EXHIBIT 4.11
BUSINESS SALE AND PURCHASE AGREEMENT
DATED 2 NOVEMBER, 2003
BETWEEN:
1. UNILEVER BESTFOODS UK LIMITED, a company incorporated in England and
Wales (registered number 43520) whose registered office is at Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxx, Xxxx Xxxxxx XX00 0XX (the "SELLER");
AND
2. PREMIER AMBIENT PRODUCTS (UK) LIMITED, a company incorporated in
England and Wales (registered number 04427006) whose registered office
is at 00 Xxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx X00 0XX (the "PURCHASER").
WHEREAS:
The Seller has agreed to sell or procure the sale of and the Purchaser has
agreed to purchase or procure the purchase of and pay or procure payment for the
Business (as defined in this Agreement) comprising the Business Assets (as
defined in this Agreement) as a going concern for the consideration and on the
terms set out in this Agreement.
WHEREBY IT IS AGREED as follows:
1. INTERPRETATION
(A) Certain words and expressions used in, and principles of interpretation
applicable to, this Agreement are defined, or as the case may be set
out, in Schedule 1.
(B) The Schedules, the Attachments and documents in an Agreed Form form
part of this Agreement and shall have the same force and effect as if
set out in the body of this Agreement and any reference to this
Agreement shall include the Schedules, the Attachments and documents in
an Agreed Form.
2. SALE AND PURCHASE
(A) On the terms set out in this Agreement, the Seller shall sell or
procure the sale and assignment of and the Purchaser shall purchase or
procure the purchase by the relevant Designated Purchaser of the
Business comprising the Business Assets listed below as a going concern
at and with effect from Completion (subject as indicated in this
Agreement):
(i) with full title guarantee, the Business Goodwill;
(ii) with full title guarantee (subject to Permitted Encumbrances),
the Business Plant and Machinery;
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(iii) with full title guarantee (subject to Permitted Encumbrances),
the Business Stocks;
(iv) subject to Clause 9, the benefit (subject to the burden) of
the Contracts;
(v) with full title guarantee, the Business Cash Float;
(vi) the Business IPR and the Business Confidentiality Rights
subject, in each case, to the licences granted in Clause 16;
(vii) with full title guarantee, the Business Properties (in
accordance with Schedule 8);
(viii) subject to Clause 23, such of the Books and Records as relate
exclusively to the Business;
(ix) the Business Claims; and
(x) all other property, rights and assets owned by or in the
possession of the Seller's Group and exclusively used, enjoyed
or exercised in the Business
(together, the "BUSINESS ASSETS"), in each case excluding the following
assets (the "EXCLUDED ASSETS"):
(a) the Receivables;
(b) cash at bank and any current investments
used in that part of the Business carried on
by each Business Seller;
(c) amounts recoverable in respect of Taxation
relating to the Business attributable to
periods ended on or before Completion or in
respect of any acts, events or occurrences
occurring (or being deemed to have occurred)
on or before Completion;
(d) the benefit of any third party insurance
policy of any Business Seller or any other
member of the Seller's Group relating to the
Business or any of the Business Assets or
Business Employees to the extent such
insurance policy relates to any of the
Excluded Liabilities;
(e) all rights in or to any information which
relates to the sale or proposed sale of the
whole or part of the Business including such
information which relates to the negotiation
of the transactions contemplated by this
Agreement (excluding rights to enforce
confidentiality undertakings and agreements
against potential purchasers of the
Business);
(f) the Excluded IPR; and
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(g) the assets listed in Attachment 9.
(B) In consideration for the sale to it (or the relevant Designated
Purchaser) of the Business Assets, the Purchaser shall or shall procure
that the relevant Designated Purchaser shall:
(i) discharge and indemnify each member of the Seller's Group in
respect of the Assumed Liabilities in accordance with Clause
10; and
(ii) pay the Final Cash Consideration in accordance with the
provisions of this Agreement.
(D) With effect from (and subject to the occurrence of) Completion, the
Seller hereby assigns to the Purchaser all unregistered Business IPR
(together with the goodwill in the Business IPR and all rights of
action (including without limitation, the right to claim for
infringement), remedies, powers and benefits pertaining thereto) and
all Business Confidentiality Rights.
3. CONSIDERATION
(A) The initial aggregate cash consideration payable at Completion for the
sale of the Business Assets shall be the payment by the Purchaser (on
behalf of the relevant Designated Purchasers) to the Seller (on behalf
of itself and the other Business Sellers) of an amount equal to the
Initial Cash Consideration (such payment to be made in accordance with
Clause 6(C) and Schedule 2).
(B) Following determination of the Completion Stocks Amount in accordance
with the provisions of Clause 4 the aggregate cash consideration shall
be adjusted to take account of any payments made pursuant to that
Clause and paragraph 12 of Schedule 9 in order to determine the final
aggregate cash consideration for the sale of the Business Assets (the
"FINAL CASH CONSIDERATION").
(C) The Initial Cash Consideration, the Final Cash Consideration, any
payments made pursuant to Clause 4 or paragraph 12 of Schedule 9 and
any other consideration for the sale of the Business Assets shall be
exclusive of any amounts in respect of VAT.
(D) The Final Cash Consideration shall be allocated between the Business
Assets on the basis set out in Schedule 7 and such allocation shall be
adopted by the Seller and the Purchaser and each relevant member of the
Seller's Group and the Purchaser's Group for all purposes (including
Tax).
4. STOCKS ADJUSTMENT
(A) Each of the parties shall comply with the requirements relating to that
party set out in Schedule 5 in relation to the Completion Stocks
Statement.
(B) Subject to sub-clause (C), if the Completion Stocks Amount is less than
the Target Stocks Amount (the amount by which the Completion Stocks
Amount is less than the Target Stocks Amount being the "SHORTFALL")
then the Seller (on behalf of the relevant
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member(s) of the Seller's Group) shall pay an amount equal to the
Shortfall, together with an amount equivalent to interest thereon at
the Agreed Rate (accrued daily and compounded monthly) for the period
from (and including) the Completion Date to (but excluding) the date of
payment, to the Purchaser (on behalf of the relevant Designed
Purchaser(s)) within five Business Days of finalisation of the
Completion Stocks Statement in accordance with Schedule 5. Subject to
sub-clause (C), if the Completion Stocks Amount is greater than the
Target Stocks Amount (the amount by which the Completion Stocks Amount
is greater than the Target Stocks Amount being the "EXCESS") then the
Purchaser (on behalf of the relevant Designated Purchaser(s)) shall pay
an amount equal to the Excess, together with an amount equivalent to
interest thereon at the Agreed Rate (accrued daily and compounded
monthly) for the period from (and including) the Completion Date to
(but excluding) the date of payment, to the Seller (on behalf of the
relevant member(s) of the Seller's Group) within five Business Days of
finalisation of the Completion Stocks Statement in accordance with
Schedule 5.
(C) No payment shall be required to be made by the Seller or the Purchaser
under sub-clause (B) unless the Shortfall, or as the case may be, the
Excess is equal to or greater than (pound)100,000, but in such event
the whole of the amount equal to the Shortfall or, as the case may be,
the Excess shall be payable and not just the amount in excess of such
figure.
(D) All payments referred to in this Clause shall be made in immediately
available funds in sterling to the Purchaser's Bank Account or (as the
case may be) the Seller's Bank Account. Any payment made pursuant to
this Clause shall constitute an adjustment to the aggregate cash
consideration as referred to in Clause 3(B).
5. CONDUCT OF BUSINESS BEFORE COMPLETION
(A) Between the date of this Agreement and the Completion Date, the Seller
shall (or shall procure that any member of the Seller's Group shall):
(i) carry on the Montana Business in the ordinary course of
trading substantially in the same manner in which the same has
been carried on prior to the date of this Agreement in
accordance with all applicable legal requirements of a
material nature;
(ii) not enter into any new Material Contract or make any material
variation to any existing Material Contract;
(iii) not (other than in consultation with the Purchaser) employ or
dismiss any employee or employees of the Business whose
remuneration exceeds (pound)50,000 (in aggregate) other than
(in relation to dismissal) as a result of the conduct of that
person;
(iv) not create, extend, grant, issue or redeem or agree to create,
grant or issue any Encumbrance over the Business or Business
Assets (other than Permitted Encumbrances arising in the
ordinary course of business);
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(v) other than in respect of any budgeted capital expenditure
disclosed to the Purchaser prior to the date of this
Agreement, not, in respect of the Business agree to make
capital expenditure or commitments requiring capital
expenditure in excess of (pound)100,000 (in aggregate);
(vi) not alter or agree to alter any terms of employment or
benefits affecting all of the Business Employees or alter any
material working practices of the Business or collective
agreement relating to such material working practices;
(vii) not, in relation to any Business Employee, amend or
discontinue (wholly or partly) any pension scheme relating to
the Business Employees or communicate to any Business Employee
a plan, proposal or intention so to amend or discontinue
(wholly or partly) that scheme (unless and to the extent that
such amendment is required by law);
(viii) on reasonable notice, allow the Purchaser and its officers and
representatives reasonable access to the Business Properties
at pre-arranged times convenient to both the Seller and the
Purchaser and allow the Purchaser and its officers and
representatives reasonable access to Senior Employees at
pre-arranged times having regard to such persons' ongoing
duties as employees of the Seller; and
(ix) continue to maintain all existing insurance policies
concerning the Business and not knowingly do anything which
would cause any such insurance policies to become void:
in each case save:
(a) with the prior written consent of the Purchaser;
(b) as required by law, regulation or any relevant Tax Authority;
or
(c) as required or permitted pursuant to any of the other
provisions of this Agreement or any of the other Transaction
Documents.
(B) The Purchaser shall have the right to elect by notice in writing to the
Seller not to complete the acquisition of the Business and the Business
Assets in the event of there having occurred in the period pending
Completion any physical destruction or damage to the Business
Properties and other Business Assets located in the Business Properties
which causes a loss of value by more than 50% of the total aggregate
value of the Business Properties and other Business Assets located at
the Business Properties.
(C) The Seller shall use its reasonable endeavours to procure the
finalisation and execution of the Settlement Agreement and the APV
Purchase Agreement prior to 31 January 2004 and, in respect of the APV
Purchase Agreement shall procure that the terms of that agreement (as
finally executed) provide that no cash consideration shall be payable
by the relevant contract counterparty to APV (UK) Limited for the
supply and installation of the relevant machinery which is the subject
matter thereof. If the Settlement Agreement and the APV Purchase
Agreement have not been executed by 31 January 2004, the
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Seller shall if requested by the Purchaser assign such of its rights
against APV (UK) Limited for failure of the APV1 plant, as described in
paragraph 12(A) of the Disclosure Letter, as relate to the cost of
obtaining plant which would perform to the agreed specifications of
APV1 and shall retain such of its rights against APV (UK) Limited for
failure of the APV1 plant as relate to the losses associated with the
product recall described in paragraph 12(A) of the Disclosure Letter.
6. COMPLETION
(A) Pre-Completion of the sale and purchase of the Business comprising the
Business Assets (subject as provided in sub-clause (F)) shall take
place at 10.00 a.m. on the Pre-Completion Date at the offices of
Xxxxxxxxx and May at Xxx Xxxxxxx Xxx, Xxxxxx XX0X 0XX and at such other
places as may be agreed between the Seller and the Purchaser.
(B) Completion of the sale and purchase of the Business comprising the
Business Assets (subject as provided in sub-clause (F)) shall take
place at 1.00 p.m. on the Completion Date.
(C) Each of the Seller and the Purchaser shall (subject as provided in
sub-clause (F)) do, or procure the doing of, all those things
respectively listed in relation to them in Schedule 2 at Pre-Completion
or at such other time as is specified in Schedule 2.
(D) The Initial Cash Consideration shall be payable by or on behalf of the
Purchaser in immediately available funds at Completion. On the
Pre-Completion Date, the Purchaser shall pay the Initial Cash
Consideration, or shall procure that the Initial Cash Consideration is
paid, into the Escrow Account on the basis that XX Xxxxxx Chase Bank
shall be irrevocably instructed to hold such monies to the order of the
Purchaser until 1.00 p.m. on the Completion Date and to the order of
the Seller thereafter. After 1.00 p.m. on the Completion Date the
Initial Cash Consideration standing to the credit of the Escrow Account
shall be held solely for the benefit of the Seller and shall be paid to
such bank account as the Seller may direct as soon as possible
thereafter. Monies standing to the credit of the Escrow Account other
than the Initial Cash Consideration shall be held solely for the
benefit of the Purchaser.
(E) Receipt of funds in accordance with sub-clause (D) shall constitute a
good discharge of the Purchaser in respect of the payment of the
Initial Cash Consideration but not, for the avoidance of doubt, in
respect of the Purchaser's obligations under Clause 4. The Purchaser
shall not be concerned to see that the moneys transferred are applied
in paying the Business Sellers in accordance with their respective
entitlements.
(F) At Completion, the Purchaser shall be obliged to complete (or procure
the completion of) the sale and purchase of the Business Assets and to
pay the Initial Cash Consideration (in accordance with the provisions
of Clause 6(D)) and the Seller shall be obliged to comply with the
requirements of Schedule 2 PROVIDED THAT those Business Assets referred
to in Clause 8(A) and Clause 9(A) shall be deemed to have been acquired
by the Purchaser (on behalf of the relevant Designated Purchaser) for
the purposes of determining whether the Seller has complied with the
requirements of Schedule 2.
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7. ACTION AFTER COMPLETION
(A) At the request of the Purchaser, the Seller shall (or procure that the
Business Sellers shall), for a period of 30 days following Completion,
join with the Purchaser (or the relevant Designated Purchaser) in
sending out notices and letters in such form as the Purchaser may
reasonably require to all of those suppliers and customers in relation
to the Montana Business and other business contacts relating to the
Montana Business informing them of the transfer of the Montana Business
pursuant to this Agreement.
(B) The Seller shall procure that originals of all notices, correspondence,
information, orders or enquiries relating solely to the Montana
Business and copies of all notices, correspondence, information, orders
or enquiries relating partly to the Montana Business and partly to one
or more of the remaining businesses of the Seller's Group which are
received by any member of the Seller's Group on or after Completion
shall be passed as soon as practicable to the Purchaser.
(C) The Purchaser shall procure that originals of all notices,
correspondence, information, orders or enquiries relating solely to one
or more of the remaining businesses of the Seller's Group and copies of
all notices, correspondence, information, orders or enquiries relating
partly to one or more of the remaining businesses of the Seller's Group
and partly to the Montana Business which are received by the
Purchaser's Group on or after Completion shall be passed as soon as
practicable to the relevant member of the Seller's Group.
(D) The Seller shall procure that each Business Seller shall, as soon as
reasonably practicable after receipt thereof, pay to the Purchaser (on
behalf of the relevant Designated Purchaser) an amount equal to any
monies which it actually receives after Completion to the extent that
such monies are owned by the Purchaser (or the Designated Purchaser)
and were comprised within or were represented by or relate to any of
the Business Assets sold at Completion pursuant to this Agreement.
(E) The Purchaser shall procure that each Designated Purchaser shall, as
soon as reasonably practicable after receipt thereof, pay to the Seller
(on behalf of the relevant Business Seller) an amount equal to any
monies which it actually receives after Completion to the extent that
such monies are owned by the Seller (or the Business Seller) and were
not part of the Business Assets sold at Completion pursuant to this
Agreement.
(F) As soon as possible after Completion and with respect to any UK
Business Assets which are plant and machinery for the purposes of Part
2 of the Capital Allowances Act 2001 and which are also fixtures (as
that term is defined in section 173(1) of that Act) and in respect of
which the Seller or any member of the Seller's Group has been claiming
allowances as fixtures, the Seller shall procure that the relevant
member of the Seller's Group shall, and the Purchaser shall procure
that the relevant Designated Purchaser shall, jointly elect by notice
pursuant to section 198 of that Act to determine in accordance with
sections 198, 200 and 201 of that Act how much of the consideration
falls to be treated as expenditure on the provision of fixtures.
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(G) The Seller undertakes to provide the Purchaser's Group with all
reasonable assistance and information to enable the Purchaser's Group
to calculate its entitlement to capital allowances on the buildings
located at the Business Properties.
(H) (i) The Seller shall procure that the names of the Seller and any
members of the Seller's Group will be changed within 30 days
of Completion to exclude the word "Ambrosia" or any
confusingly similar words or names or words or names which may
suggest a connection with the Business.
(ii) The Seller shall procure that the names of any member of the
Seller's Group incorporated in any country outside Asia will
be changed within 30 days of Completion to exclude the words
"Xxxxx and Xxxxxx" or any confusingly similar words or names
or words or names which may suggest a connection with the
Business.
8. THIRD PARTY CONSENTS FOR THE SALE OF BUSINESS ASSETS
(A) Subject to sub-clause (C), where any consent or agreement of any third
party is required to the transfer of any of the Business Assets or
where any governmental or regulatory procedure, application or other
requirement must be complied with to enable such transfer lawfully to
take place (other than, in either case, in relation to the transfer of
any Contract or the performance of any Contract by any Designated
Purchaser) and such consent or agreement has not been obtained or that
procedure, application or other requirement has not been complied with
(as the case may be) at or before Completion, then the following
provisions shall apply:
(i) the sale of the relevant Business Assets shall not take
effect, notwithstanding Completion, until that consent or
agreement has been obtained or that procedure, application or
other requirement has been complied with (as the case may be);
and
(ii) the Seller and the Purchaser shall use their respective
reasonable endeavours after Completion to obtain the consent
or agreement or to ensure that the relevant procedure,
application or other requirement is complied with (as the case
may be) as soon as possible.
(B) After Completion, and until such time as any consent or agreement
referred to in sub-clause (A) is obtained, the Business Sellers shall
be deemed to hold the benefit of the relevant Business Asset referred
to in sub-clause (A) on trust for the relevant Designated Purchaser.
(C) This Clause shall not apply to the Business Properties.
9. CONTRACTS
(A) Where any consent or agreement of any third party is required to enable
a Designated Purchaser to perform any Contract after Completion or to
enable any Business Seller to transfer the benefit or burden of any
Contract to a Designated Purchaser, then the following provisions shall
apply:
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(i) this Agreement shall not constitute an assignment or an
attempted assignment of the relevant Contract if or to the
extent that such an assignment or attempted assignment would
constitute a breach of such Contract;
(ii) after Completion the relevant Business Seller and the relevant
Designated Purchaser shall use their respective reasonable
endeavours to obtain the consent or agreement of the other
party to whatever assignment, transfer or novation is
necessary to enable the relevant Designated Purchaser to
perform any such Contract after Completion or, as the case may
be, to transfer the benefit and burden of any such Contract to
the relevant Designated Purchaser; and
(iii) after Completion, until the consent or agreement referred to
in sub-clause (A) is obtained, the relevant Designated
Purchaser shall, unless to do so is not permitted under the
relevant Contract, perform all the obligations of such
Business Seller under such Contract as agent for or
sub-contractor to such Business Seller and indemnify each
member of the Seller's Group in respect of such performance
or, if the relevant Contract does not permit the relevant
Designated Purchaser from so acting as agent and
sub-contractor or the relevant Designated Purchaser cannot be
permitted to act as agent and sub-contractor because of
material confidentiality obligations, such Business Seller
shall, at the pre-approved cost of the relevant Designated
Purchaser and to the extent (a) permitted under the relevant
Contract, and (b) that such Business Seller is able, do all
such acts and things as the relevant Designated Purchaser may
reasonably require to enable due performance of the Contract
and to provide for the relevant Designated Purchaser the
benefits, subject to the burdens, of the Contract, and the
relevant Designated Purchaser shall indemnify each member of
the Seller's Group in respect of all such acts and things;
provided that the relevant Designated Purchaser shall not be
required to indemnify any member of the Seller's Group where,
in the event that the relevant Designated Purchaser has
pre-approved the relevant costs, a Business Seller fails to
perform the Contract in accordance with its terms as
reasonably directed by a Designated Purchaser, in which case
the Seller shall indemnify each member of the Purchaser's
Group in respect of any such failure arising out of the
negligence or wilful default of such Business Seller. For this
purpose, it shall not be reasonable to require any Business
Seller to make any payment unless the relevant Designated
Purchaser has first paid such Business Seller sufficient
cleared funds to make such payment.
(B) After Completion, and until such time as the consent or agreement
referred to in sub-clause (A) is obtained, the relevant Business Seller
shall be deemed to hold the benefit of the relevant Contract referred
to in sub-clause (A) (except for any Contract relating to Intellectual
Property or Confidentiality Rights where to do so is not permissible
under the terms of the Contract) on trust for the relevant Designated
Purchaser.
(C) Subject to Clause 10, from the Completion Date the relevant Designated
Purchaser shall carry out, perform and complete all the obligations and
liabilities to be performed under the Contracts, save that the Business
Sellers shall be responsible for carrying out,
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performing and completing all the obligations and liabilities which
fell due to be performed before Completion.
10. ASSUMED LIABILITIES, PAYABLES AND RETAINED LIABILITIES
(A) The Purchaser (on behalf of the relevant Designated Purchasers) hereby
agrees with the Seller (for itself and as trustee for each other member
of the Seller's Group) that it will (or will procure that a member of
the Purchaser's Group will) duly and properly perform, assume and pay
and discharge when due, and indemnify each member of the Seller's Group
against, all Assumed Liabilities.
(B) In this Agreement "ASSUMED LIABILITIES" means (a) all liabilities
incurred, and (b) all obligations (of whatever nature) which fall due
to be performed after Completion, in each case in respect of the
Montana Business as carried on at or at any time prior to Completion or
the Business Properties (including, for the avoidance of doubt, all
liabilities of the Purchaser (and/or any member of the Purchaser's
Group) in respect of Taxation relating to or arising from their conduct
of the Montana Business attributable to periods after Completion or in
respect of any acts, events or occurrences occurring (or being deemed
to occur) after Completion), excluding in each case any Excluded
Liabilities.
(C) The Seller (on behalf of the relevant Business Sellers) hereby agrees
with the Purchaser (for itself and as trustee for each other member of
the Purchaser's Group) that it will (or will procure that a member of
the Seller's Group will) duly and properly perform, assume and pay and
discharge when due, and indemnify each member of the Purchaser's Group
against, all Excluded Liabilities (other than any liabilities of the
Purchaser's Group under any trading agreements between any member of
the Seller's Group and any member of the Purchaser's Group).
11. RECEIVABLES AND APPORTIONMENT
(A) The Purchaser shall not acquire or procure the acquisition of the
Receivables and accordingly the Business Sellers shall be entitled to
the Receivables in accordance with the terms of this Clause.
(B) The Purchaser agrees that the Business Sellers alone shall be
responsible for the collection of any of the Receivables and that:
(i) the Business Sellers shall be entitled to take such steps as
they may think fit to recover any outstanding Receivables;
(ii) the Purchaser shall not take, and shall procure that no other
member of the Purchaser's Group takes, any step to collect the
Receivables, and shall not do anything to hinder their
collection by any Business Seller; and
(iii) if the Purchaser or any other member of the Purchaser's Group
should receive any communication or payment in respect of any
Receivable, the Purchaser shall or shall procure that written
details of any such communication or payment are given to the
Seller immediately.
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(C) Where anything (including any service) is to be provided by a member of
the Purchaser's Group under any of the Contracts after Completion, but
any payment (whether by way of deposit, prepayment or otherwise) in
respect of the price or cost of it has been received by a member of the
Seller's Group before Completion, the Seller shall procure that that
member of the Seller's Group pays a sum equal to the amount of that
payment (excluding any amount in respect of VAT for which that member
of the Seller's Group is required to account) to the relevant member of
the Purchaser's Group and shall hold such sum in trust for that member
of the Purchaser's Group until it is paid over.
(D) Where anything (including any service) is to be provided to a member of
the Purchaser's Group under any of the Contracts after Completion, but
any payment (by way of deposit, prepayment or otherwise) has been made
by a member of the Seller's Group in respect of the price or cost of it
before Completion, the Purchaser shall procure that that member of the
Purchaser's Group pays a sum equal to the amount of that payment
(excluding such part of that payment as is VAT) to the relevant member
of the Seller's Group and shall hold such sum in trust for that member
of the Seller's Group until it is paid over.
(E) Save in respect of the payment and receipt of moneys in respect of the
sales agency services provided by members of the Seller's Group to
members of the Purchaser's Group following Completion pursuant to the
Transitional Services Agreement, which moneys shall be treated in
accordance with clause 4 of the Transitional Services Agreement, the
Purchaser shall procure that all moneys or other items belonging to any
member of the Seller's Group which are received by any member of the
Purchaser's Group on or after Completion in connection with the Montana
Business or any of the Business Assets shall be held in trust by that
member of the Purchaser's Group for that member of the Seller's Group
and that such moneys or other items are paid over to that member of the
Seller's Group as soon as reasonably practicable following receipt
thereof by the relevant member of the Purchaser's Group.
(F) Save in respect of the payment and receipt of moneys in respect of the
sales agency services provided by members of the Seller's Group to
members of the Purchaser's Group following Completion pursuant to the
Transitional Services Agreement, which moneys shall be treated in
accordance with clause 4 of the Transitional Services Agreement, the
Seller shall procure that all moneys or other items belonging to any
member of the Purchaser's Group which are received by any member of the
Seller's Group after Completion in connection with the Montana Business
or any of the Business Assets shall be held in trust by that member of
the Seller's Group for that member of the Purchaser's Group and that
such moneys or other items are paid over to that member of the
Purchaser's Group as soon as reasonably practicable following receipt
thereof by the relevant member of the Seller's Group.
(G) Material periodical outgoings of the Business, including but not
limited to, rents, rates, non-customer rebates, gas, electricity, and
water charges and all liabilities in relation to salaries (including
PAYE), wages, bonuses, national insurance and pension contributions
(but not any entitlements to redundancy payment or any other obligation
in respect of a Business Employee's period of continuous service) shall
be apportioned on a time basis so that such part of the relevant
charges attributable to the period up to the Completion Date shall be
borne and paid by the Seller and such part of the relevant charges
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attributable to the period after the Completion Date shall be borne and
paid by the Purchaser.
(H) Notwithstanding any other provisions of this Agreement, in respect of
customer rebate or discount arrangements or promotional accruals
applicable to the Business as at the Completion Date the Seller shall
remain responsible for paying customer rebates, discounts or
promotional accruals which accrue in respect of sales made in the
period up to the Completion Date and the Purchaser shall be responsible
for paying customer discounts or promotional accruals which accrue in
respect of sales made in the period after the Completion Date on the
basis set out in sub-clauses (I) and (J).
(I) In respect of any rebates, discounts or promotional accruals which
apply in respect of sales and purchases made both before and after
Completion, the Seller and the Purchaser shall use all reasonable
endeavours to agree an apportionment of such discounts promptly
following the expiry of the period to which they relate. The Seller
shall calculate the total amount of such discount payable in respect of
such period and how much of such discount is payable by the Seller and
how much by the Purchaser. Such calculation and apportionment shall be
made according to the relevant discount structure applicable as at the
Completion Date:
(i) in respect of volume related arrangements, by calculating the
volume of the particular sales or purchases made before the
Completion Date and the volume of the particular sales or
purchase made after the Completion Date and applying the ratio
of these amounts to the total amount due. The total amount due
in respect of the total period shall be calculated in line
with the relevant contract conditions existing on the
Completion Date and shall be pro-rated between the Purchaser
and the Seller according to the said ratio notwithstanding
that the discount is expressed on a different basis (for
example, even though a high discount may be payable once sales
or purchases pass a certain figure, the Seller and the
Purchaser shall assume that the total discount due is evenly
spread across the total volume to which the discount relates);
(ii) in respect of non-volume related arrangements, on a fair and
equitable basis based on the terms of the relevant arrangement
and the Purchaser and the Seller shall, in good faith use
their respective reasonable endeavours to agree such basis of
allocation and if they fail to agree within 30 days, such
allocation shall be made on the basis set out in (i) above;
(iii) in respect of net invoice value related rebate or discount
arrangements, for the avoidance of doubt, no apportionment
shall be made.
Any amount required to be paid by the Seller or the Purchaser (as the
case may be) under this sub-clause (I) shall be paid directly to the
relevant third party by the Seller either for itself in respect of the
period prior to the Completion Date or on behalf of the Purchaser in
respect of the period after the Completion Date, in accordance with the
provisions of clause 4 of the Transitional Services Agreement.
(J) In the event that the Purchaser wishes to modify an existing discount
scheme, it shall first bring to an end the existing scheme and make the
calculations under sub-clause (I)
13
in respect of the period up to the date on which the scheme is ended
and the amounts shall be apportioned and paid in accordance with
sub-clause (I).
12. VALUE ADDED TAX
Without prejudice to the generality of Clause 3(C), each of the parties
shall comply with the requirements relating to that party set out in
Schedule 11.
13. EMPLOYEES
(A) Subject to sub-clause (K) and to Schedule 10, if the contract of
employment of any Business Employee terminates or is found or alleged
not to have effect after Completion as if originally made with the
Purchaser or another member of the Purchaser's Group as a consequence
of the sale and purchase of the Business Assets and other matters
contemplated under this Agreement other than by virtue of regulation
5(4A) of the Regulations, the Purchaser (on behalf of the relevant
member of the Purchaser's Group) agrees that:
(i) in consultation with the Seller, it will, within five Business
Days of being so requested (as long as the request is made no
later than 10 Business Days after the Seller becomes aware of
such finding or allegation), make to that Business Employee an
offer in writing to employ him under a new contract of
employment subject to, and to take effect upon, the
termination referred to below; and
(ii) the offer to be made will be on such terms and conditions as
are consistent with the Purchaser's undertakings in
sub-clauses (F) and (G).
Upon that offer being made (or at any time after the expiry of the five
Business Days if the offer is not made as requested), the relevant
member of the Seller's Group shall, where legally possible, terminate
the employment of the Business Employee concerned (save where already
terminated). The Purchaser (on behalf of the relevant Designated
Purchaser) shall indemnify each member of the Seller's Group against
all liabilities arising from the employment of that Business Employee
after Completion until such termination (up to a maximum period of 6
months) where the services of the employee concerned are available to a
member of the Purchaser's Group during such period.
(B) Subject to sub-clause (K), if the contract of employment of any person
who is immediately prior to Completion employed by a member of the
Seller's Group (other than a Business Employee) is found or alleged to
have effect after Completion as if originally made with the Purchaser
or another member of the Purchaser's Group as a consequence of the sale
and purchase of the Business Assets and other matters contemplated
under this Agreement, the Seller (on behalf of the relevant member of
the Seller's Group) agrees that:
(i) in consultation with the Purchaser, it will, within five
Business Days of being so requested (as long as the request is
made no later than 10 Business Days after the Purchaser (or
such member of the Purchaser's Group) becomes aware of such
termination, finding or allegation and, in any event, within
the period of six months after Completion), procure that a
member of the Seller's Group makes
14
to that employee an offer in writing to employ him under a new
contract of employment subject to, and to take effect upon,
the termination referred to below; and
(ii) the offer to be made will be on the same terms and conditions
as were provided to that employee immediately before
Completion.
Upon that offer being made (or at any time after the expiry of the five
Business Days if the offer is not made as requested), the relevant
member of the Purchaser's Group shall, where legally possible,
terminate the employment of the employee concerned. The Purchaser (on
behalf of the relevant Designated Purchaser) shall indemnify each
member of the Seller's Group against all liabilities arising from the
employment of that employee after Completion until such termination (up
to a maximum period of 6 months from the Completion Date) where the
services of the employee concerned are available to and used by a
member of the Purchaser's Group during such period. The Seller (on
behalf of the relevant member of the Seller's Group) shall indemnify
each member of the Purchaser's Group against all liabilities arising
from the employment of that employee after Completion until such
termination (up to a maximum period of 6 months from the Completion
Date) where the services of the employee concerned are not available to
a member of the Purchaser's Group during such period and, whether or
not the services of the employee concerned are available to a member of
the Purchaser's Group during such period, against all liabilities
arising from the termination of employment of that employee.
(C) The Purchaser has provided or will provide (as the case may be) to the
Seller all the information required to enable it to comply with any
obligations to inform, consult or notify any person about the matters
contemplated by this Agreement in so far as it relates to any Business
Employee to the extent required by local law and within the relevant
time limits imposed by local law. Where applicable, the Seller shall
use its reasonable endeavours to request relevant information from the
Purchaser.
(D) (i) Subject to Clause 13(D)(ii), the Purchaser (on behalf of the
relevant Designated Purchaser) shall indemnify the Seller and
each other member of the Seller's Group against any claim
relating to the terms and conditions of employment or benefits
offered to or provided to the Business Employees in connection
with their employment after Completion (including, without
limitation, claims relating to the terms and conditions of
such employment or benefits and termination of such employment
or benefits) and against any breach by the Purchaser of this
Clause or Schedule 10.
(ii) The Seller shall retain liability in respect of benefits
accrued prior to the Completion Date under the Bonus Plans and
shall indemnify the Purchaser against any claim relating to
such liabilities.
(E) For so long as the Business Employees continue in the employment of any
member of the Purchaser's Group or any person to whom the whole or any
part of the Business of the Purchaser's Group is transferred, the
obligations under sub-clauses (F) and (G) and Schedule 10 shall
continue in force and accordingly the Purchaser shall procure that the
15
acquiror concerned honours the obligations under sub-clauses (F) and
(G) and Schedule 10 in respect of each Business Employee concerned in
such a disposal.
(F) (i) If the employment of any Business Employee is terminated
within three years of the Completion Date the Purchaser shall
procure that there shall be applied in respect of such
Business Employee policies and benefits (whether contractual
or otherwise and giving due credit to the Business Employees
for any additional service or earnings from the Completion
Date onwards) in such a manner as to be no less favourable
than those applicable in respect of the particular Business
Employee at the Completion Date.
(ii) The Purchaser shall procure that, in respect of benefits which
are provided on the death or disability of a Business Employee
or his spouse, child or dependant within the period of three
years following the Completion Date (other than such benefits
provided under the UPF (as defined in Schedule 9)), equivalent
benefits must be provided on such events which are payable in
circumstances and under conditions which are not materially
less favourable to the beneficiary concerned as those which
would have applied had the death or disability occurred whilst
the beneficiary was a beneficiary of the arrangement in
question under the provisions of that arrangement in force
immediately prior to the Completion Date.
(G) Without prejudice to sub-clause (F), the Purchaser shall procure that
for a period of three years following the Completion Date Business
Employees who are employed shall be employed on terms and conditions
(whether contractual or otherwise and including, without limitation,
any related to length of service and in relation to post-retirement
benefits but specifically excluding any benefits under the UPF (as
defined in Schedule 9) and excluding any share schemes or share option
schemes) which are no less favourable taken as a whole in respect of
each Business Employee than those which apply in respect of each
Business Employee at Completion. This undertaking does not constitute a
guarantee that the Business Employees will continue to be employed
following Completion. In relation to share schemes and share option
schemes, the Purchaser shall procure that following the Completion
Date, the Business Employees who are employed shall, in respect of the
period of three years following the Completion Date, be considered on
the same basis for participation in share schemes or share option
schemes as similarly situated employees of the same seniority or job
description of companies in the Purchaser's Group subject always to the
rules of the particular scheme and any qualifying conditions. The
Purchaser reserves the right, as with all of its existing employees, to
set the exercise price of such share option schemes in its sole and
absolute discretion.
(H) The Purchaser's agreement to the provisions of sub-clauses (F) and (G)
and Schedule 10 is given by the Purchaser on the express understanding
that, if the Purchaser is in breach of any such provisions, the Seller
may, in its absolute discretion, and without limitation, seek to
procure compliance with such provisions by the Purchaser by applying to
the court for damages and/or specific performance.
(I) Without prejudice to the parties' obligations under sub-clauses (A) to
(G), each of the parties shall comply with the requirements relating to
that party set out in Schedule 10.
16
(J) For the avoidance of doubt, the provisions of this Clause 13 are
without prejudice to:
(i) the operation of any rule of law in relation to, or
contractual term of, the terms and conditions of employment of
the Business Employees; and
(ii) any provision of Schedule 10.
(K) If any Business Employee requires a work permit or employment pass or
other approval (in this Clause "PERMITS") for his employment to
continue after Completion, the Purchaser undertakes to procure that any
necessary applications are promptly made and to use its best efforts to
secure the necessary Permits and the provisions of Clause 29 shall
apply in relation to the continued employment of Business Employees and
their transfer to another employer after Completion.
(L) Each Seconded Employee shall (subject to the rights of the respective
employer and employee to terminate the employee's employment at any
time in their absolute discretion) continue to be employed by a member
of the Seller's Group and shall, for a period of up to six months
following Completion, be seconded by the Seller or relevant member of
the Seller's Group to work in the Montana Business for such period (not
exceeding six months) as nominated by the Purchaser to the Seller prior
to Completion, provided that the Purchaser may from time to time in
respect of each Seconded Employee terminate any such secondment early
by giving 30 days prior notice in writing to the Seller. In respect of
the period after such termination the Purchaser shall not be liable for
the indirect and direct cost of salary and other employment benefits of
the relevant Seconded Employee under sub-clause (L)(i). The following
additional provisions shall apply with respect to the Seconded
Employees:
(i) Each Seconded Employee shall be paid, and employment benefits
shall be provided to such Seconded Employee, by a member of
the Seller's Group and the Purchaser (on behalf of the
relevant Designated Purchaser) shall pay to the Seller (on
behalf of the relevant member of the Seller's Group) (in
accordance with the terms of the Transitional Services
Agreement) the direct and indirect cost of salary and other
employment benefits for that Seconded Employee for such
calendar month, including relevant Taxes, social security
costs, the cost of the accrual of funded retirement, death and
disability benefits (calculated ignoring any surplus or
deficit in the relevant fund) and any notional or unfunded
costs or accruals in relation to post-Completion service (for
example in relation to retirement, death and disability
benefits), on such basis as the Seller may reasonably
determine and agree with the Purchaser. For the avoidance of
doubt, all such costs of the Seconded Employees are included
in the costings for the services set out in the Transitional
Services Agreement. To the extent such agreement is not
reached, paragraph 10 of Schedule 9 shall apply (with
necessary changes).
(ii) The relevant member of the Seller's Group may from time to
time increase the salary and/or benefits of such Seconded
Employee PROVIDED THAT any such increases are broadly in line
with increases for similar employees of the Seller's Group.
17
(iii) The Purchaser shall procure that the working environment of
each Seconded Employee at the Business Properties and the work
carried out by each Seconded Employee is similar to his
working environment and work before Completion.
(iv) The Purchaser (on behalf of the relevant member of the
Purchaser's Group) shall indemnify the Seller (on behalf of
the relevant member of the Seller's Group) against any claim
by, or relating to, a Seconded Employee to the extent that
such claim arises as a result of any act or omission of the
Purchaser (or any other member of the Purchaser's Group).
(v) The Seller agrees that those Seconded Employees based at the
registered office of the Seller (the "SELLER'S PREMISES") as
at the date of this Agreement will continue to be based at
such site until the end of their period of secondment. The
Purchaser agrees that such Seconded Employees shall comply
with such requirements as the Seller shall impose in relation
to those Secondees' use of the Seller's Premises during the
period of the secondment, including a requirement that the
Seconded Employees will not be permitted to hold meetings
(other than by telephone) with third parties who are not
Seconded Employees at the Seller's Premises, other than with
the Seller's consent.
(M) Provided the Purchaser has complied with sub-clause (C), the Seller
shall indemnify the Purchaser against all liabilities, obligations,
proceedings, court or tribunal orders, fines and penalties, damages,
compensation payments, charges, expenses, costs claims and demands
arising out of or in connection with any failure by the Seller to
comply with its obligations under Regulation 10 of the Regulations.
14. PENSIONS
Each of the parties shall comply with the requirements relating to that
party set out in Schedule 9.
15. INSURANCE
(A) The Purchaser acknowledges and agrees (on behalf of itself and each
member of the Purchaser's Group) that upon Completion all insurance
cover provided to any member of the Seller's Group in relation to the
Montana Business pursuant to policies maintained by the Seller's Group
(whether such policies are maintained with third party insurers or with
other members of the Seller's Group) shall cease.
(B) To the extent that any insurance claim in respect of any Business
Asset, any Assumed Liability or the Business arises under an insurance
policy held by any member of the Seller's Group in respect of the
Business which is written on a claims arising basis prior to
Completion, the Seller (or the relevant member of the Seller's Group)
will, if requested by the Purchaser prior to the third anniversary of
the Completion Date and subject to being indemnified by the Purchaser
against any expense, cost or liability which they may thereby incur
(including, without limitation, any excess or deductible payable under
the relevant policy of insurance), use its reasonable endeavours to
make a claim under such insurance policy and pay to the Purchaser any
proceeds thereof, net of any excess and
18
costs (including Tax) incurred by the Seller (or the relevant member of
the Seller's Group). From the date of this Agreement, the Seller will
use reasonable endeavours to have the Purchaser noted as an interested
party on all its insurance policies relating to the Business and the
Business Assets.
16. CONTINUING ARRANGEMENTS BETWEEN THE SELLER'S GROUP AND THE MONTANA
BUSINESS
(A) The Seller and the Purchaser shall enter into the Transitional Services
Agreement at Completion. Prior to the Completion Date, the Seller and
the Purchaser shall use their reasonable endeavours to finalise the
details to be included in the Network Access Agreement (as defined in
the Transitional Services Agreement).
(B) Save as set out in this Agreement or (when duly executed) the
Transitional Services Agreement:
(i) no member of the Seller's Group shall be obliged to supply any
services to any member of the Purchaser's Group after
Completion; and
(ii) no member of the Purchaser's Group shall be obliged to supply
any services to any member of the Seller's Group after
Completion.
(C) Subject to receiving a valid assignment of the Xxxxxxxx Xxxxx pursuant
to this Agreement, the Purchaser hereby grants and agrees to procure
the grant (on behalf of itself and each relevant Designated Purchaser)
to the Seller and each member of the Seller's Group an exclusive,
royalty-free, irrevocable licence to use the Xxxxxxxx Xxxxx for 18
months in the Nordic Region in respect of the Nordic Products
(notwithstanding any changes from time to time to the formulations of
any such products) in relation to its foodservice business (as defined
in the definition of "Montana Business" in Schedule 1) in the Nordic
Region.
(D) Subject to receiving a valid assignment of the Xxxxxxxx Xxxxx pursuant
to this Agreement, the Purchaser hereby grants and agrees to procure
the grant (on behalf of itself and each relevant Designated Purchaser)
to the Seller and each member of the Seller's Group an exclusive,
royalty-free, irrevocable licence to use the Xxxxxxxx Xxxxx for 18
months in the United Kingdom and the Republic of Ireland in relation to
its foodservice business (as defined in the definition of "Montana
Business" in Schedule 1) in such countries in respect of the Retained
Products (notwithstanding any changes from time to time in the
formulation of any such products), sales of such products bearing the
Xxxxxxxx Xxxxx not to exceed(pound)3,600,000 (three million, six
hundred thousand pounds) in any calendar year, in which case such
licence shall be revocable at will and/or the parties shall use
reasonable endeavours to agree a mutually acceptable new licence
arrangement.
(E) For the avoidance of doubt and subject to receiving a valid assignment
of the B&P Marks, the Purchaser hereby grants and agrees to procure the
grant (on behalf of itself and each relevant Designated Purchaser) to
the Seller and each member of the Seller's Group a non-exclusive,
royalty-free, irrevocable licence to use the B&P Marks in
19
continental Europe, until the expiry or termination of the Supply
Agreements, for the sole purposes of performing the Supply Agreements.
(F) The Purchaser hereby grants and agrees to procure the grant (on behalf
of itself and each relevant Designated Purchaser) to the Seller and
each member of the Seller's Group a non-exclusive, royalty-free,
irrevocable licence to use the Xxxxxxxx Xxxxx for 18 months in
continental Europe for the purpose of manufacturing, packaging, holding
and transporting (but not selling) products for sale in the Nordic
Region, the United Kingdom or the Republic of Ireland pursuant to the
licences granted in sub-clauses (C) or (D) above.
(G) The Seller shall procure that an application be made, as soon as
reasonably practicable (and in any case within 6 months) after the
Completion Date, for the cancellation of all trade xxxx registrations
and applications (except in Brunei, Darussalam, India, Indonesia,
Malaya, Malaysia, Pakistan, Sobah, Sarawak, Singapore and Sri Lanka) in
respect of signs which consist of or include both (i) any Unilever Xxxx
or Retained Xxxx, and (ii) any Xxxxxxxx Xxxx or B&P Xxxx. The Seller
shall use its reasonable endeavours to complete such applications for
cancellation as soon as reasonably practicable after the Completion
Date. The Seller shall not pay any renewal fees becoming due in respect
of such marks after the Completion Date.
(H) The Seller shall procure that:
(i) prior to the Completion Date, no member of the Seller's Group
shall give notice to terminate either of the Supply
Agreements; and
(ii) subject to (i) above, no member of the Seller's Group shall
give notice prior to 1 January 2005 to terminate either of the
Supply Agreements, save for any notice given in the event of
breach of the relevant Supply Agreement in accordance with the
terms thereof.
(I) The Seller agrees (on behalf of itself and each member of the Seller's
Group) that any member of the Purchaser's Group may terminate any of
the Supply Agreements, by giving 6 months prior written notice at any
time. The clause shall be deemed to be an amendment to the Supply
Agreements.
(J) The Seller undertakes and confirms that no material Business IPR or
material Business Confidentiality Rights were transferred to, or will
transfer to, CreaVite Limited pursuant to the letter of intent
disclosed in the Data Room (or any associated documentation).
(K) The Seller undertakes not to oppose any application by the Purchaser or
any member of the Purchaser's Group to register the Xxxxxxxx Xxxxx as
trade marks for food anywhere in the world during the period of five
years after the Completion Date.
(L) The rights granted under sub-clauses (C) and (D) do not include any
rights to grant sub-licences except for the purposes of having
packaging, promotional materials, products and other materials
manufactured on its behalf solely in accordance with those rights.
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17. SELLER'S WARRANTIES AND PURCHASER'S REMEDIES
(A) Subject as provided in this Agreement, the Seller warrants to the
Purchaser as at the date of this Agreement in the terms set out in
Schedule 3.
(B) The only Warranties given:
(i) in respect of the Business Properties are those contained in
paragraph 14 of Schedule 3 and each of the other Warranties
shall be deemed not to be given in relation to the Business
Properties;
(ii) in respect of Environmental Matters are those contained in
paragraph 15 of Schedule 3 and each of the other Warranties
shall be deemed not to be given in relation to Environmental
Matters; in respect of know-how or Intellectual Property
matters or agreements relating to Intellectual Property or
know-how are those contained in paragraph 16 of Schedule 3 and
each of the other Warranties shall be deemed not to be given
in relation to know-how or Intellectual Property matters or
agreements relating to Intellectual Property or know-how;
(iii) in respect of competition or trade regulation law are those
contained in paragraph 17 of Schedule 3 and each of the other
Warranties shall be deemed not to be given in relation to
competition, anti-restrictive trade practice or anti-trust
legislation;
(iv) in respect of all employment matters (save for matters
relating to pensions) are those contained in paragraph 18 of
Schedule 3 and each of the other Warranties shall be deemed
not to be given in relation to employment matters (save for
matters relating to pensions);
(v) in respect of Tax are those contained in the Tax Warranties
and each of the other Warranties shall be deemed not to be
given in relation to Tax; and
(vi) in respect of all pensions matters are those contained in
paragraph 21 of Schedule 3 and each of the other Warranties
shall be deemed not to be given in relation to pensions
matters.
(C) In the absence of fraud or wilful concealment on the part of the
Seller, the liability of the Seller under or in relation to the
Warranties shall be limited as set out in Schedule 4.
(D) The Seller accepts that the Purchaser is entering into this Agreement
in reliance upon the Warranties.
(E) Subject and without prejudice to Clause 30, the Purchaser acknowledges
and agrees that the Seller makes no representation or warranty as to
the accuracy of the forecasts, estimates, projections, statements of
intent or statements of opinion provided to the Purchaser (howsoever
provided) on or prior to the date of this Agreement or in the
Disclosure Letter or in the Data Room. The Purchaser acknowledges that
no representations or warranties, express or implied, have been or are
given other than the Warranties and any warranties contained in any
documents in the Agreed Form.
21
(F) The only remedy of the Purchaser for breach of the Warranties shall be
damages (subject to Schedule 4) and Completion shall not in any way
constitute a waiver of the Purchaser's right to damages. The Purchaser
hereby waives any rights (other than the right to seek damages) in
respect of any breach of the Warranties (and howsoever arising or
deemed to arise) other than any such rights in respect of fraud or
wilful concealment or wilful default.
(G) The Seller undertakes that, if any claim is made against it by the
Purchaser in connection with the sale of the Business Assets to the
Purchaser, it shall not make any claim against any Business Employee on
whom it may have relied before agreeing to any terms of this Agreement
or any document in the Agreed Form or authorising any statement in the
Disclosure Letter.
(H) Each of the Warranties shall be construed as being separate and
independent and, except where expressly provided to the contrary, shall
not be limited or restricted by reference to or inference from the
terms of any other Warranty or any other provision of this Agreement or
any document in the Agreed Form.
18. PURCHASER'S WARRANTIES
(A) The Purchaser warrants to the Seller as at the date of this Agreement
that:
(i) the Purchaser has the requisite power and authority to enter
into and perform this Agreement and the other documents
specified in this Agreement which are to be delivered by the
Purchaser at Completion (the "PURCHASER'S COMPLETION
DOCUMENTS");
(ii) this Agreement constitutes and the Purchaser's Completion
Documents will, when delivered by the Purchaser, constitute
binding obligations of the Purchaser in accordance with their
respective terms;
(iii) the execution and delivery of, and the performance by the
Purchaser of its obligations under, this Agreement and the
Purchaser's Completion Documents will not:
(a) result in a breach of any provision of the
memorandum and articles of association of
the Purchaser;
(b) result in a breach of, or constitute a
default under, any instrument to which the
Purchaser is a party or by which the
Purchaser is bound and which is material in
the context of the transactions contemplated
by this Agreement;
(c) so far as the Purchaser is aware, result in
a breach of any order, judgment or decree of
any court or governmental agency to which
the Purchaser is a party or by which the
Purchaser is bound and which is material in
the context of the transactions contemplated
by this Agreement; or
22
(d) save as contemplated by this Agreement,
require the Purchaser to obtain any consent
or approval of, or give any notice to or
make any registration with, any governmental
or other authority which has not been
obtained or made at the date of this
Agreement and is in full force and effect
where failure to obtain such consent or
approval, give such notice or make such
registration is material in the context of
the transactions contemplated by this
Agreement;
(iv) the Purchaser has (and at Completion will have) immediately
available on an unconditional basis (subject only to
Completion and customary conditions precedent to drawdown as
listed in facility agreements between members of the
Purchaser's Group and the financiers thereof provided to the
Seller prior to the date of this Agreement) the necessary cash
resources to pay the Initial Cash Consideration and meet its
other obligations under this Agreement and the Purchaser's
Completion Documents; and
(v) each Designated Purchaser is, and will at and immediately
after Completion be, a member of the Purchaser's Group.
(B) The Purchaser accepts that the Seller is entering into this Agreement
in reliance upon the warranties set out in sub-clause (A).
19. PURCHASER'S UNDERTAKINGS
(A) The Purchaser agrees and undertakes on behalf of itself and each other
member of the Purchaser's Group that (in the absence of fraud) it has
no rights against and shall not make any claim against any employee,
director, agent, officer or adviser of any member of the Seller's Group
on whom it may have relied before agreeing to any term of this
Agreement or any other agreement or document referred to herein or
entering into this Agreement or any other agreement or document
referred to herein.
(B) The Purchaser undertakes on behalf of itself and each member of the
Purchaser's Group (and without prejudice to the confidentiality
agreement referred to in Clause 33(D)) that, subject to Clause 33(B),
each member of the Purchaser's Group will treat as strictly
confidential and not disclose to any person (other than other members
of the Purchaser's Group and its professional advisers on a
confidential basis) any Seller Confidential Information. The Purchaser
acknowledges that any future use of Seller Confidential Information is
without representation, warranty or liability on the part of any member
of the Seller's Group. No updates of the Seller Confidential
Information will be provided by any member of the Seller's Group to any
member of the Purchaser's Group.
(C) The Purchaser acknowledges and agrees on behalf of itself and each
member of the Purchaser's Group that nothing in this Agreement shall
operate as an agreement to transfer (nor shall transfer) any right,
title or interest in, and (save as permitted by sub-clause (D)) from
Completion the Purchaser shall procure that no member of the
Purchaser's Group shall use, any of the Unilever Marks or any of the
Retained Marks.
23
(D) The Purchaser and the Designated Purchasers may use the Unilever Marks
after Completion only in respect of the Business and to the extent
necessary to use sales literature, stationery, buildings, signage and
vehicles (existing, in each case, at Completion) and in respect of the
Business Stocks and only provided that the Purchaser shall, or shall
procure that the relevant Designated Purchaser shall:
(i) as soon as reasonably practicable after Completion (but in any
event by the relevant date set out in sub-clause (ii) below)
cease all use of the Unilever Marks on any sales literature,
stationery, building signage or vehicles; and
(ii) by the last day of the sixth month following Completion,
destroy or delete from existing sales literature and
stationery or buildings, signage or vehicles, and by the last
day of the sixth month following Completion destroy or delete
the Unilever Marks from existing Business Stocks in the
possession, or under the control, of the Designated
Purchasers.
(E) Subject to the terms of the Transitional Services Agreement, the
Purchaser shall, and shall procure that each member of the Purchaser's
Group shall, by the last day of the sixth month following Completion
cease to use any financial or accounting software owned by the Seller
or members of the Seller's Group.
(F) The Purchaser shall procure that, for a period of 12 months after
Completion, the Montana Business shall prepare, where reasonably
requested to do so by the Seller and subject to reimbursement by the
Seller of the reasonable out-of-pocket expenses of the Montana
Business, financial data required for the financial accounts,
management accounts or statutory accounts of any member of the Seller's
Group and any data relating to the Montana Business prior to the
Completion Date required by any member of the Seller's Group for
compliance with any reporting requirements of any stock exchange or
securities or other regulatory authority or under any applicable law,
rule or regulation which shall each be delivered to the Seller as soon
as reasonably practicable and, in any event, within 30 Business Days of
the relevant request.
(G) The Purchaser undertakes with the Seller (for itself and as trustee for
each other member of the Seller's Group) to comply with all
notifications and other requirements arising as a result of this
Agreement and the transactions contemplated hereunder under any
relevant competition, anti-restrictive trade practices or anti-trust
laws (except where such requirements are the sole responsibility of the
Seller under such laws) and the Purchaser shall indemnify each member
of the Seller's Group against any and all costs, claims, expenses and
liabilities whatsoever which the Seller or any such member of the
Seller's Group may suffer or incur as a result of the Purchaser's
failure to comply with such laws.
(H) The Purchaser agrees and acknowledges (for itself and as trustee for
each member of the Purchaser's Group) that no part of the Montana
Business shall have or retain any right whatsoever (whether proprietary
or by way of Intellectual Property or otherwise) in or in respect of
the Unilever Manuals and Policy Documents or any of them, or any right
to use or continue to use them or any of them after Completion. All
originals and copies of the Unilever Manuals and Policy Documents shall
be delivered to the Seller or to its order to such location or
locations as the Seller shall reasonably specify as soon as
24
reasonably practicable following Completion (and, in any event, within
six months following Completion).
(I) If the Seller or any Business Seller assigns to the Purchaser any
Intellectual Property or right of confidence which is owned by a member
of the Seller's Group but which is not used exclusively in the
Business, the Purchaser undertakes to reassign such Intellectual
Property or right of confidence to the Seller or a member of the
Seller's Group nominated by the Seller for nominal consideration. In
such circumstances, the Seller hereby grants and agrees to procure the
grant of (on behalf of itself and each relevant member of the Seller's
Group) to the Purchaser and each Designated Purchaser a non-exclusive,
royalty-free, worldwide, irrevocable right to use the Intellectual
Property except for any Excluded IPR or right of confidence insofar as
it is material to the operation of the Business, for the sole purpose
of conducting the Business. The Purchaser undertakes to, and undertakes
to procure that all members of the Purchaser's Group, return to the
Seller within a period of 12 months after Completion all copies or
relevant extracts of all books and records (including all written
material and all forms of computer or machine readable material) in
their possession or under their control which contain information in
which any such Intellectual Property or right of confidence subsists.
20. RESTRICTIONS ON THE SELLER
The Seller undertakes that it shall not, and shall procure that each
other member of the Seller's Group shall not for as long as it remains
such a member, save for any Seconded Employees, within two years from
the Completion Date, solicit or entice away from the employment of any
member of the Purchaser's Group any Senior Employee without the prior
written consent of the Purchaser, other than:
(i) any Senior Employee whose employment with the relevant member
of the Purchaser's Group has then ceased or who has given or
received notice terminating such employment; and
(ii) any Senior Employee who responds to any public recruitment
advertisement placed by or on behalf of any member of the
Seller's Group,
and shall not intentionally assist any person to do any of the
foregoing things.
21. RESTRICTIONS ON THE PURCHASER
The Purchaser undertakes to the Seller that it shall not, and shall
procure that each member of the Purchaser's Group shall not (for so
long as it remains such a member), within two years of the Completion
Date solicit or entice away from the employment of any member of the
Seller's Group any Senior Seller's Group Employee other than:
(i) any Senior Seller's Group Employee whose employment with the
relevant member of the Seller's Group has then ceased or who
has given or received notice terminating such employment; and
25
(ii) any Senior Seller's Group Employee who responds to any public
recruitment advertisement placed by or on behalf of any member
of the Purchaser's Group,
and shall not intentionally assist any person to do any of the
foregoing things.
22. PROVISION RELATING TO RESTRICTIONS
Each undertaking contained in Clauses 20 and 21 shall be construed as a
separate undertaking and if one or more of the undertakings is held to
be against the public interest or unlawful or in any way an
unreasonable restraint of trade, the remaining undertakings shall
continue to bind the Seller and/or the Purchaser as the case may be.
23. BOOKS AND RECORDS
(A) The Business Sellers shall on Completion deliver to, or hold to the
order of, the Purchaser originals of all the Books and Records relating
exclusively to the Business excluding:
(i) those Books and Records which any member of the Seller's Group
is required by law to retain or which any Business Seller is
permitted to retain in accordance with Clause 12 and Schedule
11;
(ii) all Books and Records of the Business Sellers which contain
legally privileged information in which the Seller owns
Confidentiality Rights (other than Business Confidentiality
Rights) which shall be retained by the Seller; and
(iii) any Books and Records relating to Taxation.
(B) For a period of eight years from Completion the Purchaser shall
maintain and make available the Books and Records which are delivered
to the Purchaser under this Agreement for inspection and copying by
representatives of any Business Seller and its professional advisers
during Working Hours on reasonable advance notice and such undertaking
as to confidentiality as the Purchaser may reasonably require being
given, save that such period shall be 15 years in relation to Books and
Records which contain any information relating to the occupational
health of any of the Business Employees.
(C) Subject to any provision contained in Schedule 11, for a period of
eight years from Completion, the Seller shall maintain and make
available to the Purchaser any Books and Records relating (but not
exclusively relating) to the Business (or, if practicable, the relevant
parts thereof) which contain information which is required by the
Purchaser for the purpose of the Business or any Tax or other return in
connection with the Business for inspection and copying by
representatives of the Purchaser during Working Hours on reasonable
advance notice and, if it is not practicable only to make available the
relevant parts thereof, such undertaking as to confidentiality as the
Seller may reasonably require being given.
(D) (i) The Seller shall procure that each Business Seller shall,
where reasonably requested to do so by the Purchaser and
subject to the reimbursement by the Purchaser of the Business
Seller's reasonable out-of-pocket expenses, assist
26
the Purchaser with the preparation of data relating to the
Montana Business reasonably required by any member of the
Purchaser's Group for compliance with any reporting
requirements of any stock exchange or securities or other
regulatory authority under any applicable law, rule or
regulation and shall provide such reasonable assistance as
soon as reasonably practicable and, in any event, within 30
Business Days of the relevant request.
(ii) The Purchaser shall and shall procure that any relevant member
of the Purchaser's Group shall, where reasonably requested by
the Seller or any Business Seller and subject to the
reimbursement by the Seller of the reasonable out-of-pocket
expenses of the Purchaser or relevant member of the
Purchaser's Group, assist the Seller or, where relevant,
Business Sellers with the preparation of any information
request from any Tax Authority regarding the Taxation affairs
of the Seller and/or any of the Business Sellers in respect of
the Montana Business.
24. PAYMENTS
(A) Except to the extent otherwise set out in this Agreement, any payment
to be made by either party under this Agreement shall be made in full
without any set-off, restriction or condition (whether for or on
account of any counterclaim or otherwise) and without, and free and
clear of, any deduction or withholding whatsoever (save only as
required by law). If any deductions or withholdings are required by law
to be made from any sums payable under this Agreement (except for
payments of interest), the party who is obliged to make the payment
shall also be obliged to pay to the party to whom payment is to be made
such sum as will, after such deduction or withholding has been made,
leave the party to whom payment is to be made with the same amount as
it would have been entitled to receive in the absence of any such
requirement to make such deduction or withholding.
(B) If any Tax Authority brings into charge to Tax (or into any computation
of income, profit or gain for the purposes of any charge to Tax) any
sum payable under the Warranties then the party making such payment
shall pay such additional amount to the party to whom the payment is
made so as to ensure that the net amount retained after the relevant
Tax liability is equal to the amount that would have been retained had
the payment not been so subject to Tax.
(C) If any amount payable under this Agreement is payable to a person to
whom the rights of a party under this Agreement have been assigned in
accordance with Clause 28, the payer shall not be required by this
Clause (or any other provision of this Agreement including, without
prejudice to the generality of the foregoing, Clause 27) to pay any
greater amount than it would have been required to pay had the sum been
payable to the original party to this Agreement.
(D) This sub-clause applies if one party (the "PAYER") makes a payment
under sub-clause (A) above (a "TAX PAYMENT") in favour of a person
entitled to a payment under this Agreement (the "RECIPIENT"). In this
case, each of the following applies:
27
(i) The Recipient agrees to notify the Payer in writing if the
Recipient obtains or is entitled to obtain a refund of Tax or
obtains and uses a credit against Tax on its overall net
income (a "TAX CREDIT") which the Recipient is able to
identify as attributable to that Tax Payment.
(ii) The Recipient agrees to reimburse to the Payer within 10
Business Days of obtaining such refund as referred to in
sub-clause 24(D)(i) the amount reasonably determined by the
Recipient to be the proportion of the Tax Credit that, if it
is paid back to the Payer, will leave the Recipient (after
that reimbursement) in no better or worse position in respect
of its Tax liabilities than it would have been in if no Tax
Payment had been required. There will only be an obligation
under this paragraph to the extent the Recipient can make the
reimbursement without there being, in the reasonable opinion
of the Recipient, any adverse consequences to the Recipient.
(iii) The Recipient is under no obligation by virtue of this
sub-clause to disclose any information regarding its Tax
affairs and computations. This sub-clause does not affect the
right of the Recipient to arrange its Tax affairs as it thinks
fit.
25. EFFECT OF COMPLETION
Save as otherwise provided herein, any provision of this Agreement or
of any other document referred to herein which is capable of being
performed after but which has not been performed at or before
Completion and all Warranties contained in this Agreement shall
(subject to Schedule 4) remain in full force and effect notwithstanding
Completion.
26. CAPACITY OF THE SELLER AND THE PURCHASER
(A) Any obligation of the Seller under this Agreement to take any action
shall be satisfied by any member of the Seller's Group taking such
action.
(B) Any obligation of the Purchaser under this Agreement to take any action
shall be satisfied by any member of the Purchaser's Group taking such
action.
(C) The undertakings given by the Purchaser to, and agreements made by the
Purchaser with, the Seller in this Agreement are given and made to and
with the Seller for itself and as trustee for each other member of the
Seller's Group.
(D) The undertakings given by the Seller to, and agreements made by the
Seller with, the Purchaser in this Agreement are given and made to and
with the Purchaser for itself and as trustee for each other member of
the Purchaser's Group.
27. REMEDIES, WAIVERS AND INDEMNIFICATION
(A) No delay or omission on the part of either party to this Agreement in
exercising any right, power or remedy provided or under this Agreement
or any other documents referred to in it shall affect such right, power
or remedy or operate as a waiver thereof.
28
(B) The single or partial exercise of any right, power or remedy provided
under this Agreement or any document referred to in it shall not
preclude any other or further exercise thereof or the exercise of any
other right, power or remedy except where expressly stated in this
Agreement.
(C) Upon any person (the "INDEMNIFIED PERSON") becoming aware of any
assessment, claim, action or demand of a third party (a "THIRD PARTY
CLAIM") against it which gives rise to any claim for indemnification
under this Agreement, the Indemnified Person shall:
(i) as soon as practicable notify the person from whom
Indemnification is sought (the "INDEMNIFYING PARTY") by
written notice as soon as it appears to the Indemnified Person
that any Third Party Claim received by or coming to the notice
of the Indemnified Person may result in a claim for
indemnification;
(ii) subject to the Indemnifying Party indemnifying the Indemnified
Person against any liability, cost, damage or expense which
may be incurred thereby, take such reasonable action and give
such information and access to personnel, premises, chattels,
documents and records to the Indemnifying Party and their
professional advisers as the Indemnifying Party may reasonably
request and the Indemnifying Party shall be entitled to
require any relevant company (being a member of the
Purchaser's Group where the Indemnified Person is a member of
the Purchaser's Group or a member of the Seller's Group where
the Indemnified Person is a member of the Seller's Group) to
take such reasonable action and give such information and
assistance in order to avoid, dispute, resist, mitigate,
settle, compromise, defend or appeal any claim in respect
thereof or adjudication with respect thereto;
(iii) at the request of the Indemnifying Party, allow the
Indemnifying Party to take the sole conduct of such actions as
the Indemnifying Party may deem appropriate in connection with
any such assessment or claim in the name of the Indemnified
Person or any such relevant company referred to above and in
that connection the Indemnified Person shall give or cause to
be given to the Indemnifying Party all such assistance as it
may reasonably require in avoiding, disputing, resisting,
settling, compromising, defending or appealing any such claim
and shall instruct such legal or other professional advisors
as the Indemnifying Party may nominate to act on behalf of the
Indemnified Person or any relevant company, as appropriate,
but to act in accordance with the Indemnifying Party's
instructions PROVIDED THAT the Indemnified Person shall not be
required to commence any legal proceedings where either:
(a) the Indemnified Person has validly assigned
all of its rights in relation to the
relevant claim to the Indemnifying Party in
a manner which entitles the Indemnifying
Party to the same benefits in respect of
such rights as the Indemnified Person had;
or
(b) where sub-paragraph (C)(iii)(a) does not
apply, the Indemnifying Party has not
notified the relevant party against whom
such
29
proceedings are brought that such
proceedings are being brought at the
instruction of the Indemnifying Party;
(iv) be entitled to participate in the defence of any Third Party
Claim and to employ separate counsel to represent it at its
own expense PROVIDED THAT the Indemnifying Party (acting
reasonably) shall control the defence of the Third Party
Claim;
(v) make no admission of liability, agreement, settlement or
compromise with any third party in relation to any such claim
or adjudication without the prior written consent of the
Indemnifying Party (such consent not to be unreasonably
withheld); and
(vi) take all reasonable action to mitigate any loss suffered by it
in respect of which a claim could be made for indemnification.
(D) The Indemnifying Party shall be entitled at any stage and in its
absolute discretion to settle any such Third Party Claim.
(E) Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defence of any Third Party Claim (and shall be
liable for the reasonable expenses (including legal expenses) incurred
by the Indemnified Person in defending such Third Party Claim) if the
Third Party Claim seeks any relief other than damages (including any
orders, injunctions or other equitable relief) against the Indemnified
Person which the Indemnified Person reasonably determines cannot be
separated from any related claim for damages. If such claim for other
relief can be separated from the claim for damages, the Indemnifying
Party shall be entitled to assume the defence of the claim for damages.
(F) If any Indemnified Person has a claim for indemnification against any
Indemnifying Party under this Agreement which does not involve a Third
Party Claim being brought or alleged against such Indemnified Person,
the Indemnified Person may give notice of such claim to the
Indemnifying Party. The failure by any Indemnified Person so to notify
the Indemnifying Party shall not relieve the Indemnifying Party from
any liability which it may have to such Indemnified Person. If the
Indemnifying Party does not notify the Indemnified Person within 20
Business Days following its receipt of such notice that the
Indemnifying Party disputes its liability to the Indemnified Person
under this Agreement such claim specified by the Indemnified Person in
such notice shall be conclusively deemed a liability of the
Indemnifying Party under this Agreement and the Indemnifying Party
shall pay the amount of such liability to the Indemnified Person on
demand or, in the case of any notice in which the amount of the claim
(or any portion thereof) is estimated, on such later date when the
amount of such claim (or such portion thereof) becomes finally
determined. If the Indemnifying Party has disputed its liability with
respect to such claim within the time period specified in this
sub-clause, the Indemnifying Party and the Indemnified Person shall
proceed in good faith to negotiate a resolution of such dispute.
(G) The provisions of paragraphs 4 to 9 (inclusive) and paragraph 12 of
Schedule 4 shall apply with respect to any claim for indemnification
under this Agreement.
30
28. NO ASSIGNMENT
(A) Subject to the prior written consent of the Seller (such consent not to
be unreasonably withheld or delayed) the rights of the Purchaser under
this Agreement may be assigned or transferred to another member of the
Purchaser's Group PROVIDED THAT the Purchaser shall procure that no
such member of the Purchaser's Group shall cease to be a member of the
Purchaser's Group unless such rights have been assigned back to the
Purchaser, and PROVIDED FURTHER THAT the liabilities of the Seller and
all other members of the Seller's Group under this Agreement shall be
no greater than such liabilities would have been had the assignment not
occurred.
(B) Subject to the prior written consent of the Purchaser (such consent not
to be unreasonably withheld or delayed) the rights of the Seller under
this Agreement may be assigned or transferred to another member of the
Seller's Group PROVIDED THAT the Seller shall procure that no such
member of the Seller's Group shall cease to be a member of the Seller's
Group unless such rights have been assigned back to the Seller and
PROVIDED FURTHER THAT the liabilities of the Purchaser and all other
members of the Purchaser's Group under this Agreement shall be no
greater than such liabilities would have been had the assignment not
occurred.
(C) The rights of the Purchaser or any Designated Purchaser under this
Agreement may be assigned or transferred by way of security only in
accordance with the terms of any arm's length arrangements for the
funding (in whole or in part) of the purchase of the Business and the
Business Assets under this Agreement and/or the refinancing of such
funding PROVIDED THAT the liabilities of the Seller and all other
members of the Seller's Group under this Agreement shall be no greater
than such liabilities would have been had the assignment not occurred.
(D) Sub-clauses (A), (B) and (C) may be enforced by any such assignees or
transferees notwithstanding Clause 37 and may not be amended without
the consent of such assignees or transferees (or their agent).
(E) Subject to sub-clauses (A), (B), and (C), the rights and obligations of
the parties under this Agreement shall not be assignable.
29. FURTHER ASSURANCE
(A) In addition to the obligations set out in Clause 6(E), without
prejudice to any restriction or limitation on the extent of any party's
obligations under this Agreement and except in relation to Business
IPR, each of the parties shall from time to time, so far as each is
reasonably able, do or procure the doing of all such acts and/or
execute or procure the execution of all such documents in a form
reasonably satisfactory to the party concerned as they may reasonably
consider necessary to transfer the Business Assets to the Purchaser or
otherwise to give any party the full benefit of this Agreement.
(B) The Seller undertakes that after Completion and at the request of the
Purchaser it will at its cost execute or procure the execution by any
member of the Seller's Group of any documents and do all things which
are reasonably necessary to secure the vesting in the Purchaser or a
member of the Purchaser's Group of the Business IPR provided however
31
that the Purchaser undertakes to the Seller that it will be responsible
for preparing all such documents and PROVIDED THAT (save as set out in
Clause 34(C)) the Purchaser shall be responsible for:
(i) all pre-approved out-of-pocket costs incurred by the Seller or
any member of the Seller's Group in respect of such execution;
and
(ii) the costs of effecting and recording the Trade Xxxx
Assignments at the relevant patent and trade xxxx offices.
30. ENTIRE AGREEMENT
(A) This Agreement, the Disclosure Letter and any other documents referred
to in this Agreement (the "TRANSACTION DOCUMENTS") constitute the whole
and only agreement between the parties relating to the sale and
purchase of the Business Assets and, except to the extent expressly
repeated in any of the Transaction Documents, any prior drafts,
agreements, undertakings, representations, warranties and arrangements
of any nature whatsoever, whether or not in writing, relating thereto
are superseded and extinguished.
(B) The Purchaser acknowledges and agrees (for itself and on behalf of each
other member of the Purchaser's Group) with the Seller (on behalf of
itself and each other member of the Seller's Group) that:
(i) it does not rely on and has not been induced to enter into any
of the Transaction Documents on the basis of any Assurance
(express or implied) made or given by or on behalf of any
member of the Seller's Group or any of their respective
agents, directors, officers, employees or advisers other than
those expressly set out in the Transaction Documents or, to
the extent that it has been, it has (in the absence of fraud)
no rights or remedies in relation thereto and shall make no
claim in relation thereto or against such parties;
(ii) no member of the Seller's Group, or any of their respective
agents, directors, officers, employees or advisers, has given
or made any Assurance other than those expressly set out in
the Transaction Documents or, to the extent that they have,
the Purchaser hereby (for itself and on behalf of each other
member of the Purchaser's Group) unconditionally and
irrevocably waives (in the absence of fraud) any claim which
it might otherwise have had in relation thereto; and
(iii) save in respect of any warranties implied in Clause 2 by
virtue of Part 1 of the Law of Property (Miscellaneous
Provisions) Xxx 0000, any warranty or other rights which may
be implied by law in any jurisdiction in relation to the sale
of the Business Assets in such jurisdiction shall be excluded
or, if incapable of exclusion, irrevocably waived and the
Purchaser agrees to indemnify each member of the Seller's
Group in respect of any liabilities, costs, claims and
expenses arising or incurred as a result of claims made by the
Purchaser or any member of the Purchaser's Group under any
such implied warranties (other than any warranties implied in
Clause 2 by virtue of Part 1 of the Law of Property
(Miscellaneous Provisions) Act 1994).
32
(C) This Agreement may only be varied by a document signed by each of the
parties and expressed to be a variation to this Agreement.
31. NOTICES
(A) Any notice or other communication given or made under or in connection
with the matters contemplated by this Agreement shall be in writing.
(B) Any such notice or other communication shall be addressed as provided
in sub-clause (C) and, if so addressed, shall be deemed to have been
duly given or made as follows:
(i) if sent by personal delivery, upon delivery at the address of
the relevant party;
(ii) if sent by first-class post, two Business Days after the date
of posting;
(iii) if sent by airmail, five Business Days after the date of
posting;
(iv) if sent by facsimile, when received,
PROVIDED THAT if, in accordance with the above provisions, any such
notice or other communication would otherwise be deemed to be given or
made outside Working Hours, such notice or other communication shall be
deemed to be given or made at the start of Working Hours on the next
Business Day.
(C) The relevant addressee, address and facsimile number of each party for
the purposes of this Agreement, subject to sub-clause (D), are:
NAME OF PARTY ADDRESS FACSIMILE NUMBER
------------- ------- ----------------
Unilever Bestfoods UK Unilever UK x00 (0)0000 000000
Limited Xxxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxxx-xx-Xxxxxx
Xxxxxx XX00 0XX
For the attention of: UK General Counsel
With a copy to:
Unilever PLC Unilever House x00 (0)00 0000 0000
Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
For the attention of: Joint Secretary and
General Counsel
33
NAME OF PARTY ADDRESS FACSIMILE NUMBER
------------- ------- ----------------
Premier Ambient Premier House x00(0) 0000 000 000
Products (UK) Limited Centrium Business Park
Xxxxxxxxx Xxx
Xx. Xxxxxx
Xxxxx
XX0 0XX
For the attention of: Chief Executive and
Finance Director
With a copy to:
Weil, Gotshal & One South Place, + 44 (0) 20 7903 0990
Xxxxxx Xxxxxx XX0X 0XX
For the attention of: Xxxxxxx Xxxxxxxx
(D) A party may notify the other party to this Agreement of a change to its
name, relevant addressee, address or facsimile number for the purposes
of sub-clause (C) PROVIDED THAT such notification shall only be
effective on:
(i) the date specified in the notification as the date on which
the change is to take place; or
(ii) if no date is specified or the date specified is less than
five Business Days after the date on which notice is given,
the date falling five Business Days after notice of any such
change has been given.
(E) For the avoidance of doubt, the parties agree that the provisions of
this Clause shall not apply in relation to the service of any writ,
summons, order, judgment or other document relating to or in connection
with any Proceedings.
32. ANNOUNCEMENTS
(A) Subject to sub-clause (B), no announcement concerning the sale or
purchase of the Business Assets or any ancillary matter (other than the
Press Announcements and any other announcements consistent therewith),
shall be made by either party without the prior written approval of the
other, such approval not to be unreasonably withheld or delayed.
(B) Either party may make an announcement concerning the sale or purchase
of the Business Assets or any ancillary matter if required by:
(i) the law of any relevant jurisdiction;
(ii) any securities exchange or regulatory or governmental body to
which either party or any holding company thereof is subject
or submits, wherever situated
34
(including, without limitation, London Stock Exchange plc and
the Amsterdam Stock Exchange), whether or not the requirement
has the force of law,
in which case the party concerned shall take all such steps as may be
reasonable and practicable in the circumstances to agree the contents
of such announcement with the other party before making such
announcement and PROVIDED THAT any such announcement shall be made only
after notice to the other party.
(C) The restrictions contained in this Clause shall continue to apply after
the termination of this Agreement without limit in time.
33. CONFIDENTIALITY
(A) Subject to sub-clause (B) and Clause 32 and without prejudice to Clause
19(B):
(i) each party shall treat as strictly confidential all
information received or obtained as a result of entering into
or performing this Agreement which relates to:
(a) the provisions or the subject matter of this
Agreement or any document referred to
herein; or
(b) the negotiations relating to this Agreement
or any document referred to herein;
(ii) the Purchaser shall treat, and shall procure that each other
member of the Purchaser's Group treats, as strictly
confidential all information received or obtained which
relates to any retained business of the Seller's Group; and
(iii) the Seller shall treat, and shall procure that each other
member of the Seller's Group treats, as strictly confidential
all information in which Business Confidentiality Rights
subsist.
(B) Either party may disclose information which would otherwise be
confidential if and to the extent:
(i) that the information is in the public domain other than as a
result of the breach or default of that party;
(ii) required by the law of any relevant jurisdiction or for the
purpose of any judicial proceedings;
(iii) required by any securities exchange or regulatory or
governmental body to which either party or any holding company
thereof is subject or submits, wherever situated (including,
without limitation, London Stock Exchange plc, the Amsterdam
Stock Exchange or any Tax Authority), whether or not the
requirement for information has the force of law;
(iv) that the information is disclosed on a strictly confidential
basis to the professional advisers, auditors and bankers of
such party PROVIDED THAT
35
such party shall be liable for any failure by its professional
advisers, auditors and bankers to keep such information
strictly confidential;
(v) that the other party has given prior written approval to the
disclosure, such approval not to be unreasonably withheld or
delayed;
(vi) it does so to a member of the Seller's Group (in the case of
the Seller) or a member of the Purchaser's Group (in the case
of the Purchaser) which accepts restrictions in the terms of
this Clause; or
(vii) required to enable that party to enforce its rights under this
Agreement,
PROVIDED THAT any such information disclosed pursuant to paragraph (i)
or (ii) shall be disclosed (where practicable) only after notice to the
other party.
(C) The restrictions contained in this Clause shall continue to apply after
the termination of this Agreement without limit in time.
(D) The confidentiality agreement set out in the letter dated 21 August,
2003 from the Seller to the Purchaser (and countersigned on behalf of
the Purchaser on 21 August, 2003) is hereby terminated with effect from
the date of this Agreement without prejudice to rights and liabilities
of the parties which have accrued thereunder prior to such date.
34. COSTS AND EXPENSES
(A) Save as otherwise stated in any other provision of this Agreement, each
party shall pay its own costs and expenses in relation to the
negotiations leading up to the sale of the Business Assets and to the
preparation, execution and carrying into effect of this Agreement and
all other documents referred to in it.
(B) Without prejudice to sub-clause (A) and except in relation to VAT (to
which Clauses 3(C) and 12 and Schedule 11 shall apply) and as set out
in sub-clause (C), all stamp, transfer, registration, sales and other
similar Taxes, duties and charges and all notarial fees (if any)
payable in connection with the sale or purchase of the Business Assets
under this Agreement shall be paid by the Purchaser. Where there is a
choice of methods of execution, the Seller shall consent to the use of
such methods of execution as the Purchaser may reasonably request so as
to minimise stamp, transfer and registration Taxes, duties and charges
and notarial fees (if any) payable in connection with Completion.
(C) The Seller shall reimburse the Purchaser for any registry fees payable
in connection with the recordal of the Trade Xxxx Assignments at the
relevant patent and trade xxxx offices which would not have been
payable but for the previous transfer of the relevant Business IPR
pursuant to the assignment between Conopco, Inc. and Unilever PLC dated
1 July 2003 (a copy of which assignment is at tab F.2.1 of the Data
Room).
36
35. COUNTERPARTS
(A) This Agreement may be executed in any number of counterparts, and by
the parties on separate counterparts, but shall not be effective until
each party has executed at least one counterpart.
(B) Each counterpart shall constitute an original of this Agreement, but
all the counterparts shall together constitute but one and the same
instrument.
36. INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, that shall not affect or impair:
(i) the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
(ii) the legality, validity or enforceability under the law of any
other jurisdiction of that or any other provision of this
Agreement.
37. THIRD PARTY RIGHTS
(A) Clauses 13(F) and 13(G), paragraphs 4 and 5 of Schedule 9 and Schedule
10 confer a benefit on each Business Employee and, subject to the
remaining provisions of this Clause, are intended to be enforceable by
each Business Employee by virtue of the Contracts (Rights of Third
Parties) Xxx 0000.
(B) Notwithstanding the provisions of sub-clause (A), this Agreement may be
rescinded or varied in any way and at any time by the parties to this
Agreement without the consent of any Business Employee.
(C) In any proceedings by a Business Employee against the Purchaser to
enforce the terms of any or all of Clauses 13(F) and 13(G), paragraphs
4 and 5 of Schedule 9 and Schedule 10, the Purchaser shall not be
entitled to any defences or rights of set-off which would have been
available had the Seller brought those proceedings.
(D) A Business Employee shall be entitled to enforce the terms of Clauses
13(F) and 13(G), paragraphs 4 and 5 of Schedule 9 and Schedule 10 by
way of proceedings in the courts of England.
(E) The parties to this Agreement do not intend that any term of this
Agreement, apart from Clauses 13(F) and 13(G), paragraphs 4 and 5 of
Schedule 9 and Schedule 10 should be enforceable, by virtue of the
Contracts (Rights of Third Parties) Xxx 0000, by any person who is not
a party to this Agreement.
37
38. PURCHASER'S GROUP COMPANY OBLIGATIONS
(A) The Purchaser shall procure that any obligation which is expressed
under this Agreement to be an obligation of any member of the
Purchaser's Group be performed.
(B) The Purchaser hereby guarantees each liability of each member of the
Purchaser's Group under this Agreement (including, without limitation,
any liability to pay money) which the Purchaser agrees under the terms
of this Agreement to discharge on behalf of that member of the
Purchaser's Group.
39. GOVERNING LAW
This Agreement is governed by, and shall be construed in accordance
with, English law.
40. JURISDICTION
(A) The courts of England are to have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement. Any
Proceedings shall be brought in the English courts.
(B) Each party waives (and agrees not to raise) any objection on the ground
of forum non conveniens or on any other ground to the taking of
Proceedings in the English courts. Each party also agrees that a
judgment against it in Proceedings brought in England shall be
conclusive and binding upon it and may be enforced in any other
jurisdiction.
(C) Each party irrevocably submits and agrees to submit to the jurisdiction
of the English courts.
41. LANGUAGE
Each notice, demand, request, statement, instrument, certificate or
other communication given, delivered or made by any party to any other
party under or in connection with this Agreement shall be in English.
IN WITNESS whereof the parties have entered into this Agreement the day and year
first before written.
38
SCHEDULE 1
(INTERPRETATION)
1. In this Agreement and the Schedules to it, unless otherwise specified:
"AGREED FORM" means, in relation to any document, such document in
the form initialled for the purposes of
identification only by or on behalf of the Purchaser
and the Seller;
"AGREED RATE" means 2 per cent. above the base rate of National
Westminster Bank PLC from time to time;
"AMBROSIA LOGO" means the logo set out in Part 2 of Attachment 4;
"XXXXXXXX XXXXX" means the sign "AMBROSIA" and the Ambrosia Logo;
"APV PURCHASE AGREEMENT" means the purchase agreement to be entered into
between the Seller and APV (UK) Limited, a draft
copy of which is at E.1.3 of the Data Room;
"ASIA BUSINESS" means the businesses as carried on at the date of
this Agreement by any member of the Seller's Group
in and from Malaysia, India and Sri Lanka under the
B&P Marks;
"ASSUMED LIABILITIES" has the meaning given in Clause 10(B);
"ASSURANCE" means any warranty, representation, statement,
assurance, covenant, agreement, undertaking,
indemnity, guarantee or commitment of any nature
whatsoever;
"BONUS PLANS" means the bonus plans operated by the Seller in
respect of the Business Employees, which are
variable pay, pay for profitability and the Lifton
site bonus plan;
"BOOKS AND RECORDS" means all books and records owned by the Business
Sellers at Completion including, without limitation,
all documents and other material, certificates,
deeds and licences whether or not relating to
Intellectual Property (including all forms of
computer or machine readable material);
"B&P MARKS" means the sign "XXXXX & POLSON";
39
"BUSINESS" means the Montana Business as carried on at the date
of this Agreement by the Seller's Group;
"BUSINESS ASSETS" has the meaning given in Clause 2(A);
"BUSINESS CASH FLOAT" means the cash held as xxxxx cash by the Business
Sellers at the Business Properties for the purposes
of the Business at Completion;
"BUSINESS CONFIDENTIALITY means the Confidentiality Rights owned by any member
RIGHTS" of the Seller's Group which are used exclusively in
the Business;
"BUSINESS CLAIMS" means the benefit of all rights, entitlements or
claims to which the Seller or any member of the
Seller's Group is entitled arising directly or
indirectly out of or in connection with the
operation by the Seller or any member of the
Seller's Group of the Business prior to Completion
(including under any warranty, condition, guarantee
or indemnity under any of the Contracts or in
respect of any policy of insurance, and including,
for the avoidance of doubt, any claim against APV
(UK) Limited under the APV Purchase Agreement),
excluding all rights, entitlements or claims in
respect of the Excluded Contracts, Excluded
Liabilities or the Excluded Assets;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks are open for business in London;
"BUSINESS EMPLOYEES" means the employees of the Business Sellers or other
members of the Seller's Group who are identified by
position in Data Room document S.I.4.4. employed
exclusively or substantially exclusively in relation
to the Business at Completion or any of them
(subject to any changes made in accordance with
Clause 5(A)), but excluding (i) any employees listed
in Part 1 of Attachment 6 as "EXCLUDED EMPLOYEES"
and (ii) the Seconded Employees;
"BUSINESS GOODWILL" means all the goodwill of the Business Sellers in
relation to the Business together with the exclusive
right for the Purchaser to carry on the Business in
succession to the Business Sellers anywhere in the
world;
40
"BUSINESS IPR" means the Intellectual Property owned by any member
of the Seller's Group which is used exclusively in
the Business but excluding the Excluded IPR;
"BUSINESS PLANT AND means all the plant, fixed equipment, fixtures and
MACHINERY" fittings, moveable plant and machinery, tools and
equipment, engineering stores, other non-prudct
related stocks and related work in progress and
motor vehicles as referred to in Topic Area 290,
Topics 15 and 35 of the Unilever Accounting Policy
Manual owned by the Business Sellers and used or to
be used exclusively in the Business;
"BUSINESS PROPERTIES" means the Immovable Property specified in Part B of
Schedule 8;
"BUSINESS SELLERS" means the companies listed in column (2) of Schedule
6, each of which carries on part of the Business or
holds Business Assets;
"BUSINESS STOCKS" means all raw materials, packing materials and
consumables, stocks-in-process or finished stocks
and goods for resale (wherever located and whether
in the custody or possession of third parties and as
classified and further detailed in Topic Area 550,
Topics 10 to 45 of the Unilever Accounting Policy
Manual but excluding, for the avoidance of doubt,
engineering stores and other non-product related
stocks relating to the Business) beneficially owned
by or on behalf of the Business Sellers (including
items which, although subject to reservation of
title by the relevant sellers, are under the control
of the Business Sellers) and which have in any case
been:
(A) physically allocated or separated for use
exclusively in any part of the Business; or
41
(B) otherwise clearly identified (whether
physically or by written reference agreed
by the Seller and the Purchaser) as forming
part or a fixed proportion of one or more
sets, stores or consignments of such raw
materials, consumables, stocks-in-process,
finished stocks or goods or such fixed
proportion of the same, being a proportion
of the fungible contents of any tank or
storage or dispensing vessel, as is in any
case for the exclusive use of any part of
the Business,
in each case:
(i) for the purposes of the definition
of "Completion Stocks Amount"
only, at midnight on the day
immediately preceding the
Completion Date; and
(ii) for all other purposes, at
Completion;
"COMPLETION" means completion of the sale and purchase of the
Business Assets under this Agreement;
"COMPLETION DATE" means 30 November 2003;
"COMPLETION STOCKS means the aggregate value expressed in sterling of
AMOUNT" the Business Stocks to be calculated in accordance
with Schedule 5 as at midnight on the day
immediately preceding the Completion Date and to be
shown in the Completion Stocks Statement;
"COMPLETION STOCKS means the completion stocks statement relating to
STATEMENT" the Montana Business prepared in accordance with
Clause 4 and Schedule 5 and in the format set out in
Attachment 7;
"CONFIDENTIALITY RIGHTS" means rights of confidence in information
(including, without limitation, know-how and trade
secrets) and all rights or forms of protection of a
similar nature or having equivalent similar effect
to any of those which may subsist anywhere in the
world;
42
"CONTRACTS" means all the contracts, arrangements and
engagements relating either exclusively to the
Business or relating in part to the running of the
Business (but then only to the extent that the same
do so relate) to which any of the Business Sellers
is (itself or through an agent) a party or the
benefit of which is held in trust for or has been
assigned to any of the Business Sellers as at
Completion and which, in any case, are current or
unperformed as at Completion or in respect of which
any of the Business Sellers has any benefit,
liability or obligation as at Completion, including
the Supply Contracts but excluding in all cases the
Excluded Contracts;
"DATA ROOM" means those documents referred to in the list in
Attachment 3;
"DESIGNATED PURCHASERS" means the companies listed in Column (3) of Schedule
6, and "DESIGNATED PURCHASER" means any one of them;
"DISCLOSURE BUNDLE" shall have the meaning given in the Disclosure
Letter;
"DISCLOSURE LETTER" means the letter of the same date as this Agreement
written by the Seller to the Purchaser for the
purposes of paragraph 10 of Schedule 4;
"DOMAIN NAME" means the domain name Xxxxxxxx.xx.xx;
"DOMAIN NAME TRANSFER" means the transfer of the Domain Name in the form
prescribed by the relevant domain name registry;
"DRAFT COMPLETION STOCKS has the meaning given in Schedule 5;
STATEMENT"
"ENCUMBRANCE" means any mortgage, charge, pledge, lien or other
security interest over or in respect of the use of
the relevant assets;
"ENVIRONMENT" means all, or any, of the following media, namely
the air (including, without limitation, the air
within buildings and the air within other natural or
man-made structures above or below ground), water
and land and any living organisms or systems
supported by those media;
43
"ENVIRONMENTAL LAWS" means all applicable statutes and subordinate
legislation and other international, national,
federal, state and local laws, regulations,
directives, orders, common law, codes of practice,
guidance notes and the like having the force of law
judicial decisions or regulatory orders or
regulatory agreements to the extent that they relate
to Environmental Matters;
"ENVIRONMENTAL MATTERS" means:
(i) pollution or contamination;
(ii) the disposal, release, spillage, deposit,
escape, discharge, leak, emission, leaching
or migration of Hazardous Materials or
Waste;
(iii) exposure of any person to Hazardous
Materials or Waste;
(iv) the creation of any noise, vibration,
radiation, common law or statutory
nuisance, or other adverse impact on the
Environment; and
(v) any other matters relating to the
protection of the Environment arising out
of the manufacturing, processing,
treatment, storage, keeping, handling, use,
possession, supply, receipt, sale,
purchase, import, export, transportation or
presence of Hazardous Materials or Waste;
"ENVIRONMENTAL PERMIT" means any licence, approval, authorisation,
permission, waiver, order or exemption issued or
granted under Environmental Laws;
"ESCROW ACCOUNT" means an interest bearing account to be established
with XX Xxxxxx Xxxxx Bank in the joint names of the
Purchaser and the Seller;
"EXCESS" has the meaning given in Clause 4(B);
"EXCLUDED ASSETS" has the meaning given in Clause 2(A);
44
"EXCLUDED BUSINESS" means:
(i) the foodservice ambient desserts business in
respect of the Retained Products carried on
by any member of the Seller's Group
(including the Business Sellers) in the
United Kingdom and the Republic of Ireland
under the Xxxxxxxx Xxxxx; and
(ii) the foodservice ambient desserts business
carried on by any member of the Seller's
Group (including the Business Sellers) in
the Nordic Region under the Xxxxxxxx Xxxxx,
in each case, including the manufacture of products
under the Xxxxxxxx Xxxxx in Europe only for each of
those businesses, where "foodservice business" shall
have the same meaning as set out in the definition of
"Montana Business" below;
"EXCLUDED CONTRACTS" means:
(i) all contracts with Business Employees (save
that any loans from members of the Seller's
Group to Business Employees shall be
Contracts);
(ii) all contracts relating to the Business
Properties which do not relate exclusively
to the Business Properties;
(iii) all contracts pursuant to which the
promotion or advertising of the products
manufactured in, for or on behalf of the
Business is planned, arranged and/or carried
out, excluding all design contracts
exclusively relating to such products;
(iv) all contracts relating to computer hardware,
software, networks and/or other information
technology (whether embedded or otherwise)
which relate, but not exclusively, to the
Business;
45
(v) all warehouse management, supply or haulage
contracts, arrangements or engagements which
do not relate exclusively to the Business;
(vi) the Settlement Agreement (if executed prior
to the Completion Date);
(vii) all contracts pursuant to which market
research, sales data and/or other market
information relating to the Business, or any
of the products manufactured in, for or on
behalf of the Business, is provided to any
member of the Seller's Group (including the
Business Sellers); and
(viii) all contracts in relation to the Excluded
Assets;
"EXCLUDED IPR" means:
(i) all Intellectual Property which subsists in
any of the Unilever Marks;
(ii) all Intellectual Property which subsists in
any of the Retained Marks; and
(iii) for the avoidance of doubt, all Intellectual
Property subsisting in any of the B&P Marks
in any territory other than in Australia,
Gibraltar, Republic of Ireland, New Zealand
and the United Kingdom;
"EXCLUDED LIABILITIES" means (whether absolute, accrued, contingent, fixed
or otherwise, or whether due or to become due):
(a) all liabilities of the Seller or any
Business Seller in respect of Taxation
relating to or arising from their conduct of
the Montana Business attributable to periods
ended on or before Completion or in respect
of any acts, events or occurrences occurring
(or being deemed to have occurred) on or
before Completion;
(b) all Payables;
46
(c) save as disclosed by the Seller to the
Purchaser prior to the date of this
Agreement, all liabilities of the Seller or
any Business Seller arising out of the
material breach of any Contract by any
member of the Seller's Group of which the
Seller is aware as at the date of this
Agreement, to the extent that such breach
occurs from an act or omission on or prior
to Completion;
(d) any amount of overrider payable by any
member of the Seller's Group to Landmark
Cash & Carry in respect of the period prior
to Completion;
(e) any liabilities arising under the Settlement
Agreement (as and when executed);
(f) save as disclosed by the Seller to the
Purchaser prior to the date of this
Agreement, any liability arising out of a
material breach of law or regulation by the
Seller or any Business Seller, or by any of
the employees of the Business in
circumstances where (and to the extent that)
the Seller or any Business Seller is
vicariously liable, in each case (i) on or
prior to Completion and (ii) of which the
Seller is aware as at the date of this
Agreement;
(g) any liability arising from a claim by a
Business Employee or any former employee of
the Business to the extent that claim
relates to the suffering of personal injury
or illness by that individual and to the
extent that personal injury or illness is
attributable to the period prior to
Completion during which that individual was
employed in the Business or a member of the
Seller's Group; and
(h) all liabilities arising under any Excluded
Contract, Excluded Business, Excluded Asset
or Excluded IPR.
"EXPERT" means:
(i) subject to (ii) below, a partner of at least
10 years' qualified experience at an
47
independent firm of chartered accountants of
international standing agreed by the parties
or, in default of agreement within 10
Business Days of one of the parties seeking
the appointment of an Expert, selected by
the President for the time being of the
Institute of Chartered Accountants in
England and Wales; and
(ii) in the case of any matter relating to
Taxation, a leading tax counsel in the
United Kingdom of at least 10 years'
qualified experience agreed between the
parties or, in default of agreement within
10 Business Days of one of the parties
seeking the appointment of an Expert,
selected by the President of the Law Society
of England and Wales;
"FINAL CASH has the meaning given in Clause 3(B);
CONSIDERATION"
"FINANCIAL INFORMATION" means the financial information in respect of the
Montana Business comprising statements of turnover,
gross profit and profit before overheads of the
Montana Business for the six months ended on the
Reference Date and for the calendar year ended 31
December, 2002, as set out in Parts 1 and 2
respectively of Attachment 1, together with the notes
set out in Part 3 of Attachment 1;
"HAZARDOUS MATERIAL" means hazardous or toxic substances, pollutants or
contaminants, as defined by, or controlled or
regulated under, applicable laws;
"ICTA 1988" means the Income and Corporation Taxes Xxx 0000;
"IMMOVABLE PROPERTY" means freehold and leasehold land and buildings or
other immovable property anywhere in the world;
"INDEMNIFIED PERSON" has the meaning given in Clause 27(C);
"INDEMNIFYING PARTY" has the meaning given in Clause 27(C);
"INFORMATION MEMORANDUM" means the information memorandum in respect of the
Business dated September 2003 included at tab 1 of
the Disclosure Bundle;
48
"INITIAL CASH means (pound)105,000,000;
CONSIDERATION"
"INTELLECTUAL PROPERTY" means patents, trade marks, service marks, rights in
designs, trade or business names, logos, copyrights
(including rights in computer software) and database
rights and topography rights (whether or not any of
these is registered and including applications for
registration of any such thing) and all rights or
forms of protection of a similar nature or having
equivalent or similar effect to any of these which
may subsist anywhere in the world;
"MATERIAL CONTRACT" has the meaning given in paragraph 7(A) of Schedule
5;
"MONTANA BUSINESS" means:
(i) the retail and foodservice ambient desserts
business carried on by the Business Sellers
or any member of the Seller's Group in and
from the United Kingdom and the Republic of
Ireland under the Xxxxxxxx Xxxxx, including
the manufacture of products under the
Xxxxxxxx Xxxxx (including those products
listed at page 84 of the Information
Memorandum);
(ii) the retail and foodservice ambient desserts
and cornflour businesses carried on by the
Business Sellers or any member of the
Seller's Group in and from the United
Kingdom and the Republic of Ireland under
the B&P Marks (including the sale of those
products listed at page 86 of the
Information Memorandum);
(iii) the contract manufacture of own-label
cornflour products by the Business Sellers
for sale and distribution in the United
Kingdom (including, for the avoidance of
doubt, the contract manufacture of cornflour
products under the sign "Finecook" for Kwik
Save and Somerfield in the United Kingdom);
49
(iv) the contract manufacture of canned custard
products under the sign "President's Choice"
as carried on by the Business Sellers or any
member of the Seller's Group at and from the
Business Properties; and
(v) any other business carried on at and from
the Business Properties,
but excluding the Excluded Business and the Asia
Business,
where, in each of paragraphs (i) and (ii) above,
(1) a "RETAIL BUSINESS" comprises the
distribution and sale to customers of
products under the marks concerned and
through retail outlets, other than products
intended primarily for consumption
out-of-home; and
(2) a "FOODSERVICE BUSINESS" comprises the
distribution and sale to customers of
products under the marks concerned and
intended primarily for out-of-home
consumption;
"NORDIC REGION" means the kingdom of Denmark (including, for the
avoidance of doubt, Greenland and the Faroe Islands),
Finland, Iceland, Norway and Sweden;
"NORDIC PRODUCTS" means as listed in Attachment 11;
"PAYABLES" means, in respect of each Business Seller, all trade
and other creditors accounts payable, other amounts
owing, incurred or accrued for the purposes of the
Business (including, without limitation, all book and
other debts (including any overdraft or financial
debt), credit notes issued, like amounts owed to
companies in the Seller's Group and bills of exchange
payable) in all cases whether or not then invoiced,
accrued, due or payable or reflected in the Books and
Records of the Business and which relate to, or have
been incurred in, the period prior to midnight on the
day immediately preceding the Completion Date and
including any part of such amounts as relates to VAT;
50
"PAYER" has the meaning given in Clause 24(D);
"PERMITTED ENCUMBRANCES" means:
(i) security interests arising in the ordinary
course of business or by operation of law,
security interests arising under sales
contracts with title retention provisions
and equipment leases with third parties
entered into in the ordinary course of
business and security interests for Taxes
and other governmental charges which are not
due and payable or which may thereafter be
paid without penalty;
(ii) mortgages, charges, pledges, liens or other
forms of security or encumbrance or equity
which secure debt of less than
(pound)50,000; and
(iii) non-exclusive licences of Intellectual
Property or Confidentiality Rights (in each
case not material to the Montana Business)
entered into in relation to the Montana
Business;
"PRE-COMPLETION" means the date of delivery of certain documents into
escrow and the payment of monies into an Escrow
Account as set out in Schedule 2;
"PRE-COMPLETION DATE" means 28 November 2003;
"PRESS ANNOUNCEMENTS" means the press announcements to be issued by each of
the Seller and the Purchaser upon signature of this
Agreement, each as set out in Attachment 8;
"PROCEEDINGS" means any proceeding, suit or action arising out of
or in connection with this Agreement or any
transaction contemplated hereby;
"PROPERTY TRANSFER" means the transfer of the relevant Business Property
in the Agreed Form;
"PURCHASER'S ACCOUNTANTS" means PricewaterhouseCoopers, of 0 Xxxxxxxxxx Xxxxx,
Xxxxxx XX0X 0XX;
51
"PURCHASER'S BANK means the sterling account designated by the
ACCOUNT" Purchaser to the Seller not less than two Business
Days prior to the due date for payment of any moneys
by the Seller to the Purchaser pursuant to Clause 4
or paragraph 12 of Schedule 9;
"PURCHASER'S COMPLETION has the meaning given in Clause 18(A);
DOCUMENTS"
"PURCHASER'S GROUP" means the Purchaser and its subsidiaries (including
the Designated Purchasers) at the relevant time, and
references to a "MEMBER" or "MEMBERS" of the
Purchaser's Group shall be construed accordingly;
"PURCHASER'S SOLICITORS" means Weil, Gotshal and Xxxxxx of Xxx Xxxxx Xxxxx,
Xxxxxx XX0X 0XX;
"RECEIVABLES" means, in respect of each Business Seller,
debtors/accounts receivable for the purposes of the
Business (including third party trade debtors, like
amounts owed by companies in the Seller's Group,
other debtors, accrued income and prepayments, each
as detailed in Topic Area 220 of the Unilever
Accounting Policy Manual) in each case at midnight on
the day immediately preceding the Completion Date and
including such part of such amounts as relates to
VAT;
"RECIPIENT" has the meaning given in Clause 24(A);
"REFERENCE DATE" means 30 June, 2003;
"REGULATIONS" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"RETAINED MARKS" means the signs set out in Part 2 of Attachment 5 and
any other sign which is similar thereto or which
includes or consists thereof;
"RETAINED PRODUCTS" means those products listed in Attachment 10;
"REVIEW PERIOD" has the meaning given in paragraph 5 of Schedule 5;
"SECONDED EMPLOYEES" means the persons whose names are set out in Part 2
of Attachment 6;
52
"SELLER CONFIDENTIAL means all information which is not in the public
INFORMATION" domain in whatever form held:
(i) relating to any member of the Seller's Group
or the business or assets of any such member
(other than to the extent that it relates to
the Business);
(ii) supplied by or on behalf of any member of
the Seller's Group to any member of the
Purchaser's Group; or
(iii) supplied in confidence to any member of the
Seller's Group by any third party,
and, for the avoidance of doubt, shall include the
Unilever Manuals and Policy Documents;
"SELLER'S ACCOUNTANTS" means PricewaterhouseCoopers of 0 Xxxxxxxxxx Xxxxx,
Xxxxxx XX0X 0XX;
"SELLER'S BANK ACCOUNT" means the sterling account designated by the Seller
to the Purchaser not less than two Business Days
prior to the date for payment of any moneys by the
Purchaser to the Seller pursuant to Clause 4;
"SELLER'S COMPLETION has the meaning given in paragraph 1 of Schedule 3;
DOCUMENTS"
"SELLER'S GROUP" means the Seller, Unilever N.V., Unilever PLC and
their respective subsidiaries at the relevant time,
and references to a "MEMBER" or "MEMBERS" of the
Seller's Group shall be construed accordingly;
"SENIOR EMPLOYEES" means those Business Employees listed in Part 4 of
Attachment 6;
"SENIOR SELLER'S GROUP means any Seconded Employee or any employee of any
EMPLOYEE" member of the Seller's Group (other than any Business
Employee) who at any time is involved in, or has
dealings with, the Montana Business in respect of the
provision of services to the Montana Business
pursuant to the provisions of the Transitional
Services Agreement;
"SERVICE DOCUMENT" means a claim form, summons, order, judgment or other
document issued in connection with any Proceedings;
53
"SETTLEMENT AGREEMENT" means the settlement agreement to be entered into
between the Seller and APV (UK) Limited, a draft copy
of which is at tab E.1.4 of the Data Room;
"SHORTFALL" has the meaning given in Clause 4(C);
"SITE" means:
(i) any site owned or occupied at or prior to
Completion by any member of the Seller's
Group in relation to the Business and used
or formerly used in relation to the Business
by a member of the Seller's Group for the
manufacture by such person of products; and
(ii) any site to which Hazardous Materials
generated by any member of the Seller's
Group in relation to the Business have been
sent for recovery, treatment or disposal at
or prior to Completion;
"SO FAR AS THE SELLER IS means so far as is within the actual knowledge of
AWARE" Xxxxx Xxxxx, Xxxx Xxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxx,
Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxxx
Xxxxxxxx and Xxxxxxx Xxxx (in relation to any
matters), Xxxxx Xxxxxxx (in relation to Tax matters)
and Xxxxx Xxxxx (in relation to pensions matters),
and all other phrases in this Agreement relating to
the knowledge, information and belief or awareness of
the Seller shall be construed as a reference to "SO
FAR AS THE SELLER IS AWARE" as so defined; and where
a Warranty is qualified by the expression "so far as
the Seller is aware", that Warranty shall be deemed
to include an additional statement that it has been
made after all reasonable enquiries of the foregoing
persons (save as expressly limited above in respect
of Xxxxx Xxxxxxx and Xxxxx Xxxxx);
54
"SUPPLY AGREEMENTS" means (i) the supply agreement between the Seller and
Unilever Bestfoods France effective as of 1 January
2003 relating to the supply of cornflour products by
Unilever Bestfoods France to the Seller (a copy of
which is included at tab C.6.5 of the Data Room), and
(ii) that part of the supply agreement between the
Seller and Unilever Bestfoods Deutschland GmbH
effective as of 1 January 2003 that relates to the
supply of cornflour products by Unilever Bestfoods
Deutschland GmbH to the Seller (a copy of which is
included at tab S.C.6.1 of the Data Room);
"TARGET STOCKS AMOUNT" means (pound)5,627,000;
"TAX" OR "TAXATION" means all taxes, levies, duties, imposts, charges and
withholdings of any nature whatsoever, together with
all penalties, fines, charges and interest relating
to any of them;
"TAX AUTHORITY" means any taxing or other authority (anywhere in the
world) competent to impose any liability to assess or
collect Tax;
"TAX CREDIT" has the meaning given in Clause 24(D);
"TAX PAYMENT" has the meaning given in Clause 24(D);
"TAX WARRANTIES" means the Warranties set out in paragraph 20 of
Schedule 3;
"THIRD PARTY CLAIM" has the meaning given in Clause 27(C);
"TRADE XXXX ASSIGNMENTS" means the assignments in respect of the registered
Business IPR (and any applications to register any
Business IPR) in the Agreed Form;
"TRANSITIONAL SERVICES means the transitional services agreement in the
AGREEMENT" Agreed Form;
"UK BUSINESS ASSETS" means any Business Assets located in the United
Kingdom at the date of this Agreement;
"UNILEVER ACCOUNTING means the Unilever Accounting Policy Manual which
POLICY MANUAL" forms Attachment 2;
55
"UNILEVER MANUALS AND means the Seller's Group's financial and management
POLICY DOCUMENTS" procedures manuals and other documents which are in
the possession or under the control of the Business
or any of the Business Employees or are otherwise
used in the operation of the Business;
"UNILEVER MARKS" means the signs set out in Part 1 of Attachment 5 and
any other sign which is similar thereto, or which
includes or consists thereof;
"VAT" means the tax imposed by the Sixth Council Directive
of the European Community and any national
legislation implementing that directive together with
legislation supplemental thereto and, in particular,
in relation to the United Kingdom, the tax imposed by
the VATA 1994 and legislation supplemental thereto;
"VATA 1994" means the Value Added Tax Xxx 0000 of the United
Kingdom;
"VENDOR DUE DILIGENCE means the draft due diligence report on the Business
REPORT" dated 1 October 2003 prepared on behalf of the Seller
by Ernst & Young LLP, a copy of which is at tab 2 of
the Disclosure Bundle;
"WARRANTIES" means the warranties set out in Schedule 3;
"WASTE" means any waste including anything which is
abandoned, unwanted or surplus irrespective of
whether it is capable of being recovered or recycled
or has any value; and
"WORKING HOURS" means 9.30 a.m. to 5.30 p.m. (local time) on a
Business Day.
2. In this Agreement and the Schedules to it, unless otherwise specified:
(A) references to Clauses, sub-clauses, Schedules and Attachments are to
Clauses and sub-clauses of, and Schedules and Attachments to, this
Agreement;
(B) a reference to a sub-clause is to a sub-clause of the Clause in which
such reference appears, to a paragraph is to a paragraph of the
sub-clause or Schedule (as the case may be) in which such reference
appears and to a sub-paragraph is to a sub-paragraph of the paragraph
in which such reference appears;
(C) a reference to any statute or statutory provision shall be construed as
a reference to the same as it may have been, or may from time to time
be, amended, modified or re-
56
enacted, except to the extent that the Seller's or the Purchaser's
liability would be increased as a result of such amendment,
modification or re-enactment;
(D) references to a "COMPANY" shall be construed so as to include any
company, corporation or other body corporate, wherever and however
incorporated or established;
(E) references to a "PERSON" shall be construed so as to include any
individual, firm, company, government, state or agency of a state or
any joint venture, association, partnership, works council or employee
representative body (whether or not having separate legal personality);
(F) a company is a "SUBSIDIARY" of another company (its "HOLDING COMPANY")
if that other company, directly or indirectly, through one or more
subsidiaries:
(i) holds a majority of the voting rights in it; or
(ii) is a member or shareholder of it and has the right to appoint
or remove a majority of its board of directors or other
equivalent managing body; or
(iii) is a member or shareholder of it and controls alone, pursuant
to an agreement with other shareholders or members, a majority
of the voting rights in it;
(G) references to writing shall include any modes of reproducing words in a
legible and non-transitory form;
(H) references to times of the day are to London time;
(I) headings are for convenience only and do not affect the interpretation
of this Agreement;
(J) references to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official, or
any legal concept or thing shall in respect of any jurisdiction other
than England be deemed to include what most nearly approximates in that
jurisdiction to the English legal term;
(K) where it is necessary to determine whether a monetary limit or
threshold set out in paragraph 1 of Schedule 4 has been reached or
exceeded (as the case may be) and the value of the relevant claim or
any of the relevant claims is expressed in a currency other than
sterling, the value of each such claim shall be translated into
sterling at the spot rate of exchange (closing mid-point) on the date
of receipt by the Seller of written notification from the Purchaser in
accordance with paragraph 2 of Schedule 4 of the existence of such
claim or, if such day is not a Business Day, on the Business Day
immediately preceding such day as published in the London edition of
The Financial Times first published thereafter or, where no such rate
of exchange is published on that date, the rate quoted by Citibank N.A.
as at the close of business in London on that date;
(L) references to "INDEMNIFY" and "INDEMNIFYING" any person against any
circumstances shall mean indemnifying and keeping that person harmless,
on an after-Tax basis, from all actions, claims, demands and
proceedings from time to time made against that person and all
liabilities, loss, damages and all reasonable payments, costs and
57
expenses made or incurred by that person as a consequence of or which
would not have arisen but for that circumstance and:
(i) the provisions of Clause 27(C) to (F) shall apply to such
indemnification;
(ii) references to the Purchaser indemnifying each member of the
Seller's Group or relevant Business Sellers shall constitute
undertakings by the Purchaser to the Seller for itself and on
behalf of each other member of the Seller's Group; and
(iii) references to the Seller indemnifying each member of the
Purchaser's Group shall constitute undertakings by the Seller
to the Purchaser for itself and on behalf of each other member
of the Purchaser's Group;
(M) references to the singular shall include the plural and vice versa;
(N) references to "STERLING" or "(POUND)" are to the lawful currency of the
United Kingdom; and
(O) each of the Attachments shall be in an Agreed Form.
58
SCHEDULE 2
(COMPLETION ARRANGEMENTS)
1. SELLER'S OBLIGATIONS
At Pre-Completion the Seller shall deliver to the Purchaser's
Solicitors the following documents on the basis that such documents
shall be held in escrow and shall be held to the order of the Seller
until 1.00 p.m. on the Completion Date at which time such documents
shall be deemed to be delivered and held to the order of the Purchaser:
(i) a copy of the minutes of a duly held meeting of the directors
of the Seller (or of a duly constituted committee thereof)
authorising the execution by the Seller of this Agreement and
of the Seller's Completion Documents to which the Seller is a
party and, in the case where such execution is authorised by a
committee of the board of directors of the Seller, a copy of
the minutes of a duly held meeting of the directors
constituting such committee or the relevant extract thereof;
(ii) counterparts of the Trade Xxxx Assignments and the Domain Name
Transfer duly executed by the Seller and/or the relevant
members of the Seller's Group;
(iii) a Property Transfer for each Business Property pursuant to,
and subject to, the provisions of Schedule 8; and
(iv) a counterpart of the Transitional Services Agreement, duly
executed on behalf of the Seller.
At Completion, the Seller shall procure that all land or title
certificates, title deeds or other documents relating to the Business
Properties are either delivered to the Purchaser or are held to the
order of the Purchaser.
2. PURCHASER'S OBLIGATIONS
At Pre-Completion the Purchaser shall deliver to the Seller's
Solicitors the following documents on the basis that such documents
shall be held in escrow and shall be held to the order of the Purchaser
until 1.00 p.m. on the Completion Date at which time such documents
shall be deemed to be delivered and held to the order of the Seller:
(a) a copy of the minutes of a duly held meeting of the directors
of the Purchaser (or of a duly constituted committee thereof)
authorising the execution by the Purchaser of this Agreement
and the Purchaser's Completion Documents and, in the case
where such execution is authorised by a committee of the board
of directors of the Purchaser, a copy of the minutes of a duly
held meeting of the directors constituting such committee or
the relevant extract thereof;
(b) counterparts of the Trade Xxxx Assignments duly executed by
the Purchaser and/or the relevant members of the Purchaser's
Group;
59
(d) a receipt acknowledging delivery of all documents required to
be delivered at Pre-Completion by the Seller pursuant to this
Schedule to the Purchaser's Solicitors as described above; and
(e) a counterpart of the Transitional Services Agreement, duly
executed on behalf of the Purchaser.
3. GENERAL PROVISION IN RELATION TO THE BUSINESS ASSETS
At Completion (or as soon as reasonably practicable thereafter) the
Business Sellers shall deliver to the Purchaser all the Business Assets
which are capable of transfer by delivery (other than any Books and
Records which shall be delivered to the Purchaser in accordance with
Clause 23), with the intent that title in such Business Assets shall
pass by and upon such delivery.
60
SCHEDULE 3
(THE WARRANTIES)
1. CAPACITY OF THE SELLER
(A) The Seller has the requisite power and authority to enter into and
perform this Agreement and the other documents which are to be
delivered by the Seller at Completion (the "SELLER'S COMPLETION
DOCUMENTS").
(B) This Agreement constitutes and the Seller's Completion Documents will,
when delivered by the Seller, constitute binding obligations of the
Seller in accordance with their respective terms.
(C) The execution and delivery of, and the performance by the Seller of its
obligations under, this Agreement and the Seller's Completion Documents
will not:
(i) result in a breach of any provision of the memorandum or
articles of association of the Seller;
(ii) result in a breach of, or constitute a default under, any
instrument to which the Seller is a party or by which the
Seller is bound and which is material in the context of the
transactions contemplated by this Agreement;
(iii) so far as the Seller is aware, result in a breach of any
order, judgment or decree of any court or governmental agency
to which the Seller is a party or by which the Seller is bound
and which is material in the context of the transactions
contemplated by this Agreement; or
(iv) save as contemplated by this Agreement, require the Seller to
obtain any consent or approval of, or give any notice to or
make any registration with, any governmental or other
authority which has not been obtained or made at the date of
this Agreement and is in full force and effect where failure
to obtain such consent or approval, give such notice or make
such registration is material in the context of the
transactions contemplated by this Agreement.
2. AGREEMENTS BETWEEN THE SELLER'S GROUP AND THE BUSINESS
No contract or agreement which is other than on arm's length terms is
outstanding between any Business Seller, in relation to the Business,
and any member of the Seller's Group (other than the Business Sellers).
3. OWNERSHIP AND SUFFICIENCY OF BUSINESS ASSETS
(A) Each of the material Business Assets is owned both legally and
beneficially by a Business Seller (except for assets which have been
sold subject to retention of title and assets which are leased or
subject to hire purchase arrangements where the lease or hire purchase
payment is less than (pound)50,000 per year) and each of those assets
capable of possession is, save where in the possession of third parties
in the ordinary course of
61
business, in the possession of a Business Seller or another member of
the Seller's Group.
(B) The Business Assets, the Excluded Assets and the Excluded Contracts,
together with such other facilities and services which are to be
provided to the Purchaser and/or to other members of the Purchaser's
Group pursuant to the Transitional Services Agreement, comprise all the
assets used by the Business Sellers or members of the Seller's Group to
operate the Business.
4. ENCUMBRANCES
Save for Permitted Encumbrances, no option, right to acquire, mortgage,
charge, pledge, lien or other form of security or encumbrance or equity
on, over or affecting the whole or any part of the Business Assets is
outstanding and, save in relation to Permitted Encumbrances, no
agreement or commitment has been entered into by any of the Business
Sellers or any other member of the Seller's Group to give or create
any.
5. FINANCIAL INFORMATION
(A) The Financial Information was, save as otherwise specified in Part 3 of
Attachment 1, prepared in all material respects in accordance with the
accounting policies and practices set out in the Unilever Accounting
Policy Manual. On that basis, and subject as described in the Financial
Information, (i) the Financial Information in respect of the Montana
Business set out in Part 1 of Attachment 1 shows respectively, in all
material respects, a true complete and accurate view of the turnover,
gross profit and profit before overheads of the Montana Business for
the six months ended on the Reference Date, and (ii) the Financial
Information in respect of the Montana Business set out in Part 2 of
Attachment 1 shows respectively, in all material respects, a true,
complete and accurate view of the turnover, gross profit and profit
before overheads of the Montana Business for the twelve months ended on
31 December 2002.
(B) The Financial Information set out in Part 1 of Attachment 1 and
relating to the six months ended on the Reference Date was, save as
specified in Attachment 1, prepared on bases and in accordance with
policies, principles, procedures and practices consistent in all
material respects with those applied in relation to the Financial
Information set out in Part 2 of Attachment 1 and relating to the year
ended 31 December, 2002.
(C) The Financial Information does not include any turnover, group profit
and profit before overheads relating to the Excluded Business.
For the purposes of this paragraph 5, where any Warranty (or part
thereof) is qualified by reference to the phrase "in all material
respects", such reference shall be construed in accordance with the
concept of materiality which would be applicable if the Financial
Information were to have been prepared in accordance with UK GAAP.
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6. EVENTS SINCE THE REFERENCE DATE
Since the Reference Date:
(i) there has been no material adverse change in the financial
position of the Montana Business taken as a whole; and
(ii) the Montana Business has in all material respects been carried
on in the ordinary course.
7. CONTRACTS
(A) No Contract:
(i) both calls for payments by the relevant Business Seller (in
relation to the Business) in excess of (pound)100,000 in any
one year and is not terminable by or on behalf of such
Business Seller by notice of 12 months or less (excluding
purchase or sales orders for stocks placed in the ordinary
course of business);
(ii) is material and has an unexpired term of two years or more; or
(iii) is material and can be terminated by any party thereto (other
than a Business Seller, an agent or a Business Seller or a
person holding the benefit of a contract for a Business
Seller) in the event of the disposal of all or a substantial
part of the Business by the Business Seller.
(iv) restricts the Seller from carrying on the Business in any part
of the world; or
(v) is a joint venture agreement under which the Seller, in
relation to the Business, is to participate with any other
person in any business,
(any such contract being a "MATERIAL CONTRACT").
(B) Details of the top four current agreements for the supply of milk (in
terms of volume contracted to the supplied to the Seller (in relation
to the Business)) to which the Seller (in relation to the Business) is
a party are set out in the Disclosure Letter.
(C) So far as the Seller is aware, no Business Seller (in relation to the
Business) is in breach of any material term of any of the Contracts
referred to in sub-paragraphs (A) or (B) nor, so far as the Seller is
aware, is any other party to any such contracts.
(D) There are no outstanding Contracts under which any Business Seller (in
relation to the Business) has made any loan to any person (other than
trade credit in the ordinary course of business or any loan to any
Business Employee).
(E) Copies of all Material Contracts or all material details thereof have
been set out in the Data Room. There is no offer, tender or other
prospective contract outstanding in respect of the Business which is
capable of being converted into a Material Contract solely by virtue of
an acceptance or other act of a third party.
63
8. POWERS OF ATTORNEY
None of the Business Sellers has given, in relation to the Business,
during the last three years, any power of attorney, proxy or similar
authority (other than to an officer of the Business Seller, a Business
Employee or a patent or trade xxxx agent, in each case in the ordinary
course of its respective business) which is still outstanding.
9. GRANTS AND ALLOWANCES
None of the Business Sellers has received, in relation to the Business,
any grant, allowance, aid or subsidy from any supranational, national
or local authority or government agency during the last three years
which is currently repayable as a result of any act or failure to act
by the relevant Business Seller or which would be repayable as a result
of the sale of the Business Assets to the Purchaser.
10. SUBSTANTIAL DEPENDENCE
Since 1 January 2003 no person has purchased from or sold to the
Montana Business more than 5 per cent. of the aggregate amount of all
sales or purchases made by the Montana Business during such period
(each, a "MATERIAL CUSTOMER" or a "MATERIAL SUPPLIER").
11. CONSENTS AND LICENCES
All governmental and quasi-governmental licences, consents and
permissions and approvals (other than Environmental Permits and
licences, consents, permissions and approvals relating to the Business
Properties), the absence of which would have a material adverse effect,
required for the carrying on of any part of the Montana Business have
been obtained and, so far as the Seller is aware, there is no
circumstance which indicates that any such licence, consent, permission
or approval is likely to be revoked.
12. LITIGATION
(A) No Business Seller (in relation to the Business) is engaged in any
litigation or arbitration, administrative or criminal proceedings,
whether as plaintiff, defendant or otherwise.
(B) No such litigation or arbitration, administrative or criminal
proceedings as are referred to in sub-paragraph (A) are pending nor, so
far as the Seller is aware, threatened.
13. DELINQUENT AND WRONGFUL ACTS
(A) No Business Seller (in relation to the Business) has committed any
criminal or illegal act which would have a material adverse effect on
the Montana Business.
(B) No Business Seller (in relation to the Business) has received
notification during the last three years that any investigation or
inquiry is being or has been conducted by any supranational, national
or local authority or governmental agency in respect of the business or
affairs of the Business which would have a material adverse effect.
64
(C) No material dispute exists between the Business Seller (in respect of
the Business) and any Material Customer or Material Supplier.
14. BUSINESS PROPERTIES
(A) The Business Properties are each legally and beneficially owned by a
Business Seller and are the only land and buildings owned, used or
occupied in connection with the Business.
(B) Neither of the Business Properties is subject to any sub-lease, tenancy
or right of occupation which has a material adverse effect on the use
or enjoyment of the relevant Business Property for its current use.
(C) So far as the Seller is aware, no written notices have been received by
the Business Seller shown in Schedule 8 as the owner of either Business
Property which would materially interfere with the use of the relevant
Business Property for its current use whether from a local authority or
any other body or person.
(D) So far as the Seller is aware, and except for Permitted Encumbrances,
there is no mortgage, charge or lien affecting either Business
Property.
(E) The current use of each Business Property is a lawful use for the
purposes of town and country planning legislation.
(F) So far as the Seller is aware, there are no outstanding litigation,
material disputes or material claims affecting the Business Properties
(or either of them).
(G) All covenants, restrictions, stipulations and other encumbrances
affecting the Business Properties have been performed in all material
respects.
(H) All buildings and structures on the Business Properties are in a
sufficient state of repair and condition for the purposes of carrying
on the Business.
(I) So far as the Seller is aware, the Business Properties have not been
affected by flooding nor have suffered from subsidence building or
drainage defects within the past 5 years.
15. ENVIRONMENT AND HEALTH AND SAFETY
(A) Each Business Seller (in relation to the Business and the Business
Assets) has complied with Environmental Laws and/or laws relating to
the health and safety of employees (for the avoidance of doubt, to the
extent in force and legally binding on the relevant Business Seller on
or prior to the date of this Agreement) at all times during the period
of three years prior to the date of this Agreement (the "RELEVANT
PERIOD").
(B) Each Business Seller (in relation to the Business and the Business
Assets) has at all times during the Relevant Period held all
Environmental Permits which are necessary under Environmental Laws for
the purpose of carrying on the Business as at the date of this
Agreement and each Business Seller (in relation to the Business) has at
all times
65
during the Relevant Period been in compliance in all material respects
with all terms and conditions of all such Environmental Permits.
(C) So far as the Seller is aware, there are no conditions, facts or
circumstances which are likely to give rise to any material revocation,
suspension or any withdrawal or non-renewal of any Environmental Permit
held at the date of this Agreement by a Business Seller (in relation to
the Business and Business Assets) or material amendment or variation to
such permit (not including, for the avoidance of doubt, any matters
relating to the Pollution, Prevention and Control Act 1999).
(D) None of the Business Sellers (in relation to the Business and the
Business Assets) has received any notification of any claim, suit,
proceeding, investigation or enquiry by any relevant authority or third
party in respect of any breach of any Environmental Laws or pollution
or contamination of soil or groundwater which could reasonably be
expected to give rise or is likely to give rise to a liability under
Environmental Law in force on or before the date of this Agreement
("CURRENT ENVIRONMENTAL LAW") and, so far as the Seller is aware, there
are no circumstances likely to give rise to any such claim, suit,
proceeding, investigation or inquiry by any relevant authority or third
party under Current Environmental Law or any requirement by any
regulatory authority to perform remedial works under such law.
(E) So far as the Seller is aware, all material reports prepared for or on
behalf of any of the Business Sellers during the Relevant Period in
relation to asbestos (not including, for the avoidance of doubt, any
certification or other documentation produced by the relevant asbestos
contractor or specialist in connection with the removal or other
remediation of any asbestos identified at the Business Property by any
report which has been disclosed) and/or health and safety of employees
and/or pollution of soil or groundwater at or from either of the
Business Properties have been disclosed to the Purchaser.
16. INTELLECTUAL PROPERTY
(A) Details of all registered Business IPR (and applications therefor) are
set out in Part 1 of Attachment 4 .
(B) All renewal, maintenance and other official registry fees due at the
date of this Agreement in respect of the rights disclosed pursuant to
sub-paragraph (A) have been paid and none of the registered Business
IPR set out in Part 1 of Attachment 4 has been allowed to lapse.
(C) Details of all licences of Intellectual Property or Confidentiality
Rights granted to or by any Business Seller in relation to the Business
which, in each case, is material to the on-going operations of the
Business are disclosed in the Disclosure Letter.
(D) So far as the Seller is aware, none of the Business Sellers is in
breach of any licence referred to in sub-paragraph (C).
(E) The Seller is not aware that any of the activities of the Montana
Business make unauthorised use of or infringe any Intellectual Property
or Confidentiality Rights or
66
moral rights owned by any third party where such unauthorised use or
infringement would have a material adverse effect on the Business.
(F) The Seller is not aware of any unauthorised use or infringement by any
person of any Business IPR or Business Confidentiality Rights where
such unauthorised use or infringement would have a material adverse
effect on the Business.
(G) So far as the Seller is aware, the registered Business IPR is free from
all Encumbrances other than licences.
(H) The Seller or a member of the Seller's Group is the sole owner of all
unregistered Business IPR.
(I) The Domain Name is the only domain name registered by a member of the
Seller's Group which is used exclusively in the Business and all
renewal fees due as at the date of this Agreement in respect of such
domain name have been paid.
17. COMPETITION AND TRADE REGULATION LAW
(A) So far as the Seller is aware, none of the Business Sellers (in
relation to the Business) is or has been a party to any agreement,
arrangement, concerted practice or course of conduct which infringes
Article 81 or 82 (formerly Articles 85 and 86 respectively) of the
Treaty Establishing the European Community or any other competition or
similar legislation in any jurisdiction in which Business is conducted
where such infringement is likely to have a material adverse effect on
the Business.
(B) None of the Business Sellers (in relation to the Business) is or has
been a party to any agreement or arrangement or been involved in any
business practice in respect of which an undertaking has been given by
or an order made against or in relation to it pursuant to any
competition or similar legislation in any jurisdiction in which it
carries on business (including (without limitation) Article 81 or 82
(formerly Articles 85 and 86 respectively) of the Treaty Establishing
the European Community) where such undertaking or order is likely to
have a material adverse effect on the Business.
(C) None of the Business Sellers (in relation to the Business) is or, at
any time in the last three years, has been a party to any agreement or
arrangement or been involved in any business practice in respect of
which:
(i) any request for information, statement of objections or
similar matter has been received from any court, tribunal,
governmental, national or supra-national authority; or
(ii) an application for negative clearance or exemption has been
made to the European Commission.
18. EMPLOYMENT
(A) A list of the Business Employees specifying the identity of their
employer and annual basic pay of each of the Business Employees, the
age and length of service of each of
67
the Business Employees (unless otherwise stated) are set out in Data
Room documents I.1.1 (for employer) and S.I.4.4 (as at 29th October,
2003) and are accurate in all material respects as at that date.
(B) So far as the Seller is aware, there is no material dispute relating to
Business Employees between any of the Business Sellers and any trade
union, works council or other organisation formed for a similar purpose
existing, pending or threatened in writing to any of the Business
Sellers and there is no material collective bargaining agreement
(whether binding or not) applicable to any Business Employees to which
any of the Business Sellers is a party.
(C) Summary details of the material terms and conditions of employment of
the Business Employees and the forms of the contracts of employment of
the Senior Employees are contained or referred to in the Disclosure
Letter.
(D) The Disclosure Letter contains full details of any share option or
share schemes, profit sharing, incentive and bonus arrangements in
which any Business Employee participates.
(E) No proposal, assurance or commitment has been communicated to any
person regarding any material change to his terms of employment or the
introduction, increase or improvement of any material benefit which as
at the date of this Agreement has not been made effective.
19. INSURANCES
(A) Details of the insurance policies in respect of which any member of the
Seller's Group (in relation to the Montana Business) has an interest
are set out in the Disclosure Letter.
(B) All premiums due and payable in respect of such insurances have been
paid.
20 TAX
(A) There are no Business Assets to which the provisions of Part XV Value
Added Tax Regulations 1995 (Adjustments to the Deduction of Input Tax
on Capital Items) apply.
(B) No election has been made nor will before Completion be made pursuant
to paragraph 2 of Schedule 10 to VATA 1994 in relation to any of the
Business Assets or any part of any of them.
(C) The amount of Tax chargeable on the Seller in respect of the Business
during any accounting period ending on or within six years before the
Reference Date has not, to any material extent, depended on any
concession, agreement or other formal or informal arrangement with any
Tax Authority, including (but without limitation) the Inland Revenue
and H.M. Customs & Excise.
(D) The Business Sellers have not provided to any employee or ex-employee
employed in connection with the Business, or to any officer or
ex-officer appointed in connection with the Business or the Business
Assets any securities or interest in securities in respect of
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which the Purchaser will or would, if any prescribed circumstances
arise, be required on or after Completion to operate PAYE or pay or
account for any national insurance contributions by virtue of Chapters
2-5 inclusive of Part 7 of the Income Tax (Earnings and Pensions) Xxx
0000.
(E) All documents in the possession or under the control of the Business
Sellers which establish or are necessary to establish the title of the
Business Sellers to the Business Assets have been duly stamped and any
applicable stamp duties or charges in respect of such documents have
been duly accounted for and paid, and no such documents which are
outside the United Kingdom would attract stamp duty if they were
brought in to the United Kingdom.
(F) Neither of the Business Properties falls within paragraph (a) of item 1
of group 1 of Schedule 9 to the VATA 1994.
21. PENSIONS
For the purposes of this paragraph 21, "Relevant Employees" and "UPF" shall each
have the meaning given in Schedule 9.
(A) Save in respect of:
(i) the UPF;
(ii) the UK state scheme;
(iii) any arrangement the sole purpose of which is to provide
benefits on injury or death; and
(iv) any arrangement which only provides death benefits secured by
an insurance policy,
no member of the Seller's Group (in this paragraph 21, the "EMPLOYER"):
(a) has any obligation (whether legally binding or not) to:
(1) pay any pension; or
(2) make any other payment on or after retirement or
death; or
(3) otherwise to provide "relevant benefits" (within the
meaning of Section 612 of ICTA),
to, or in respect of, any Business Employee (or spouse or
dependant of any of them) such Business Employee; and
(b) is a party to or obligated to contribute to any scheme or
arrangement having as its purpose, or one of its purposes, the
making of any such payments or the
69
provision of any such benefits to, or in respect of, any
Business Employee (or spouse or dependant of any of them).
(B) Full details of the UPF insofar as it relates to the Relevant Employees
are comprised in the Data Room and up-to-date and complete copies of
the following documents are comprised in the Data Room:
(i) the trust deeds and announcements (to the extent not already
reflected in the trust deed) currently governing the UPF and a
copy of the latest trustee report and accounts and actuarial
valuation; and
(ii) a full list of Relevant Employees as at 29th October, 2003.
(C) The UPF is an "exempt approved scheme" (within the meaning of Chapter I
of Part XIV of ICTA) and has, in relation to the Business Employees, at
all times complied with and been administered in all material respects
in accordance with all applicable laws, regulations and requirements,
including the requirements of the Inland Revenue for continued approval
as an exempt approved scheme or of the National Insurance Contributions
Office on behalf of the Inland Revenue for continued eligibility for
contracting-out of the UK state scheme and of trust law. So far as the
Seller is aware, there is no reason why approval of the UPF by the
Board of Inland Revenue should be withdrawn.
(D) There is no established practice in relation to the exercise of
discretion under the UPF to provide benefits to or in respect of the
Relevant Employees other than in accordance with the Relevant
Employees' or their dependants' entitlements under the UPF.
(E) There is no dispute with regard to the benefits payable under the UPF
to or in respect of any Business Employee which is material in the
context of the total liabilities in respect of the pre-Completion
pensionable service of the Business Employees and no legal proceedings
by or against the trustees of the UPF in their capacity as such in
respect of such benefits are pending, threatened or expected and so far
as the Seller is aware there is no fact or circumstance likely to give
rise to such proceedings.
(F) The information contained in S.I.4.4 was accurate in all material
respects as at 29 October 2003.
(G) No undertaking or assurance has been given to all or any of the
Relevant Employees as to the continuance, introduction, increase or
improvement of any retirement, death or disability benefits.
(H) The copies of Data Room documents I.24.2, I.25.1, I.26.1, I.28.1,
I.7.1, I.7.2, I.8.1, I.8.2 and I.15.1 are true and complete.
22. INSOLVENCY
(A) No order has been made and no resolution has been passed for the
winding up of the Seller, or any of the Business Sellers or for a
provisional liquidator to be appointed in respect of the Seller or any
of the Business Sellers and no petition has been presented
70
and no meeting has been convened for the purpose of winding up the
Seller or any of the Business Sellers.
(B) No administration order has been made and no petition for such an order
has been presented in respect of the Seller or any of the Business
Sellers.
(C) No receiver (which expression shall include an administrative receiver)
has been appointed in respect of the Seller or any of the Business
Sellers or in respect of all or any of their assets.
(D) Neither the Seller nor any of the Business Sellers is unable to pay its
debts within the meaning of section 123(1) of the Insolvency Xxx 0000,
or has generally stopped paying its debts as they fall due.
(E) No voluntary arrangement under section 1 of the Insolvency Xxx 0000 or
composition in satisfaction of the debts of the Seller or any of the
Business Sellers has been proposed.
(F) No event analogous to any of the foregoing has occurred in relation to
any Business Seller incorporated outside England and Wales.
23. COMPLIANCE WITH LAWS
Save where any such non-compliance would not have a material adverse
effect on the Business, the Seller and the Business Sellers have
conducted the Business in compliance with all applicable laws.
24. PRODUCT LIABILITY
No member of the Seller's Group has any product liability (including
liability for defective labelling on packaging) in respect of any
product of the Montana Business manufactured and sold at any time prior
to Completion other than any such product liability consistent with the
normal level of returns of the Montana Business in the three years
immediately preceding the date of this Agreement.
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SCHEDULE 4
(LIMITATIONS ON LIABILITY)
1. LIMITATION ON QUANTUM AND GENERAL
(A) Except in relation to the Warranties in paragraphs 1 and 4 of Schedule
3, the Purchaser shall not be entitled in any event to damages or other
payment in respect of any claim or claims under any of the Warranties
in respect of any individual claim:
(i) for less than (pound)100,000; or
(ii) unless and until the aggregate amount of all such claims
(taking no account of those referred to in paragraph (i)
above) exceeds (pound)2,000,000, in which event the Seller
shall be liable for the excess of such claim above that amount
only and not for the whole amount,
PROVIDED THAT in applying this sub-paragraph (A) so as to limit the
liability of the Seller, any Warranty that is qualified as to
materiality in any way shall be deemed not to be so qualified such
that, though in order for any matter, event or circumstance to give
rise to the breach of any such Warranty, the matter, event or
circumstances giving rise to such breach must meet the appropriate
level of materiality as set out in the Warranty, if such materiality
threshold is met the relevant amount of the claim for the purposes of
applying sub-paragraph (A) shall be the total amount of such claim and
not solely that portion of the amount which may be deemed to be in
excess of the relevant materiality threshold.
(B) The total aggregate liability of the Seller under the Warranties shall
not in any event exceed(pound)35,000,000.
(C) The Purchaser shall be entitled to claim for loss of profit which is a
direct and natural consequence of the breach of any Warranty but shall
not be entitled to claim for any consequential loss (including indirect
or consequential loss of profit) or punitive damages.
(D) Each provision of this Schedule shall be read and construed without
prejudice to each of the other provisions of this Schedule.
2. TIME LIMITS FOR BRINGING CLAIMS
No claim shall be brought against the Seller in respect of any of the
Warranties unless the Purchaser shall have given to the Seller written
notice of such claim specifying (in reasonable detail) the matter which
gives rise to the claim, the nature of the claim and if then
ascertainable the amount claimed in respect thereof (detailing the
Purchaser's calculation of the loss thereby alleged to have been
suffered by it or the relevant member of the Purchaser's Group):
(i) subject to sub-paragraph (ii), on or before the date falling
18 months after the Completion Date; or
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(ii) in respect of any claims under the Tax Warranties, on or
before the seventh anniversary of the Completion Date;
PROVIDED THAT the liability of the Seller in respect of such claim
shall absolutely terminate (if such claim has not been previously
satisfied, settled or withdrawn) if legal proceedings in respect of
such claim shall not have been commenced within six months of the date
referred to in paragraph (i) or (ii) above and for this purpose
proceedings shall not be deemed to have been commenced unless they
shall have been properly issued and validly served upon the Seller
except, provided in each case that the Purchaser has given the notice
required by the first sentence of this paragraph 2:
(i) in the case of a claim based upon a liability which is
contingent or otherwise not capable of being quantified, in
which case the six month period shall commence on the date
that the contingent liability ceases to be contingent or the
liability is capable of being quantified; or
(ii) in the case of a claim where the Purchaser has a corresponding
claim against an insurer or a corresponding entitlement to
recovery from some other person, in which case the six month
period shall commence on the date that the corresponding claim
or entitlement is finally settled or finally determined.
3. CONDUCT OF LITIGATION
(A) Upon the Purchaser or any member of the Purchaser's Group becoming
aware of any claim, action or demand against it which is likely to give
rise to any claim in respect of any of the Warranties, the Purchaser
shall:
(i) as soon as practicable notify the Seller, save that, subject
and without prejudice to paragraph 2 and sub-paragraph (D),
any failure to give such notice shall not preclude the
Purchaser from making the relevant claim;
(ii) subject to sub-paragraph (D) below and without prejudice to
its right to make a claim against the Seller for breach of any
of the Warranties, (a) consult as fully as is reasonably
practicable with the Seller as regards the conduct of any
proceedings arising out of such claim, (b) in response to
reasonable requests from the Seller, keep the Seller informed
of the progress of the claim, and (c) provide the Seller with
copies of such documentation relating to the claim as the
Seller may reasonable request;
(iii) subject to sub-paragraph (D) below and without prejudice to
the right of the Purchaser to make a claim against the Seller
for breach of any of the Warranties, and subject to the Seller
indemnifying the Purchaser against any loss, liability and
expenses, cost, damage or expense which may be incurred
thereby, take such reasonable action and give such information
and access to personnel, premises, documents and records to
the Seller and its legal advisers and accountants as the
Seller may reasonably request in order to avoid, dispute,
resist, mitigate, settle, compromise, defend or appeal any
claim in respect thereof or adjudication with respect thereto
PROVIDED THAT the Purchaser shall not be obliged to take any
action or proceedings (or join any legal
73
proceedings) relating to the claim in question in
circumstances where the Purchaser (acting reasonably)
considers that to do so would have a material detrimental
affect on the Purchaser, the Purchaser's Group or their
respective businesses;
(iv) in the case of a claim, action or demand in respect of which
the provisions of sub-paragraph (iii) apply, be entitled to
participate in the defence of any such claim and to employ
separate counsel to represent it at the Seller's expense
PROVIDED THAT the Seller (acting reasonably) shall control the
defence of such claim;
(v) make no admission of liability, agreement, settlement or
compromise with any third party in relation to any such claim
or adjudication without the prior written consent of the
Seller (such consent not to be unreasonably withheld); and
(vi) take all reasonable action to mitigate any loss suffered by it
or any member of the Purchaser's Group in respect of which a
claim could be made under the Warranties.
(B) Notwithstanding the foregoing, the Seller shall not be entitled to
participate in the defence of any claim, action or demand of a third
party (and shall be liable for the reasonable expenses (including legal
expenses) incurred by the Purchaser or relevant member of the
Purchaser's Group in defending such claim, action or demand) if such
claim, action or demand seeks any relief other than damages (including
any order, injunction or other equitable relief) against the Purchaser
or relevant member of the Purchaser's Group which cannot be separated
from any related claim for damages. If such claim for other relief can
be separated from the claim for damages, the Seller shall be entitled
to participate in the defence of the claim for damages.
(C) The Seller shall be entitled at any stage and in its absolute
discretion to settle any such third party assessment or claim.
(D) If, pursuant to provisions of the proviso to sub-paragraph A (iii)
above or otherwise, the Purchaser determines not to take any action or
proceedings against the relevant third party in respect a claim to
which this paragraph 3 relates, the Purchaser shall not be entitled to
bring any claim against the Seller in respect of the Warranties in
respect of such claim.
4. NO LIABILITY IF LOSS IS OTHERWISE COMPENSATED FOR
(A) No liability shall attach to the Seller by reason of any breach of any
of the Warranties to the extent that the same loss has been recovered
by the Purchaser under any other Warranty or 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.
(B) The Seller shall not be liable for breach of any of the Warranties to
the extent that the loss in respect of the claim has been or is made
good without cost to the Purchaser or any other member of the
Purchaser's Group.
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(C) For the avoidance of doubt, 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 or any Designated
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. RECOVERY FROM INSURERS AND OTHER THIRD PARTIES
(A) If, in respect of any matter which would give rise to a claim under the
Warranties, any member of the Purchaser's Group is entitled to claim
under any policy of insurance, then, if requested by the Seller and if
it is legally able to do so, the appropriate member of the Purchaser's
Group may, if it so decides immediately effect a legal assignment of
the right to bring such claim against its insurers and notify such
insurers in writing of such assignment.
(B) Where the Purchaser or any member of the Purchaser's Group is at any
time entitled to recover from some other person or, subject to
sub-paragraph (A) above, under any policy of insurance covering
substantially equivalent risks and providing cover up to substantially
equivalent amounts as the policies of insurance maintained immediately
prior to Completion in respect of the Business (or would have been so
entitled had any of them put in place or maintained in force with
effect from Completion policies covering substantially equivalent risks
and providing cover up to substantially equivalent amounts as the
policies of insurance maintained immediately prior to Completion in
respect of the Business) any sum in respect of any matter giving rise
to a claim under the Warranties, the Purchaser shall, and shall procure
that the member of the Purchaser's Group concerned shall, take all
reasonable steps to enforce such recovery at the Seller's expense and,
in the event that the Purchaser or any member of the Purchaser's Group
shall recover any amount from such other person or under any policy of
insurance, the amount of the claim against the Seller shall be reduced
(or extinguished) by the amount recovered taking account of all costs,
charges, expenses and Taxation incurred thereon by the Purchaser or any
member of the Purchaser's Group in recovering that sum PROVIDED THAT
the Purchaser shall not be required to commence any legal proceedings
where either:
(i) the Purchaser has validly assigned all of its rights in
relation to the relevant claim to the Seller in a manner which
entitles the Seller to the same benefits in respect of such
rights as the Purchaser had; or
(ii) where sub-paragraph (B)(i) does not apply, the Seller has not
notified the relevant party against whom such proceedings are
brought that such proceedings are being brought at the
instruction of the Seller.
The obligations of the Purchaser under this paragraph shall be without
prejudice to the Purchaser's right to make and pursue a claim under the
Warranties and the obligations of the Seller under this paragraph shall
be without prejudice to the Seller's right to make any claim or
counterclaim against the Purchaser.
(C) If the Seller pays at any time to the Purchaser or any member of the
Purchaser's Group an amount pursuant to a claim in respect of the
Warranties and the Purchaser or
75
relevant member of the Purchaser's Group subsequently recovers from
some other person a sum representing the same loss, the Purchaser
shall, and shall procure that the relevant member of the Purchaser's
Group shall, repay to the Seller the lesser of (i) the amount paid by
the Seller to the Purchaser or other member of the Purchaser's Group
and (ii) the sum (including interest (if any) less any Tax chargeable
in respect of the sum recovered or the interest) recovered from such
other person, taking account of all costs, charges, expenses and
Taxation incurred by the Purchaser or any other member of the
Purchaser's Group in recovering that sum.
6. ACTS OF PURCHASER
(A) No claim shall lie against the Seller under or in relation to the
Warranties to the extent that such claim is attributable to any
voluntary act, omission, transaction or arrangement carried out at the
request of or with the consent of the Purchaser or by a member of the
Purchaser's Group before, at or after Completion or under the terms of
this Agreement or any other agreement contemplated by it.
(B) The Seller shall not be liable for any breach of any Warranty which
would not have arisen but for any reorganisation or change in ownership
of any member of the Purchaser's Group or of any assets of any such
member after, but not at, Completion or any change after Completion in
any accounting basis on which any member of the Purchaser's Group
values its assets or any accounting basis, method, policy or practice
of any member of the Purchaser's Group which is different from that
adopted or used in the preparation of the Financial Information other
than changes required to comply with the United Kingdom Generally
Accepted Accounting Practice.
7. THE COMPLETION STOCKS STATEMENT
No matter shall be the subject of a claim under the Warranties to the
extent that allowance, provision or reserve in respect of such matter
shall have been made in the Completion Stocks Statement.
8. RETROSPECTIVE LEGISLATION
No liability shall arise in respect of any breach of any of the
Warranties to the extent that liability for such breach occurs or is
increased directly or indirectly as a result of any change in or
introduction of any legislation announced, or if not announced in
advance of being made, made, after the date of this Agreement with
retrospective effect or as a result of the withdrawal of any
extra-statutory concession or other agreement or arrangement currently
granted by or made with any governmental authority or Tax Authority or
as a result of any change after the date of this Agreement of any
generally accepted interpretation or application of any legislation or
in the enforcement policy or published practice of the relevant
authorities or as a result of the withdrawal of any extra-statutory
concession or any other formal agreement or arrangements with any Tax
Authority (whether or not having the force of law) currently granted by
or made with any Tax Authority.
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9. TAXATION
Without prejudice to the generality of paragraph 8, the Seller shall
not be liable in any event in respect of any breach of the Warranties
if such breach or claim would not have occurred or arisen but for any
change in the basis of, method of calculation of, or increase in the
rate or rates of Taxation or changes in the published practice of any
Tax Authority announced (or if not so announced in advance, being made)
after the date of this Agreement but with retrospective effect (judged
as when so announced or made) or the withdrawal of any extra-statutory
concession currently granted by any Tax Authority.
10. DISCLOSURE
The Purchaser shall not be entitled to claim that any fact, matter or
circumstance causes any of the Warranties to be breached to the extent
that such fact, matter or circumstance is fairly disclosed in the
Disclosure Letter, in any document delivered with the Disclosure Letter
or in any document in the Data Room.
11. PURCHASER'S KNOWLEDGE
The Purchaser shall not be able to claim that any fact, matter or
circumstance causes any of the Warranties to be breached to the extent
that such breach, after having regard to the provisions of this
schedule was within the actual knowledge of the directors of the
Purchaser on or prior to the date of this Agreement.
12. ALLOCATION OF CONSIDERATION
For the avoidance of doubt, it is understood and agreed that the Seller
shall not be liable for the accuracy of the valuations of assets and
liabilities in Schedule 7.
13. CLAIM TO BE REDUCTION OF FINAL CASH CONSIDERATION
Any payment made by the Seller or any other person in respect of any
claim under the Warranties shall be made (so far as possible) by way of
repayment of (and adjustment to) the Final Cash Consideration payable
by the Purchaser under this Agreement to the Seller (on behalf of the
relevant Business Seller) and allocable to the relevant Business Asset
to which the claim relates.
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SCHEDULE 5
(COMPLETION STATEMENT IN RESPECT OF BUSINESS STOCKS)
1. The Completion Stocks Statement shall:
(i) be based on the books and records of the relevant Business
Sellers;
(ii) consist of statements for each part of the Business conducted
by a Business Seller in the format of Attachment 7 comprising
a statement of the Completion Stocks Amount as at midnight on
the day immediately preceding the Completion Date;
(iii) subject to sub-paragraphs (i) and (ii), be prepared on the
basis that the exercise of judgment and discretion in the
application of principles, policies, procedures, methods and
practices of accounting will be consistent with such exercise
as applied in the preparation of the Vendor Due Diligence
Report.
(iv) subject to sub-paragraphs (ii) and (iii), be prepared on the
basis and in accordance with the principles, policies,
procedures, methods and practices of accounting set out in the
Unilever Accounting Policy Manual as applied by the Seller in
respect of the Montana Business; and
(v) subject to sub-paragraphs (iii) and (iv), be prepared in
accordance with principles, policies, procedures, methods and
practices of accounting generally accepted in the United
Kingdom as applied by the Seller in respect of the Montana
Business.
2. In the preparation of the Completion Stocks Statement, the Completion
Stocks Amount shall be expressed in sterling.
3. The Seller shall deliver, or procure the delivery to the Purchaser of,
by the date falling 20 Business Days after the Completion Date, a draft
Completion Stocks Statement (the "DRAFT COMPLETION STOCKS STATEMENT").
4. For the purposes of preparing the Draft Completion Stocks Statement,
after Completion the Purchaser shall, and shall procure that each other
member of the Purchaser's Group shall, give the Seller and the Seller's
Accountants reasonable access at reasonable times to all books and
records in their respective possession or control relating to the
Montana Business on or prior to the Completion Date and generally shall
provide the Seller with such other information and assistance as the
Seller may reasonably request (including the reasonable assistance of
financial personnel employed in the Montana Business) for the purposes
of preparing the Draft Completion Stocks Statement. Management of the
Montana Business, the Seller's Group and the Purchaser's Group shall
act in good faith in connection with all matters involving the
Completion Stocks Statement. The fees, costs and expenses of the
Seller's Accountants shall be paid by the Seller.
5. The Purchaser shall have a period of 15 Business Days (the "REVIEW
PERIOD") after the date of delivery to it by or on behalf of the Seller
of the Draft Completion Stocks
78
Statement to review, in conjunction with the Purchaser's Accountants,
the Draft Completion Stocks Statement and to present to the Seller in
writing any objections (stating in reasonable detail, including
specific amounts, the matters in dispute) it may have to the Draft
Completion Stocks Statement. The only grounds upon which the Purchaser
shall be entitled to object to the Draft Completion Stocks Statement
are mathematical errors in the computation of the Completion Stocks
Amount or that it has not been prepared in accordance with this
Schedule and no objection shall be raised which would not, if
successful, lead to an amendment to the Completion Stocks Amount in
accordance with paragraph 10. Any such objections must be accompanied
by a recalculation of each amount in the Draft Completion Stocks
Statement based upon such objections and shall be accompanied by
reasonable evidence supporting each objection.
6. For the purposes of enabling the Purchaser and the Purchaser's
Accountants to present any such written objections as are referred to
in paragraph 5, the Seller shall, following the presentation of the
Draft Completion Stocks Statement, give the Purchaser and the
Purchaser's Accountants reasonable access at reasonable times to all
books and records in its possession or control after the Completion
Date relating to the Montana Business and generally shall provide the
Purchaser with such other information (including working papers) as the
Purchaser may reasonably request PROVIDED THAT the Purchaser and the
Purchaser's Accountants shall not be entitled to any such access or
information which goes beyond that reasonably necessary to determine
whether the Draft Completion Stocks Statement has been prepared in
accordance with the provisions of this Schedule. The fees, costs and
expenses of the Purchaser's Accountants shall be paid by the Purchaser.
7. If and to the extent that no such written objections as are referred to
in paragraph 5 are presented to the Seller by the end of the Review
Period in accordance with that paragraph then the Draft Completion
Stocks Statement shall, as between the Purchaser and the Seller, be
deemed to have been accepted and approved by the Purchaser and the
Seller and the Draft Completion Stocks Statement shall be final and
binding on the Purchaser and the Seller and shall constitute the
"COMPLETION STOCKS STATEMENT" for all purposes of this Agreement.
8. If and to the extent that any such written objections as are referred
to in paragraph 5 are presented to the Seller by the end of the Review
Period in accordance with that paragraph then the Seller and the
Purchaser shall attempt to resolve the matters in dispute between them
in good faith negotiations. To facilitate the Seller's review of any
such written objections, the Purchaser shall provide the Seller and the
Seller's Accountants with such information (including working papers)
as the Seller may reasonably require for the purpose of the review. If
there are any such matters in dispute between the Purchaser and the
Seller which have not been resolved in good faith negotiations within a
period of 15 Business Days after the end of the Review Period, then the
specific matters in dispute shall be referred for determination to an
Expert who shall be instructed to notify the Seller and the Purchaser
of his determination within 10 Business Days of such referral. If the
Purchaser and the Seller resolve all matters in dispute in relation to
the Draft Completion Stocks Statement, then the Draft Completion Stocks
Statement shall, as between the Purchaser and the Seller, be deemed to
have been accepted and approved by the Purchaser and the Seller and the
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Draft Completion Stocks Statement shall be final and binding on the
Purchaser and the Seller and shall constitute the "COMPLETION STOCKS
STATEMENT" for all purposes of this Agreement.
9. The Seller shall, and shall procure that each other member of the
Seller's Group shall, and the Purchaser shall and shall procure that
each other member of the Purchaser's Group shall, give the Expert
reasonable access at reasonable times to all books and records in their
respective possession or control relating to the Montana Business and
generally shall provide the Expert with such other information and
assistance as the Expert may reasonably require. In making his
determination, the Expert shall act as expert and not as arbitrator and
shall provide a reasoned opinion for his determination and the Draft
Completion Stocks Statement as amended by the Expert shall, as between
the Seller and the Purchaser and in the absence of manifest error by
the Expert, be deemed to have been accepted and approved by the Seller
and the Purchaser, shall be final and binding on the Seller and the
Purchaser and shall constitute the "COMPLETION STOCKS STATEMENT" for
all purposes of this Agreement. Notwithstanding the foregoing, any
amendment by the Expert of any amount set out in the Completion Stocks
Statement shall be within the range for such amount indicated by the
Draft Completion Stocks Statement and any amendment to the Draft
Completion Stocks Statement made pursuant to paragraph 5. The fees and
costs of the Expert shall be paid as to 50 per cent. by the Purchaser
and 50 per cent. by the Seller unless otherwise directed by the Expert
(who shall have the authority to make such direction if he deems it
equitable). The Expert may, if he decides it is necessary or desirable
to do so in his absolute discretion, refer any interpretational matter
which relates to any dispute to a leading counsel approved by the
Seller and the Purchaser and the terms of appointment of the Expert
shall allow him to make such reference.
10. Notwithstanding the foregoing paragraphs of this Schedule, where the
value of any individual item in the Completion Stocks Statement as
finally determined or agreed in accordance with this Schedule differs
by (pound)25,000 or less from the value of that item as set out in the
original Draft Completion Stocks Statement delivered pursuant to
paragraph 3 then the value set out in the original Draft Completion
Stocks Statement delivered pursuant to paragraph 3 shall be used for
the purpose of determining the Completion Stocks Amount.
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SCHEDULE 6
(BUSINESS SELLERS AND DESIGNATED PURCHASERS)
(1) (2) (3)
LOCATION OF BUSINESS ASSETS BUSINESS SELLER(S) DESIGNATED PURCHASER
---------------------------------------------------------------------------------------------------------------------------------
Republic of Ireland Unilever Bestfoods Ireland Limited Premier Ambient Products (UK) Limited
Xxxxx and Xxxxxx (Ireland) Limited Premier Ambient Products (UK) Limited
Unilever PLC (in respect of certain Business IPR only) Premier Ambient Products (UK) Limited
Unilever UK & CN Holdings Limited (in respect of certain Premier Ambient Products (UK) Limited
Business IPR only)
---------------------------------------------------------------------------------------------------------------------------------
United Kingdom Unilever Bestfoods UK Limited Premier Ambient Products (UK) Limited
Unilever PLC (in respect of certain Business IPR only) Premier Ambient Products (UK) Limited
Unilever UK & CN Holdings Limited (in respect of certain Premier Ambient Products (UK) Limited
Business IPR only)
---------------------------------------------------------------------------------------------------------------------------------
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SCHEDULE 7
(ALLOCATION OF FINAL CASH CONSIDERATION)
1. The Final Cash Consideration and the amount of the Assumed Liabilities
shall be allocated between the categories of Business Assets on the
basis set out in this Schedule below and such allocation shall be
adopted by the Seller and the Purchaser for all purposes (including
Tax) subject to any further adjustment in accordance with paragraph 13
of Schedule 4.
2. The Initial Cash Consideration shall be allocated between the Business
Assets as follows:
(POUND)
Business Goodwill - UK 64.227% of the balance of the Initial
Cash Consideration
- Ireland 2.440% of the balance of the Initial
Cash Consideration
Business Plant and Machinery net book value as at the Completion
Date
Business Stocks 5,627,000
the benefit (subject to the burden) of the Contracts 1
Business Cash Float actual xxxxx cash as at the
Completion Date
Business IPR (other than Irish trade marks) 32.000% of the balance of the Initial
Cash Consideration
Irish trade marks 1.333% of the balance of the Initial
Cash Consideration
Business Properties net book value as at the Completion
Date
the Books and Records (as relate exclusively to the
Business) 1
Business Claims 1
TOTAL 105,000,000
3. After the Completion Stocks Statement has been prepared in accordance
with Schedule 5, the Final Cash Consideration shall be allocated
between the Business Assets as set out in paragraph 2 above save that:
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(i) if a payment has been made pursuant to Clause 4(B) because of
a Shortfall, the amount of the Final Cash Consideration
allocated to the Business Stocks shall be reduced by an amount
equal to the amount of such payment; and
(ii) if a payment has been made pursuant to Clause 4(B) because of
an Excess, the amount of the Final Cash Consideration
allocated to the Business Stocks shall be increased by an
amount equal to the amount of such payment.
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SCHEDULE 8
(BUSINESS PROPERTIES)
PART A - GENERAL PROPERTY PROVISIONS
1. MATTERS TO WHICH THE SALE IS SUBJECT
The Business Properties are sold subject to and (where appropriate)
with the benefit of the following matters:
(i) all local land charges and all matters capable of registration
as local land charges;
(ii) all notices served and orders, demands, proposals or
requirements made by any local or other competent authority;
and
(iii) all exceptions and reservations of whatever nature, all rights
of way, water, light, air or other rights, easements,
quasi-easements, wayleaves (whether constituted in the title
deeds or otherwise) and third party rights of possession or
occupation.
2. SALE WITH VACANT POSSESSION
Each Business Property is sold with vacant possession.
3. TITLE
(A) The Purchaser shall be deemed to be purchasing with full knowledge of
the contents of all deeds and other documents of title relating to the
Business Properties and shall raise no requisition or object in
relation to any such title other than any matters not previously
disclosed by the Purchaser's Solicitors' pre-Completion searches.
(B) The Purchaser shall be deemed to be purchasing with full notice of the
use or development of the Business Properties for which planning or
zoning consent has been granted and accepts the position without any
further enquiry or requisition.
4. THE PROPERTY TRANSFER
(A) Legal completion of the transfer of the Business Properties shall take
place on Completion.
(B) On legal completion the relevant Business Seller will deliver a duly
signed or executed Property Transfer of the Business Property to the
Purchaser.
(C) On legal completion, the Seller, insofar as it is able, will transfer
whatever right and interest it has in the land adjoining the Business
Property known as the car park land situate on the south west of the
Business Property, such transfer being in a form agreed between the
Seller and the Purchaser both acting reasonably.
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5. STANDARD CONDITIONS
In so far as the same are applicable and are not inconsistent with the
express terms of this agreement the Standard Conditions of Sale (4th
edition) are incorporated in this agreement except that
(A) (i) the "Contract rate" means the Agreed Rate;
(ii) "transfer" means the Property Transfer;
(iii) "working day" means Business Day; and
(B) conditions 1.2, 1.3, 1.4, 2, 3.3, 4.1, 4.2, 4.3, 5.1.2, 5.2,
6.1, 6.3.1, 6.3.2, 6.3.6, 6.4, 6.5, 6.7, 6.8, 7.1, 7.2, 7.3,
7.5, 7.6, 8, 9 and 10 shall not apply.
85
PART B
BUSINESS PROPERTIES
FREEHOLD PROPERTIES WITH REGISTERED TITLES
REGISTERED PROPRIETOR
(OWNER) TITLE NUMBER NATURE OF TITLE SHORT DESCRIPTION USE
Unilever Bestfoods UK Part of title number Freehold Ambrosia Creamery, Lifton Factory/dairy (with associated
Limited DN468192 storage and office facilities)
Unilever Bestfoods UK DN468191 Freehold Land to the south of Station Part of factory/dairy site
Limited Road, Lifton
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SCHEDULE 9
(PENSIONS)
1. DEFINITIONS
(i) In this Schedule the following expressions shall have the
meanings respectively assigned to them:
"AN ACTUARY" means a Fellow of the Institute of Actuaries or a
Fellow of the Faculty of Actuaries in Scotland, such
actuary if appropriate to be employed by a company or
firm making available the advice of an actuary who is
a director or employee of that company or an employee
or partner of that firm.
"THE ACTUARY" means an Actuary (if any) appointed for the purposes
of paragraph 4(G) or 10(C).
"ARTICLE 141" means Article 141 of the Treaty of Rome or any
current or future legislation which implements
Article 141 or which implements any EC Directive
relating to equal treatment. References to the EC
shall be taken to include the European Community
(formerly the European Economic Community) and the
European Union.
"BESTFOODS TRANSFER means a transfer agreement for the Bestfoods Pension
AGREEMENT" Scheme to the Unilever Pension Fund dated 30 October,
2001;
"CONTRIBUTION PAY" shall have the same meaning as set out in the
Definitive Trust Deed and Rules of the UPF.
"LATE PAYMENT RATE" means 2 percentage points above the base rate from
time to time of National Westminster Bank plc.
"THE PAYMENT DATE" means either:
(a) the later of:
(i) the first Business Day following 30
days after the agreement of the
Relevant Capital Sum under
paragraph 10 or the certification
of the Relevant Capital Sum by the
Actuary in default of agreement,
and
(ii) the first Business Day following 30
days after the date by which the
Relevant Conditions have been
satisfied and the
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Seller has received written notice
of that fact from the Purchaser
(for the avoidance of doubt, such
notice shall not of itself
constitute conclusive evidence that
the Relevant Conditions have been
satisfied); or
(b) such other date as may be agreed in
writing between the Seller and the
Purchaser.
"PENSIONABLE PAY" shall have the same meaning as set out in the
Definitive Trust Deed and Rules of the UPF.
"PURCHASER'S ACTUARY" means an Actuary appointed by the Purchaser to act on
the Purchaser's behalf for the purposes of this
Schedule as the Purchaser notifies to the Seller.
"PURCHASER'S PENSION shall mean the retirement benefits scheme providing
SCHEME" death and retirement benefits for or in respect of
the Relevant Employees to be established or nominated
by the Purchaser pursuant to paragraph 4 or, if the
context so requires, the trustees of that scheme.
"RELEVANT CAPITAL SUM" means such sum in cash as is certified by the
Seller's Actuary and agreed with the Purchaser's
Actuary (or, in default of agreement, as determined
by the Actuary under paragraph 10) as being the
transfer value at the Completion Date attributable to
the Transferring Members calculated in accordance
with paragraph 8.
"RELEVANT CONDITIONS" means the obligations to be performed by the
Purchaser under paragraphs 4, 5, 7 and 14 (insofar as
those obligations have arisen by the time in
question).
"RELEVANT EMPLOYEES" means such of the Business Employees as are members
of the UPF immediately before the Completion Date.
"SELLER'S ACTUARY" means Xxxxxx Xxxxx & Xxxxxxx or such other Actuary
appointed by or on behalf of the Seller to act on the
Seller's behalf for the purposes of this Schedule as
the Seller notifies to the Purchaser.
"TIMING ADJUSTMENT" means, in relation to a period and in respect of each
sum to which this definition applies, the formula
found by calculating:
40% of the proportionate change during the period
specified of the FT/ S&P Actuaries World Ex UK Pound
Sterling Index with 86% of the gross dividend income
88
reinvested in the same index at the end of each
calendar month;
plus
40% of the proportionate change during the period
specified of the FTSE Actuaries All-Share Total
Return Index;
plus
20% of the proportionate change during the period
specified of the FTSE Actuaries Government Securities
15 Year Yield Total Return Index.
For the avoidance of doubt, if (for example), the
change in the Indices above during the period
specified is an increase of 5 per cent., then the
Timing Adjustment will be a multiplicative factor of
1.05.
The FT/ S&P Actuaries World Ex UK Pound Sterling
Index or the FTSE Actuaries All-Share Total Return
Index or the FTSE Actuaries Government Securities 15
Year Yield Total Return Index at a particular date is
the Index for that date. The Index for that date
shall be determined by the Seller's Actuary and
agreed by the Purchaser's Actuary. If the Seller's
Actuary and the Purchaser's Actuary fail to reach
agreement as to the Index or the calculation of the
above formula, the provisions of paragraphs 10(C) to
(F) inclusive shall apply with all necessary changes.
"TRANSFERRING MEMBER" means a Relevant Employee who:
(a) becomes a member of the Purchaser's Pension
Scheme on the Completion Date and who
immediately before that date was a member of
the UPF in pensionable service, and
(b) (i) who agrees in writing to a transfer
payment to the Purchaser's Pension
Scheme from the UPF in respect of
his or her interest therein (such
agreement in writing to include a
discharge in the Agreed Form in
favour of the UPF and the Seller's
Group for any liability to or in
respect of that Relevant Employee
to provide any further benefits
under the UPF); and
89
(ii) who does not withdraw that
agreement before such benefits are
transferred to the Purchaser's
Pension Scheme.
"UPF" means the Unilever Pension Fund, constituted by a
definitive trust deed and rules dated 31st January,
2000 (as amended) or, if the context so requires, the
trustee of the Unilever Pension Fund.
"VOLUNTARY FUND" means a fund comprising voluntary contributions paid
by members and the investments and moneys
representing those contributions and any income
derived therefrom but excluding any voluntary
contributions paid in return for the provision of a
pensionable service credit in the UPF.
(B) Save where specifically defined or where the context otherwise
requires, words and expressions used in Chapter I of Part XIV of the
Income and Corporation Taxes Xxx 0000 or in the Xxxxxxx Xxxxxxx Xxx
0000 shall have the same meanings in this Schedule.
2. THERE IS NO PARAGRAPH 2.
3. THERE IS NO PARAGRAPH 3.
4. PURCHASER TO PROVIDE BENEFITS FOR FUTURE SERVICE
(A) No later than the Completion Date the Purchaser shall procure
that:
(i) there shall have been established or nominated the
Purchaser's Pension Scheme which shall be
contracted-out of the State earnings related pension
scheme on the basis specified in Section 9(2B) of the
Xxxxxxx Xxxxxxx Xxx 0000 and capable of approval
under Chapter I of Part XIV of the Income and
Corporation Taxes Act 1988 by the Board of the Inland
Revenue, and
(ii) membership of the Purchaser's Pension Scheme is
offered to all Relevant Employees with effect from
the Completion Date who would have been in
pensionable service on the Completion Date in the UPF
but for the transaction provided for in this
Agreement without imposing any condition as to the
transfer of benefits in the UPF to the Purchaser's
Pension Scheme as a condition of membership of the
Purchaser's Pension Scheme.
(B)
(i) The Purchaser shall provide or procure to be provided
in respect of service for the period of 3 years from
and including the Completion Date, benefits payable
on terms no less favourable than those set out in
90
the Trust Deed and Rules of the UPF (subject to
paragraph 4(B)(ii)(b)) for and in respect of each
Transferring Member (such definition shall include,
for the purposes of this paragraph 4, any Relevant
Employee who joins the Purchaser's Pension Scheme on
the Completion Date and who does not elect to
transfer his benefits under the UPF to the
Purchaser's Pension Scheme) and his dependants,
which, taken as a whole in respect of such
Transferring Member, shall be no less favourable
overall (as agreed or determined in accordance with
paragraph 4(D)) than the benefits applicable to and
in respect of that Transferring Member under the
Trust Deed and Rules of the UPF at the Completion
Date and the Bestfoods Transfer Agreement except to
the extent otherwise agreed with the Transferring
Member.
(ii) For the purpose of this paragraph 4 and paragraph 5,
in determining whether benefits are "no less
favourable" than benefits under the UPF, the
following provisions shall apply (but for the
avoidance of doubt with paragraph 4(G) applying to
determine any disagreement between the Purchaser's
Actuary and the Seller's Actuary (or between the
Seller and the Purchaser) over the construction of
such provisions):
(a) benefits in the UPF shall be deemed to
include, and benefits to be provided or
procured to be provided by the Purchaser
shall include:
- a right to receive benefits
unreduced from age 60 (irrespective
of when the member reaches age 60
and irrespective of whether the
member retires from active
pensionable service or deferred
pensioner status); and
NOTE: Pre-1st October, 1987 female
members of the UPF have this
benefit as of right under the UPF
rules. Pre-1st October, 1987 male
members have this benefit as of
right in respect of post-16th May,
1990 pensionable service. For other
members (and for pre-17th May, 1990
pensionable service for pre-1st
October, 1987 male members) due
allowance for unreduced benefits
from age 60 is made in cash
equivalent calculations and see
also the allowance made in the
statement from the Seller's Actuary
comprised in Annex A to this
Schedule.
- where a Pensionable Employee has
elected, at any time before the
Completion Date, under the UPF to
purchase a pensionable service
credit with additional voluntary
contributions and the period over
which such contributions are
payable in respect of the cost of
that credit has not expired before
the Completion Date, a right, for
so long as he remains in
pensionable service by reference to
the Purchaser's Pension Scheme, to
purchase over the period commencing
on the
91
Completion Date the balance of the
pensionable service credit which he
would have been entitled to
purchase had he remained in
pensionable service by reference to
the UPF on the same terms and
conditions as apply under the
provisions of the UPF in force
immediately prior to the Completion
Date.
(b) where there is an established practice as to
the exercise of discretions in relation to
benefits, the Purchaser shall make an
announcement to the Relevant Employees which
is in the Agreed Form that it will continue
that practice, provided that the Purchaser
shall, subject to applicable law, have the
same rights of variation and discontinuance
of that practice as the relevant member of
the Seller's Group has immediately prior to
the Completion Date. This provision shall
also apply in relation to the promise
referred to in the document at tab S.I.20.6
in the Data Room as if such an announcement
had been issued by the Purchaser in relation
to that practice provided that no general
announcement shall be required in relation
to that practice.
(c) benefits in the UPF and benefits to be
provided or procured to be provided by the
Purchaser shall be valued on the basis of
the same actuarial method and assumptions as
are set out in the statement from the
Seller's Actuary referred to in paragraph 8,
modified to such extent as may be agreed in
writing by the Seller's Actuary and the
Purchaser's Actuary and the procedure
referred to in paragraph 10(C) to (F)
inclusive shall apply if any such
modification is not so agreed.
(d) whether or not a transfer is made to the
Purchaser's Pension Scheme in respect of
past service benefits, no less favourable
benefits in respect of the service of each
Relevant Employee for the period referred to
in paragraph 4(B)(i) must vest on the same
or shorter timescale and at least in the
same circumstances as if the Relevant
Employee concerned had continued to be an
active member of the UPF for so long as he
continues to accrue benefits under the
Purchaser's Pension Scheme.
(e) no less favourable benefits in respect of
service prior to and on and after the
Completion Date must also be of a type and
form approved by the Seller. For this
purpose, it is agreed that it will be
reasonable for the Seller's Actuary not to
approve money purchase benefits in place of
benefits under the UPF.
(f) where benefits are provided under the UPF on
the death or disability of a Relevant
Employee or his spouse, child or dependant,
equivalent benefits must be provided on such
events which are payable in circumstances
and under
92
conditions which are not materially less
favourable to the beneficiary concerned as
those which would have applied had the death
or disability occurred whilst the
beneficiary was a beneficiary of the UPF
under the provisions of the UPF in force
immediately prior to the Completion Date.
(g) where benefits in the UPF are calculated by
reference to pensionable pay at or in a
period immediately prior to the earlier of
retirement or leaving pensionable service,
benefits in the UPF shall be deemed to
include, and benefits to be provided or
procured to be provided by the Purchaser:
(i) shall include in respect of
benefits both under this paragraph
4 and under paragraph 5 a right to
receive such benefits calculated by
reference to such pensionable pay
at or in such period immediately
prior to leaving the employment of
a member of the Purchaser's Group
(whether or not continuing to
accrue benefits of any type under
the Purchaser's Pension Scheme
until leaving such employment) or
the member's voluntary opting out
of the Purchaser's Pension Scheme
without becoming a member of
another retirement benefits scheme
provided by the Purchaser's Group,
if earlier;
(ii) provided that, at any time after
the expiry of the 3 year period
after the Completion Date, the
Purchaser may determine that, with
effect from the expiry of that
period or later (the "CALCULATION
DATE"), such benefits shall,
instead, be calculated by reference
to such pensionable pay at or in
such period immediately prior to
the Calculation Date or, if
earlier, the date of leaving the
employment of a member of the
Purchaser's Group;
(iii) Except for any contributions due in respect of a
service credit under the UPF, the Purchaser shall
procure that, in the satisfaction of its obligation
under paragraph 4(B)(i), compulsory contributions
shall not be payable by a Pensionable Employee,
except to the extent otherwise expressly agreed in
writing by that Pensionable Employee, at a rate
greater than the rate:
(a) at which he would have been required to
contribute to the UPF during the period from
the day immediately after the Completion
Date to and including 31st December 2003
under the provisions of the UPF, had he been
an active member of the UPF throughout that
period and his employer had remained part of
the Seller's Group; and
93
(b) of 5% of Contribution Pay for the remainder
of the period referred to in paragraph
4(B)(i) after the expiry of the period in
(a) above.
(C) The obligations under paragraph 4(B) and paragraph 5(A) shall
continue in force even if the Purchaser disposes of a member
of the Purchaser's Group or all or any part of the business
thereof and accordingly the Purchaser shall procure that the
acquiror concerned honours the obligations under paragraph
4(B) and paragraph 5(A) in respect of each Transferring Member
(as such definition is extended in paragraph 4(B)(i))
concerned in such a disposal.
(D)
(i) The Purchaser shall procure that the Purchaser's
Actuary shall notify the Seller's Actuary in writing
of the benefits which it is proposed the Purchaser
will provide or procure to be provided in accordance
with paragraph 4(B).
(ii) The Seller's Actuary, on receipt of notification in
accordance with paragraph 4(D)(i), shall review the
benefits to be provided and shall determine by notice
in writing to the Purchaser's Actuary whether the
benefits proposed to be provided comply with the
requirements of paragraph 4(B).
(iii) If the Purchaser's Actuary does not agree with the
Seller's Actuary's determination referred to in
paragraph 4(D)(ii), the disagreement shall be
resolved in accordance with the procedure referred to
in paragraph 4(G). For the avoidance of doubt, the
Purchaser and the Seller agree that any question
relating to the construction of paragraph 4(B) shall
be resolved in accordance with the procedure in
paragraph 4(G).
(E) Any announcement to be issued by the Seller or a member of the
Purchaser's Group in relation to benefits the subject of this
paragraph 4 or paragraph 5 must be consistent with the terms
of this paragraph 4 and paragraph 5 and, prior to the issue of
any such announcement, the Seller or, as the case may be, the
Purchaser, shall provide to the other a copy of the intended
announcement and shall not issue it without prior consultation
with the other.
(F) The Purchaser's agreement to the provisions of this paragraph
4 and paragraph 5 is given by the Purchaser on the express
understanding that, if the Purchaser is in breach of any of
such provisions, the Seller may, at its absolute discretion,
and without limitation, seek to procure compliance with such
provisions by the Purchaser by applying to the court for
damages and/or specific performance.
(G) (i) If paragraph 4(D)(iii) applies, or if there is any
disagreement between the Seller and the Purchaser or
the Seller's Actuary and the Purchaser's Actuary as
to the construction of any provision of paragraph 4
or paragraph 5, the Purchaser's Actuary and the
Seller's Actuary shall
94
jointly appoint the Actuary to determine each and
every such disagreement. If they fail jointly to
appoint the Actuary, the Actuary shall be appointed
by the President for the time being of the Institute
of Actuaries at the instance of the party first
applying to him.
(ii) A determination given by the Actuary under this
paragraph 4(G) shall be conclusive and binding on the
parties hereto.
(iii) The Actuary shall act as an expert and not as an
arbitrator.
(iv) The costs of the Actuary shall be borne by the
Purchaser and the Seller in equal amounts or in such
other proportions as the Actuary shall determine to
be fair and reasonable in the circumstances.
5. PURCHASER TO OFFER BENEFITS FOR PAST SERVICE AND TO GIVE OTHER
UNDERTAKINGS
(A) The Purchaser shall procure that each Relevant Employee who
has not immediately before the Completion Date:
- ceased to be in employment of the Purchaser, or
- attained normal retirement age in the UPF,
shall, in respect of pensionable service up to the day before
the Completion Date, have the option of transferring, subject
to:
(a) the UPF agreeing to transfer the Relevant Capital Sum
as adjusted in accordance with paragraph 11, or
(b) a payment being made pursuant to paragraph 12(A),
the benefits accrued to and in respect of that Relevant
Employee in the UPF to the Purchaser's Pension Scheme on the
basis that the benefits to be provided for and in respect of
that Relevant Employee and his dependants under the
Purchaser's Pension Scheme in respect of pensionable service
up to the day before the Completion Date will be payable on
terms no less favourable than those set out in the Trust Deed
and Rules of the UPF (subject to paragraph 4(B)(ii)(b)) and
will, taken as a whole in respect of that Relevant Employee,
be no less favourable overall (as agreed or determined in
accordance with paragraphs 4(D) and 4(G)) than the benefits
for and in respect of that Relevant Employee until then
provided under the UPF and the Bestfoods Transfer Agreement.
(B) In determining, for the purpose of paragraph 5(A), whether
benefits under the Purchaser's Pension Scheme are "no less
favourable" than benefits under the UPF, the provisions of
paragraph 4(B)(ii) shall apply with all necessary changes.
(C) The Purchaser shall procure before the Payment Date that:
95
(i) the Purchaser's Pension Scheme delivers to the UPF an
undertaking under which the Purchaser's Pension
Scheme agrees:
(a) to accept any payment proposed to be made to
the Purchaser's Pension Scheme by the UPF in
respect of the Transferring Members;
(b) subject to receipt of the amount referred to
in paragraph 11 or to a payment being made
pursuant to paragraph 12(A) to provide
benefits to the Transferring Members in
accordance with paragraph 5(A); and
(c) to comply with the applicable requirements
of Clause 19(b) (Bulk transfers-out) of the
UPF Trust Deed, being:
- any undertakings given by the UPF
to the Board of Inland Revenue;
- the preservation requirements of
the Xxxxxxx Xxxxxxx Xxx 0000 (and
any regulations relating to the
preservation requirements made
under that Act); and
- the contracting-out requirements of
the Xxxxxxx Xxxxxxx Xxx 0000 (and
any regulations relating to the
contracting-out requirements made
under that or any other Act),
in each case to the extent applicable. For
the avoidance of doubt, that undertaking
will contain no further conditions which may
be requested by the UPF.
(ii) the employer of the Transferring Members in question
is named in a contracting-out certificate issued for
contracting-out on the basis specified in Section
9(2B) of the Xxxxxxx Xxxxxxx Xxx 0000 in relation to
the Purchaser's Pension Scheme; and
(iii) (a) the Purchaser produces evidence as to the
adequacy of the funding of the Purchaser's
Pension Scheme which is to the reasonable
satisfaction of the Seller, and the
Purchaser must procure that the funding of
the Purchaser's Pension Scheme is to the
reasonable satisfaction of the Seller; or
(b) the Purchaser agrees to amend the provisions
of the Purchaser's Pension Scheme in such a
way, which is to the reasonable satisfaction
of the Seller, that ring-fences the
liabilities and assets in relation to the
Transferring Members from all other
liabilities and assets of the Purchaser's
Pension Scheme both on an ongoing basis and
on a termination or winding-up of the
Purchaser's Pension Scheme; or
96
(c) the Purchaser's Actuary delivers a
certificate to the Seller and the UPF
confirming that the Purchaser's Pension
Scheme has no liabilities as at the
Completion Date.
(iv) The Purchaser's obligation under paragraph
5(C)(iii)(a) and (b) shall include an obligation to
amend the Purchaser's Pension Scheme or, to the
extent that is not within the control of the
Purchaser's Group, to establish or make available an
alternative Purchaser's Pension Scheme.
(v) For the purpose of paragraph 5(C)(iii)(a), the
funding of the Purchaser's Pension Scheme shall be
deemed to be to the reasonable satisfaction of the
Seller if:
(a) on the basis of the minimum funding
requirement imposed by Section 56 of the
Pensions Xxx 0000, the assets of the
Purchaser's Pension Scheme are at least
equal to its liabilities as at the date in
question; and
(b) on the basis of such reasonable actuarial
method and assumptions as are proposed by
the Seller's Actuary and agreed by the
Purchaser's Actuary, the assets of the
Purchaser's Pension Scheme are at least
equal to its liabilities as at the date in
question. In default of agreement between
the Seller's Actuary and the Purchaser's
Actuary the provisions of paragraph 10(C) to
(F) inclusive shall apply with all necessary
changes.
(D) The Purchaser shall procure that the notices to be issued to
Relevant Employees in respect of the option referred to in
paragraph 5(A) are in terms which require consents to a
transfer to be given by a date agreed between the Seller and
the Purchaser.
6. THERE IS NO PARAGRAPH 6.
7. PURCHASER TO COMPLY WITH CERTAIN OTHER CONDITIONS
The Purchaser shall:
(i) supply to the Seller and to the UPF copies of any notices to
be issued to the Relevant Employees in connection with the
matters contemplated by this Schedule before they are issued
to the Relevant Employees;
(ii) procure that no such notices as are referred to in paragraph
7(i) are issued to the Relevant Employees until the benefits
to be provided or procured to be provided by the Purchaser in
accordance with paragraphs 4 and 5 have been agreed or
determined in accordance with those paragraphs; and
(iii) return the forms of consent referred to in paragraph 5(D) to
the UPF.
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8. METHOD OF CALCULATION OF THE RELEVANT CAPITAL SUM
(A) The Relevant Capital Sum shall be calculated as the transfer
payment in respect of the Transferring Members, which is the
amount as at the Completion Date calculated in accordance with
the basis set out in the Statement from the Seller's Actuary
comprised in Annex A to this Schedule.
(B) In calculating the Relevant Capital Sum it shall be assumed
there is no obligation to equalise benefits (to the extent not
already equalised under the UPF) under Article 141 including,
without limitation, accrued rights to guaranteed minimum
pensions.
9. DATA TO BE PROVIDED
(A) As soon as reasonably practicable following the Completion
Date, the Seller shall procure that there is provided promptly
to the Seller's Actuary and the Purchaser's Actuary all
necessary data within its possession or under its power or
control for computation of the Relevant Capital Sum and that
this data is in all material respects true, complete and
accurate.
(B) As soon as reasonably practicable following the Completion
Date, the Purchaser shall procure that there is provided
promptly to the Seller's Actuary and the Purchaser's Actuary
all the necessary data within its possession or under its
power or control (including, for the avoidance of doubt, the
identity of the Transferring Members) for computation of the
Relevant Capital Sum and that this data is in all material
respects true, complete and accurate.
10. DETERMINATION OF RELEVANT CAPITAL SUM
(A) Subject to the Purchaser complying with its obligations under
paragraph 9(B), the Seller shall use all reasonable endeavours
to cause the Seller's Actuary to compute and certify to the
Purchaser's Actuary the Relevant Capital Sum no later than 2
months after the data has been provided to Seller's Actuary by
the Purchaser and the Seller or such other time period as the
Seller and Purchaser may agree.
(B)
(i) The Purchaser's Actuary shall review the computation
referred to in paragraph 10(A).
(ii) The Purchaser undertakes to the Seller to use all
reasonable endeavours to cause the Purchaser's
Actuary to conduct the review under (i) above
promptly.
(C) If the Purchaser's Actuary is not satisfied with the
computation referred to in paragraph 10(A), the Purchaser's
Actuary and the Seller's Actuary shall jointly appoint the
Actuary to certify the Relevant Capital Sum. If they fail
jointly to
98
appoint the Actuary, the Actuary shall be appointed by the
President for the time being of the Institute of Actuaries at
the instance of the party first applying to him.
(D) A certificate given by the Actuary under this paragraph 10
shall be conclusive and binding on the parties hereto.
(E) The Actuary shall act as an expert and not as an arbitrator.
(F) The costs of the Actuary shall be borne by the Purchaser and
the Seller in equal amounts or in such other proportions as
the Actuary shall determine to be fair and reasonable in the
circumstances.
11. SELLER TO USE REASONABLE ENDEAVOURS TO PROCURE PAYMENT OF RELEVANT
CAPITAL SUM
The Seller shall use its reasonable endeavours to procure that the UPF
shall subject to:
(i) the specific approval of the Board of the Inland Revenue,
(ii) the Purchaser being named in a contracting-out certificate
issued for contracting-out on the basis specified in Section
9(2B) of the Xxxxxxx Xxxxxxx Xxx 0000 in relation to the
Purchaser's Pension Scheme, and
(iii) the requirements of Clause 19(b) (Bulk transfers-out) of the
UPF Trust Deed,
pay the higher of:
- the Relevant Capital Sum; and
- an amount calculated by the Seller's Actuary as representative
of the aggregate of cash equivalents (as calculated under
Regulation 7 and 8(2) of the Occupational Pension Schemes
(Transfer Value) Regulations 1996) of the Transferring Members
as at the Completion Date, for the avoidance of doubt on the
basis that, for this purpose, such Transferring Members have
the right to retire at age 60,
in cash adjusted by the Timing Adjustment for the period from the
Completion Date to and including the day before the Payment Date (or,
if earlier, to and including the day before the date of actual payment)
to the Purchaser's Pension Scheme on or before the Payment Date.
12. SHORTFALL
(A) Subject to the conditions in paragraph 11 (i), (ii) and (iii)
having been satisfied, if the UPF does not transfer the full
amount referred to in paragraph 11 to the Purchaser's Pension
Scheme on or before the Payment Date, the Seller shall, no
later than 14 days after the Payment Date, pay to the
Purchaser, so far as possible by way of repayment of the
consideration for the sale of the Business Assets referred to
in Clause 4, an amount in cash (the "SHORTFALL PAYMENT")
calculated according to the formula:
99
(A-B) + C
where
A = the higher of:
- the Relevant Capital Sum; and
- an amount calculated by the Seller's Actuary
as representative of the aggregate of cash
equivalents (as calculated under Regulation
7 and 8(2) of the Occupational Pension
Schemes (Transfer Value) Regulations 1996)
of the Transferring Members as at the
Completion Date, for the avoidance of doubt
on the basis that, for this purpose, such
Transferring members have the right to
retire at 60,
adjusted by the Timing Adjustment for the period from
the Completion Date to and including the day before
the Payment Date.
B = the value of the amount (if any) paid by the UPF to
the Purchaser's Pension Scheme (adjusted by the
Timing Adjustment for the period from and including
the date of actual payment by the UPF to and
including the day before the Payment Date);
C = if the day of payment under this paragraph 12(A) is
more than 10 Business Days after the Payment Date,
interest at the Late Payment Rate on (A-B) in respect
of the period from and including the day 10 Business
Days after the Payment Date to and excluding the date
of payment;
The amount of the Shortfall Payment shall be determined by the
Seller's Actuary and agreed by the Purchaser's Actuary or, in
default of agreement, be determined under paragraph 10(C) to
(F) inclusive, with all necessary changes.
(B)
(i) On receipt of the Shortfall Payment, the Purchaser
shall promptly pay an amount equal to (A - B) + C (as
defined above) into the Purchaser's Pension Scheme
(the "SHORTFALL CONTRIBUTION").
(ii) If, in respect of the Shortfall Contribution, the
Purchaser obtains (in whole or in part) for the
accounting period for which a payment equal to the
Shortfall Contribution is paid into the Purchaser's
Pension Scheme (or for any future accounting period)
a deduction for part (or the whole) of that payment
which results in a Reduction in Taxable Profits for
the purposes of corporation tax:
- in the accounting period (or accounting
periods) in which that deduction is obtained
or,
100
- in a case where that deduction exceeds the
available taxable profits for the said
accounting period (or any of the said
accounting periods) but gives rise to a tax
loss or other tax relief that is eligible to
be carried forward for offset against future
taxable profits, in any future accounting
period (or future accounting periods) in
which such offset is obtained,
the Purchaser shall pay to the Seller so far as
possible by way of addition to the consideration for
the sale of the Business Assets referred to in Clause
4, an amount equal to:
- the aggregate amount by which the Shortfall
Contribution reduces the said taxable
profits in the accounting period (or
accounting periods) in question,
multiplied by
- the marginal rate of tax applicable to the
Purchaser for the accounting period (or, as
the case may be, for each of the accounting
periods) in which the deduction is obtained
or (as the case may be) the tax loss or
other tax relief arising from that deduction
is utilised.
(iii) The Purchaser shall procure that a Reduction in
Taxable Profits in respect of the Shortfall
Contribution is obtained in priority to any Reduction
in Taxable Profits which could be obtained in respect
of any other matter with a view to ensuring that full
payment is made under (ii) above to the Seller as
soon as practicable after the Shortfall Contribution
is paid to the Purchaser's Pension Scheme.
(iv) Any payment under (ii) above shall be made by the
Purchaser forthwith upon the later of:
- the date on which tax would otherwise have
been paid if it had not been for the said
Reduction in Taxable Profits (or, if there
is more than one date on which the relevant
amount of tax would otherwise have been
paid, whether by instalments or otherwise,
the earliest of such dates); and
- the amount of the said Reduction in Taxable
Profits being certified by the auditor to
the Purchaser (which certification the
Purchaser shall procure is made at the
earliest reasonable practical opportunity,
each accounting period being dealt with
separately).
(v) For the purpose of this paragraph (B) a "REDUCTION IN
TAXABLE PROFITS" includes not only a reduction in the
taxable profits of the Purchaser but also a reduction
in the taxable profits for any accounting period of
any member of any group or consortium to which any
tax loss or other tax relief arising from or
attributable to the payment by the Purchaser of an
amount equal to the Shortfall Contribution is
surrendered by way of group relief or consortium
relief in accordance
101
with the provisions of Section 402-413, Income and
Corporation Taxes Xxx 0000.
(vi) If the amount actually transferred from the UPF to
the Purchaser's Pension Scheme in respect of the
Transferring Members is in excess of the amount
referred to in paragraph 11 (the amount of such
difference being referred to in this paragraph as the
"EXCESS"), then the Purchaser shall pay to the
Seller, so far as possible by way of addition to the
consideration for the sale of the Business Assets
referred to in Clause 4, the following amounts at the
following times:
- on the first anniversary of the date the
Excess is paid to the Purchaser's Pension
Scheme, a sum in cash equal to one third of
the Excess plus interest at the base rate
from time to time of National Westminster
Bank plc (the "BASE RATE") in respect of the
period from the date the Excess is paid
until the date of payment of this amount to
the Seller;
- on the second anniversary of the date the
Excess is paid to the Purchaser's Pension
Scheme, a sum in cash equal to one third of
the Excess plus interest at the Base Rate in
respect of the period from the date the
Excess is paid until the date of payment of
this amount to the Seller; and
- on the third anniversary of the date the
Excess is paid to the Purchaser's Pension
Scheme, a sum in cash equal to one third of
the Excess plus interest at the Base Rate in
respect of the period from the date the
Excess is paid until the date of payment of
this amount to the Seller.
The amount of the Excess shall be determined by the
Seller's Actuary and agreed by the Purchaser's
Actuary or, in default of agreement, be determined
under paragraph 10(C) to (F) inclusive, with all
necessary changes.
13. VOLUNTARY CONTRIBUTIONS
Notwithstanding the foregoing, the Voluntary Fund within the UPF and
the benefits payable or prospectively or contingently payable therefrom
and the contributions payable thereto shall be disregarded in
determining the Relevant Capital Sum except that there shall be added
to the Relevant Capital Sum that part of the Voluntary Fund which is
attributable to those Transferring Members who join the Purchaser's
Pension Scheme on the Scheme Change Date and who agree to the transfer
of their Voluntary Fund.
14. NO ASSISTANCE TO BE GIVEN BY THE PURCHASER
The Purchaser undertakes to take no action and to give no assistance
whether directly or indirectly to any person in any manner which would
or might result in the UPF having to pay a larger amount than the
amount payable under paragraph 11 to the Purchaser's
102
Pension Scheme. The Purchaser agrees that this undertaking extends to
the Purchaser and any other company directly or indirectly controlled
or connected with the Purchaser.
15. AGREEMENT TO ACT PROMPTLY
The Purchaser and the Seller will use their respective reasonable
endeavours to ensure that they comply with all their obligations under
this Schedule promptly.
103
ANNEX A STATEMENT FROM THE SELLER'S ACTUARY
104
SCHEDULE 10
(BUSINESS EMPLOYEES)
1. If any Business Employee is made redundant by, or ceases on the grounds
of Ill-Health to be employed by, any member of the Purchaser's Group
(or any person to whom the Business or part thereof or any member of
the Purchaser's Group is transferred) within three years of the
Completion Date the Purchaser shall, subject to paragraph 4 below:
(a) procure that there shall be paid to such Business Employee a
sum of money as redundancy pay or Ill-Health pay which shall
be calculated in such a manner as to be no less favourable
than a calculation done in accordance with the terms
applicable to the particular Business Employee comprised in
the Data Room; and
(b) comply with the provisions of paragraph 2 in respect of such
Business Employee, to the extent applicable.
2. (a) If any Business Employee (whether or not a Transferring Member
(as defined in Schedule 9)) to whom the provisions of
paragraph 1 apply is at the date of redundancy or cessation of
employment on grounds of Ill-Health:
(i) aged 50 or more; and
(ii) has completed at least 10 years' Pensionable Service
(as defined in paragraph 3),
then the payment to be made to such Business Employee shall be
calculated in accordance with the early retirement terms
comprised in the Data Room.
(b) If the employment of any Business Employee to whom paragraph
2.2 of part XII of the transfer agreement (at I.24.2 of the
Data Room) (the "TRANSFER AGREEMENT") applies is terminated by
reason of redundancy with effect from a date on or before 31
December 2003, then the payment to be made to such Business
Employee shall be calculated in accordance with paragraph 2.2
of part XII of the Transfer Agreement, ignoring the provisions
of paragraph 2.1 of the Transfer Agreement.
3. "PENSIONABLE SERVICE" for the purpose of paragraph 2(a) means service
which is pensionable service under the UPF and under the Purchaser's
Pension Scheme (as defined in Schedule 9) and includes linked
qualifying service. Pensionable Service shall be construed in
accordance with Section 70 of the Xxxxxxx Xxxxxxx Xxx 0000 and linked
qualifying service shall be construed in accordance with Section 179 of
the Xxxxxxx Xxxxxxx Xxx 0000.
4. For the purposes of this Schedule 10:
(a) a Business Employee shall be redundant where:
105
(i) he or she is entitled to a redundancy payment under
the Employment Rights Xxx 0000; or
(ii) his or her employment is terminated at the request of
his or her employer (this does not, for the avoidance
of doubt, include termination as a result of the
employee's misconduct) otherwise than in
circumstances in which paragraph (i) applies; and
(b) "ILL-HEALTH" shall have the same meaning as described in
document I.15.1 comprised in the Data Room.
106
SCHEDULE 11
(VAT)
1. The Seller and the Purchaser shall use all reasonable endeavours to
procure that the supply of those Business Assets under this Agreement
which would otherwise be chargeable to VAT (but for the sale being
treated, for the purposes of applicable VAT legislation, as a transfer
of all or part of the assets of a business as a going concern as
hereinafter mentioned) and which the Seller and the Purchaser consider
should qualify as a transfer of all or part of the assets of a business
as a going concern for the purposes of applicable VAT legislation is so
treated by the relevant Tax Authority, except that the Seller shall not
be required by virtue of this sub-clause to make any appeal to any
court against any determination of the relevant Tax Authority that that
sale does not fall to be so treated.
2. The Purchaser declares that it (or, if it procures that the Business
Assets referred to in paragraph 1 are acquired by a Designated
Purchaser, the relevant Designated Purchaser) is or will as a result of
such acquisition become a taxable person for the purposes of VAT and
the Purchaser undertakes to procure that the Purchaser or such person
is either duly registered for VAT purposes in the relevant jurisdiction
or jurisdictions or a member of a group of companies for VAT purposes
of which the representative member is duly registered for those
purposes in the relevant jurisdiction or jurisdictions, in either case
by Completion, and the Purchaser declares that the Purchaser or such
person shall upon and immediately after Completion use the Business
Assets referred to in paragraph 1 to carry on the same kind of business
(whether or not as part of any existing business of the Purchaser or
such other person) as that carried on by the relevant Business Seller
or Business Sellers in relation to the Business Assets referred to in
paragraph 1 owned by such Business Sellers before Completion.
3. The Seller shall be entitled to retain all those records of the
Business which under Section 49 VATA 1994, paragraph 6 of Schedule 11
to the VATA 1994 or any other relevant VAT legislation are required to
be preserved after Completion and shall request the relevant Tax
Authority so to direct in accordance with applicable VAT legislation.
If the relevant Tax Authority does not grant the request the Seller
shall on demand deliver these records to the Purchaser. The Purchaser
shall render all reasonable assistance to the Seller in connection with
such a request.
4. The Seller shall for such period as may be required by applicable law
preserve all the records of the Business that it is entitled to retain
pursuant to paragraph 3 and, upon being given reasonable notice by the
Purchaser or its agents, the Seller shall make those records available
to the Purchaser or its agents for inspection (during Working Hours) or
copying (at the Purchaser's expense).
5. The Seller shall not at any time cease to preserve the records of the
Business that it is entitled to retain pursuant to paragraph 3 without
giving the Purchaser a reasonable opportunity to inspect and remove
such of them as the Purchaser wishes, and if the records are delivered
to the Purchaser pursuant to paragraph 3, paragraphs 4 and 5 shall
apply as if references to the Seller are references to the Purchaser
and vice versa.
107
6. If, notwithstanding the provisions of paragraph 1, the relevant Tax
Authority shall determine that VAT is chargeable in respect of the
supply of all or any of the Business Assets referred to in paragraph 1
under this Agreement, the Seller shall notify the Purchaser of that
determination within five Business Days of its being so advised by the
relevant Tax Authority and the Purchaser (on behalf of the relevant
Designated Purchaser) shall pay to the Seller (on behalf of the
relevant Business Seller or Business Sellers) by way of additional
consideration a sum equal to the amount of VAT (together with any
interest and/or penalties relating thereto) determined by the relevant
Tax Authority to be so chargeable within five Business Days of the
Seller notifying the Purchaser of that determination (against delivery
by the Seller on behalf of the relevant Business Seller or Business
Sellers of an appropriate tax invoice for VAT purposes). For the
avoidance of doubt, the payment "by way of additional consideration" of
a sum equal to the amount of VAT (together with any interest and/or
penalties relating thereto) determined by the relevant Tax Authority to
be so chargeable shall be inclusive of VAT.
7. At Completion, the Purchaser (on behalf of the relevant Designated
Purchaser) shall pay to the Seller (on behalf of the relevant Business
Seller or Business Sellers) by way of additional consideration for the
Business Assets a sum equal to the amount of any VAT chargeable on the
supply of the Business Assets which are not referred to in paragraph 1
against delivery by the Seller (on behalf of the relevant Business
Seller or Business Sellers) of an appropriate tax invoice for VAT
purposes. For the avoidance of doubt, the payment "by way of additional
consideration" of a sum equal to the amount of VAT (together with any
interest and/or penalties relating thereto) determined by the relevant
Tax Authority to be so chargeable shall be inclusive of VAT.
8. If the Purchaser pays the Seller an amount in respect of VAT under
paragraph 6 above and the relevant Taxation Authority rules that all or
part of it was not properly chargeable, the Seller shall repay the
amount or relevant part of it to the Purchaser. The Seller shall make
the repayment promptly after the ruling, unless it has already
accounted to the relevant Taxation Authority for the VAT. In that case
the Seller shall apply for a refund of the VAT (plus any interest
payable by the relevant Taxation Authority), use reasonable endeavours
to obtain it as speedily as practicable and pay promptly to the
Purchaser the amount of the refund and any interest payable by the
relevant Taxation Authority when and to the extent received from the
relevant Taxation Authority.
108
Signed by )
as duly authorised attorney )
for and on behalf of ) Xxxxx Xxxxx (sgd)
UNILEVER BESTFOODS UK LIMITED ) ____________________________
Signed by )
duly authorised )
for and on behalf of ) Xxxxxx Xxx (sgd)
PREMIER AMBIENT PRODUCTS (UK) LIMITED ) ____________________________
CONTENTS
PAGE
----
1. INTERPRETATION 1
2. SALE AND PURCHASE 1
3. CONSIDERATION 3
4. STOCKS ADJUSTMENT 3
5. CONDUCT OF BUSINESS BEFORE COMPLETION 4
6. COMPLETION 6
7. ACTION AFTER COMPLETION 7
8. THIRD PARTY CONSENTS FOR THE SALE OF BUSINESS ASSETS 8
9. CONTRACTS 8
10. ASSUMED LIABILITIES, PAYABLES AND RETAINED LIABILITIES 10
11. RECEIVABLES AND APPORTIONMENT 10
12. VALUE ADDED TAX 13
13. EMPLOYEES 13
14. PENSIONS 17
15. INSURANCE 17
16. CONTINUING ARRANGEMENTS BETWEEN THE SELLER'S GROUP AND THE MONTANA BUSINESS 18
17. SELLER'S WARRANTIES AND PURCHASER'S REMEDIES 20
18. PURCHASER'S WARRANTIES 21
19. PURCHASER'S UNDERTAKINGS 22
20. RESTRICTIONS ON THE SELLER 24
21. RESTRICTIONS ON THE PURCHASER 24
22. PROVISION RELATING TO RESTRICTIONS 25
23. BOOKS AND RECORDS 25
24. PAYMENTS 26
25. EFFECT OF COMPLETION 27
26. CAPACITY OF THE SELLER AND THE XXXXXXXXX 00
00. REMEDIES, WAIVERS AND INDEMNIFICATION 27
28. NO ASSIGNMENT 30
29. FURTHER ASSURANCE 30
30. ENTIRE AGREEMENT 31
31. NOTICES 32
32. ANNOUNCEMENTS 33
33. CONFIDENTIALITY 34
34. COSTS AND EXPENSES 35
35. COUNTERPARTS 36
36. INVALIDITY 36
37. THIRD PARTY RIGHTS 36
38. PURCHASER'S GROUP COMPANY OBLIGATIONS 37
39. GOVERNING LAW 37
40. JURISDICTION 37
41. LANGUAGE 37
SCHEDULE 1 (INTERPRETATION) 38
SCHEDULE 2 (COMPLETION ARRANGEMENTS) 58
SCHEDULE 3 (THE WARRANTIES) 60
SCHEDULE 4 (LIMITATIONS ON LIABILITY) 71
SCHEDULE 5 (COMPLETION STATEMENT IN RESPECT OF BUSINESS STOCKS) 77
SCHEDULE 6 (BUSINESS SELLERS AND DESIGNATED PURCHASERS) 80
SCHEDULE 7 (ALLOCATION OF FINAL CASH CONSIDERATION) 81
SCHEDULE 8 (BUSINESS PROPERTIES) 83
SCHEDULE 9 (PENSIONS) 86
SCHEDULE 10 (BUSINESS EMPLOYEES) 104
SCHEDULE 11 (VAT) 106
LIST OF ATTACHMENTS
1. Financial Information:
Part 1: 6 months to 30 June 2003
Part 2: 12 months to 31 December 2002
Part 3: Notes
2. Unilever Accounting Policy Manual.
3. Data Room List.
4. Intellectual Property:
Part 1: Business IPR
Part 2: Ambrosia Logo
Part 3: Xxxxx & Xxxxxx Logo
5. Unilever and Retained Marks:
Part 1: Unilever Marks
Part 2: Retained Marks
6. Business Employees:
Part 1: Excluded Employees
Part 2: Seconded Employees
Part 3: Senior Employees
7. Format of Completion Stocks Statement.
8. Press Announcements.
9. Additional Excluded Assets.
10. Retained Products.
11. Nordic Products
LIST OF AGREED FORM DOCUMENTS
Transitional Services Agreement
Trade Xxxx Assignments
Property Transfer
Announcement concerning discretionary practices (retirement benefits)
UPF transfer/discharge form
CONFORMED COPY
DATED 2 NOVEMBER, 2003
UNILEVER BESTFOODS UK LIMITED
AND
PREMIER AMBIENT PRODUCTS (UK) LIMITED
---------------------------------------------
BUSINESS SALE AND PURCHASE
AGREEMENT
---------------------------------------------
XXXXXXXXX AND MAY
XXX XXXXXXX XXX
XXXXXX XX0X 0XX
(GNE/ADJ)
CD033070043
