Group and which are recorded on
disk form as attached and identified as Annex 1 (and which consist 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);
"INDEPENDENT EXPERT" has the meaning given in sub-Clause 11.2;
"IMPLEMENTATION AGREEMENTS" means the Americas Implementation
Agreements and the Newco Implementation Agreements;
"INITIAL AMERICAS DISCLOSURE LETTER" means the disclosure letter in
the Agreed Form in relation to the Americas Business and the LPC
Business (other than the LPC Interests);
"INITIAL NEWCO DISCLOSURE LETTER" means the disclosure letter in the
Agreed Form in relation to the Newco Business;
"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;
"LONGSTOP DATE" means 31 December 1998;
"LPC" means the Louisiana Pigment Company, Limited Partnership, care
of The Corporation Trust Company, Corporation Trust Centre, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 XXX;
"LPC BUSINESS" means the LPC Interests, sales sourced from LPC and any
Stocks, Operating Debtors, Operating Creditors less than one year (the
definitions of such terms in Schedule 3 being applied to LPC) and
other assets or liabilities relating to LPC as determined and
distinguished from the Americas Business in accordance with Schedule 5
to this agreement;
"LPC INTERESTS" means all partnership interests held by ICI or its
Affiliates in LPC pursuant to the Joint Venture Agreement dated as of
18 October 1993, as amended, between TAI and Kronos Louisiana, Inc.;
"LPC TERMINATION AGREEMENT" means the agreement listed as 5 in
Schedule 2 Part II;
"NBQ" means the land known as Xxxxxxxxx Bottom Quarry as defined in a
conveyance dated 1 June 1978 between Roade Aggregates Limited and
Apollo Site Services Limited; "NEWCO" means a subsidiary of TEL being
the purchaser of the Newco Business pursuant to the Hivedown
Agreement;
"NEWCO BUSINESS" means the business to be sold to Newco pursuant to
the Hivedown Agreement;
"NEWCO IMPLEMENTATION AGREEMENTS" means the Newco Sale Agreements and
those other agreements which are listed in Schedule 2 Part I and are
in Agreed Form, unless otherwise stated in such Schedule;
"NEWCO PATENT AND KNOW-HOW LICENCE" means the licence in the Agreed
Form to be entered into between DuPont and Newco pursuant to the
Hivedown Agreement;
"NEWCO SALE" means the sale of Newco to the Purchaser in accordance
with the Newco Sale Agreements;
"NEWCO SALE AGREEMENTS" means the share sale agreement relating to the
sale of Newco ("NEWCO SHARE SALE AGREEMENT") to be entered into on the
Completion Date between TEL and the relevant Purchaser Affiliate, the
Hivedown Agreement and the Newco Technology Agreements; and a "NEWCO
SALE AGREEMENT" means any one of them;
"NEWCO SHARES" means all the issued share capital of Newco held by TEL
following completion of the TEL Sale and to be sold to the Purchaser
or the relevant Purchaser Affiliate pursuant to the Newco Share Sale
Agreement;
"NEWCO TECHNOLOGY AGREEMEnts" means the Newco Patent and Know-How
Licence and the agreements listed as 4.1 to 4.4 in Schedule 2 Part I;
"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;
"PERMITS" means all licences, permits, authorisations, registrations
and approvals (formal and informal) required by law or regulation or
issued or granted by statutory or local authorities to the Seller or
the relevant Company for the purposes of operation of the Businesses
(but excluding planning permissions issued by relevant planning
authorities (save for Environmental Authorisations as defined in the
relevant Implementation Agreements) and the Regulatory Conditions);
"PROPOSED TRANSACTIONS" means the transactions (other than the TEL
Sale) contemplated by Clauses 3 and 4;
"PURCHASER GROUP" means the Purchaser and its Affiliates from time to
time;
"RECORD DATE" has the meaning given in sub-Clause 2.5;
"REGULATORY CONDITIONS" means the anti-trust approvals referred to in
sub-Clause 2.3.1;
"SALE AGREEMENTS" means the Newco Sale Agreements and the Americas
Sale Agreements;
"SELLER" means the relevant entity holding the relevant shares to be
sold or other assets to be transferred or rights to be granted under,
as the context may require, the Newco Sale Agreements and the Americas
Sale Agreements;
"TAI" means Tioxide Americas Inc, a corporation incorporated under the
laws of the State of Delaware, USA of 0000 Xxxxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxx Xxxxx, Xxxxxxxx 00000, XXX;
"TCI" means Tioxide Canada Inc, a corporation incorporated under the
laws of the Province of Quebec, Canada (registered number 1140405920)
of 0000 Xxxxx Xxxxx Xxxxxxxx, Xxxxx, Xxxxxx, X0X XX0, Xxxxxx;
"TEL" means Tioxide Europe Limited, a company incorporated in England
(registered number 832447) of Xxxxxxx Xxxxx, 000/000 Xxxxxxxxxxx Xxxx,
Xxxxxx X00 XXX;
"TEL COMPLETION DATE" means the time of completion of the TEL Sale;
"TEL SALE" means the sale of the TEL Shares by Tioxide Group Limited
to Du Pont (U.K.) Limited;
"TEL SHARES" means the entire issued share capital of TEL;
"UK GAAP" means generally accepted accounting principles in the United
Kingdom; and
"WSL CONTRACT" means the purchase contract dated 28 May 1987 (as
amended) for the supply of ilmenite between (1) Tioxide Group plc as
agent for TEL (formerly Tioxide UK Ltd), Tioxide Australia Ltd and
Tioxide Espana S.A. and (2) Westralian Sands Ltd.
1.2 Any express reference to an enactment includes references to:
1.2.1 that enactment as amended, extended or applied by or under any
other enactment before or after this agreement;
1.2.2 any enactment which that enactment re-enacts (with or without
modification); and
1.2.3 any subordinate legislation made (before or after this
agreement) under any enactment, including one within
sub-Clauses 1.2.1 or 1.2.2 above,
except to the extent that any of the matters referred to in
sub-Clauses 1.2.1 to 1.2.3 occurring after the date of this agreement
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.
2 CONDITIONS PRECEDENT
2.1 The obligations of the parties under Clauses 3 and 4 and sub-Clauses
16.1 and 16.2 are subject to the Conditions Precedent and completion
of this agreement is subject to sub-Clause 2.8.
2.2 The parties shall use all reasonable efforts to procure that the
Conditions Precedent are fulfilled as soon as possible after the date
of this agreement.
2.3
2.3.1 Subject to the terms and conditions of this agreement,
each party will use all reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable in relation to antitrust
and regulatory approvals necessary to complete the Proposed
Transactions. In furtherance and not in limitation of the
foregoing, each party agrees to make an appropriate filing of
a Notification and Report Form pursuant to the HSR Act with
respect to the Proposed Transactions as promptly as
practicable and in any event within 10 Business Days of the
date hereof and to supply as promptly as practicable any
additional information and documentary material that may be
reasonably requested pursuant to the HSR Act and to take all
other actions necessary or desirable to cause the expiration
or termination of the applicable waiting periods under the HSR
Act as soon as practicable.
2.3.2 Each party shall, in connection with the efforts referred to
in sub-Clause 2.3.1:
(i) use all reasonable efforts to co-operate in all respects
with each other in connection with any filing or
submission, or the timing thereof;
(ii)in connection with any investigation or other inquiry,
including any proceeding initiated by a private party,
keep the other parties informed on a timely basis in all
material respects of any material communication received
by such party from, or given by such party to, the Office
of Fair Trading (the "OFT"), the Bundeskartellamt (the
"BK"), the European Commission (the "EC"), the US Federal
Trade Commission (the "FTC"), the Antitrust Division of
the US Department of Justice (the "DOJ") or any other
governmental authority and of any material communication
received or given in connection with any proceeding by a
private party, in each case regarding any of the Proposed
Transactions, and permit any other party to review any
material communication given by or to it; and
(iii) consult with each other, in advance of any meeting or
conference with such governmental authorities or, in
connection with any proceeding by a private party, with
any other person provided that in relation to unsolicited
communications, the obligations in this sub-Clause shall
be such as are practicable in the relevant circumstances.
2.3.3 The parties will use all reasonable endeavours to obtain
such approvals as promptly as possible and, in this regard,
provide all information reasonably requested, shall assist and
co-operate with one another to make the necessary filings and
take such other steps as may be commercially reasonably
required to secure the non-objection of the relevant antitrust
and regulatory authorities, provided that nothing in this
sub-Clause 2.3.3 shall be construed to require any party to
conduct its commercial affairs in a manner other than in
accordance with its own independent business judgement.
2.3.4 The parties will use all reasonable efforts to take all action
and to do all things necessary in order to consummate and make
effective the transactions contemplated by this agreement
(including satisfaction, but not waiver, of all Conditions
Precedent).
2.4 The Conditions Precedent shall be deemed to have been fulfilled when
they have been satisfied within the terms described in Schedule 1.
2.5 Each party shall promptly advise the others once the Conditions
Precedent which relate to that party have been fulfilled. The date
that the last of the Conditions Precedent (other than Condition
Precedent number 12 relating to the TEL Sale) has been so fulfilled
shall be the "Record Date" and the Completion Date shall be determined
in accordance with the provisions of sub-Clause 2.7 below. The parties
shall be deemed to have satisfied or waived any Conditions Precedent
(as applicable) by signing and completing the Sale Agreements in
accordance with sub-Clause 2.7 below.
2.6 If the Conditions Precedent (other than Condition Precedent number 12
relating to the TEL Sale) have not been fulfilled by the Longstop
Date, or earlier upon the written agreement of the parties that such
Conditions Precedent cannot so be met, any of the parties shall have
the right (but not the obligation) to terminate this agreement by
notice in writing, to be given after the Longstop Date or earlier by
written agreement between the parties, in which case no party shall
have any rights or obligations under this agreement except under
Clauses 14, 15, 19, 25 and 26 which shall survive the termination of
this agreement.
2.7 The TEL Sale shall be completed at midnight London time on the last
day of the calendar month (or if that last day is a Friday or not a
Business Day on the first Business Day thereafter) following the month
in which the Record Date falls. The date and time of signature and of
completion of the Hivedown Agreement and any documents to be entered
into pursuant thereto will be immediately thereafter. The date and
time of signature and completion (the "Completion Date" for the
purposes of this agreement) of the other Sale Agreements will be
immediately following completion of the Hivedown Agreement as referred
to above.
2.8 The parties agree that:
(a) the signature and completion of the Sale Agreements will not
take place unless completion of the TEL Sale has taken place;
and
(b) the signature and completion of each of the Newco Share Sale
Agreement and each of the Americas Share Sale Agreements will
be simultaneous and none will be completed unless all are
completed.
2.9 Immediately after the TEL Completion Date but before the Hivedown
Agreement is entered into, the Purchaser shall serve written notice
upon DuPont and TEL and DuPont shall procure TEL to serve written
notice on the Purchaser, in each case confirming that all conditions
precedent to the Newco Sale are satisfied and that TEL and the
Purchaser each has an unconditional obligation pursuant to this
agreement to execute and complete the Newco Share Sale Agreement.
Accordingly, TEL will have ceased to be the beneficial owner of the
Newco Shares before the Hivedown Agreement is entered into.
3 IMPLEMENTATION, CONSIDERATION AND ADJUSTMENT
3.1 Subject to the prior satisfaction of the Conditions Precedent, the
parties will and will procure that their relevant Affiliates enter
into and complete in the following order:
3.1.1 in accordance with Clause 2.7 (so as to take place immediately
following completion of the TEL Sale), the Hivedown Agreement
and any deed, document or agreement to be entered into
pursuant thereto; and
3.1.2 on the Completion Date, the Newco Implementation Agreements
and the Americas Implementation Agreements.
3.2 The consideration due to the relevant parties in relation to the sales
of the Americas Shares and the Newco Business and the LPC Termination
Agreement contemplated under the Implementation Agreements shall be
calculated in accordance with Schedule 3 and the relevant
Implementation Agreements. The Enterprise Value for each of the
Americas Business, the LPC Business (excluding the value of the LPC
Interests) and the Newco Business and the agreed consideration for the
LPC Interests shall be as shown in Schedule 3.
4 TECHNOLOGY AGREEMENTS
On the Completion Date the parties will and/or will procure that their
relevant Affiliates will enter into and complete the Newco Technology
Agreements and Americas Technology Agreements.
5 CONDUCT OF BUSINESS
5.1 Pending the execution and delivery of the Implementation Agreements
(or the earlier termination of this agreement), neither ICI nor
DuPont, nor any of their Affiliates, nor any of their officers,
employees, representatives or agents, will solicit or initiate any
discussions or negotiations with, or participate in any negotiations
with, or provide any information to or otherwise cooperate in any
other way with, or facilitate or encourage any effort or attempt by,
any corporation, partnership, person or other entity or group (other
than NL, its Affiliates and its directors, officers, employees, agents
and representatives) concerning any acquisition of the Americas
Shares, the Intellectual Property which is the subject of the Americas
Technology Agreements, the LPC Interests, the Newco Business, the
Newco Shares, or the Intellectual Property which is the subject of the
Newco Technology Agreements.
5.2 ICI agrees, pending the execution and delivery of the Implementation
Agreements (or the earlier termination of this agreement), to conduct
each of the Businesses only in the Ordinary Course of Business. ICI
shall also use its reasonable commercial endeavours to: (i) maintain
the business and properties of TAI, TCI and the Newco Business, and
preserve intact their business organisations and goodwill, (ii) keep
available the services of their officers and employees and (iii)
maintain satisfactory relationships with suppliers, customers and
others having a business relationship with the Businesses.
6 ICI WARRANTIES AND REPRESENTATIONS
6.1 ICI warrants and represents to the Purchaser that:
6.1.1 subject to satisfaction of the Conditions Precedent (in each
case in relation to the obligations referred to in sub-Clause
2.1 but not in relation to any other obligations):
(i) it has the requisite power and authority to enter into
and perform this agreement;
(ii)it has obtained and satisfied all corporate, regulatory
and other approvals, or any other conditions, necessary to
execute and perform this agreement;
(iii) this agreement constitutes the legally valid and binding
obligations of ICI enforceable in accordance with its
terms; and
(iv)compliance with the terms of this agreement and each
relevant Americas Implementation Agreement will not
constitute a default under any provision of:
(a) ICI's memorandum or articles of association; or
(b) (i) any order, judgment or decree; or (ii) any
statute, rule or regulation; or (iii) any other
restriction of any kind by which ICI is bound; and
6.1.2 none of ICI and its Affiliates has employed any investment
banker, broker or finder, or incurred any liability for any
brokerage fees, commissions, finder's fees or similar payments
in connection with the Proposed Transactions for which the
Purchaser or its Affiliates or any of the Companies or LPC may
be liable.
6.2 ICI and the Purchaser agree that the Warranties to be given under the
Americas Share Sale Agreements (in this Clause, Warranties having the
meaning given in the relevant Americas Share Sale Agreement) will be
given at the Completion Date and will be given subject to any matter
which is fairly disclosed in the Final Disclosure Letter applicable to
each Americas Share Sale Agreement. ICI and the Purchaser agree that
ICI may require to amend the Initial Americas Disclosure Letter or the
Disclosure Documents (as defined in the Initial Americas Disclosure
Letter) (together in this Clause 6, the "INITIAL AMERICAS DISCLOSURE
DOCUMENTS") in accordance with sub-Clause 6.3 below by adding to,
amending or removing the specific matters identified, referred to
and/or disclosed therein in each case in the event of them being
incomplete or inaccurate.
6.3 ICI undertakes to the Purchaser that it will fairly disclose to the
Purchaser in writing any matter or thing known to ICI before or after
the date of this agreement and prior to the TEL Completion Date which,
if not disclosed, would constitute a breach of any of the Warranties
(if they had been given at the date of this agreement) or which
constitutes an amendment which is required pursuant to sub-Clause 6.2
above in order to amend any factual errors or omissions in the Initial
Americas Disclosure Documents. Such disclosure or any such amendment
shall be made not later than 14 days before the TEL Completion Date in
respect of matters or things which are known to ICI at or before the
Record Date and shall be incorporated in the Final Disclosure Letter
applicable to each Americas Share Sale Agreement. In relation to
matters or things which only become known to ICI after the Record
Date, such disclosure or amendment shall be fairly disclosed or
communicated in writing as soon as practicable before the TEL
Completion Date and shall be incorporated in the Final Disclosure
Letter applicable to each Americas Share Sale Agreement. ICI shall
provide the Purchaser with amendments to the Initial Americas
Disclosure Documents on a regular basis (being every four to six
weeks) during the period from the date hereof to the TEL Completion
Date.
Any such amendments to the information contained in the Initial
Americas Disclosure Documents shall, to constitute a valid disclosure
against the Warranties, be required to be expressly incorporated in
the Final Disclosure Letters applicable to the Americas Share Sale
Agreements.
ICI undertakes to the Purchaser that only those specific categories of
general disclosure contained in the Initial Americas Disclosure
Letters will be contained in the Final Disclosure Letters in relation
to the Americas Sale Agreements and that such specific categories will
not be amended in any way.
7 PURCHASER'S WARRANTIES AND REPRESENTATIONS
7.1 The Purchaser warrants and represents to ICI and DuPont that:
7.1.1 subject to satisfaction of the Conditions Precedent (in each
case in relation to the obligations referred to in sub-Clause
2.1 but not in relation to any other obligation):
(i) it has the requisite power and authority to enter into
and to perform this agreement;
(ii)it has obtained and satisfied all corporate, regulatory
and other approvals, or any other significant conditions,
necessary to execute and perform this agreement;
(iii) this agreement constitutes the legally valid and binding
obligations of the Purchaser enforceable in accordance
with its terms; and
(iv)compliance with the terms of this agreement and each
relevant Implementation Agreement will not constitute a
default under any provision of:
(a) the Purchaser's by-laws or other constitutional
documents; or
(b) (i) any order, judgment or decree; or (ii) any
statute, rule or regulation or (iii) any other
restriction of any kind by which the Purchaser is
bound; and
7.2 none of the Purchaser and its Affiliates has employed any investment
banker, broker or finder, or incurred any liability for any brokerage
fees, commissions, finder's fees or similar payments in connection
with the Proposed Transactions, for which ICI or DuPont or their
Affiliates (excluding, following the Completion Date, the Companies
and LPC) may be liable.
8 DUPONT WARRANTIES AND REPRESENTATIONS
DuPont warrants and represents to the Purchaser that:
8.1 subject to satisfaction of the Conditions Precedent (in each case in
relation to the obligations referred to in sub-Clause 2.1 but not in
relation to any other obligation):
(i) it has the requisite power and authority to enter
into and to perform this agreement;
(ii)it has obtained and satisfied all corporate, regulatory
and other approvals, or any other significant conditions,
necessary to execute and perform this agreement;
(iii) this agreement constitutes the legally valid and binding
obligations of DuPont enforceable in accordance with its
terms; and
(iv)compliance with the terms of this agreement and each
relevant Newco Implementation Agreement will not
constitute a default under any provision of:
(a) DuPont's by-laws or other constitutional documents;
and
(b) (i) any order, judgment or decree; or (ii)any
statute, rule or regulation; or (iii) any other
restriction of any kind by which DuPont is bound;
8.2 none of DuPont or its Affiliates has employed any investment banker,
broker or finder, or incurred any liability for any brokerage fees,
commissions, finder's fees or similar payments in connection with the
Newco Sale Agreements for which the Purchaser or its Affiliates or any
of the Companies may be liable.
9 NEWCO DISCLOSURE DOCUMENTS
9.1 ICI and the Purchaser agree that the Warranties to be given under the
Newco Share Sale Agreement (in this Clause Warranties having the
meaning given in the Newco Share Sale Agreement) will be given at the
Completion Date and will be given subject to any matter which is
fairly disclosed in the Final Disclosure Letter applicable to the
Newco Share Sale Agreement. ICI and the Purchaser agree that ICI may
require to amend the Initial Newco Disclosure Letter or the Disclosure
Documents (as defined in the Initial Newco Disclosure Letter)
(together, the "INITIAL NEWCO DISCLOSURE DOCUMENTS") in accordance
with sub-Clause 9.2 below by adding to, amending or removing the
specific matters identified, referred to and/or disclosed therein in
each case in the event of them being incomplete or inaccurate.
9.2 ICI undertakes to the Purchaser that it will fairly disclose to the
Purchaser in writing any matter or thing known to ICI before or after
the date of this agreement and prior to the TEL Completion Date which,
if not disclosed, would constitute a breach of any of the Warranties
(if they had been given at the date of this agreement) or which
constitutes an amendment which is required pursuant to sub-Clause 9.1
above in order to amend any factual errors or omissions in the Initial
Newco Disclosure Documents. Such disclosure or any such amendment
shall be made not later than 14 days before the TEL Completion Date in
respect of matters or things which are known to ICI at or before the
Record Date and shall be incorporated in the Final Disclosure Letter
applicable to the Newco Share Sale Agreement. In relation to matters
or things which only become known to ICI after the Record Date such
disclosure or amendment shall be fairly disclosed or communicated in
writing as soon as practicable before the TEL Completion Date and
shall be incorporated in the Final Disclosure Letter applicable to the
Newco Share Sale Agreement. ICI shall provide the Purchaser with
amendments to the Initial Newco Disclosure Documents on a regular
basis (being every four to six weeks) during the period from the date
hereof to the TEL Completion Date.
Any such amendments to the information contained in the Initial Newco
Disclosure Documents shall, to constitute a valid disclosure against
the Warranties, be required to be expressly incorporated in the Final
Disclosure Letter applicable to the Newco Share Sale Agreement.
ICI undertakes to the Purchaser that only those specific categories of
general disclosure contained in the Initial Newco Disclosure Letter
will be contained in the Final Disclosure Letter in relation to the
Newco Sale Agreements and that such specific categories will not be
amended in any way.
10 TRIGGER EVENTS
10.1 If in consequence of any one or more Trigger Events (as defined below)
there is a Material Adverse Effect (as defined below) which is not
remedied by ICI or its Affiliates at no cost to the Purchaser or, as
the case may be TAI or TCI or Newco, before the TEL Completion Date,
then, provided the Purchaser or its Affiliates have not knowingly
caused or contributed to such Material Adverse Effect (to the extent
it would not have constituted such a Material Adverse Effect without
such contribution), the Purchaser shall have the right, by notice
served on both ICI and DuPont at any time during the period from the
date of this agreement to immediately prior to the TEL Completion
Date, to terminate its obligation to purchase the Newco Shares and the
Americas Shares which in the event of exercise of such right by the
Purchaser shall be its exclusive remedy and shall extinguish any claim
by the Purchaser or any of its Affiliates for damages (whether arising
in contract, tort or otherwise) in connection with this agreement
provided that on such termination the provisions of sub-Clause 2.6
shall apply mutatis mutandis.
10.2 In the event that there is a dispute as to whether a right to
terminate under sub-Clause 10.1 exists, the matter shall be referred
to the Independent Expert for determination in accordance with
sub-Clause 11.2. If completion of the Sale Agreements would have
occurred but for the application of the provisions of sub-Clause 10.1,
and if the determination is that the right to terminate does not
exist, the date of that determination shall be treated as the Record
Date for the purposes of sub-Clause 2.5 and this Clause shall apply in
relation to the new Record Date.
10.3 For the purposes of this Clause 10:
"TRIGGER EVENT" means:
10.3.1 any amendment to or variation of the Initial Newco
Disclosure Documents or the Initial Americas Disclosure
Documents or other disclosure pursuant to sub-Clauses 6.3 and
9.2 in the period following signature of this agreement and
before the TEL Completion Date in respect of any matter or
thing which but for notification to the Purchaser under
sub-Clauses 6.3 and 9.2 above would constitute a breach of the
Warranties (as defined in sub-Clauses 6.2 and 9.1) if they had
been given at the date of this agreement or the Purchaser
otherwise becoming aware, without being in breach of this
agreement, of a matter or thing which would constitute a
breach of such Warranties, if they had been given at the date
of this agreement; or
10.3.2 without prejudice to sub-Clause 10.3.1 above, where any such
amendment or variation is made to correct an error or omission
in the information contained in the Initial Newco Disclosure
Documents or the Initial Americas Disclosure Documents, the
Purchaser shall be entitled to use such information for the
purpose of calculating whether, together with any other
Trigger Event(s), a Material Adverse Effect has occurred; or
10.3.3 contractual terms not being available (immediately prior to
the expiry of the period referred to in sub-Clause 10.1) for
the Newco Business to be supplied, for a period of at least 2
years following the Completion Date, with volumes of ilmenite
ore consistent with those consumed by the Newco Business over
the 12 months ending on the date of this agreement at prices
substantially similar to those payable by TEL under the WSL
Contract from time to time.
"MATERIAL ADVERSE EFFECT" means a diminution in the aggregate value of
the Americas Business and the Newco Business having regard to their
aggregate Enterprise Value as determined by reference to Schedule 3 of
US$35,000,000 or more as a result of any one or more Trigger Events
occurring prior to the TEL Completion Date ignoring any such
diminution: (a) which would be reflected in an adjustment pursuant to
the provisions of this agreement or the Sale Agreements as at the
Completion Date to the aggregate consideration for the purchase of the
Americas Shares or the Newco Business; and (b) to the extent that the
diminution in value has been remedied by ICI at no cost to the
relevant Companies or Businesses Provided that where any adverse
effect arising from one or more Trigger Event(s) is not reasonably
capable of calculation in monetary terms, the question as to whether a
Material Adverse Effect has occurred whether wholly or partly as a
result of such Trigger Event(s) shall, failing agreement between the
parties, be determined by the Independent Expert.
11 INDEPENDENT ACCOUNTANT AND EXPERT
11.1 INDEPENDENT ACCOUNTANT
11.1.1 If any party (a "COMPLAINANT") wishes to refer any
matter in dispute in accordance with Schedule 3 for
determination under this Clause, it shall give notice to the
others (or if the matter concerns only one or some of the
others, then only to such other or others) (the "OTHERS")
requiring the appointment of an independent accounting firm of
international reputation (the "INDEPENDENT ACCOUNTANT").
Accounting firms who have acted as auditors of the Complainant
or the Others or their respective Affiliates, during the five
years preceding the date of this agreement, shall be excluded
from such appointment. If the Complainant and the Others 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 the Complainant or any of the Others.
11.1.2 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 Complainant and the Others, appoint another in its
place.
11.1.3 The Independent Accountant shall act as an expert and not as
an arbitrator and its decision shall (in the absence of
manifest error) be final and binding on the Complainant and
the Others. The Independent Accountant shall afford the
Complainant and the Others the opportunity of making written
representations to it and shall make its determination within
40 days of its appointment.
11.1.4 The fees and expenses of the Independent Accountant shall be
borne by the Complainant and the Others in equal shares unless
the Independent Accountant otherwise determines.
11.2 INDEPENDENT EXPERT
11.2.1 If a Complainant wishes to refer any matter in dispute
for determination under this sub-Clause 11.2, the Complainant
may give notice to the Others requiring the matter to be
referred to an independent expert (the "INDEPENDENT EXPERT")
agreed by the Complainant and the Others. If the Complainant
and the Others are unable to agree upon the Independent Expert
within 14 days of such notice then the Independent Expert
shall be appointed by the chairman for the time being of the
Institute of Arbitrators on the application of the Complainant
or any of the Others.
11.2.2 If the Independent Expert delays or becomes unwilling or
incapable of acting or if for any other reason the chairman
for the time being of the Institute of Arbitrators thinks fit
he may discharge the Independent Expert and, in the absence of
agreement between the Complainant and the Others, appoint
another in his or her place.
11.2.3 The Independent Expert shall act as an expert and not as an
arbitrator and his or her decision shall (in the absence of
manifest error) be final and binding on the Complainant and
the Others. The Independent Expert shall afford the
Complainant and the Others the opportunity of making written
representations to him or her and shall make his or her
determination within 40 days of appointment.
11.2.4 The fees and expenses of the Independent Expert shall be borne
by the Complainant and the Others in equal shares unless the
Independent Expert otherwise determines.
12 LIABILITY IN RELATION TO THE NEWCO SALE AND THE HIVEDOWN AGREEMENT
12.1 The Purchaser agrees for itself and in respect of its Affiliates that,
other than as expressly provided in this agreement, the Americas
Implementation Agreements and the Newco Implementation Agreements, no
representation or warranty is given (express or implied) and no
liability is accepted by ICI, DuPont or any of their respective
Affiliates or any of their respective directors, employees, agents or
advisers (respectively the "ICI SELLING GROUP" and the "DUPONT SELLING
GROUP" and together the "SELLING GROUP"), as to the accuracy or
completeness of any information in the Data Rooms (or any further
information supplied on request or any communication in relation
thereto) or as to the reasonableness of any assumptions on which any
of it is based.
12.2 The Purchaser for itself and in respect of its Affiliates (including
the Companies for the purpose of this Clause 12) agrees that, other
than as a result of fraud on the part of either any member of the
DuPont Selling Group or of any member of the ICI Selling Group as
relevant (in which case only the members of the relevant Selling Group
shall be liable):
(i) no member of the Selling Group shall incur any liability
whatsoever to the Purchaser or any of its Affiliates
arising out of or in connection with the acquisition of
the Newco Shares or the Americas Shares and entry into by
the Purchaser of the Newco Sale Agreements and the
Americas Sale Agreements; and
(ii)the Purchaser shall have no right of action whatsoever
against any member of the Selling Group in connection with
or arising out of the purchase of the Companies;
both other than as provided in this agreement, the Americas
Implementation Agreements and the Newco Implementation Agreements.
12.3 The Purchaser for itself and its Affiliates undertakes to the Selling
Group to waive any liability which such parties may incur by reason of
the Purchaser's or its Affiliates' use of or reliance upon any
information or documentation provided by such party and their advisers
in relation to the sale of the Companies, other than as provided in
this agreement, the Americas Implementation Agreements and the Newco
Implementation Agreements.
12.4 It is agreed that none of ICI, DuPont, the Purchaser or any of their
respective Affiliates are partners under this agreement or any other
agreement herein referred to for any purpose, except the partnership
agreement dated 20 December 1993 (as amended) between Affiliates of
ICI and Affiliates of the Purchaser with respect to LPC.
12.5 The Purchaser acknowledges (for itself and its Affiliates) that DuPont
and ICI have agreed between themselves arrangements in the Agreed Form
regarding the conduct of any claim under any of the Newco
Implementation Agreements which also gives rise to or constitutes a
claim under the same or equivalent provisions of the agreements
between ICI or any of its Affiliates (on the one hand) and DuPont or
any of its Affiliates (on the other hand) relating to the TEL Sale.
If DuPont notifies the Purchaser that the conduct of any claim under
any of the Newco Implementation Agreements is to be assumed and
controlled by ICI or any of its Affiliates in accordance with such
arrangements then the Purchaser agrees (subject to the terms of the
Newco Implementation Agreements) to co-operate and deal accordingly so
that references in the Newco Implementation Agreements to "the Seller"
in the context of the conduct of any such claim shall be deemed to
mean ICI or any of its Affiliates and the Purchaser (for itself and
its Affiliates) acknowledges that any payment or settlement by ICI or
any of its Affiliates to or with the Purchaser (or any of its
Affiliates) in respect of any claim made by the Purchaser (or any of
its Affiliates) against DuPont or its Affiliates under any of the
Newco Implementation Agreements shall discharge DuPont or its
Affiliates' liability to the Purchaser (or any of its Affiliates)
under any such Newco Implementation Agreement in respect of such claim
to the extent of any payment or settlement so made. The provisions of
this Clause are without prejudice to the Purchaser's rights under the
Newco Implementation Agreements.
12.6 It is agreed between DuPont and the Purchaser (for itself and on
behalf of Newco) that in circumstances where the subject matter of any
claim under any of the Newco Implementation Agreements also gives rise
to or constitutes a claim or dispute between DuPont or its Affiliates
and Newco under or pursuant to the Hivedown Agreement then the
provisions of the Newco Implementation Agreements dealing with the
notification, assistance and conduct of any claim, dispute or
proceedings shall prevail over and override any corresponding or
similar provisions contained in the Hivedown Agreement. The Purchaser
shall procure that Newco complies with the provisions of this Clause.
12.7
12.7.1 ICI, DuPont and the Purchaser agree to co-operate
generally and take all steps which may reasonably be required
(including without limitation making appropriate applications
to the relevant governmental and/or local authorities) to
arrange for the transfer or assignment to Newco or the
re-issue in the name of Newco of each of the Permits (insofar
as they relate to the Newco Business) with effect from the
Completion Date in each case upon terms which will enable
Newco to continue to conduct the Newco Business with effect
from the Completion Date substantially in the manner in which
the Newco Business is conducted prior to the Completion Date.
Any direct costs arising from the obligations under this
sub-Clause 12.7 will be divided equally among the parties.
Furthermore, each of the parties shall use all reasonable
efforts to effect each such transfer, assignment or re-issue
as promptly as practicable after the date of this agreement.
12.7.2 ICI and DuPont shall together use reasonable endeavours to
obtain such consents from third parties as may be reasonably
required to enable Newco to obtain the benefit of the software
licences which are necessary for the operation of the Newco
Business as at the Completion Date at no additional licence
fee.
12.7.3 If such consents are not obtained, ICI and DuPont shall
procure such additional software licences as are necessary for
the operation by Newco of the Newco Business as at the
Completion Date. ICI and DuPont shall each be liable for 50
per cent of the costs of such additional software licence
fees.
12.8 Other than in respect of the members of the Selling Group's compliance
with the provisions of sub-Clause 12.7, the Purchaser hereby accepts
and agrees that none of the Selling Group shall be liable for any
failure or refusal by any relevant governmental or local authority to
arrange or effect the transfer or assignment to Newco or the re-issue
in the name of Newco of any of the Permits as aforesaid.
12.9 It is agreed between DuPont (for itself and on behalf of its
Affiliates) and the Purchaser (for itself and on behalf of Newco) that
the indemnity given by Newco in favour of TEL in respect of Newco
Liabilities (as defined in the Hivedown Agreement) pursuant to Clause
7.3 of the Hivedown Agreement (the "NEWCO INDEMNITY") shall not apply
if and to the extent that the subject matter of any claim under the
Newco Indemnity also gives rise to or constitutes a claim by the
Purchaser and/or relevant Purchaser Affiliate under or pursuant to the
Newco Share Sale Agreement.
12.10 For the purposes of sub-Clauses 12.7 and 12.8 the expression "PERMITS"
shall include any registrations which may be required for Newco for
taxation purposes.
12.11 With effect from the Record Date, or earlier with the agreement of the
parties (such agreement not to be unreasonably withheld), the parties
shall use such reasonable endeavours as they are each able to do so as
to procure that TEL and Newco meet their obligations under the first
sentence of paragraph 3 of Schedule 7 of the Hivedown Agreement (as if
the obligations under the first sentence of paragraph 3 had come into
effect on the Record Date, or earlier as aforesaid) but subject to the
provisions of paragraph 13 of Schedule 7 of the Hivedown Agreement.
For the purpose of this sub-Clause 12.11, references to "consents" in
such paragraph 3 shall be deemed to include the Consents.
12.12
12.12.1 If the Purchaser (which for the purpose of this sub-Clause
12.12 shall not include its successors in title) or any
relevant Affiliate ("PURCHASER COMPANIES") has not by 1
September 2003 renewed the planning approval no. W/66/338/84
in relation to NBQ issued on 27 September 1988 on appeal
against the decision of Lincolnshire County Council (the
"APPROVAL") expiring on 1 September 2003 relating to the
disposal of digester residue for a further term of a minimum
of 8 years on terms enabling the continued use of NBQ for its
current waste disposal purposes, then, subject to compliance
by the Purchaser Companies with the provisions of this
sub-Clause 12.12, ICI shall on written notice from the
Purchaser Companies given on or within ten working days after
1 September 2003 (a "COMPLETION NOTICE") purchase, or procure
the purchase of, NBQ, on the terms set out in Clause 12.12.4
from the Purchaser Companies.
12.12.2 ICI's obligation in sub-Clause 12.12.1 is conditional on the
following obligations of the Purchaser Companies, from the
Completion Date:
(i) to use and manage NBQ during the period of its ownership
materially in accordance with Environmental Law, the
standards of the relevant regulatory authorities, the
conditions of any Permits and planning permissions
relating thereto and good industry practice, in a manner
conducive to the renewal of the Approval;
(ii)to use NBQ solely for the purpose of the disposal of
digester residue arising from the sulphate TiO2 process at
the Grimsby Site (as such term is defined in the Newco
Share Sale Agreement); such residue disposed to be broadly
similar in quality, quantity and type to that currently
disposed at the date of this agreement and materially
consistent with the requirements of the Approval and any
Permits relating thereto;
(iii) to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all
things reasonably necessary, proper or advisable in
relation to obtaining the renewal of the Approval for a
term of at least 8 years, including acceding to the
reasonable demands of the relevant regulatory authorities
and in particular to submit an application for such a
renewal on or before 31 December 2001.
12.12.3 The Purchaser Companies shall from the Completion Date:
(i) use all reasonable efforts to be a "fit and proper person"
within the meaning of the Environmental Protection Xxx
0000;
(ii)promptly inform ICI of all material matters relating to
the process for the renewal of the Approval, including
providing copies of correspondence, and permitting ICI
reasonable opportunity to participate in the process (at
ICI's expense) and including providing a copy of the
application for the renewal of the Approval to ICI prior
to its submission to the relevant planning authority.
Expense incurred by the Purchaser Companies in relation to
the renewal of the Approval shall be borne by the
Purchaser Companies; and
(iii) not create or permit or suffer to be created any
encumbrances over NBQ which shall subsist at the date of
the transfer of NBQ to the Buyer.
12.12.4 The following conditions shall apply on any sale of NBQ by the
Purchaser Companies to the "BUYER" (ICI or a company nominated
by ICI);
(i) The price payable for NBQ shall be GBP1;
(ii)The Purchaser shall sell with Full Title Guarantee;
(iii) Completion shall take place ten working days after the
receipt of a Completion Notice before 2.00 pm at the
registered office of ICI or at such other date, time or
place as may be agreed between ICI and the Purchaser;
(iv)The Purchaser Companies shall prior to completion deduce
to the Buyer the title to NBQ insofar as it differs from
the title at the date of this agreement and the Buyer
shall not raise any requisition in respect of any matter
arising before the date of this agreement;
(v) NBQ will be sold subject to:
(a) all overriding interests as defined in the Land
Registration Act 1925 as amended;
(b) all matters referred to in the registers of the title
under which NBQ is to be registered (other than
financial charges and encumbrances created in breach
of sub-Clause 12.12.3 (iii));
(c) all matters subject to which NBQ is to be sold to the
Purchaser insofar as they remain valid, subsisting
and affect the title at the completion of the sale to
the Buyer;
as well as those encumbrances referred to in Standard
Condition 3.1.2.
12.12.5 NBQ will be sold with vacant possession on completion
of its sale.
12.12.6 The transfer of NBQ will contain covenants by the Buyer to
comply with the following obligations insofar as the Purchaser
Companies may remain liable (directly or indirectly) for them
after the date of the transfer:
(i) obligations arising from matters referred to in the
registered title of NBQ;
(ii)obligations arising under any documents subject to which
NBQ is sold to the Purchaser;
and to indemnify the Purchaser Companies against any
non-compliance.
12.12.7 The transfer of NBQ will contain an undertaking by the
Purchaser to indemnify and keep indemnified on a continuing
basis the Buyer (for itself and its affiliates) against any
Adverse Consequences (as defined in the Americas Share Sale
Agreements) ICI or the Buyer may suffer as a result of the
failure of the Purchaser Companies to comply with their
obligations under sub-Clauses 12.12.2 and 12.12.3 including,
without limitation, any Environmental Liabilities arising
therefrom;
12.12.8 The agreement set out in this sub-Clause 12.12 incorporates
the Standard Conditions of Sale (Third Edition) ("STANDARD
CONDITIONS"). In case of conflict between this sub-Clause
12.12 and the Standard Conditions, this sub-clause 12.12
prevails. Terms used or defined in the Standard Conditions
have the same meanings when used in this sub-clause 12.12.
12.12.9 On the transfer of NBQ to the Buyer:
(i) ICI shall indemnify the Purchaser Companies against all
and any Loss relating to NBQ and arising from or
associated with any Environmental Liability arising on or
after 1 September 2003;
(ii)From the date on which NBQ is transferred to the Buyer and
until such time as the transfer of the Waste Management
Licence is effected, ICI shall comply with all conditions
of the Waste Management Licence and any requirement or
written or oral communication received from any regulatory
authority in relation to the same.
(iii) Both ICI and the Purchaser Companies shall use their
reasonable efforts to procure the transfer of the Waste
Management Licence to ICI as soon as possible following
the transfer of NBQ to the Buyer.
(iv)For the purposes of this sub-Clause 12.12 the following
definitions apply:
"ENVIRONMENT" means the natural and man-made environment
and all or any of the following media namely air
(including air within buildings and air within other
natural or man-made structures above or below ground),
water (including water under or within land or in drains
or sewers and inland waters) and land and any living
organisms (including humans) or systems supported by those
media;
"ENVIRONMENTAL LAW" means all present and future rules of
common law, acts, regulations, standards or codes,
applicable rights or obligations under European Community
Law, any notices, directions, impositions or requirements
issued, imposed, or directed by any regulatory authority
relating to the Environment, the protection of human
health and safety or the Environment including without
limitation all laws relating to emissions, seepages,
discharges, escapes, releases, leaks or threatened
escapes, releases, and leaks of pollutants, contaminants
or hazardous substances relating to the creation,
handling, storage or disposal of same and for the
avoidance of doubt, includes any law introducing any
materially more onerous or stringent requirements than
were applicable at the date hereto including but not
limited to Part IIA of the Environmental Protection Act
1990 (and the relevant draft guidance as at the date
hereto) and sections 161A to 161D of the Water Resources
Xxx 0000 whether or not in force at the date hereto;
"ENVIRONMENTAL LIABILITY" means the clean-up and
restoration of NBQ, compliance with the Waste Management
Licence or the surrender, revocation or transfer of the
same, compliance with any requirement, request or
communication from a regulatory authority in relation to
Environmental Laws, any monitoring, investigation,
remediating, removing, abating, cleaning-up, containing or
otherwise taking corrective action and shall include
post-remedial monitoring or responding to requests for
information in relation to NBQ, and shall also include any
actual or potential claim by a third party in relation to
site clean-up or restoration of the land or any of the
aforementioned matters;
"LOSS" means any losses, claims, penalties, fines, costs,
expenses, liabilities, obligations, judgements, damages or
settlement payments which are suffered or incurred
directly or indirectly by the Purchaser Companies after
sale of NBQ to the Buyer in relation to any Environmental
Liability;
"WASTE MANAGEMENT LICENCE" means the waste management
licence (number L142) issued to Tioxide Europe Limited,
Xxxxxxx, Xxxxx Xxxxxxxxxx XX00 0XX or any similar waste
management licence relating to NBQ in force at 1 September
2003.
13 INTEREST
If any sum due for payment under or in accordance with this agreement
is not paid on the due date the party in default shall pay Default
Interest on that sum from the due date until the date of actual
payment calculated on a day to day basis.
14 ANNOUNCEMENTS
No party shall make or permit any member of the ICI Group, DuPont
Group or the Purchaser 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 parties which shall not be unreasonably
withheld or delayed.
15 CONFIDENTIALITY
15.1 For the purposes of this Clause:
15.1.1 "CONFIDENTIAL INFORMATION" means:
(i) all information received by the Purchaser Group from the
ICI Group relating to ICI, its Affiliates and the
businesses conducted by the ICI Group and all information
received by the Purchaser Group from DuPont or its
Affiliates relating to DuPont or its Affiliates, (in both
cases whether pursuant to, or in relation to, this
agreement or any of the Newco Implementation Agreements or
the Americas Implementation Agreements); and
(ii)all information received by the ICI Group and the DuPont
Group from the Purchaser Group relating to the Purchaser,
its Affiliates and the businesses conducted by the
Purchaser Group (whether pursuant to, or in relation to,
this agreement or any of the Newco Implementation
Agreements or the Americas Implementation Agreements);
including, in all cases, not only written information but
information transferred orally, visually, electronically,
or by any other means. The term "Confidential Information"
shall not include:
(a) information that is in the public domain at the date
of this agreement;
(b) information that subsequently comes into the public
domain, otherwise than as a result of a breach of
this agreement, but only after it has come into the
public domain;
(c) information which the receiving party or its
Representatives obtain from a third party not under
any confidentiality obligation to the disclosing
party respecting such information;
(d) information which the receiving party or its
Representatives at the time of disclosure already has
in its possession and which is not subject to any
obligation of secrecy on their part to the disclosing
party;
(e) information which is independently developed by
employees of the receiving party or its
Representatives who had no access to the information
disclosed by the disclosing party; or
(f) information which relates exclusively to the
Businesses after completion of the Newco Sale
Agreements and Americas Sale Agreements which the
Purchaser or its Affiliates disclose publicly.
15.1.2 "REPRESENTATIVES" means Affiliates, directors, officers,
employees, agents or representatives of any party or its
Affiliates, and their respective solicitors, accountants,
consultants and financial advisers.
15.2 Each party undertakes for a period of 5 years from the date of this
agreement (subject to such other period specified in a Newco
Implementation Agreement or an Americas Implementation Agreement in
relation to particular information) following the Completion Date to
maintain Confidential Information received by it, its Affiliates or
its Representatives relating to any other party or any other party's
Affiliates in confidence and not disclose that Confidential
Information to any person other than its Representatives, except as
required by law or any competent regulatory authority or with the
prior written approval of such other party, which shall not be
unreasonably withheld or delayed.
15.3 Each party undertakes only to disclose to its Representatives such
Confidential Information relating to the disclosing party or parties
or the disclosing party's or parties' Affiliates as is reasonably
required for the purposes of performing the obligations under this
agreement or the Newco Implementation Agreements or the Americas
Implementation Agreements and only to those Representatives whom it
has informed of the confidential nature of the Confidential
Information and who undertake to keep it confidential. Each party
shall be responsible for breach of such confidentiality undertaking by
it or its Representatives and undertakes to indemnify and hold
harmless the disclosing party or parties, its Affiliates or any
successor to such business against all actions, proceedings, costs,
claims, demands, liabilities, losses or expenses (including legal
expenses) arising from such breach.
15.4 In the event that, after receipt of Confidential Information, any
party, or any person or Representative to whom it has transmitted
Confidential Information, becomes legally required (by oral questions,
interrogatories, requests for information or documents, subpoena,
civil investigation, demand or similar process, or otherwise) to
disclose any of the Confidential Information received, the legally
compelled party shall provide the disclosing party with prompt written
notice of that requirement so that the disclosing party may seek a
protective order or other appropriate remedy but shall not be obliged
to delay disclosure if to do so would be in breach of any conditions
for such disclosure imposed by the authority compelling disclosure and
in any event should the disclosing party not be successful in seeking
or obtaining a protective order or other appropriate remedy, the
disclosing party shall waive compliance with the provisions of this
agreement for such particular case to enable the legally compelled
party or its Representative to comply with any such legal requirement.
15.5 Each party will only use (or permit the use by its Representatives of)
the Confidential Information received by it or its Representatives for
the purposes of the transactions contemplated by this agreement.
15.6 Nothing in this Clause 15 shall make a party liable to any other party
for any of its Representatives in relation to breaches of this Clause
which occur after the time when such Representative becomes the
Representative of another party to this agreement. Nothing in this
sub-Clause 15.6 shall affect any duty owed personally by such
Representative.
15.7 Nothing in this Clause 15 shall supersede or vary the obligations of
the parties set out in any of the Newco Technology Agreements, the
Americas Technology Agreements or any other agreement, the
confidentiality provisions of which exist on the date of this
agreement.
15.8 Notwithstanding any provision to the contrary, the provisions of this
Clause shall survive termination of this agreement.
16 GUARANTEES AND INDEMNITY
16.1 Each party undertakes to procure that, subject to the terms of this
agreement, its relevant Affiliates enter into the relevant Newco
Implementation Agreements or Americas Implementation Agreements on the
Completion Date, as the case may be.
16.2 The parties shall on the Completion Date enter into a deed of
guarantee in the Agreed Form in relation to the obligations of the
parties and their Affiliates after the Completion Date under the Newco
Sale Agreements and Americas Sale Agreements and the relevant
Implementation Agreements.
16.3 At or as soon as reasonably practicable after the Completion Date, the
Purchaser will use its reasonable endeavours to procure, whether by
offering its own covenant in substitution for that of a member of the
Selling Group or otherwise howsoever (but in no event shall the
Purchaser or any of its Affiliates be required to make any payment as
a basis for such release), the release of ICI and/or DuPont or any of
their respective Affiliates (the "Selling Group") from the guarantees
specifically identified in the Final Disclosure Letter applicable to
the Newco Share Sale Agreement for the purposes of this provision and
pending such release the Purchaser will indemnify and keep indemnified
each of the members of the Selling Group from and against any
liability (including any claim, demand, proceeding, costs, damages and
expenses) which they may suffer or incur under or in relation to such
guarantees.
16.4 The Purchaser will indemnify and keep indemnified the Selling Group
from and against any liability (including any claim, demand,
proceeding, costs, damages and expenses) which they may suffer as a
result of the failure of the Purchaser to comply with its obligations
under paragraph 2 of Schedule 4.
17 FURTHER ASSURANCE
The parties shall, and shall procure that their Affiliates shall, at
their own expense, comply with the terms of this Clause 17 and
Schedule 4 and, at all times from the date of this agreement, do all
things as may be reasonably required to give effect to this agreement
and to all other agreements contemplated hereby, including, without
limitation, the execution of all deeds and documents, procuring the
convening of all meetings, the giving of all necessary waivers (other
than in respect of Conditions Precedent) and consents and the passing
of all resolutions and otherwise exercising all powers and rights
available to them.
18 NOTICES
18.1 Any notice or other document to be served under this agreement shall
be in writing and may be delivered by hand or by courier or 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 18.3 below) or at such other address (or
marked for the attention of such other person) as it may have notified
to the other parties in accordance with this Clause. Any notice or
other document sent by post shall be sent by registered post (if both
posted and for delivery within the same jurisdiction) or by registered
airmail (if posted for delivery outside the jurisdiction in which it
is posted), return receipt requested (or any substantially equivalent
service).
18.2 Any notice or document delivered or sent in accordance with sub-Clause
18.1 shall be deemed to have been served:
18.2.1 if delivered by hand or by courier, at the time of delivery;
or
18.2.2 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
10.00 a.m. (local time at the destination) on the Business Day
after its transmission (if sent at any other time); or
18.2.3 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.
18.3 The person to whom notices or documents should be addressed for the
purposes of sub-Clause 18.1 is:
18.3.1 if to be served on ICI:
the Company Secretary
Imperial Xxxxxxxx Xxxxx
0 Xxxxxxxx
Xxxxxx XX0X 0XX
Fax: (00) 000 000 0000
18.3.2 if to be served on DuPont:
Vice President & General Manager
White Pigment & Mineral Products
E.I. du Pont de Nemours and Company
Building 00-0xx Xxxxx
Xxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx X.X.X. 00000
Fax: (0) 000 000 0000
18.3.3 if to be served on the Purchaser:
General Counsel
NL Industries, Inc
00000 Xxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000, XXX
Fax: (0) 000 000 0000
18.4 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).
19 COSTS
Save as otherwise provided in this agreement, or as otherwise
specifically agreed to in writing by the parties after the date of
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 including without limitation in respect
of their obligations fulfilling the Conditions Precedent.
20 ASSIGNMENT
None of the rights or obligations under this agreement may be assigned
or transferred without the prior 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:
20.1 such assignment shall only be permitted if the assignment has no
adverse effect on the Non-assigning Parties;
20.2 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
20.3 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).
21 RTPA
Each of the parties to this agreement confirms on its own behalf and
on behalf of each of its Affiliates that is party to any of the
Implementation Agreements (as executed) that if by virtue of any
provision of this agreement or any of the Newco Implementation
Agreements or the Americas Implementation Agreements (as executed) or
any other agreement or arrangement of which this agreement or any of
the Implementation Agreements forms part, any such agreement or
arrangement is subject to registration under the Restrictive Trade
Practices Act 1976 (the "RTPA") (provided that any such agreement or
arrangement is not a non-notifiable arrangement under Section 27A of
the RTPA) none of the parties to any such agreement or arrangement who
carries on business within the United Kingdom shall give effect to, or
enforce or purport to enforce the agreement or arrangement in respect
of any such provision until the day after particulars of the agreement
or arrangement (as the case may be) have been furnished to the
Director General of Fair Trading under section 24 of the RTPA.
22 CONFLICT WITH OTHER AGREEMENTS
In the event of any conflict between this agreement and any of the
Implementation Agreements, this agreement shall prevail (as between
the parties to this agreement and as between any other members of the
ICI Group, the DuPont Group and the Purchaser Group) save where such
other agreement expressly states that it (or any part of it) is
overriding this agreement in any respect and the parties to this
agreement are either also parties to that other agreement or otherwise
expressly and in writing agree that such other agreement shall
override this agreement in that respect.
23 WHOLE AGREEMENT
23.1 This agreement, the Newco Implementation Agreements, the Americas
Implementation Agreements and any other agreements contemplated in
this agreement or in those 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 Newco Implementation Agreements and the Americas
Implementation Agreements and supersede all previous agreements
between the parties and their respective Affiliates relating to such
transactions.
23.2 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 Newco Implementation Agreements and the
Americas Implementation Agreements, it has not relied on any
representation, warranty, collateral contract or other assurance
(except those set out in this agreement or any Implementation
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.
23.3 Each obligation, representation and warranty on the part of ICI,
DuPont or the Purchaser under this agreement (excluding any obligation
fully performed on the Completion Date) shall continue in force after
the Completion Date.
23.4 Nothing in this agreement or the Implementation Agreements shall be
deemed to constitute a partnership between the parties hereto. All
obligations of the parties shall be several.
24 AMENDMENTS
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 all the parties.
25 GOVERNING LAW
This agreement is governed by and shall be construed in accordance
with English law.
26 JURISDICTION
26.1 The parties agree to submit to the exclusive jurisdiction of the
English courts for all purposes relating to this agreement and to take
no action to avoid, dispute or suggest to such court that such
jurisdiction is improper.
26.2 DuPont irrevocably appoints Du Pont (U.K.) Limited of Xxxxxxxx Xxx,
Xxxxxxxxx, Xxxxxxxxxxxxx XX0 0XX as its agent for the service of
process in England.
26.3 The Purchaser irrevocably appoints Xxxxxxx Xxxxx (Ref 554) of Xxxxxxxx
Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxx, XX0X 0XX as its agent for service of
process in England.
AS WITNESS the hands of the duly authorised representatives of the
parties on the date which appears first on page 1.
SCHEDULE 1
CONDITIONS PRECEDENT
(CLAUSE 2)
1 In so far as it has jurisdiction over the Proposed Transactions, the
Office of Fair Trading indicating in terms reasonably satisfactory to
the parties that it is not the intention of the Secretary of State to
refer the Proposed Transactions to the Monopolies and Mergers
Commission (the "OFT CONDITION").
2 In so far as it has jurisdiction over the Proposed Transactions, the
Bundeskartellamt approving the Proposed Transactions in terms
reasonably satisfactory to the parties (the "BK CONDITION")
3 In so far as it has jurisdiction over the Proposed Transactions, the
European Commission issuing a decision, pursuant to Article 6(1)(b) of
Regulation 4064/89 (or amending Regulation 1310/97) (the
"REGULATIONS") declaring in terms reasonably satisfactory to the
parties that any concentration arising from the Proposed Transactions
is compatible with the common market (the "EC CONDITION").
4 In so far as it has jurisdiction over the Proposed Transactions, the
European Commission not issuing a decision pursuant to Article 9(3) of
the Regulations, to refer the Proposed Transactions to the competent
authorities of any Member State of the European Union.
5 No Member State of the European Union taking measures pursuant to
Article 21 of the Regulations, to protect legitimate interests.
6 All waiting periods and any extensions thereof under the HSR Act
applicable to the consummation of the Proposed Transactions having
been satisfied, expired or terminated (the "HSR CONDITION").
7 The Director appointed under the Canadian Competition Act (the
"COMPETITION ACT") issuing an advance ruling certificate in terms
reasonably satisfactory to the parties under Section 102 of the
Competition Act in respect of the sale of TCI by Affiliates of ICI to
the Purchaser or the applicable waiting period under Section 123 of
the Competition Act having expired and the Director having advised the
Purchaser in terms reasonably satisfactory to the parties that he does
not intend to apply to the Competition Tribunal for an order under
Section 92 or Section 100 of the Competition Act in respect of the
proposed acquisition of TCI (the "COMPETITION ACT CONDITION").
8 All other consents and approvals, as are required by law, having been
obtained, or all waiting periods (in addition to the HSR Condition,
the OFT Condition, the EC Condition, the BK Condition and the
Competition Act Condition) (and any extensions thereof) having expired
or terminated in any relevant jurisdiction for the purposes of
implementing the Proposed Transactions in a form satisfactory to all
parties (but only where such parties are directly concerned or
interested).
9 No order, writ, injunction or decree has been issued which restrains,
enjoins or invalidates, or otherwise materially adversely affects, the
Proposed Transactions and no action, suit or other proceeding is
pending or threatened that has a reasonable likelihood of resulting in
any such order, writ, injunction or decree being issued.
10 The obligations of ICI and DuPont to consummate the Proposed
Transactions contemplated by this agreement are subject, at the option
of ICI and DuPont, to the satisfaction of the conditions that:
10.1 all obligations and undertakings of the Purchaser (the breach of
which, singly or in the aggregate, would be material) to be performed
by the Purchaser under this agreement prior to or at the Completion
Date shall have been performed; and
10.2 all warranties and representations made by the Purchaser in this
agreement (the breach of which, singly or in the aggregate, would be
material) shall be true and correct in all material respects.
11 The obligations of the Purchaser to consummate the Proposed
Transactions contemplated by this agreement are subject, at the option
of the Purchaser, to the satisfaction of the conditions that:
11.1 all obligations and undertakings of ICI (the breach of which, singly
or in the aggregate, would be material) to be performed by ICI under
this agreement prior to or at the Completion Date shall have been
performed;
11.2 all warranties and representations made by ICI in this agreement (the
breach of which, singly or in the aggregate, would be material) shall
be true and correct in all material respects; and
11.3 all warranties and representations made by DuPont in this agreement
(the breach of which, singly or in the aggregate, would be material)
shall be true and correct in all material respects.
12 The completion of the TEL Sale, for which purpose the definition of
TEL Sale shall be deemed to include the execution of the Deed relating
to the Tioxide Pension Fund in the Agreed Form.
13 All Permits which are material in relation to the operation of the
Newco Business having been transferred or assigned to or reissued in
the name of Newco or arrangements reasonably satisfactory to the
Purchaser having been made for any of the same that cannot be so
transferred or assigned or reissued prior to the Completion Date to be
so transferred or assigned or reissued after the Completion Date.
SCHEDULE 2
PART I
NEWCO IMPLEMENTATION AGREEMENTS
(CLAUSE 1.1)
1 Hivedown Agreement
2 Newco Share Sale Agreement
3 Product Exchange Agreement between TEL and Newco
4 Technology Agreements
4.1 Name Agreement between Newco, TEL and DuPont
4.2 Name Agreement between Newco, TEL and DuPont
4.3 Newco Patent and Know-How Licence
4.4 Technical Assistance Agreement between TEL (or an Affiliate of TEL)
and Newco
4.5 Service Agreement for transitional IT services between TEL (or an
Affiliate of TEL) and Newco
4.6 Service Agreement (Eutech) between ICI (or an Affiliate of ICI) and
Newco
5 Deed of Guarantee (to include a guarantee given by the Purchaser in
respect of Newco's obligations under the Hivedown Agreement)
6 Transfers, in a form reasonably satisfactory to the Purchaser, of the
legal interest in respect of the NBQ and Killingholme properties in
favour of the Purchaser or any of its Affiliates
7 Product Supply Agreement (Newco to DuPont or an Affiliate of DuPont)
for:
7.1 Zirconia Frit;
7.2 Titanyl Sulphate;
7.3 Zirconium Orthosulphate Solution
7.4 Trivalent Titanium
8 Product Supply Agreement (DuPont or an Affiliate of DuPont to Newco)
for Titanium Tetrachloride
9 Product Supply Agreement (ICI or an Affiliate of ICI to Newco) for:
9.1 Sulphuric Acid
9.2 Sulphur
9.3 Caustic Soda
SCHEDULE 2
PART II
AMERICAS IMPLEMENTATION AGREEMENTS
(CLAUSE 1.1)
1 Americas Share Sale Agreements
2 Canadian and US Deeds of Indemnity
3 Americas Technology Agreements
3.1 Assignment and Substitution Agreement between Tioxide Group Limited,
Tioxide Group Services Limited, DuPont and TCI
3.2 Name Agreement between TEL, TAI and DuPont
3.3 Name Agreement between TEL, TCI and DuPont
3.4 Patent and Know-How Licence between TCI and DuPont
3.5 Venturis Agreement between DuPont and LPC
4 Deeds of Guarantee
5 LPC Termination Agreement between Kronos, Inc., Kronos Louisiana,
Inc., Kronos International, Inc., Kronos Europe S.A./N.V., Kronos
Canada Inc., Kronos Titan GmbH, LPC, Tioxide Group Limited and Tioxide
Group Services Limited
6 LPC Licence Agreement between Kronos, Inc., Kronos Louisiana, Inc.,
Kronos International, Inc., Kronos Europe S.A./N.V., Kronos Canada
Inc., Kronos Titan GmbH, LPC and Tioxide Europe Limited
SCHEDULE 3
(CLAUSE 3.3)
1 Consideration and Adjustment
(1) In this Schedule 3:
"A FORM" means, in relation to each of TAI and TCI, 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 relevant 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 TAI and TCI 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; and in relation to Newco, a
financial report in the format set forth in Annex 3 and in accordance
with the accounting policies, practices and other requirements set out
or referred to in ICI's Controller's Manuals and prepared as at the
Completion Date on a basis consistent with that adopted by TEL for the
preparation of A Forms prior to the completion of the Hivedown
Agreement;
"ACTUAL NET DEBT" means Net Debt as agreed or determined in accordance
with paragraphs (6) to (8) below;
"ACTUAL NET WORKING CAPITAL" means Net Working Capital as at the
Completion Date as determined under paragraphs (6) to (8) below;
"ESTIMATED CONSIDERATION" has the meaning given in paragraph
(3)(a) below as applicable;
"ESTIMATED COMPLETION STATEMENT" has the meaning given in paragraph
(3) below;
"ESTIMATED NET DEBT" has the meaning given in paragraph (3)(b) below;
"ENTERPRISE VALUE" means, for each Company or Business, the value
shown against the line described as Enterprise Value shown in the
column headed EV in Section 2 of this Schedule 3 against the relevant
Company or Business which is the amount which the parties have agreed
to represent the fair market value (excluding in relation to TAI any
item relating to the LPC Interests) of that Company or Business on a
basis free of Net Debt;
"FINAL CONSIDERATION" has the meaning given in paragraph (5)(a) below;
"FINAL COMPLETION STATEMENT" has the meaning given in paragraph
(5)(b) below;
"FINAL STOCKS" means the value of Stocks for the relevant Company at
Completion;
"INITIAL STOCKS" means the value of Stocks for the relevant Company
or Business as at 28 February 1998;
"INTEREST RATE" means LIBOR plus 25 basis points;
"NET DEBT" means, in relation to a Company, the amount reported as
"net debt" on line 70090 of the A Form for that 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:
(c) Operating Debtors; plus
(d) 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
(e) Operating Creditors less than one 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 "NWC 28" means, for
each Company or Business, the value shown in the column headed NWC in
Section 2 of this Schedule 3 against the relevant Company or Business
which is the amount which the parties have agreed to represent the
value of Net Working Capital at 28 February 1998;
"OPERATING CREDITORS LESS THAN 1 YEAR" means, in relation to a
Company, the absolute value of the amount reported as creditors of
that Company which are external to that 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 one year" on
line 70020 of the A Form for that Company as described in ICI's
Controller's Manuals;
"OPERATING DEBTORS" means, in relation to a Company, debtors of that
Company which are external to that 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 that Company as described in ICI's Controller's Manuals;
"SHARE SALE AGREEMENTS" means the Americas Share Sale Agreements
and/or the Newco Share Sale Agreement (as the context so requires);
"STOCKS" means, in relation to a Company or Business, 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 that Company or Business as
determined on line 70000 of the A Form for the relevant 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 (and in relation to amounts in the Estimated
Completion Statement shall be the rate of exchange as at the
date which is nine days before the Completion Date).
(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.
ESTIMATED CONSIDERATION PAYABLE AT COMPLETION
(3) In relation to each Share Sale Agreement or, as appropriate, the
Hivedown Agreement, no later than seven days before the Completion
Date ICI (in relation to TAI and TCI) and TEL (in relation to Newco)
shall deliver to the Purchaser a statement (the "ESTIMATED COMPLETION
STATEMENT") calculating the Estimated Consideration for the relevant
Company on the following basis:
(a) Estimated Consideration for the relevant Company shall be the
amount determined by the following formula:
Estimated Consideration = EV minus END plus in the case only
of Newco US$1 (excluding in the case of TAI in relation to any
of the foregoing any item or matter attributable to the LPC
Interests) plus in the case only of TAI LV
Where (in relation to the relevant Company):
EV = Enterprise Value
END = Estimated Net Debt
LV = X (value of LPC Interests)
(b) Estimated Net Debt shall be the amount which ICI (in relation
to TAI and TCI) and TEL (in relation to Newco), estimates (in
good faith based on the accounting records and forecasts of
the relevant Company (or as the case may be TEL) and after
consultation with the Purchaser and (in relation to Newco)
DuPont) to be the Net Debt for the relevant Company at the
Completion Date.
(c) In relation to the LPC Interests, the consideration shall be
US$X, which shall not be subject to adjustment.
The figure represented by X in this paragraph (3) shall be as agreed
between ICI and the Purchaser.
(4) On the Completion Date the relevant Purchaser Affiliate will pay or
procure the payment of (in accordance with the provisions of the
relevant Share Sale Agreement or as appropriate, the Hivedown
Agreement) an amount equal to the Estimated Consideration. In relation
to the LPC Termination Agreement, the relevant Purchaser Affiliate
shall pay or procure the payment of (in accordance with the provision
of the LPC Termination Agreement) an amount equal to the consideration
due under such agreement being US$Y.
The figure represented by Y in this paragraph (4) shall be as agreed
between ICI and the Purchaser.
CALCULATION OF THE FINAL CONSIDERATION IN RELATION TO TAI AND TCI
(5) In relation to the Americas Share Sale Agreements:
(a) the Final Consideration for the relevant Company shall be
determined by the following formula:
Final Consideration = EV minus AND minus NWC 28 plus ANWC
(excluding in the case of TAI in relation to any of the
foregoing any item or matter attributable to the LPC
Interests) plus in the case only of TAI LV
Where (in relation to the relevant Company):
EV = Enterprise Value
AND = Actual Net Debt
NWC28 = Net Working Capital as at 28 February 1998
ANWC = Actual Net Working Capital
LV = X (value of LPC Interests)
The figure represented by X in this paragraph (5) shall be as
agreed between ICI and the Purchaser.
(b) After the Completion Date ICI shall prepare a completion
statement as at the Completion Date which shall contain a
statement of the Final Consideration in accordance with
paragraph 5(a) above based on ICI's calculations (the "FINAL
COMPLETION STATEMENT"). The Final Completion Statement shall
be prepared using ICI's normal accounting policies and
practices as set out or referred to in ICI's Controller's
Manuals as applied by the relevant Company on a consistent
basis and shall be submitted by ICI to ICI's Auditors for
review.
No final consideration adjustment will be made for the Newco Shares
under the Newco Share Sale Agreement and the provisions of the
Hivedown Agreement will apply. The provisions of sub-paragraphs 1(5) -
(9) inclusive will not apply to the Newco Share Sale Agreement.
(6) Within 45 days of the Completion Date, ICI shall issue the Final
Completion Statement (distinguishing between the Americas Business and
the LPC Business) for the relevant Companies to the Purchaser together
with a copy of a report by ICI's Auditors addressed to ICI and
substantially in the form set out in Annex 2 to the effect that the
Final Completion Statement has been prepared in accordance with this
agreement. Although it is ICI's responsibility to prepare the Final
Completion Statement, ICI 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 ICI's Auditors a signed letter in the form
set out in Annex 4, to review the Final Completion Statement and ICI's
Auditors working papers relating to the Final Completion Statement.
Within 45 days of delivery to the Purchaser of the Final Completion
Statement and ICI's Auditors report (each of which shall be in
English) to the Purchaser's designated location, the Purchaser shall
give notice to ICI in writing of any item or items in the Final
Completion Statement which it wishes to dispute and the basis on which
it disputes that item or those items and the changes to the Final
Completion Statement which the Purchaser believes should be made and
ICI and the Purchaser shall use their reasonable endeavours 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 ICI and the Purchaser on
any disputed item shall be final, conclusive and binding on the
parties.
(7) If ICI and the Purchaser agree the Final Completion Statement then any
adjusting payments referred to in paragraph (9) below shall be made by
the paying party within seven days of being agreed by the parties.
(8) If ICI and the Purchaser fail to agree on any element of the Final
Completion Statement within 14 days after the Purchaser has given
notice in writing to ICI of any item(s) in the Final Completion
Statement which the Purchaser wishes to dispute (in accordance with
paragraph (6) above) then any agreed amounts shall be paid in
accordance with the preceding paragraph and any dispute may be
referred by either ICI or the Purchaser 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 party not later
than seven days after such final determination.
(9) 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 (calculated on a day-to-day basis and compounded
monthly) at the Interest Rate on the amount in paragraph (9)
(a) above from the Completion Date to the date of payment,
calculated on a day to day basis
which shall be paid by the relevant ICI Affiliate to the relevant
Purchaser Affiliate (or vice versa, as appropriate).
(10) In this Schedule, references to lines of A Forms have been chosen by
ICI 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, subject to the
Purchaser's agreement, there shall be substituted for that line
reference another line reference (if any) which corresponds to the
matter described or referred to. Any dispute between the Purchaser and
ICI as to any matter arising under this sub-paragraph (10) shall be
referred for final determination in accordance with sub-Clause 11.1 of
this Agreement.
2 Enterprise Value (paragraph 1(1) of this Schedule)
Uplift of
Stocks to
fair market
value for the
purpose of
allocation of
consideration
to classes of
assets
EV NWC 28
US$ GBP US$
Newco Business 118,410,000 3,950,000 (1) 215,000
TAI: US$
Americas Business 6,857,000 6,857,000 Nil
(1) As provided in the Hivedown Agreement.
LPC Business
(excluding
LPC Interests): Z 15,081,000 1,697,000
TCI: US$ CAN $ US$
Americas Business 14,733,000 7,444,000 62,000
LPC Business W 2,575,000 Nil
The figures represented by Z and W in this Section 2 shall be as
agreed between ICI and the Purchaser.
SCHEDULE 4
FURTHER ASSURANCE
(CLAUSE 17)
1 ICI, DuPont and the Purchaser recognise that it may be necessary for
certain of the excluded or shared assets to be used by the ICI Group
and/or the DuPont Group and the Companies after the Completion Date.
If any such assets are identified by ICI, DuPont or the Purchaser,
ICI, DuPont and the Purchaser will negotiate in good faith to reach a
sharing arrangement (on a fair, equitable and cost-effective basis) in
relation to such assets.
2 In accordance with its obligations under the Transfer of Undertakings
(Protection of Employment) Regulations 1981 (as amended the "TRANSFER
REGULATIONS") in relation to the employees to be employed by Newco,
the Purchaser shall promptly provide TEL, ICI or its Affiliates in
writing with such information as is reasonably necessary to enable
TEL, ICI or its Affiliates to carry out the duties under Regulations
10(2)(d) and 10(6) of the Transfer Regulations and the obligations to
consult under the Transfer Regulations and Council Directive 00/000
XXX.
3 ICI shall be responsible for the incorporation of Newco.
4
4.1 Up until the Completion Date (or the earlier termination of this
agreement) the parties agree in good faith to co-operate generally and
take all steps as may reasonably be required (in so far as each party
is able to do so and the same is permitted by law or regulation):-
(a) for TEL to split with Newco the WSL Contract (whether by
partial assignment or otherwise) on a PRO RATA volume basis by
reference to that proportion of the ilmenite ore supplied
under the WSL Contract which has been consumed by the Newco
Business during the 12 months ending on the date of this
agreement (THE "AGREED GRIMSBY VOLUME PROPORTION"); and/or
(b) for TEL to effect a sub-contract arrangement in favour of
Newco for a period of two years from the Completion Date in
respect of the WSL Contract giving to the Newco Business the
Agreed Grimsby Volume Proportion; and/or
(c) for contractual terms to be made available to Newco for Newco
to be supplied, for a period of at least two years following
the Completion Date, with volumes of ilmenite ore consistent
with those consumed by the Newco Business over the 12 months
ending on the date of this agreement (THE "GRIMSBY HISTORICAL
VOLUME"); and/or
(d) if prior to the Completion Date the volumes of ilmenite
ore contractually available for supply to the Newco Business
are less than the Grimsby Historical Volume, for any ilmenite
ore made available during the period from the date of this
agreement until the second anniversary of the Completion Date
to TEL or any other companies to be sold to DuPont or any of
its Affiliates upon completion of the TEL Sale (the "TIOXIDE
GROUP") pursuant to any new contract ("NEW CONTRACT") which is
entered into after the date of this agreement and prior to the
TEL Completion Date by any member of the Tioxide Group to be
shared as between the Newco Business and the Tioxide Group
other than the Newco Business (the "REVISED TIOXIDE Group") so
that the Newco Business is entitled to receive a proportion of
such ilmenite ore equal to the Agreed Grimsby Volume
Proportion but so that the aggregate of ilmenite ore
contractually available to the Newco Business under any New
Contracts shall not, when taken together with any other
contractual arrangements available to the Newco Business, be
required to exceed the Grimsby Historical Volume.
4.2 If the volumes of ilmenite ore contractually available for supply to
the Newco Business at the Completion Date are less than the Grimsby
Historical Volume, Dupont shall use all reasonable endeavours to
procure (if permitted by law or regulation) that any ilmenite ore made
available during the period of two years immediately after the
Completion Date to the Revised Tioxide Group pursuant to any new
contract ("NEW TIOXIDE CONTRACT") which is entered into after the
Completion Date is shared as between the Newco Business and the
Revised Tioxide Group so that the Newco Business is entitled to
receive a proportion of such ilmenite ore equal to the Agreed Grimsby
Volume Proportion but so that the aggregate of ilmenite ore so
contractually available to the Newco Business under any New Tioxide
Contracts shall not, when taken together with any other contractual
arrangements available to the Newco Business, be required to exceed
the Grimsby Historical Volume.
4.3 If the volumes of ilmenite ore contractually available for supply to
the Revised Tioxide Group at the Completion Date are less than the
volumes of ilmenite ore consumed by the Revised Tioxide Group over the
12 months ending on the date of this agreement, the Purchaser shall
use all reasonable endeavours to procure (if permitted by law or
regulation) that any ilmenite ore made available during the two years
immediately after the Completion Date to the Newco Business pursuant
to any new contract which is entered into after the Completion Date is
shared as between the Newco Business and the Revised Tioxide Group so
that each shall be entitled to receive volumes by reference to the
proportions of ilmenite ore consumed by the Newco Business and the
Revised Tioxide Group under the WSL Contract during the 12 months
ending on the date of this agreement.
4.4 Neither ICI (for itself or its Affiliates), Dupont (for itself or its
Affiliates) nor the Purchaser (for itself or its Affiliates) will
apply any xxxxx xxxx up pursuant to the arrangements referred to in
sub-clauses 4.1(d), 4.2 and 4.3 (save, in the case of ICI, or its
Affiliates, as consistent with practice at the date hereof).
5 On or before the Completion Date the Purchaser shall establish or
nominate a retirement benefits scheme which satisfies the conditions
set out in Schedule 4 of the Newco Share Sale Agreement.
6 ICI, DuPont and the Purchaser acknowledge that certain property,
rights and assets of or relating to or used in the Newco Business as
at the Transfer Time may not exclusively relate to or be exclusively
used in the Newco Business as at such time. If the Purchaser becomes
aware of any such property, right or asset at any time after the date
of this agreement and prior to the date falling twelve months
following the Completion Date and serves notice thereof on ICI and
DuPont, ICI (prior to the Completion Date) and DuPont (following the
Completion Date) shall unless otherwise agreed:
(i) make arrangements for the continued use of the same,
subject to the same terms (including as to cost and use)
as applied immediately prior to the Completion Date; or
(ii)to the extent such continued use is not permitted, make,
insofar as reasonably possible, arrangements for the use
of such property, right or asset as is equivalent thereto,
from and after the Completion Date.
To the extent that third party consents are required, the provisions
of Schedule 7 of the Hivedown Agreement shall apply MUTATIS MUTANDIS
and in relation to sub-paragraph (ii) the aggregate of payments
required to be made under the existing arrangements and such
equivalent arrangements (taking into account any increase in costs
thereunder) shall be borne equitably between ICI, DuPont and the
Purchaser.
This Paragraph 6 shall not apply to the extent that the use in the
Newco Business of the property, right or asset in question is
otherwise expressly provided for in the Newco Implementation
Agreements.
SCHEDULE 5
(SUB-CLAUSE 1.1)
PRINCIPLES FOR DISTINGUISHING
LPC BUSINESS AND AMERICAS BUSINESS
TAI A FORMS
AMERICAS
(SULPHATE)
LPC BUSINESS BUSINESS COMMENTS
--------------------- ----------------- ---------------- ---------------------
--------------------- ----------------- ---------------- ---------------------
- Office equipment
FIXED ASSETS All etc.
--------------------- ----------------- ---------------- ---------------------
INVESTMENTS All - Partnership share
--------------------- ----------------- ---------------- ---------------------
- Based on actual
Stocks quantities of
manufactured by All other stocks from each
STOCKS LPC stocks source
--------------------- ----------------- ---------------- ---------------------
Sales of - Based on detailed
OPERATING DEBTORS material analysis of all
Trade Debtors} manufactured by All other open accounts
Intra Group Debtors} LPC trade debtors concerned
--------------------- ----------------- ---------------- ---------------------
Items exclusive
to LPC
partnership or
trade in
product All other
Other operating manufactured by operating
debtors LPC debtors
--------------------- ----------------- ---------------- ---------------------
OPERATING CREDITORS
LESS THAN ONE YEAR Purchases of All other - Based on detailed
Trade Creditors} material operating analysis of all
Intra Group manufactured by creditors less open accounts
Creditors} LPC than 1 year concerned
--------------------- ----------------- ---------------- ---------------------
Purchases and
services
exclusively
related to LPC
partnership and - Based on detailed
to material All other analysis of all
Other operating manufactured by operating open accounts
creditors LPC creditors concerned
--------------------- ----------------- ---------------- ---------------------
Items - Mainly tax split
exclusively based on analysis
related to LPC of results based on
and materials All other non detailed analysis
NON OPERATING manufactured by operating of all open
DEBTORS/CREDITORS LPC debtors/creditor accounts concerned
--------------------- ----------------- ---------------- ---------------------
All Net Debt to
NET DEBT LPC Business
--------------------- ----------------- ---------------- ---------------------
Items
specifically All other
PROVISIONS related to LPC provisions
--------------------- ----------------- ---------------- ---------------------
Items
specifically All other
DEFERRED INCOME related to LPC deferred income
--------------------- ----------------- ---------------- ---------------------
- Calculated by
NET ASSETS difference
--------------------- ----------------- ---------------- ---------------------
NOTES:
1 Pension Liability (Approx. US$250,000) is accounted for according to
US rules (FAS87 etc.) in A Form. Therefore no reconciling difference
between US and UK GAAP.
2 ICI A Forms do not report deferred tax for ICI's US subsidiaries.
However any deferred tax in the US GAAP accounts is readily analysable
into its LPC and Sulphate and is estimated to derive to the extent of
some 99 per cent. from LPC's tax depreciation.
PRINCIPLES FOR DISTINGUISHING
LPC BUSINESS AND AMERICAS BUSINESS
TCI A FORMS
--------------------- --------------- ---------------- --------------------
AMERICAS
(SULPHATE)
LPC BUSINESS BUSINESS COMMENTS
--------------------- --------------- ---------------- --------------------
FIXED ASSETS All
--------------------- --------------- ---------------- --------------------
INVESTMENTS N/A N/A
--------------------- --------------- ---------------- --------------------
Stocks
manufactured - Based on actual
by LPC and quantities of
Kronos at All other stocks from each
STOCKS Varennes stocks source
--------------------- --------------- ---------------- --------------------
Sales of
material
manufactured - Based on
OPERATING DEBTORS by LPC and detailed analysis
Trade Debtors} Kronos at All other of all open
Intra Group Debtors} Varennes trade debtors accounts concerned
--------------------- --------------- ---------------- --------------------
Other operating
debtors All
--------------------- --------------- ---------------- --------------------
Purchases of
OPERATING CREDITORS material
LESS THAN 1 YEAR manufactured All other - Based on
Trade Creditors} by LPC and operating detailed analysis
Intra Group Kronos at creditors less of all open
Creditors} Varennes than one year accounts concerned
--------------------- --------------- ---------------- --------------------
Other operating
creditors All
--------------------- --------------- ---------------- --------------------
NON OPERATING
DEBTORS/CREDITORS All
--------------------- --------------- ---------------- --------------------
NET DEBT All
--------------------- --------------- ---------------- --------------------
PROVISIONS All
--------------------- --------------- ---------------- --------------------
DEFERRED INCOME All
--------------------- --------------- ---------------- --------------------
- Calculated by
NET ASSETS difference
--------------------- --------------- ---------------- --------------------
NOTE:
Stocks/materials/product manufactured by LPC includes items made
available to LPC under product swap arrangements with Kronos's plant
at Varennes.
SIGNED by
for and on behalf of
IMPERIAL CHEMICAL INDUSTRIES PLC } Xxxxx X Xxxxxxx
SIGNED by
for and on behalf of
E.I. DU PONT DE NEMOURS AND
COMPANY } Xxxxxxx X Xxxxxx
SIGNED by
for and on behalf of
N L INDUSTRIES, INC. } Xxxxx X Xxxxxxxx
