EXHIBIT 10.6
DATED 1998
ICI AMERICAN HOLDINGS INC.
and
NL INDUSTRIES, INC.
SHARE SALE AND PURCHASE AGREEMENT
OF
TIOXIDE AMERICAS INC.
LINKLATERS & PAINES
One Xxxx Xxxxxx
Xxxxxx XX0X 0XX
TEL: (x00) 000 000 0000
Ref: XXX
THIS AGREEMENT (this "AGREEMENT") is made on 1998 BETWEEN:
(1) ICI AMERICAN HOLDINGS INC. a Delaware Corporation with principal
place of business at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000,
XXX (the "SELLER"); and
(2) N L INDUSTRIES, INC., a corporation incorporated under the laws of
New Jersey, whose principal place of business is at 00000 Xxxxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, XXX (the "PURCHASER").
WHEREAS:
(A) Tioxide Americas Inc. is a corporation incorporated in Delaware,
USA, short particulars of which are set out in Schedule 1 (the
"COMPANY").
(B) The Seller holds all of the issued shares in the capital of the
Company (the "SALE SHARES") particulars of which are contained in
Schedule 1.
(C) The Seller has agreed to sell and the Purchaser has agreed to
purchase the Sale Shares on the terms and subject to the conditions
set out in this agreement and the Framework Agreement.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 In this agreement:
"ACCOUNTS" means the audited accounts of the Company for the year
ended 31 December 1997;
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, liabilities, obligations, liens (other than
those arising by operation of law or by statute) losses, expenses and
fees, including court costs and reasonable attorneys' fees and expenses;
"AFFILIATES" means with respect to a specified entity, an entity that
directly or indirectly through one or more intermediaries, Controls, or
is Controlled by, or is under common Control with, the entity specified,
provided, that, without limiting the generality of the foregoing, in
relation to ICI and its subsidiary companies, the term "AFFILIATES"
shall not include any entity in which a party has a 50 per cent or less
ownership interest. For the purposes hereof, "CONTROL" means possession,
directly or indirectly, of the power to direct or cause the direction of
the management and operating policies of the entity in respect of which
the determination is being made, through the ownership of voting
securities, contract, voting trust or otherwise but any reference in
this agreement to an Affiliate of the Seller or the Purchaser shall
exclude the Company, and references to the Seller's Group or the
Purchaser's Group shall be construed accordingly;
"AGREED FORM" means, in relation to any document, the form of that
document which has been initialled for the purpose of identification by
or on behalf of the parties to this agreement;
"AMERICAS LIABILITY AGREEMENT" means the liability agreement between
ICI and the Purchaser dated [ ];
"ASSETS" means all of the assets and rights of the Company relating to
the Business but excluding the LPC Interests;
"BUSINESS" means the manufacture, import, export, sale and distribution
of titanium dioxide pigments and co-products, and related products and
all other business and operations as carried on by the Company as at the
date hereof but shall not include:
(i) the manufacture, sale or disposal by way of trade of any
organometallic compounds save the manufacture, sale or
disposal of a pigment which incorporates as an essential
feature of its composition an organometallic compound shall
not be considered to be the manufacture, sale or disposal of
an organometallic compound as such;
(ii)the manufacture, sale or disposal by way of trade of any form
of titanium dioxide of ultraviolet-attenuating grade having a
ratio of absorbance response at 308 nm (A308) to absorbance
response at 524 nm (A524) of not less than 5 as defined in US
Pharmacopeia, amendment published in Pharmacopeia Forum,
Volume 22, Number 4, Page 2636 and attached hereto as Annex
2; and
(iii) any matter relating to the LPC Interests or LPC;
"BUSINESS DATA" means the Company's historical and current documents
relating to the Business, including customer lists, product, distributor
and supplier lists, catalogues, literature, employee records, documents
of title to the Assets (but excluding those relating to the Properties),
sales targets, sales statistics, market share statistics, marketing
surveys and reports, marketing research and any advertising or other
promotional materials, production data, safety data and accounting
(including management account records) and other financial data (other
than the US Financial Information), whether in hard copy or in computer
held form (including for the avoidance of doubt such media as microfilm
and microfiche);
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are generally open for normal business in both London and New York
and (when any action is required by this agreement to be taken in
Canada) Montreal;
"CODE" means the United States Internal Revenue Code of 1986, as
amended;
"COMPLETION" means completion of the sale and purchase of the Sale
Shares in accordance with Clause 7 which shall occur immediately
following signature and exchange of this agreement;
"COMPLETION DATE" means [ ] on the date of this
agreement;
"COMPUTER SYSTEMS" means all computer hardware, software,
microprocessors and firmware which in each case are used in the
Business;
"CONTRACTS" means all contracts and arrangements relating to the
Business entered into before Completion by or on behalf of the Company
in connection with the Business which remain (in whole or in part) to be
performed at Completion and, in addition, means any contracts or
arrangements between the Company and the Seller (or any of its
Affiliates) but shall not include any contracts or arrangements relating
to the LPC Interests or LPC;
"DEFAULT INTEREST" means LIBOR plus 200 basis points compounded
monthly;
"DISCLOSURE LETTER" means the letter of the same date as this
agreement from the Seller to the Purchaser;
"DUPONT" means E.I. du Pont de Nemours and Company;
"EMPLOYEES" means all those individuals employed by the Company at
Completion;
"ENVIRONMENT" has the meaning in Schedule 5;
"ENVIRONMENTAL AUTHORISATIONS" means all or any permits, certificates,
consents, licences, approvals, registrations and other authorisations
required under Environmental Laws and all terms and conditions thereof
required under any Environmental Law for the operation of the Business;
"ENVIRONMENTAL LAWS" has the meaning given in Schedule 5;
"ESTIMATED CONSIDERATION" has the meaning given in Clause 3;
"FIELD OF ACTIVITY" means the manufacture, import, export, sale and
distribution of titanium dioxide pigments and co-products, and related
products as carried on by the Company, but shall not include:
(i) the manufacture, sale or disposal by way of trade of any
organometallic compounds save the manufacture, sale or
disposal of a pigment which incorporates as an essential
feature of its composition an organometallic compound shall
not be considered to be the manufacture, sale or disposal of
an organometallic compound as such; and
(ii)the manufacture, sale or disposal by way of trade of any form
of titanium dioxide of ultraviolet-attenuating grade having a
ratio of absorbance response at 308 nm (A308) to absorbance
response at 524 nm (A524) of not less than 5 as defined in US
Pharmacopeia, amendment published in Pharmacopeia Forum,
Volume 22, Number 4, Page 2636 and attached hereto as Annex
2;
"FINAL CONSIDERATION" has the meaning given in Schedule 6;
"FRAMEWORK AGREEMENT" means the agreement dated o between ICI, DuPont
and the Purchaser;
"GUARANTEES" means all guarantees and indemnities given by the Seller or
Affiliates of the Seller in respect of obligations of the Company in
relation to the Business, short particulars of which are contained in
the Disclosure Letter;
"HAZARDOUS MATERIAL" has the meaning given in Schedule 5;
"ICI" means Imperial Chemical Industries PLC;
"ICI GROUP" means ICI and its Affiliates as at the Completion Date;
"IMPLEMENTATION AGREEMENTS" means the documents in Schedule 4;
"INDEPENDENT ACCOUNTANT" has the meaning given in Clause 11;
"INTELLECTUAL PROPERTY" shall mean all patents, trademarks, service
marks, trade names and all goodwill associated with the foregoing,
registered designs, copyrights, copyrightable works (including, without
limitation, data, documentation and databases) registered internet
domain names, and rights to inventions and applications for and rights
to apply for protection or registrations of any of the same; including
any continuation, continuation-in-part, provisional, reissue, divisional
and re-examination patent applications and all rights in Technical
Information;
"INTRA-GROUP LOANS" means all Net Debt due from the Company to the
Seller or any Affiliate of the Seller or due to the Company from the
Seller or any Affiliate of the Seller as determined in accordance with
Schedule 6, and in both circumstances relating only to those Affiliates
of the Seller following Completion;
"LIBOR" means the rate for deposits in US Dollars for a period of one
month which appears on the Reuters Screen ISDA Page (or such other page
as the parties may agree) at approximately
11.00 a.m., London time, on the first day of the period to which any
interest period relates (the "RELEVANT DATE"). If such rate does not
appear on the Reuters Screen ISDA Page on the Relevant Date, the rate
for that Relevant Date will be determined as if the parties had
specified that the rate for the Relevant Date will be determined on the
basis of the rates at which deposits in US Dollars are offered by
Midland Bank plc at approximately 11.00 a.m., London time, on the
Relevant Date to prime banks in the London interbank market for a period
of one month commencing on that Relevant Date for amounts of
US$10,000,000;
"LPC" means the Louisiana Pigment Company Limited Partnership;
"LPC INTERESTS" means all partnership interests held by the Seller or
its Affiliates in LPC pursuant to the Joint Venture Agreement dated as
of 18 October 1993, as amended, between the Company and Kronos
Louisiana, Inc.;
"LPC BUSINESS" means the LPC Interests, sales sourced from LPC and any
Stocks, Operating Debtors, Operating Creditors less than 1 year (the
definitions of such terms in Schedule 6 being applied to LPC) and other
assets or liabilities relating to LPC as determined and distinguished
from the Business in accordance with Schedule 7;
"LPC WARRANTIES" has the meaning given in sub-Clause 5.1(b);
"MATERIAL CONTRACTS" means all Contracts (i) which at Completion have in
excess of 12 months to run and which in that time can reasonably be,
expected to involve income or expenditure in respect of the Business in
excess of US$200,000 per annum; or (ii) which at Completion have less
than 12 months to run and which in that time can reasonably be expected
to involve income or expenditure in respect of the Business in excess of
US$500,000; or (iii) which relate to the treatment and/or disposal of
waste; or (iv) which relate to contract manufacturing or processing of
products by third parties; or (v) which relate to third party
distribution or agency in respect of products; or (vi) the absence of
which would have a material negative impact on the conduct of the
Business;
"NET DEBT" has the meaning given in Schedule 6;
"NON-LPC WARRANTIES" has the meaning given in sub-Clause 5.1(a);
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice including, without limitation
quantity and frequency, taking into account the relevance and
reasonableness of the same and with allowance made for the inherently
cyclical nature of the titanium dioxide industry;
"PARENT UNDERTAKING" shall have the meaning given in section 258 of
the United Kingdom Companies Xxx 0000;
"PERMITS" means all licences, permits, authorisations, registrations and
approvals required by law or regulation or issued or granted by
statutory or other authorities to the Company for the operation of the
Business (but excluding, for the avoidance of doubt, planning
permissions issued by relevant planning authorities (save for
Environmental Authorisations) and any licence, permit, authorisation or
approval which falls within the definition of Regulatory Conditions);
"PLANT AND EQUIPMENT" means the plant, machinery, spare parts, tools,
equipment, chattels, motor vehicles, furniture, fixtures and fittings
(to the extent they are not included in the Properties) and all other
tangible personal property located at the Property (including without
limitation office equipment) which in each case is owned and/or used by
the Company in relation to the Business as at Completion;
"PROPERTY" means the property shown in Schedule 2 Part I;
"PURCHASER'S AUDITORS" means PricewaterhouseCoopers;
"PURCHASER'S GROUP" means the Purchaser's ultimate parent undertaking
and that parent undertaking's Affiliates;
"REGULATORY CONDITIONS" means the anti-trust or regulatory approvals
(other than Environmental Authorisations) necessary to complete the sale
of the Company on the terms set out in this agreement;
"SCHEME" means the Company's pension plans described in the Disclosure
Letter;
"SELLER'S AUDITORS" means KPMG;
"SELLER'S GROUP" means the Seller's ultimate parent undertaking and
that parent undertaking's Affiliates as at the Completion Date;
"STOCK" means the stocks of fuels, raw materials, ingredients,
packaging, office and laboratory supplies, engineering spares,
consumable stores, work-in-progress and finished goods at Completion
held by the Company for the purposes of the Business;
"TAX" has the meaning given in the Tax Deed of Covenant;
"TAXATION" has the meaning given in the Tax Deed of Covenant;
"TAX AUTHORITY" has the meaning given in the Tax Deed of Covenant;
"TAX DEED OF COVENANT" means the tax deed of covenant in the Agreed
Form;
"TAX LIABILITY" has the meaning given in the Tax Deed of Covenant;
"TECHNICAL INFORMATION" shall mean all technical data and know-how,
industrial and technical information, trade secrets, confidential
information, drawings, formulations, technical reports, operating and
testing procedures, instruction manuals, raw material or production
specifications, the results of research and development work, whether in
hard copy or in computer held form (including for the avoidance of doubt
in such media as microfilm and microfiche or otherwise);
"TERRITORIES" means the United States of America, Canada, Mexico,
Central and South America;
"UK GAAP" means generally accepted accounting principles in the United
Kingdom;
"US DOLLARS", "US$" or "$" means the lawful currency of the United
States of America;
"US FINANCIAL INFORMATION" means the financial information attached as
Schedule 8;
"US NAME AGREEMENT" means the agreement in the Agreed Form;
"WARRANTIES" means the LPC Warranties and the Non-LPC Warranties; and
"WARRANTY CLAIM" has the meaning given in sub-Clause 5.4.
1.2 Unless otherwise stated, any express reference to an enactment includes
references to:
(a) that enactment as amended, extended or applied by or under any
other enactment before or after this agreement;
(b) any enactment which that enactment re-enacts (with or without
modification); and
(c) any subordinate legislation made (before or after this agreement)
under any enactment, including one within (a) or (b) above,
except to the extent that any of the matters referred to in (a) to (c)
occurring after the date of this agreement would increase or alter the
liability of any party under this agreement.
1.3 The singular shall include the plural and vice versa and words denoting
persons shall include bodies corporate and unincorporated associations
of persons and, unless otherwise stated, shall include permitted
successors or assigns of such persons.
1.4 Sub-Clauses 1.1 to 1.3 apply unless the contrary intention appears.
1.5 The headings in this agreement do not affect its interpretation.
1.6 Any Schedule or Annex to this agreement shall take effect as if set out
in this agreement and references to this agreement shall include its
Schedules and Annexes.
1.7 Where any statement in this agreement (or in the attached Schedules or
Annexes) (other than in Schedule 3 paragraphs H(2) and H(4) is qualified
by the expression "SO FAR AS THE SELLER IS AWARE," "TO THE SELLER'S
KNOWLEDGE, INFORMATION AND BELIEF," "KNOWN TO THE SELLER" or any similar
statement, that statement shall be deemed to mean the knowledge, after
reasonable investigation, of the officers and operational and functional
managers of ICI and its Affiliates who have direct responsibility for
the subject matter concerned, being those listed in Schedule 9.
2 SALE AND PURCHASE OF THE SALE SHARES
2.1 The Seller shall with full title guarantee sell and the Purchaser shall
purchase the Sale Shares together with all rights attaching to them.
2.2 The Sale Shares shall be sold free from all liens, charges, equities and
encumbrances and other rights exercisable by third parties or Affiliates
of the Seller.
3 CONSIDERATION AND ADJUSTMENTS
3.1 Subject to sub-Clause 3.4 below, the consideration for the sale of the
Sale Shares shall be US$[o] payable in cash by the Purchaser on
Completion (the "ESTIMATED CONSIDERATION").
3.2 The payment under sub-Clause 3.1 shall be paid to the correspondent bank
named below for credit to the US Dollar account of o (the "ICI ACCOUNT")
referred to below:
Correspondent bank:
Bank account:
Account name:
Account no:
Sort code:
3.3 Any payments to the Purchaser under this agreement shall be paid to the
correspondent bank named below for credit to the US Dollar account of o
(the "PURCHASER ACCOUNT") referred to below:
3.4
Correspondent bank:
Bank account:
Account name:
Account no:
Sort code:
3.5 The Final Consideration shall be determined and any difference between
the Estimated Consideration and the Final Consideration shall be paid in
accordance with the provisions of Schedule 6.
4 PURCHASER'S WARRANTIES
The Purchaser represents and warrants to the Seller that:
(a) it (and each of its Affiliates, in respect of the Implementation
Agreements to which such Affiliate is a party) has the requisite
power and authority to enter into and to perform this agreement
and such Implementation Agreements;
(b) it (and each of its Affiliates, in respect of the Implementation
Agreements to which such Affiliate is a party) has obtained or
satisfied all corporate, regulatory and other approvals, or any
other significant conditions, necessary to execute and perform
this agreement and such Implementation Agreements;
(c) this agreement and the Implementation Agreements constitute valid
and binding obligations of the Purchaser (and each of its
Affiliates, in respect of the Implementation Agreements to which
such Affiliate is a party) enforceable in accordance with their
respective terms; and
(d) compliance with the terms of this agreement by the Purchaser and
the Implementation Agreements by the Purchaser or its Affiliates
(as appropriate) will:
(i) not constitute a breach of any agreement or contract to which
the Purchaser or such Affiliate of the Purchaser is a party
or by which it is bound; and
(ii)be in compliance with the Purchaser's or such Affiliate of
the Purchaser's memorandum and articles of association or
other constitutional documents; and
(iii) not contravene:
(a)any order, judgment or decree; or
(b)any statute, rule or regulation or;
(c)any other restriction of any kind by which the Purchaser
or such Affiliate of the Purchaser is bound.
5 SELLER'S WARRANTIES
5.1 The Seller represents and warrants to the Purchaser in the terms set out
in Part A.1 of Schedule 3.1 and that:
(a) with respect to the Business and to the sale of the Sale Shares
and not with respect to the LPC Interests, save as otherwise
stated in this agreement and subject to all matters and
circumstances fairly disclosed in the Disclosure Letter, each
of the statements set out in Schedule 3.1 Part A.2 to N
(inclusive) (the "NON-LPC WARRANTIES") is true and accurate as
at the date of this agreement and the Seller acknowledges that
the Purchaser has entered into this agreement in reliance upon
the Non-LPC Warranties; and
(b) with respect to the LPC Interests only, save as otherwise stated
in this agreement and subject to all matters and circumstances
fairly disclosed in the Disclosure Letter, each of the statements
set out in Schedule 3.2 (the "LPC Warranties") is true and
accurate as at the date of this agreement and the Seller
acknowledges that the Purchaser has entered into this Agreement
in reliance upon the LPC Warranties.
The Purchaser agrees that save as set out in Schedule 3.2, no warranty,
representation, undertaking or indemnity or any other contractual
obligation or otherwise is made or given by the Seller to either the
Purchaser or its Affiliates in relation to LPC or the LPC Interests.
5.2 Each of the Warranties shall be separate and independent and no Warranty
shall limit the scope or construction of any other Warranty or any other
provision of this agreement.
5.3 The Purchaser acknowledges and agrees that:
(i) save as may be set out in this agreement or in the
Implementation Agreements, except for the Warranties and in
relation to an allegation of fraud, no statement, promise or
forecast made by or on behalf of the Seller or any member of
the Seller's Group may form the basis of, or be pleaded in
connection with, any claim by the Purchaser under or in
connection with this agreement or the Implementation
Agreements; and
(ii)any claim by the Purchaser or any person deriving title from
it in connection with the Warranties shall be subject to the
following provisions of this clause.
5.4 The liability of the Seller in respect of any breach of the Warranties
(a "WARRANTY CLAIM") or the indemnities contained in this agreement
shall be governed by the terms of the Americas Liability Agreement
except as expressly provided therein.
5.5 The liability of the Seller under or in respect of a Warranty Claim
shall also be limited in respect of any liability which is contingent,
unless and until such liability becomes an actual liability and is due
and payable provided that the Purchaser shall not be prohibited from
bringing a Warranty Claim pending such liability becoming due and
payable.
5.6 The Purchaser acknowledges and agrees that:
(i) no liability shall attach to the Seller by reason of any
breach of any of the Warranties or any indemnities contained
in this agreement to the extent that the loss including all
relevant costs and expenses has been recovered by the
Purchaser under Schedule 5 or any other term of this
agreement or any other document referred to herein and
accordingly the Purchaser may only recover once in respect of
the same loss; and
(ii)in calculating the liability of the Seller for any breach of
the Warranties there shall be taken into account the amount
by which any Taxation for which the Purchaser is now or in
the future accountable or liable to be assessed is reduced or
extinguished as a result of the matter giving rise to such
liability.
5.7 The Purchaser shall not be entitled to make any Warranty Claim:
(i) to the extent that the claim arises as a result only of any
change after Completion in the accounting bases upon which
the Company values its assets or computes its profits or
arises as a result of the taxation or accounting policies,
bases or practices of the Purchaser being different to those
adopted or used in preparing the Accounts; or
(ii)to the extent that the matter which constitutes the claim was
specifically consented to in writing by the Purchaser in the
knowledge that such matter would give rise to such Warranty
Claim.
5.8 The Purchaser shall not be entitled to rescind or terminate this
agreement after Completion in any circumstances provided that nothing in
this sub-Clause shall exclude or limit any right to rescind or terminate
for fraud.
5.9 Save as otherwise provided in this agreement, the Seller shall not be
liable in respect of any Warranty Claim to the extent that the liability
of the Seller in respect thereof is incurred or increased as a result of
any legislation not brought into force at the date of this agreement or
as a result of any change in or repeal of legislation hereafter or as a
result of the introduction or cessation of or change in the published
practice of any taxation authority after the date of this agreement.
5.10 The Purchaser shall not be entitled to make any claim in respect of any
breach or alleged breach of the Warranties to the extent that:
(i) the facts, matters or circumstances giving rise thereto (in
respect of which any such claim or alleged claim arises) have
been fairly disclosed in the Disclosure Letter; or
(ii)such claim arises or is incurred as a result of any voluntary
act or omission of the Purchaser or any Affiliate of the
Purchaser after the date of this agreement, other than any
such act or omission which is in the Ordinary Course of
Business or is required by law or is pursuant to a legally
binding commitment of the Company or any member of the
Seller's Group created or entered into before Completion.
5.11 The provisions of this Clause 5 shall have effect notwithstanding any
other provisions of this agreement.
6 SELLER'S INDEMNITY
6.1 The Seller undertakes to indemnify and keep indemnified the Purchaser,
its Affiliates and the Company (the "INDEMNIFIED PARTIES") against all
claims by third parties (other than any subsequent purchaser or
purchasers of either the Sale Shares or the business or assets of the
Company and their successors in title or assigns) giving rise to Adverse
Consequences which may be paid, suffered or incurred by any of the
Indemnified Parties or to which any of the Indemnified Parties may
become subject and which arise as a result of the operation of the
Business by the Company prior to Completion (unless and to the extent
that the circumstances giving rise to the Adverse Consequences were
fairly disclosed in the Disclosure Letter) and including without
limitation those Adverse Consequences arising:
(a) as a result of the failure by the Company to comply with relevant
and legally enforceable corporate or other laws, rules,
ordinances or regulations with respect to the operations of the
Business prior to Completion;
(b) as a result of the failure by the Company to obtain required
relevant governmental permits, licences, consents or other
authorisations with respect to the operation of the Business
prior to Completion;
(c) from or with respect to any breach of contract, tort or product
liability or otherwise arising from, or with respect to, the
operation of the Business prior to Completion and asserted by any
third party; and
(d) from or with respect to any suit, action, arbitration, charge,
governmental investigation, claim, litigation or proceedings
affecting the Business or the Company.
Provided that the indemnity contained in this Clause 6 shall not apply
to:
(i) liabilities expressly assumed by the Purchaser pursuant to
this agreement or the Implementation Agreements; or
(ii)to the extent that such liabilities have been taken into
account in establishing the Final Consideration; or
(iii) any Environmental Liabilities, any failure or omission to
obtain or comply with Environmental Authorisations, any
failure or omission to comply with any Environmental Laws or
any claim by any person in respect of any matter concerning
the Environment (indemnity for which is provided in
sub-Clause 9.2 and Schedule 5); or
(iv)Taxation (indemnity for which is provided in the Tax Deed
of Covenant); or
(v) the LPC Interests or LPC.
6.2 The Purchaser agrees to give the Seller notice of any and all claims
asserted against the Purchaser for which indemnification under this
Clause 6 is or may be sought. Such notice shall be given as soon as
reasonably practicable after the Purchaser becomes aware that it has or
may have a claim against the Seller. Under this Clause 6, failure to
give such notice shall not abrogate or diminish the Seller's obligation
under this Clause if the Seller has or receives knowledge of the
existence of any such claim by any other means or if such failure does
not prejudice the Seller's ability to defend such a claim.
7 COMPLETION
7.1 Completion shall take place at the offices of the [ ] immediately
after the signature of this agreement when:
(a) each party shall provide to the other evidence in a form
reasonably satisfactory to the other that it (and each of its
relevant Affiliates entering into an Implementation Agreement)
has all necessary corporate approvals and consents and its
signatories have necessary authority to enter into this agreement
and the other agreements referred to herein;
(b) each party shall (or shall procure that its relevant Affiliates
will) duly execute and, to the extent applicable, complete the
Implementation Agreements and the Tax Deed of Covenant;
(c) the Seller shall deliver to or into the possession and control of
the Purchaser:
(i) a duly executed transfer or transfers in favour of the
Purchaser (or such Affiliate of the Purchaser as the
Purchaser may nominate) of all the Sale Shares;
(ii)share certificate(s) or other documents of title relating to
the Sale Shares (or an express indemnity in a form reasonably
satisfactory to the Purchaser in the case of any missing
certificates or documents of title);
(iii) the company books relating to the Company, including
certificates of incorporation, common seals, minute books,
statutory registers, shareholders' agreements and share
certificate books (duly written up to date);
(iv)resignations of all the directors and secretary of the
Company;
(v) the written resignation of the auditors of the Company to
take effect on Completion, with acknowledgments signed by
them to the effect that they have no claim against the
Company and to the effect that there are no circumstances
connected with their resignation which they consider should
be brought to the notice of the shareholders or creditors of
the Company;
(vi)bank statements in respect of every account which the Company
has, dated two days prior to the Completion Date and the
relevant reconciliation statements prepared on the previous
Business Day;
(vii) the Business Data;
(viii) the documentation and title deeds to the Property in
accordance with the provisions of Part II of Schedule 2;
(ix)the Implementation Agreements duly executed by the Seller
and/or Affiliates of the Seller as applicable; and
(x) the Disclosure Letter;
(d) the Purchaser shall pay to the Seller the Estimated
Consideration;
(e) the Purchaser or another member of the Purchaser's Group shall
procure that all Intra-group Loans due from the Company to the
Seller or any Affiliate of the Seller are repaid by the Company
and the Seller or another member of the Seller's Group shall
procure that all Intra-group Loans due to the Company from the
Seller or any Affiliate of the Seller are repaid by the Seller or
its relevant Affiliates;
(f) the Seller shall take, or shall procure the taking of, such steps
as may be necessary to:
(i) approve the transfers referred to in Clause 7.1(c) (i)
(subject only to the Purchaser arranging and paying any taxes
or duties arising in relation to the transfer); and
(ii)appoint such directors and secretary as the Purchaser may
specify as directors and the secretary of the Company; and
(iii) release the securities, guarantees, claims and indemnities
existing immediately prior to Completion other than those
arising in the Ordinary Course of Business, owed or due to or
claimed by the Seller or any Affiliate (being an Affiliate
after Completion) from the Company, true and complete
particulars of which are set out in Schedule 10;
(g) each party shall deliver a copy of the Tax Deed of Covenant duly
executed to the other party.
8 EMPLOYEES
8.1 The Purchaser agrees to procure that the Company for a period of four
years from the Completion Date, will procure that:
(a) the Employees will receive and enjoy contractual remuneration and
benefits (including separation and other benefits described in
the Disclosure Letter) which, judged objectively, are no less
favourable overall than their contractual remuneration and
benefits at the Completion Date; and
(b) it will not make any unilateral material change to the
contractual terms and conditions of employment with the Employees
without prior consultation where required by any local laws or
agreements, with recognised trade unions, appropriate employee
representatives, or the Employees.
8.2 The Seller will procure that, on or before Completion, the Company will
discharge its liability to Xx Xxxx Xxxxxxxx in respect of Supplemental
Employment Terms.
8.3 For the purposes of this clause, "SUPPLEMENTAL EMPLOYMENT TERMS" shall
mean:
8.3.1 the period of additional notice (if any) due from the Company at
the date such liability crystallises under the arrangement in
force as at Completion which is in excess of that which he would
have received under the terms of his service agreement dated 25
October 1990;
8.3.2 the additional life assurance cover (if any) under the
arrangement in force as at Completion which is in excess of the
cover provided under the terms of his service agreement dated 25
October 1990;
8.3.3 the supplemental retirement benefits that are in addition to the
benefits to which Xx. Xxxxxxxx is entitled under the TAI
Retirement Plan and the TCI Staff Employees' Pension Plan; and
8.3.4 any other enhancements to his terms and conditions of employment
granted between 25 October 1990 and Completion and which are in
force as at Completion other than those granted in the Ordinary
Course of Business.
8.4 The Seller will indemnify the Purchaser (for itself and as agent and
trustee for the Company) on a continuing basis against any and all
losses or liabilities, costs (including without limitation legal costs),
charges, expenses, actions, proceedings, claims and demands which the
Purchaser or the Company may incur and which relate to or arise out of
the continuation after Completion of the Supplemental Employment Terms.
8.5 The Purchaser acknowledges and agrees that all of the funds set aside or
due at Completion to be set aside by the Company in trust for the
purpose of meeting the liability of the Seller and the Company to
provide supplemental retirement benefits for Xx Xxxxxxxx will be used
for this purpose. The funds held in trust are held at Xxxxxxx Xxxxx
Trust Company of America Chicago in account no. 000-00-000. If these
funds have not been used for this purpose before Completion, the
Purchaser will procure that the Company complies with any directions
given by the Seller as to the use of these funds after Completion for
the purpose of providing such benefits for Xx Xxxxxxxx.
8.6 The Seller will indemnify the Purchaser (for itself and as agent and
trustee for the Company) on a continuing basis against any and all
losses or liabilities, costs (including without limitation legal costs)
charges, expenses, actions, proceedings, claims and demands which the
Purchaser or the Company may incur as a result of the severance
payments, pension entitlements, accelerated pension entitlements and any
other benefits actually paid to any employee whose employment is
terminated after Completion if and to the extent such payments,
entitlements and/or benefits are in excess of those which would have
applied at any time in the period prior to 10 September 1997 Provided
always that the dismissal which results in the excess costs being
incurred takes effect within four years of Completion and the regular
salary figure used in the calculations is one which has been prevailing
in respect of the relevant employee for at least six months prior to
termination. This indemnity shall not extend to any losses or
liabilities, costs
(including without limitation legal costs) charges, expenses, actions,
proceedings, claims and demands which the Purchaser or the Company may
incur as a result of its or their negligence or default. Any claims
under this indemnity must be made within 4 years and 3 months of
Completion following which this indemnity shall have no effect.
8.7 The Seller shall not be required to make any payment under the indemnity
set out in sub clause 8.6 unless a draft certificate shall have been
delivered to it by the Purchaser within 30 days after the date requiring
the Seller to indemnify the Purchaser pursuant to sub-clause 8.6 and
certifying the amount payable thereunder. In order to enable the Seller
to review the certificate, the Purchaser shall (to the extent it is
permitted by law to do so) make available and supply to the Seller and,
at the Seller's request and expense, the Seller's auditors, copies of
all relevant records and other working papers) relating to the subject
matter of the indemnity, during normal office hours.
8.8 If the Seller does not within 30 days after presentation to it of the
draft certificate give notice to the Purchaser that it disagrees with
the certificate or any item thereof, such notice stating the reasons for
the disagreement in reasonable detail, the draft certificate shall
become final and binding on the parties for all purposes.
8.9 If the Seller gives a valid notice within such 30 days, the parties
shall attempt in good faith to reach agreement in respect thereof and,
if they are unable to do so within 21 days of such notification, either
party may by notice to the other refer the certificate to the
Independent Accountants in accordance with the provisions of clause 11
of this agreement which shall apply mutatis mutandis, references to the
"COMPLAINANT" being deemed to be references to the "SELLER" and
references to the "OTHERS" being to the "PURCHASER".
8.10 The Seller shall pay interest at the rate of LIBOR plus 200 basis point
compounded monthly on all payments pursuant to this clause from the date
of delivery of the draft certificate.
9 PROPERTY, ENVIRONMENTAL AND LOUISIANA GRANTS
9.1 The Seller and the Purchaser shall observe and perform the provisions of
Schedule 2 expressed to be observed and performed by each of them
respectively.
9.2 The Seller and the Purchaser shall observe the provisions of Schedule 5
expressed to be observed and performed by each of them respectively,
which shall apply only to the Business and not the LPC Interests or LPC.
9.3 The Seller and the Company shall cooperate with the Purchaser in taking
reasonable steps to transfer to the Purchaser the ongoing benefits of
the applicable Louisiana Exemption Grants defined in Section 5.1,
Article V, "TAX MATTERS OF THAT CERTAIN FORMATION AGREEMENT" dated as of
October 18, 1993 between Affiliates of the Purchaser and the Seller.
10 PENSIONS
10.1 The Purchaser agrees to procure that the Company will, commencing with
the Completion Date, respect and perform the provisions of the Scheme.
10.2 Subject to the payment of the transfer amount, as described below, the
Purchaser will provide retirement benefits for Mr J Gush and Xx X X
Xxxxx in respect of their service with the Company on and after
Completion so that, in each case, their total benefits on retirement,
leaving service or death (inclusive of any retirement benefits
attributable to service up to Completion) are as described in their
retirement benefit profiles in the Agreed Form. The Purchaser will also
nominate retirement benefits arrangements to which a transfer payment
can be made from the Tioxide Offshore Pension Fund.
10.3 The Purchaser shall indemnify the Seller (for itself and its Affiliates)
on a continuing basis against any and all losses, liabilities, costs
(including without limitation legal costs), charges, expenses, actions,
proceedings, claims and demands which the Seller or its Affiliates may
incur and which relate to or arise out of any failure by the Purchaser
to comply with these obligations.
10.4 The Seller (or its relevant Affiliate) will use its reasonable
endeavours to procure payment of a transfer amount from the Tioxide
Offshore Pension Fund to the arrangements nominated by the Purchaser.
10.5 The transfer amount will be:
10.5.1 based on benefits accrued by Xx Xxxx and Xx Xxxxx under the
Tioxide Offshore Pension Fund for service up to Completion (i.e.
excluding benefits earned under all other Tioxide plans in which
they have participated); and
10.5.2 calculated on a past service reserve basis using the projected
unit method, based on salaries projected to retirement or earlier
date of leaving or death, using the actuarial assumptions set out
in the actuarial valuation of the Tioxide Offshore Pension Fund
as at 1 April 1997 and will be adjusted as agreed between the
Seller and the Purchaser for the period between Completion and
the date of payment.
10.6 If an appropriate transfer amount cannot be agreed within three months
after Completion, either party may require the amount to be determined
by an independent actuary, to be nominated by the Seller and the
Purchaser jointly, or if they cannot agree, by the President of the
Institute of Actuaries on application by either party. The independent
actuary will act as an expert and not as an arbitrator, and his decision
will be final and binding on the parties. His costs will be payable
equally by the Seller and the Purchaser.
10.7 If the trustee of the Tioxide Offshore Pension Fund does not pay the
transfer amount in full by a date one month after the date on which it
is agreed (or decided by the independent actuary), the Seller will pay
to the Purchaser the amount of the shortfall by way of adjustment to the
Final Consideration. However, the Seller will not be required to pay an
amount in excess of the net cost to the Purchaser or the Company (after
taking account of tax) of making good the shortfall by a payment to the
arrangements.
11 INDEPENDENT ACCOUNTANT
11.1 If either party wishes to refer any matter in dispute in accordance with
the provisions of Clause 3 or Schedule 6 for determination under this
Clause it shall give notice to the other requiring the appointment of an
independent accounting firm of international reputation (the
"INDEPENDENT ACCOUNTANT") excluding accounting firms who have acted as
auditors of either party or of any of their Affiliates in the last five
years. If the parties are unable to agree upon the Independent
Accountant within 14 days of such notice, then the Independent
Accountant shall be appointed by the President for the time being of the
Institute of Chartered Accountants in England and Wales on the
application of either party.
11.2 If the Independent Accountant delays or becomes unwilling or incapable
of acting or if for any other reason the President for the time being of
the Institute of Chartered Accountants in England and Wales thinks fit
he may discharge the Independent Accountant and, in the absence of
agreement between the parties, appoint another in its place.
11.3 The Independent Accountant shall act as an expert and not as an
arbitrator and his decision shall (in the absence of manifest error) be
final and binding on the parties. The Independent Accountant shall
afford the parties the opportunity of making written representations to
them and shall make its determination within 40 days of its appointment.
11.4 The fees and expenses of the Independent Accountant shall be borne by
the parties in equal shares unless the Independent Accountant determines
otherwise.
12 PROTECTIVE COVENANTS
12.1 The Seller covenants with the Purchaser that no member of the Seller's
Group will:
(a) for a period of five years from Completion within any part of the
Territories carry on or be engaged or involved in the Field of
Activity (save as the owner for investment purposes only of
securities traded on a recognised stock exchange and not
exceeding one per cent. of the securities of that class); or
(b) without prior approval from the Purchaser, for a period of two
years from Completion, directly or indirectly solicit, or
endeavour to entice away from the Purchaser or its Affiliates any
of the Employees.
12.2 Each of the restrictions in sub-Clause 12.1 above shall be enforceable
independently and its validity shall not be affected if the other is
invalid.
12.3 The Seller acknowledges that the provisions of this Clause 12 are no
more extensive than is reasonable to protect the Company.
12.4 Nothing in this Clause 12 or in this agreement shall prevent:
(a) the Seller or its Affiliates from purchasing shares in any
company or any business which has an interest in the Field of
Activity (the ownership of which would otherwise contravene
sub-Clause 12.1) unless the turnover of such company or
business in its last accounting year generated by its interest
in the Field of Activity was the greater of 10 per cent of the
aggregate turnover of such company or business and US$100
million. In the event that the Seller or any of its Affiliates
within five years from Completion purchases any corporation or
business which does have interests in the Field of Activity,
the Seller or the relevant Affiliate are contractually obliged
to offer for sale such interests to DuPont.
If DuPont does not purchase such interests from the Seller (or
its relevant Affiliate), the Seller (or the relevant Affiliate)
shall, if DuPont shall fail to or does not accept the offer
referred to above within such period to which it is entitled for
such purpose, within 30 days of receipt from DuPont of notice
that DuPont does not intend to purchase such interests offer for
sale such interests to the Purchaser on terms which are no less
favourable by written notice ("OFFER NOTICE").
If the Purchaser does not unconditionally purchase such interests
from the Seller (or its relevant Affiliates) within a period of
18 months after the date of the Offer Notice, the Seller (or the
relevant Affiliate) shall be free to retain such interests with
the consent of the Purchaser (such consent not to be unreasonably
withheld or delayed). If such consent is reasonably withheld, the
Seller (or the relevant Affiliate) shall use its best endeavours
to divest such interests within 12 months of such consent having
been withheld; or
(b) the Seller or its Affiliates from carrying on or being engaged or
involved in:
(i) any business it currently carries on (other than the
Business);
(ii)any business which only supplies other members of the
Seller's Group; or
(iii) any business after such time as the Purchaser or its
Affiliates have ceased to carry on or be engaged or involved
in such business other than by way of trade sale.
13 ANNOUNCEMENTS
The parties agree that neither party shall make or permit any member of
the Seller's Group or the Purchaser's Group, as the case may be, to make
any announcement concerning this agreement or any ancillary matter
except as required by law or any competent regulatory body or with the
prior written approval of the other party which will not be unreasonably
withheld or delayed.
14 DEFAULT INTEREST
Subject as otherwise provided to the contrary in this agreement, if any
sum due for payment under this agreement or in accordance with this
agreement is not paid on the due date, the party in default shall pay
Default Interest on that sum from the due date until the date of actual
payment calculated on a day-to-day basis.
15 NOTICES
15.1 Any notice or other document to be served under this agreement shall be
in writing and may be delivered by hand or by courier, sent by fax or by
post to the party to be served at its address appearing in this
agreement (and marked for the attention of the person whose name is
referred to in sub-Clause 15.3 below) or at such other address (or
marked for the attention of such other person) as it may have notified
to the other party in accordance with this Clause 15. Any notice or
other document sent by post shall be sent by registered post (if both
posted and for delivery within the same jurisdiction) or by registered
airmail (if posted for delivery outside the jurisdiction in which it is
posted), in either case return receipt requested (or any substantially
equivalent service).
15.2 Any notice or document delivered or sent in accordance with sub-Clause
15.1 shall be deemed to have been served:
15.2.1 if delivered by hand or by courier, at the time of delivery; or
15.2.2 if sent by fax, at the time of delivery if sent between 12.01
a.m. and 6.00 p.m. (local time at the destination) or on the
Business Day after transmission, if sent at any other time;
15.2.3 if posted, at 10.00 a.m. on the second Business Day after it was
put into the post if posted for delivery within the same
jurisdiction, or at 10.00 a.m. (local time at the destination) on
the fifth Business Day after it was put in the post if sent by
registered airmail.
15.3 The person to whom notices or documents should be addressed for the
purposes of sub-Clause 15.1 is:
(a) if to be served on the Seller or on Affiliates of the Seller:
[ * ]
Fax: [ * ]
copy to the Company Secretary of Imperial Chemical Industries
PLC of Imperial Xxxxxxxx Xxxxx, 0 Xxxxxxxx, Xxxxxx, XX0X 0XX
Fax: (00) 000 000 0000
(b) if to be served on the Purchaser:
General Counsel
NL Industries, Inc.
00000 Xxxxx Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx XXX XX 00000
Fax: (0) 000 000 0000
15.4 In proving service of a notice or document it shall be sufficient to
prove that delivery was made by hand, courier or fax or that the
envelope containing the notice or document was properly addressed and
posted (either by registered post or by registered airmail, as the case
may be, in accordance with the requirements of this Clause 15).
16 GENERAL
16.1 Each of the obligations, Warranties and undertakings set out in this
agreement which is not fully performed at Completion will continue in
force after Completion.
16.2 Unless otherwise expressly stated all claims made and payments to be
made under this agreement shall be made in US Dollars. Payments to the
Seller shall be made in immediately available funds to the account of
the Seller at such account as the Seller may notify to the Purchaser and
to the Purchaser in immediately available funds to such account as the
Purchaser may notify to the Seller. All payments and values under this
agreement shall be in US Dollars and where an amount is not itself
calculated in US Dollars, it shall be converted into US Dollars at the
mid-market closing exchange rate for that currency in US Dollars as
published in the London Edition of the Financial Times published two
Business Days prior to the date on which the relevant payment is due or
where no such rate is published, at the rate quoted by Citibank, N.A. at
the close of business in London on that date. This sub-Clause shall not
apply to Schedule 6.
16.3 Save as otherwise provided to the contrary in this agreement, each
payment to be made under this agreement shall be made in the currency in
which the relevant amount is payable, free and clear of all deductions
or withholdings of any kind, except for those required by law, and if
any deduction or withholding must be made by law, an additional amount
will be paid which is necessary to ensure that the recipient receives a
net amount equal to the full amount which it would have received if the
payment had been made without the deduction or withholding.
16.4 None of the rights or obligations under this agreement may be assigned
or transferred without the written consent of the other party (the
"NON-ASSIGNING PARTY") other than an assignment of the rights (but not
the obligations) to an Affiliate of the assigning party provided that:
(a) such assignment shall only be permitted if the assignment has no
adverse effect on the Non-assigning Party;
(b) if the Affiliate to which the rights have been assigned ceases to
be an Affiliate of the assigning party, the rights which have
been transferred shall be re-transferred to the party which
originally assigned those rights or to another Affiliate of that
original assigning party; and
(c) it shall be a condition of any such assignment that reasonable
notice is given in writing to the Non-assigning Party of the
proposal to assign (identifying the rights proposed to be
assigned, the identity of the proposed assignee and such other
details relating thereto as the Non-assigning Party may
reasonably require).
16.5 Save as otherwise provided in this agreement, each party shall pay the
costs and expenses incurred by it and its Affiliates in connection with
the entering into and completion of this agreement.
16.6 This agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same agreement and any
party may enter into this agreement by executing a counterpart.
16.7 No amendment, variation or waiver of this agreement or any provision of
this agreement shall be effective unless it is in writing specifically
referring to this agreement and duly executed by or on behalf of both
parties.
16.8 Both parties shall at their own expense at all times from the date of
this agreement do all things as may be required to give effect to this
agreement including, without limitation, the execution of all deeds and
documents, procuring the convening of all meetings, the giving of all
waivers and consents and the passing of all resolutions and otherwise
exercising all powers and rights available to them.
16.9 The Seller and the Purchaser agree to make a timely, effective and
irrevocable election under Section 338(h)(10) of the Code and under any
comparable statutes in any other jurisdiction with respect to the
Company (the "SECTION 338(H)(10) ELECTION"), and to file such election
in accordance with applicable regulations. Without limiting the
generality of the foregoing, in order to effect such election, the
Seller and the Purchaser shall jointly execute the necessary copies of
IRS Form 8023 and attachments required to be filed therewith. The
Section 338(h)(10) Election shall properly reflect the Price Allocation
(as hereinafter defined). Within 45 days after the Completion Date, the
Purchaser shall deliver to the Seller a statement (the "ALLOCATION
STATEMENT") allocating the modified ADSP (as such terms is defined in
Treasury Regulations Section 1.338(h)(10)-1) (the "MODIFIED AGGREGATE
DEEMED SALES PRICE") of the assets of the Company in accordance with
this Agreement and the Treasury Regulations promulgated under Section
338(h)(10).
The Seller shall have the right to review the Allocation Statement. If
within 30 days after receipt of the Allocation Statement, the Seller
notifies the Purchaser in writing that the allocation of one or more
items reflected in the Allocation Statement is not a reasonable
allocation, the Purchaser and the Seller will negotiate in good faith to
resolve such dispute. If the Purchaser and the Seller fail to resolve
such dispute within 30 days, the Independent Accountant shall determine
whether the allocation was reasonable and, if not reasonable, shall
appropriately revise the Allocation Statement. If the Seller does not
respond within 30 days, or upon resolution of the disputed items, the
allocation reflected on the Allocation Statement (as such may have been
adjusted) shall be the "PRICE ALLOCATION" and shall be binding on the
parties hereto. The Seller and the Purchaser agree to act in accordance
with the Price Allocation in the preparation of financial statements,
filing and audit of any Tax return.
17 WHOLE AGREEMENT
17.1 Subject to sub-Clause 17.2 below, this agreement, the Framework
Agreement and the Implementation Agreements (if and when executed)
contain the whole agreement between the parties and their respective
Affiliates relating to the transactions contemplated by this agreement
and the Implementation Agreements and supersede all previous agreements
between the parties and their respective Affiliates relating to such
transactions.
17.2 A provision in another agreement between the parties to this agreement
or between the respective parent undertakings of the parties (and
whether made before or after the date of this agreement) which refers to
this agreement and which extends or supplements any provision in this
agreement will be deemed for the purposes of sub-Clause 17.1 above to
form part of the whole agreement between the parties as referred to in
that sub-Clause.
17.3 Each of the parties to this agreement acknowledges on its own behalf and
on behalf of each of its Affiliates that, in agreeing to enter into this
agreement and the Implementation Agreements, it has not relied on any
representation, warranty, collateral contract or other assurance (except
those set out in this agreement) and waives all rights and remedies
which, but for this sub-Clause, might otherwise be available to it in
respect of any such representation, warranty, collateral contract or
other assurance, provided that nothing in this Clause shall limit or
exclude any liability for fraud.
18 GOVERNING LAW
This agreement is governed by and shall be construed in accordance with
English law.
19 JURISDICTION
19.1 The parties agree, subject to sub-Clause 19.2, to submit to the
exclusive jurisdiction of the courts of the State of Delaware for all
purposes relating to this agreement.
19.2 If the courts of the State of Delaware decline jurisdiction, the English
courts shall have exclusive jurisdiction for all purposes relating to
this agreement.
19.3 In both sub-Clauses 19.1 and 19.2, neither party shall take any action
to avoid, dispute or suggest to such court that such jurisdiction is
improper.
19.3 If the English courts have jurisdiction, ICI American Holdings Inc.
irrevocably appoints Imperial Chemical Industries PLC of Imperial
Xxxxxxxx Xxxxx 0, Xxxxxxxx, Xxxxxx XX0X 0XX as its agent for process in
England and the Purchaser irrevocably appoints Xxxxxxx Xxxxx (Ref 554)
of Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxx, XX0X 0XX as its agent for
process in England.
AS WITNESS the hands of the duly authorised representatives of the
parties on the date which first appears on page 1.
SCHEDULE 1
PARTICULARS OF THE COMPANY
Date and Place of
Incorporation: 00 Xxxxxx 0000, Xxxxx, Xxxxxxxx, XXX
Registered Office: 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx Xxxxx,
XX 00000 XXX
Authorised Share Capital: 11,000 Common stock of US$1 par value
Shareholders and Issued 10,750 Shares of US$1 each owned by
Share Capital: ICI American Holdings Inc.
Directors: X.X. Xxxxxxxxxxx
X. Xxxxxxxx
X. Xxxxxxxx
Secretary: X. Xxxxxxxx
SCHEDULE 2
PROPERTY
(CLAUSE 1)
PART I
ADDRESS ESTATE OR INTEREST USE
0000 Xxxxxxxxxxx Xxxx, Leasehold Offices
Suite 601, Downers Grove
Illinois 1660515
PART II
On Completion, the Seller shall deliver to the Purchaser all title
documentation (and other documentation disclosed to the Purchaser) in
connection with the Property.
SCHEDULE 3.1
WARRANTIES WITH RESPECT TO THE BUSINESS
AND TO THE SALE SHARES ONLY
A. GENERAL
A.1 CAPACITY AND CONDUCT OF BUSINESS
(1) The Seller (and each of its Affiliates in respect of the Implementation
Agreements to which they are parties) has the requisite power and
authority to enter into and to (otherwise as provided in this agreement)
perform this agreement and such Implementation Agreements.
(2) The Seller (and each of its Affiliates, in respect of the Implementation
Agreements to which they are parties) has obtained and satisfied all
corporate, regulatory and other approvals, and any other conditions,
necessary to execute and (otherwise as provided in this agreement)
perform this agreement and the Implementation Agreements.
(3) This agreement and the Implementation Agreements constitute (or when
executed will constitute) valid and binding obligations of the Seller
(and each of its Affiliates in respect of the Implementation Agreements
to which they are parties) enforceable in accordance with their terms.
(4) The execution and compliance with the terms of this agreement by the
Seller and the Implementation Agreements by the Seller or its Affiliates
(as appropriate) will:
(a) not constitute a breach of any material contract to which the
Seller (or any of its Affiliates) is a party or by which it
or they are bound or entitle any person to terminate or avoid
any such agreement or contract;
(b) be in compliance with the Seller's and the Company's
memorandum and articles of association or other
constitutional documents (or those of any of its Affiliates);
(c) not contravene:
(i) any order, judgment or decree; or
(ii) any statute, rule or regulation;
(iii)any other restriction of any kind by which the Seller
or any of its Affiliates or the Company is bound; or
(d) not result in the loss or impairment of or any default under
any licence, authorisation or consent required by the Company
for the purposes of its business.
(5) All factual information contained in this agreement relating to the
Company is true and accurate in all material respects.
(6) There are no outstanding powers of attorney executed on behalf of the
Company.
A.2 THE COMPANY
(1) The information relating to the Company contained in Schedule 1 is
true and accurate.
(2) Compliance has been made with all legal requirements in connection with
the formation of the Company and all issues and grants of shares,
debentures or other securities of the Company.
A.3 OWNERSHIP OF THE SALE SHARES
(1) The Seller is the sole legal and beneficial owner of the Sale Shares.
The Sale Shares constitute the entire issued share capital of the
Company.
(2) The Seller is entitled to sell and procure the transfer of the full
legal and beneficial ownership in the Sale Shares free from any
encumbrance, equity or third party right of any kind or nature
whatsoever, from any agreement or contract to grant the same and from
any claim to any of the same.
(3) The Sale Shares are fully paid up or credited as fully paid up and
constitute the whole of the issued and allotted share capital owned by
the Seller in the Company.
(4) No agreement or contract has been entered into which requires or may
require the Company to allot or issue any share or loan capital and the
Company has not allotted or issued any securities which are convertible
into share or loan capital and there are no voting trusts, proxies or
other agreements or understandings with respect to the voting of the
Sale Shares.
A.4 SUBSIDIARIES
(1) The Company is not the holder or beneficial owner of (nor has agreed to
acquire) any class of any shares or loan capital or other securities of
any other corporation (whether incorporated in the United States of
America or elsewhere).
(2) Other than with respect to its interest in LPC, the Company is not and
has not agreed to become a member of any partnership or other
unincorporated association, joint venture or consortium (other than
recognised trade associations).
(3) The Company does not have any place of business or permanent
establishment (as that expression is defined in double taxation
conventions) outside the United States of America.
A.5 OWNERSHIP OF ASSETS
(1) Except for the LPC Interests and those assets that are leased (as
described in the Disclosure Letter) the Company has full legal and
beneficial title to all assets (whether tangible or intangible)
reflected in the US Financial Information (save for current assets and
fixed assets worth less than US$100,000, both as defined for the
purposes of the US Financial Information, disposed of by the Company in
the Ordinary Course of its Business since 28 February 1998) and to all
assets acquired by the Company since 28 February 1998.
(2) None of the Assets is subject to any encumbrance (including, without
limitation, any debenture, mortgage, charge, lien (other than any such
lien arising by operation of law or by statute), deposit by way of
security, xxxx of sale, option or right of pre-emption) except those
that arise in the Ordinary Course of Business and do not have a material
adverse effect on the Business. All significant items of Plant and
Equipment have been regularly and adequately maintained where such
maintenance is normally required and are in reasonable working order
having regard to their age and use and taken as a whole are capable of
operating the Business fully and effectively as conducted by the Company
prior to Completion.
(3) Save for fluctuations and variations in Stock due to normal business
factors including, without limitation, production schedules and market
demand (including seasonal factors affecting the same) the Stocks in
aggregate comprise broadly the same mix of products as has been required
and has been maintained at levels sufficient to meet the level of sales
of the Business for the last four quarters. The Stock is owned by the
Company free and clear of all liens, claims, charges and encumbrances
other than any such liens arising by operation of law or by statute. The
Stock is located at the Property and as disclosed in the Disclosure
Letter.
(4) The Company owns or has the right to use all the property rights and
assets necessary for the Company to carry on fully and effectively the
Business in the manner and to the extent to which it is presently
conducted.
(5) The Business Data taking into account the time, purpose, nature and
context in which it was prepared is in all material respects a bona fide
and accurate record and in the Seller's opinion is collectively
sufficient for the purposes of conducting the Company's business in the
Ordinary Course of Business. The Business Data and the Company's
information, and the means of access to them, are exclusively owned by
it and under its direct control or are under its authority.
(6) The Disclosure Letter contains details of the current insurance
arrangements applicable to the Business. Those arrangements are in full
force and effect, all premiums have been duly paid and, so far as the
Seller is aware, nothing has been done or omitted to be done which would
make any policy of insurance of the Company void or voidable. There is
no claim outstanding under any such arrangement.
A.6 COMPLIANCE WITH STATUTES
The Company has complied with all applicable laws (including rules,
regulations both having the force of law, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of national, local,
and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, claim, demand, or notice has
been filed or commenced against the Company alleging any failure so to
comply.
A.7 LICENCES AND CONSENTS
The Company has all Permits necessary to own and operate its Assets and
to carry on the Business in the manner in which such business is now
carried on. All such Permits are valid and subsisting and have been
complied with in all material respects. The Company has paid all fees
due under the same. A list of material Permits has been disclosed and
identified in the Disclosure Letter and the list identifies those
material Permits which allow for revocation on a change in controlling
shareholder.
A.8 LITIGATION
(1) The Company is not engaged in any litigation or arbitration proceedings
except as plaintiff for collection of debts in the Ordinary Course of
Business which is likely to involve the Company claiming or paying sums
in excess of US$100,000 or which otherwise will have a material effect
on the operation of the Company and the Business and there are no such
proceedings pending and no letter before action has been received by the
Company and so far as the Seller is aware there are no facts likely to
give rise to any such proceedings. The Seller has disclosed in the
Disclosure Letter a list (which is complete and accurate in all material
respects) which includes a description of each pending law suit, claim
(including customer complaints), administrative proceedings,
arbitration, labour dispute or governmental investigation or inspection
to which the Company is a party or involves the operation of the
Business or involves the Sale Shares and in each case which is likely to
involve the Company claiming or paying sums in excess of US$100,000. The
Seller has disclosed all material (individually or in the aggregate)
product liability claims received by the Company or by the Seller during
the last three years. There are no orders, decrees, judgments or
agreements with any Court or governmental authority to which the Company
or the Seller (on behalf of the Company) is a party or by which the
Company or the Seller or the Sale Shares are bound and which will have a
material effect on the operation of the Company and its business.
(2) No administrator, receiver or administrative receiver or any other
equivalent officer has been appointed in respect of the Company or in
respect of any parts of the assets or undertakings of the Company.
(3) No petition has been presented, no order has been made, no resolution
has been passed and no meeting has been convened for the winding-up of
the Company or for an administration order to be made in relation to the
Company nor has any such order been made.
(4) No voluntary arrangement has been approved and no compromise or
arrangement has been sanctioned in respect of the Company pursuant to
any applicable bankruptcy or insolvency legislation.
(5) The Company has not become unable to pay its debts.
(6) No distress, distraint, charging order, garnishee order, execution or
other process has been levied or applied for in respect of the whole or
any part of any of the property, assets and/or undertaking of the
Company.
A.9 ENVIRONMENTAL MATTERS
(1) Environmental Authorisations
(a) The Company has lawfully obtained all Environmental
Authorisations and each such authorisation is in full force
and effect and the Company has complied at all times with and
can continue to comply in the future with all conditions of
such authorisations.
(b) No works or costs are or will be necessary to obtain or
secure compliance with or maintain any existing Environmental
Authorisations or their conditions or otherwise to comply
with Environmental Laws.
(c) The Company has received no communication in any form in
respect of any Environmental Authorisation varying, modifying
in any material respect, revoking, suspending or cancelling
the same or indicating an intention or threatening so to do
and there are no facts or circumstances which the Seller
knows or ought reasonably to know which will result in any
Environmental Authorisation being so varied, modified,
revoked, suspended or which may prejudice their renewal.
(d) The Seller or the Company has taken all necessary action in
connection with the renewal or extension of all Environmental
Authorisations.
(e) The Company is not engaged in and, so far as the Seller is
aware, there are no facts which make it likely or desirable
that it should be engaged in any appeal in respect of any
Environmental Authorisation or any conditions contained
therein or any refusal of any Environmental Authorisation.
(f) So far as the Seller is aware or ought to be aware, there is
no reason (other than reasons relating to the Purchaser or
its Affiliates) to believe that those Environmental
Authorisations which have been applied for but which have not
yet been granted or are pending will not be granted within a
reasonable period of time and on terms which are acceptable
in order for the Company to continue its current business
operations.
(g) So far as the Seller is aware or ought to be aware, the
execution and/or performance of this agreement and all other
documents which are to be executed at Completion will not
result in any Environmental Authorisations being varied,
modified, revoked, suspended, cancelled or not renewed, other
than for reasons relating to the Purchaser or its Affiliates.
(2) Compliance with Environmental Laws
(a) The Company, in relation to the Business, is in compliance
with Environmental Laws and the state and use of the Property
have been at all times in conformity with Environmental Laws.
(b) The Company, in relation to the Business, has not received
any communication in any form from any competent authority
requiring the taking of remedial or other steps in relation
to the pollution or protection of the Environment or the
state or use of the Property. So far as the Seller is aware,
there are no circumstances which might give rise to such
communications being received and the Seller is not aware of
any intention on the part of any such authority to give such
notice.
(c) In relation to the Business, no proceedings or other action,
claim or investigation are or have been in existence or so
far as the Seller is aware pending or threatened against the
Company arising from or in relation to any Environmental
Authorisations or otherwise concerning Environmental Laws.
(3) Liability
(a) The Company or the Seller, in relation to the Business, has
not received any notice or intimation of any complaint or
claim from any person in respect of any matter concerning the
Environment.
(b) The Company or the Seller, in relation to the Business, are
not and have not been engaged in any action, litigation,
arbitration or dispute resolution proceedings relating to or
concerning any actual or potential liability under
Environmental Laws and the Seller is not aware of any such
matters pending or being threatened or of any circumstances
or facts likely to give rise to any such matters.
(c) The Company or the Seller, in relation to the Business, are
not and have not been subject to any injunction or similar
remedy or order by a court of competent jurisdiction, or to
any undertakings given to such court in respect of any
matters relating to or concerning the Environment.
(4) As far as the Seller is aware, there has not been in relation to the
Business in the last three years any adverse report, complaint or
investigation or any prosecution, formal caution or warning for any
violation of any applicable laws or regulations relating to health,
safety and the environment.
A.10 DATA ROOM DOCUMENTS
(1) Save as disclosed in Schedule 6 of the Disclosure Letter, so far
as the Seller is aware, each licence, permit, contract, list and
report set out in Annex 6 and disclosed in the Data Room, and
identified on Annex 6 by reference to the reference number set
out in the Data Room Index annexed to the Disclosure Letter:
(a) other than where redacted, is a true copy of the original;
(b) is the latest version thereof;
(c) is complete; and
(d) has not been altered, amended or varied since the date
thereon.
(2) To the extent that any note, summary or response to questions of
or in respect of the documents set out in Annex 6 referred to in
sub-Paragraph A.10(1) contains any expression of opinion of the
ICI Group (not including the opinion of third parties), such
opinion reflects the current reasonably held opinion of its
author given in good faith taking into account the respective
author's knowledge and understanding.
B. US FINANCIAL INFORMATION
(1) The US Financial Information relating to the Business has been derived
from the books of the Company, which books have been regularly and
consistently kept and maintained using ICI's normal accounting policies
and practices as set out or referred to in ICI's Controller's Manuals
(and the policies contained in these Manuals are in accordance with UK
GAAP) as applied by the relevant business on a consistent basis in
accordance with UK GAAP and, on such basis, represents the assets and
liabilities of the Business as at 28 February 1998.
(2) The US Financial Information relating to the Business fairly represents
the matters presented therein. Since 28 February 1998 there has been:
(a) no material change in any accounting or inventory valuation
methods used by the Company in connection with the Assets;
(b) no upward revaluations of existing Stocks; and
(c) no material adverse change in the Business or financial condition
of the Company, which for this purpose shall not include the
inherently cyclical nature of the titanium dioxide industry or
general economic conditions.
(3) Since [DATE OF FRAMEWORK AGREEMENT] 1998:
(i) the Company has not sold, leased, transferred, or assigned
any of its assets, tangible or intangible, other than for a
fair consideration in the Ordinary Course of Business;
(ii)the Company has not entered into any agreement, contract,
lease, or licence (or series of related agreements,
contracts, leases and licences) either involving more than
US$1,000,000 within a 12 month period or outside the Ordinary
Course of Business;
(iii) no party (including any of the Company's Affiliates) has
accelerated, terminated, modified, or cancelled any
agreement, contract, lease, or licence (or series of related
agreements, contracts, leases, and licences) involving more
than US$250,000 within a 12 month period to which the Company
is a party or is bound;
(iv)the Company has not imposed or permitted another to impose
any encumbrance upon any of its assets, tangible or
intangible other than those arising by operation of law or
statute;
(v) the Company has not made any capital expenditure (or series
of related capital expenditures) either involving more than
US$250,000 or outside the Ordinary Course of Business;
(vi)the Company has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any
other person (or series of related capital investments, loans
and acquisitions) either involving more than US$250,000 or
outside the Ordinary Course of Business;
(vii) other than to Affiliates of the Seller, the Company has not
issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalised lease obligation either
involving more than US$250,000 singly or US$2,500,000 in the
aggregate;
(viii) the Company has not delayed or postponed the payment of
accounts payable and other liabilities other than in the
Ordinary Course of Business;
(ix)the Company has not cancelled, compromised, waived, or
released any right or claim (or series of related rights and
claims) either involving more than US$250,000;
(x) the Company has not granted any licence or sublicence of any
rights under or with respect to any Intellectual Property;
(xi)there has been no change made or authorised in the
constitutional documents of the Company;
(xii) the Company has not issued, sold, or otherwise disposed of
any of its capital stock, or granted any options, warrants,
or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock;
(xiii) the Company has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital
stock (whether in cash or in kind) or redeemed, purchased, or
otherwise acquired any of its capital stock;
(xiv) the Company has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to its property
involving sums in excess of US$250,000;
(xv) the Company has not made or pledged to make any
charitable contribution outside the Ordinary Course of
Business;
(xvi) the Company has not committed to any of the foregoing.
C. ANTI-COMPETITIVE ARRANGEMENTS
The Company or the Seller, in relation to the Business, have not
received in the last 3 years any process, notice or communication,
formal or informal, from any anti-trust regulatory authority, relating
to any aspect of the Business, which alleges any illegal practices in
relation to the Business and so far as the Seller is aware no such
process, notice or communication is likely to be received.
D. MATERIAL CONTRACTS
(1) Particulars of all Material Contracts are annexed to the Disclosure
Letter.
(2) The Company is not in breach of, or default under, any of the Material
Contracts or any other Contracts the consequence of which would or may
have a material adverse effect on the Company and, so far as the Seller
is aware, no state of facts exists or event has occurred, is pending or
is threatened which after the giving of notice or the lapse of time
would or may constitute or result in a breach or a default by the Seller
or by the Company or any other person, firm, corporation or entity of or
in relation to any contract the consequences of which would have a
material effect on the operation of the Business. All Material Contracts
are legal, valid and binding obligations of the Company and are
enforceable in accordance with their terms.
E. EMPLOYEES
(1) Particulars of the material terms of employment of all Employees and
officers of the Company are annexed to the Disclosure Letter and such
particulars are true, complete and accurate.
(2) No Employee has given to the Company and the Company has not received
from any Employee, nor has the Company given to any Employee, notice of
termination of any such Employee's employment.
(3) Standard form consultancy agreements, agency or self-employed or
contracted labour agreements or contracts where sums in excess of
US$75,000 per annum are paid or are payable by the Company have been
disclosed in the Disclosure Letter.
(4) So far as the Seller is aware, there is no material industrial action by
the Employees pending or threatened in relation to the Business nor has
there been within the last 12 months.
(5) Particulars of all loans made by the Company to Employees and which
shall remain outstanding at Completion, together with sums owed by the
Company to any Employee (other than remuneration and other contractual
or customary benefits) are disclosed in the Disclosure Letter.
(6) No Employee of Grade 37 or above previously employed by the Company has
a right to return to work or any right to be reinstated or re-engaged by
the Company, whether under statute or otherwise.
(7) No Employees previously employed by the Company have a right to return
to work or any right to be reinstated or re-engaged by the Company,
whether under statute or otherwise.
(8) In relation to the Employees, there are no existing nor, so far as the
Seller is aware, threatened arbitration procedures arising out of or
under any union recognition or works council agreement covering the
Employees nor, so far as the Seller is aware, does any basis therefore
exist nor has the Seller or the Company received any request for
recognition or representation by any trade union not currently
recognised at the Property.
(9) The Company has complied in all material respects with all statutes,
regulations, orders and codes of conduct relating to employment and
relations with Employees and trade unions and has maintained records
required by law regarding the service of each of its Employees.
(10) The Disclosure Letter contains a list of Employees at the Property
together with a list of Employees below Grade 37 and a list of Employees
above Grade 37. The Disclosure Letter also contains a list of Employees
of the Company who are employed at locations other than at the Property.
(11) So far as the Seller is aware here are no material complaints, disputes
or grievances pending or threatened against the Company of any nature in
relation to its Employees or former Employees.
(12) All of the Employees are employed by the Company.
(13) The Company has discharged such obligations to Employees in respect of
salaries, wages, commissions, bonuses, overtime pay and holidays as have
accrued and become payable to Employees in accordance with the Company's
normal pay policies, including the normal timing of such payments, as at
the date hereof.
For the purposes of this Part E, "GRADE 37" refers to a particular grade
of employee, as determined by the Company, using the Hay-MSL evaluation
system.
F. PENSIONS
In this Part F, "SCHEME DOCUMENTS" means the documents relating to the
Scheme identified in the Disclosure Letter.
(1) Except pursuant to the Scheme, the Company has not paid, provided or
contributed towards, and is not under any obligation (whether or not
legally enforceable) to pay, provide or contribute towards any relevant
benefit payable on death or retirement for or in respect of any present
or past officer or employee (or any spouse, child or dependant of any of
them) of the Company.
(2) The Scheme Documents comprise all the documents governing the Scheme
including financial statements for the preceding period of three years,
all explanatory booklets and announcements to the Employees describing
the terms of the Scheme (other than routine benefit statements) of
current effect and full particulars of any enhancement of benefit and
contributions payable to the Scheme and there is no obligation to
provide or continue to provide benefits in respect of Employees or
former Employees of the Company under the Schemes other than as revealed
in the Scheme Documents.
(3) The Scheme has been registered as required under applicable legislation.
(4) The Scheme has at all times complied with the provisions of all relevant
statutes, regulations and requirements and have been administered in
accordance with the trusts, powers and provisions of the Scheme and with
due regard to the general requirements of trust law and the advisers to
the Scheme have not had and do not have any cause to report any matter.
(5) The Company has complied in all material respects with its obligations
under the Scheme and all amounts due to be paid to the Scheme by it and
its Employees have been paid.
(6) There are no claims or actions in progress, pending or threatened (other
than routine claims for benefits) against the trustees of the Scheme or
the Company about benefits payable under the Scheme in respect of
Employees or former Employees of the Company.
(7) All information of a factual nature made available to the Purchaser or
its advisers in connection with the Scheme is true and accurate in all
material respects and there is no omission therefrom.
(8) No proposal has been announced to alter or discontinue the Scheme nor
has any proposal which is legally enforceable been announced to
establish any retirement, death or disability agreement or arrangement
of the nature referred to in paragraph (1) above in respect of Employees
which proposal remains outstanding and has not been implemented.
(9) There is no amount which is due to the trustees of the Scheme.
G. PROPERTY
(1) The Property constitutes all of the freehold or leasehold or other
immovable property currently owned by the Company or in which the
Company has an ownership interest.
(2) The particulars of the Property shown in Schedule 2 (including in the
case of immovable property registration particulars) are true, complete
and correct. The use of the Property for the purpose stated in Schedule
2 corresponds to the use to which it is in fact put or (where the
Property is not presently in use) to the use to which it was last in
fact put.
(3) The leasehold interest relating to the Property is held pursuant to a
valid and binding lease.
(4) The Company does not require the use and is not in occupation of or
entitled to any estate or interest in any land or premises other than
the Property. The Company is in exclusive occupation of the whole of the
Property and on Completion shall be in exclusive occupation of the whole
of the Property.
(5) The Property is not affected by any of the following matters:
(a) any easement, reservation, covenant, restriction, agreement,
licence, franchise, mortgage, charge, encumbrance, or third
party right;
(b) any notice, order, proposal, dispute or complaint relating to
it or its present use under any legislation, agreement,
covenant, condition, licence or consent; or
(c) outgoings (other than uniform business rates, water charges
and other standard payments to the relevant water company
including, without limitation, insurance premiums and other
usual business expenses), whether of a periodically recurring
nature or otherwise and whether payable by the owner or
occupier of the relevant property.
(6) All obligations, restrictions, conditions and covenants (including any
imposed by or pursuant to any lease but excluding any referred to in
paragraph A.9 above) affecting the Property have been observed and
performed so far as the Seller is aware and there are no subsisting
allegations of a breach of any thereof relating to the Property or its
present use under any legislation, agreement, covenant, condition,
licence or consent other than those referred to in paragraph A.9 or so
far as the Seller is aware any circumstance which might give rise to
such a breach.
(7) The Property is in a good and substantial state of repair and condition
and fit for the purposes for which it is presently used and the Company
has not used in the Property any substances not in conformity with
relevant standards or codes of practice or which are generally known to
be deleterious to health and safety and there are no uncompleted works
of any description at the Property other than routine maintenance.
(8) There are no subsisting allegations that the use of the Property for the
purpose stated in Schedule 2 is not the permitted use under the
provisions of all relevant legislation.
(9) The Company has no liabilities or contingent liabilities (but excluding
any matters referred to in paragraph A.9 above) in respect of any
properties (other than the Property) (or any interest therein) whether
by privity of contract or by way of guarantee or surety or otherwise.
(10) The Property has the benefit of all rights, easements and consents
required for the occupation and operation of the Property for its
present use and any plant, machinery and processes thereat and such
rights, easements and consents are enjoyed on terms which do not permit
them to be determined by any third party or by effluxion of time.
(11) There are no outstanding liabilities to make payments in respect of
rates, water charges, or any other charges payable in respect of the
Property to any governmental, state, municipal or other similar
authority.
H. INTELLECTUAL PROPERTY
(1) The rights licensed to the Company pursuant to the US Name Agreement in
combination with all rights owned by the Company in Intellectual
Property constitutes all the Intellectual Property necessary for the
conduct of the Business by the Company as now conducted.
(2) The Seller does not have actual notice of any infringement by others or
of attacks on the validity or enforceability of or on the Company's
title to any Material Intellectual Property used in the Business. The
Disclosure Letter identifies all patents, patent applications,
registrations and applications for registration of Intellectual
Property, all Material unregistered trademarks, service marks, trade
names and copyrights owned by the Company. "MATERIAL" in this Warranty
H(2) means Intellectual Property the absence of which would have a
significant negative impact on either (a) the revenue attributable to or
derived from the Intellectual Property or (b) otherwise on the conduct
of the Company's business. The Disclosure Letter also identifies the
status of the relevant patents and, so far as the Seller is aware,
whether or not such patents are currently being opposed.
(3) The Disclosure Letter identifies all information technology used by the
Company which is defined in the Disclosure Letter as being "MATERIAL
INFORMATION TECHNOLOGY".
(4) The Seller does not have actual knowledge and has not received written
notification that the activities of the Business infringe the
Intellectual Property of any third party (the Seller having no
obligation to conduct investigations in relation to any such potential
infringement).
(5) So far as the Seller is aware or ought to be aware, all Material
agreements relating to Intellectual Property and Technical Information
to which the Seller is a party and which relate to the Business are
listed in the Disclosure Letter. "MATERIAL" in this Warranty H(5) means
agreements relating to Intellectual Property the absence of which would
have a significant negative impact on either (a) the revenue
attributable to or derived from the Intellectual Property or (b)
otherwise on the conduct of the Company's business.
(6) All Intellectual Property material to the conduct of the Business
immediately prior to Completion will be owned or available for use by
the Company immediately after Completion. For the purposes of this
Warranty H (6), material has the same meaning as in Warranty H (2).
I. BROKERS
Neither the Seller nor the Company has employed any investment banker,
broker or finder or incurred any liability for any brokerage fees,
commissions, finders fees or similar payments in connection with the
transactions contemplated by this agreement for which the Purchaser, the
Purchaser's Affiliates, LPC or the Company may be liable.
J. TAXATION
(1) Tax Returns, disputes, records and claims etc.
(a) The Company has timely filed all proper returns required to
be made for any Taxation purpose and has supplied or caused
to be supplied all information required by law to be supplied
to any revenue authority.
(b) There is no dispute or disagreement (not including routine
queries relating to the Taxation returns of the Company)
outstanding at the date of this Agreement with any revenue
authority regarding the proper method of computing the
profits of the Company (or any part of it) for Taxation
purposes or the proper treatment of any supplies of goods or
services made (or treated as made) by the Company or in
respect of any other Taxation matter and there are no
circumstances of which the Seller is aware which make it
likely that any such dispute or disagreement will commence.
Without prejudice to the generality of the foregoing, there
is no current investigation being undertaken by any Taxation
authority and, so far as the Seller is aware, there are no
existing circumstances which make it likely, in the event of
such an investigation taking place, that a liability will
arise. There are no liens for Tax upon the Assets of the
Company, except liens for current Tax not yet due.
(c) The amount of Taxation chargeable on the Company during any
accounting period ending on or within six years before
Completion has not to any material extent depended on any
concession, agreement, dispensation or other formal
arrangement with any revenue authority in circumstances where
either:
(i) the availability of any such arrangement will be
prejudiced as a result of the change of control of the
Company resulting from this agreement; or
(ii)the Company has not acted in accordance with the terms
of the arrangement in question.
(d) The Company has made all Taxation claims, disclaimers and
elections and taken all other action the making or doing of
which was assumed to have been made for the purpose of the
Taxation provisions in the Accounts.
(2) Duties etc.
All customs duties and sales and goods and services taxes payable to any
revenue authority upon the importation of any of the Company's assets
and all excise duties payable to any revenue authority in respect of any
of these assets have been paid in full, and none of these assets is
liable to confiscation or forfeiture or subject to a Tax lien except for
liens for current Tax not yet due (whether by virtue of non-payment or
underpayment of any Taxation or duty or by virtue of non-compliance with
any legislation or regulation relating to any Taxation or duty or
otherwise howsoever).
(3) Contracts
In relation to the Business, no contracts to which the Company is a
party and no obligation to any present or former director, employee or
officer involve any future liabilities of a revenue nature which when
incurred will not be deductible in computing profits for Tax purposes
otherwise than as a result of any future changes in the law or as a
result of any voluntary act after Completion of the Purchaser or of the
Company outside the Ordinary Course of Business of the Company.
(4) Distributions and payments
In relation to the Business, the Company has deducted and properly
operated and accounted to the appropriate revenue authority for all
amounts which it has been obliged to deduct in respect of Taxation.
(5) Employee benefits
(a) The Company has made all required deductions and withholdings
from all payments made, or treated as made, to its directors,
Employees or officers or former directors, Employees or
officers or any person required to be treated as such, and
accounting to the taxation authorities for all Taxation so
deducted and for all Taxation chargeable on the Company on
benefits provided for its directors, Employees or officers,
or former directors, Employees or officers.
(b) The Disclosure Letter contains full details of all share
incentive schemes, profit sharing schemes and profit related
pay schemes established by the Company.
(6) Residence and offshore interests
(a) The Company is and has at all times been resident in the
United States of America for the purposes of all Taxation
Statutes and has not at any time been resident outside the
United States of America for the purposes of any Taxation
Statute or any double taxation arrangements.
(b) The Company has not at any time had a branch outside the
United States of America or any permanent establishment (as
that expression is defined in the respective double taxation
relief orders current at the date of this Agreement) outside
the United States of America and the Company has no existing
entitlement to receive royalties, (or any sum treated as
royalties for any Taxation purposes) which are paid subject
to deduction of Tax in a jurisdiction outside the United
States of America.
(7) Election under section 338 (h) (10) of the Code
The Seller represents that it has filed a consolidated federal income
tax return for the Company for the taxable year immediately preceeding
the current taxable year and the Seller is eligible to make an election
under Section 338 (h) (10) of the Code.
K. MILLENNIUM COMPLIANCE
(1) For the purposes of this agreement "MILLENNIUM COMPLIANT" means that the
Computer Systems are capable of the following functions before, during
and/or after 1 January 2000:
(a) handling date information involving all and any dates before,
during and/or after 1 January 2000 including accepting date
input, providing date output and performing date calculations
in whole or part;
(b) operating accurately without interruption on and in respect
of any and all dates before, during and/or after 1 January
2000 and without any change in performance;
(c) responding to and processing two digit year input without
creating any ambiguity as to the century; and
(d) storing and providing date input information without creating
any ambiguity as to the century.
(2) The Disclosure Letter contains material details of the measures that
have been implemented within the Business to determine the extent to
which its Computer Systems are not Millennium Compliant, and material
details of any programme undertaken by the Business with a view to its
Computer Systems achieving Millennium Compliance (or so close to
Millennium Compliance as is practicable).
L. INTRA-GROUP ARRANGEMENTS
(1) There is no indebtedness or liability (actual or contingent) nor any
security owed by the Company to any member of the Seller's Group or
ICI's Group (as constituted following Completion) other than arising in
the Ordinary Course of Business and as conducted on arm's length terms.
(2) There is no agreement or contract to which the Company is a party and to
which any member of the Seller's Group (as constituted following
Completion) is a party or in which any such member is otherwise
interested in any way whatsoever which shall continue beyond the
Completion Date.
M. DEBTORS
(1) The Company has not made, or entered into any contract or agreement to
make any loan to, or other arrangement with, any person as a result of
which it is or may be owed any money other than trade debts incurred in
the Ordinary Course of Business and cash at bank.
(2) The Company is not entitled to the benefit of any debt otherwise than as
the original creditor and has not factored or discounted any debt or
agreed to do so.
(3) All of the debts which will be reflected in the Final Completion
Statement as owing to the Company (apart from bad and doubtful debts to
the extent to which they have been provided for in the Final Completion
Statement (as defined in Schedule 6)) will realise their full value as
included in the Final Completion Statement within the payment terms
agreed with the respective creditors.
N. OTHER OPERATIONS AND ASSETS
(1) During the 8 years prior to the date hereof, neither the Company, nor
any of its downstream Affiliates nor any entity to which the Company has
succeeded through merger or by operation of law, has engaged, directly
or through downstream Affiliates or agents or in partnership, in a
business other than the manufacture, import, export, sale and
distribution of titanium pigments, co-products and related products.
(2) The Seller has disclosed to the Purchaser details of all real property
owned, leased or occupied by the Company or any of its downstream
Affiliates or any entity to which the Company has succeeded through
merger or by operation of law at any time during the 8 years prior to
the date hereof.
(3) The Seller has disclosed to the Purchaser all off-site disposal
locations of Hazardous Materials owned by the Company, its downstream
Affiliates and any entity to which the Company has succeeded through
merger or by operation of law during the 8 years prior to the date
hereof.
(4) Neither the Company, nor any of its downstream Affiliates nor any entity
to which the Company has succeeded through merger or by operation of law
has owned or controlled a business for whose liabilities any of them
could be responsible the business records of which have not been made
available in the Data Room.
SCHEDULE 3.2
WARRANTIES WITH RESPECT TO THE LPC INTERESTS ONLY
(1) With respect to the LPC Interests, the execution, delivery and
performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) violate the
certificate of incorporation or bylaws of the Seller or the Company,
(ii) violate any law, rule, regulation, judgment, injunction, order or
decree applicable to LPC or the LPC Interests, (iii) constitute a
default under any provision of any agreement or other instrument binding
upon the Seller or the Company relating to the LPC Interests or LPC, or
(iv) result in the creation or imposition of any lien on the LPC
Interests.
(2) The Seller or the Company has good title to the LPC Interests, free and
clear of any lien or other adverse interest.
(3) There is no action, suit, investigation or proceeding pending against,
or to the knowledge of Seller or the Company, threatened against or
affecting, the Seller or the Company before any court or arbitrator or
any governmental body, agency or official, relating to the LPC
Interests, which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this
agreement.
(4) Neither the Seller nor the Company is in violation of any law, rule,
regulation, judgment, injunction, order or decree applicable to the LPC
Interests or to LPC.
(5) The US Financial Information relating to the LPC Interests has been
derived from the books of the Company, which books have been regularly
and consistently kept and maintained using ICI's normal accounting
policies and practices as set out or referred to in ICI's Controller's
Manuals (and the policies contained in these Manuals are in accordance
with UK GAAP) as applied by the relevant business on a consistent basis
in accordance with UK GAAP and, on such basis, represents the assets and
liabilities of the Business as at 28 February 1998.
(6) The US Financial Information relating to the LPC Interests fairly
represents the matters presented therein. Since 28 February 1998 there
has been:
(a) no material change in any accounting or inventory valuation
methods used by the Company in connection with the Assets; and
(b) no upward revaluations of existing Stocks.
SCHEDULE 4
IMPLEMENTATION AGREEMENTS
1 Deed of Indemnity
2 Name Agreement between Tioxide Europe Limited, E.I. Du Pont de Nemours
and Company and the Company
3 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
4 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 5
ENVIRONMENT
1 INTERPRETATION
For the purposes of this Schedule, words and expressions defined in the
Share Sale Agreement to which this Schedule is attached shall have the
same respective meanings in this Schedule and, in addition, the
following terms shall have the following respective meanings:
"COMMERCIALLY REASONABLE EXPENSES" are those costs and expenses which a
reasonable person acting in a commercially prudent manner, taking into
account (but without imposing an absolute requirement) the need to
minimise his expenditure, would expend, in the case of any obligation to
carry out the remediation of Environmental Contamination pursuant to
Environmental Laws, to meet that obligation. For the avoidance of doubt,
Commercially Reasonable Expenses shall not include any costs or expenses
to the extent that they are incurred as a result of the adoption or
imposition of standards of clean-up materially more stringent than those
which are provided for under Environmental Laws;
"CONTROLLED WATERS" means waters including any ground or surface
waters;
"COUNTER INDEMNITY" means the indemnity defined in sub-paragraph 3.1
of this Schedule;
"ENVIRONMENT" means air, Controlled Waters, land (whether on, in or
below such land, excluding any buildings or other permanent structures
on, in or below the land) but including the surface of any river bed,
the surface of any sea bed or any other land covered by water, and flora
and fauna and all other natural resources;
"ENVIRONMENTAL CONTAMINATION" means any discharge, transport, emission,
release, leakage, spillage, escape or disposal of Hazardous Material at
or from the Site(s) onto or into any part of the Environment;
"ENVIRONMENTAL LAWS" means any and all legislation (whether civil,
criminal or administrative), statutes, treaty, statutory instrument,
directive, bylaw or judgment, regulations, ordinances, notices, orders,
government circulars, codes of practice, policy and guidance notes or
decisions of any competent regulatory body or common law relating to
pollution or protection of the Environment or harm to human health
arising from Environmental Contamination, which as at Completion are in
effect and legally capable of enforcement by legal process in the
country in which the Site(s) are situated;
"ENVIRONMENTAL LIABILITIES" means all claims, costs, damages, expenses
(including reasonable professional fees incurred), losses, liabilities
(including without limitation liability to third parties), fines or
penalties suffered or incurred by the Company, the Purchaser or its
Affiliates (or the Seller or its Affiliates in the case of the Counter
Indemnity) in relation to the Company (excluding in the case of the
Indemnity but not the Counter Indemnity the LPC Interests and LPC) as a
direct consequence of or in connection with any Environmental
Proceeding;
BUT EXCLUDING any claims, costs, damages, expenses, losses, liabilities:
(i) in respect of capital expenditure on plant and equipment
other than capital to carry out remediation of Environmental
Contamination pursuant to Environmental Laws;
(ii)in respect of loss of anticipated profits, loss of revenue,
or any other loss in respect of business interruption other
than such reasonably foreseeable losses of third parties who
have themselves directly suffered the relevant Environmental
Contamination or whose use of the Environment has been
adversely and directly affected by the relevant Environmental
Contamination;
(iii) where applicable to the extent that they are not
Commercially Reasonable Expenses;
"ENVIRONMENTAL PROCEEDING" means in relation to the Company:
(i) subject to (ii) below, any one or more writs, interim or
final judicial or administrative decrees, judgments,
injunctions, orders, or notices:
(a)under which the Company, the Purchaser or its Affiliates
(or the Seller or its Affiliates in the case of the
Counter Indemnity) are obliged by Environmental Laws or
legal process pursuant to Environmental Laws to undertake
or pay the cost of remediation or with which the aforesaid
parties are otherwise obliged to comply; or
(b)in respect of any violation or alleged violation of
Environmental Laws; or
(c)in respect of:
(01) any personal injury to any third party; or
(02) damage to any property of any third party,
both pursuant to Environmental Laws;
Provided that in the case of the Indemnity only:
* the reference to the Company shall exclude the LPC
Interests and LPC; and
* in paragraphs (i) (c) (01) and (02), the reference to
a "THIRD PARTY" shall not include any employee,
contractor or agent of the Company, the Purchaser or
and its Affiliates, except when:
- the personal injury other than asbestos-related
personal injury (in the case of paragraph (i) (c)
(01); and/or
- the damage to property (in the case of (i) (c) (02),
occurs after Completion and, the Purchaser did not
know or reasonably ought not to have known of the
circumstances which gave rise to that personal injury,
or as the case may be, that damage; and
(ii)any agreement between the Seller and Purchaser (or in the
event of disagreement any determination by the Experts) that
it is Reasonably Necessary to undertake remediation of
Environmental Contamination, which would (but for the fact
that an environmental authority is unaware of it) be more
likely than not to result in an environmental authority
bringing an Environmental Proceeding under (i)(a) in the
definition of Environmental Proceeding and which would result
in Environmental Liabilities;
"HAZARDOUS MATERIAL" means hazardous, poisonous, dangerous, noxious or
toxic substances, pollutants or wastes including (to the extent they are
hazardous, poisonous, dangerous, noxious or toxic) pesticides,
contaminants, petroleum products, asbestos, polychlorinated biphenyls
and radiation;
"INDEMNITY" means the indemnities contained in paragraph 2 below;
"REASONABLY NECESSARY" means reasonably necessary to avoid or avert or
mitigate the development of substantial adverse and material pollution
of the Environment or harm to human health which will arise within a
period of six months; and
"SITES(S)" means the Properties.
2 INDEMNITY
2.1 Subject to the provisions of this agreement, the Seller undertakes to
the Purchaser (for the benefit of the Company, the Purchaser and each of
its Affiliates) that it will indemnify and hold harmless the Company,
the Purchaser and each of the Purchaser's Affiliates against:
2.1.1 all Environmental Liabilities arising at or from the Site(s), to
the extent that such Environmental Liabilities are a result of
Environmental Contamination occurring on or before Completion;
and
2.1.2 save in respect of the LPC Interests and LPC, all costs,
damages, expenses, losses, fines or penalties suffered or
incurred by the Company or the Purchaser or its Affiliates as a
result of any prosecutions commenced or proceedings taken, or
notices served or other formal enforcement action between [DATE
OF SIGNATURE OF FRAMEWORK AGREEMENT] 1998 and Completion by any
competent regulatory body in connection with the Environment or
health and safety as a result of any breaches of any
Environmental Laws related to the operation of those Sites
which are owned, occupied or used by the Company AT [DATE OF
SIGNATURE OF FRAMEWORK AGREEMENT] 1998. "DAMAGES" in this
paragraph 2.1.2 includes any capital expenditure reasonably
required to remedy such breaches; and
2.2 notwithstanding sub-paragraphs 2.1 above and 4.1 below, neither the
Seller nor any of its Affiliates shall be liable under the Indemnity or
otherwise to the extent that such liability arises from or is
attributable to the failure of the Purchaser to comply or procure the
Company's compliance with the provisions of paragraphs 4.2, 6.1, 6.2, 7,
8, 9, 10, 12 and 14 of this Schedule.
3 THE COUNTER INDEMNITY
3.1 The Purchaser undertakes to the Seller (for the benefit of the Seller
and each of its Affiliates) that, subject to the provisions of this
agreement, it will indemnify and hold harmless (the "COUNTER Indemnity")
the Seller and each of its Affiliates against all Environmental
Liabilities arising at or from the Site(s) to the extent that such
Environmental Liabilities are as a result of Environmental Contamination
after Completion.
3.2 Notwithstanding sub-paragraph 3.1 above, the Purchaser and its
Affiliates shall not be liable to the Seller under the Counter Indemnity
or otherwise to the extent that such liability arises from or is
attributable to the failure of the Seller to comply with the provisions
of paragraphs 3.3, 4.2, 6.1, 6.2, 7, 8, 9, 10, 12 and 14 of this
Schedule.
3.3 The Seller shall take all reasonable steps to avoid or mitigate any
Environmental Liabilities and potential Environmental Liabilities which
may give rise to a claim under or in connection with this
Counter Indemnity, howsoever arising.
3.4 The provisions of sub-paragraphs 4.2 and 12.1 shall apply equally
mutatis mutandis in respect of the Seller and the Purchaser's rights or
obligations in respect of the Counter Indemnity.
4 LIMITATIONS
4.1.1 Neither the Seller nor any of its Affiliates shall be liable
under the Indemnity to the extent that Environmental
Liabilities have arisen, been increased, exacerbated, enhanced
or caused as a result of any act or omission (whether direct or
indirect) of the Company, the Purchaser or any Affiliates,
employees, agents or contractors thereof after Completion
(including, without limitation, any change of use of the
Site(s) including closure of all or any part of the Sites but
not including any material change of process within the
existing plant and/or buildings or any material change to or
development of the business and operations carried on at any
Site which does not result in any Site or any part of any Site
ceasing to be used for general industrial/manufacturing of a
type materially similar to the existing Site operation.
4.1.2 The word "OMISSION" as used in this paragraph 4.1 shall not
mean any failure by the Company or Purchaser to carry out
remediation or preventative action in circumstances where it is
not within their power to do so or where the Purchaser is not
aware or could not reasonably have been aware of the
Environmental Liabilities in question or where (without
prejudice to the obligations of the Purchaser under paragraph
5) the rights of the Purchaser to bring a claim under the
Indemnity would be prejudiced as a result thereof.
4.2 No claim may be made for any Environmental Liabilities under the
Indemnity or Counter Indemnity to the extent that any Environmental
Liabilities arise:
4.2.1 as a result directly or indirectly of information voluntarily
given, in the case of the Indemnity by the Purchaser or the
Company (but only post Completion in the case of the Company)
or, in the case of the Counter Indemnity, by the Seller after
Completion to a regulatory authority in circumstances other
than where there is a mandatory reporting requirement under
Environmental Laws or where information is given as required in
the context of applications for or variations to
authorisations, licences and other forms of environmental
consent required by the Business in the course of the Company's
or the Purchaser's or Seller's normal business activities (as
appropriate) or where the other party has previously proposed
or approved this course of action in writing; and
4.2.2 save where compelled by law, from any admission of liability by a
representative of the Purchaser or Seller holding a rank not less
than that of Senior Vice President in respect of any clean-up
which needs to be done, except where the other party has approved
such admission in writing such approval not to be unreasonably
withheld or delayed.
4.3 No claim under the terms of the Indemnity or Counter Indemnity for any
Environmental Liabilities shall be valid unless notice has been served
in accordance with the provisions of paragraph 7 and in the case of
Indemnity, but not the Counter Indemnity, said notice has been served
within 10 years of Completion.
4.4 The Seller's liability under the Indemnity shall be limited in
accordance with the provisions of the Americas Liability Agreement,
except for sub-clauses 4.1.2 (save for the proviso to sub-clause 4.1)
and 4.2 of the Americas Liability Agreement, the subject matter of which
will be governed by the provisions of this Schedule.
4.5 In the event that the Indemnitor (as defined in paragraph 6.1) either
incurs external charges, costs and expenses for environmental services
or internal charges for its own environmental services, in either case
including but not limited to testing and/or analytical services and/or
contaminated soil disposal facilities, in connection with or in relation
to any actual or potential Environmental Liabilities under the Indemnity
or Counter Indemnity (as appropriate) then such external and internal
charges, costs and expenses shall be deemed to be payments made under
the Indemnity or Counter Indemnity (as appropriate). Any internal
charges shall be made on the same basis as the Indemnitor charges to its
own business or its Affiliates.
4.6 It is hereby expressly agreed that, save where the Seller has accepted
liability or becomes otherwise liable under the terms of the Indemnity,
all costs incurred by the Purchaser in carrying out environmental
analyses and tests of the Site(s) (and its (or their) surrounds) shall
be borne by the Purchaser, other than costs in the exercise of the
rights and powers given to the Seller by sub-paragraphs 9.1 and 9.2
which shall be borne by the Seller unless the Purchaser becomes liable
therefor under the terms of the Counter Indemnity or unless the parties
otherwise agree.
4.7 The Seller shall be liable under the Indemnity for any asbestos-related
personal injury unless and to the extent that any works carried out by
the Purchaser or its Affiliates or the Company after Completion, were
not carried out by a reputable contractor or contractors, who were duly
and properly authorised or approved to undertake such works to at least
the standards of the relevant federal, state or other regulatory
authorities published by or in operation (in accordance with good
industry practice) at all times during the carrying out of such works.
5 MITIGATION
The Seller and the Purchaser shall take all reasonable steps after
Completion to avoid or mitigate any Environmental Liabilities and/or
potential Environmental Liabilities to the extent it is reasonably
within their respective powers to do so, which may give rise to a claim
under or in connection with this Indemnity or Counter Indemnity, as
appropriate, howsoever arising. Such steps will include but shall not be
limited to:
5.1 in the case of the Purchaser, carrying out (where reasonably
practicable) appropriate soil tests before taking any action which is
likely to cause a material disturbance to soil;
5.2 in the case of the Purchaser, where reasonably practicable carrying on
its activities on the Site(s) so as to minimise disturbance to known
areas of existing or probable soil contamination (other than deliberate
removal of such contaminated soil) without incurring abnormal unusual or
excessive cost in so doing;
5.3 where relevant, (with the approval of the other party not to be
unreasonably withheld or delayed) settling a claim of any party (not
being an Affiliate of the Purchaser in the case of the Indemnity or of
the Seller in the case of the Counter Indemnity) which will or may fall
within the terms of the Indemnity or Counter Indemnity, as appropriate,
the costs and expenses associated with such settlement (so approved by
the other party) being deemed to be Environmental Liabilities for the
purposes of this agreement, provided always that nothing in this
sub-paragraph 5.3 shall oblige the Purchaser or the Seller to enter into
any settlement which it does not, in its sole discretion, consider to be
in the best interests of its operations;
5.4 making reasonable and timely efforts to pursue claims against any third
parties (including insurers) who may have some liability in respect of
the matter in question under the Indemnity or Counter Indemnity as
appropriate provided always that this shall not limit or restrict or
operate in any way as a pre-condition to the rights to make a claim
under this Indemnity or Counter Indemnity, as appropriate; and
5.5 in the case of the Purchaser, using reasonable endeavours to avoid acts
or omissions of the nature described in sub-paragraph 4.1 of this
Schedule.
6 Notification
6.1 As soon as reasonably practicable after either party becomes aware of
any actual or potential Environmental Liabilities which may give rise to
a claim by it under the Indemnity or Counter Indemnity (the "CLAIMANT")
(whether or not the Claimant is of the opinion that it has a valid claim
against the other party under the Indemnity or Counter Indemnity (the
"INDEMNITOR")), the Claimant shall give written notice thereof to the
Indemnitor (and thereafter will use all reasonable efforts to keep the
Indemnitor reasonably informed of all material developments relating
thereto). Such written notice shall include reasonable details of all
relevant matters relating to any actual or potential Environmental
Liabilities. Thereafter, the Claimant will promptly advise the
Indemnitor orally of the Claimant's reasonable estimate of the extent of
and, where reasonably practicable, the cost of remediation of the
Environmental Liabilities, as a result thereof), provided that the
Indemnitor shall have given the Claimant written notice of the name of
its representative to whom such oral communication shall be imparted.
6.2 Neither party shall admit, settle or discharge any claim or liability
which might constitute a claim against the other under the Indemnity or
Counter Indemnity (as appropriate) without having first served a notice
under this paragraph 6 and given the other a reasonable opportunity to
consider the circumstances referred to in the said notice.
7 CLAIMS
In the event that the Claimant wishes to make a claim against the
Indemnitor under the Indemnity or Counter Indemnity (as appropriate)
then it shall do so by giving notice in writing of the same to the
Indemnitor giving such details as are then in its possession of the
relevant subject matter of such claim.
8 CONDUCT
If any notice is received by either party under paragraphs 6 or 7, the
Claimant shall, if so requested by the Indemnitor, take all steps which
are necessary and reasonable to avoid, resist, appeal, compromise or
defend any claim and any adjudication in respect thereof (subject to the
Claimant being indemnified against all cost and expenses which may
reasonably and necessarily be incurred in connection therewith), and the
Indemnitor shall (subject to the provisions of this paragraph), at its
request, be allowed to conduct any negotiations, proceedings or appeals
incidental thereto PROVIDED ALWAYS that if the claim relates to or
arises from a Site which at the time is owned, occupied or used by the
Company and which is operational at the date of the notice under
paragraph 7 then the Purchaser shall have conduct of all negotiations,
proceedings or appeals incidental thereto but shall nonetheless keep the
Seller fully informed of all material developments relating to the
subject matter of the claims.
9 SITE ACCESS
If any notice is received by the Seller under paragraphs 6 or 7:
9.1 the Seller and/or its agents and contractors shall be free to have
access to any Site(s) to the extent it is within the power of the
Company, the Purchaser or its Affiliates, during normal business hours,
and after reasonable prior notice, and, if so required by the Purchaser,
in the presence of authorised representatives of the Purchaser to assess
(including but not limited to assessment by soil sampling and testing)
the extent of the Environmental Liabilities and/or potential
Environmental Liabilities and to determine the action required in order
to remediate such liabilities (such actions to be subject to the prior
agreement of the Purchaser (including as to the action to be taken) such
agreement not to be unreasonably withheld); and
9.2 the Purchaser shall (during normal business hours) allow the Seller or
its agents access to inspect and take copies of such books and records
of the business of the Company and/or the Purchaser relating to the
Site(s) as may be necessary in connection with any Environmental
Liabilities and/or potential Environmental Liabilities.
9.3 The Seller shall exercise proper care in the exercise of its powers and
rights pursuant to this paragraph 9 and shall indemnify the Purchaser
for all reasonably incurred losses or liabilities arising from the
Seller's failure to do so.
10 DISCUSSIONS
Upon either party having given a notice under paragraphs 6 or 7, either
the Seller or the Purchaser may request a meeting as soon as practicable
to discuss the matter (and if either does so the other party shall
comply promptly with such request) and, irrespective of whether there
has been any agreement on liability, each party shall be fully involved
but (save as otherwise agreed between the parties) not as to make any
admission or liability not permitted by the other provisions of this
Schedule in any discussions and/or negotiations with any party imposing
or seeking to impose any Environmental Liabilities.
11 DISPUTE RESOLUTION
Upon either party giving a notice in accordance with paragraph 7, in the
event that the Seller and the Purchaser are unable to agree promptly
upon any factual matter relevant to a claim under this Indemnity or
Counter Indemnity (as appropriate) or in the event of any other matter
being referred to the Experts in accordance with this Schedule then the
following provisions of this paragraph 11 shall apply:
11.1 a reputable independent firm of experts (the "EXPERTS") (who shall act
as experts and not arbitrators) in relation to the Environment relevant
to the claim or potential claim (having at least ten years relevant
experience) shall be appointed by mutual agreement of the parties hereto
(and the parties shall each be obliged to use their respective best
endeavours to reach agreement as soon as practicable) to resolve any
factual matter in dispute between the parties but not including any
interpretation of laws or regulations as they apply to such factual
matters or any conclusions regarding responsibility or liability for or
in relation to any factual matters. The Experts shall be offered the
appointment within 15 Business Days of the parties reaching such mutual
agreement and shall be notified in writing of the provisions of
sub-paragraph 11.7 below. Failing such mutual agreement on the
appointment of Experts, the parties shall promptly refer the issue, at
their joint cost, to the President for the time being of the Royal
Institute of Chartered Surveyors in the United Kingdom with instructions
to appoint suitable Experts within 14 days of receipt of such
instructions;
11.2 the said Experts shall only be dismissed by the mutual agreement of the
parties hereto;
11.3 both parties shall promptly and simultaneously exchange with each other
and submit to the Experts, and in any event in accordance with the
Experts' written directions, their arguments and submissions in
connection with any matter of fact referred to them in accordance with
this paragraph 11;
11.4 following receipt by the Experts of the written arguments and other
submissions of the parties pursuant to paragraph 11.3, the parties shall
instruct the Experts to issue, as soon as reasonably practicable, a
formal written opinion pertaining to the matter of fact referred to
them. In any event, the Experts shall be instructed to present the said
opinion within two months after receiving the written arguments and
other submissions of the parties pursuant to sub-paragraph 11.3;
11.5 the formal written opinion of the Experts issued pursuant to
sub-paragraph 11.4 shall be conclusive in any proceedings between the
parties hereto as to the question of fact so determined;
11.6 the fees and expenses of the Experts shall be borne equally by the
Seller and the Purchaser (unless otherwise directed by the Experts); and
11.7 the Experts, and any company, firm, partnership or other organisation
with which the Experts are connected, shall not be eligible to be
considered to undertake any clean-up work in respect of the claim for
which they have so acted on or around the Site(s) save where the parties
hereto mutually agree to waive this provision. For the avoidance of
doubt, either party may withhold such consent in any event.
12 ACCEPTANCE OF LIABILITY
In the event that the Seller admits that it has any liability to the
Purchaser under the Indemnity (or where the Seller agrees to accept the
Purchaser's claim as falling within the Indemnity notwithstanding the
fact that no Environmental Liability may at that point in time have
arisen):
12.1 Subject to consulting with and paying reasonable regard to the views of
the Purchaser, the Seller shall have the right independently to
determine whatever measures are appropriate in order to remediate
pursuant to applicable Environmental Laws the subject matter of the
claim under the Indemnity and furthermore the Seller shall have the
right independently to carry out such remediation itself (or through
suitable third party agents or contractors) provided that in so doing
the Seller (or its said agents or contractors) shall be obliged to use
reasonable endeavours to avoid causing undue interruption to the conduct
of the business of the Company and/or its Affiliates;
12.2 The Seller and/or its agents and contractors shall, in addition to the
rights of access provided for in paragraph 9 above, be free to have
access to the Site(s) if currently owned, leased or, where within the
power of the Company and its Affiliates, during normal business hours
after reasonable prior notice, and if so required, in the presence of
authorised representatives of the Purchaser, to carry out the
remediation referred to in sub-paragraph 12.1 above provided that the
Seller (or its agents or contractors) shall be obliged to use reasonable
endeavours to avoid causing undue interruption to the conduct of the
business of the Company and/or its Affiliates.
12.3 The Seller shall exercise reasonable care in the exercise of its powers
and rights pursuant to this paragraph 12 and shall exercise reasonable
skill, care and diligence in carrying out any works and shall not use
any materials which are not in accordance with the recommendations of
relevant authorities and codes of practice. The Seller shall procure
that the contractors and consultants engaged to carry out and advise on
the works are bound by obligations in the same terms of reasonable
skill, care and diligence as herein before mentioned and otherwise
engaged on market terms at the time and shall procure suitable
warranties in accordance with normal market practice at the time from
the contractors and consultants om favour of the Purchaser. The Seller
shall not carry out the works itself but shall always engage external
contractors and consultants approved by the Purchaser such approval not
to be unreasonably withheld or delayed.
13 STATEMENTS
In the event of any circumstances arising which do or may give rise to
Environmental Liabilities which may fall within the terms of the
Indemnity or the Counter Indemnity (as appropriate) neither the Company,
the Purchaser nor the Seller (nor any of their respective Affiliates) to
the extent practicable shall make any public statements which is not
required by law or the rules of any regulatory authority to make
regarding such circumstances without first discussing with the other
party and reaching written agreement (such agreement not to be
unreasonably withheld or delayed) on the text of any such public
statement before it is made.
14 GENERAL
14.1 Any information, records, or other material of one party shall be
treated as strictly confidential by the other party except when (a) it
is required to be used in order to comply with an order of the court or
regulatory authority or (b) it is used by the other party to enforce its
rights under this Schedule or so as to make an insurance claim provided
that, in the case of either (a) or (b), disclosure is made in accordance
with this sub-paragraph 14.1. If either party becomes legally compelled
(including by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process) to disclose any
of the information, records, or other material referred to in this
sub-paragraph 14.1, the party so compelled shall provide the other with
prompt prior written notice of such requirement so that the other may
seek a protective order or other appropriate remedy. To the extent
lawfully able to do so, each party agrees to cooperate in each other's
efforts to obtain a protective order or other reasonable assurance that
confidential treatment shall be accorded any such information. If such
protective order or other remedy is not obtained, the party so compelled
agrees to disclose only that portion of the information, records, or
other material which it is advised by opinion of outside counsel is
legally required to be disclosed and to take all reasonable steps to
preserve the confidentiality of the information, records, or other
material referred to in this sub-paragraph 14.1. Any other disclosure by
one party of information, records or materials of the other party shall
require the prior written consent of such other party, which shall not
be unreasonably withheld or delayed.
14.2 The Purchaser's and its Affiliates' and the Seller's and its Affiliates'
exclusive remedies in respect of any claims which fall within the scope
of the Indemnity or Counter Indemnity, as appropriate, shall be in
accordance with the provisions of this Schedule, and the Purchaser on
behalf of itself and its Affiliates and the Seller, on behalf of itself
and its Affiliates, hereby waives all other remedies whether in
contract, tort (including, for the avoidance of doubt, negligence) or
howsoever otherwise arising which it may have against the Seller or any
of its Affiliates or the Purchaser or any of its Affiliates as
appropriate at law or in equity in respect of the matters which fall
within the scope of the Indemnity or Counter Indemnities and, for the
avoidance of doubt, if such a claim under this Schedule could also give
rise to a Warranty Claim or a claim under any other provision of this
agreement in respect of the same subject matter, the Purchaser or the
Seller as appropriate may only bring a claim under this Schedule.
14.3 The Seller undertakes to co-operate with the Purchaser and assist the
Purchaser in achieving a transfer to the Purchaser (or as it directs) of
all Environmental Authorisations, Permits and licences held by the
Seller at Completion.
15 CO-OPERATION
The Purchaser undertakes that wherever co-operation is required by the
Company to ensure compliance with the Purchaser's obligations hereunder,
the Purchaser will use its reasonable endeavours to ensure that the
Company provides the requisite co-operation.
SCHEDULE 6
CONSIDERATION ADJUSTMENT TEXT
(Clause 3.3)
1 Consideration and Adjustment
SECTION 1
(1) In this Schedule 3:
"A FORM" means, in relation to the Company, the quarterly financial
reports in the format set forth in Annex 3 which are prepared in
accordance with the accounting policies, practices and other
requirements set out or referred to in ICI's Controller's Manuals as
applied by the Company (with the exception of pensions liabilities which
are accounted for in accordance with FAS 87) and prepared at the
Completion Date on a basis consistent with that adopted by the Company
in the A Form at 31 December 1997 (with the exception that pensions
liabilities shall be reported in Provisions); and if the Completion Date
does not fall on the due date for the preparation of an A Form, a
financial report prepared on the same basis for the financial period
from the latest date at which an A Form was prepared to the Completion
Date;
"ACTUAL NET DEBT" means Net Debt as agreed or determined in accordance
with paragraphs (4) to (6) below;
"ACTUAL NET WORKING CAPITAL" means Net Working Capital as at the
Completion Date as determined under paragraphs (4) to (6) below;
"ESTIMATED CONSIDERATION" has the meaning given in sub-Clause 3.1;
"ENTERPRISE VALUE" means US$23,635,000;
"FINAL CONSIDERATION" has the meaning given in paragraph (3)(a) below;
"FINAL COMPLETION STATEMENT" has the meaning given in paragraph (3)(b)
below;
"FINAL STOCKS" means the value of Stocks for the Company at Completion;
"ICI'S CONTROLLER'S MANUALS" means the control manuals in existence at
14 July 1997 and which are compiled in accordance with UK GAAP used for
accounting purposes within the Seller's Group, copies of which have been
received by the Purchaser or an Affiliate of the Purchaser (and which
consists of an introduction to the Group Controller's Manual, Bulletin
Board Accounting Language, Bulletin Board Reporting, Accounting
Definitions and Conventions, Accounting Policies and Procedures,
Controls, Reporting);
"INITIAL STOCKS" means the value of Stocks for the Company as at 28
February 1998;
"INTEREST RATE" means LIBOR plus 25 basis points;
"NET DEBT" means the amount reported as "NET DEBT" on line 70090 of the
A Form for the Company as described in ICI's Controller's Manuals which,
for the avoidance of doubt, can be either a negative or a non-negative
number;
"NET WORKING CAPITAL" means the aggregate of:
(a) Operating Debtors; plus
(b) Stocks (for the purposes of this definition meaning Initial
Stocks when used for Net Working Capital as at 28 February 1998
and meaning Final Stocks when used for Actual Net Working
Capital); less
(b) Operating Creditors less than 1 year;
For the purposes of (b) the Stocks shall be valued in accordance with
the document headed "STOCKTAKING AND VALUATION PRINCIPLES" in the Agreed
Form marked "NWC-S";
"NET WORKING CAPITAL AS AT 28 FEBRUARY 1998" or "NWC28" means, the value
shown in the column headed NWC 28 in Section 2 of this Schedule 3 which
is the amount which the parties have agreed to represent the value of
Net Working Capital at 28 February 1998 of the Company;
"OPERATING CREDITORS LESS THAN 1 YEAR" means the absolute value of the
amount reported as creditors of the Company which are external to the
Company (including without limitation creditors which are members of, or
other business units within, the ICI Group as at the date of the
relevant A Form) as defined by reference to "OPERATING CREDITORS LESS
THAN 1 YEAR" on line 70020 of the A Form for the Company as described in
ICI's Controller's Manuals;
"OPERATING DEBTORS" means debtors of the Company which are external to
the Company (including without limitation debtors which are members of,
or other business units within, the ICI Group as at the date of the
relevant A Form) as defined by reference to "OPERATING DEBTORS" on line
70010 of the A Form for the Company as described in ICI's Controller's
Manuals;
"STOCKS" means the stock of fuels, raw materials, ingredients,
packaging, office and laboratory supplies, revenue engineering spares,
consumable stores, work in progress and finished goods owned by the
Company as determined on line 70000 of the A Form for the Company or
Business as described in ICI's Controller's Manuals;
(2)
(a) All payments and values under this Schedule shall be in US
Dollars and where an amount is not itself calculated in US
Dollars it shall be converted into US Dollars at the mid market
closing exchange rate in London for the currency in which that
amount is expressed in US Dollars as published in the London
Edition of the Financial Times first published thereafter or,
where the exchange rate is not published in the London Edition
of the Financial Times, at the exchange rate quoted by Citibank
N.A. as at the close of business in London for the currency in
which that amount is expressed on the Completion Date in
relation to amounts in the Final Completion Statement.
(b) References to the absolute value of a number X shall be construed
as follows:
(i) if X is greater than or equal to zero, the absolute value of
X shall be equal to X; and
(ii)if X is less than zero, the absolute value of X shall be X
multiplied by -1,
so that, for the purposes of illustration, the absolute value of
1 is equal to 1 and the absolute value of -1 is equal to 1.
CALCULATION OF THE FINAL CONSIDERATION
(3) In relation to this agreement:
(a) the Final Consideration for the Company shall be determined by
the following formula:
Final Consideration = EV minus AND minus NWC 28 plus ANWC
(excluding 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 Company):
EV = Enterprise Value
AND = Actual Net Debt
NWC28 = Net Working Capital as at 28 February 1998
ANWC = Actual Net Working Capital
LV = US$176,222,000 (value of LPC Interests)
(b) After the Completion Date, the Seller shall prepare a
completion statement as at the Completion Date which shall
contain a statement of the Final Consideration in accordance
with paragraph 3(a) above based on the Seller's calculations
(the "FINAL COMPLETION STATEMENT"). The Final Completion
Statement shall be prepared using the Seller's normal
accounting policies and practices as set out or referred to in
ICI's Controller's Manuals as applied by the Company on a
consistent basis and shall be submitted by the Seller to the
Seller's Auditors for review. Taxation paid or payable by the
Company (including any sum paid or payable to a member of the
Seller's Group in respect of Taxation) as a result of the
transfer of the Sale Shares to the Purchaser (including
Taxation paid or payable by the Seller under Clause 5 of the
Tax Deed of Covenant) shall not be taken into account in the
calculation of the Final Consideration.
(4) Within 45 days of the Completion Date, the Seller shall issue the Final
Completion Statement (distinguishing between the LPC Business and the
other business of the Company) for the Company to the Purchaser together
with a copy of a report by the Seller's Auditors addressed to the Seller
and substantially in the form set out in Annex 3 to the effect that the
Final Completion Statement has been prepared in accordance with this
agreement. Although it is the Seller's responsibility to prepare the
Final Completion Statement, the Seller will require the assistance of
the employees of the relevant Purchaser Affiliates to fulfil this
responsibility and the Purchaser shall ensure such assistance is
provided promptly and at no charge. Immediately after delivery of the
Final Completion Statement, the Purchaser's Auditors shall have the
right, subject to the Purchaser delivering to the Sellers' Auditors a
signed letter in the form set out in Annex 5, to review the Final
Completion Statement and the Seller's Auditors working papers relating
to the Final Completion Statement. Within 45 days of delivery to the
Purchaser of the Final Completion Statement and the Seller's Auditors
report (each of which shall be in English) to the Purchaser's designated
location, the Purchaser shall give notice to the Seller in writing of
any item or items in the Final Completion Statement which they wish to
dispute and the basis on which they dispute that item or those items and
the changes to the Final Completion Statement which the Purchaser
believes should be made and the parties shall use their reasonable
endeavors to resolve that dispute. Any items in respect of which the
Purchaser does not give such notice will be deemed to have been accepted
by the Purchaser. Any written resolution reached by the parties on any
disputed item shall be final, conclusive and binding on the parties.
(5) If the parties agree the Final Completion Statement then any adjusting
payments referred to in paragraph (7) below shall be made by the paying
party within 7 days of being agreed by the parties.
(6) If the parties fail to agree on any element of the Final Completion
Statement within 14 days after the Purchaser has given notice in writing
to the Seller of any item(s) in the Final Completion Statement which the
Purchaser wishes to dispute (in accordance with paragraph (4) above)
then any agreed amounts shall be paid in accordance with the preceding
paragraph and any dispute may be referred by either party for final
determination in accordance with sub-Clause 11.1 of this agreement and
any amounts thereby found to be due shall be paid by the relevant
Affiliate not later than 7 days after such final determination.
(7) When the Final Consideration is agreed or otherwise determined in
accordance with the three preceding paragraphs the following adjusting
payments shall be made:
(a) an amount equal to the difference between (i) the Estimated
Consideration and (ii) the Final Consideration; and
(b) interest (compounded monthly) at the Interest Rate on the amount
in paragraph (a) above from the Completion Date to the date of
payment, calculated on a day to day basis;
which shall be paid by the Seller Affiliate to the Purchaser (or vice
versa, as appropriate).
(8) In this Schedule, references to lines of A Forms have been chosen by the
Seller and are believed in good faith to correspond to the matters to
which they refer. If, however, that reference when compared to the
matter it describes or refers to is incorrect then there shall be
substituted for that line reference to another line reference (if any)
which corresponds to the matter described or referred to.
SECTION 2
UPLIFT OF STOCKS
TO FAIR MARKET
VALUE FOR THE
NWC28 PURPOSE OF
US$ ALLOCATION OF
CONSIDERATION TO
CLASSES OF ASSETS
US$
Americas Business 6,857,000 Nil
LPC Business 15,081,000 1,697,000
SCHEDULE 7
(Clause 1.1)
PRINCIPLES FOR DISTINGUISHING
LPC BUSINESS AND AMERICAS BUSINESS
TAI A FORM
------------------------------------------------------------------------
LPC BUSINESS AMERICAS COMMENTS
(SULPHATE)
BUSINESS
------------------------------------------------------------------------
------------------------------------------------------------------------
FIXED ASSETS All - Office equipment
etc.
------------------------------------------------------------------------
INVESTMENTS All - Partnership share
------------------------------------------------------------------------
STOCKS Stocks All other - Based on actual
manufactured stocks quantities of
by LPC stocks from each
source
------------------------------------------------------------------------
OPERATING DEBTORS Sales of All other - Based on
Trade Debtors} material trade debtors detailed analysis
Intra Group Debtors} manufactured of all open
by LPC accounts concerned
------------------------------------------------------------------------
Other operating Items All other
debtors exclusive to operating
LPC debtors
partnership or
trade in
product
manufactured
by LPC
------------------------------------------------------------------------
OPERATING CREDITORS
LESS THAN 1 YEAR
Trade Creditors} Purchases of All other - Based on
Intra Xxxxx xxxxxxxx operating detailed analysis
Creditors} manufactured creditors of all open
by LPC less than 1 accounts concerned
year
------------------------------------------------------------------------
Other operating Purchases and All other - Based on
creditors services operating detailed analysis
exclusively creditors of all open
related to LPC accounts concerned
partnership
and to
material
manufactured
by LPC
------------------------------------------------------------------------
NON OPERATING Items All other -Mainly tax split
DEBTORS/CREDITORS exclusively non-operating based on analysis
related to LPC debtors/ of results based
and materials creditors on detailed
manufactured analysis of all
by LPC open accounts
concerned
------------------------------------------------------------------------
NET DEBT All Net Debt
to LPC Business
------------------------------------------------------------------------
PROVISIONS Items All other
specifically provisions
related to LPC
------------------------------------------------------------------------
DEFERRED INCOME Items All other
specifically deferred
related to LPC income
------------------------------------------------------------------------
NET ASSETS - Calculated by
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.
SCHEDULE 8
US FINANCIAL INFORMATION
(Clause 1.1)
SPLIT A FORMS AS AT 28 FEBRUARY 1998
TAI BALANCE SHEET
AT 28 FEBRUARY
USD THOUSANDS
AMERICAS LPC TOTAL
BUSINESS BUSINESS
Fixed Assets 50 - 50
Investments - 155,744 155,744
Stocks 8,891 9,851 18,742
Operating Debtors 17,736 12,447 30,183
TCI Debtor - 1,405 1,405
Operating (18,002) (8,622) (26,624)
Creditors less
than 1 year
TCI Creditor (1,768) - (1,768)
Non Operating - 288 288
Debtors
Non Operating - (728) (728)
Creditors less
than 1 year ------- -------- --------
6,907 170,385 177,292
------- -------- --------
Net Debt - 39,943 39,943
Provisions 268 - 268
Deferred Income - - -
-------- -------- --------
268 39,943 40,211
Shareholders' Equity 137,081
--------
177,292
--------
NOTES:
1 Operating Debtors at 28 Feb 1998 have been split pro rata to sales in
January and February 1998.
2 The pensions provision has been reclassified into "PROVISIONS" in
accordance with the definition of A Form in this agreement.
3 TCI Debtors/TCI Creditors and TAI Debtors/TAI Creditors net out.
SCHEDULE 9
(Clause 1.7)
Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxxxxxxxxxx
Xxx Xxxxxxxx
Xxxx Xxxx
Xxxx Xxxxxxxx
Xxxxxxx Xxxxxxx
Xxxx Xxxxxxxx
SCHEDULE 10
(Clause 7.1(f)(iii))
SIGNATURES
SIGNED by }
for and on behalf of
ICI AMERICAN HOLDINGS INC.
SIGNED by }
or and on behalf of
NL INDUSTRIES, INC.
ANNEX 1
AGREED FORM DEED OF INDEMNITY
