EXHIBIT 2.1
CONFORMED COPY
DATE 20TH DECEMBER, 2001
UNILEVER U.K. HOLDINGS LIMITED
AND
INVERNESS MEDICAL INNOVATIONS, INC.
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SALE AGREEMENT
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Slaughter and May
35 Basinghall Street
London EC2V 5DB
CFIS/RJYT/ADJ
CD020020072
CONTENTS
PAGE
1. INTERPRETATION .......................................................... 1
2. SALE AND PURCHASE ....................................................... 1
3. CASH CONSIDERATION ...................................................... 5
4. FIXED INTRA-GROUP DEBT AMOUNTS .......................................... 6
5. WORKING CAPITAL AND VARIABLE INTRA-GROUP DEBT ADJUSTMENTS ............... 6
6. COMPLETION ACCOUNTS AND VARIABLE INTRA-GROUP DEBT STATEMENT ............. 9
7. COMPLETION .............................................................. 12
8. THIRD PARTY CONSENTS FOR THE TRANSFER OF THE US BUSINESS ASSETS ......... 13
9. TRANSFER OF US CONTRACTS AND IP LICENCES ................................ 13
10. ASSUMED LIABILITIES AND RETAINED LIABILITIES ............................ 16
11. INTRA-GROUP TRADING AND SERVICES ........................................ 21
12. INTRA-GROUP GUARANTEES AND OTHER AGREEMENTS ............................. 23
13. EMPLOYEES ............................................................... 24
14. PENSIONS ................................................................ 33
15. RISK AND INSURANCE ...................................................... 33
16. DUTCH SALES STAFF ....................................................... 39
17. INTELLECTUAL PROPERTY ................................................... 41
18. REORGANISATION INDEMNITY ................................................ 42
19. VENDOR'S WARRANTIES AND UNDERTAKINGS AND PURCHASER'S REMEDIES ........... 44
20. PURCHASER'S WARRANTIES .................................................. 51
21. PURCHASER'S UNDERTAKINGS ................................................ 53
22. RESTRICTIONS ON THE VENDOR .............................................. 55
23. PROFIT AND LOSS EQUALISATION ............................................ 58
24. BOOKS AND RECORDS ....................................................... 59
25. NO SET OFF .............................................................. 60
26. EFFECT OF COMPLETION .................................................... 60
27. REMEDIES AND WAIVERS .................................................... 61
28. NO ASSIGNMENT ........................................................... 61
29. FURTHER ASSURANCE ....................................................... 62
30. ENTIRE AGREEMENT ........................................................ 63
31. NOTICES ................................................................. 64
32. ANNOUNCEMENTS ........................................................... 65
33. CONFIDENTIALITY ......................................................... 66
34. COSTS AND EXPENSES ...................................................... 68
35. COUNTERPARTS ............................................................ 68
36. INVALIDITY .............................................................. 69
37. CAPACITY OF THE PARTIES AND GROUP COMPANY OBLIGATIONS ................... 69
38. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 ............................ 70
39. GOVERNING LAW ........................................................... 70
40. JURISDICTION ............................................................ 70
41. AGENT FOR SERVICE OF PROCESS ............................................ 70
42. LANGUAGE ................................................................ 71
SCHEDULE 1 (Interpretation) ................................................ 72
SCHEDULE 2 (Information about the Vendor) .................................. 94
SCHEDULE 3 (Information about the Companies) ............................... 95
SCHEDULE 4 (Ownership of the Shares) ....................................... 97
SCHEDULE 5 (Completion Arrangements) ....................................... 98
SCHEDULE 6 (Warranties) .................................................... 103
SCHEDULE 7 (Limitations on Liability) ...................................... 129
SCHEDULE 8 (Pensions) ...................................................... 143
SCHEDULE 9 (Properties) .................................................... 179
SCHEDULE 10 (Completion Accounts and Variable Intra-Group Debt Statement) .. 180
Schedule 11 (Employees) .................................................... 181
Schedule 12 (Allocation of Cash Consideration) ............................. 182
Schedule 13 (Fixed Intra-Group Debt Amounts) ............................... 183
Schedule 14 (Domain Names) ................................................. 184
Schedule 15 (Patent Cases) ................................................. 185
Schedule 16 (Intellectual Property Licences) ............................... 186
LIST OF ATTACHMENTS
1. Business Purchase Agreement dated 20th July, 2001 between Unipath
Management Limited and Unipath Limited (then named, respectively, Unipath
Limited and MW Grieg Limited).
2. Reorganisation Step Plan.
3. Accounts of each of the Companies.
4. Indirect Taxation.
5. Management Accounts and October Management Accounts of the Transferring
Business.
6. Press Announcements (Vendor (x2) and Purchaser).
7. List of Monoclonal Assets.
8. Accounting Manual Extracts.
9. Property Documents referred to in SUB-CLAUSE 19(K).
10. Agreement for the transfer of the Share in Unipath Diagnostics GmbH.
11. Calculation of the aggregate working capital of the Companies and the US
Business as at 30th June, 2001.
12. Severance Provisions Applicable to US Employees.
13. US Balance Sheet.
14. Employee non-contractual benefits.
15. Certain IP Licences.
16. Directors and Company Secretaries to resign at Completion.
LIST OF AGREED FORM DOCUMENTS
Bedford Property Transfer.
Deed of Undertaking.
Antibody Patent Licence.
Intellectual Property Assignments.
Tax Covenant.
Transitional Services Agreement.
US Transfer Agreement.
US Lease Assignments.
Power of Attorney (as referred to in SUB-PARAGRAPHS 1(A)(xii) and 1(B)(ix) of
SCHEDULE 5 (Completion Arrangements)).
SALE AGREEMENT
DATED 20th December, 2001
BETWEEN
1. UNILEVER U.K. HOLDINGS LIMITED (registered in England and Wales no. 17049)
whose registered office is at Unilever House, Blackfriars, London EC4P 4BQ
(the "VENDOR");
AND
2. INVERNESS MEDICAL INNOVATIONS, INC. (incorporated under the laws of the
State of Delaware, United States of America) whose principal office is at
Suite 200, 51 Sawyer Road, Waltham, Massachusetts 02453, United States of
America (the "PURCHASER").
WHEREAS:
(A) The Vendor's Group and the Companies carry on the Transferring Business (as
defined in this Agreement). The Vendor is the beneficial owner of, or is
able to procure the sale of, the Shares, the Bedford Property, the US
Business Assets, the IP Assets and the Monoclonal Assets (each as defined
in this Agreement) on the terms of this Agreement.
(B) The Purchaser has agreed to purchase, or procure the purchase of, the
Shares, the Bedford Property, the US Business Assets, the IP Assets and the
Monoclonal Assets for the consideration, including the assumption of
liabilities, provided for in this Agreement and on the terms of this
Agreement.
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 (Interpretation).
(B) The Schedules 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.
2. SALE AND PURCHASE
SHARE SALE
(A) On the terms set out in this Agreement, the Vendor shall sell, or procure
the sale of, and the Purchaser shall purchase, or procure the purchase by
the relevant Designated Purchaser of, the full legal and beneficial
interest in the Shares as at and with effect from Completion. The Shares
shall be sold free from all liens, charges, equities,
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encumbrances and other rights exercisable by third parties and together
with all rights attached or accruing to them at Completion.
(B) Each relevant Designated Purchaser shall be entitled, with effect from
Completion, to exercise all rights attaching to or accruing to the Shares
to be acquired by it including, without limitation, the right to receive
all dividends, distributions or other returns of capital declared, paid or
made by each relevant Company in respect of periods commencing on or after
Completion.
(C) The Vendor (for itself and on behalf of each other member of the Vendor's
Group) waives, and will procure the waiver prior to Completion of, all
rights of pre-emption over any of the Shares conferred upon it or any other
member of the Vendor's Group in any way.
BEDFORD PROPERTY SALE
(D) On the terms set out in this Agreement (in particular, but without
limitation, Part C of SCHEDULE 9 (Properties)), the Vendor shall sell and
the Purchaser shall purchase, or procure the purchase by the relevant
Designated Purchaser of, the Bedford Property.
US BUSINESS SALE
(E) On the terms set out in this Agreement, the Vendor shall sell, or procure
the sale of, and the Purchaser shall purchase, or procure the purchase by
the relevant Designated Purchaser of, the full legal and beneficial
interest (subject as qualified in PARAGRAPH (vi)) in the US Business Assets
listed below as at and with effect from Completion in each case free, with
the exception of Permitted Encumbrances, from all liens, charges, equities,
encumbrances and other rights exercisable by third parties:
(i) the US Goodwill;
(ii) the US Properties;
(iii) the US Plant and Machinery;
(iv) the US Business Stocks;
(v) the benefit of the US Contracts and US Claims;
(vi) all right, title and interest of any member of the Vendor's Group
in:
(a) the US Business Information; and
(b) all US Business Records to the extent, but only to the extent,
that they contain or relate to US Business Information or on
which US Business Information is recorded;
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(vii) all rights of the Vendor or any other member of the Vendor's Group
to receive payment of Intra-Group Trading and Services Amounts in
respect of the US Business;
(viii) the US Receivables and amounts recoverable in respect of Indirect
Taxation in respect of the US Business to the extent that such
amounts are taken into account in the calculation of the Working
Capital Amount; and
(ix) all other property, assets and rights of the Vendor or any other
member of the Vendor's Group predominantly used in or for the
purposes of the US Business at Completion;
but excluding the following:
(x) cash or cash equivalents, in hand or at the bank used in the US
Business;
(xi) save as set out in CLAUSE 15 (Risk and Insurance), the benefit of
any insurance policy relating to any of the US Business Assets;
(xii) any rights of any member of the Vendor's Group arising under this
Agreement, any Specified Agreement or any other document required to
be delivered or entered into at Completion under the terms of
SCHEDULE 5 (Completion Arrangements);
(xiii) any rights in relation to Intellectual Property used in the US
Business;
(xiv) without prejudice to the provisions of the Transitional Services
Agreement, any rights of the US Business Seller or any other member
of the Vendor's Group to be provided with goods, services or
facilities in relation to the US Business by other members of the
Vendor's Group together with any assets employed by such other
members of the Vendor's Group in connection with the provision of
such goods, services or facilities in relation to the US Business;
(xv) except in the case of amounts recoverable in respect of Indirect
Taxation in respect of the US Business to the extent that such
amounts are taken into account in the calculation of the Working
Capital Amount and with the exception of rights to receive payment
of Intra-Group Trading and Services Amounts (which rights shall be
sold pursuant to PARAGRAPH (vii)), any rights of the US Business
Seller or any other member of the Vendor's Group to receive any
indebtedness incurred in relation to the US Business and owing to it
by other members of the Vendor's Group;
(xvi) all documents and other information prepared or obtained by members
of the Vendor's Group in connection with the sale of the US Business
Assets or any other assets to be sold pursuant to this Agreement
(including, without limitation, details of offers received from
parties other than the Purchaser);
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(xvii) amounts recoverable in respect of Taxation (other than any amounts
recoverable in respect of Indirect Taxation in respect of the US
Business to the extent that such amounts are taken into account in
the calculation of the Working Capital Amount) relating to the US
Business arising in respect of:
(a) any period of account for Taxation purposes ending on or before
Completion; or
(b) in the case of a Straddle Period, the portion of that period
ending on Completion; or
(c) any acts, events or occurrences occurring on or before
Completion, PROVIDED that the Taxation is properly attributable
to a period specified in (a) or (b) above; and
(xviii) any rights, claims and causes of action of any member of the
Vendor's Group relating to any of the assets described in
PARAGRAPHS (x) to (xvii) above or, to the extent relevant to the
US Business, to any Retained Liabilities.
IP ASSETS
(F) On the terms set out in this Agreement, the Vendor shall sell, or procure
the sale of, and the Purchaser shall purchase, or procure the purchase by
the relevant Designated Purchaser of, the full legal and beneficial
interest in the IP Assets as at and with effect from Completion free from
all liens, charges, equities, encumbrances and other rights exercisable by
third parties (other than (i) in the case of US IP Assets only,
encumbrances of the type within PARAGRAPH (i) of the definition of
Permitted Encumbrances set out in SCHEDULE 1 (Interpretation), and (ii) in
the case of all IP Assets, the BD Licence and the rights of counterparties
under the IP Licences disclosed in the Disclosure Letter), provided that
nothing in this CLAUSE 2(F) shall be or shall be deemed to be a covenant,
warranty, representation or undertaking as to validity or non-infringement
of any of the IP Assets.
(G) SUB-CLAUSE 2(F) shall operate as an assignment of such of the Business IPR
as is not the subject of a registration or an application for registration
with effect from Completion. Any Business IPR which is registered or which
is the subject of an application for registration shall be assigned to the
Purchaser or relevant Designated Purchaser pursuant to the Intellectual
Property Assignments and any subsequent assignments to be entered into
following Completion pursuant to CLAUSE 29(B).
MONOCLONAL ASSETS
(H) On the terms set out in this Agreement, the Vendor shall sell, or procure
the sale of, and the Purchaser shall purchase, or procure the purchase by
the relevant Designated Purchaser of, the full legal and beneficial
interest in the Monoclonal Assets as at and with effect from Completion in
each case free from all liens, charges, equities, encumbrances and other
rights exercisable by third parties.
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GENERALLY
(I) In consideration for the sale to it (or the relevant Designated Purchaser)
of the Shares, the Bedford Property, the US Business Assets, the IP Assets
and the Monoclonal Assets, the Purchaser shall or shall procure that the
relevant Designated Purchaser shall:
(i) pay to the Vendor (on behalf of itself, the Share Sellers, the US
Business Seller, the IP Assets Sellers and the Monoclonal Assets
Seller) the Cash Consideration in accordance with the provisions of
this Agreement; and
(ii) discharge and indemnify each member of the Vendor's Group in respect
of the Assumed Liabilities in accordance with CLAUSE 10 (Assumed
Liabilities and Retained Liabilities).
(J) Any Transferring Business Plant and Machinery at a Property which is
leasehold is sold subject to the rights of the relevant landlord arising
under the law relating to tenant's fixtures and under the relevant lease.
(K) For the avoidance of doubt, Part I of the Law of Property (Miscellaneous
Provisions) Act 1994 shall not apply for the purpose of this CLAUSE 2.
3. CASH CONSIDERATION
(A) The Cash Consideration payable at Completion for the sale of the Shares,
the Bedford Property, the US Business Assets, the IP Assets and the
Monoclonal Assets shall be (pound)49,310,000, which amount shall be payable
at Completion as to (pound)37,565,613.13 in pounds sterling (the "STERLING
AMOUNT") and US$17,000,000 in US dollars (the "DOLLAR AMOUNT").
(B) The Cash Consideration and the assumption by the Purchaser and the relevant
Designated Purchasers of the Assumed Liabilities pursuant to CLAUSE 10
(Assumed Liabilities and Retained Liabilities) shall each be exclusive of
any amount in respect of VAT. If the Cash Consideration or the assumption
of the Assumed Liabilities is or is deemed to be the consideration for a
taxable supply for VAT purposes, the Purchaser shall, in addition to the
Cash Consideration and assumption of the Assumed Liabilities, pay (on
receipt of a VAT invoice and on behalf of itself and each relevant
Designated Purchaser) an amount equal to any VAT which may from time to
time be chargeable in respect of such supply.
(C) The Cash Consideration shall be allocated between the Shares, the Bedford
Property, the US Business Assets, the IP Assets and the Monoclonal Assets
and between the categories of Shares, US Business Assets and Monoclonal
Assets and between the IP Assets Sellers on the basis set out in SCHEDULE
12 (Allocation of Cash Consideration) and such allocation shall be adopted
by the Vendor and the Purchaser, each relevant member of the Vendor's Group
and each Designated Purchaser for all purposes (including Tax). For US
federal income Tax purposes such allocation shall be in accordance with
section 1060 of the Code, and no party shall take any position, in a Tax
6
return or otherwise, inconsistent with such allocation. For the avoidance
of doubt, it is understood and agreed that the inclusion of valuations of
the Shares, the Bedford Property, the US Business Assets, the IP Assets and
the Monoclonal Assets in SCHEDULE 12 (Allocation of Cash Consideration) is
not intended to be, and shall not be interpreted as, any Assurance by any
party as to the assets being transferred or as to the value thereof. The
Assumed Liabilities which are attributable to the US Business shall be
allocated to the US Business Assets.
(D) The Cash Consideration may be adjusted in accordance with the terms of this
Agreement and/or under the Tax Covenant.
4. FIXED INTRA-GROUP DEBT AMOUNTS
(A) The Purchaser undertakes that it will, on Completion, procure that each
relevant Company pays to the relevant member or members of the Vendor's
Group (as specified in SCHEDULE 13 (Fixed Intra-Group Debt Amounts)) the
Fixed Intra-Group Debt Amount(s) owing by that Company to such member or
members of the Vendor's Group. Each payment required by this SUB-CLAUSE (A)
shall be made:
(i) in the currency specified in SCHEDULE 13 (Fixed Intra-Group Debt
Amounts) in respect of the relevant Fixed Intra-Group Debt Amount;
and
(ii) by telegraphic transfer to the bank account specified by the
relevant member of the Vendor's Group.
(B) The Vendor (on behalf of itself and each relevant member of the Vendor's
Group) undertakes to the Purchaser (on behalf of each of the Companies)
that payment of the Fixed Intra-Group Debt Amounts pursuant to SUB-CLAUSE
4(A) shall satisfy and extinguish the liability of the Companies in respect
of the Fixed Intra-Group Debt Amounts. The Vendor shall procure that each
relevant member of the Vendor's Group delivers to the Purchaser a duly
executed receipt in respect of such payment at Completion.
5. WORKING CAPITAL AND VARIABLE INTRA-GROUP DEBT ADJUSTMENTS
(A) Subject to SUB-CLAUSES (B)AND (C), the Cash Consideration referred to in
SUB-CLAUSE 3(A) shall be:
(i) increased by (pound)1 for every (pound)1 by which the Working
Capital Amount exceeds the Working Capital Benchmark or, as the case
may be, reduced by (pound)1 for every (pound)1 by which the Working
Capital Amount is less than the Working Capital Benchmark; and
(ii) reduced by a sum equal to the Variable Intra-Group Debt if the
Variable Intra-Group Debt reflects a net liability of the Companies
or, as the case may be, increased by a sum equal to the Variable
Intra-Group Debt if the Variable Intra-Group Debt reflects a net
asset of the Companies.
7
The Cash Consideration referred to in SUB-CLAUSE 3(A) as so adjusted shall
constitute the "ADJUSTED CASH CONSIDERATION". Any adjustments to the Cash
Consideration required by this SUB-CLAUSE (A) shall be allocated to the
greatest extent possible to the particular Shares to which the adjustments
relate.
(B) SUB-CLAUSE (A)(i) shall not operate to increase the Cash Consideration
unless the Working Capital Amount exceeds the Working Capital Benchmark by
an amount in excess of (pound)250,000 and shall not operate to reduce the
Cash Consideration unless the Working Capital Amount is less than the
Working Capital Benchmark by an amount in excess of (pound)250,000. For the
avoidance of doubt, in either such case the Cash Consideration shall be
increased or reduced (as appropriate) by the full amount of the difference
between the Working Capital Amount and the Working Capital Benchmark and
not merely by the excess of such difference over (pound)250,000.
(C) The Vendor shall procure that any net liability of the Companies in respect
of Variable Intra-Group Debt does not exceed the amount of the Cash
Consideration attributable to the Shares (following any adjustment required
pursuant to SUB-CLAUSE (A)(i) but before any adjustment is made pursuant to
SUB-CLAUSE (A)(ii)) and the Vendor shall procure that the indebtedness
represented by any such excess shall be capitalised by the issue of fully
paid shares in the relevant Company as soon as reasonably practicable and
forthwith thereafter the relevant member or members of the Vendor's Group
shall sell, and the Purchaser shall purchase, or procure the purchase by
the relevant Designated Purchaser of, the full legal and beneficial
interest in the shares in the relevant Company arising from such
capitalisation for a consideration of(pound)1. Such shaRES shall be sold
free from all liens, charges, equities, encumbrances and other rights
exercisable by third parties and together with all rights attaching or
accruing to them as at the date of such transfer.
(D) As soon as reasonably practicable after and, in any event, within 10
Business Days of the Completion Accounts, the Variable Intra-Group Debt
Statement and the Working Capital Benchmark being agreed by the Vendor and
the Purchaser or (as the case may be) finalised pursuant to CLAUSE 6
(Completion Accounts and Variable Intra-Group Debt Statement):
(i) if the Adjusted Cash Consideration:
(a) is less than the Cash Consideration referred to in SUB-CLAUSE
3(A), an amount equal to the shortfall shall be repaid to the
Purchaser (on behalf of the relevant Designated Purchaser) by
the Vendor (on behalf of the relevant members of the Vendor's
Group) by telegraphic transfer to an account notified to the
Vendor by the Purchaser; or
(b) is greater than the Cash Consideration referred to in SUB-CLAUSE
3(A), an amount equal to the excess shall be paid to the Vendor
(on behalf of the relevant members of the Vendor's Group) by the
Purchaser (on behalf of the relevant Designated Purchaser) by
telegraphic transfer to an account notified to the Purchaser by
the Vendor; and
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(ii) if the Variable Intra-Group Debt:
(a) reflects a net asset of the Companies, the Vendor shall procure
that an amount equal to the Variable Intra-Group Debt shall be
paid to the Purchaser by telegraphic transfer to an account
notified to the Vendor by the Purchaser; or
(b) reflects a net liability of the Companies, the Purchaser shall
procure that an amount equal to the Variable Intra-Group Debt
shall be paid to the Vendor by telegraphic transfer to an
account notified to the Purchaser by the Vendor.
Any amount which a party is required to procure payment of under SUB-CLAUSE
(D)(ii) shall be set off against any amount owed to such party under
SUB-CLAUSE (D)(i) so that only a single payment is made by one party to the
other party in respect of all amounts due under SUB-CLAUSES (D)(i) and
(D)(ii). As from the Completion Date, no payments (whether of interest or
principal) shall be made by any member of the Vendor's Group or the
Purchaser's Group in respect of Variable Intra-Group Debt other than in
accordance with this SUB-CLAUSE (D) and SUB-CLAUSE (E).
(E) Any amount paid pursuant to SUB-CLAUSE (D) shall be paid together with a
supplementary amount computed as if it were interest calculated at (i) the
Agreed Rate in respect of the period from the Completion Date to the
earlier of (a) the date of actual payment and (b) the date (the "SETTLEMENT
DATE") falling 10 Business Days after the day upon which the Completion
Accounts, the Variable Intra-Group Debt Statement and the Working Capital
Benchmark are agreed by the Vendor and the Purchaser or, as the case may
be, determined by the Independent Accountants pursuant to CLAUSE 6
(Completion Accounts and Variable Intra-Group Debt Statement) and (ii) (if
the date of actual payment falls after the Settlement Date) at the Default
Rate in respect of the period from the Settlement Date to the date of
actual payment. Any supplementary amount payable pursuant to this
SUB-CLAUSE (E) shall be treated as a further adjustment to the Cash
Consideration.
(F) The Vendor (on behalf of each relevant member of the Vendor's Group) and
the Purchaser (on behalf of each relevant Company) undertake to each other
that payment of the amounts due under SUB-CLAUSE (D)(ii) (including by way
of set off) shall satisfy and extinguish all those liabilities of the
Companies and of the Vendor's Group in respect of the Variable Intra-Group
Debt. The party receiving payment of such amounts shall receive them on
behalf of the relevant Companies (in the case of receipt by the Purchaser)
or, as the case may be, on behalf of the relevant member(s) of the Vendor's
Group (in the case of receipt by the Vendor). The effect of SUB-CLAUSE
(D)(ii) and this SUB-CLAUSE (F) shall be that as from the date of payment
under SUB-CLAUSE (D)(ii):
(i) each member of the Vendor's Group which owed to a Company an amount
included within Variable Intra-Group Debt shall owe that amount
instead to the Vendor (which will have paid that amount on behalf of
that member of the Vendor's Group to the Purchaser on behalf of that
Company) and,
9
correspondingly, the Purchaser shall owe that amount to the
Company on whose behalf the Purchaser received it; and
(ii) each Company which owed to a member of the Vendor's Group an amount
included within Variable Intra-Group Debt shall owe that amount
instead to the Purchaser (which will have paid that amount on behalf
of that Company to the Vendor on behalf of that member of the
Vendor's Group) and, correspondingly, the Vendor shall owe that
amount to the member of the Vendor's Group on whose behalf the
Vendor received it.
6. COMPLETION ACCOUNTS AND VARIABLE INTRA-GROUP DEBT STATEMENT
(A) The Purchaser shall procure the preparation of the Completion Accounts and
the Variable Intra-Group Debt Statement in compliance with the provisions
of SCHEDULE 10 (Completion Accounts and Variable Intra-Group Debt
Statement). The Purchaser shall, subject to compliance by the Vendor with
its obligations under SUB-CLAUSE (F), procure that:
(i) the Completion Accounts and the Variable Intra-Group Debt Statement;
and
(ii) a statement of any adjustments which the Purchaser considers should
be made to the Working Capital Benchmark (the "BENCHMARK STATEMENT")
are delivered to the Vendor within 40 Business Days of Completion. The only
grounds upon which the Purchaser shall be entitled to propose adjustments
to the Working Capital Benchmark are mathematical errors in the computation
of the Working Capital Benchmark (apparent from PART B of SCHEDULE 10
(Completion Accounts and Variable Intra-Group Debt Statement) or from
ATTACHMENT 11) or inconsistency between the basis of preparation of the
Working Capital Benchmark and the basis of preparation of the Completion
Accounts as provided for in PART A of SCHEDULE 10 (Completion Accounts and
Variable Intra-Group Debt Statement), for this purpose substituting 30th
June 2001 for the Completion Date as the date at which the Working Capital
Benchmark is prepared. Any Benchmark Statement shall contain an explanation
(supported, so far as reasonably practicable, by reasonable evidence) of
the adjustments which the Purchaser considers should be made to the Working
Capital Benchmark.
(B) The Vendor shall be entitled at any time within the period expiring 30
Business Days after receipt of the Completion Accounts, the Variable
Intra-Group Debt Statement and the Benchmark Statement (if any) to dispute
the Completion Accounts and/or the Variable Intra-Group Debt Statement
and/or the proposed adjustments to the Working Capital Benchmark set out in
the Benchmark Statement by notice in writing (a "DISPUTE NOTICE") to the
Purchaser setting out, in reasonable detail, the grounds for dispute. The
only grounds upon which the Vendor shall be entitled to dispute the
Completion Accounts and/or the Variable Intra-Group Debt Statement are
mathematical errors in the computation of the Working Capital Amount or
Variable Intra-Group Debt or a failure by the Purchaser to prepare the
Completion Accounts and/or the Variable Intra-Group Debt Statement in
compliance with SCHEDULE 10 (Completion Accounts and Variable Intra-Group
Debt Statement). The only grounds on which the Vendor shall be entitled to
10
dispute the proposed adjustments to the Working Capital Benchmark set out
in the Benchmark Statement are that such proposed adjustments do not comply
with the provisions of SUB-CLAUSE (A). Any Dispute Notice shall be
accompanied by a statement (supported, so far as reasonably practicable, by
reasonable evidence) of the adjustments which the Vendor considers should
be made to (a) the Completion Accounts and/or the Variable Intra-Group Debt
Statement, and/or (b) the adjustments to the Working Capital Benchmark set
out in the Benchmark. If no Dispute Notice is given by the Vendor before
the expiry of the 30 Business Day period referred to above:
(i) the Completion Accounts and the Variable Intra-Group Debt Statement
shall be deemed to have been agreed by the Vendor and the Purchaser;
and
(ii) the Working Capital Benchmark shall be deemed to have been agreed
between the Vendor and the Purchaser (on the basis that the proposed
adjustments set out in the Benchmark Statement are made)
and, in each case, shall be final and binding on the Vendor and the
Purchaser. The Vendor shall, if it has not served a Dispute Notice, be
entitled to notify the Purchaser prior to the expiry of such 30 Business
Day period that the Completion Accounts, the Variable Intra-Group Debt
Statement and, if applicable, the Working Capital Benchmark are agreed (in
the case of the Working Capital Benchmark, on the basis that the proposed
adjustments set out in the Benchmark Statement are made) and that the
Vendor does not intend to serve a Dispute Notice and following any such
notification the Completion Accounts, the Variable Intra-Group Debt
Statement and, if applicable, the Working Capital Benchmark shall be deemed
to be agreed by the Vendor and the Purchaser and shall be final and binding
on the Vendor and the Purchaser.
(C) The Vendor and the Purchaser shall use all reasonable endeavours to resolve
any dispute(s) and agree the Completion Accounts, the Variable Intra-Group
Debt Statement and the Working Capital Benchmark within 30 Business Days of
the date of receipt of a Dispute Notice by the Purchaser. If the Vendor and
the Purchaser fail to agree the Completion Accounts, the Variable
Intra-Group Debt Statement and the Working Capital Benchmark by the expiry
of the 30 Business Day period referred to above, any matter in dispute may
be referred by the Vendor or the Purchaser to the Independent Accountants
(acting as experts and not as arbitrators). For these purposes, the
"INDEPENDENT ACCOUNTANTS" shall be an independent firm of chartered
accountants of international repute appointed by the Vendor and the
Purchaser or, in default of agreement as to such appointment within five
Business Days of one of them notifying the other of its wish to appoint
Independent Accountants, by the President for the time being of the
Institute of Chartered Accountants in England and Wales (or in his absence,
any appropriate deputy) on the application of either of them.
(D) (i) The Independent Accountants shall determine the matters in dispute
and, providing it is made in accordance with SUB-CLAUSE (D)(ii),
their decision shall be final and binding on the Vendor and the
Purchaser in the absence of manifest error (whereupon the relevant
matter shall be referred back to the Independent Accountants to be
redetermined). The Vendor and the Purchaser shall be
11
bound by the terms of reference and timetable agreed with or, in
default of such agreement, imposed by the Independent
Accountants.
(ii) The only adjustments which the Independent Accountants may determine
should be made to the Completion Accounts and/or the Variable
Intra-Group Debt Statement and/or the Working Capital Benchmark are
adjustments in relation to items to which the Vendor has proposed
adjustments pursuant to SUB-CLAUSE (B) (in the case of the
Completion Accounts and the Variable Intra-Group Debt Statement) and
adjustments proposed in the Benchmark Statement (in the case of the
Working Capital Benchmark) and any such adjustments shall be:
(a) in the case of the Completion Accounts and/or the Variable
Intra-Group Debt Statement, within the range delineated by the
contents of the Completion Accounts and/or the Variable
Intra-Group Debt Statement delivered by the Purchaser to the
Vendor pursuant to SUB-CLAUSE (A) and the adjustments proposed
by the Vendor pursuant to SUB-CLAUSE (B); and
(b) in the case of the Working Capital Benchmark, within the range
delineated by the Working Capital Benchmark as calculated in
accordance with PARAGRAPH 3 of PART B of SCHEDULE 10 (Completion
Accounts and Variable Intra-Group Debt Statement) and the
adjustments proposed in the Benchmark Statement.
(E) Following settlement of any matter in dispute (whether settled under
SUB-CLAUSE (C) or (D) or otherwise by agreement between the Vendor and the
Purchaser), the Completion Accounts, the Variable Intra-Group Debt
Statement and the Working Capital Benchmark as so settled shall constitute
the Completion Accounts, the Variable Intra-Group Debt Statement and the
Working Capital Benchmark for the purposes of this Agreement and shall be
final and binding on the Vendor and the Purchaser.
(F) The Vendor shall give the Purchaser and the Purchaser's Accountants, and
the Vendor shall procure that the members of the Vendor's Group shall give
the Purchaser and the Purchaser's Accountants, such access to those books,
records, working papers and employees at the relevant premises of the
Vendor's Group (or under the control of the Vendor's Group) which the
Purchaser or the Purchaser's Accountants may reasonably require in
connection with the preparation and review of the Completion Accounts, the
Variable Intra-Group Debt Statement and the Benchmark Statement (if any) or
with the review of any Dispute Notice. Such employees as to whom the
Purchaser or the Purchaser's Accountants may reasonably require to have
access shall be instructed to give promptly all such information and
explanations as the Purchaser or the Purchaser's Accountants may reasonably
require for these purposes and the Purchaser and the Purchaser's
Accountants shall be entitled to take photocopies of relevant
documentation.
(G) The Purchaser shall give the Vendor and the Vendor's Accountants, and the
Purchaser shall procure that the members of the Purchaser's Group shall
give the Vendor and the
12
Vendor's Accountants, such access to those books, records, working papers
and employees at the relevant premises of the Purchaser's Group (or under
the control of the Purchaser's Group) which the Vendor or the Vendor's
Accountants may reasonably require to review the Completion Accounts, the
Variable Intra-Group Debt Statement and the Benchmark Statement (if any)
and to determine whether the Completion Accounts, the Variable Intra-Group
Debt Statement and the Benchmark Statement (if any) have been prepared in
accordance with SCHEDULE 10 (Completion Accounts and Variable Intra-Group
Debt Statement). Such employees as to whom the Vendor or the Vendor's
Accountants may reasonably require to have access shall be instructed to
give promptly all such information and explanations as the Vendor or the
Vendor's Accountants may reasonably require for these purposes and the
Vendor and the Vendor's Accountants shall be entitled to take photocopies
of relevant documentation.
(H) Without limiting any other provision of this Agreement, until the
Completion Accounts, the Variable Intra-Group Debt Statement and the
Working Capital Benchmark shall have been agreed by the Vendor and the
Purchaser or determined by the Independent Accountants, the Vendor and the
Purchaser shall each keep or cause to be kept proper and accurate records
of all assets, rights and liabilities which are the subject of the
Completion Accounts, the Variable Intra-Group Debt Statement and the
Working Capital Benchmark and each shall allow the Independent Accountants,
and shall procure that the Independent Accountants are allowed, access to
books, records, working papers and employees on the basis set out in
SUB-CLAUSE (F) or (G) (as appropriate). This SUB-CLAUSE (H) does not impose
on the Purchaser any obligation to create or cause to be created any record
of the Transferring Business to the extent not in existence at Completion
and either owned or under the control of a Company or purchased by the
Purchaser or a Designated Purchaser under this Agreement.
(I) Each party shall bear its own costs in relation to the preparation,
determination and review of the Completion Accounts, the Variable
Intra-Group Debt Statement and (if any) the Benchmark Statement. The Vendor
shall be responsible for the charges of the Vendor's Accountants and the
Purchaser shall be responsible for the charges of the Purchaser's
Accountants. The charges of the Independent Accountants shall be shared
equally by the Vendor and the Purchaser unless the Independent Accountants
determine otherwise.
7. COMPLETION
(A) Completion of the sale and purchase of the Shares, the Bedford Property,
the US Business Assets, the IP Assets and the Monoclonal Assets shall take
place (subject, in the case of the Bedford Property, to the provision of
PART C of SCHEDULE 9 (Properties)) immediately following the execution of
this Agreement at the offices of Slaughter and May at 4 Coleman Street,
London EC2 and at such overseas locations as may be agreed between the
Vendor and the Purchaser.
(B) At Completion, each of the Vendor and the Purchaser shall do or procure the
carrying out of all those things listed in respect of it in SCHEDULE 5
(Completion Arrangements).
13
(C) Neither the Vendor nor the Purchaser shall be obliged to complete the sale
and purchase of any of the Shares, the Bedford Property, the US Business
Assets, the IP Assets or the Monoclonal Assets unless the other (the Vendor
or the Purchaser as the case may be) shall have complied with its
obligations under SUB-CLAUSE (B) and SCHEDULE 5 (Completion Arrangements)
but this SUB-CLAUSE (C) shall not prejudice any other rights or remedies
available to either party in respect of any default of the other party.
8. THIRD PARTY CONSENTS FOR THE TRANSFER OF THE US BUSINESS ASSETS
(A) Where any consent or agreement of any third party is required to the
transfer of any US Business Asset (other than the benefit of a US Contract)
and such consent or agreement has not been obtained at or before
Completion, the transfer of the relevant US Business Asset shall not take
effect, notwithstanding Completion, until that consent or agreement has
been obtained and the Vendor and the relevant Designated Purchaser shall
use their respective reasonable endeavours after Completion to obtain it as
soon as possible.
(B) No failure to obtain any consent or agreement referred to in SUB-CLAUSE (A)
and specifically referenced to the Warranty set out in PARAGRAPH 8(E) of
SCHEDULE 6 (Warranties) as a required consent or agreement in the
Disclosure Letter shall constitute a breach of any of the Warranties. With
the exception of the foregoing, the obligations and indemnities set out in
this CLAUSE 8, section 4(ii) of the US Transfer Agreement and section 2 of
the US Lease Assignments shall not preclude the Purchaser from making any
claim and recovery (subject to the provisions of SCHEDULE 7 (Limitation on
Liability)) under any of the Warranties in respect of any matter relating
to any of the US Business Assets to the extent that such matter comprises a
breach, or breaches, of any of the Warranties.
(C) After Completion, and until such time as any consent or agreement referred
to in SUB-CLAUSE (A) is obtained, the Vendor shall, or shall procure that
the relevant member of the Vendor's Group shall:
(i) hold the benefit of the relevant US Business Asset referred to in
SUB-CLAUSE (A) on trust for the relevant Designated Purchaser; and
(ii) so far as it lawfully may and subject to (except in respect of any
Retained Liabilities) the relevant Designated Purchaser indemnifying
it in respect of any liability, cost, damage or expense which it may
thereby incur, give all reasonable assistance to the relevant
Designated Purchaser to enable it to enforce its rights in respect
of the US Business Asset referred to in SUB-CLAUSE (A).
9. TRANSFER OF US CONTRACTS AND IP LICENCES
(A) Subject to SUB-CLAUSES (B) and (C), the relevant Designated Purchaser shall
become entitled to the benefits of the relevant members of the Vendor's
Group under the US Contracts and the IP Licences with effect from
Completion and this Agreement shall constitute:
14
(i) an assignment by the Vendor (for itself and on behalf of the
relevant members of the Vendor's Group) of the benefit, subject to
the burden, of all the IP Licences to the relevant Designated
Purchaser with effect from Completion; and
(ii) an agreement by the Vendor (for itself and on behalf of the relevant
members of the Vendor's Group) to assign the benefit, subject to the
burden, of all the US Contracts to the relevant Designated Purchaser
with effect from Completion. Such assignment of the US Contracts
shall, subject to SUB-CLAUSES (B) and (C), be effected (in each case
without prejudice to the obligations of the Vendor set out in this
SUB-CLAUSE (A)(ii) and the procurement obligation of the Vendor set
out in SUB-CLAUSE 2(E)) by the US Transfer Agreement or, in the case
of the leases relating to the US Properties, by the US Lease
Assignments.
(B) Where any consent or agreement of any third party is required to enable the
relevant Designated Purchaser to perform any US Contract or IP Licence
after Completion or to enable the Vendor or any member of the Vendor's
Group to transfer, or to procure the transfer of, the benefit or burden of
any US Contract or IP Licence to the relevant Designated Purchaser, then
the following provisions shall apply:
(i) neither this Agreement nor, to the extent relevant, the US Transfer
Agreement or the US Lease Assignments shall constitute an assignment
or an attempted assignment of the relevant US Contract or IP Licence
if or to the extent that such an assignment or attempted assignment
would constitute a breach of such US Contract or IP Licence;
(ii) after Completion the parties shall use their respective reasonable
endeavours including, in the case of the Purchaser and without
limitation, procuring (to the extent permitted by any banking
covenant to which any member of the Purchaser's Group is subject
pursuant to the financing arrangements entered, or to be entered,
into by members of the Purchaser's Group at or about the date hereof
in order to consummate the transactions contemplated by this
Agreement) the provision of a guarantee from a member of the
Purchaser's Group, to obtain the consent or agreement of the
relevant third party to whatever assignment, transfer, novation or
other arrangement is necessary to enable the relevant Designated
Purchaser to assume the burden of and perform any such US Contract
or IP Licence after Completion and to transfer the benefit of any
such US Contract or IP Licence to the relevant Designated Purchaser;
and
(iii) after Completion, until the consent or agreement referred to in
SUB-CLAUSE (B)(ii) is obtained, the relevant Designated Purchaser
shall, except to the extent that the relevant US Contract or IP
Licence prohibits it, perform all the obligations of the Vendor or
the relevant member of the Vendor's Group under such US Contract or
IP Licence as agent for or sub-contractor to the Vendor or such
member of the Vendor's Group and shall indemnify each member of the
Vendor's Group in respect of such performance or, to the extent that
the relevant US Contract or IP Licence prohibits the relevant
Designated Purchaser from so acting as agent or sub-contractor or
the relevant Designated Purchaser
15
cannot be permitted to act as agent or sub-contractor because of
confidentiality obligations, the Vendor shall or shall procure that
a member of the Vendor's Group shall, at the cost of the relevant
Designated Purchaser and to the extent that the Vendor or the
relevant member of the Vendor's Group is able, put in place such
other suitable arrangements in relation to such US Contract or IP
Licence as the Purchaser may reasonably request or do all such acts
and things as the relevant Designated Purchaser may reasonably
require to enable the due performance of the US Contract or IP
Licence and to provide for the relevant Designated Purchaser the
benefits (subject as aforesaid to the burdens) of the US Contract or
IP Licence, and the relevant Designated Purchaser shall indemnify
each member of the Vendor's Group in respect of all such
arrangements, acts and things.
(C) After Completion, and until such time as the consent or agreement referred
to in SUB-CLAUSE (B) is obtained, the Vendor or the relevant member of the
Vendor's Group shall be deemed to hold the benefit of the relevant US
Contract or IP Licence on trust for the relevant Designated Purchaser and,
so far as it lawfully may and subject to the relevant Designated Purchaser
indemnifying it in respect of any liability, cost, damage or expense which
it may thereby incur, shall give all reasonable assistance to the relevant
Designated Purchaser to enable it to exercise the rights of the relevant
member of the Vendor's Group so held on trust under the relevant US
Contract or IP Licence. The foregoing provisions of this SUB-CLAUSE (C)
shall not apply in relation to any IP Licence if and to the extent they are
not lawfully permitted in relation to, or not possible without incurring a
breach of, any term of that IP Licence and, in such circumstances, the
Vendor shall, or shall procure that the relevant member of the Vendor's
Group shall, so far as it lawfully may and subject to the relevant
Designated Purchaser indemnifying it in respect of any liability, cost,
damage or expense which it may thereby incur, give all reasonable
assistance to the relevant Designated Purchaser to enable it to exercise
the rights of the relevant members of the Vendor's Group under that IP
Licence until such time as the consent or agreement referred to in
SUB-CLAUSE (B) is obtained.
(D) Subject to the other provisions of this CLAUSE 9 and to CLAUSE 10 (Assumed
Liabilities and Retained Liabilities), from the Completion Date the
relevant Designated Purchasers shall carry out, perform and complete all
the obligations and liabilities to be performed under the US Contracts and
the IP Licences.
(E) As soon as reasonably practicable after the obtaining of the relevant third
party consent to the transfer of a US Property, the relevant member of the
Vendor's Group and the relevant Designated Purchaser shall execute the US
Lease Assignment with respect to that US Property.
(F) No failure to obtain any consent or agreement referred to in SUB-CLAUSE (B)
and specifically referenced to the Warranty set out in PARAGRAPH 8(E) of
SCHEDULE 6 (Warranties) as a required consent or agreement in the
Disclosure Letter shall constitute a breach of any of the Warranties. With
the exception of the foregoing, the obligations and indemnities set out in
this CLAUSE 9, in section 4(ii) of the US Transfer Agreement and in section
2 of the US Lease Assignments shall not preclude the Purchaser from making
any claim and recovery (subject to the provisions of SCHEDULE 7
16
(Limitations on Liability)) under any of the Warranties in respect of any
matter relating to any of the US Contracts or the IP Licences to the extent
that such matter comprises a breach, or breaches, of any of the Warranties.
(G) The provisions of this CLAUSE 9 shall be without prejudice to the
provisions of CLAUSE 10 (Assumed Liabilities and Retained Liabilities).
10. ASSUMED LIABILITIES AND RETAINED LIABILITIES
(A) The Purchaser (on behalf of the relevant Designated Purchasers) hereby
agrees with the Vendor that it will (or will procure that the relevant
Designated Purchasers will) duly and properly perform, assume, pay and
discharge when due and indemnify each member of the Vendor's Group against
all Assumed Liabilities. Without limiting the foregoing, such assumption of
the Assumed Liabilities shall, insofar as they relate to the US Business or
the US Business Assets and subject to the remaining provisions of this
CLAUSE 10, be effected by the US Transfer Agreement and the US Lease
Assignments. The obligations and indemnities set out in this SUB-CLAUSE
(A), in section 4(ii) of the US Transfer Agreement and in section 2 of the
US Lease Assignments shall not preclude the Purchaser from making any claim
and recovery (subject to the provisions of SCHEDULE 7 (Limitations on
Liability)) under any of the Warranties in respect of any matter which is
the subject of the Assumed Liabilities to the extent that such matter
comprises a breach, or breaches, of any of the Warranties.
(B) In this Agreement "ASSUMED LIABILITIES" means, subject to SUB-CLAUSES (C),
(D), (E) and (G), all past (except to the extent satisfied at or prior to
the signature of this Agreement), present and future liabilities and
obligations (including, without limitation, contingent liabilities or
obligations) of the Vendor and each member of the Vendor's Group
(including, without limitation, for the purposes of sub-paragraph (iii)
below, Unipath Diagnostics S.A. (France)) of whatsoever nature in respect
of:
(i) the IP Licences;
(ii) (other than the marketing, sale or use of Persona products, which
matters are the subject of (iii) below) the US Business, the US
Business Assets and the US Contracts, to the extent such liabilities
and obligations are or have been incurred in the ordinary course of
the US Business (which liabilities and obligations shall include,
for the avoidance of doubt and without limitation, the US Assumed
Litigation);
(iii) (subject to the second sentence of CLAUSE 15(F)) any marketing,
sales or use of Persona products, except to the extent that such
liabilities and obligations are liabilities and obligations of a
member of the Vendor's Group domiciled in the United States of
America. For the avoidance of doubt, nothing in this Agreement shall
impair, or operate as a waiver of, any right of a member of the
Vendor's Group (a) to defend any claim in respect of any marketing,
sales or use of Persona products on the basis that such liabilities
or obligations are liabilities or obligations of any of the
Companies, or (b) to recover from any of the Companies in respect of
any such liabilities or obligations; PROVIDED that no
17
member of the Vendor's Group domiciled in the United States of
America shall recover from any of the Companies any exemplary or
punitive damages in respect of any marketing, sales or use of
Persona products; and
(iv) (save for any Indirect Taxation of the Companies) Indirect Taxation
to the extent that it is taken into account in calculating the
Working Capital Amount.
(C) Notwithstanding SUB-CLAUSES (A) and (B) the Assumed Liabilities shall not
include the following (the "RETAINED LIABILITIES"):
(i) any liability or obligation of the Vendor or any other member of the
Vendor's Group for or in respect of Taxation (other than in respect
of Indirect Taxation to the extent that it is taken into account in
calculating the Working Capital Amount) (a) arising in respect of
any period of account for Taxation purposes ending on or before
Completion or, in the case of any Straddle Period, in respect of the
portion of the Straddle Period ending on Completion, or (b) arising
in respect of any acts, event or occurrences occurring on or before
Completion, provided that the Taxation is properly attributable to a
period specified in (a));
(ii) any liability or obligation of the Vendor or any other member of the
Vendor's Group for or in respect of Intra-Group Trading and Services
Amounts to the extent that such amounts are US Business Assets or
are owed by the Vendor or any member of the Vendor's Group at
Completion to any of the Companies;
(iii) any liability or obligation of the Vendor or any other member of the
Vendor's Group for or in respect of any indebtedness (which, for the
purposes of this SUB-CLAUSE (C)(iii)) shall exclude amounts which
are Intra-Group Trading and Services Amounts) incurred in relation
to the US Business and owing to another member of the Vendor's
Group;
(iv) any exemplary or punitive damages awarded against any member of the
Vendor's Group (including, without limitation, Unipath Diagnostics
S.A. (France)) in respect of marketing, sales or use of Persona
products sold prior to Completion. For the avoidance of doubt,
nothing in this Agreement shall impair, or operate as a waiver of,
any right of a member of the Vendor's Group (including, without
limitation, Unipath Diagnostics S.A. (France)) domiciled outside the
United States of America (a) to defend any claim in respect of any
marketing, sales or use of Persona products on the basis that such
liabilities or obligations are liabilities or obligations of any of
the Companies, or (b) to recover from any of the Companies in
respect of any such liabilities or obligations;
(v) any liability or obligation of the Vendor or any other member of the
Vendor's Group in respect of the US Business, any of the US Business
Assets and/or any of the US Contracts to the extent that such
liabilities and obligations have been incurred outside the ordinary
course of the US Business prior to Completion,
18
other than any other Assumed Liabilities of the type referred to in
SUB-CLAUSE 10(B) (i), (iii) or (iv);
(vi) any liability or obligation of the Vendor or any other member of the
Vendor's Group in respect of bodily injury to any former employee of
any member of the Vendor's Group in respect of the US Business or
any US Employee, in each case arising out of and in the course of
his employment with the relevant member of the Vendor's Group before
Completion; and
(vii) any liability or obligation of the Vendor or any of the member of
the Vendor's Group in respect of the US Retained Litigation,
and the Vendor hereby agrees with the Purchaser that it will, or will
procure that the appropriate member of the Vendor's Group (including,
without limitation, Unipath Diagnostics S.A. (France)) will, duly and
properly perform, assume and pay and discharge when due, and the Vendor
will indemnify the Purchaser and the other members of the Purchaser's Group
(other than, save in relation to SUB-CLAUSE (C)(ii), the Companies) against
all Retained Liabilities.
(D) Notwithstanding any of the other provisions of this Agreement, the Assumed
Liabilities shall not include any liability or obligation of the Captive
Insurer. Accordingly, the provisions of this CLAUSE 10 shall be without
prejudice to, and neither the Purchaser nor any other member of the
Purchaser's Group shall assume, or indemnify the Captive Insurer or any
guarantor of the Captive Insurer in respect of, any liability or obligation
of the Captive Insurer in relation to the Assumed Liabilities or the
obligations of the Vendor pursuant to SUB-CLAUSE 15(H)(iv).
(E) To the extent that the provisions of this CLAUSE 10 would otherwise relate
to the Employees or the Dutch Sales Staff, the Assumed Liabilities shall
not extend to or include any liability or obligation of the Vendor or any
other member of the Vendor's Group in respect of the Employees or the Dutch
Sales Staff (including, without limitation, in relation to pensions). This
SUB-CLAUSE (E) is, however, without prejudice to the provisions of CLAUSE
13 (Employees) and SCHEDULE 8 (Pensions) which shall apply in accordance
with their terms to the transfer or assumption of any such liability or
obligation.
(F) The Purchaser covenants that, at any time and from time to time on or after
Completion, it will (or will procure that the relevant Designated Purchaser
will) execute and deliver all such further instruments of assumption and
acknowledgements or take such other action as the Vendor may reasonably
request in order to effect the release and discharge in full of any Assumed
Liability and the assumption of the Assumed Liabilities and the
substitution of the Purchaser or the relevant Designated Purchaser as the
primary obligor in respect of the Assumed Liabilities in each case on a
non-recourse basis to any member of the Vendor's Group other than, for the
purposes of applicable insurance claims, the Captive Insurer.
(G) The Vendor (on behalf of itself and each other member of the Vendor's Group
(including, if applicable and without limitation, Unipath Diagnostics S.A.
(France)))
19
shall use reasonable endeavours to mitigate the loss of any member of the
Vendor's Group (including, without limitation, Unipath Diagnostics S.A.
(France)) arising from any of the Assumed Liabilities.
(H) (i) As soon as reasonably practicable after the Vendor or any member of
the Vendor's Group receives or otherwise becomes actually aware of
any assessment, claim, action or demand against it by a third party
(not being the Purchaser or a member of the Purchaser's Group) or
any other matter which is reasonably likely to give rise to any
claim by it under the indemnity set out in SUB-CLAUSE (A) (the
"ASSUMED LIABILITIES INDEMNITY"), the Vendor shall notify the
relevant Designated Purchaser in writing of such assessment, claim,
action or demand. Such notice shall include such details of the
assessment, claim, action or demand of which the Vendor or any
member of the Vendor's Group is actually aware (including the
quantum of such assessment, claim, action or demand, if known) and
which the Vendor, acting reasonably, considers relevant in order for
the relevant Designated Purchaser to evaluate the assessment, claim,
action or demand and whether such assessment, claim, action or
demand prima facie gives rise to a liability of the Purchaser or the
relevant Designated Purchaser under the Assumed Liabilities
Indemnity. Any failure by the Vendor to comply with this
SUB-PARAGRAPH (H)(i) shall not, for the avoidance of doubt, of
itself prevent the Vendor or any member of the Vendor's Group from
making a claim under the Assumed Liabilities Indemnity but neither
the Purchaser nor the relevant Designated Purchaser shall be liable
to the Vendor or the relevant member of the Vendor's Group in
respect of the Assumed Liabilities Indemnity to the extent that the
amount of the relevant assessment, claim, action or demand
thereunder is increased, or not reduced, as a result of such
failure.
(ii) Save with respect to the Persona Litigation (in respect of which the
provisions of SUB-CLAUSE 15(H)(ii) shall apply) and any Indirect
Taxation taken into account in calculating the Working Capital
Amount, at the request of the relevant Designated Purchaser and
subject to:
(a) the relevant Designated Purchaser first admitting irrevocably
and unconditionally (subject to the provisions of SUB-CLAUSES
10(G) and 10(H)(i)) to the Vendor in writing and in a legally
binding manner its liability under the Assumed Liabilities
Indemnity in relation thereto; and
(b) the Purchaser first undertaking in a deed to the Vendor that it
will indemnify the Vendor and each other member of the Vendor's
Group (other than the Captive Insurer) against all liabilities,
costs, damages or expenses incurred by any member of the
Vendor's Group (other than the Captive Insurer) whether prior
to, on or after the date of such deed in respect of such
conduct,
the Vendor shall allow the relevant Designated Purchaser to take
conduct as the relevant Designated Purchaser may deem appropriate in
connection with any such third party assessment, claim, action or
demand in the name of the
20
Vendor or the appropriate member of the Vendor's Group (other than
the Captive Insurer) and in that connection (subject to the
indemnification as aforesaid) the Vendor:
(j) shall give, or cause to be given by the relevant members of the
Vendor's Group (other than the Captive Insurer), to the relevant
Designated Purchaser all such assistance as the relevant
Designated Purchaser may reasonably require in avoiding,
disputing, resisting, settling, defending or appealing any such
assessment, claim, action or demand including, without
limitation, such access to the books and records of any member
of the Vendor's Group, and to the premises and employees and
professional advisors of the Vendor's Group, during Working
Hours and on reasonable advance notice, as the Purchaser may
reasonably require with respect to such third party assessment,
claim, action or demand;
(k) shall, and shall procure that each other member of the Vendor's
Group shall, pass to the relevant Designated Purchaser copies of
all notices or other documents received by the Vendor or any
member of the Vendor's Group in relation to the relevant third
party assessment, claim, action or demand, in each case as soon
as reasonably practicable after receipt by the Vendor or
relevant member of the Vendor's Group thereof; and
(l) shall instruct such legal counsel as the relevant Designated
Purchaser may nominate to act on behalf of the Vendor or any
relevant member of the Vendor's Group (other than the Captive
Insurer), as appropriate, but to act in accordance with the
relevant Designated Purchaser's instructions,
provided that no member of the Vendor's Group shall be required to commence
any legal proceedings where either:
(y) the Vendor or the relevant member of the Vendor's Group has
effected a valid legal assignment all of its or their rights in
relation to the relevant claim to the relevant Designated
Purchaser; or
(z) where SUB-CLAUSE (H)(ii)(y) does not apply, the Purchaser or
relevant Designated Purchaser has not as soon as reasonably
practicable notified the relevant party against whom such
proceedings are brought that such proceedings are being brought
at the instruction of the relevant Designated Purchaser.
(iii) The Vendor shall not make (and shall procure that no member of the
Vendor's Group shall make) any admission of liability, agreement or
settlement with any third party in relation to any third party
assessment, claim, action or demand in respect of which the relevant
Designated Purchaser has admitted its liability and the Purchaser
has given an undertaking to indemnify the Vendor and the other
21
members of the Vendor's Group (other than the Captive Insurer), in
each case in accordance with SUB-CLAUSE (H)(ii), without the prior
written consent of the relevant Designated Purchaser.
(iv) The relevant Designated Purchaser shall be entitled at any stage and
in its absolute discretion to settle any assessment, claim, action
or demand in respect of which the relevant Designated Purchaser has
admitted its liability and the Purchaser has given an undertaking to
indemnify the Vendor and the other members of the Vendor's Group
(other than the Captive Insurer), in each case in accordance with
SUB-CLAUSE (H)(ii).
(v) The provisions of SUB-CLAUSES (H) (ii) to (iv) are subject to (i)
the provisions of any policy of insurance under which the Vendor
and/or any other member of the Vendor's Group (including, if
applicable and without limitation, Unipath Diagnostics S.A.
(France)) and/or any of the Companies makes a claim with respect to
the assessment, claim, action, demand or other matter giving rise to
the claim under the Assumed Liabilities Indemnity, and (ii) in such
case, the directions of the relevant insurer under such insurance
policy; PROVIDED that the Vendor shall, and shall procure that the
other members of the Vendor's Group shall, and the Purchaser shall,
and shall procure that the other members of the Purchaser's Group
shall, comply with the provisions of SUB-CLAUSES (H)(ii) to (iv) to
such extent as is permitted under the relevant insurance policy
under which such a claim is made or as the relevant insurers
thereunder may otherwise consent.
(I) The provisions of SUB-CLAUSE 10(H) shall be without prejudice to the
provisions of CLAUSE 15 (Risk and Insurance).
(J) The Purchaser (on behalf of the relevant Designated Purchaser) hereby
agrees with the Vendor that it will duly pay and discharge (or procure to
be paid and discharged) and indemnify each member of the Vendor's Group
against all Taxation in respect of or in relation to the Bedford Property,
the US Business Assets, the IP Assets and the Monoclonal Assets (or their
use) in respect of (a) any period of account for Taxation purposes
beginning after Completion or, in the case of any Straddle Period, in
respect of the portion of the Straddle Period beginning after Completion,
or (b) arising in respect of any acts, events or occurrences occurring
after Completion, PROVIDED that the Taxation is properly attributable to a
period specified in (a) above.
11. INTRA-GROUP TRADING AND SERVICES
(A) The Purchaser shall procure that each of the Intra-Group Trading and
Services Amounts which is either an Assumed Liability in respect of the US
Business or is owed at Completion by any of the Companies to any member of
the Vendor's Group (in either case, in respect of the period up to
Completion), together with any interest thereon payable in accordance with
SUB-CLAUSE (C), is paid to the relevant member of the Vendor's Group to
whom it is owed:-
22
(i) if the relevant parties have agreed in writing a period (not being
longer than 30 days following Completion) during which the amount
shall be paid, on or before the end of such period; and
(ii) if the relevant parties have not made such an agreement, within 30
days following Completion.
(B) The Vendor shall procure that each of the Intra-Group Trading and Services
Amounts the right to payment of which is a US Business Asset or which is
owed at Completion by any member of the Vendor's Group to any of the
Companies (in either case, in respect of the period up to Completion),
together with any interest thereon payable in accordance with SUB-CLAUSE
(C), is paid to the relevant Company or the relevant Designated Purchaser
to whom it is owed:-
(i) if the relevant parties have agreed in writing a period (not being
longer than 30 days following Completion) during which the amounts
shall be paid, on or before the end of such period; and
(ii) if the relevant parties have not made such an agreement, within 30
days following Completion.
(C) If a Company, a Designated Purchaser or, as the case may be, a member of
the Vendor's Group fails to pay any Intra-Group Trading and Services Amount
within the time allowed for payment under SUB-CLAUSE (A) or SUB-CLAUSE (B)
(as the case may be) then interest shall be payable thereon by that
Company, Designated Purchaser or member of the Vendor's Group (as
appropriate) at the Agreed Rate (accrued daily and compounded monthly) from
the date on which such amount should have been paid until the actual date
of payment thereof. For the avoidance of doubt, any interest payable by a
Company, a Designated Purchaser or, as the case may be, a member of the
Vendor's Group pursuant to this SUB-CLAUSE (C) shall be in addition to any
interest included in any Intra-Group Trading and Services Amount.
(D) All payments referred to in this CLAUSE 11 shall be made in immediately
available funds without any set-off, restriction or condition and without
any deduction or withholding (save only as required by law) in such manner
as is the normal business practice of the relevant payee and in the local
currency of the relevant payee.
(E) For the avoidance of doubt:
(i) the provisions of this CLAUSE 11 are without prejudice to the
provisions of CLAUSE 5 (Working Capital and Variable Intra-Group
Debt Adjustments); and
(ii) without prejudice to the provisions of the Transitional Services
Agreement and with the exception of the Dutch Sales Representation
Agreement, all agreements and arrangements between any of the
Companies and members of the Vendor's Group which are in force
immediately prior to Completion and pursuant to which any of the
Companies provides or receives services to or from members of the
23
Vendor's Group or pursuant to which members of the Vendor's Group
license Intellectual Property to any of the Companies shall be
terminated with effect from Completion.
12. INTRA-GROUP GUARANTEES AND OTHER AGREEMENTS
(A) Subject to SUB-CLAUSES (B) and (C), the Purchaser covenants that, at any
time and from time to time on or after Completion, it will use its
reasonable endeavours as the Vendor may reasonably request to effect the
release and discharge in full of any Assurance given by any member of the
Vendor's Group to any person in respect of any Assumed Liability or any
obligation or liability of any of the Companies and shall procure the
assumption of, and the substitution of an appropriate member of the
Purchaser's Group as the primary obligor in respect of, each such Assurance
in each case on a non-recourse basis to the members of the Vendor's Group.
Pending such release and discharge, the Purchaser hereby agrees with the
Vendor that it will assume and pay and discharge when due, and indemnify
each member of the Vendor's Group against, all such Assurances.
(B) The obligations of the Purchaser under SUB-CLAUSE (A) will not apply in
relation to Assurances which are not disclosed and specifically referenced
to this clause in the Disclosure Letter ("UNDISCLOSED ASSURANCES"). Subject
to SUB-CLAUSE (C) the Purchaser acknowledges (on behalf of the Designated
Purchasers and the Companies) that this CLAUSE 12 shall be without
prejudice to any rights of subrogation which are available to any member of
the Vendor's Group in connection with an Undisclosed Assurance.
(C) The provisions of this CLAUSE 12 shall not apply in respect of any
Assurance given by the Captive Insurer whether disclosed or not.
(D) Without prejudice to the generality of SUB-CLAUSE (A), the Purchaser and
the Vendor will, and the Vendor will procure that Unipath Management
Limited will, at Completion, enter into a deed of undertaking in the Agreed
Form (the "DEED OF UNDERTAKING") pursuant to which:
(i) Unipath Management Limited will release the guarantee given by the
Vendor of certain of the obligations assumed by Unipath Limited
("UNIPATH'S OBLIGATIONS") under the Business Purchase Agreement
dated 20th July, 2001 between Unipath Management Limited and Unipath
Limited (then named, respectively, Unipath Limited and MW Grieg
Limited) (a copy of which is set out in ATTACHMENT 1); and
(ii) the Purchaser will be substituted as the guarantor of Unipath's
Obligations.
(E) The Vendor covenants that, at any time and from time to time on or after
Completion, it will execute and deliver all such instruments of assumption
and acknowledgements or take such other action as the Purchaser may
reasonably request (as soon as reasonably practicable following such
request) in order to effect the release and discharge in full of any
Assurance given by a Company to any person in respect of any obligation or
liability of any member of the Vendor's Group (other than an Assumed
24
Liability), and shall procure the assumption of, and the substitution of an
appropriate member of the Vendor's Group as the primary obligor in respect
of, each such Assurance on a non-recourse basis to the Purchaser's Group.
Pending such release and discharge, the Vendor hereby agrees with the
Purchaser (on behalf of itself and as trustee for the Companies) that it
will assume and pay and discharge when due, and indemnify each Company
against, all such Assurances.
13. EMPLOYEES
ALL EMPLOYEES
(A) At the request of the Vendor, the Purchaser has provided or will provide
(as the case may be) the Vendor with all reasonable information which the
Purchaser has access to, in order to enable the Vendor 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 Employee to
the extent required by local law (including, without limitation, the
Transfer Regulations) and within the relevant time limits imposed by local
law.
(B) The provisions of this CLAUSE 13 shall apply to a relevant Employee only
for so long as he/she continues in the employment of any member of the
Purchaser's Group, any Company or any person to whom the whole or any
relevant part of the Transferring Business is transferred. Accordingly, the
Purchaser shall procure that the acquirer from it or another member of the
Purchaser's Group of the whole or any part of the Transferring Business or,
directly or indirectly, the whole or any part of the issued share capital
of any Company shall honour the obligations of the Purchaser under this
CLAUSE 13 (including, for the avoidance of doubt, under this SUB-CLAUSE
(B)) in respect of all Employees concerned in the relevant acquisition or
transfer.
(C) The Purchaser agrees with the Vendor that it will indemnify each member of
the Vendor's Group against any claim relating to the terms and conditions
of employment or benefits offered to or provided to the Employees in
connection with their employment (including, without limitation, claims
relating to the terms and conditions of such employment or benefits and
termination of such employment or benefits) provided that any such claim
arises after Completion and is in respect of the period after Completion
and that any such liability has not arisen due to a breach of this
Agreement by the Vendor.
(D) (i) If the employment of any Employee is terminated within three years
of the Completion Date the Purchaser shall procure that there shall,
subject to SUB-CLAUSE (F)(ii) and F(iii), be applied in respect of
such Employee contractual terms and conditions and those
non-contractual terms and benefits listed in ATTACHMENT 14 (the
"NON-CONTRACTUAL BENEFITS") giving due credit to the Employee 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 Employee at the Completion Date and, in
the case of the US Employees, those set out in ATTACHMENT 12. For
the avoidance of doubt, nothing in this SUB-CLAUSE (D)(i) shall
oblige the Purchaser to maintain any contractual term or
Non-Contractual Benefit applicable to an Employee after the
25
date of termination of their employment in the event that the
Purchaser terminates the employment of that Employee within 3 years
of the Completion Date other than applicable severance payments
which may be payable on or after termination of employment.
(ii) The Purchaser shall procure that, in respect of benefits which are
provided on the death or disability of an Employee or his spouse,
child or dependant within the period of three years following the
Completion Date (other than benefits provided under a Vendor's Group
Plan or benefits under the Unilever Superannuation Fund (for the
purposes of this CLAUSE 13, a "GROUP PLAN BENEFIT")), equivalent
benefits shall 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.
(E) Without prejudice to SUB-CLAUSE (D), the Purchaser shall procure that for a
period of three years following the Completion Date Employees who are
employed shall be employed, subject to SUB-CLAUSES (F)(ii) AND (iii), on
contractual terms and conditions (including, without limitation, any
related to length of service but excluding any Group Plan Benefit) and
shall be granted Non-Contractual Benefits which are no less favourable
taken as a whole in respect of each Employee than those which apply in
respect of each Employee at Completion. This undertaking does not
constitute a guarantee that the Employees will continue to be employed
following Completion. In addition, in respect of Stephen Pepper, Lisa Link
and Patricia Nasshorn the Purchaser shall procure that for a period of
three years following the Completion Date these Employees shall be
considered for a grant of discretionary share options in the same way as
any other individual of equivalent seniority employed by the Purchaser or
any other member of the Purchaser's Group. Further the Purchaser shall, on
1st July, 2002 or as soon as reasonably practicable thereafter but in any
event before 31st December, 2002, procure that the Employees shall be
entitled to join the Purchaser's existing US employee stock purchase plan
in place as at the date of this Agreement (and any replacement scheme) and
that the Employees shall be entitled to participate in such scheme for at
least 3 years following the Completion Date.
(F) (i) The Purchaser's agreement to the provisions of SUB-CLAUSES (D) and
(E) is given by the Purchaser on the express understanding that, if
the Purchaser is in breach of any such provisions, the Vendor 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.
(ii) Notwithstanding SUB-CLAUSE (D)(i) and SUB-CLAUSE (E), the Purchaser
shall have no obligation in respect of the application of
Non-Contractual Benefits in connection with the termination of the
employment of any Employee within three years of the Completion Date
and shall have no obligation in respect of the Non-Contractual
Benefits to which any Employee is entitled in the period of
26
three years following the Completion Date except to the extent that
such Non-Contractual Benefits are disclosed as set out in ATTACHMENT
14.
(iii) For the avoidance of doubt, the Purchaser shall be entitled, so far
as is lawful and/or with the consent of the relevant Employee or
Employees, to vary contractual terms and the Non-Contractual
Benefits referred to in SUB-CLAUSE (D)(i) or the contractual terms
and the Non-Contractual Benefits referred to in SUB-CLAUSE (E)
provided that such variations result in contractual terms and
non-contractual benefits which are no less favourable, taken as a
whole in respect of each Employee, than those applicable on the
Completion Date.
(G) Without prejudice to the parties' obligations under SUB-CLAUSES (A) to (F),
each of the parties shall comply with the requirements relating to that
party set out in Annex B of Part A of SCHEDULE 8 (Pensions).
(H) 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 Employees; and
(ii) any provision of SCHEDULE 8 (Pensions).
(I) If any Employee requires a work permit or employment pass or other approval
(in this sub-clause, "PERMITS") for his employment to continue for the
period of three years after the Completion Date the Purchaser undertakes to
procure that any necessary applications are promptly made and to use its
reasonable efforts to secure the necessary Permits.
SECONDED EMPLOYEES
(J) The Vendor shall procure that the relevant member of the Vendor's Group
shall use its reasonable endeavours to procure that each Seconded Employee
continues to be employed by a member of the Vendor's Group and is, in the
case of Peter Welch and Michael Joubert, for the period of 24 months
following Completion and, in the case of Fiona Humberstone, for the period
of 12 months following Completion, seconded to work in the Transferring
Business. For the avoidance of doubt, neither the Vendor nor any other
member of the Vendor's Group, shall be under any obligation to provide to
the Purchaser or any member of the Purchaser's Group any replacements for
the Seconded Employees if either Seconded Employee resigns during his
period of secondment or upon the death of any Seconded Employee. The Vendor
shall inform the Purchaser promptly if any Seconded Employee resigns their
employment with the Vendor's Group during their period of secondment. 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 Vendor's
Group and the Purchaser shall pay to the Vendor (on behalf of the
relevant member of the Vendor's Group) (in advance) on the twentieth
Business Day of each calendar
27
month 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 and any notional or
unfunded costs or accruals in relation to post-Completion service
(for example in relation to Group Plan Benefits) together with the
cost of benefit accrual charge on a local funding basis but ignoring
any surplus or deficit in the Vendor's Group Plan in question on
such basis as the Vendor may reasonably determine and agree with the
Purchaser. To the extent such agreement is not reached, the relevant
provisions of PARAGRAPH 10 of PART A of SCHEDULE 8 (PENSIONS) shall
apply. If any payment made pursuant to this SUB-CLAUSE (J)(i) is or
is deemed to be the consideration for a taxable supply for VAT
purposes, the Purchaser shall, in addition to such payment, pay (on
receipt of a VAT invoice) an amount equal to any VAT which may from
time to time be chargeable in respect of any such supply.
(ii) The relevant member of the Vendor's Group may from time to time
increase the salary benefits of such Seconded Employees; PROVIDED
that any such increases are in line with increases for similar
employees of the Vendor's Group.
(iii) The Purchaser shall indemnify each member of the Vendor's Group
against any claim by, or relating to, a Seconded Employee except to
the extent that such claim arises as a result of acts or omissions
of the Vendor or any other member of the Vendor's Group. There shall
be no liability under this SUB-CLAUSE J(iii) to the extent of any
amount recovered by the Vendor or any other member of the Vendor's
Group under any policy of employers' liability insurance in respect
of any such claim by, or relating to, a Seconded Employee and the
Vendor shall (and shall procure that the other members of the
Vendor's Group shall) use reasonable endeavours (other than with
respect to an insurance claim with no reasonable prospect of
success) to recover under any relevant employees' liability
insurance policy maintained by any member of the Vendor's Group in
respect of any such claim by, or relating to, a Seconded Employee.
(iv) The Purchaser shall request that each Seconded Employee enters into
a reasonable standard form confidentiality agreement for the benefit
of the Purchaser's Group in relation to the confidential information
which they shall obtain while on secondment and, in the event that
any Seconded Employee declines to enter into such confidentiality
agreement, the Purchaser shall, notwithstanding the further
provisions of this SUB-CLAUSE (J), be entitled to terminate (without
liability to the Purchaser's Group) the secondment arrangement with
that Seconded Employee immediately upon written notice to the
Vendor.
If, after Completion, the Purchaser does not require the Seconded Employees
then it shall give the Vendor 3 months' written notice of its wish to
terminate the arrangements and the Vendor will be responsible for the
salary and other benefits from the expiry of such notice, and any
applicable retirement or severance benefits of the relevant Seconded
Employees.
28
(K) For the avoidance of doubt, the Seconded Employees shall continue to be
employed by a member of the Vendor's Group for the period of 24 months and
12 months (as the case may be) following Completion and this Agreement
shall not operate to transfer their employment to the Purchaser or any
other member of the Purchaser's Group during the period of secondment. The
Vendor agrees that the Purchaser may offer the Seconded Employees
employment with the Purchaser's Group during the period of secondment and
that if such offer is accepted by any Seconded Employee the relevant member
of the Vendor's Group shall release them from their contract of employment.
(L) For the avoidance of doubt the Purchaser shall have no obligation to employ
or have seconded to the Purchaser or any other member of the Purchaser's
Group, Robert Field, Malcolm Smith or Frans van der Ouderaa (the "EXCLUDED
EMPLOYEES"). Nothing in this agreement shall operate to transfer the
employment of the Excluded Employees to the Purchaser or the Purchaser's
Group and the Purchaser shall not be liable for any salary, benefits,
retirement or severance benefits relating to these Excluded Employees. The
Vendor shall indemnify each member of the Purchaser's Group against any
liabilities, costs, damages, claims, expenses arising or incurred by any
member of the Purchaser's Group regarding the Excluded Employees.
VENDOR'S INDEMNITY
(M) The Vendor shall perform and discharge all of its obligations in respect of
all Employees and Seconded Employees in respect of the period prior to the
Completion Date and shall indemnify each member of the Purchaser's Group
against any liabilities, costs, damages, claims or reasonable expenses
arising or incurred by any member of the Purchaser's Group arising out of
or relating to any act or omission by any member of the Vendor's Group or
any Company in respect of the period prior to the Completion Date in
respect of any of its obligations or duties to or in relation to the
employment of any of the Employees or any former employees of any members
of the Vendor's Group or any Company in respect of the period prior to
Completion; PROVIDED that this SUB-CLAUSE (M) shall not apply in relation
to any liabilities in respect of the provision of Group Plan Benefits or in
relation to any liabilities disclosed in the Disclosure Letter or taken
into account in the Completion Accounts or, for the avoidance of doubt,
with respect to any liability or obligation in respect of bodily injury to
any Employee in respect of which the provisions of SUB-CLAUSES 10(C)(vi),
15(I), 15(J) and 15(K) shall apply. Such liabilities shall include those
incurred as a result of the termination of employment of an Employee where
notice has been given to the Employee by a member of the Vendor's Group or
a Company prior to Completion but where such notice has not expired by
Completion provided that, in such a case, shall exclude any liabilities
arising in respect of the period on and after Completion due to the acts or
omissions of a member of the Purchaser's Group.
(N) The Purchaser shall and shall procure that each relevant member of the
Purchaser's Group shall:
(i) as soon as practicable after becoming aware of such a matter, notify
the Vendor of any matter which may be likely give rise to a claim
for indemnification under SUB-CLAUSE (M);
29
(ii) give the Vendor or the relevant member of the Vendor's Group all
reasonable co-operation, assistance and information which may be
reasonably requested to dispute, resist, appeal, defend, remedy or
mitigate the matter;
(iii) not admit, defend, compromise, negotiate or settle any claim arising
out of such matter without the consent of the Vendor or the relevant
member of the Vendor's Group in writing, such consent not to be
unreasonably withheld or delayed; and
(iv) allow the Vendor or the relevant member of the Vendor's Group to
have conduct of any litigation and negotiations in connection with
any claim arising out of such matter if so requested by the Vendor,
provided that there should be no rights under this SUB-CLAUSE (N) unless
the Vendor agrees to indemnify the Purchaser against any reasonable costs,
liabilities, damages, claims or expenses in respect of SUB-CLAUSES (N)(ii),
(iii) AND (iv) above. The Purchaser undertakes that it will not, and will
procure that no member of the Purchaser's Group will, suggest, promote,
support or assist any claim which may give rise to a claim for
indemnification under SUB-CLAUSE (M).
FRENCH EMPLOYEES
(O) The Vendor and the Purchaser anticipate that, in relation to the French
Employees, the Transfer Regulations will apply to the sale and purchase of
the Transferring Business under this Agreement so that the contracts of
employment of the French Employees will have effect after Completion as if
originally made between the relevant Designated Purchaser and the French
Employees.
(P) If the contract of employment of any person who is not a French 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 application of the Transfer Regulations to the sale and purchase of
the Transferring Business under this Agreement, the Vendor agrees that:
(i) in consultation with, and if so requested by, the Purchaser, it
will, within seven Business Days after being so requested by the
Purchaser (as long as the request is made no later than fourteen
Business Days after the Purchaser becomes aware of such finding or
allegation), make to that person an offer in writing to employ him
under a new contract of employment to take effect upon the
termination referred to below; and
(ii) the offer to be made will be such that none of the terms and
conditions of the new contract will differ from the corresponding
provision of that person's contract of employment immediately before
Completion.
Upon that offer being made (or at any time after the expiry of the seven
Business Days if the offer is not made as requested), the Purchaser shall
terminate, or shall procure the termination of the employment of the person
concerned.
30
(Q) If the contract of employment of any French Employee is found or alleged
not to have effect after Completion as if originally made with the relevant
Designated Purchaser as a consequence of the application of the Transfer
Regulations to the sale and purchase of the Transferring Business under
this Agreement, the Purchaser agrees that:
(i) in consultation with the Vendor, it will, within seven days of being
so requested by the Vendor (as long as the request is made no later
than fourteen Business Days after the Vendor becomes aware of such
finding or allegation), procure that the relevant Designated
Purchaser makes to the relevant Employee an offer in writing to
employ him under a new contract of employment to take effect upon
the termination referred to below; and
(ii) the offer to be made will be such that none of the terms and
conditions of the new contract (other than the identity of the
employer) will differ from the corresponding provisions of the
Employee's contract of employment immediately before Completion.
Upon that offer being made (or after the expiry of the seven Business Days
if the offer is not made as requested), the Vendor shall forthwith
terminate, or procure the termination of, the employment of the Employee
concerned. The Vendor undertakes that before any termination of employment
of this nature it will not make any change, and will procure that no change
is made, to the terms and conditions of the relevant Employee's contract of
employment as existing immediately before Completion.
(R) The Purchaser (on behalf of the relevant Designated Purchaser) shall
indemnify each member of the Vendor's Group against any liability
whatsoever in respect of the French Employees arising out of or relating to
any act or omission by any member of the Purchaser's Group either before or
after Completion including, without limitation, any breach of the relevant
Designated Purchaser's obligations or duties under the Transfer Regulations
and any breach of the Purchaser's obligations under SUB-CLAUSES 13(P) and
13(Q). This indemnity shall not extend to acts or omissions of the
Companies prior to Completion.
US EMPLOYEES
(S) The following provisions of this CLAUSE 13 are without prejudice to the
preceding provisions of this CLAUSE 13.
(T) Immediately upon Completion the Vendor shall procure that the US Business
Seller terminates the employment of all the US Employees and the relevant
Designated Purchaser shall hire all the US Employees, on terms and
conditions complying with the Purchaser's obligations under the preceding
provisions of this CLAUSE 13 (including, for the avoidance of doubt each US
Employee's entitlements to payments in respect of the Long Term Incentive
Plan and Short Term Incentive Plan), and the Purchaser (on behalf of the
relevant Designated Purchaser) shall indemnify each member of the Vendor's
Group against all costs, liabilities, damages and expenses incurred by each
member of the Vendor's Group (including, for the avoidance of doubt, the
termination benefits referred to in the succeeding sentence) as a result of
any breach by the Purchaser or
31
relevant Designated Purchaser of this SUB-CLAUSE (T). If the relevant
Designated Purchaser fails so to hire any US Employee, the termination
benefits set out in ATTACHMENT 12 shall be applied by the Vendor except
where the failure so to hire such US Employee was due to such US Employee's
refusal to accept an offer of employment from the relevant Designated
Purchaser for a reason other than:
(i) the failure of the Purchaser or the relevant Designated Purchaser to
comply with its obligations under the preceding provisions of this
CLAUSE 13; or
(ii) a reason set out in points 2) or 3) of the third bullet point of
ATTACHMENT 12.
(U) With respect to the US Employees, the Vendor shall procure that the US
Business Seller and any other relevant member of the Vendor's Group retain
liability under any of their group life, accident, worker's compensation,
medical, hospitalisation, prescription drug, dental, reimbursement account
or short-term or long-term disability plans, whether or not insured, for
any claims arising prior to the Completion Date except to the extent such
liabilities are disclosed in the Disclosure Letter or are taken into
account in the preparation of the Completion Accounts and the Purchaser (on
behalf of the relevant Designated Purchaser) shall assume all liability for
claims arising on or after the Completion Date under the relevant
Designated Purchaser's group life, accident, worker's compensation,
medical, hospitalisation, prescription drug, dental, reimbursement account
or short-term or long-term disability plans. For the purposes of this
SUB-CLAUSE (U), claims shall be deemed to have arisen:
(i) with respect to all death or dismemberment claims, on the actual
date of death or dismemberment;
(ii) with respect to disability claims, on the day the claimant makes a
claim for the relevant benefit;
(iii) with respect to claims under salary continuance plans, on an ongoing
basis by reference to the period to which the payment of salary
relates;
(iv) with respect to all hospital, medical, drug or dental claims, on the
date the service or supply was purchased or received by the
claimant; and
(v) with respect to worker's compensation claims which are
single-accident specific, on the date of the occurrence, and with
respect to all other worker's compensation claims, on the date the
award is made; PROVIDED that neither the Vendor nor any other member
of the Vendor's Group shall have any liability in respect of matters
arising prior to Completion which form part of any claim brought by
an Employee more than 3 years after Completion.
(V) The Vendor shall procure that the US Business Seller and any other relevant
member of the Vendor's Group transfer as of the Completion Date the excess,
if any, of the accumulated contributions to their health and dependent care
flexible spending account plans made by the US Employees over the pay-outs
made from such accounts to such employees as of the Completion Date, to
corresponding accounts set up in the relevant
32
Designated Purchaser's flexible spending account plans. The Purchaser (on
behalf of the relevant Designated Purchaser) agrees to cause its flexible
spending account plans to honour and continue through the end of the
calendar year in which the Completion Date occurs the elections as in
effect immediately prior to the Completion Date made by US Employees in
respect of which a transfer is made. Following the transfer to the
Purchaser's flexible spending account plans, the relevant Designated
Purchaser shall be responsible for such transferred excess amounts in its
flexible spending account plans and all claims (without duplication of
claims reimbursed by the US Business Seller or any other member of the
Vendor's Group prior to such transfer) made by US Employees for
reimbursement under such flexible spending account plans.
(W) On and after the Completion Date the Purchaser shall, or shall procure that
the relevant members of the Purchaser's Group shall, give the US Employees
full credit for all purposes (including for purposes of eligibility to
participate, early retirement eligibility and early retirement subsidies
and vesting) under any employee benefit plans or arrangements maintained by
the members of the Purchaser's Group for the US Employees' service with the
US Business Seller or any other member of the Vendor's Group to the same
extent recognised by the US Business Seller and other relevant members of
the Vendor's Group immediately prior to Completion.
(X) To the extent permitted by law, the Purchaser shall, or shall procure that
the relevant member of the Purchaser's Group shall, assume all US
Employees' accrued compensation, bonus and vacation liabilities, regardless
of whether such liabilities relate to events which occurred on or prior to
Completion (except for the unfunded deferred compensation arrangements for
which liability will be retained by the US Business Seller and any other
relevant member of the Vendor's Group).
(Y) As of the Completion Date, the Purchaser (or the relevant Designated
Purchaser) shall be responsible for any legally mandated continuation of
health care coverage under federal or state law for all US Employees and/or
their covered dependants who have a loss of health care coverage under
health plans applicable to any US Employee with effect from the Completion
Date due to a qualifying event (as defined in Section 4980B of the US
Internal Revenue Code of 1986, as amended (the "CODE")) that occurs on or
after the Completion Date. The Vendor or relevant member of the Vendor's
Group shall be responsible for any legally mandated continuation of health
coverage for all US Employees and/or their covered dependants who have a
loss of health care coverage under health plans of the Vendor's Group due
to a qualifying event that occurs prior to the Completion Date except to
the extent that any relevant liabilities are disclosed in the Disclosure
Letter or taken into account in the preparation of the Completion Accounts.
(Z) The Purchaser shall procure that for a period of three years following the
Completion Date, each US Employee who is employed by any member of the
Purchaser's Group or any person to whom the whole or part of the US
Business or the Purchaser's Group is transferred shall be provided with
coverage under a "group health plan" (within the meaning of Code Section
4980B(g)(2)) that is substantially similar (taking into account both the
services provided under such plan and the cost of such coverage that is
borne by the US Employee (both as an absolute amount and in comparison to
the cost of such coverage payable by the employer)) to the coverage under a
group health plan
33
maintained by the Vendor's Group provided to such US Employee immediately
prior to the Completion Date.
14. PENSIONS
Each of the parties shall comply with the requirements relating to that
party set out in SCHEDULE 8 (Pensions).
15. RISK AND INSURANCE
GENERAL
(A) Risk in the IP Assets, the US Business Assets and the Monoclonal Assets
shall pass to the Purchaser and the other relevant Designated Purchasers on
Completion.
(B) The Purchaser acknowledges and agrees (on behalf of itself and each other
member of the Purchaser's Group) that, following Completion, in respect of
all insurance cover provided in relation to the Transferring Business
pursuant to policies maintained by the Vendor's Group (whether such
policies are maintained with third party insurers or with other members of
the Vendor's Group), no claim shall be made by any of the Companies or in
relation to the IP Assets, the US Business, the US Business Assets, the
Bedford Property or the Monoclonal Assets other than the following which
shall be permitted:
(i) any claim in respect of any losses, events, circumstances or
occurrences notified to the relevant insurer before Completion; or
(ii) any claim in respect of any losses, events, circumstances or
occurrences arising prior to Completion where such losses, events,
circumstances or occurrences are, subject to SUB-CLAUSES (D) and
(I), notified to the relevant insurer within 90 days of Completion,
and SUB-CLAUSE B(i) and (ii) shall include, but not be limited to, any
losses, events, circumstances or occurrences arising prior to Completion in
respect of the marketing, sale or use of any Persona products sold by any
Company or any member of the Vendor's Group (including, without limitation,
Unipath Diagnostics S.A. (France)) before Completion. (For the purposes of
this CLAUSE 15, Persona products will be deemed to have been sold when
title in the Persona product passed from the relevant Company or member of
the Vendor's Group to a third party).
(C) Subject to SUB-CLAUSES 15(B), (E), (F) and (J) and SUB-CLAUSE 13(J)(iii),
the Purchaser acknowledges and agrees (on behalf of itself and each other
member of the Purchaser's Group) that, upon Completion, the insurance cover
provided in relation to the Transferring Business pursuant to policies
maintained by members of the Vendor's Group shall cease.
34
PERSONA LITIGATION
(D) The 90 day time limit (set out in SUB-CLAUSE (B)(II)) for notification
of losses, events, circumstances or occurrences arising prior to
Completion shall not apply in relation to losses, events, circumstances
or occurrences arising in respect of the marketing, sale or use of any
Persona products sold by any Company or any member of the Vendor's
Group (including, without limitation, Unipath Diagnostics S.A.
(France)) before Completion.
(E) The Vendor undertakes that from Completion the Companies shall (at no
cost to themselves) be Insureds under, subject to and as defined in the
Liability Insurance Policies for the purposes of the entitlement in
CLAUSE 15(B) to make notifications and claims under those Liability
Insurance Policies in respect of any occurrence (for the purposes of
the entitlement in CLAUSE 15(B)) which arose prior to Completion. Any
such notification and claim shall be subject to the terms, conditions
and limits of those Liability Insurance Policies.
(F) If, in respect of any matter which would give rise to a claim under
CLAUSE 10(A) arising from Assumed Liabilities falling within SUB-CLAUSE
10(B)(III), any member of the Vendor's Group (including, without
limitation, Unipath Diagnostics S.A. (France)) is entitled to claim
under any Liability Insurance Policy, then no such matter shall be the
subject of a claim under CLAUSE 10(A) unless and until the appropriate
member of the Vendor's Group (including, without limitation, Unipath
Diagnostics S.A. (France)) shall have made a claim against its insurers
and used all reasonable endeavours to pursue such insurance claim
including where reasonable and appropriate commencing and prosecuting
proceedings against insurers (and for the purposes of dealing with
insurers in respect of such insurance claims the appropriate member of
the Vendor's Group (including, without limitation, Unipath Diagnostics
S.A. (France)) shall act in accordance with the reasonable guidance and
direction of the Purchaser). There shall, moreover, be no liability
under CLAUSE 10(A) in respect of Assumed Liabilities falling within
SUB-CLAUSE 10(B)(III) to the extent of the amount recovered under such
insurance claim except to the extent:
(i) of the reasonable costs and expenses and any Taxation incurred
or suffered by any member of the Vendor's Group in connection
with the recovery; and/or
(ii) that the future insurance costs of the Vendor or any other
member of the Vendor's Group are increased by the matter
giving rise to the insurance claim or the claim itself.
(G) The Vendor warrants (for itself and on behalf of the Share Sellers) to
the Purchaser (for itself and on behalf of the other Designated
Purchasers and the Companies) as at the date hereof that:
(i) the facts set out in a letter from the Captive Insurer to
Richard Hazell of Unilever PLC dated 18th December, 2001,
included at tab 15 of the Disclosure Bundle, are true and
accurate in all material respects and are not misleading in
any material respect;
(ii) the aggregate limit of indemnity of all group liability
insurance cover provided in relation to the Transferring
Business pursuant to the Liability Insurance Policies
maintained by the Vendor's Group (including, without
limitation, Unipath Diagnostics S.A. (France)) in respect of
each policy year beginning in or after 1996 is not less than
the amount specified in the following table:
----------------------------------------- --------------
PERIOD OF INSURANCE POLICY AMOUNT
('000S)
----------------------------------------- --------------
midnight 30th April 1996 - Midnight (pound)175,000
30th April 1997
----------------------------------------- --------------
midnight 30th April 1997 - midnight (pound)200,000
30th April 1998
----------------------------------------- --------------
midnight 30th April 1998 - midnight (pound)200,000
30th April 1999
----------------------------------------- --------------
midnight 30th April 1999 - midnight (euro)304,368
30th April 2000
----------------------------------------- --------------
midnight 30th April 2000 - midnight (euro)304,368
30th April 2001
----------------------------------------- --------------
midnight 30th April 2001 - midnight (euro)350,000
30th April 2002
----------------------------------------- --------------
(iii) so far as it is aware, the aggregate of the amounts paid and
reserved by the relevant insurers under the Liability
Insurance Policies in respect of each policy year beginning in
or after 1996 in respect of any losses, events or
circumstances notified to those insurers before the date of
this Agreement under those Liability Insurance Policies
(excluding any amounts paid or reserved in respect of claims
made with respect to the United States) do not exceed the
amount specified in the following:
--------------------------------------- ----------------
PERIOD OF INSURANCE POLICY AMOUNT (euro)
--------------------------------------- ----------------
midnight 30th April 1996 - midnight 2,300,000
30th April 1997
--------------------------------------- ----------------
midnight 30th April 1997 - midnight 950,000
30th April 1998
--------------------------------------- ----------------
midnight 30th April 1998 - midnight 750,000
30th April 1999
--------------------------------------- ----------------
midnight 30th April 1999 - midnight 1,500,000
30th April 2000
--------------------------------------- ----------------
midnight 30th April 2000 - midnight 1,500,000
30th April 2001
--------------------------------------- ----------------
midnight 30th April 2001 - midnight 950,000
30th April 2002
--------------------------------------- ----------------
and the Vendor is not aware of any facts or circumstances
which would render any reserves incurred in any such amounts
materially understated.
(iv) details (including, without limitation, details of the
appropriate limits, the names of the relevant insurers
thereunder and the address to which claims thereunder should
be notified) of each Liability Insurance Policy for each
policy year beginning in or after 1996 is included at tab 16
of the Disclosure Bundle (it being acknowledged by the
parties that copies of the first commercial market layer
Liability Insurance Policy for the period midnight 30th
April 2001 - midnight 30th April 2002 so attached is the
latest draft of such policy and has not yet been finalised
as regards the scope of coverage for liability arising in
the USA between the relevant members of the Vendor's Group
and the insurers thereunder);
(v) insurance for the primary layer written by the Captive Insurer
and by each excess layer for each policy period beginning in
or after 1996 is placed on substantially the same terms and
conditions (other than limits of indemnity) as the Liability
Insurance Policy applicable to that period attached to the
Disclosure letter;
(vi) neither the Vendor nor the Companies nor any member of the
Vendor's Group (including, without limitation, Unipath
Diagnostics S.A. (France)) has (by act or omission) done
anything which would render any Liability Insurance Policy
void or voidable, or entitle any relevant insurer to repudiate
or rescind any such Liability Insurance Policy, in respect of
any claim made or notifiable under it relating to any matters,
losses, events, circumstances or occurrences arising prior to
Completion in respect of the marketing, sale or use of Persona
products sold by any Company or any member of the Vendor's
Group (including, without limitation, Unipath Diagnostics S.A.
(France)) before Completion; and
(vii) any claim or circumstance known to any Company or any member
of the Vendor's Group (including, without limitation, Unipath
Diagnostics S.A. (France)) relating to the Transferring
Business arising out of the marketing, sales or use of Persona
products sold before Completion which is notifiable to any
insurer under any Liability Insurance Policy has been notified
to such insurer in accordance with the conditions set out in
the relevant Liability Insurance Policy.
(H) The Vendor undertakes to the Purchaser (for itself and on behalf of
each other member of the Purchaser's Group) that:
(i) it shall not (and shall procure that each member of the
Vendor's Group (including, without limitation, Unipath
Diagnostics S.A. (France)) shall not) take or omit to take any
action which shall have the effect of making any Liability
Insurance Policy void or voidable, or entitle any relevant
insurer to repudiate or rescind any such Liability Insurance
Policy, in respect of any claim made or notifiable before
Completion under it relating to any losses, events,
circumstances or occurrences arising prior to Completion in
respect of the marketing, sale or use of Persona products sold
by any Company or any member of the Vendor's Group (including,
without limitation, Unipath Diagnostics S.A. (France)) before
Completion;
(ii) it shall procure that after the date of this Agreement the
Captive Insurer shall exercise its rights in relation to the
conduct of any Persona Litigation under any Liability
Insurance Policy in a manner substantially consistent with its
usual practices in relation to claims under those Liability
Insurance Policies prior to the date hereof; provided that if
so requested by the Purchaser, the Vendor and each other
relevant member of the Vendor's Group (including, without
limitation, Unipath Diagnostics S.A. (France)) shall use their
reasonable endeavours to procure that the leading
insurer on the first commercial market insurance layer
affected shall give guidance and directions to the Captive
Insurer as to the exercise of those rights, and the Vendor
shall procure that the Captive Insurer shall, if the Purchaser
so requests, act in accordance with such guidelines and
instructions;
(iii) it will procure that the Captive Insurer treats as a single
occurrence under the Liability Insurance Policy for the
1996/97 policy year all claims notified or threatened before
the date hereof in respect of the marketing, sale or use of
Persona products sold before Completion and any future claim
containing substantially similar allegations to those already
notified as Generic Claims; provided that the Captive Insurer
shall be entitled to treat occurrences after 30th April, 2001
but before Completion as falling within the Liability
Insurance Policy for the 2001/02 policy year; and provided
further that it is acknowledged by the parties that the claim
of Mrs. Wooster and any claim of a like nature or which is
alleged to arise from a separate and distinct defect in any
Persona product, or in the manner in which it was marketed,
sold or used, may not form part of the Generic Claims and may
be treated by the Captive Insurer otherwise than as part of
the single occurrence under the Liability Insurance Policy for
the 1996/7 policy year; and
(iv) it will indemnify the Companies for any loss suffered by any
of them by reason of the failure of the Captive Insurer, as a
result of its insolvency, to satisfy on a reasonably timely
basis any liability of the Captive Insurer to any of the
Companies under the Liability Insurance Policies underwritten
by the Captive Insurer in favour of the Companies in respect
of any claim arising from the marketing, sale or use of
Persona products sold before Completion notified by or on
behalf of any of them to it on or prior to the date hereof or
pursuant to CLAUSE 15.
35
EMPLOYERS' LIABILITY
(I) The 90 day time limit (set out in SUB-CLAUSE (B)(ii)) for notification of
losses, events, circumstances or occurrences arising prior to Completion
shall not apply in relation to losses, events, circumstances or occurrences
arising in respect of any claim by an Employee or any past employee (or
their executors, personal representatives or dependants) of any of the
relevant Companies as set out in (i) or (ii) as appropriate below arising
out of and in the course of his employment by any such Company prior to
Completion:
(i) against any Company incorporated in England and Wales if that
Company is insured in respect of those claims under any policy of
employers' liability insurance maintained by any relevant member of
the Vendor's Group on or before Completion; and
(ii) against each of the Companies if that Company is insured in respect
of those claims under the extension in the Liability Indemnity
Policies referred to in the Liability Insurance Policies as
"Residual Employers Liability Insurance".
(J) The Vendor undertakes that from Completion any Company incorporated in
England and Wales shall (at no cost to themselves) be Insureds under,
subject to and as defined in any policy of employers' liability insurance
maintained by any relevant member of the Vendor's Group on or before the
date of Completion for the purposes of the entitlement in CLAUSE 15(B) to
make notifications and claims to which SUB-CLAUSE (I)(i) refers. Any such
notification and claim shall be subject to the terms, conditions and limits
of the relevant policy of employers' liability insurance. For the avoidance
of doubt, pursuant to SUB-CLAUSE (E) each of the Companies shall (at no
cost to themselves) be Insureds under, subject to and as defined in the
Liability Insurance Policies in respect of the "Residual Employers'
Liability Insurance" coverage provided under those Liability Insurance
Policies in respect of any occurrence in respect of any claim by an
Employee or any past employee (or their executors, personal representatives
or dependants) of any of the relevant Companies which arose out of and in
the course of his employment by any such Company prior to Completion.
(K) The Vendor acknowledges that neither the Vendor nor any other member of the
Vendor's Group (including, if applicable and without limitation, Unipath
Diagnostics S.A. (France)) shall take any voluntary action (excluding any
action taken to effect completion of the transactions contemplated by this
Agreement) to terminate any employers' liability insurance arrangements
effected prior to Completion by those Companies incorporated in France,
Germany, the Netherlands and Sweden which are not policies maintained by
the Vendor's Group.
(L) (i) In calculating the liability of the Vendor for any breach of the
undertakings set out in SUB-CLAUSES (E) and/or (J) or any of the
warranties set out in SUB-CLAUSE (G) there shall be taken into
account any repayment in respect of Tax or
36
any Relief arising as a result of the matter giving rise to such
liability which the Purchaser or any member of the Purchaser's
Group obtains and utilises on or before the date of calculating
such liability.
(ii) To the extent that the Purchaser (or the relevant member of the
Purchaser's Group) obtains and utilises any repayment in respect of
Tax or any Relief arising as a result of the matter giving rise to
the liability of the Vendor for any breach of the undertakings set
out in SUB-CLAUSES (E) and/or (J) or any of the warranties set out
in SUB-CLAUSE (G), the Purchaser (or the relevant member of the
Purchaser's Group) shall, except to the extent that such utilisation
has been taken into account in calculating the liability of the
Vendor pursuant to PARAGRAPH (i) of this SUB-CLAUSE (L), remit to
the Vendor, within 15 Business Days of actual receipt, an amount
equal to so much of the economic benefit from that repayment in
respect of Tax or Relief which the Purchaser (or the relevant member
of the Purchaser's Group) has actually received; PROVIDED that
nothing in this PARAGRAPH (ii) shall restrict the ability or
discretion of the Purchaser (or the relevant member of the
Purchaser's Group) to order its Tax affairs in any way which it sees
fit and to keep its Tax affairs confidential. Any question
concerning whether the Purchaser (or the relevant member of the
Purchaser's Group) has actually realised any such economic benefit
or the quantum and timing of such benefit shall be determined by the
auditors for the time being of the Purchaser (or the relevant member
of the Purchaser's Group).
(M) Without prejudice to the provisions of SUB-CLAUSE 15(L), any payment made
by a member of the Vendor's Group or any other person in respect of any
breach of the undertakings set out in SUB-CLAUSES (E) and/or (J) or any of
the warranties set out in SUB-CLAUSE (G) shall be deemed, so far as
possible, to be a reduction of the Cash Consideration payable by the
Purchaser (on behalf of the relevant Designated Purchaser) and such
reduction shall be allocated to the greatest extent possible to the
particular Shares or US Business Assets to which the claim relates. Any
such payment, to the extent not deemed to be such a reduction of the Cash
Consideration, shall be made on an after Tax basis.
16. DUTCH SALES STAFF
(A) The Vendor shall procure that, as soon as reasonably practicable following
Completion, consultation shall commence with the Dutch Sales Staff in the
manner prescribed by the law of the Netherlands with a view to securing
their consent to enter into new contracts of employment, as soon as
reasonably practicable after Completion, with the relevant Designated
Purchaser or such Company as the Purchaser may nominate. The Vendor shall
use its reasonable endeavours to finalise the consultation process with the
Dutch Sales Staff in an efficient and timely manner.
(B) The Vendor and the Purchaser agree to do all that they are each reasonably
capable of doing to enable compliance with the relevant obligations of the
law of the Netherlands (including, without limitation, the prompt provision
to the Vendor of all information reasonably necessary to satisfy the
obligations of the Vendor or any other member of
37
the Vendor's Group to consult with the Dutch Sales Staff in accordance with
local law) with respect to the Dutch Sales Staff and to enter into new
contracts of employment.
(C) If all or any member of the Dutch Sales Staff does not agree to enter into
new contracts of employment with the relevant Designated Purchaser or such
company as the Purchaser may nominate within six months of Completion, the
Vendor and the Purchaser shall procure that the Dutch Sales Representation
Agreement is terminated with respect to the Dutch Sales Staff, unless the
termination of the Dutch Sales Representation Agreement less than 6 months
after Completion would prejudice the on-going consultation process with the
remaining Dutch Sales Staff, in which case the parties agree to delay such
termination (or to terminate in respect of the non-transferring Dutch Sales
Staff only) until up to a maximum of 6 months from Completion. The Vendor
(on behalf of Lever Faberge Nederland B.V.) and the Purchaser (on behalf of
Unipath Limited) agree that if the Dutch Sales Representation Agreement is
terminated pursuant to this SUB-CLAUSE (C) then paragraph 10 of that
agreement shall not apply and the Vendor shall procure that Lever Faberge
Nederland B.V. shall bear the costs referred to therein. If some of the
Dutch Sales Staff do not agree to enter into new contracts of employment
with the relevant Designated Purchaser or such company as the Purchaser may
nominate within six months of Completion, the Vendor shall procure that
Lever Faberge Nederland B.V. shall bear the costs related to such
non-transferring Dutch Sales Staff.
(D) In the event that any or all of the members of the Dutch Sales Staff do
enter into an employment contract with the relevant Designated Purchaser or
such company as the Purchaser may nominate within six months of Completion,
the Purchaser will observe the obligations set out in SUB-CLAUSES 13(B) to
13(I) (Employees) and Part B of SCHEDULE 8 (Pensions) as if they applied to
such member of the Dutch Sales Staff. Following any such transfer of the
employment of such member of the Dutch Sales Staff, the Vendor and the
Purchaser shall procure that the Dutch Sales Representation Agreement is
terminated with respect to such member of the Dutch Sales Staff. The Vendor
(on behalf of Lever Faberge Nederland B.V.) and the Purchaser (on behalf of
Unipath Limited) agree that if the Dutch Sales Representation Agreement is
terminated pursuant to this SUB-CLAUSE (D) then paragraph 10 of that
agreement shall not apply and each of Lever Faberge Nederland B.V. and
Unipath Limited shall bear its own costs (if any) in relation to such
termination.
(E) The Vendor shall procure that neither Lever Faberge Nederland B.V. nor any
other member of the Vendor's Group shall terminate the Dutch Sales
Representation Agreement otherwise than pursuant to SUB-CLAUSE (C) or (D).
The Purchaser (on behalf of Unipath Limited) agrees with the Vendor (on
behalf of Lever Faberge Nederland B.V.) that, pending termination of the
Dutch Sales Representation Agreement, Lever Faberge Nederland B.V. will
have no obligation to replace any member of the Dutch Sales Staff who
leaves the employment of Lever Faberge Nederland B.V. and that such a
departure shall not constitute a breach of the Dutch Sales Representation
Agreement.
(F) The Vendor (on behalf of Lever Faberge Nederland B.V.) and the Purchaser
(on behalf of Unipath Limited) agree that if the Dutch Sales Representation
Agreement is
38
terminated other than pursuant to SUB-CLAUSE (C) or (D) then paragraph 10
of that agreement shall apply.
(G) For the avoidance of doubt, the Dutch Sales Staff shall continue to be
employed by Lever Faberge Nederland B.V. following Completion and this
Agreement shall not operate to transfer their employment to the Purchaser
or any other member of the Purchaser's Group until such time as they agree
to enter into an employment contract with a member of the Purchaser's
Group.
17. INTELLECTUAL PROPERTY
"WRONG POCKETS"
(A) If either party discovers that any of the Business IPR or Company IPR has
been used exclusively by a member of the Vendor's Group in the twelve
months prior to Completion other than in connection with the Transferring
Business, or has never been used prior to Completion in connection with the
Transferring Business (and for these purposes use includes use for
research, development or commercially or any of them), the Purchaser agrees
to procure, at the Vendor's cost, that such Intellectual Property is
transferred to the Vendor or a company nominated by the Vendor for nominal
consideration as soon as reasonably practicable.
(B) If either party discovers that any member of the Vendor's Group owns any
Intellectual Property or know-how which has been used exclusively in the
Transferring Business in the twelve months prior to Completion, or has
never been used by a member of the Vendor's Group prior to Completion other
than in connection with the Transferring Business (and for these purposes
use includes use for research, development, commercially or any of them),
the Vendor agrees to procure that such Intellectual Property or know-how
(as applicable) is transferred to the Purchaser or a company nominated by
the Purchaser for nominal consideration as soon as reasonably practicable.
SHARED RIGHTS
(C) Each party shall have the rights and obligations relating to that party as
set out in SCHEDULE 16 (INTELLECTUAL PROPERTY LICENCES).
BD LICENCE
(D) The Purchaser acknowledges that following Completion it or a member of the
Purchaser's Group may receive sums from Becton Dickinson pursuant to the BD
Licence. The Purchaser undertakes that:
(i) it will pay to the Vendor all sums received by the Purchaser or
members of the Purchaser's Group pursuant to CLAUSE 3.1 of the BD
Licence; PROVIDED that any sum payable by the Purchaser pursuant to
this SUB-CLAUSE 17(D)(i) shall be reduced by an amount corresponding
to Taxation payable by the Purchaser (or the relevant member of the
Purchaser's Group) in respect of such sum
39
received, except to the extent that the corresponding sum payable
by the Purchaser is tax deductible for the Purchaser (or relevant
member of the Purchaser's Group) for the purposes of calculating
income, profits or gains;
(ii) neither it nor any member of the Purchaser's Group will within five
years from the date of this Agreement:
(a) directly or indirectly grant a licence to Becton Dickinson or
any related company to use the Biosensors Patents; or
(b) enter into any other agreement with Becton Dickinson or any
other company pursuant to which Becton Dickinson acquires the
right to use the Biosensors Patents,
in relation to electrochemical biosensors for markers for diabetes,
including the analysis of glucose in blood, on whatever terms and
whether for monetary consideration or otherwise; and
(iii) it will observe all the rights of Becton Dickinson under the BD
Licence.
TREATMENT OF PATENT CASES
(E) The provisions of Part B of SCHEDULE 15 (Patent Cases) shall apply in
relation to the treatment of the Patent Cases by the parties following
Completion.
AUDIT RIGHTS
(F) Each of the Vendor and the Purchaser shall give the other party such access
to those books, records and employees of the members of the Vendor's Group
or the Purchaser's Group (as the case may be) which the other party may
reasonably require to ascertain that the members of the Vendor's Group or
the Purchaser's Group (as the case may be) are in compliance with their
obligations under this CLAUSE 17 and/or Part B of SCHEDULE 15 (Patent
Cases). Such employees to whom the requesting party may require access
shall be instructed to give promptly all such information and explanations
as the requesting party may reasonably require for this purpose, and each
party shall be entitled to take photocopies of relevant documentation.
PAYMENTS
(G) Any payments made by the Purchaser pursuant to SUB-CLAUSE (D) shall be
received by the Vendor on behalf of the relevant IP Assets Sellers.
18. REORGANISATION INDEMNITY
(A) Subject to the remaining provisions of this CLAUSE 18, the Vendor agrees
with the Purchaser that it will indemnify each member of the Purchaser's
Group in respect of all liabilities, losses, charges, costs, claims or
demands ("INDEMNIFIED LOSSES") to the extent that such Indemnified Losses
are incurred by any member of the Purchaser's
40
Group as a consequence of, or which would not have occurred or arisen
either directly or indirectly but for, the implementation of the
Reorganisation. Any payments made by the Vendor pursuant to this SUB-CLAUSE
(A) shall be by way of adjustment to the Cash Consideration paid in respect
of the Shares of Unipath Limited.
(B) The indemnity set out in SUB-CLAUSE (A) does not apply to any Indemnified
Losses relating to Tax or UK stamp duty and the only remedy in respect of
such Indemnified Losses shall be pursuant to the Tax Covenant.
(C) Where the Purchaser or any member of the Purchaser's Group becomes aware of
any liability of the Subsidiary or Unipath Limited arising as a result of
the failure to obtain the consent of a third party creditor (in
circumstances where such consent was required under contract or law and was
not obtained), or of any matter likely to give rise to such a liability, in
each case which gives or is likely to give rise to Indemnified Losses
arising out of the sale by the Subsidiary to Unipath Limited of
substantially all of the business and assets of the Subsidiary (in
accordance with Step 2 of the Reorganisation (as described IN ATTACHMENT 2)
(the "STEP TWO HIVE-DOWN")) the Purchaser shall notify the Vendor of such
liability, or such matter, as soon as reasonably practicable after becoming
aware thereof and the Purchaser shall, and shall procure that each other
member of the Purchaser's Group shall (i) co-operate with the Vendor with
regard to such liability or matter to the extent reasonable; and (ii) take
all reasonable steps to mitigate any Indemnified Losses arising from such
liability or matter, PROVIDED that, for the purposes of this SUB-CLAUSE
(ii), it shall not be considered reasonable for any member of the
Purchaser's Group to take any step to the extent that it would prejudice
the operations of the Transferring Business.
(D) The Purchaser undertakes to the Vendor (for itself and as trustee for each
member of the Vendor's Group and for all the past, present and future
employees and directors of each member of the Vendor's Group and of the
Subsidiary (together, "PROTECTED PERSONS")) that it will not, and will
procure that no member of the Purchaser's Group (subject to SUB-CLAUSE
18(F), while it remains such a member) will, except in the case of fraud,
make any claim or bring any proceedings (whether pursuant to the indemnity
set out in SUB-CLAUSE (A) or otherwise) alleging that the sale by the
Subsidiary to the Vendor of the entire issued share capital of Unipath
Limited (in accordance with step three of the Reorganisation (as described
in ATTACHMENT 2) (the "STEP THREE SALE")) involved an unlawful distribution
or an unlawful reduction of capital effected by the Subsidiary. The
undertaking by the Purchaser set out in this SUB-CLAUSE (D) shall not apply
where any Tax Authority makes a claim or brings proceedings against a
member of the Purchaser's Group alleging that the Step Three Sale involved
an unlawful distribution or an unlawful reduction of capital effected by
the Subsidiary or if the Vendor or any member of the Vendor's Group makes a
legal challenge (other than by reason of the failure of the Purchaser or
any Designated Purchaser to have legal capacity to enter into this
Agreement and/or to purchase such Shares hereunder) to the rights of the
Purchaser or the relevant Designated Purchaser as purchaser of the Shares
in Unipath Limited in accordance with the provisions of SUB-CLAUSES 2(A) -
(C). Where the undertaking by the Purchaser in this SUB-CLAUSE (D) applies
and is breached, or is alleged by the Purchaser or any member of the
Purchaser's Group to be invalid, the indemnity set out in SUB-CLAUSE (A)
shall not apply in respect of any unlawful distribution
41
or unlawful reduction of capital effected by the Subsidiary in respect of
the Step Three Sale or in respect of any claims or proceedings alleging any
such unlawful distribution or unlawful reduction of capital. The
penultimate sentence of this SUB-CLAUSE (D) is without prejudice to the
second sentence of this SUB-CLAUSE (D).
(E) If, as a result of breach or invalidity of the undertaking of the Purchaser
set out in SUB-CLAUSE (D), any Protected Person becomes liable to pay any
sum to a member of the Purchaser's Group (whether by agreement or
otherwise) as a result of a determination or allegation (howsoever arising)
that the Step Three Sale involved an unlawful distribution or an unlawful
reduction of capital effected by the Subsidiary the Purchaser shall, within
five Business Days of it being notified of such liability, pay to the
Vendor an amount equal to such sum. This SUB-CLAUSE (E) is without
prejudice to the second sentence of SUB-CLAUSE (D)
(F) The Purchaser shall procure that any person not being a member of the
Purchaser's Group (an "ACQUIRING PERSON") who, following Completion,
acquires (directly or indirectly) all or part of the issued share capital
of the Subsidiary from a member of the Purchaser's Group shall enter into
undertakings in favour of the Vendor in terms which are equivalent to those
set out in SUB-CLAUSES (D) and (E). Any undertakings with the Vendor
entered into by an Acquiring Person pursuant to this SUB-CLAUSE (F) shall
also impose an obligation on that Acquiring Person in equivalent terms to
that imposed on the Purchaser by this SUB-CLAUSE (F).
19. VENDOR'S WARRANTIES AND UNDERTAKINGS AND PURCHASER'S REMEDIES
(A) Subject as provided in this Agreement, the Vendor warrants (for itself and
on behalf of the Share Sellers, the US Business Seller and the IP Assets
Sellers) to the Purchaser (for itself and on behalf of the other Designated
Purchasers) as at the date hereof in the terms set out in the Warranties.
(B) Without prejudice to the warranties set out in CLAUSE 15 and the other
warranties referred to in SUB-CLAUSES E(iii), (iv) AND (v), the only
Warranties given:
(i) in respect of the Properties are those contained in PARAGRAPHS 19
and 5(A) of SCHEDULE 6 (Warranties) and each of the other Warranties
shall be deemed not to be given in relation to the Properties;
(ii) in respect of Intellectual Property and know-how matters and
agreements granting rights to the same are those contained in the
following paragraphs of SCHEDULE 6 (Warranties):
2 (Capacity), 5 (Accuracy of Information), 6 (Accounts), 7
(Events Since 31st December 2000), 8 (B) (iii), 8 (D), 8
(E), 9 (Powers of Attorney), 10 (Grants and Allowances), 11
(Licences), 13 (Insolvency), 14 (A), 15 (Delinquent and
Wrongful Acts) (provided always that paragraph 15(A) shall
not apply to infringement of third party Intellectual
Property rights except to the extent it constitutes criminal
infringement), 17 (Book Debts), 21 (Intellectual Property
and Information Technology), 22
42
(Competition and Trade Regulation Law), 23 (Insurances),
24(A), (B), (D), (E), (H) and (J) (Employment), 26 (The
Accounts and Tax), 27 (Tax Events Since the Accounts Date),
28 (Tax Returns, Disputes, Records and Claims etc), 29
(Stamp Duty and Stamp Duty Reserve Tax), 30 (Value Added
Tax), 31 (Duties), 32 (Deductions and Withholdings), 33
(Residence), 34 (Tax on Disposal of Assets or Debts), 35
(Group Relief), 36 (Intra-Group Transactions), 37 (US
Business Assets and Monoclonal Assets), 39 (Non -Deductible
Revenue Outgoing), 40 (Non-Deductible Royalty Payments, and
41 (Rollover and Holdover Claims);
and each of the other Warranties shall be deemed not to be given in
relation to Intellectual Property or know-how matters or agreements
to the extent such agreements grant rights to the same.
None of the Warranties referred to in SUB-CLAUSE 19(B)(ii) shall
constitute or be construed as giving any warranty as to or relating
to validity of Intellectual Property except for the Warranty set out
in PARAGRAPH 21(H) of SCHEDULE 6 (Warranties).
Except in relation to the Warranty set out in PARAGRAPH 15(A) of
SCHEDULE 6 (Warranties), in respect of criminal infringement only
and the Warranty set out in PARAGRAPH 21(F) of Schedule 6
(Warranties), none of the Warranties referred to in this SUB-CLAUSE
19(B)(ii) shall constitute or be construed as giving any warranty as
to or relating to the infringement of third party Intellectual
Property rights.
(iii) in respect of competition laws, anti-restrictive trade practice laws
or anti-trust laws are those contained in PARAGRAPH 22 of SCHEDULE 6
(Warranties) and each of the other Warranties shall be deemed not to
be given in relation to competition laws, anti-restrictive trade
practice laws or anti-trust laws;
(iv) in respect of employment matters (save for matters relating to
pensions) are those contained in PARAGRAPHS 6, 7, 14, 15(A) and 24
of SCHEDULE 6 (Warranties) and the Tax Warranties 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 environmental matters (including worker health and
safety matters) are those contained in the Environmental Warranties
and each of the other Warranties shall be deemed not to be given in
relation to environmental matters (including worker health and
safety matters);
(vi) 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
(vii) in respect of pensions matters are those contained in PARAGRAPH 18
of PART A and PARAGRAPH 5 of PART B of SCHEDULE 8 (Pensions),
PARAGRAPHS 6, 7 and 9 of
43
SCHEDULE 6 (Warranties) and the Tax Warranties and each of the
other Warranties shall be deemed not to be given in relation to
pensions matters.
(C) The liability of the Vendor, the Share Sellers, the US Business Seller and
the IP Assets Sellers under or in relation to the Warranties (including
without limitation the Warranties set out in SCHEDULE 8 (Pensions)) and the
Tax Covenant (but without prejudice to the provisions of the Tax Covenant)
shall be limited as set out in SCHEDULE 7 (Limitations on Liability).
(D) The Vendor accepts and acknowledges that the Purchaser (for itself and on
behalf of the other Designated Purchasers) is entering into this Agreement
and the Specified Agreements in reliance upon (i) the Warranties, (ii) the
warranties set out in CLAUSE 15, (iii) the warranties set out in clause 11
of the Transitional Services Agreement, (iv) the warranties set out in
clause 14 of the Tax Covenant and (v) any other warranties expressly set
out as such in any of the Relevant Agreements.
(E) The Purchaser acknowledges that no representations or warranties, express
or implied, have been or are given by the Vendor, the Share Sellers, the US
Business Seller, the IP Assets Sellers or any other member of the Vendor's
Group which is a party to any of the Specified Agreements other than (i)
the Warranties, (ii) the warranties set out in CLAUSE 15, (iii) the
warranties set out in clause 14 of the Tax Covenant, (iv) the warranties
set out in clause 11 of the Transitional Services Agreement and (v) any
other warranties expressly set out as such in any of the Relevant
Agreements.
(F) Except in respect of the Warranties set out in PARAGRAPHS 21(L) and (M) of
SCHEDULE 6 (Warranties), the only remedy of the Purchaser for breach of the
Warranties or any of the other warranties specified in SUB-CLAUSE (E) shall
be damages (subject, in the case of the Warranties, to SCHEDULE 7
(Limitations on Liability)) and the Purchaser hereby agrees to waive any
other right, power or remedy it may have in relation to a breach of the
Warranties or any of the other warranties specified in SUB-CLAUSE (E). The
only remedy of the Purchaser for breach of the Warranties set out in
PARAGRAPHS 21(L) and (M) of SCHEDULE 6 (Warranties) shall be damages and
specific performance (subject in each case to SCHEDULE 7 (Limitations on
Liability)); PROVIDED that where an order for specific performance results
in any Intellectual Property being assigned from the Vendor's Group to the
Purchaser or a member of the Purchaser's Group, the Purchaser shall
simultaneously grant or procure the grant to the Vendor for itself and on
behalf of each member of the Vendor's Group of a non-exclusive, perpetual,
worldwide, assignable, irrevocable, royalty-free licence in respect of such
Intellectual Property to use, manufacture, research, develop and/or sell
products outside the Defined Field and the field of human and animal IN
VITRO diagnostics (with the right to sub-licence to (i) sub-contractors for
the purpose of that sub-contractor carrying out research, development,
manufacturing or sale activities on behalf of the Vendor's Group, (ii)
customers of the Vendor's Group in respect of products supplied to such
customers by the Vendor's Group, and (iii) then current sub-licensees of
the Vendor's Group under any of that Intellectual Property outside the
Defined Field and the field of human and animal IN VITRO diagnostics).
Notwithstanding the foregoing the remedy available to the Purchaser for a
breach of the Warranties set out in PARAGRAPHS 21(L) and (M) of SCHEDULE 6
(Warranties) shall be damages or specific performance, but not both.
44
(G) The Vendor agrees and undertakes with the Purchaser (for itself and as
trustee for each Employee and member of the Dutch Sales Staff and each
Company and its directors) to waive (and shall procure that each member of
the Vendor's Group shall waive), in the absence of fraud, any rights or
claims which they may have in respect of any misrepresentation, inaccuracy
or omission in relation to any information or advice supplied or given by
any Employee, any member of the Dutch Sales Staff, any Company or any of
its directors in connection with the giving of any of the Warranties and/or
any warranty set out in CLAUSE 15 and/or any other warranty referred to in
SUB-CLAUSE (E) and/or any other undertaking on the part of any member of
the Vendor's Group in this Agreement or any of the Specified Agreements
and/or in connection with the preparation of the Disclosure Letter.
(H) Each of the Warranties set out in the several paragraphs of SCHEDULE 6
(WARRANTIES) and SCHEDULE 8 (PENSIONS), the warranties set out in CLAUSE 15
and/or the other warranties referred to in SUB-CLAUSE (E) is separate and
independent and, except as expressly provided to the contrary in this
Agreement, is not limited:
(i) by reference to any other paragraph of either such Schedule; or
(ii) by anything in this Agreement or any other Specified Agreement.
(I) The Purchaser and, as applicable, any Designated Purchaser shall be
entitled to claim both before and after Completion that any of (i) the
Warranties (subject to SCHEDULE 7 (Limitations on Liability)), (ii) the
warranties set out in CLAUSE 15 and/or (iii) any other warranties referred
to in SUB-CLAUSE (E) has or had been breached and Completion shall not
constitute a waiver of any of the rights of the Purchaser or any such
Designated Purchaser.
(J) The Vendor agrees that it will, and will procure that each relevant member
of the Vendor's Group will, after the Completion Date:
(i) promptly provide the Purchaser with such information and access to
personnel, premises, chattels and documents belonging to, or under
the control of, any members of the Vendor's Group as the Purchaser
may reasonably consider necessary in connection with the Persona
Litigation and any claim under any Liability Insurance Policy in
connection with the marketing, sale or use of Persona products; and
(ii) promptly, and in any event within five Business Days of receipt of
any written communication relating to the Persona Litigation,
provide the Purchaser with a copy of such written communication.
The obligations of the Vendor and the relevant members of the Vendor's
Group pursuant to this SUB-CLAUSE (J) are subject to the Purchaser promptly
reimbursing the Vendor and such members of the Vendor's Group for the
reasonable out-of-pocket expenses incurred by them in performing such
obligations.
45
(K) The Vendor will indemnify each member of the Purchaser's Group against all
liabilities, losses, charges, costs, claims or demands arising from:
(i) the Lease dated 20th October, 1981 between Standard Life Assurance
Company (1) and Thameside Properties Limited (2) of Unit 3, Bilton
Road, Kingsland Industrial Park, Basingstoke, Hampshire and all
documents supplemental or ancillary thereto;
(ii) the Lease dated 4th November, 1974 between Stan-Bilt Limited (1)
Oxoid Limited (2) and Brooke Bond Leibig Limited (3) of Industrial
Premises on the Kingsland Industrial Estate, Basingstoke, Hants and
all documents supplemental or ancillary thereto; and
(iii) the two Agreements for Sale dated 13th December, 2001 between
Unipath Management Limited (1) and Unilever U.K. Central Resources
Limited (2);
(each of which documents is set out in ATTACHMENT 9),
Provided always that the Subsidiary uses reasonable endeavours to collect
sums owing to it in respect of any sub-letting of the properties referred
to at (i) and (ii) above.
(L) The Vendor agrees (for itself and on behalf of each other member of the
Vendor's Group) and undertakes with the Purchaser (for itself and on behalf
of each other member of the Purchaser's Group) that from Completion, no
member of the Vendor's Group shall have any right, title or interest in,
and no member of the Vendor's Group (nor, so far as achievable using
reasonable endeavours, any member of the Vendor's Group which ceases to be
such a member before the third anniversary of the date of this Agreement)
shall use, the word "Unipath" or any word similar thereto or any colourable
imitation thereof or any name or mark which includes or consists thereof,
provided that nothing in this clause shall prevent members of the Vendor's
Group from using "Uni", either on its own or as a prefix, provided such use
does not cause confusion with any part of the Transferring Business' use of
the word "Unipath".
(M) Subject to SUB-CLAUSE 32(B) (Announcements) and SUB-CLAUSE 33(B)
(Confidentiality) and without prejudice to SUB-CLAUSE 17(E) (Intellectual
Property), the Vendor undertakes on behalf of itself and each other member
of the Vendor's Group (and, so far as achievable using reasonable
endeavours, any member of the Vendor's Group which ceases to be such a
member before the third anniversary of the date of this Agreement) to treat
as strictly confidential and not disclose to any person (other than other
members of the Vendor's Group on a confidential basis) any Purchaser
Confidential Information. The Vendor acknowledges (for itself and on behalf
of each other member of the Vendor's Group) that any future use of
Purchaser Confidential Information is without representation, warranty or
liability on the part of any member of the Purchaser's Group. No updates of
the Purchaser Confidential Information will be provided by any member of
the Purchaser's Group to any member of the Vendor's Group.
(N) The Vendor shall procure that, for a period of two years from the date of
Completion, there shall be prepared in relation to the US Business, where
reasonably required by
46
the Purchaser and subject to reimbursement by the Purchaser of the
reasonable out-of-pocket expenses of any relevant member of the Vendor's
Group:
(i) financial data required for the preparation of financial accounts,
management accounts or statutory accounts for any member of the
Purchaser's Group which relate, in each case, to a period of account
which is closed or in progress at Completion; and
(ii) any data required for compliance with any reporting requirements of
any Stock Exchange or securities or other regulatory authority or
under any applicable law, rule or regulation (including, without
limitation, the American Stock Exchange),
which shall each be delivered to the Purchaser as soon as reasonably
practicable following receipt by the Vendor of a written request therefor
by the Purchaser.
(O) Subject to SUB-CLAUSE 33(B) and save as expressly permitted by SUB-CLAUSE
17(C) the Vendor undertakes, for itself and on behalf of each other member
of the Vendor's Group (and, so far as achievable using reasonable
endeavours, any member of the Vendor's Group which ceases to be such a
member before the third anniversary of the date of this Agreement) that it
will not use or disclose any confidential know-how of the Companies or any
confidential know-how forming part of the US Business.
(P) (i) The Purchaser warrants to the Vendor that:
(a) the common stock, par value $0.001 per share, of the Purchaser
is listed on the American Stock Exchange and the Purchaser is a
reporting company for purposes of the United States securities
laws;
(b) the Purchaser is required to make certain periodic and other
filings with the United States Securities and Exchange
Commission (the "SEC") under the United States Securities
Exchange Act of 1934, as amended (the "US 1934 ACT") and the
rules and regulations promulgated thereunder;
(c) the Purchaser will be required to file certain financial
information pertaining to the Transferring Business with the SEC
pursuant to Item 7 of the Current Report on Form 8-K ("FORM
8-K") as contemplated by the US 1934 Act and the rules and
regulations promulgated thereunder and may, if it registers any
securities, be required to file certain similar financial
information under the United States Securities Act of 1933, as
amended (together with the US 1934 Act, the "US SECURITIES
LAWS") and the rules and regulations promulgated thereunder
(such required financial information, the "REQUIRED
INFORMATION");
(d) the Required Information may include audited financial
statements of the Transferring Business for the three most
recent fiscal years, together with unaudited financial
statements of the Transferring Business for the interim period
that ends within 135 days of the filing
47
date and a comparative interim period for the prior year, and
certain pro-forma information;
(e) the Form 8-K reporting the consummation of the transactions
contemplated by this Agreement must be filed by the Purchaser
with the SEC not more than 15 days after the consummation of the
transactions contemplated by this Agreement; and
(f) the Required Information must be filed by the Purchaser with the
SEC not more than 60 days after the due date for the filing of
the Form 8-K referred to in SUB-CLAUSE (P)(i)(e).
(ii) The Vendor agrees that it will, and will procure that each relevant
member of the Vendor's Group will, use its or their reasonable
endeavours, having regard to the time periods set out in SUB-CLAUSE
(P)(i), to assist the Purchaser and the Purchaser's Accountants in
the preparation of the Required Information and, upon reasonable
notice in writing, the Vendor, or such other member of the Vendor's
Group, will provide to the Purchaser or the Purchaser's Accountants
(subject to the execution of customary hold harmless letters between
the Vendor and/or the Vendor's Accountants, on the one hand, and the
Purchaser and/or the Purchaser's Accountants, on the other) (a) such
financial and other information, records and documents relating to
the Transferring Business; (b) such access to the Vendor's
Accountants and the employees of the Vendor and the other members of
the Vendor's Group; and (c) such access for the Purchaser's
Accountants but not the Purchaser to the working papers of the
Vendor's Accountants in relation to prior audit work which relate
exclusively to the Transferring Business, in each case as the
Purchaser or the Purchaser's Accountants may reasonably request in
order to prepare and audit the Required Information (such audit to
be performed in accordance with United States generally accepted
auditing standards); PROVIDED that in the case of access to working
papers as referred to in (c) above, any information that relates to
the procedures or processes used by the Vendor's Group (or part
thereof) generally and not exclusively relating to the Transferring
Business shall only be made available to the Purchaser's Accountants
subject to the execution of mutually satisfactory restricted access
agreements between the Vendor and/or the Vendor's Accountants, on
the one hand, and the Purchaser and/or the Purchaser's Accountants,
on the other.
(iii) For the avoidance of doubt, neither the Vendor nor any other member
of the Vendor's Group nor any of its or their employees, the
Vendor's Accountants or any other accountant retained by any member
of the Vendor's Group, shall, or shall be required pursuant to the
provisions of this SUB-CLAUSE (O) to, audit, review or perform any
other procedures, or provide any opinion, report or letter, with
respect to the Required Information or any of the information
provided by the Vendor, any other member of the Vendor's Group or
the Vendor's Accountants to the Purchaser or the Purchaser's
Accountants under this SUB-CLAUSE (P).
48
(iv) The obligations of the Vendor and the relevant members of the
Vendor's Group pursuant to this SUB-CLAUSE (P) are subject to the
Purchaser promptly reimbursing the Vendor and such members of the
Vendor's Group for the reasonable out-of-pocket expenses incurred by
them in performing such obligations.
20. PURCHASER'S WARRANTIES
(A) The Purchaser warrants to the Vendor that:-
(i) the Purchaser has the corporate power and authority to enter into
and perform this Agreement and each of the Purchaser and the other
relevant members of the Purchaser's Group (other than the Companies)
has the corporate power and authority to enter into and perform any
other agreement required to be entered into by it under this
Agreement;
(ii) this Agreement constitutes and the other Specified Agreements to be
executed by any member of the Purchaser's Group (other than the
Companies) which are to be delivered at Completion will, when
executed, constitute binding obligations of the relevant members of
the Purchaser's Group (other than the Companies) in accordance with
their respective terms;
(iii) the execution and delivery of this Agreement and the other Specified
Agreements and the performance by each relevant member of the
Purchaser's Group (other than the Companies) of its obligations
hereunder and thereunder will not:
(a) result in a breach of any provision of the memorandum or
articles of association or by-laws or equivalent constitutional
documents of that member of the Purchaser's Group;
(b) result in a breach of, or constitute a default under, any
instrument to which that member of the Purchaser's Group is a
party or is bound;
(c) result in a breach of any order, judgment, award, injunction or
decree of any court or governmental agency or of any other
restriction of a similar nature to which that member of the
Purchaser's Group is a party or is bound;
(d) require the consent of its shareholders; or
(e) require that member of the Purchaser's Group 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;
49
(iv) the Purchaser has immediately available on an unconditional basis
(subject only to Completion) the necessary cash resources to meet
its obligations under CLAUSE 3 (Cash Consideration), CLAUSE 4 (Fixed
Intra-Group Debt Amounts) and CLAUSE 5 (Working Capital and Variable
Intra-Group Debt Adjustments) of this Agreement; and
(v) there are no:
(a) outstanding judgments, orders, injunctions or decrees of any
governmental or regulatory body or arbitration tribunal against
or affecting any member of the Purchaser's Group;
(b) lawsuits, actions or proceedings in being or, to the knowledge
of the Purchaser, pending or threatened against or affecting any
member of the Purchaser's Group; or
(c) investigations by any governmental or regulatory body which are,
to the knowledge of the Purchaser, pending or threatened against
any member of the Purchaser's Group,
and which, in the case of each of SUB-PARAGRAPHS (v)(a), (b) and
(c), have or would be likely to have a material adverse effect on
the ability of the Purchaser or any other member of the Purchaser's
Group to execute and deliver, or perform its obligations under, this
Agreement and any other documents which are to be executed by the
Purchaser or any other member of the Purchaser's Group and which are
to be delivered at Completion.
(B) The Purchaser accepts and acknowledges that the Vendor is entering into
this Agreement in reliance upon (i) the warranties set out in SUB-CLAUSES
20(A) and 19(P), and (ii) any other warranties expressly set out as such in
any of the Relevant Agreements.
(C) The Vendor acknowledges that no representations, express or implied, have
been or are given by the Purchaser, any Designated Purchaser or any other
member of the Purchaser's Group which is a party to any of the Specified
Agreements other than (i) the warranties set out in SUB-CLAUSES 20(A) and
19(P), and (ii) the other warranties expressly set out as such in any of
the Relevant Agreements.
(D) The Vendor shall be entitled to claim both before and after Completion that
any of (i) the warranties contained in SUB-CLAUSES 20(A) or 19(P), and/or
(ii) any of the other warranties referred to in SUB-CLAUSE (C) has or had
been breached and Completion shall not constitute a waiver of any of the
Vendor's rights.
(E) The only remedy of the Vendor for breach of the warranties set out in
SUB-CLAUSES 20(A) and 19(P) and any of the other warranties referred to in
SUB-CLAUSE (C) shall be damages and the Vendor hereby agrees to waive any
other right, power or remedy it may have in relation to a breach of such
warranties.
50
21. 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 in relation to the matters contemplated by this SUB-CLAUSE (A)
against, and shall not make any claim against, any employee, director or
agent of any member of the Vendor's Group on whom the Vendor 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 including, without prejudice to
the generality of the foregoing, any such persons as are named in the
definition of "so far as the Vendor is aware". The agreement and
undertaking set out in this SUB-CLAUSE 21(A) is without prejudice to any
rights of any member of the Purchaser's Group described in SUB-CLAUSE
30(E).
(B) Subject to SUB-CLAUSE 32(B) (Announcements) and SUB-CLAUSE 33(B)
(Confidentiality) and without prejudice to SUB-CLAUSE 17(E) (Intellectual
Property), the Purchaser undertakes on behalf of itself and each other
member of the Purchaser's Group (and, so far as achievable using reasonable
endeavours, any member of the Purchaser's Group which ceases to be such a
member before the third anniversary of the date of this Agreement) to treat
as strictly confidential and not disclose to any person (other than other
members of the Purchaser's Group on a confidential basis) any Vendor
Confidential Information. The Purchaser acknowledges (for itself and on
behalf of each other member of the Purchaser's Group) that any future use
of Vendor Confidential Information is without representation, warranty or
liability on the part of any member of the Vendor's Group. No updates of
the Vendor Confidential Information will be provided by any member of the
Vendor's Group to any member of the Purchaser's Group.
(C) The Purchaser acknowledges and agrees on behalf of itself and each other
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 (subject to SUB-CLAUSES (D) AND (E) and the provisions
of the Transitional Services Agreement), from Completion, the Purchaser
shall procure that no member of the Purchaser's Group (and, so far as
achievable using reasonable endeavours, any member of the Purchaser's Group
which ceases to be such a member before the third anniversary of the date
of this Agreement) shall use, the words "Unilever", "Lever" or "Conopco" or
any of them or any letter combination or words similar thereto or any
colourable imitation thereof or any name or mark which includes or consists
thereof (the "UNILEVER MARKS"); provided that nothing in this clause shall
prevent any member of the Purchaser's Group from using "Unipath" or any
trade mark forming part of the Business IPR or any trade mark owned by any
of the Companies.
(D) The Vendor (on behalf of itself and as agent for the Vendor's Group) grants
to the Companies and, in relation to the US Business, the relevant
Designated Purchaser, subject to the terms of this SUB-CLAUSE (D) an
irrevocable, royalty-free, non-exclusive licence:
51
(i) to continue to use and supply existing stocks, packaging, sales
literature, stationery, marketing materials and similar materials
bearing the Unilever Marks (or any of them) for a period not to
exceed 9 months from Completion; and
(ii) to continue to apply the Unilever Marks in the same manner as
applied at Completion to products, packaging, sales literature,
stationery, marketing materials and similar materials used or
supplied by the Transferring Business for a period not to exceed 3
months from Completion and to use and supply any of the same for a
period not to exceed 9 months from Completion;
provided that the Purchaser shall, and shall procure that the Companies and
each of the businesses within the Transferring Business shall, use all
reasonable endeavours to cease all use of the Unilever Marks as soon as
reasonably practicable after Completion.
(E) The Purchaser shall, and shall procure that the Companies and each of the
businesses within the Transferring Business shall, by the last day of the
ninth month following the Completion Date, destroy or delete from existing
stocks, packaging, sales literature, stationery, marketing materials and
similar materials, building, signage and vehicles, the Unilever Marks.
(F) The Purchaser shall have exclusive control and undertakes with the Vendor
(for itself and as trustee for each member of the Vendor's Group) that it
will (without prejudice to the Transitional Services Agreement) take over
all and any administrative functions relating to the Business IPR and
Company IPR immediately following Completion and that it will be
responsible for paying any filing, prosecution, maintenance and renewal
fees relating to such Business IPR and Company IPR which fall due for
payment after Completion.
(G) The Purchaser shall procure that, for a period of two years from the date
of Completion, each Company shall prepare and there shall be prepared in
relation to the US Business, where reasonably requested by the Vendor and
subject to reimbursement by the Vendor of the reasonable out-of-pocket
expenses of the Company and/or any other relevant member of the Purchaser's
Group:
(i) financial data required for the preparation of financial accounts,
management accounts or statutory accounts for any member of the
Vendor's Group which relate, in each case, to a period of account
which is closed or in progress at Completion; and
(ii) any data required 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 Vendor as soon as reasonably
practicable.
(H) The Purchaser agrees that it will, and will procure that each relevant
member of the Purchaser's Group will, after the Completion Date:
52
(i) promptly provide the Vendor with such information and access to
personnel, premises, chattels and documents belonging to, or under
the control of, any members of the Purchaser's Group as the Vendor
may reasonably consider necessary in connection with the Persona
Litigation and any claim under any Liability Insurance Policy in
connection with the marketing, sale or use of Persona products; and
(ii) promptly, and in any event within five Business Days of receipt of
any written communication relating to the Persona Litigation,
provide the Vendor with a copy of such written communication.
The obligations of the Purchaser and the relevant members of the
Purchaser's Group pursuant to this SUB-CLAUSE (H) are subject to the Vendor
promptly reimbursing the Purchaser and such members of the Purchaser's
Group for the reasonable out-of-pocket expenses incurred by them in
performing such obligations.
(I) The Purchaser undertakes that following Completion it shall, and shall
procure that each member of the Purchaser's Group shall (at the cost of the
Vendor):
(i) provide to the Vendor, the other members of the Vendor's Group and
their respective professional advisers, during Working Hours and on
reasonable advance notice being given, access (a) to the
Transferring Books and Records which are delivered to the Purchaser
pursuant to CLAUSE 24 to the extent such relate to the US Retained
Litigation (which books and records the Purchaser shall retain, or
cause to be retained by the members of the Purchaser's Group, until
the US Retained Litigation has been finally compromised or settled),
and (b) to the employees and counsel of the Purchaser and other
members of the Purchaser's Group for the purposes of the Vendor's
conduct of the US Retained Litigation; and
(ii) respond to the reasonable requests of the Vendor to assist in the
prosecution or defence of the US Retained Litigation.
(J) The Purchaser shall procure that Unipath Limited, or any other relevant
Company or member of the Purchaser's Group, within 20 Business Days of
Completion, sells to the Vendor, or such other member of the Vendor's Group
as the Vendor may designate in writing, at net book value as at the
Completion Date the three motor cars owned by Unipath Limited (or such
other Company or member of the Purchaser's Group) and used by Robert Field,
Malcolm Smith and Frans van der Ouderaa as at the date of this Agreement.
22. RESTRICTIONS ON THE VENDOR
(A) The Vendor undertakes, subject to SUB-CLAUSE (B), that it shall not, and
shall procure that each other member of the Vendor's Group shall not for as
long as it remains such a member, do any of the following things:
53
(i) for a period of three years after the Completion Date, either alone
or jointly with any other person, directly or indirectly carry on,
be engaged in or control any business or hold any securities or
other participating financial interest (whether in the nature of
debt or equity but excluding any interest as a trade creditor
arising in the ordinary course of business) in any business which,
in any such case, competes with the Diagnostics Business as carried
on at Completion in any part of the world in which it is so carried
on (a "RESTRICTED BUSINESS");
(ii) for a period of three years after the Completion Date, induce any
supplier of the Transferring Business to cease to supply, or to
restrict or vary the terms of supply to, the Transferring Business
(which shall not preclude any member of the Vendor's Group entering
into and/or performing agreements or arrangements on ordinary
commercial terms in the ordinary course of business (at the relevant
time) of that member where carrying on such business does not amount
to a breach of SUB-CLAUSE (A)(i));
(iii) engage any Senior Employee for a period of six months from the
Completion Date;
(iv) without prejudice to SUB-CLAUSE (A)(iii) and within two years from
the Completion Date, solicit or entice away from or persuade to
leave the employment of any member of the Purchaser's Group any
Senior Employee other than:-
(a) any Senior Employee who (prior to such solicitation, enticement
or persuasion) has given or received notice terminating such
employment; or
(b) any Senior Employee who responds (prior to such solicitation,
enticement or persuasion) to any public recruitment
advertisement (not specifically directed at such Employee) by or
on behalf of any member of the Vendor's Group; or
(v) assist any person or attempt to do any of the foregoing things save,
in the case of assistance to a third party where the activity of the
third party who is so assisted would fall under the provisions of
SUB-CLAUSE (A)(i) were such third party a member of the Vendor's
Group, where such assistance comprises any member of the Vendor's
Group entering into and/or performing agreements or arrangements on
ordinary commercial terms in the ordinary course of business (at the
relevant time) of that member and where carrying on such business
does not amount to a breach of SUB-CLAUSE (A)(i).
(B) Nothing in SUB-CLAUSE (A) shall prevent any member of the Vendor's Group:
(i) being the holder of shares, debentures or other securities of a
company which is engaged in any Restricted Business (in each case,
conferring not more than 5 per cent. (when aggregated with such
holding of any other member of the Vendor's Group) of the votes
which would normally be cast at a general meeting of that company);
or
54
(ii) acquiring the whole or any part of a business that includes
activities the carrying on of which would otherwise amount to a
breach of the undertaking contained in SUB-CLAUSE (A)(i) if the
turnover of such activities does not amount to more than 25 per
cent. of the aggregate turnover of the business concerned; PROVIDED
THAT in such case the Vendor shall, or shall cause the relevant
member of the Vendor's Group, to (a) use its reasonable endeavours
to sell such Restricted Business within 12 months of such
acquisition, and (b) invite the Purchaser to participate in any
sales process organised in relation thereto, subject to the
Purchaser having entered into a confidentiality agreement with, and
upon terms reasonably acceptable to, the Vendor or such other member
of the Vendor's Group, on the basis that the Vendor or such other
member of the Vendor's Group shall allow the Purchaser a period of
15 Business Days prior to the despatch thereof to third parties to
review the information memorandum prepared in relation to such sale;
or
(iii) carrying on research and development into markers; or
(iv) using markers in connection with the manufacture, development,
marketing and/or sale of diagnostic products for, or which are sold
in conjunction with or as part of, food, skin products, hair
products, oral hygiene products, deodorant products or household
care products (excluding for the avoidance of doubt the products
referred to in paragraph (i) of the definition of Diagnostics
Business set out in SCHEDULE 1 (Interpretation)); or
(v) for the avoidance of doubt, carrying on research and development
which is primarily directed at the manufacture, development,
marketing and/or sale of any products other than IN VITRO diagnostic
products; or
(vi) holding any securities or having any other ownership or partnership
interest in any person (for the avoidance of doubt, not being a
member of the Vendor's Group) the purpose of which is to make and
hold investments in different start-up or other businesses; PROVIDED
that:
(a) no member of the Vendor's Group is able to control or direct
such person in any way with respect to the choice or the making
of such investments;
(b) no member of the Vendor's Group influences any such person to
make or hold investments in any Restricted Business; and
(c) the scope of any marketing or selling memorandum in respect of
the raising of capital for any such person to invest shall not
be restricted but shall not expressly focus on any business area
which comprises all or any material part of the Restricted
Business.
(C) The Vendor (for itself and on behalf of each other member of the Vendor's
Group) acknowledges that each restraint and undertaking contained in this
CLAUSE 22 is both fair and reasonable and the Vendor and Purchaser express
their intention that the
55
restraints imposed by this CLAUSE 22 be enforceable to the maximum extent
permitted by law.
(D) Each of the covenants, obligations and restrictions set out in this CLAUSE
22 will be severable and independent such that if this CLAUSE 22 or any
part or provision of this CLAUSE 22 is held or found to be wholly or partly
void, invalid, or otherwise unenforceable then such part or provision will
be deemed eliminated to the extent to which it is necessary to make this
CLAUSE 22 or that part or provision enforceable.
(E) If a court of competent jurisdiction determines that the duration of any of
the restrictions set out in this CLAUSE 22 is unreasonably long but that a
shorter period would be lawful and reasonable, or that the territory is too
wide but that a different territory would be lawful and reasonable, then
such restrictions shall be read so as to refer to such shorter period
and/or different territory, as the court considers valid in respect of such
restrictions.
23. PROFIT AND LOSS EQUALISATION
(A) The Vendor and the Purchaser shall procure that the Profit and Loss
Equalisation Agreement between Unipath Diagnostics GmbH and Deutsche
Unilever GmbH dated 12th August, 1992 (the "PROFIT AND LOSS EQUALISATION
AGREEMENT") is terminated by mutual agreement (Aufhebung) with effect from
31st December, 2001.
(B) Immediately following 31st December, 2001 the Purchaser (at the cost and
expense of the Vendor) shall procure the preparation of unaudited accounts
of Unipath Diagnostics GmbH for the fiscal year commencing on 1st January,
2001 and ending on 31st December, 2001. The Purchaser shall procure that
such accounts are prepared on the same basis, and in accordance with the
same accounting policies, as were employed in the preparation of the
Accounts of Unipath Diagnostics GmbH (except that, for the avoidance of
doubt, there shall be no requirement for such accounts to be audited) and
that such accounts are delivered to the Vendor within 3 months of
Completion.
(C) If the accounts prepared in accordance with SUB-CLAUSE (B) show Unipath
Diagnostics GmbH to have made a loss (which, for this purpose, shall have
the same meaning as in Section 5 of the Profit and Loss Equalisation
Agreement) for the period commencing on 1st January, 2001 and ending on
31st December, 2001 then:
(i) the Vendor shall procure that Deutsche Unilever GmbH pays to Unipath
Diagnostics GmbH an amount equal to that loss within 7 Business Days
of the receipt by the Vendor of such accounts; and
(ii) subject to the payment specified in SUB-CLAUSE (C)(i) being made,
the Purchaser shall pay, or procure the payment of, an amount equal
to such loss to the Vendor on behalf of Deutsche Unilever GmbH
within seven Business Days of the payment being made under
SUB-CLAUSE (C)(i).
(D) If the accounts prepared in accordance with SUB-CLAUSE (B) show Unipath
Diagnostics GmbH to have made a profit (which, for this purpose, shall have
the same meaning as
56
in Section 5 of the Profit and Loss Equalisation Agreement) for the period
commencing on 1st January, 2001 and ending on 31st December, 2001 then:
(i) the Purchaser shall procure that Unipath Diagnostics GmbH pays to
Deutsche Unilever GmbH an amount equal to that profit within 7
Business Days of the delivery of such accounts to the Vendor; and
(ii) subject to the payment specified in SUB-CLAUSE (D)(i) being made,
the Vendor shall pay, or procure the payment of, an amount equal to
that profit to such member of the Purchaser's Group as the Purchaser
shall nominate within 7 Business Days of the payment being made
under SUB-CLAUSE (D)(i).
(E) (i) All payments to be made pursuant to this CLAUSE 23 shall be made
free from all withholdings and deductions (save for those required
to be made by law).
(ii) If any payment to be made pursuant to this CLAUSE 23 is not made
within the time specified for such payment then there shall be added
to that payment interest at the Agreed Rate.
(F) The Purchaser shall procure that Unipath Diagnostics GmbH does not declare,
make or pay any dividend (including, without limitation, any dividends
satisfied in cash or in kind or including a non-cash asset) after
Completion and prior to 1st January, 2002.
24. BOOKS AND RECORDS
(A) The Vendor shall on Completion deliver to, or hold to the order of, the
Purchaser originals of all the Transferring Business Books and Records
relating exclusively to the Transferring Business with the exception of any
Transferring Business Books and Records (i) relating to Taxation or (ii)
wholly or predominately relating to the US Retained Litigation.
(B) For a period of eight years from Completion the Purchaser shall maintain
and make available, as reasonably required by the Vendor, the Transferring
Business Books and Records which are delivered to the Purchaser under this
Agreement for inspection and copying (at the cost and expense of the
Vendor) by representatives of the Vendor and its professional advisers
during Working Hours on reasonable advance notice being given and on the
basis that confidentiality is maintained in respect of such Transferring
Business Books and Records save as provided in SUB-CLAUSE 33(B)
(Confidentiality).
(C) For a period of eight years from Completion, the Vendor shall, and shall
procure that each member of the Vendor's Group shall, maintain and make
available, as reasonably required by the Purchaser, any Transferring
Business Books and Records which are not delivered to, or held to the order
of, the Purchaser pursuant to SUB-CLAUSE (A) (or, if practicable, the
relevant parts thereof)and which contain information which is required by
any member of the Purchaser's Group for the purpose of the Transferring
Business and were in the possession of or under the control of the Vendor
or any member of the Vendor's Group immediately prior to Completion for
inspection and copying (at the cost and expense of the Purchaser) by
representatives of any member of the Purchaser's
57
Group during Working Hours on reasonable advance notice being given (and,
if it is not practicable only to make available the relevant parts thereof,
on the basis that confidentiality is maintained in relation to such
Transferring Business Books and Records save as provided in SUB-CLAUSE
33(B) (Confidentiality)).
(D) The Purchaser shall procure that if, following Completion, any member of
the Vendor's Group or any of the Companies discovers that any of the
Company Books and Records in the possession of a Company relate exclusively
to the Retained Businesses that Company shall promptly deliver to the
Vendor the originals (and any copies) of all such Company Books and
Records.
(E) For a period of eight years from Completion the Purchaser shall procure
that the Companies shall maintain and make available to members of the
Vendor's Group any Company Books and Records relating (but not exclusively
relating) to the Retained Businesses (or, if practicable, the relevant
parts thereof relating to the Retained Business) and which contain
information which is required by any member of the Vendor's Group for the
purposes of the Retained Businesses and were in the possession of or under
the control of any of the Companies immediately prior to Completion for
inspection and copying (at the cost and expense of the Vendor) by
representatives of any member of the Vendor's Group during Working Hours on
reasonable advance notice being given (and, if it is not practicable only
to make available the relevant parts thereof, on the basis that
confidentiality is maintained in relation to such Company Books and Records
save as provided in SUB-CLAUSE 33(B) (Confidentiality)).
25. NO SET OFF
(A) Any payment to be made by any party under this Agreement shall be made in
full without any set-off, restriction, condition or deduction for or on
account of any counterclaim.
(B) All sums payable by any party under this Agreement shall be paid free and
clear of all deductions or withholdings whatsoever, save only as may be
required by law.
(C) If any deductions or withholdings are required by law to be made from any
of the sums payable as mentioned in SUB-CLAUSE (B) (except interest or
amounts treated as interest), the paying party shall be obliged to pay to
the recipient such sum as will, after such deduction or withholding has
been made, leave the recipient 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.
26. EFFECT OF COMPLETION
Save as otherwise provided herein or therein, any obligations and
undertakings contained in this Agreement or in any other document referred
to herein which are capable of being performed after but which have not
been performed at or before Completion and all Warranties shall (subject to
SCHEDULE 7 (Limitations on Liability)) remain in full force and effect
notwithstanding Completion.
58
27. REMEDIES AND WAIVERS
(A) No delay or omission on the part of any party to this Agreement in
exercising any right, power or remedy provided under this Agreement or any
other documents referred to in it shall impair such right, power or remedy
or operate as a waiver thereof except where expressly stated herein or
therein.
(B) The single or partial exercise of any right, power or remedy provided under
this Agreement shall not preclude any other or further exercise thereof or
the exercise of any other right, power or remedy except where expressly
stated herein.
28. NO ASSIGNMENT
(A) Neither the obligations nor the benefits under this Agreement shall be
assignable except as set out in SUB-CLAUSE (B) and as follows in this
SUB-CLAUSE (A). The Purchaser or a Permitted Assignee (as defined below)
may, upon giving written notice to the Vendor, assign the benefit of this
Agreement in whole or in part (subject, for the avoidance of doubt, to all
limitations contained herein including, without limitation, limitations on
claims under the Warranties) to one or more members of the Purchaser's
Group (a "PURCHASER PERMITTED ASSIGNEE") subject to the condition (a
"DEPARTURE-FROM-GROUP CONDITION") that if such Permitted Assignee shall
subsequently cease to be a member of the Purchaser's Group, the Purchaser
shall procure that prior to its ceasing to be a member of the Purchaser's
Group the Permitted Assignee shall assign so much of the benefit of this
Agreement as has been assigned to it to the Purchaser or (upon giving
further written notice to the Vendor) to another member of the Purchaser's
Group. Subject to SUB-CLAUSE (B) any purported assignment in contravention
of this SUB-CLAUSE 28(A) shall be void. The Vendor may assign the benefit
of this Agreement in whole or in part (subject, for the avoidance of doubt,
to all limitations contained herein) to one or more other members of the
Vendor's Group (a "VENDOR PERMITTED ASSIGNEE") from time to time subject to
a Departure-from-Group Condition by reference to the Vendor's Group.
(B) The Purchaser shall be able, upon giving prior written notice to the
Vendor, to assign all, but not part of, the benefit (but not the burden) of
this Agreement (subject, for the avoidance of doubt, to all limitations
contained herein including, without limitation, limitations on claims under
the Warranties) by way of security only to The Royal Bank of Scotland PLC,
as facility agent and security trustee for the financial institutions
providing debt finance to the Purchaser's Group for the purposes of
completing the transactions contemplated by this Agreement (the
"FINANCIERS"), and the terms of such assignment shall provide that:
(i) such assignee may not assign the benefit of this Agreement to any
other person except (i) by way of re-assignment to the Purchaser; or
(ii) following enforcement of security by The Royal Bank of Scotland
PLC to any other person where it has received the prior written
consent of the Vendor (such consent not to be unreasonably withheld
or delayed);
59
(ii) on the debt finance referred to above being repaid in full, the
Purchaser and The Royal Bank of Scotland PLC shall procure that the
security is released and that the benefit of this Agreement is
re-assigned to the Purchaser; and
(iii) the liabilities of the Vendor and all other members of the Vendor's
Group under this Agreement shall be no greater than such liabilities
would have been had the assignment (or any subsequent assignment or
re-assignment) not occurred.
(C) The parties hereby agree that:
(i) where the Purchaser or a Purchaser Permitted Assignee assigns the
benefit of this Agreement in whole or in part to any other person
the liabilities of the Vendor and all other members of the Vendor's
Group under this Agreement to the Purchaser's Group shall be no
greater than such liabilities would have been had the assignment not
occurred; and
(ii) where the Vendor or a Vendor Permitted Assignee assigns the benefit
of this Agreement in whole or in part to any other person the
liabilities of the Purchaser and all other members of the
Purchaser's Group under this Agreement to the Vendor's Group shall
be no greater than such liabilities would have been had the
assignment not occurred.
29. FURTHER ASSURANCE
(A) Without prejudice to any restriction or limitation set out in this
Agreement on the extent of any party's obligations under this Agreement and
except in relation to the Business IPR and the Domain Names, each of the
parties shall, from time to time and at its own cost and expense, 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 other party
as may be reasonably necessary to transfer the Shares, the Bedford
Property, the US Business Assets, the IP Licences and/or the Monoclonal
Assets to the Purchaser or the relevant Designated Purchaser on the terms
of this Agreement and the Specified Agreements and otherwise to give any
party the full benefit of this Agreement.
(B) The Vendor undertakes, for a period of two years after Completion and at
the request of the relevant Designated Purchaser (and at its own cost and
expense), and thereafter as reasonably requested by the Purchaser (at the
Purchaser's cost and expense), to execute or procure the execution of all
such documents as may reasonably be necessary or desirable to secure the
vesting in the relevant Designated Purchaser of the Business IPR and the
Domain Names provided however that the relevant Designated Purchaser
undertakes with the Vendor that it will be responsible for preparing all
such documents and provided that the relevant Designated Purchaser shall be
responsible for all costs and expenses of effecting and recording the
Intellectual Property Assignments at the relevant Patent and Trade Mark
offices.
(C) In relation to each Company, the Vendor has procured, or will as part of
Completion procure, the convening of all meetings, the giving of all
waivers and consents and the
60
passing of all resolutions necessary to give effect to the transfer of the
Shares in that Company.
30. ENTIRE AGREEMENT
(A) This Agreement, the Disclosure Letter and the Specified Agreements
constitute the whole and only agreement between the parties relating to the
sale and purchase of the Shares, the Bedford Property, the US Business
Assets, the IP Assets and the Monoclonal Assets and, except to the extent
expressly repeated in this Agreement, the Disclosure Letter or any of the
Specified Agreements, 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 Vendor (on behalf of itself
and each other member of the Vendor's Group) that:
(i) it does not rely on and has not been induced to enter into this
Agreement, the Disclosure Letter or the Specified Agreements on the
basis of any Assurance (express or implied) made or given by or on
behalf of the Vendor or any other member of the Vendor's Group or
any of their respective agents, directors, officers, employees or
advisers other than those expressly set out in this Agreement, the
Disclosure Letter or any of the Specified Agreements 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 any such person and, without prejudice to the
generality of the foregoing (including, without limitation, the
Warranties), it has not relied upon, and will have no action or
remedy as a result of, the Information Memorandum except to the
extent that any statement in the Information Memorandum is set out
as an Assurance in this Agreement, the Disclosure Letter or any of
the Specified Agreements;
(ii) any warranty or other rights which may be implied by law in any
jurisdiction in relation to the sale of the Shares, the Bedford
Property, the US Business Assets, the IP Assets or the Monoclonal
Assets in such jurisdiction (except to the extent specifically
incorporated into this Agreement, the Disclosure Letter or any of
the Specified Agreements) shall be excluded or, if incapable of
exclusion, irrevocably waived; and
(iii) if any provision of this Agreement conflicts with any provision of
any of the Transfer Documents, the provisions of this Agreement
shall prevail.
(C) The Vendor acknowledges and agrees (for itself and on behalf of each other
member of the Vendor's Group) with the Purchaser (on behalf of itself and
each other member of the Purchaser's Group) that it does not rely on and
has not been induced to enter into this Agreement, the Disclosure Letter or
any of the Specified Agreements on the basis of any Assurance (express or
implied) made or given by or on behalf of the Purchaser or any other member
of the Purchaser's Group or any of their respective agents, directors,
officers, employees or advisers other than those expressly set out in this
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Agreement, the Disclosure Letter or any of the Specified Agreements 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 any such person.
(D) This Agreement may only be varied by a document signed by each of the
parties and expressed to be a variation to this Agreement.
(E) The provisions of SUB-CLAUSE 21(A) and the foregoing provisions of this
CLAUSE 30 shall be without prejudice to any rights which the Purchaser or
any member of the Purchaser's Group may have under any arrangements which
the Purchaser or any member of the Purchaser's Group has entered, or may
enter, into with the Vendor's Accountants with respect to the PwC Due
Diligence Report.
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. Notices and
communications transmitted by e-mail shall not be considered to be in
writing for the purposes of this CLAUSE 31.
(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:
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NAME OF PARTY ADDRESS FACSIMILE NO. FOR THE ATTENTION OF
- ------------- ------- ------------- --------------------
Unilever U.K. Unilever House, (44) 207 822 6108 the Company
Holdings Limited Blackfriars, Secretary
(Vendor) London
EC4P 4BQ,
United Kingdom
Inverness Medical Suite 200, 001 781 647 3939 the General
Innovations, Inc. 51 Sawyer Road, Counsel
(Purchaser) Waltham,
Massachusetts,
02453,
United States of
America
(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 31 shall not apply in relation to the service of Service Documents.
32. ANNOUNCEMENTS
(A) Subject to SUB-CLAUSE (B), no announcement concerning the sale or purchase
of the Shares, the Bedford Property, the US Business Assets, the IP Assets
and/or the Monoclonal Assets or any ancillary matter (other than the Press
Announcements), shall be made by any party without the prior written
approval of the other, such approval not to be unreasonably withheld or
delayed.
(B) Any party may make an announcement concerning the sale or purchase of the
Shares, the Bedford Property, the US Business Assets, the IP Assets and/or
the Monoclonal 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
any party or any holding company of it is subject or submits,
wherever situated (including, without limitation, the UK Listing
Authority, the London Stock Exchange PLC, the American Stock
Exchange, the Panel on Take-Overs and Mergers or the
63
Securities and Exchange Commission) 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.
(C) The restrictions contained in this CLAUSE 32 shall continue to apply
notwithstanding Completion without limit in time.
33. CONFIDENTIALITY
(A) Without prejudice to SUB-CLAUSE 19(L) (Vendor's Warranties and Undertakings
and Purchaser's Remedies) and SUB-CLAUSE 21(B) (Purchaser's Undertakings)
but subject to SUB-CLAUSE (B), the Vendor (for itself and on behalf of each
other member of the Vendor's Group) and the Purchaser (for itself and on
behalf of each other member of the Purchaser's Group) undertake to treat as
strictly confidential:
(i) the provisions or the subject matter of this Agreement or any
document referred to herein; and
(ii) the negotiations relating to this Agreement or any document referred
to herein.
(B) Any person subject to this CLAUSE 33 may disclose information which would
otherwise be confidential if and to the extent:
(i) required by the law of any relevant jurisdiction or for the purpose
of any judicial proceedings;
(ii) required by any securities exchange or regulatory or governmental
body to which such person or any holding company of it is subject or
submits, wherever situated (including, without limitation, the UK
Listing Authority, the London Stock Exchange PLC, the American Stock
Exchange, the Panel on Takeovers and Mergers or the Securities and
Exchange Commission) whether or not the requirement for information
has the force of law; PROVIDED THAT in the case of any requirement
to file a copy of this Agreement or any of the Specified Agreements
with any such authority, exchange, commission or other body, the
party to this Agreement which is under such filing obligation shall
use its reasonable endeavours to request that as many parts of this
Agreement and the Specified Agreements as such authority, exchange,
commission or other body will permit receive confidential treatment
with respect to such filing;
(iii) that the information is disclosed on a strictly confidential basis
to the professional advisers, auditors and bankers of such person;
(iv) that the relevant party (being the Vendor in the case of disclosure
by a member of the Purchaser's Group or the Purchaser in the case of
disclosure by a
64
member of the Vendor's Group) has given prior written approval to
the disclosure;
(v) it is disclosure to Employees, or to those of the Dutch Sales Staff
whose contracts of employment transfer to the relevant Designated
Purchaser pursuant to the transactions contemplated by this
Agreement, on a confidential basis of information contained within
CLAUSE 13 (Employees), CLAUSE 16 (Dutch Sales Staff), SCHEDULE 8
(Pensions) or the Employee Disclosures for the purpose of clarifying
their employment terms or is disclosure to Employees or such Dutch
Sales Staff of other information where such disclosure is necessary
for the operation of the Transferring Business and is on a
confidential and reasonable need to know basis;
(vi) required to enable any member of the Vendor's Group or the
Purchaser's Group, as the case may be, to enforce its rights under
this Agreement or any document referred to herein or to vest the
full benefit of this Agreement or such other document in that
member; or
(vii) where such person is a member of the Purchaser's Group, such
disclosure is made on a confidential and reasonable need to know
basis and is required in connection with the conduct of the business
of the Purchaser's Group;
PROVIDED THAT any such information disclosed pursuant to PARAGRAPHS (i) or
(ii) (other than any disclosure to a Tax Authority) shall be disclosed only
after notice to the relevant party (being the Vendor in the case of
disclosure by a member of the Purchaser's Group or the Purchaser in the
case of disclosure by a member of the Vendor's Group).
(C) The restrictions contained in this CLAUSE 33 shall continue to apply after
the termination of this Agreement without limit in time.
(D) This CLAUSE 33 shall be without prejudice to CLAUSE 32 (Announcements).
(E) With the exception of the obligation of the Purchaser set out in paragraph
12 of such agreement (to the extent that such obligation relates to
directors, officers or employees who are not engaged in the Transferring
Business), the Confidentiality Agreement (and all rights and obligations
under it) is hereby terminated with effect from the date of this Agreement.
(F) If, at any time after the Completion Date, the Purchaser notifies the
Vendor in writing, (setting out in all reasonable detail the circumstances
thereof, including the name of the relevant third party) that it suspects
that a third party attended the Data Room and is misusing any of the
confidential information relating to the Transferring Business provided to
it by or on behalf of any member of the Vendor's Group or the Companies
prior to Completion in connection with the proposed sale of the
Transferring Business, then, to the extent the Vendor, or any other member
of the Vendor's Group, has a right of action against such third party under
any of the Auction Confidentiality Agreements
65
(save where such right of action has no reasonable likelihood of success),
the Vendor shall, or shall procure that such member of the Vendor's Group
shall, either:
(i) take all reasonable steps, at the Purchaser's expense, to enforce
its rights under the relevant Auction Confidentiality Agreement
against such third party in order to prevent and/or stop the use
and/or disclosure of such confidential information by the third
party; or
(ii) transfer and assign the benefit of the relevant Auction
Confidentiality Agreement to the Purchaser and, if requested by the
Purchaser, and at the Purchaser's expense, use its reasonable
endeavours to assist the Purchaser in the enforcement thereof.
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 and purchase of the Shares, the Bedford Property,
the US Business Assets, the IP Assets and the Monoclonal 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):
(i) all stamp, transfer, registration, sales (including state and local
sales Taxes) and other similar Taxes, duties and charges and all
notarial fees (if any) ("TRANSFER TAXES") payable in connection with
the sale, transfer or purchase of the Shares in Unipath Limited,
Unipath B.V. and Unipath Diagnostics GmbH and the Bedford Property
under or pursuant to this Agreement shall be paid by the Purchaser;
and
(ii) all Transfer Taxes payable in connection with the sale, transfer or
purchase of the Shares in Unipath Scandinavia A.B., the US Business
Assets, the IP Assets and the Monoclonal Assets under or pursuant to
this Agreement shall be for the account of the Purchaser.
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.
66
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. CAPACITY OF THE PARTIES AND GROUP COMPANY OBLIGATIONS
(A) The undertakings given by the Purchaser to, and agreements made by the
Purchaser with, the Vendor in this Agreement are given and made to and with
the Vendor for itself and as trustee for the Share Sellers, US Business
Seller, the IP Assets Sellers and/or the Monoclonal Assets Seller (as
appropriate in each case).
(B) The undertakings given by the Vendor to, and agreements made by the Vendor
with, the Purchaser in this Agreement are given and made to and with the
Purchaser for itself and as trustee for the relevant Designated Purchaser
or Purchasers (as appropriate in each case).
(C) 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
(including, to the extent expressly set out in this Agreement, a member of
the Purchaser's Group who ceases to be such a member) or of any Designated
Purchaser (including any obligation expressed to be given, undertaken or
assumed by the Purchaser on behalf of one or more such persons) shall be
performed and not breached and, in the event of breach or non-performance
of any such obligation, the Vendor shall be entitled, subject to any
express applicable limitations set out in this Agreement, to bring
proceedings and recover in full against the Purchaser without being obliged
to do so first against such other persons.
(D) The Vendor shall procure that any obligation which is expressed under this
Agreement to be an obligation of any member of the Vendor's Group
(including, to the extent expressly set out in this Agreement, a member of
the Vendor's Group who ceases to be such a member) or of the Share Sellers,
the US Business Seller, the IP Assets Sellers, the Monoclonal Assets Seller
or any of them (including any obligation expressed to be given, undertaken
or assumed by the Vendor on behalf of one or more such persons) shall be
performed and not breached and, in the event of breach or non-performance
of any such obligation, the Purchaser shall be entitled, subject to the
provisions of SCHEDULE 7 (Limitations on Liability) (where applicable) and
to any other express applicable limitations set out in this Agreement, to
bring proceedings and recover in full against the Vendor without being
obliged to do so first against such other persons.
67
(E) In SUB-CLAUSES 37(C) and 37(D), any reference to any obligation shall
include, without limitation, the giving of any warranty or undertaking
under this Agreement.
38. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
(A) The parties to this Agreement do not intend that any term of this Agreement
should be enforceable, by virtue of the Contracts (Rights of Third Parties)
Act 1999, by any person who is not a party to this Agreement.
(B) Notwithstanding SUB-CLAUSE (A), the undertakings given by the Purchaser in,
and the agreement of the Purchaser to, CLAUSE 13 (Employees), paragraphs 4
and 5 of Part A of SCHEDULE 8 (Pensions), paragraph 2 of Part B of SCHEDULE
8 (Pensions) and Annex B of Part A of SCHEDULE 8 (Pensions) are given to
and made with the Vendor as trustee for each of the Employees and, if he
becomes employed within six months of Completion by a member of the
Purchaser's Group, each member of the Dutch Sales Staff.
39. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with,
English law.
40. JURISDICTION
(A) Each of the parties to this Agreement irrevocably agrees that the courts of
England are to have sole jurisdiction to settle any disputes which may
arise out of or in connection with this Agreement and that accordingly any
Proceedings shall be brought in such courts.
(B) Each party irrevocably waives (and irrevocably agrees not to raise) any
objection which it may have now or hereafter to the laying of the venue of
any Proceedings in any such court as is referred to in SUB-CLAUSE (A) and
any claim of FORUM NON CONVENIENS and further irrevocably agrees that a
judgment in any Proceedings brought in any court referred to in SUB-CLAUSE
(A) shall (subject to rights of appeal) be conclusive and binding upon such
party and may be enforced in the courts of any other jurisdiction.
41. AGENT FOR SERVICE OF PROCESS
(A) The Purchaser irrevocably appoints Unipath Limited of Priory Business Park,
Bedford MK44 3UP (or such other address as may be notified to the Vendor)
to be its agent for the receipt of service of process in England. It agrees
that any Service Document may be effectively served on it in connection
with Proceedings in England and Wales by service on its agent.
(B) If the agent at any time ceases for any reason to act as such, the
Purchaser shall appoint a replacement agent having an address for service
in England or Wales and shall notify the Vendor of the name and address of
the replacement agent. Failing such appointment and notification, the
Vendor shall be entitled by notice to the Purchaser (notifying the name and
address of the replacement agent) to appoint a replacement agent to act on
the Purchaser's behalf.
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(C) A copy of any Service Document served on an agent shall be sent by post to
the Purchaser. Failure or delay in so doing shall not prejudice the
effectiveness of service of the Service Document.
(D) "SERVICE DOCUMENT" means a document relating to or in connection with any
Proceedings.
42. 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.
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SCHEDULE 1
(INTERPRETATION)
(A) In this Agreement and the Schedules to it, unless otherwise specified:
"ACCOUNTS" means:
(i) in relation to all Companies other than Unipath
B.V., the non-consolidated audited accounts
comprising a balance sheet, profit and loss
account and notes of each such Company as at and
for the year ended on the Accounts Date; and
(ii) in relation to Unipath B.V., the
non-consolidated unaudited accounts of that
Company as at and for the year ended on the
Accounts Date, which accounts were compiled for
the purpose of the preparation of the
consolidated accounts of the Vendor's Group,
copies of all of which are set out in ATTACHMENT 3;
"ACCOUNTING MANUAL means the extracts from the Unilever Accounting
EXTRACTS" Manual set out in ATTACHMENT 8;
"ACCOUNTS DATE" means 31st December, 2000;
"ADJUSTED CASH has the meaning given in SUB-CLAUSE 5(A) (Working
CONSIDERATION" Capital and Variable Intra-Group Debt Adjustments);
"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 Vendor (as amended by agreement or pursuant
to the terms of this Agreement);
"AGREED RATE" means 2 per cent. above the base rate of National
Westminster Bank PLC from time to time;
"ANTIBODY PATENT LICENCE" means the licence and related side letter, in the
Agreed Form, relating to certain technology to be
entered into by Unilever PLC, Unilever N.V. and the
Designated Purchaser of the IP Assets at Completion;
"ASSUMED LIABILITIES" has the meaning given in SUB-CLAUSE 10(B) (Assumed
Liabilities and Retained Liabilities);
"ASSUMED LIABILITIES has the meaning given in SUB-CLAUSE 10(G) (Assumed
INDEMNITY" Liabilities and Retained Liabilities);
70
"ASSURANCE" means any warranty, representation, assurance,
covenant, agreement, undertaking, indemnity,
guarantee or commitment of any nature whatsoever;
"AUCTION CONFIDENTIALITY means the four confidentiality agreements entered
AGREEMENTS" into in connection with the proposed sale of the
Transferring Business between Unilever PLC and all
those third parties (other than the Purchaser and
other members of the Purchaser's Group) who have been
given access to the Data Room prior to the date of
this Agreement, each in substantially the same form,
and dated on or around the same date, as the
Confidentiality Agreement;
"BD LICENCE" means the licence agreement dated 20th November, 2001
between Unilever PLC, Unilever N.V. and Becton
Dickinson, a copy of which is attached to the
Disclosure Letter, pursuant to which Becton Dickinson
has been granted a non-exclusive licence of patents
owned by Unilever PLC and Unilever N.V.;
"BEDFORD PROPERTY" means the leasehold property at Priory Business Park,
Bedford, details of which are set out in Part A of
SCHEDULE 9 (Properties);
"BEDFORD PROPERTY means the transfer of the Bedford Property in the
TRANSFER" Agreed Form prepared in accordance with the
provisions of Part C of SCHEDULE 9 (Properties);
"BENCHMARK STATEMENT" has the meaning given in SUB-CLAUSE 6(A) (Completion
Accounts and Variable Intra-Group Debt Statement);
"BIOSENSORS PATENTS" means US patent number 5,141,868 and its equivalents
in Australia, Canada, Japan and Europe and patents
based on or claiming priority from any of those
patent applications and patents, as well as any
substitution, division, continuation,
continuation-in-past, re-examination or re-issue
thereof;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks generally are open in London for normal
business (other than solely for settlement and
trading in euros);
"BUSINESS IPR" means (i) the Intellectual Property licensed pursuant
to the IP Licences listed in Attachment 15; (ii) any
or all of the Intellectual Property owned by a member
of the Vendor's Group which is used exclusively in
the Transferring Business as at Completion; and (iii)
any or all of the Intellectual Property owned by a
member of the Vendor's Group which has been used in
the Transferring Business but has never been used in
any other business carried on by members of the
Vendor's Group. The Business IPR includes, without
limitation, those patents, patent applications, trade
marks and trade mark applications listed in the
Disclosure Letter;
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"CAPTIVE INSURER" means Verzekeringsmaatschappij Palma N.V., an
insurance company which is a member of the Vendor's
Group;
"CASH CONSIDERATION" means the aggregate cash consideration payable for
the Shares, the Bedford Property, the US Business
Assets, the IP Assets and the Monoclonal Assets as
set out in SUB-CLAUSE 3(A) (Cash Consideration), as
such consideration may be adjusted pursuant to the
other provisions of this Agreement;
"CODE" means the US Internal Revenue Code of 1986, as
amended;
"COMPANIES" means Unipath Limited, Unipath Management Limited,
Unipath Diagnostics GmbH, Unipath Scandinavia A.B.
and Unipath B.V.; and "COMPANY" shall be construed
accordingly;
"COMPANY BOOKS AND means all books and records of the Companies
RECORDS" containing information relating to the Retained
Businesses or on which any information relating to
the Retained Businesses is recorded including,
without limitation, all documents and other material
(including, without limitation, all forms of computer
or machine readable material);
"COMPANY IPR" means Intellectual Property owned by any of the
Companies;
"COMPLETION" means completion of the sale and purchase of the
Shares, the Bedford Property, the US Business Assets,
the IP Assets and the Monoclonal Assets;
"COMPLETION ACCOUNTS" means the aggregated working capital statement of the
Companies and the US Business together with an
individual working capital statement for each of the
Companies and the US Business, in each case as at the
Completion Date, all of which are to be prepared in
accordance with CLAUSE 6 (Completion Accounts and
Variable Intra-Group Debt Statement) and SCHEDULE 10
(Completion Accounts and Variable Intra-Group Debt
Statement);
"COMPLETION DATE" means the date of this Agreement;
"CONFIDENTIALITY means the confidentiality agreement entered into
AGREEMENT" between Unilever PLC and the Purchaser dated 21st
August, 2001 (as amended);
"CURRENT YEAR TAX has the meaning given in the Tax Covenant;
LIABILITY"
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"DATA ROOM" means those documents, including, without limitation,
copies of documents, made available to the Purchaser
prior to the date of this Agreement and listed in the
Data Room Index;
"DATA ROOM INDEX" has the meaning given in the Disclosure Letter;
"DEED OF UNDERTAKING" has the meaning given in SUB-CLAUSE 12(D)
(Intra-Group Guarantees and Other Arrangements);
"DEFAULT RATE" means 4 per cent. above the base rate of National
Westminster Bank PLC from time to time;
"DEFINED FIELD" means:
(i) the manufacture, distribution and
sale of pregnancy testing kits,
ovulation and fertility monitoring
systems, aids to contraception and
other women's reproductive health
diagnostic products;
(ii) the manufacture, distribution and sale of
certain in vitro diagnostic products; and
(iii) the carrying out of research or development
work in relation to products of the type
referred to in (i) or (ii) above;
in each case only as carried on at the date of this
Agreement by the Companies and, in relation to the US
Business, the US Business Seller;
"DEPARTURE-FROM- has the meaning given in SUB-CLAUSE 28(A)
GROUP-CONDITION" (No Assignment);
"DESIGNATED PURCHASERS" means the Purchaser and such other members of the
Purchaser's Group as may be nominated by the
Purchaser to purchase any of the Shares, the Bedford
Property, the US Business Assets, the IP Assets and
the Monoclonal Assets and "DESIGNATED PURCHASER"
means any one of them;
"DIAGNOSTICS BUSINESS" means the business of:
(i) the manufacture, distribution and sale of
pregnancy testing kits, ovulation and
fertility monitoring systems, aids to
contraception and other women's reproductive
health diagnostic products;
(ii) the manufacture, distribution and sale of
certain IN VITRO diagnostic products;
73
(iii) the carrying out of research and development
work in relation to products of the type
referred to in PARAGRAPHS (i) AND (ii); and
(iv) the licensing of Intellectual Property for
(i), (ii) or (iii) above,
in each case only as carried on at the date of this
Agreement by (i) the Companies (including through the
occupation or use of the Bedford Property, the IP
Assets and the Monoclonal Assets), and (ii) in
relation to the US Business, by the US Business
Seller;
"DISCLOSURE BUNDLE" has the meaning given in the Disclosure Letter;
"DISCLOSURE LETTER" means the disclosure letter of the same date as this
Agreement written by the Vendor to the Purchaser;
"DISPUTE NOTICE" has the meaning given in SUB-CLAUSE 6(B) (Completion
Accounts and Variable Intra-Group Debt Statement);
"DOMAIN NAMES" means the internet domain names listed in SCHEDULE 14
(Domain Names);
"DUTCH SALES STAFF" means Paul Heijstee, Nelleke Broekema, Joop Bergsma
and Saskia van der Heijden each of whom is employed
by Lever Faberge Nederland B.V. (a member of the
Vendor's Group incorporated in the Netherlands) and
each of whom provides sales services to Unipath
Limited pursuant to the Dutch Sales Representation
Agreement;
"DUTCH SALES means the Sales Representation Agreement with an
REPRESENTATION effective date of 2nd July, 2001 between Unipath
AGREEMENT" Limited and Lever Faberge Nederland B.V.;
"EMPLOYEES" means the French Employees, the German Employees, the
Scandinavian Employees, the UK Employees and the US
Employees;
"EMPLOYEE DISCLOSURES" means the disclosures relating to the Employees set
out in paragraph 24 of the Disclosure Letter;
"ENVIRONMENT" has the meaning given in the Environmental
Warranties;
"ENVIRONMENTAL LAWS" has the meaning given in the Environmental
Warranties;
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"ENVIRONMENTAL MATTERS" has the meaning given in the Environmental
Warranties;
"ENVIRONMENTAL PERMITS" has the meaning given in the Environmental
Warranties;
"ENVIRONMENTAL means the Warranties set out in PARAGRAPH 25 of
WARRANTIES" SCHEDULE 6 (Warranties);
"FIXED ASSET REGISTER" means the fixed asset register set out at tab 5 of
the Disclosure Bundle which lists, inter alia, as at
1st December, 2001 those US Business Assets which are
Material Fixed Assets and those assets of the
Companies which are Material Fixed Assets;
"FIXED INTRA-GROUP DEBT means certain amounts in the nature of indebtedness
AMOUNTS" owing by the Companies to members of the Vendor's
Group as at the date of this Agreement, details of
which are set out in SCHEDULE 13 (Fixed Intra-Group
Debt Amounts);
"FRENCH EMPLOYEES" means those individuals whose names are set out in
Part A of SCHEDULE 11 (Employees) being the persons
who are employed by Elida Faberge SA and are engaged
in the Transferring Business;
"GENERIC CLAIMS" means those claims notified or threatened against
members of the Vendor's Group or any of the Companies
prior to the date hereof in respect of the marketing,
sale and use of Persona products in which it is
asserted that the Persona product is defective, or
that the Persona product is not suitable for its
intended purpose, by virtue of any failure to warn an
intended user of the Persona product that the Persona
product is not 94% reliable when used in accordance
with the instructions set out therewith and/or that
the figure of 94% reliability should not have been
used in respect of the Persona product, being the
claims referred to as a single occurrence in the
letter from the Captive Insurer to Richard Hazell of
Unilever PLC dated 18th December, 2001 included at
tab 15 of the Disclosure Bundle;
"GERMAN EMPLOYEES" means those individuals whose names are set out in
Part B of SCHEDULE 11 (Employees) being the persons
who are employed by Unipath Diagnostics GmbH;
"HAMERS AGREEMENT" means the agreement dated 17th March, 1997 between
Unilever Nederland BV and the Vrije Universiteit
Brussel, a copy of which is attached to the
Disclosure Letter;
"HAZARDOUS SUBSTANCES" has the meaning given in the Environmental
Warranties;
"IMMOVABLE PROPERTY" means freehold and leasehold land and buildings,
fixtures, or other immovable property;
75
"INDEMNIFIED LOSSES" has the meaning given in SUB-CLAUSE 18(A)
(Reorganisation Indemnity);
"INDIRECT TAXATION" means those taxes listed in ATTACHMENT 4;
"INFORMATION means the information memorandum dated August, 2001
MEMORANDUM" and prepared by Deutsche Bank AG on behalf of the
Vendor's Group in connection with the proposed sale
of the Transferring Business;
"INTELLECTUAL PROPERTY" means patents, trade marks, service marks, trade or
business names, rights in designs, copyrights
(including, without limitation, rights in computer
software), rights in databases and topography rights
(whether or not any of those is registered and
including, without limitation, applications and
rights to apply 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;
"INTELLECTUAL PROPERTY means the assignments of registered Business IPR (and
ASSIGNMENTS" applications therefor) in the Agreed Form to be
entered into at Completion between the IP Assets
Sellers and the Designated Purchaser of the IP
Assets;
"INTRA-GROUP TRADING means:
AND SERVICES AMOUNT"
(i) any amount owed by or to any member of the
Vendor's Group to or by any of the Companies
as at Completion; and
(ii) any amount owed by one member of the Vendor's
Group to another member of the Vendor's Group
in respect of the US Business as at
Completion,
in either case, in the ordinary course of the
Transferring Business (including, without limitation,
trade payables and receivables, amounts owed in
respect of salaries or other employee benefits,
amounts in respect of VAT, insurance (including,
without limitation, health and motor insurance),
pension or retirement benefit payments, management
training and car rental payments paid or management
services provided by or to any member of the Vendor's
Group);
"IP ASSETS" means the Business IPR, the Domain Names and the IP
Licences;
76
"IP ASSETS SELLERS" means Conopco, Inc., Hindustan Lever Limited,
Unilever N.V., Unilever PLC and Unilever Patent
Holdings B.V., each of which is a member of the
Vendor's Group;
"IP LICENCES" means:
(i) the IP Licences listed in ATTACHMENT 15;
(ii) all agreements, arrangements or understandings
relating to the Transferring Business at
Completion pursuant to which:
(a) any member of the Vendor's Group has the
right to use any Intellectual Property in
the Transferring Business but excluding
any such agreements, arrangements or
undertakings relating to computer
software and excluding the Hamers
Agreement and the BD Licence; or
(b) any third party has the right to use any
Business IPR; and
(iii) all agreements, arrangements and
understandings either relating exclusively to
the Transferring Business as at Completion or
relating in part to the Transferring Business
at Completion (but then only to the extent
that they do so relate) to which any member of
the Vendor's Group is a party and pursuant to
which any of the Companies or, in relation to
the US Business, any member of the Vendor's
Group has the right to use any computer
software;
"LEASE" means the lease under which any Property which is
leasehold is held and all documents supplemental to
the lease including any licence, consent or approval
given under it;
"LETTINGS" means, in respect of a Property, the leases,
tenancies and other rights of occupation affecting
the relevant Property;
"LIABILITY INSURANCE means all contracts of insurance entered into by the
POLICIES" Companies and any member of the Vendor's Group
(including, without limitation, Unipath Diagnostics
S.A. (France)) before Completion (but except in
relation to the 2001-2002 policy year, excluding any
such contracts of insurance providing coverage for
companies domiciled in the United States of America)
under which any member of the Vendor's Group and the
Companies (or any of them) are insured in respect of
liability to third parties arising from or in
connection with the carrying on of the
77
manufacture, marketing, sale and use of Persona
products including, for the avoidance of doubt, all
such contracts of liability insurance effected with
the Captive Insurer and all excess layer contracts of
liability insurance;
"LITIGATION" has the meaning given in paragraph 14 of SCHEDULE 6
(Warranties);
"MANAGEMENT ACCOUNTS" means the management accounts of the Transferring
Business for the year ended on the Accounts Date and
for the period from 1st January, 2001 to 29th
September, 2001, copies of which are set out in
ATTACHMENT 5;
"MATERIAL CONTRACT" means:
(i) any agreement, arrangement or understanding to
which any of the Companies is a party or the
benefit of which is held in trust for or has
been assigned to any Company; or
(ii) in relation to the US Business, a US Contract
either (a) as a result of which such Company or, as
the case may be, the member of the Vendor's Group
which is party to the relevant US Contract is liable
to pay (pound)500,000 or more per annum and/or
entitled to receive (pound)500,000 or more per annum
or (b) the absence or termination of which would have
a material adverse effect on the Transferring
Business;
"MATERIAL FIXED ASSET" means any fixed asset with a net book value of
(pound)100,000 or more;
"MONOCLONAL ASSETS" means the assets listed in (i) Part A of ATTACHMENT 7
(including, without limitation, those antibody clones
identified as belonging to "Unipath" but excluding
those identified as belonging to "Unilever"), and
(ii) Part B of ATTACHMENT 7 (non-clone assets);
"MONOCLONAL ASSETS means Unilever U.K. Central Resources Limited, a
SELLER" member of the Vendor's Group incorporated in England
and Wales, which company holds the Monoclonal Assets;
"NON-UK EMPLOYEES" means the French Employees, the German Employees,
the Scandinavian Employees and the US Employees;
"OCTOBER MANAGEMENT means the management accounts of the Transferring
ACCOUNTS" Business for the period from 1st January, 2001 to 3rd
November, 2001, a copy of which is set out in
ATTACHMENT 5;
78
"PATENT CASES" means the patent litigation identified in Part A of
SCHEDULE 15 (Patent Cases);
"PERMITS" has the meaning given in SUB-CLAUSE 13(I)
(Employees);
"PERMITTED ASSIGNEE" has the meaning given in SUB-CLAUSE 28(A) (No
Assignment);
"PERMITTED ENCUMBRANCES" means liens or security interests:
(i) arising by operation of law in the ordinary
and usual course of business;
(ii) arising under title retention provisions in
sales contracts with third parties entered
into in the ordinary and usual course of
business;
(iii) arising under equipment leases with third
parties entered into in the ordinary and usual
course of business (save for liens or security
interests arising as a result of breach of any
such equipment leases); or
(iv) for Taxes and other governmental charges which
are not due and payable;
"PERSONA LITIGATION" means any third party complaint, claim, demand,
proceeding, suit or action brought or to be brought
whether before, on or after the Completion Date
against any member of the Purchaser's Group or
against any member of the Vendor's Group (including,
without limitation, the intimation of a claim or a
letter before action) arising out of marketing, sales
or use of any Persona product;
"PERSONA PRODUCT" means any product marketed as "Persona" or "Persona
test sticks" by any of the Companies or any member of
the Vendor's Group (including, without limitation,
Unipath Diagnostics S.A. (France)) prior to, or as
at, the date of this Agreement;
"PLANNING ACTS" means the enactments from time to time in force
relating to town and country planning;
"PRESS ANNOUNCEMENTS" means the press announcements to be issued by
Unilever PLC and/or Unilever N.V. and the Purchaser
upon Completion each as substantially in the form set
out in ATTACHMENT 6;
"PROCEEDINGS" means any proceeding, suit or action arising out of
or in connection with this Agreement;
"PROFIT AND LOSS has the meaning given in SUB-CLAUSE 23(A) (Profit and
EQUALISATION AGREEMENT" Loss Equalisation);
79
"PROFIT AND LOSS has the meaning given in the Tax Covenant;
EQUALISATION AGREEMENT
TAX LIABILITY"
"PROPERTIES" means the freehold, leasehold or other Immovable
Property specified in SCHEDULE 9 (Properties);
"PROPERTY APPROVAL" means, in relation to any Property, the consent of
any landlord or other third party required for the
grant of an underlease of the whole or any part of
the relevant Property to the Purchaser;
"PROPERTY CONSENT" means, in relation to any Property, the consent of
any landlord or other third party required for the
transfer of the whole or any part of the relevant
Property to the Purchaser;
"PROTECTED PERSONS" has the meaning given in SUB-CLAUSE 18(D)
(Reorganisation Indemnity);
"PURCHASER'S ACCOUNTANTS" means Arthur Andersen of 180 Strand, London WC2R 1BL
or such other accountants as may be notified to the
Vendor from time to time;
"PURCHASER CONFIDENTIAL means all information which is not in the public
INFORMATION" domain in whatever form held:
(i) relating to any member of the Purchaser's
Group or the business of any such member;
(ii) supplied by or on behalf of any member of the
Purchaser's Group to any member of the
Vendor's Group relating to the business of the
Purchaser's Group;
(iii) supplied in confidence to any member of the
Vendor's Group by any third party and which
relates to the business of the Purchaser's
Group; or
(iv) to the extent that it relates to the
Transferring Business;
"PURCHASER'S GROUP" means the Purchaser, its subsidiaries and subsidiary
undertakings (including, without limitation, the
Companies), each holding company of the Purchaser and
all other subsidiaries and subsidiary undertakings of
any such holding company, in each case, at the
relevant time;
"PURCHASER'S SOLICITORS" means Allen & Overy of One New Change, London EC4M
9QQ;
80
"PWC DUE DILIGENCE REPORT" means the due diligence report on the Transferring
Business dated 24th August, 2001 prepared on behalf
of the Vendor by the Vendor's Accountants;
"RELEVANT AGREEMENTS" means this Agreement, the Tax Covenant, the
Intellectual Property Assignments, the Transitional
Services Agreement, the Bedford Property Transfer,
the Antibody Patent Licence, the Deed of Undertaking,
the US Transfer Agreement and the US Lease
Assignments;
"RELEVANT PERIOD" has the meaning given in the Environmental
Warranties;
"RELIEF" has the meaning given in the Tax Covenant;
"REORGANISATION" means the completed intra-group reorganisation
involving the Vendor, Unipath Limited and the
Subsidiary, details of which are set out in
ATTACHMENT 2;
"REORGANISATION TAX has the meaning given in the Tax Covenant;
LIABILITY"
"RETAINED BUSINESSES" means all businesses carried on by the Vendor's Group
other than the Transferring Business;
"RETAINED LIABILITIES" has the meaning given in SUB-CLAUSE 10(C) (Assumed
Liabilities and Retained Liabilities);
"SCANDINAVIAN EMPLOYEES" means those individuals whose names are set out in
Part C of SCHEDULE 11 (Employees) being the persons
who are employed by Unipath Scandinavia A.B.;
"SECONDED EMPLOYEES" means Messrs. Peter Welch, Michael Joubert and Fiona
Humberstone;
"SENIOR EMPLOYEES" means Employees whose work level grading at any
relevant time is, in accordance with the Vendor's
Group work grading policy, at level 3 or above;
"SERVICE DOCUMENT" has the meaning given in SUB-CLAUSE 41(D) (Agent for
Service);
"SETTLEMENT DATE" has the meaning given in SUB-CLAUSE 5(B) (Working
Capital and Variable Intra-Group Debt Adjustments);
"SHARE SELLERS" means the members of the Vendor's Group whose names
appear in COLUMN 3 of SCHEDULE 4 (Ownership of the
Shares) which, in each case, hold the Shares set
opposite their name in COLUMN 2 of SCHEDULE 4
(Ownership of the Shares);
81
"SHARES" means all the issued shares in the capital of the
Companies (other than the Subsidiary) details of
which are set out in the table in SCHEDULE 4
(Ownership of the Shares);
"SHARED IPR" means any Intellectual Property (other than the
Business IPR and excluding all trade marks) or
know-how owned by the Vendor or any member of the
Vendor's Group as at the date of this Agreement
which:
(i) has been used by the Transferring Business in
relation to a commercialised product; and/or
(ii) is a material element of any research or
development project carried on by the
Transferring Business,
in each case, at any time in the three years prior to
the date of this Agreement;
"SO FAR AS THE VENDOR means so far as is within the actual knowledge (after
AWARE" having made reasonable enquiries) of Robert Field or
Peter Welch (in relation to any matters), Keith
Goulborn (in relation to property matters), Brian
Chapman (in relation to Tax matters), Chris Tripp (in
relation to UK pensions matters), Nigel Biggs or
Peter Milner (in relation to non-UK pensions
matters), Alain Hugot, Richard Heath or Caroline
Boerma (in relation to Intellectual Property
matters), Frans van der Ouderaa (in relation to
Intellectual Property matters, Monoclonal Assets
matters and research and development matters),
Richard Hazell, James Berkeley or Susie Franklin (in
relation to legal matters), Malcolm Smith (in
relation to Employee matters), Stephen Pepper (in
relation to Environmental matters), Patricia Nasshorn
(in relation to the US Business) or Les Howcroft (in
relation to insurance matters), and all other phrases
in this Agreement relating to the knowledge,
information and belief or awareness of the Vendor
shall be construed as a reference to "so far as the
Vendor is aware" as so defined;
"SPECIFIED AGREEMENTS" means the Relevant Agreements and any other documents
to be entered into at Completion in accordance with
SCHEDULE 5 (Completion Arrangements);
"STEP THREE SALE" has the meaning given in SUB-CLAUSE 18(D)
(Reorganisation Indemnity);
"STRADDLE PERIOD" means any period of account for Taxation purposes
which begins on or before and ends after Completion;
82
"STEP TWO HIVE-DOWN" has the meaning given in SUB-CLAUSE 18(C)
(Reorganisation Indemnity);
"SUBSIDIARY" means Unipath Management Limited of Priory Business
Park, Bedford, Bedfordshire, MK44 3UP, details of
which are set out in SCHEDULE 3 (Information about
the Companies);
"TAX" OR "TAXATION" has the meaning given to "Tax" in the Tax Covenant;
"TAX AUTHORITY" means any taxing or other authority competent to
impose any liability to Tax;
"TAX CLAIM" has the meaning given in PARAGRAPH 9(C) of SCHEDULE 7
(Limitations on Liability);
"TAX COVENANT" means the tax covenant in the Agreed Form to be
entered into by the Vendor and the Purchaser at
Completion;
"TAX WARRANTIES" means the Warranties set out in PARAGRAPHS 6(H),
6(I), 7(iv) and 26 to 41 of SCHEDULE 6 (Warranties);
"TAXES ACT" means the Income and Corporation Taxes Act 1988;
"TRANSFER DOCUMENTS" means the US Transfer Agreement, the US Lease
Assignments, the Intellectually Property Assignments,
the Bedford Property Transfer, the agreement for the
transfer of the Share in Unipath Diagnostics GmbH set
out in ATTACHMENT 10, the notarial deed of transfer
of the Shares in Unipath B.V. referred to in
PARAGRAPH 5 of SCHEDULE 5 and any other documents for
the transfer of assets and/or shares to be entered
into at Completion in accordance with SCHEDULE 5
(Completion Arrangements);
"TRANSFER REGULATIONS" means the relevant legislation in France implementing
the provisions of the EU Acquired Rights Directive
(77/187/EEC) (as amended);
"TRANSFER TAXES" has the meaning given in SUB-CLAUSE 34(B) (Costs and
Expenses);
"TRANSFERRING BUSINESS" means:
(i) the business as carried on at the date of this
Agreement by the Companies (including through
the occupation or use of the Bedford Property,
the IP Assets and the Monoclonal Assets);
(ii) the US Business; and
83
(iii) the licensing as carried on at the date of
this Agreement by any member of the Vendor's
Group of the Intellectual Property which is
licensed pursuant to licences granted by any
member of the Vendor's Group and listed in the
Data Room Index including, without limitation,
that which is licensed pursuant to the
licences in Attachment 15;
"TRANSFERRING BUSINESS- means all books and records of the Vendor or of any
BOOKS AND RECORDS" member of the Vendor's Group containing information
relating to the Transferring Business or on which any
information relating to the Transferring Business is
recorded including, without limitation, all documents
and other material (including, without limitation,
all forms of computer or machine readable material);
"TRANSFERRING BUSINESS means all the plant, machinery and other equipment
PLANT AND MACHINERY" (including, without limitation, furniture, vehicles,
spares, loose tools, fittings, partitioning and other
items) owned or leased by (a) any member of the
Vendor's Group and which are used wholly or
predominantly in the Transferring Business or (b) a
Company, in each case, at Completion;
"TRANSITIONAL SERVICES means the agreement, in the Agreed Form, to be
AGREEMENT" entered into by Unilever U.K. Central Resources
Limited and Unipath Limited at Completion relating to
the provision by Unilever U.K. Central Resources
Limited and other members of the Vendor's Group to
the Purchaser, the Companies and the US Business of
certain services for a transitional period following
Completion;
"UK EMPLOYEES" means those individuals who are employed by Unipath
Limited or Unipath Management Limited as at
Completion;
"UNDISCLOSED ASSURANCES" has the meaning given in SUB-CLAUSE 12(B)
(Intra-Group Guarantees and Other Agreements);
"UNILEVER ACCOUNTING means the internal accounting manual adhered to by
MANUAL" members of the Vendor's Group, a copy of which has
been included in the Data Room;
"UNILEVER MARKS" has the meaning given in SUB-CLAUSE 21(C)
(Purchaser's Undertakings);
"UNIPATH'S OBLIGATIONS" has the meaning given in SUB-CLAUSE 12(D)
(Intra-Group Guarantees and Other Agreements);
"US ASSUMED LITIGATION" means the claims, actions and proceedings made or
brought against the US Business Seller with respect
to the US Business by Intervention, Inc., details of
which are set out in part 14 of the Disclosure
Letter;
84
"US BALANCE SHEET" means the balance sheet of the US Business as at the
Accounts Date, a copy of which is set out in
ATTACHMENT 13;
"US BUSINESS" means the business of:
(i) the distribution and sale of pregnancy testing
kits, ovulation and fertility monitoring
systems, aids to contraception and other
women's reproductive health diagnostic
products; and
(ii) the distribution and sale of certain in vitro
diagnostic products,
in each case as carried on by the US Business
Seller at the date of this Agreement;
"US BUSINESS ASSETS" means the assets utilised by the US Business Seller
wholly or predominantly in the US Business, as set
out in SUB-CLAUSES 2(E)(i) to (ix) (inclusive) (Sale
and Purchase);
"US BUSINESS INFORMATION" means all information, know-how and techniques
(whether or not confidential and in whatever form
held) including, without limitation, all:
(i) formulae, designs, specifications, drawings,
data, manuals and instructions;
(ii) customer lists, sales, marketing and
promotional information;
(iii) business plans and forecasts; and
(iv) technical or other expertise in each case,
relating wholly or predominantly to the US
Business;
"US BUSINESS NAME" means Unipath Diagnostics Co. or any name or sign
including the words Unipath Diagnostics Co. or any
name or sign confusingly similar to that name or sign
or likely to be associated with it;
"US BUSINESS RECORDS" means all books and records containing or relating to
any US Business Information or on which any US
Business Information is recorded (including, without
limitation, all documents and other material
(including, without limitation, all forms of computer
or machine readable material)), excluding all such
books and records to the extent relating to the US
Retained Litigation;
85
"US BUSINESS SELLER" means Conopco, Inc. (including as sometimes described
as d/b/a Unipath Diagnostics Company), a member of
the Vendor's Group incorporated in the State of New
York, United States of America, which company carries
on the US Business;
"US BUSINESS STOCKS" means all stocks of raw materials, work-in-progress,
finished goods or completed services and other
stock-in-trade and packaging owned by a member of the
Vendor's Group and used wholly or predominantly in
the US Business at Completion;
"US CLAIMS" means all rights and claims of any member of the
Vendor's Group subsisting at Completion under any
warranty, term, condition, guarantee or indemnity,
whether express or implied, in favour of any member
of the Vendor's Group against any third party to the
extent relating to the US Business Assets;
"US CONTRACTS" means all the contracts (which include, amongst other
things, all agreements, arrangements and commitments)
relating wholly or predominantly to the US Business
at Completion to which any member of the Vendor's
Group is a party or the benefit of which is held in
trust for or has been assigned to any such member but
excluding (i) all licences of Intellectual Property,
and (ii) any employment contracts or employment
arrangements (including, without limitation, pension
arrangements) with US Employees;
"US EMPLOYEES" means those individuals whose names are set out in
Part D of SCHEDULE 11 (Employees) being the persons
who are employed by the US Business Seller and are
engaged in the US Business;
"US GOODWILL" means all the goodwill of any member of the Vendor's
Group in relation to the US Business together with
the exclusive right for the Designated Purchaser of
the US Business and its assignees to trade under the
US Business Name and to represent itself as carrying
on the US Business in succession to the US Business
Seller or any other member of the Vendor's Group;
"US LEASE ASSIGNMENTS" means the three assignment and assumption agreements
relating to the transfer of the US Properties in the
Agreed Form;
"US PLANT AND MACHINERY" means all the plant, machinery and other equipment
(including, without limitation, furniture, vehicles,
spares, loose tools, fittings, partitioning and other
items) owned by a member of the Vendor's Group and
used wholly or predominantly by or in the US Business
as at Completion;
86
"US PROPERTIES" means the Properties located in the United States,
details of which are set out in Part B of SCHEDULE 9
(Properties);
"US RECEIVABLES" means:
(i) any debts or other sums other than Intra-Group
Trading and Services Accounts due or payable
as at Completion to any member of the Vendor's
Group to the extent relating to the US
Business;
(ii) any debts or other sums other than Intra-Group
Trading and Services Accounts which become due
or payable to any member of the Vendor's Group
after Completion to the extent relating to
goods supplied, services performed or rights
licensed in respect of the US Business prior
to Completion;
(iii) any interest payable on the debts or other
sums specified in SUB-PARAGRAPHS (i) and (ii)
above; and
(iv) the benefit of all securities, guarantees,
indemnities and rights relating to the debts
or other sums specified in SUB-PARAGRAPHS (i)
and (ii) above;
"US RETAINED LITIGATION" means the claims, actions and proceedings made or
brought against the US Business Seller with respect
to the US Business by Profile Pursuit, Inc., details
of which are set out in part 14 of the Disclosure
Letter;
"US TRANSFER AGREEMENT" means the General Assignment and Assumption Agreement
and Bill of Sale, in the Agreed Form, to be entered
into by the US Business Seller and the Designated
Purchaser of the US Business at Completion relating
to the transfer of the US Business Assets to that
Designated Purchaser;
"VARIABLE INTRA-GROUP means, as at the Completion Date, the aggregate of
DEBT" the amounts owed by the Companies to members of the
Vendor's Group in respect of the period prior to
Completion (other than the Fixed Intra-Group Debt
Amounts, Intra-Group Trading and Services Amounts and
any amount to be paid by Unipath Diagnostics GmbH
pursuant to SUB-CLAUSE 23(D)(i) (Profit and Loss
Equalisation)) after deducting the aggregate of the
amounts (if any) owed by members of the Vendor's
Group to the Companies in respect of the period prior
to Completion (other than Intra-Group Trading and
Services Amounts and any amount to be paid to Unipath
Diagnostics GmbH pursuant to SUB-CLAUSE 23(C)(i)
(Profit and Loss Equalisation)), all as set out on
the Variable Intra-Group Debt Statement. For the
avoidance
87
of doubt the Variable Intra-Group Debt can be a
positive (representing a net liability of the
Companies) or negative (representing a net asset of
the Companies) amount, or zero;
"VARIABLE INTRA-GROUP means the statement of:
DEBT STATEMENT"
(i) Variable Intra-Group Debt; and
(ii) the individual amounts comprised within
Variable Intra-Group Debt,
to be prepared in accordance with CLAUSE 6
(Completion Accounts and Variable Intra-Group Debt
Statement) and Part C of SCHEDULE 10 (Completion
Accounts and Variable Intra-Group Debt Statement);
"VAT" means the tax imposed by the Sixth Council Directive
of the European Community and any national
legislation implementing such directive together with
legislation supplemental thereto and, in particular,
means, in relation to the United Kingdom, the tax
imposed by the VATA 1994 and legislation supplemental
thereto;
"VATA 1994" means the Value Added Tax Act 1994 of the United
Kingdom;
"VENDOR'S ACCOUNTANTS" means PricewaterhouseCoopers of One Embankment Place,
London WC2N 6RH;
"VENDOR'S DOLLAR BANK [intentionally omitted]
ACCOUNT"
"VENDOR'S STERLING BANK [intentionally omitted]
ACCOUNT"
"VENDOR CONFIDENTIAL means all information which is not in the public
INFORMATION" domain in whatever form held:
(i) relating to any member of the Vendor's Group
or the business of any such member;
(ii) supplied by or on behalf of any member of the
Vendor's Group to any member of the
Purchaser's Group (including at the time when
any such member of the Purchaser's Group was a
member of the Vendor's Group) relating to the
business of the Vendor's Group; or
88
(iii) supplied in confidence to any member of the
Vendor's Group by any third party and which
relates to the business of the Vendor's Group,
to the extent that it does not relate to the
Transferring Business;
"VENDOR'S GROUP" means the Vendor, Unilever N.V., Unilever PLC and
their respective subsidiaries and subsidiary
undertakings at the relevant time (but excluding the
Companies);
"VENDOR'S GROUP PLAN" means any or all of the UPF, 1999 SERA and the
Vendor's Non-UK Group Plans (each as defined in
SCHEDULE 8 (Pensions));
"WARRANTIES" means the warranties set out in SCHEDULE 6
(Warranties) and PARAGRAPH 18 of PART A and PARAGRAPH
5 of PART B of SCHEDULE 8 (Pensions);
"WORKING CAPITAL AMOUNT" means the amount of the aggregate working capital of
the Companies and the US Business at the Completion
Date as set out in the aggregate working capital
statement included in the Completion Accounts and
calculated in accordance with PARTS A and B of
SCHEDULE 10 (Completion Accounts);
"WORKING CAPITAL means the sum calculated in accordance with PARAGRAPH
BENCHMARK" 3 of PART B of SCHEDULE 10 (Completion Accounts) as
such sum may be adjusted in accordance with CLAUSE 6
(Completion Accounts and Variable Intra-Group Debt
Statement); and
"WORKING HOURS" means 9.30 a.m. to 5.30 p.m. (local time) on a
Business Day.
(B) In this Agreement and the Schedules to it, unless otherwise specified:
(i) references to Clauses, Schedules and Attachments are to Clauses of,
and Schedules and Attachments to, this Agreement;
(ii) 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;
(iii) 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-enacted except to the extent that
the Vendor's or the Purchaser's liability would be increased as a
result of such amendment, modification or re-enactment;
89
(iv) references to a "company" shall be construed so as to include any
company, corporation or other body corporate, wherever and however
incorporated or established;
(v) 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);
(vi) a company is a "subsidiary" of another company (its "holding
company") if that other company, directly or indirectly, through one
or more subsidiaries:
(a) holds a majority of the voting rights in it; or
(b) 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
(c) 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;
(vii) references to writing shall include any mode of reproducing words in
a legible and non-transitory form;
(viii) references to times of the day are to London time;
(ix) headings are for convenience only and do not affect the
interpretation of this Agreement;
(x) 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;
(xi) references to "indemnify" and "indemnifying" any person against any
circumstances include 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 in connection
with those circumstances and all liabilities, loss, damages and all
reasonable payments, costs and expenses made or incurred by that
person as a consequence of or which would not have arisen but for
those circumstances;
(xii) references to the Purchaser indemnifying any member of the Vendor's
Group shall constitute undertakings by the Purchaser to the Vendor
for itself and on behalf of each relevant member of the Vendor's
Group and references to the Vendor indemnifying any member of the
Purchaser's Group shall constitute
90
undertakings by the Vendor to the Purchaser for itself and on behalf
of each relevant member of the Purchaser's Group;
(xiii) references to the singular shall include the plural and vice versa;
(xiv) references to "(pound)", "pounds sterling" or "sterling" are to the
lawful currency of the United Kingdom and references to "US$", "US
dollars" or "dollars" are to the lawful currency of the United States
of America; and
(xv) each of the Attachments shall be in an Agreed Form.
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SCHEDULE 2
(INFORMATION ABOUT THE VENDOR)
Name: Unilever U.K. Holdings Limited
Registered Number: 17049
Place of Incorporation: England and Wales
Registered Office: Unilever House, Blackfriars, London EC4P 4BQ
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SCHEDULE 3
(INFORMATION ABOUT THE COMPANIES)
Name: Unipath Limited
Registered Number: 417198
Place of Incorporation: England and Wales
Registered Office: Priory Business Park, Bedford MK44 3UP
Tax Residence: United Kingdom
Name: Unipath Management Limited
Registered Number: 842528
Place of Incorporation: England and Wales
Registered Office: Priory Business Park, Bedford MK44 3UP
Tax Residence: United Kingdom
Issued Share Capital: 300,000 Ordinary Shares of(pound)1 each
Name of Registered Holder: Unipath Limited
Name: Unipath Diagnostics GmbH
Registered Number: HRB 29 443 AG Koln
Place of Incorporation: Germany
Registered Office: D-50676 Koln, An Lyskirchen 14
Tax Residence: Germany
Name: Unipath Scandinavia A.B.
Registered Number: 556052 - 1410
Place of Incorporation: Sweden
Registered Office: Sankt Lars vag 45, SE 222 70 Lund, Sweden
Tax Residence: Sweden
93
Name: Unipath B.V.
Registered Number: 30142693
Place of Incorporation: The Netherlands
Registered Office: Tolnasingel 1, 2411 PV Bodegraven, The Netherlands
Tax Residence: The Netherlands
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SCHEDULE 4
(OWNERSHIP OF THE SHARES)
- ------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Name of Company Number and class of Name of registered holder Address of registered
Shares holder
- ------------------------------------------------------------------------------------------------------------
Unipath Limited 2,100 ordinary shares of Unilever U.K. Holdings Unilever House
(pound)1 each Limited Blackfriars
London
EC4P 4BQ
England
- ------------------------------------------------------------------------------------------------------------
Unipath Diagnostics GmbH One share of DM4,000,000 Gibbs Verwaltungs und Dammtorwall 15
Beteiligungs GmbH D-20355 Hamburg
Germany
- ------------------------------------------------------------------------------------------------------------
Unipath Scandinavia A.B. 7,000 shares of SEK100 Unilever Invest A.B. PO Box 621
each SE-251 06
Helsingborg
Sweden
- ------------------------------------------------------------------------------------------------------------
Unipath B.V. 50 shares of Fl.1,000 Unilever Nederland B.V. Weena 457
each 3013 AL Rotterdam
The Netherlands
- ------------------------------------------------------------------------------------------------------------
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SCHEDULE 5
(COMPLETION ARRANGEMENTS)
1. GENERAL
(A) Vendor's obligations
At Completion the Vendor shall:
(i) deliver to the Purchaser a copy of an extract of the minutes of
a duly held meeting of the directors of the Vendor (or a duly
constituted committee thereof) authorising the execution by the
Vendor of this Agreement, the Disclosure Letter, the Tax
Covenant, the Bedford Property Transfer, the Deed of Undertaking
and any other document to be executed by the Vendor and referred
to in this SCHEDULE 5 and, in the case where such execution is
authorised by a committee of the board of directors of the
Vendor, a copy of the minutes of a duly held meeting of the
directors constituting such committee or the relevant extract
thereof (in each case such copy minutes being certified as
correct by the secretary of the Vendor);
(ii) deliver to the Purchaser all proxies or powers of attorney
(where required, executed before and endorsed by a duly
appointed public notary whose signature shall, where necessary,
be authenticated as required by the law of that jurisdiction)
authorising the Vendor or the relevant member of the Vendor's
Group (or any person acting on their behalf) to enter into this
Agreement or any document set out in this SCHEDULE 5, together
with (other than the case of any power of attorney executed by
Unilever N.V.) a copy of an extract of the minutes of a duly
held meeting of the directors of the relevant company (or a duly
constituted committee thereof) authorising the execution of such
powers of attorney;
(iii) deliver to the Purchaser the Tax Covenant, duly executed by the
Vendor;
(iv) deliver to the Purchaser the Transitional Services Agreement,
duly executed by Unilever U.K. Central Resources Limited and
Unipath Limited;
(v) deliver to the Purchaser, pursuant to but subject to the
provisions of Part C of SCHEDULE 9 (Properties), the Bedford
Property Transfer duly executed by the Vendor together with all
the title deeds and documents relating to the Bedford Property
including, if already obtained, all consents necessary for its
transfer to the Purchaser;
(vi) deliver to the Purchaser the Deed of Undertaking, duly executed
by the Vendor and Unipath Management Limited;
(vii) deliver to the Purchaser the Antibody Patent Licence, duly
executed by Unilever PLC and Unilever N.V.;
96
(viii) deliver to the Purchaser the Intellectual Property Assignments,
duly executed by the IP Assets Sellers;
(ix) deliver to the Purchaser the US Transfer Agreement, duly
executed by the US Business Seller; and
(x) to the extent applicable in the relevant jurisdictions, procure
that all land or title certificates, title deeds or other
documents relating to each Property are held to the order of the
Purchaser.
(xi) deliver to the Purchaser the receipts referred to in SUB-CLAUSE
4(B) (Fixed Intra-Group Debt Amounts); and
(xii) subject to the execution thereof by the Purchaser, deliver to
the Purchaser a power of attorney in the Agreed Form, duly
executed by the Vendor, in favour of the relevant Designated
Purchaser in respect of the Shares in Unipath Limited,
PROVIDED that the US Transfer Agreement and any power of attorney
relating thereto shall be executed outside the United Kingdom and
delivered to the Purchaser at the following address: Inverness Medical
Innovations, Inc., Suite 200, 51 Sawyer Road, Waltham, Massachusetts,
02453, United States of America.
(B) Purchaser's obligations
At Completion the Purchaser shall:
(i) deliver to the Vendor a copy of an extract of the minutes of a
duly held meeting of the directors of the Purchaser (or a duly
constituted committee thereof) authorising the execution by the
Purchaser of this Agreement, the Disclosure Letter, the Tax
Covenant, the Deed of Undertaking, the US Transfer Agreement and
any other document to be executed by the Purchaser and referred
to in this SCHEDULE 5 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 (in each case such copy extract or minutes being
certified as correct by the secretary of the Purchaser);
(ii) deliver to the Vendor all proxies or powers of attorney (where
necessary, executed before and endorsed by a duly appointed
public notary whose signature shall, where necessary, be
authenticated as required by the law of that jurisdiction)
authorising the Purchaser or the relevant member of the
Purchaser's Group (or any person acting on their behalf) to
enter into this Agreement or any document set out in this
SCHEDULE 5, together with a copy of an extract of the minutes of
a duly held meeting of the directors of the relevant company (or
a duly constituted committee thereof) authorising the execution
of such powers attorney;
97
(iii) deliver to the Vendor the counterpart Tax Covenant, duly
executed by the Purchaser;
(iv) deliver to the Vendor, pursuant to but subject to the provisions
of Part C of SCHEDULE 9 (Properties), the counterpart Bedford
Property Transfer duly executed by the relevant Designated
Purchaser;
(v) deliver to the Vendor the counterpart Deed of Undertaking, duly
executed by the Purchaser;
(vi) deliver to the Vendor counterpart Intellectual Property
Assignments, duly executed by the relevant Designated Purchaser;
(vii) deliver to the Vendor the counterpart US Transfer Agreement,
duly executed by the relevant Designated Purchaser;
(viii) deliver to the Vendor the counterpart Antibody Patent Licence,
duly executed by the relevant Designated Purchaser;
(ix) deliver to the Vendor the counterpart power of attorney referred
to at SUB-PARAGRAPH (A)(xii) of this SCHEDULE 5, duly executed
by the Purchaser;
(x) pay the Sterling Amount in pounds sterling to the Vendor's
Sterling Bank Account;
(xi) pay the Dollar Amount in US dollars to the Vendor's Dollar Bank
Account; and
(xii) procure the payment of the Fixed Intra-Group Debt Amounts (in
accordance with SUB-CLAUSE 4(A)) to the bank accounts of the
relevant members of the Vendor's Group notified by them to the
Purchaser prior to Completion.
PROVIDED that the counterpart US Transfer Agreement and any power of
attorney relating thereto shall be executed outside the United Kingdom
and delivered to the Vendor at the following address: Conopco, Inc.,
Lever House, 390 Park Avenue, New York, NY 10022-4698.
2. GENERAL PROVISIONS IN RELATION TO THE US BUSINESS ASSETS AND THE
MONOCLONAL ASSETS
At Completion the Vendor shall deliver, or procure the delivery of, to
the relevant Designated Purchaser all the US Business Assets which are
capable of transfer by delivery and the Monoclonal Assets (other than
any records or Transferring Business Books and Records which are to be
retained by the Vendor in accordance with CLAUSE 24 (Books and
Records)), with the intent that title in such US Business Assets and
Monoclonal Assets shall pass by and upon such delivery.
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3. GENERAL PROVISIONS IN RELATION TO THE COMPANIES
At Completion:
(i) the Vendor shall deliver (or procure the delivery of) to the
relevant Designated Purchaser:-
(a) other than with respect to the Shares of Unipath
Scandinavia A.B., duly executed transfers in respect of the
Shares duly completed by or on behalf of all persons
required to execute such transfers in favour of the
Purchaser or such person as the Purchaser may nominate
together with the certificates for such Shares (or an
indemnity in lieu thereof) and any power of attorney under
which any transfer is executed;
(b) the certificates for the Shares of Unipath Scandinavia A.B.
duly endorsed by or on behalf of all persons required to
endorse such certificates in favour of the Purchaser or
such person as the Purchaser may nominate and any power of
attorney under which any certificate is so endorsed;
(c) or hold to the order of the Purchaser or the relevant
Designated Purchaser, the statutory books (which shall be
written up to but not including the Completion Date), the
certificate of incorporation, any certificate of
incorporation on change of name, corporate seal (if any)
and other constitutional documents of each of the Companies
(in the case of Unipath Diagnostics GmbH, Unipath
Scandinavia A.B. and Unipath B.V., to the extent
applicable);
(d) duly executed resignations in the Agreed Form of the
directors and company secretaries of the Companies as
listed in ATTACHMENT 16, such resignations to be expressed
to take effect on the Completion Date;
(e) copies (signed by the auditors) of the letters from the
auditors of each of the Companies referred to in PARAGRAPH
(ii) below;
(ii) the Vendor shall procure the present auditors of each of the
Companies to resign their office as such, and to deposit at the
registered or principal office address of the relevant Company a
letter notifying their resignation (which letters shall, in the
case of Unipath Limited and the Subsidiary and in accordance
with section 394 Companies Act 1985, acknowledge that these are
no circumstances connected with their resignation that should be
brought to the attention of members or creditors of those
Companies);
(iii) the Vendor shall procure board meetings of each of the Companies
to be held at which:-
(a) (in relation to Unipath Limited) it shall be resolved that
each of the transfers relating to the Shares shall be
approved for registration and
99
(subject only to the transfers being duly stamped) each
transferee registered as the holder of the Shares concerned
in the register of members;
(b) each of the persons nominated by the relevant Designated
Purchaser shall be appointed directors and/or secretary
and/or auditors, as the relevant Designated Purchaser shall
direct (such appointments to take effect on the Completion
Date); and
(iv) the Vendor shall procure that minutes of each board meeting held
pursuant to SUB-PARAGRAPH 3(iii), certified as correct by a
director or the secretary of the relevant Company, the relevant
notices and the resignations and acknowledgements referred to
are delivered to the relevant Designated Purchaser.
4. SPECIFIC PROVISIONS IN RELATION TO UNIPATH DIAGNOSTICS GMBH
At Completion, the Vendor shall procure that Gibbs Verwaltungs und
Beteiligungs GmbH enters into an agreement with the relevant Designated
Purchaser (notarised by a duly appointed public notary) effective to
transfer the Share in Unipath Diagnostics GmbH to the relevant
Designated Purchaser (such agreement being in the form set out in
ATTACHMENT 10).
5. SPECIFIC PROVISIONS IN RELATION TO UNIPATH B.V.
At Completion, the Vendor shall procure that Unilever Nederland B.V.
and Unipath B.V. execute, and the Purchaser shall procure that the
relevant Designated Purchaser executes, a notarial deed of transfer of
the Shares in Unipath B.V. from Unilever Nederland B.V. to the relevant
Designated Purchaser.
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SCHEDULE 6
(WARRANTIES)
1. OWNERSHIP OF THE SHARES
(A) The Shares have been validly issued, are legally and beneficially owned
by the relevant members of the Vendor's Group as stated in SCHEDULE 4
(Ownership of the Shares) and such shares in aggregate constitute the
entire issued and allotted share capital of each of the Companies other
than the Subsidiary. Unipath Limited is the legal and beneficial owner
of the entire issued and allotted share capital of the Subsidiary,
which share capital has been validly issued.
(B) There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance or equity on, over or affecting
the Shares, the shares in the capital of the Subsidiary or any of them
and there is no agreement or commitment to give or create any of the
foregoing and no claim has been made by any person to be entitled to
any of the foregoing.
(C) All unissued shares, debentures or other securities of each of the
Companies are free from any option or right to acquire, right of
pre-emption, lien, charge or other form of agreement, rights, interest
or encumbrance whatsoever. No loan or share capital of any nature has
been issued or allotted by any of the Companies since the Accounts Date
and there are in existence no rights or options to the issue or
allotment of any loan or share capital of any Company or to convert any
loan or share capital of any Company into share capital or share
capital of a different description.
(D) None of the Companies has at any time in the 6 years immediately
preceding the date of this Agreement repaid or redeemed or agreed to
repay or redeem the capital on any shares of its capital or in any way
effected any reduction of its issued share capital. No Company has at
any time in the 6 years immediately preceding the date of this
Agreement purchased its own shares.
2. CAPACITY OF THE VENDOR'S GROUP
(A) The Vendor has the corporate power and authority to enter into and
perform this Agreement and each of the Vendor and the other relevant
members of the Vendor's Group has the corporate power and authority to
enter into and perform any other Specified Agreement required to be
entered into by it under this Agreement.
(B) This Agreement constitutes, and the other Specified Agreements to be
executed by any member of the Vendor's Group which are to be delivered
at Completion will, when executed, constitute, binding obligations of
the relevant members of the Vendor's Group in accordance with their
respective terms.
(C) The execution and delivery of this Agreement and the other Specified
Agreements and the performance by each relevant member of the Vendor's
Group of its obligations hereunder and thereunder will not:-
101
(i) result in a breach of any provision of the memorandum or
articles of association of that member of the Vendor's Group;
(ii) result in a breach of, or constitute a default under, any
agreement or instrument to which that member of the Vendor's
Group is a party or is bound;
(iii) result in a breach of any order, judgment, award, injunction or
decree of any court or governmental agency or of any other
restriction of a similar nature to which that member of the
Vendor's Group is a party or is bound;
(iv) require the consent of its shareholders;
(v) require that member of the Vendor's Group 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; or
(vi) result in the creation or imposition of any lien, charge or
encumbrance of any nature on all or any part of the property or
assets comprised in the Transferring Business other than any
such lien, charge or encumbrance which arises as a result of the
execution and delivery of this Agreement and the other Specified
Agreements by the relevant members of the Purchaser's Group and
the performance by each such member of the Purchaser's Group of
its obligations hereunder and thereunder.
3. GROUP STRUCTURE
(A) The Shares and the shares in issue in the Subsidiary are all fully paid up.
(B) There is no agreement or commitment outstanding which calls for the
allotment, issue or transfer of, or accords to any person the right to
call for the allotment, issue or transfer of, any shares (including,
without limitation, the Shares) or debentures in or securities of any
of the Companies. No person has claimed to have any rights to any of
the same.
(C) No Company acts or carries on business in partnership with any other
person or is a member of any corporate or unincorporated body,
undertaking or association (other than the Subsidiary) or holds or is
liable on any share or security which is not fully paid up or which
carries any liability.
(D) No Company has any interest in or has agreed to acquire an interest in
the share capital of any other body corporate or undertaking which is
not one of the other Companies.
(E) Each Company (i) is a limited company duly incorporated under the laws
of the jurisdiction of its incorporation, (ii) possesses the capacity
to sue and be sued in its own
102
name and (iii) has the corporate power to carry on the business carried
on by it and to own the property and other assets owned by it.
4. OWNERSHIP OF FIXED ASSETS (EXCLUDING PROPERTIES)
(A) Each of the Material Fixed Assets listed in the Fixed Asset Register
(excluding the Properties) is owned both legally and beneficially by
the relevant Company or, in the case of Material Fixed Assets used in
the US Business, by a member of the Vendor's Group.
(B) The Fixed Asset Register sets out a record (complete in all material
respects) of the Material Fixed Assets used in the Transferring
Business (other than the Properties and fixed assets held pursuant to
leasing, hiring, hire purchase, credit sale or conditional sale
agreements ("LEASED ASSETS")) as at 1st December, 2001 and, since that
date, there have been no material acquisitions of fixed assets (other
than Leased Assets) used in the Transferring Business. There are no
outstanding commitments to acquire any Material Fixed Asset.
(C) All material leasing, hiring, hire purchase, credit sale or conditional
sale agreements relating to the Transferring Business and to which any
of the Companies or, in relation to the US Business, a member of the
Vendor's Group is a party are listed on the Data Room Index.
(D) With the exception of Permitted Encumbrances, there is no option, right
of pre-emption, 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 fixed assets of any of the Companies, the
US Business or otherwise comprised within the Transferring Business
(other than the Properties and any Leased Assets) and there is no
agreement or commitment to give or create any.
(E) With the exception of the IP Assets and assets which will be employed
by the Vendor or members of the Vendor's Group in the provision of
services pursuant to the Transitional Services Agreement, the assets of
the Companies, the Bedford Property, the US Business Assets and the
Monoclonal Assets comprise all the assets used by one or more of the
Companies and members of the Vendor's Group to operate the Transferring
Business as carried on at the date of this Agreement.
(F) Save for goods, services or facilities to be provided by the Vendor or
any member of the Vendor's Group pursuant to the Transitional Services
Agreement, there were (immediately prior to the execution of this
Agreement) no goods, services or facilities provided by the Vendor or
any other member of the Vendor's Group to or for the benefit of the
Transferring Business where the failure to provide such goods, services
or facilities would have a material adverse effect on the Transferring
Business.
(G) The loan between Unilever UK Central Resources Limited and the
Subsidiary partially repaid as part of the Step Two Hive-Down and all
Fixed Intra-Group Debt and Variable Intra-Group Debt were, or are, made
on an on demand basis.
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5. ACCURACY OF INFORMATION
(A) The information given in SCHEDULE 2 (Information about the Vendor),
SCHEDULE 3 (Information about the Companies), SCHEDULE 4 (Ownership of
Shares) and Parts A and B of SCHEDULE 9 (Properties) is true and
accurate.
(B) The copies of the memorandum and articles of association (or other
equivalent constitutional documents) of each Company which have been
annexed to the Disclosure Letter are complete and accurate and have
annexed to them copies of all documents required by law to be so
annexed.
(C) The statutory books (including all registers and minute books) of each
Company have been properly kept and contain a materially accurate
record of the matters which should be dealt with in those books and no
notice or allegation that any of them is incorrect or should be
rectified has been received by the Vendor or any of the Companies.
(D) All documents which should have been delivered by any of the Companies
within the last two years to the Registrar of Companies or the
equivalent thereof have been properly so delivered.
6. ACCOUNTS
(A) The Accounts of each of the Companies (other than Unipath B.V.):
(i) were prepared in accordance with accounting principles generally
accepted in the jurisdiction of incorporation of the relevant
Company at the time they were prepared and comply with
applicable local legal requirements;
(ii) show a true and fair view (in accordance with the respective
local accounting principles) of the state of affairs of the
relevant Company as at, and of the results of the business of
such Company for the financial year ended on, the Accounts Date;
and
(iii) were prepared on bases and in accordance with policies
substantially consistent with those applied by the relevant
Company in respect of the two preceding financial years.
(B) The Accounts of Unipath B.V. were prepared (i) in all material respects
in accordance with the accounting principles and practices set out in
the Unilever Accounting Manual, and (ii) on bases and in accordance
with policies substantially consistent with those applied by Unipath
B.V. in respect of the two preceding financial years. On that basis,
the Accounts of Unipath B.V. fairly state, in all material respects,
the assets and liabilities of Unipath B.V. as at the Accounts Date and
the results of its business for the year ended on the Accounts Date.
(C) The US Balance Sheet was prepared in all material respects in
accordance with the accounting principles and practices set out in the
Unilever Accounting Manual. On that
104
basis, the US Balance Sheet fairly states, in all material respects,
the assets and liabilities of the US Business as at the Accounts Date.
(D) The Management Accounts were prepared in all material respects in
accordance with the management accounting principles and practices set
out in the Unilever Accounting Manual. On that basis, the Management
Accounts fairly state, in all material respects, the total net proceeds
of sale, gross profit, market development cost and trading result of
the Transferring Business for the year ended on the Accounts Date and
for the period from 1st January, 2001 to 29th September, 2001.
(E) The Management Accounts were:
(i) extracted with due care and attention from the underlying books
of account of the Transferring Business; and
(ii) prepared on a basis substantially consistent with the respective
management accounts prepared for the Transferring Business in
respect of the two years preceding the year ended on the
Accounts Date.
(F) The October Management Accounts were prepared in good faith and with
reasonable care on a basis substantially consistent with the respective
management accounts prepared for the Transferring Business in respect
of the two years preceding the year ended on the Accounts Date and in
all material respects in accordance with the management accounting
principles and practices set out in the Unilever Accounting Manual.
(G) The accounting records of the Companies and the US Business have been
kept on a proper and consistent basis (no material change in the
methods or bases of valuation or accountancy treatment having been made
for the two years prior to the Accounts Date or since), are up-to-date
and contain all material matters required by law to be entered in them.
(H) Each of the line items shown in columns 3 (FY00) and 4 (YTD FY01) of
the table on page 49 of the PwC Due Diligence Report from "Trading
Result before ei's" to "Total Adjustments" (inclusive) represents the
complete and correct extraction for that line item from the management
accounts of the Transferring Business for the year to 31st December,
2000 and the six months to 30th June, 2001.
(I) Without regard to the reasonableness or completeness of such items as
adjustments to EBIT (earnings before interest and tax), each of the
line items shown in columns 3 (Actual FY00) and 4 (Actual Jun-01) of
the "Quality of Earnings" table on page 48 of the PwC Due Diligence
Report from the items "Persona provision" to "Bonus provision"
(inclusive, but excluding, for the avoidance of doubt, "Proforma
pension adjustment" and "Proforma research cost adjustment") has been
correctly extracted from the management accounts (or supporting
schedules of the management accounts) of the Transferring Business for
the year to 31st December, 2000 and the six months to 30th June, 2001.
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7. EVENTS SINCE 31ST DECEMBER, 2000
Since 31st December, 2000:-
(i) there has been no material adverse change in the overall
financial or trading position of either the Transferring
Business or the US Business;
(ii) the Transferring Business has been carried on, in all material
respects, in the ordinary and usual course so as to maintain it
as a going concern and in substantially the same manner
(including nature and scope) as in the year to 31st December,
2000 including managing its working capital in all material
respects consistently with past practice and not entering into
material commitments or transactions other than in the ordinary
course of business;
(iii) no part of the Transferring Business has been materially and
adversely affected by the loss of any contract, customer or
source of supply;
(iv) no securities (within the meaning of Part VI of the Taxes Act)
issued by any Company and remaining in issue at the date of this
Agreement have been issued in such circumstances that any
interest or other distribution out of assets in respect thereof
falls to be treated as a distribution under sections 209(2)(d),
(da) or (e) Taxes Act, nor has any of the Companies agreed to
issue securities (within that meaning) in such circumstances;
(v) there has been no material change in the policy (or application
of any policy) regarding the collection or settlement of
receivables or payables in respect of the US Business;
(vi) there has been no sale by or on behalf of the Transferring
Business of any fixed asset with a market value in excess of
(pound)10,000 individually such that the aggregate of the market
value of all such fixed assets sold exceeds (pound)250,000;
(vii) there has been no payment by or on behalf of the Transferring
Business in settlement of any third party claim or litigation of
more than (pound)150,000 in aggregate;
(viii) no agreement has been entered into by or on behalf of the
Transferring Business to do anything referred to in
SUB-PARAGRAPH (vi) or (vii); and
(ix) no Company (or any relevant member of the Vendor's Group in
relation to the US Business) has entered into or agreed to enter
into any capital commitment in excess of (pound)50,000
individually such that the aggregate of all such capital
commitments exceeds (pound)250,000.
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8. CONTRACTS AND COMMITMENTS
(A) Each of the Material Contracts falling within limb (a) of the
definition of such contracts as set out in SCHEDULE 1 (Interpretation)
is either listed in the Data Room Index or a complete copy thereof is
contained in the Disclosure Bundle.
(B) (i) No Company nor, in relation to the US Business, any member
of the Vendor's Group is in breach of a Material Contract
where such breach is likely to give rise to a liability in
excess of (pound)250,000 or would otherwise have a material
adverse effect on the Transferring Business;
(ii) the Vendor is not aware of any breach of a Material Contract by
another party to such contract; and
(iii) other than in relation to breach (where SUB-PARAGRAPH (i) or
(ii) applies) the Vendor is not aware of any invalidity or
grounds for determination, rescission, avoidance or repudiation
of any Material Contract except for any Contract relating to IT
Systems.
(C) So far as it is material, no Company nor, in relation to the US
Business, any member of the Vendor's Group has since 31st December,
2000 manufactured, developed, sold or provided any product (i) which
does not comply with all applicable laws and regulations or (ii) which
is defective or dangerous or not in accordance with any representations
or warranties (express or implied) given in respect of it.
(D) No Company nor any member of the Vendor's Group which is engaged in
carrying on the Transferring Business is a party to any agreement which
materially restricts its freedom to carry on the Transferring Business
in any part of the world in such manner as it thinks fit.
(E) Save as set out in the Disclosure Letter and specifically referenced to
this Warranty, no consent or agreement of any third party is required:
(i) to effect the transfer of any US Business Asset (other than the
benefit of a US Contract), any Business IPR or any domain name
listed in SCHEDULE 14 (Domain Names); or
(ii) to enable the relevant Designated Purchaser to perform any US
Contract or IP Licence (excluding software licences) after
Completion or to enable the Vendor or any member of the Vendor's
Group to transfer, or to procure the transfer of, the benefit or
burden of any US Contract or IP Licence (excluding software
licences) to the relevant Designated Purchaser,
in either case, in accordance with the terms of this Agreement.
(F) The execution and delivery of this Agreement and the other Specified
Agreements and the performance by each relevant member of the Vendor's
Group of its obligations hereunder and thereunder will not relieve any
other party to a Material Contract with a
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Company of its obligations or enable the party to vary or terminate its
rights or obligations under that Material Contract.
(G) No member of the Vendor's Group is in breach of any US Contract
(excluding any US Contract relating to IT Systems).
9. POWERS OF ATTORNEY
No Company nor any member of the Vendor's Group (in relation to the
Transferring Business) has given any power of attorney or other
authority (express, implied or ostensible) which is still outstanding
or effective to any person to enter into any contract or commitment on
its behalf other than any such other authority (not being a written
power of attorney) to its Employees to enter into routine trading
contracts in the normal course of their duties.
10. GRANTS AND ALLOWANCES
Details of all current governmental grants, allowances, aids and
subsidies paid or made available in relation to the Transferring
Business and of all outstanding claims for any such grant, allowance,
aid or subsidy from any supranational, national or local authority or
government agency are set out in the Disclosure Letter.
11. LICENCES
All governmental, statutory or regulatory licences, consents and other
permissions and approvals required for or in connection with the
carrying on of the Transferring Business as carried on at the date of
this Agreement the absence of which would have a material adverse
effect on the Transferring Business are held by the Companies or, in
relation to the US Business, by the US Business Seller and, so far as
the Vendor is aware, there is no circumstance which indicates that any
such licence, consent, permission or approval is likely to be revoked,
suspended, modified or not renewed.
12. BANK ACCOUNTS AND BORROWINGS
(A) Full details of all bank accounts maintained or used by each Company
(including, in each case and, without limitation, the name and address
of the bank with whom the account is kept and the number and nature of
the account) and statements on the accounts maintained by the Companies
as at the close of business on 17th December, 2001 are included at tab
12 of the Disclosure Bundle. Since the date of each statement no
payment out of any of the accounts has been made, except for routine
payments in the ordinary course of business.
(B) Full details of all overdraft, loan and other financial facilities
available to any of the Companies or, in relation to the US Business,
to any member of the Vendor's Group (other than overdraft, loan and
other financial facilities made available by members of the Vendor's
Group) and the amounts outstanding under them as at the close of
business on 17th December, 2001 are set out in or attached to the
Disclosure Letter. Since the close of business on 17th December, 2001
and other than in the ordinary
108
course of business there has been no material increase in the amounts
outstanding under such overdraft, loan and other financial facilities.
(C) Except for the borrowings referred to in SUB-PARAGRAPHS (A) and/or (B)
and borrowings from members of the Vendor's Group, no Company nor, in
relation to the US Business, any member of the Vendor's Group has
outstanding any loan capital or incurred or agreed to incur any
borrowing which it has not repaid or satisfied, or has lent or agreed
to lend any money which has not been repaid to it or is a party to or
has any obligation, under:-
(i) any loan agreement, debenture, acceptance credit facility, bill
of exchange, promissory note, finance lease, debt or inventory
financing, discounting or factoring arrangement or sale and
lease back arrangement; or
(ii) any other arrangement the purpose of which is to raise money or
provide finance or credit.
(D) No event which is:-
(i) an event of default under; or
(ii) a material breach by any of the Companies or, in relation to the
US Business, by any member of the Vendor's Group of,
any of the terms of any loan capital, borrowing, debenture or financial
facility of any of the Companies or, in relation to the US Business,
any member of the Vendor's Group has occurred and is continuing.
13. INSOLVENCY
(A) No order has been made and no resolution has been passed for the
winding up of any Company or any relevant member of the Vendor's Group
or for a provisional liquidator to be appointed in respect of any
Company or any relevant member of the Vendor's Group and no petition
has been presented and no meeting has been convened for the purpose of
winding up any Company or any relevant member of the Vendor's Group.
(B) No administration order has been made and no petition for such an
administration order has been presented in respect of any Company or
any relevant member of the Vendor's Group.
(C) No receiver (which expression shall include an administrative receiver)
has been appointed in respect of any Company or any relevant member of
the Vendor's Group or in respect of any part of the assets or
undertaking of any Company or any relevant member of the Vendor's
Group.
(D) No Company nor any relevant member of the Vendor's Group is insolvent
or unable to pay its debts within the meaning of section 123 of the
Insolvency Act 1986 or has stopped paying its debts as they fall due.
109
(E) Neither in respect of any of the Companies nor in respect of any relevant
member of the Vendor's Group has:
(i) any voluntary arrangement been proposed or implemented under
section 1 of the Insolvency Act 1986; or
(ii) any scheme of arrangement under section 425 of the Companies Act
1985 nor any scheme for the benefit of creditors generally been
proposed or implemented, whether or not under the protection of
the Court and whether or not involving a reorganisation or a
rescheduling of debt.
(F) No event analogous to any of the foregoing has occurred in relation to
any of the Companies or any relevant member of the Vendor's Group
incorporated outside England and Wales.
(G) No unsatisfied judgment, judicial order or judicial award is
outstanding against any Company or any relevant member of the Vendor's
Group and no written demand under section 123(1)(a) of the Insolvency
Act 1986 has been made against any Company or any relevant member of
the Vendor's Group, no distress or execution has been levied on any
asset of any Company or any relevant member of the Vendor's Group and
no event analogous to such events has occurred in relation to any of
the Companies incorporated outside England and Wales.
For the purposes of this Warranty 13, a "RELEVANT MEMBER OF THE
VENDOR'S GROUP" is a member of the Vendor's Group which is to transfer
Shares, the Bedford Property, US Business Assets, IP Assets or
Monoclonal Assets pursuant to this Agreement.
14. LITIGATION
(A) No Company nor any member of the Vendor's Group (in relation to the
Transferring Business) is engaged in any litigation, arbitration or
administrative or criminal proceedings ("LITIGATION"), whether as
plaintiff, defendant or otherwise.
(B) No Litigation by or against any of the Companies or any member of the
Vendor's Group (in relation to the Transferring Business) is, so far as
the Vendor is aware, pending, threatened or expected and, so far as the
Vendor is aware, there is no fact or circumstance likely to give rise
to any such Litigation, in each case where, if such Litigation were
determined adversely to that Company or that member of the Vendor's
Group, such determination would have a material adverse effect on the
Transferring Business.
15. DELINQUENT AND WRONGFUL ACTS
(A) No Company nor any member of the Vendor's Group (in relation to the
Transferring Business) nor any of their respective officers, agents or
employees (in the course of their duties) has done or omitted to do
anything which is a contravention of any statute, law or regulation in
any relevant jurisdiction which is likely to give rise to any fine,
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penalty or other liability or sanction on any Company or any such
member of the Vendor's Group.
(B) No notice has been received by any Company (or any member of the
Vendor's Group in relation to the Transferring Business), nor is any
Company (or any member of the Vendor's Group in relation to the
Transferring Business) otherwise aware, that an investigation, inquiry
or enforcement process is being conducted or undertaken by any
governmental, administrative, regulatory or other body in respect of
the Transferring Business and, so far as the Vendor is aware, there are
no circumstances which are likely to give rise to any such
investigation, inquiry or enforcement process.
(C) Except for (i) the Reorganisation, (ii) Permitted Encumbrances and
(iii) equipment or real property leases entered into by any of the
Companies or, in respect of the Transferring Business, any member of
the Vendor's Group, no Company nor any such member of the Vendor's
Group has been party to a transaction pursuant to, or as a result of,
which an asset owned, purportedly owned or otherwise held by any
Company or comprised within the Transferring Business or any of the
Shares or shares in the Subsidiary is liable pursuant to the law or
regulation of any relevant jurisdiction to be transferred or
re-transferred to another person (or which gives rise to a right of
compensation or other payment in favour of another person in lieu of
such transfer or re-transfer) under the law or regulation of any
relevant jurisdiction where such transfer or re-transfer (or right of
compensation or other payment in lieu of such transfer or re-transfer)
would have a material adverse effect on the Transferring Business.
16. PLANT AND MACHINERY IN WORKING ORDER
Each item of the Transferring Business Plant and Machinery in respect
of which, if such item were to fail to function properly, such failure
would have a material adverse effect on the Transferring Business:
(i) is in reasonable repair and condition;
(ii) is in satisfactory working order; and
(iii) has been properly serviced and maintained where applicable,
in each case, subject to fair wear and tear and age.
17. BOOK DEBTS
(A) The Vendor has no reason to believe that any debt in excess of
(pound)250,000 owing to any Company or, in relation to the US Business,
to any member of the Vendor's Group at the date of this Agreement
(other than the debts included in the Accounts) will not in the
ordinary course of collection realise its nominal amount plus any
accrued interest.
(B) Each debt in excess of (pound)250,000 included in the Accounts has
realised or, to the extent not realised at the Completion Date, the
Vendor has no reason to believe that any such debt will not realise, in
the ordinary course of collection, its nominal amount plus any
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accrued interest less any provisions for bad and doubtful debts
included in the Accounts.
18. DIVIDENDS
Except for the Reorganisation, all dividends (including, without
limitation, dividends satisfied in kind or of or including a non-cash
asset) declared, made or paid by each Company since the date falling
five years before the date of this Agreement have been declared, made
and paid in accordance with law and its articles of association (or
equivalent documents), and all other distributions declared, made or
paid by each Company in such period, the declaration, making or payment
of which other than in compliance with law or the relevant Company's
articles of association (or equivalent documents) would have a material
adverse effect on the Transferring Business, have been declared, made
and paid in accordance with law and its articles of association (or
equivalent documents).
19. OWNERSHIP OF PROPERTIES
(A) The Properties are the only material Properties owned, used or occupied
in relation to the Transferring Business or in which the Companies or,
in relation to the US Business, members of the Vendor's Group have any
estate, interest, right or liability.
(B) In relation to each of the Properties:-
(i) the company named in SCHEDULE 9 (Properties) as its owner is
solely legally and beneficially entitled to the Property and has
good and marketable title to it;
(ii) the company named in SCHEDULE 9 (Properties) as its owner has
under its control all of the title deeds necessary to prove its
title to the Property;
(iii) the company named in SCHEDULE 9 (Properties) as its owner holds
the Property subject to the Lettings but is otherwise in
physical possession and exclusive occupation of the Property;
(iv) there are no liens, mortgages, charges, encumbrances or third
party rights of any kind whatsoever affecting the Property;
(v) there are no agreements for sale, agreements for lease, estate
contracts, options or rights of pre-emption affecting the
Property;
(vi) there is no outstanding written notice alleging breach of any
covenants, restrictions and other encumbrances affecting the
Property;
(vii) the Property is not subject to the payment of any outgoings
other than rates, water rates (and in the case of leasehold the
rents and other sums reserved by the Lease) all of which due to
date have been paid;
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(viii) there is no action, claim, proceeding, demand or dispute in
respect of the Property or its use;
(ix) so far as the Vendor is aware, the current use of the Property
is the permitted or lawful use under town and country planning,
zoning or equivalent legislation and no material breach of such
legislation has been committed nor has any notice of breach of
such legislation been received which remains undischarged;
(x) the company named in SCHEDULE 9 (Properties) as its owner has
complied in all material respects with its repairing obligations
under the Leases.
(C) In relation to each of the Properties referred to in SCHEDULE 9
(Properties) which is leasehold:
(i) the Property is held under the terms of the lease briefly
referred to in SCHEDULE 9 (Properties) and no licences or
collateral assurances, undertakings or concessions have been
granted outside the usual course of business;
(ii) the owner referred to in SCHEDULE 9 (Properties) has not
defaulted in the payment of rent due and payable under the terms
of the Lease.
(D) The information provided by the Vendor in replies to enquiries relating
to the Bedford Property (copies of which are annexed to the Disclosure
Letter) is true and accurate in all material respects.
20. DATA PROTECTION
Each Company and, in relation to the US Business, each relevant member
of the Vendor's Group is in all material respects in compliance with
all data protection and all other requirements relating to privacy or
to protection, use or processing of personal data which are applicable
to it including, without limitation, the Data Protection Acts 1984 and
1998.
21. INTELLECTUAL PROPERTY AND INFORMATION TECHNOLOGY
(A) Details of all registered Company IPR (and all applications for
registration comprising part of Company IPR) and all registered
Business IPR (and all applications for registration comprising part of
Business IPR) are set out in the Disclosure Letter and such
Intellectual Property is owned legally and beneficially and exclusively
by the Company or member of the Vendor's Group identified as owning it
in the Disclosure Letter and the Company IPR is free of all charges,
options, liens, equities and encumbrances, save for any agreement
disclosed against Warranty 21(C) and any non-exclusive, non-material IP
Licences granted by the Companies in the ordinary course of the
Transferring Business. All material unregistered Business IPR and
material unregistered Company IPR is owned legally and beneficially and
exclusively by a member of the Vendor's Group or a Company (as
appropriate).
113
(B) All renewal fees and other official registry fees due and payable at
the date of Completion in respect of the rights referred to in the
first sentence of SUB-PARAGRAPH (A) have been paid. All steps
reasonably required to be taken before Completion for the prosecution
and maintenance of patents and patent applications of such Company IPR
and Business IPR have been taken.
(C) Each of the material licences and other material agreements relating to
Intellectual Property or know-how (excluding computer software) granted
to or by any Company or to or by any member of the Vendor's Group in
relation to the Transferring Business is either listed in the Data Room
Index (with a complete copy contained in the Data Room) or a complete
copy is contained in the Disclosure Bundle.
(D) None of the Companies nor any member of the Vendor's Group nor, so far
as the Vendor is aware, any other party is in breach of any licence or
other agreement relating to Intellectual Property or know-how
(excluding computer software) granted to or by any Company, or to or by
any member of the Vendor's Group in relation to the Transferring
Business.
(E) So far as the Vendor is aware, there is no unauthorised use or
infringement by any person of the Company IPR, the Business IPR, or
know-how proprietary to a member of the Vendor's Group which is used in
the Transferring Business or know-how proprietary to any of the
Companies, where the value of the claim in respect of such infringement
or unauthorised use is material in monetary terms (having regard to the
size of the Transferring Business) or where such infringement or
unauthorised use is, if continued, likely to have a material adverse
effect on the Transferring Business.
(F) So far as the Vendor is aware, the operations of the Transferring
Business do not infringe or make unauthorised use of any Intellectual
Property or know-how of any third party.
(G) No Company has disclosed any of its proprietary know-how (which at the
time of disclosure was confidential and material to the Transferring
Business) to a third party except under an obligation of
confidentiality and no member of the Vendor's Group has disclosed any
of its proprietary know-how relating to the Transferring Business
(which at the time of disclosure was confidential and material to the
Transferring Business) to a third party except under an obligation of
confidentiality.
(H) No Company nor any member of the Vendor's Group has received written
notice of any, and so far as the Vendor is aware there are no,
oppositions or actions in existence or threatened for cancellation,
revocation or challenging the validity or title in relation to any of
the registered Intellectual Property referred to in the first sentence
of SUB-PARAGRAPH (A).
(I) The Intellectual Property referred to in the first sentence of
SUB-PARAGRAPH (A) is subsisting and has not lapsed or been cancelled.
(J) The Business IPR, the Company IPR and the Shared IPR is all the
Intellectual Property currently owned by members of the Vendor's Group:
(i) which has been used
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commercially by or for the Transferring Business; or (ii) which is
material to any research or development program of the Transferring
Business, in each case, at or during the 36 months prior to the date of
this Agreement
(K) There are no orders, decrees, injunctions, judgments or other decisions
by any court, arbitration, administrative or other tribunal of
competent jurisdiction delivered prior to the date of this Agreement
and still in force, restricting the rights of the Companies or any
member of the Vendor's Group (as appropriate) in respect of the Company
IPR or the Business IPR.
(L) So far as the Vendor is aware, all know-how and Intellectual Property
arising from the research and development carried on at the Bedford
Property in the 36 months prior to Completion is owned by the Companies
except where otherwise provided for in agreements which are included in
the Data Room.
(M) The Business IPR includes (i) all trade marks owned by a member of the
Vendor's Group which are used in the Transferring Business (excluding
the Unilever Marks); and (ii) all Intellectual Property owned by a
member of the Vendor's Group which is material to any products sold by
the Transferring Business at the date of this Agreement .
(N) The Monoclonal Assets set out in Attachment 7 are all the antibody
clones and other cell lines owned by a Company or owned by or licensed
to any member of the Vendor's Group and (i) used commercially by or for
the Transferring Business, or (ii) material to any research or
development program material to the Transferring Business, in each
case, at or during the 36 months prior to the date of this Agreement.
(O) There have been no downtimes, equipment breakdowns or malfunctions,
data loss or failures or defects in the IT Systems in the 12 months
prior to the date of this Agreement which have had a material adverse
effect upon the business of any Company or on the US Business.
(P) Part 21 (P) of the Disclosure Letter contains a list of all the
material licences to the Vendor's Group of computer software which
relate to the Transferring Business, and correctly identifies those:
(i) which will not be assigned to the Purchaser at Completion; and (ii)
which will be assigned to the Purchaser but require a third party
consent to such assignment.
(Q) None of the Companies nor so far as the Vendor is aware any other party
is in breach of any agreement relating to the IT Systems which is
material to the Transferring Business and to which a Company is a party
and no such agreement is capable of termination (other than by the
relevant Company) as a result of completion of the transaction
contemplated by the Agreement. No member of the Vendor's Group nor, so
far as the Vendor is aware, any other party, is in breach of any
agreement relating to the IT Systems and to which a member of the
Vendor's Group is a party and no such agreement which is material to
the Transferring Business is capable of termination (other than by the
relevant member of the Vendor's Group) as a result of completion of the
transaction contemplated by the Agreement (excluding any agreement set
out in paragraph 21(S) of the Disclosure Letter).
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(R) The Domain Names comprise all domain names: (i) used in the
Transferring Business; and (ii) the rights to which are held by any
member of the Vendor's Group and incorporating any trade mark (other
than the Unilever Marks) used in the Transferring Business. All fees
and necessary administrative steps required before Completion to
maintain such Domain Names have been paid or taken.
(S) Part 21 (S) of the Disclosure Letter contains a list of assets and
agreements (excluding licences of computer software) forming part of
the IT Systems which are owned or held by a member of the Vendor's
Group and which will not be sold or assigned (as appropriate) to the
Purchaser.
(T) The cash receipts (gross of any amounts due to Tax, including, without
limitation, any withholding tax) from the licensing of Business IPR
pursuant to the IP Licences listed in ATTACHMENT 15 for the 11 month
period to 1st December, 2001 is no less than the amount which is
(pound)50,000 less than (pound)5,170,000 and such amount represents the
full amount of the income received by the Companies or any member of
the Vendor's Group pursuant to those licences of Business IPR for such
period.
In this paragraph 21, "IT SYSTEMS" means the systems comprising all
software, hardware, communications and network equipment and all
associated items used by (i) any Company or (ii) any member of the
Vendor's Group in relation to the Transferring Business.
22. COMPETITION AND TRADE REGULATION LAW
(A) So far as the Vendor is aware, no Company nor any member of the
Vendor's Group (in relation to the Transferring 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 it carries on business or has any assets or sales
where such infringement is likely to cause a material loss or liability
in respect of the Transferring Business;
(B) No Company nor any member of the Vendor's Group (in relation to the
Transferring 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 or has any assets or
sales (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 cause
a material loss in respect of the Transferring Business.
(C) No Company nor any member of the Vendor's Group (in relation to the
Transferring Business) is or has been a party to any agreement or
arrangement or been involved in any business practice in respect of
which:
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(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 or any national competition
authority.
(D) No Company nor any member of the Vendor's Group (in relation to the
Transferring Business) is or has been within the five years preceding
the date of this Agreement party to any agreement, arrangement or
concerted practice, or involved in any business practice or conduct, in
respect of which early guidance, guidance, a decision, notice or
direction has been sought, given or made pursuant to any competition or
similar legislation in any jurisdiction in which the Transferring
Business is carried on.
23. INSURANCES
Summary details of the insurance policies currently maintained by any
of the Companies and/or any member of the Vendor's Group in respect of
the Transferring Business are set out in the Disclosure Letter and, so
far as the Vendor is aware, all such policies are in full force and
effect, are not void or voidable (or subject to repudiation or
rescission) and no claims are outstanding under them in respect of the
Transferring Business.
24. EMPLOYMENT
(A) A list as at 30th November, 2001 of the names, jobs, grades, salaries
and other material emoluments of every Employee (with the exception of
Senior Employees) and the date of commencement of employment of every
such Employee is set out at tab 17 of the Disclosure Bundle and neither
the Companies nor any member of the Vendor's Group have promised,
proposed, assured or committed (in writing) to any Employee any
material change in such terms of employment or working conditions or
regarding the continuance, introduction, increase or improvement of any
benefit or discretionary practice and no negotiations have commenced in
respect of any such matter.
(B) A list as at the date of this Agreement of the names, jobs and details
of the terms of employment (including salary and other material
emoluments and work level) of every Senior Employee and the date of
commencement of employment of every Senior Employee is set out at tab
17 of the Disclosure Bundle and neither the Companies nor any member of
the Vendor's Group have promised, proposed, assured or committed (in
writing) to any Senior Employee any material change in such terms of
employment or working conditions or regarding the continuance,
introduction, increase or improvement of any benefit or discretionary
practice and no negotiations have commenced in respect of any such
matter.
(C) With the exception of the Seconded Employees, the Employees appearing
on the list referred to in SUB-PARAGRAPHS (A) and (B) were all employed
in the Transferring Business on 30th November, 2001, there were no
other persons so employed.
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(D) Short details of the terms of any consultancy agreements between each
Company and any individual (whether or not an Employee) which have an
outstanding term of six months or more are contained in the Disclosure
Letter.
(E) So far as the Vendor is aware, no Senior Employee has given written
notice terminating his contract of employment or is under notice of
dismissal and no amount due to or in respect of any such Senior
Employee is in arrears and unpaid other than his salary for the month
current at the date of this Agreement.
(F) There is no material dispute and, during the period of two years prior
to the date of this Agreement, there have been no material disputes,
between any of the Companies or any member of the Vendor's Group and
any trade union or other body representing the Employees or a
substantial number of them existing, pending or threatened in writing.
(G) There is no collective bargaining agreement (whether binding or not) to
which any of the Companies or any member of the Vendor's Group is a
party in relation to the Employees.
(H) No material claims have been made during the period of two years prior
to the date of this Agreement against any of the Companies or any
member of the Vendor's Group by or on behalf of any Employee or any
former employee of any of the Companies or the US Business, and the
Vendor is not aware of any circumstances as a result of which such a
material claim would be made.
(I) The Data Room contains details of all share schemes (either contractual
or discretionary) in which any of the Employees are entitled to
participate.
(J) All contractual terms and conditions and material, non-contractual
policies, discretions and benefits applicable to the Employees have
been disclosed.
(K) The Vendor has complied with all obligations to inform and consult with
or to notify any person or the Employees (to the extent required by
local law) about the matters contemplated by this Agreement, so far as
it relates to any Employee, and within the relevant time limits imposed
by local law.
(L) Since 30th November, 2001 there has not been any change in the number
of employees employed at each work level by the Companies or a member
of the Vendor's Group and engaged in the Transferring Business (taken
as a whole) such as would have a material adverse effect on the ability
of the Purchaser and the other members of the Purchaser's Group to
operate the Transferring Business as carried on at the date of this
Agreement.
25. THE ENVIRONMENT
(A) In this paragraph 25:
"ENVIRONMENT" means all or any part of the air (including, without
limitation, the air within buildings and the air
within other
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natural or man-made structures above or below
ground), water and land, and any living organisms or
systems supported by those media;
"ENVIRONMENTAL LAWS" means all applicable statutes and subordinate
legislation and other national, federal, state and
local laws, common laws and civil codes to the extent
that they relate to Environmental Matters and are in
force and binding on the Companies or in respect of
the US Business at or before the date of this
Agreement;
"ENVIRONMENTAL MATTERS" means all or any of the following:-
(i) the release, spillage, deposit, escape,
discharge, leak, emission, leaching, migration
or presence of Hazardous Substances; or
(ii) the creation of or exposure to noise,
vibration, odour, radiation or common law or
statutory nuisance; or
(iii) worker health and safety; or
(iv) other matters relating to the protection of
the Environment which arise out of the
generation, manufacturing, storage,
processing, treatment, keeping, handling, use,
possession, supply, distribution, receipt,
sale, purchase, import, export, removal,
disposal or transportation of any Hazardous
Substances;
"ENVIRONMENTAL PERMITS" means any permit, licence, consent, authorisation,
exemption or other approval required by Environmental
Laws in relation to the operation as at the date of
this Agreement of the Companies or the US Business;
"HAZARDOUS SUBSTANCES" means anything which alone or in combination with
other things is capable of causing harm to man or the
Environment; and
"RELEVANT PERIOD" means the period commencing 36 months before the date
of this Agreement.
(B) The Companies and the US Business have all material Environmental
Permits. The Companies comply, and the US Business is operated in
compliance, in all material respects, with those Environmental Permits.
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(C) The Companies have complied, and the US Business has been operated in
compliance, in all material respects, for the duration of the Relevant
Period, with Environmental Laws.
(D) There are no current or, so far as the Vendor is aware, pending or
threatened, formal claims, investigations, litigation or other such
proceedings by any relevant authority or other third party against or
involving any Company or the US Business which relate to Environmental
Matters.
(E) So far as the Vendor is aware, the execution or performance of this
Agreement and all other documents contemplated herein will not, and
change in control of the Companies and the US Business will not, result
in any Environmental Permits being revoked, suspended, cancelled,
varied or renewed.
(F) There have been no spills, leakages, escapes, or unlawful discharges or
emissions of Hazardous Substances by the Companies or the US Business
Seller at, in, under or from the Properties or any property formerly
owned by (i) the Companies, or (ii) the US Business Seller and used in
the conduct or operation of the US Business (collectively referred to
as "RELEVANT RELEASES"), which Relevant Releases are likely to result
in a material liability under Environmental Laws.
26. THE ACCOUNTS AND TAX
(A) No Company has any outstanding liability for Taxation (whether actual
or contingent) assessable or payable by reference to profits, gains,
income or distributions earned, received or paid or arising or deemed
to arise:
(i) on or at any time prior to the date of this Agreement; or
(ii) in respect of any period starting before the date of this
Agreement,
that was shown to be due and payable on returns filed prior to the
date of this Agreement.
(B) The amount of the provision for deferred Taxation in respect of the
Companies contained in the Accounts was, at the Accounts Date, adequate
and in accordance with accountancy practices generally accepted in the
country in which the relevant Company was incorporated and commonly
adopted by companies carrying on businesses similar to the business
carried on by that Company.
(C) If all facts and circumstances which are now known to each Company or
the Vendor had been known at the time the Accounts were drawn up, the
provisions for deferred Taxation that would be contained in such
Accounts would be no greater than the provision which is so contained.
27. TAX EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:
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(i) no Company has declared, made or paid any Distribution (as
defined in the Tax Covenant);
(ii) no period of any Company by reference to which Tax is calculated
has ended;
(iii) there has been no disposal of any asset by any Company
(including trading stock) or supply of any service or business
facility of any kind (including a loan of money or the letting,
hiring or licensing of any property whether tangible or
intangible) in circumstances where the consideration actually
received or receivable for such disposal or supply was
materially different to the consideration which could be deemed
to have been received for Tax purposes;
(iv) no event has occurred which will give rise to a Tax liability on
any of the Companies calculated by reference to deemed (as
opposed to actual) income, profits or gains or which will result
in any of the Companies becoming liable to pay or bear Tax
liability directly or primarily chargeable against or
attributable to another person, firm or company other than any
of the Companies;
(v) no disposal has taken place or other event occurred which will
or may have the effect of crystallising a liability to Taxation
which should have been included in the provisions for deferred
Taxation contained in the Accounts if such disposal or other
event had been planned or predicted at the Accounts Date;
(vi) no Company has paid any interest or penalty in connection with
any Tax, has otherwise paid any Tax after its due date for
payment or owes any Tax the due date for payment of which has
passed or will arise in the thirty days after the date of this
Agreement.
28. TAX RETURNS, DISPUTES, RECORDS AND CLAIMS, ETC.
(A) Each Company has duly and punctually made or caused to be made all
proper returns required to be made prior to the date of this Agreement,
and has duly and punctually supplied or caused to be supplied all
material information (including notices, statements, reports,
computations, accounts and assessments) required to be supplied prior
to the date of this Agreement, to any relevant Tax Authority within the
last seven years and has duly and punctually made all claims,
disclaimers and elections which have been assumed to have been made for
the purposes of the Accounts.
(B) There is no material dispute or disagreement outstanding nor is any
contemplated at the date of this Agreement between any Company and any
Tax Authority regarding any matter falling within PARAGRAPH 28(A) above
or liability or potential liability to any Tax recoverable from each
Company or regarding the availability of any relief from Tax to each
Company.
(C) The amount of Tax chargeable on each Company during any accounting
period ending on or within six years before the date of this Agreement
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 or the Customs
121
and Excise and no Company has asked for any extensions of time for the
filing of any tax returns or other documents relating to Tax.
(D) Each Company maintains complete and up to date information and records
of all transactions and activities in which it has been involved up to
and including the date of this Agreement and of its Tax affairs up to
and including the date of this Agreement which will be relevant for
calculating any Tax liability of that Company:
(i) for the first accounting period ending after Completion; and
(ii) as required by law.
(E) No Company has within the past six years paid or become liable to pay,
nor, so far as the Vendor is aware are there any circumstances by
reason of which it is likely to become liable to pay any interest,
penalty, surcharge or fine relating to Tax.
(F) No Company has within the past twelve months been subject to or is
currently subject to any non-routine investigation or audit by any Tax
or excise authority, and the Vendor is not aware of any such
non-routine investigation or audit planned for the next twelve months.
(G) The agreement dated 28th May, 1999 between, amongst others, the United
Kingdom Inland Revenue, Unilever UK Central Resources Limited, Unipath
Limited and Unipath Management Limited is the only agreement entered
into by any of the Companies pursuant to Section 36 Finance Act 1998.
29. STAMP DUTY AND STAMP DUTY RESERVE TAX
(A) All documents which are required to be stamped and by virtue of which
any Company has any right have been duly stamped.
(B) Since the Accounts Date no Company has incurred any liability to United
Kingdom stamp duty reserve tax.
30. VALUE ADDED TAX
(A) Each Company is registered for the purposes of VAT and is not a member
of a group of companies for VAT purposes.
(B) Each Company has complied in all material respects with its obligations
under any Tax legislation relating to VAT.
(C) No Company owns any assets to which the provisions of Part XV Value
Added Tax Regulations 1995 (the Capital Goods Scheme) apply.
(D) No Company nor any relevant associate of that Company (within the
meaning of paragraph 3(7) of Schedule 10 to VATA 1994) has been a party
to any arrangement
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relating to an election in accordance with paragraphs 2 and 3 of
Schedule 10 to VATA 1994.
(E) No act or transaction has been effected in consequence of which any
Company is or may be held liable for any VAT under section 47, section
48 or section 55 VATA 1994 (agents etc., tax representatives and
customer accounting on supplies of gold) or section 29 VATA 1994
(self-billing) and no direction affecting any of the Companies has been
given under paragraph 2 of Schedule 6 to VATA 1994.
(F) No Company is or was partially exempt in its current or preceding VAT
year and so far as the Vendor is aware there are no circumstances by
reason of which any Company might not be entitled to credit for all VAT
chargeable on supplies received and imports and acquisitions made (or
agreed or deemed to be received or made) by it since the beginning of
its earliest VAT year to include a period since the Accounts Date and
so far as the Vendor is aware there are no circumstances by reason of
which either regulation 107 or 108 Value Added Tax Regulations 1995
might apply (or have since the Accounts Date) applied to any Company.
(G) No direction has been or could have been made to any Company under
paragraph 1 of Schedule 6 or paragraph 1 of Schedule 7 to VATA 1994.
(H) No Company has at any time been required to give security under
paragraph 4 of Schedule 11 to VATA 1994.
(I) The Disclosure Letter contains full particulars of all claims which
have been or could be made by a Company under section 78 or section 79
VATA 1994. The Vendor is not aware of any circumstances by reason of
which an assessment under section 78A VATA 1994 has been or could be
made on a Company.
(J) The Disclosure Letter contains full particulars of all claims which
have been made under section 36 VATA 1994 and the Vendor is not aware
of any existing circumstances by virtue of which any refund of VAT
obtained or claimed may be required to be repaid. The Vendor is not
aware of any circumstances by virtue of which there could be a clawback
of input tax from any Company under section 36(4A) VATA 1994.
31. DUTIES ETC.
All VAT, import duty and other Taxes or charges payable to any Tax
Authority (including, but without limitation, to H.M. Customs and
Excise) upon the importation of goods and all excise duties payable to
any Tax Authority (including, but without limitation, to H.M. Customs
and Excise) in respect of any assets (including trading stock) imported
owned or used by each Company have been paid in full.
32. DEDUCTIONS AND WITHHOLDINGS
During the last six years, each Company has made all deductions
(including amounts required to be withheld) in respect, or on account,
of any Tax from any payments made by it which it is obliged by law or
entitled to make and has accounted in full to the
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appropriate Tax Authority for all amounts in respect of Taxation (other
than amounts which have not yet become due to be paid) so deducted or
withheld.
33. RESIDENCE
Each Company is solely resident for Tax purposes in the jurisdiction or
jurisdictions specified in relation to it in SCHEDULE 3 (Information
about the Companies) and has not since incorporation been resident in
any other jurisdiction for such purposes. The US Business Seller is
solely resident for tax purposes in the United States and has not since
incorporation been resident in any other jurisdiction for such
purposes.
34. TAX ON DISPOSAL OF ASSETS OR DEBTS
(A) In respect of a disposal by any of the Companies of an asset which it
owns at the date of this Agreement:-
(i) for a consideration equal to the value attributable to that
asset in preparing the Accounts (if it was owned by that Company
on the Accounts Date) the Taxation liability of the relevant
Company thereby incurred will not exceed the amount taken into
account in respect of that asset in computing the maximum
liability for deferred Taxation as stated in the Accounts; and
(ii) for a consideration equal to that for which the asset was
acquired (if it was acquired after the Accounts Date) no
liability to Taxation would be incurred by the relevant Company.
(B) So far as the Vendor is aware, no taxable profit or gain would accrue
on the disposal or settlement of any debt owed by any Company at the
value of that debt adopted for the purposes of the Accounts.
35. GROUP RELIEF
The Disclosure Letter details all relevant surrenders of or claims for
group relief or advance corporation tax which affect any of the
Companies for accounting periods in respect of which no final agreement
has been reached with the relevant Tax Authority as to its Tax affairs
or which were made in the seven years ending with the date of this
Agreement.
36. INTRA-GROUP TRANSACTIONS
Save in respect of the Reorganisation, no Company owns any asset which
it acquired within the period of six years ending on the date of this
Agreement from another company which was at the date of acquisition a
member of the same group of companies as that Company.
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37. US BUSINESS ASSETS AND MONOCLONAL ASSETS
No liens for Taxes exist with respect to any of the US Business Assets
or any of the Monoclonal Assets except for statutory liens for Taxes
not yet due or payable or liens for Taxes being contested in good faith
by appropriate proceedings.
38. LOAN RELATIONSHIPS
All interest, discounts or premiums paid by either Unipath Limited or
Unipath Management Limited prior to the date of this Agreement in
respect of its loan relationships within the meaning of Chapter II of
Part IV of the Finance Act 1996 are capable of being brought into
account by that company as a debit for the purposes of that Chapter as
and to the extent that they are from time to time recognised in that
Company's accounts (assuming that the accounting policies and methods
adopted for the purpose of the Accounts continue to be so adopted).
39. NON-DEDUCTIBLE REVENUE OUTGOINGS
Without prejudice to PARAGRAPH 40 below, so far as the Vendor is aware,
no Company has since the Accounts Date made a payment in excess of
(pound)50,000 or is under any obligation to make any future payment in
excess of (pound)50,000, which in either case will be prevented
(whether on the grounds of being a distribution or for any other
reason) from being deductible for the purposes of corporation tax or
the corresponding Tax on profits in a relevant foreign jurisdiction,
either in computing the profits of the relevant Company or in computing
corporation tax or the corresponding Tax chargeable on such Company.
40. NON-DEDUCTIBLE ROYALTY PAYMENTS
To the extent that any part of the (pound)1,282,000 representing the
accrual for the "Clearblue royalty" identified within the general
provision of (pound)1,619,008 in the Tax return of the Subsidiary for
the period ended on the Accounts Date are paid or are payable after
31st December, 2001, such amounts will be fully deductible for the
purposes of corporation tax or the corresponding Tax on income, profits
and gains in a relevant foreign jurisdiction for the period in which
the amounts are paid, in computing the profits of the Subsidiary (or
any other Company that makes such payments) for that period.
41. ROLL-OVER AND HOLD-OVER CLAIMS
No Company has since the Accounts Date made any hold-over or roll-over
claims or elections under sections 23, 152-162, 165, 247, 247A or 248
of the Taxation of Chargeable Gains Act 1992 (or the equivalent
statutory provisions in any jurisdiction other than the United
Kingdom).
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SCHEDULE 7
(LIMITATIONS ON LIABILITY)
1. LIMITATION ON QUANTUM AND GENERAL
(A) Neither the Purchaser nor any other Designated Purchaser shall be
entitled in any event to damages or other payment in respect of any
claim under any of the Warranties or the Tax Covenant:
(i) in respect of any individual substantiated claim for less than
(pound)50,000 (and for this purpose a series of claims with
respect to related facts or circumstances shall be aggregated
and treated as an individual claim); and
(ii) unless and until the aggregate amount of all substantiated
claims (taking no account of those falling within (i) above)
exceeds (pound)1,000,000 (in which event the Purchaser shall be
entitled to recover the full amount in respect of all such
claims and not merely the amount in excess of (pound)1,000,000).
For the purposes of this SUB-PARAGRAPH (A) a "substantiated claim"
shall be a claim to the extent it is admitted, agreed or satisfied by
the Vendor, a Share Seller, the US Business Seller or an IP Asset
Seller (as appropriate), is proven in a court of competent
jurisdiction, is settled or is the subject of consent to the entry of
judgment.
(B) The total aggregate liability of the Vendor, the Share Sellers, the US
Business Seller and the IP Assets Sellers under the Tax Covenant and
the Warranties (including, without limitation, any warranties implied
by law to the extent not effectively excluded by this Agreement) shall
not in any event exceed an amount equal to (i) (pound)77,250,000, PLUS
or MINUS (as the case may be) (ii) 75% of any adjustment made to the
Cash Consideration referred to in SUB-CLAUSE 3(A) pursuant to the
provisions of SUB-CLAUSE 5(A)(i).
(C) Each provision of this Schedule shall be read and construed without
prejudice to each of the other provisions of this Schedule except to
the extent specifically otherwise provided.
(D) As regards the Tax Covenant the provisions of this Schedule shall
operate to limit the liability of the Vendor and the Share Sellers in
so far as any provision in this Schedule is expressed to be applicable
thereto and the provisions of the Tax Covenant shall further operate to
limit the liability of the Vendor and the Share Sellers in respect of
any claim thereunder (provided that the effect of this paragraph (D)
taken together with the Tax Covenant shall not result in the
double-counting of any limitation).
2. TIME LIMITS FOR BRINGING CLAIMS
No claim shall be brought against the Vendor, the Share Sellers, the US
Business Seller or the IP Assets Sellers in respect of any of the
Warranties, under the Tax Covenant or in respect of PARAGRAPH 16 of
SCHEDULE 8 unless the Purchaser shall have given to the Vendor written
notice of such claim specifying (in reasonable detail (to the extent
127
reasonably practicable)) the matter which gives rise to the claim, the
nature of the claim and the amount claimed in respect thereof
(detailing (to the extent reasonably practicable) the Purchaser's
calculation of the loss thereby alleged to have been suffered by it):-
(i) subject to SUB-PARAGRAPHS (ii) and (iii), on or before the
second anniversary of the Completion Date;
(ii) in respect of any claims under the Tax Warranties or the Tax
Covenant on or before the seventh anniversary of the Completion
Date; and
(iii) in respect of any claims pursuant to PARAGRAPH 16 of SCHEDULE 8,
on or before the fifth anniversary of the Completion Date,
PROVIDED that, subject to SUB-PARAGRAPHS 5(A) and (B), the liability of
the Vendor, the Share Sellers, the US Business Seller and the IP Assets
Sellers 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 12 months of the service of such notice 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 Vendor, the
relevant Share Seller, the US Business Seller or the relevant IP Asset
Seller (as the case may be).
3. CONDUCT OF LITIGATION
(A) As soon as reasonably practicable after the Purchaser or any member of
the Purchaser's Group receives or otherwise becomes actually aware of
any assessment, claim, action or demand by a third party (not being the
Vendor or a member of the Vendor's Group) (a "THIRD PARTY CLAIM") which
is reasonably likely to give rise to any claim in respect of any of the
Warranties or pursuant to PARAGRAPH 16 of SCHEDULE 8, the Purchaser
shall notify the Vendor in writing of such Third Party Claim. Such
notice shall include such details of the Third Party Claim of which the
Purchaser or any member of the Purchaser's Group is actually aware
(including the quantum of the Third Party Claim, if known, and whether
the Third Party Claim is (or is reasonably likely to be) an Insured
Third Party Claim (as defined in SUB-PARAGRAPH (G) below)) and which
the Purchaser, acting reasonably, considers relevant in order for the
Vendor to evaluate the Third Party Claim and whether such Third Party
Claim prima facie gives rise to a claim in respect of any of the
Warranties or pursuant to paragraph 16 of Schedule 8.
Any failure by the Purchaser to comply with this SUB-PARAGRAPH (A)
shall not, for the avoidance of doubt, of itself prevent the Purchaser
or the relevant Designated Purchaser from bringing a Warranty claim but
none of the Vendor, the Share Sellers, the US Business Seller or the IP
Asset Sellers shall be liable to the Purchaser or the relevant
Designated Purchaser in respect of such Warranty claim to the extent
that the amount of it is increased, or not reduced, as a result of such
failure.
(B) Subject to the provisions of PARAGRAPH (C) below, the Purchaser shall,
and shall procure that any relevant member of the Purchaser's Group
shall, take such action as is
128
reasonable in order to avoid, dispute, resist, mitigate or defend the
Third Party Claim (and any related action) with reasonable diligence.
With respect to the conduct of a Third Party Claim by the Purchaser,
the Purchaser undertakes that:
(i) it shall notify the Vendor in writing of the legal counsel which
the Purchaser or the relevant member of the Purchaser's Group
proposes to instruct with respect to the Third Party Claim and
such legal counsel shall be entitled to act in relation thereto
(a) unless the Vendor reasonably objects in writing thereto
within five Business Days of receipt by the Vendor of written
notification of the identity of such legal counsel from the
Purchaser or the relevant member of the Purchaser's Group and
(b) if such legal counsel and the Purchaser or the relevant
member of the Purchaser's Group agree with the Vendor in writing
that, if the Vendor exercises its rights to assume conduct of
the Third Party Claim under SUB-PARAGRAPH (C) below, the legal
counsel will (if so requested by the Vendor) continue to act in
relation to the Third Party Claim on the instruction of the
Vendor;
(ii) in response to reasonable requests from the Vendor from time to
time, it or the relevant member of the Purchaser's Group shall
keep the Vendor informed of the progress of the Third Party
Claim;
(iii) it or the relevant member of the Purchaser's Group shall provide
the Vendor with copies of such documentation relating to the
Third Party Claim as the Vendor may reasonably request at the
cost of the Vendor;
(iv) it or the relevant member of the Purchaser's Group shall give
the Vendor such opportunities as the Vendor may reasonably
request to make written or reasonable oral representations
regarding the conduct of the Third Party Claim;
(v) it or the relevant member of the Purchaser's Group shall give
the Vendor written notice, of such period as is reasonable in
the context of the Third Party Claim, the proposal and the
circumstances in which it is made, of any proposal to settle or
consent to the entry of any judgment in respect of the Third
Party Claim, such notice to include reasonable details of the
proposed settlement or consent to the entry of judgment; and
(vi) neither it nor the relevant member of the Purchaser's Group
shall settle or consent to the entry of any judgment in respect
of the Third Party Claim during the period set out in
SUB-PARAGRAPH (B)(v) without the prior written consent of the
Vendor.
(C) At any time following the receipt by the Vendor of any notice of a
Third Party Claim under SUB-PARAGRAPH (A) above and prior to the
settlement, consent to the entry of judgment of, or non-appealable
decision of a court of competent jurisdiction in respect of, such Third
Party Claim, the Vendor shall be entitled, on written notice to the
Purchaser and subject to the provisions of SUB-PARAGRAPHS (D) and (G)
below, to assume conduct of the Third Party Claim in the name of the
Purchaser or the appropriate member of the Purchaser's Group; EXCEPT
that the Vendor shall not be
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entitled to assume conduct of any Third Party Claim which is a criminal
action or proceeding. For the avoidance of doubt, the Vendor shall be
entitled to assume conduct of any non-criminal action or proceeding
(pursuant and subject to the provisions of this SUB-PARAGRAPH (C))
which arises out of the same facts and circumstances as a criminal
action or proceeding.
(D) The Vendor shall not be entitled to assume conduct of any Third Party
Claim in the name of the Purchaser, any other member of the Purchaser's
Group or otherwise unless the Vendor first (i) admits irrevocably and
unconditionally (subject to the relevant provisions of SCHEDULE 7
(Limitations on Liability)) to the Purchaser in writing and in a
legally binding manner its liability under the Warranties in relation
thereto, and (ii) undertakes in a deed to the Purchaser that it will
indemnify the Purchaser and each other member of the Purchaser's Group
against all liabilities, costs, damages or expenses incurred by any
member of the Purchaser's Group (whether prior to, on or after the date
of such deed) in respect of such Third Party Claim or the conduct
thereof; PROVIDED that the limitations set out in SUB-PARAGRAPHS 1(A)
and 1(B) of this SCHEDULE 7 and PARAGRAPH 6 of this SCHEDULE 7 shall
apply to any liability of the Vendor under this SUB-PARAGRAPH (D)(ii)
as if such liability were a Warranty claim for the purposes of those
paragraphs.
(E) Where the Vendor assumes the conduct of a Third Party Claim pursuant to
the provisions of SUB-PARAGRAPH (C) above:
(i) the Purchaser undertakes that:
(a) neither it nor any other member of the Purchaser's Group
shall make any admission of liability, agreement or
settlement with any third party, or consent to the entry of
judgment, in relation to the Third Party Claim;
(b) it shall give, or cause to be given by the relevant members
of the Purchaser's Group, to the Vendor all such assistance
as the Vendor may reasonably require in avoiding,
disputing, resisting, mitigating or defending the Third
Party Claim, including, without limitation, such access to
the books and records of any member of the Purchaser's
Group, and to the premises and employees and professional
advisors of the Purchaser's Group, during Working Hours and
on reasonable advance notice, as the Vendor may reasonably
require; and
(c) it shall, and shall procure that each other member of the
Purchaser's Group shall, pass to the Vendor copies of all
notices or other documents received by the Purchaser or any
member of the Purchaser's Group in relation to the Third
Party Claim, in each case as soon as reasonably practicable
after receipt by the Purchaser or relevant member of the
Purchasers' Group thereof;
(ii) the Vendor undertakes that:
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(a) if it decides not to instruct the same legal counsel as
instructed by the Purchaser with respect to the Third Party
Claim (if any), it or the relevant member of the Vendor's
Group shall notify the Purchaser in writing of the legal
counsel which the Vendor proposes to instruct with respect
to the Third Party Claim and such legal counsel shall be
entitled to act in relation thereto (x) unless the
Purchaser reasonably objects in writing thereto within five
Business Days of receipt by the Purchaser of written
notification of the identity of such legal counsel from the
Vendor or the relevant member of the Vendor's Group and (y)
if such legal counsel and the Vendor or the relevant member
of the Vendor's Group agree with the Purchaser in writing
that, if the Purchaser exercises its rights under
SUB-PARAGRAPH (F) below, the legal counsel will (if so
requested by the Purchaser) continue to act in relation to
the Third Party Claim on the instruction of the Purchaser;
(b) in response to reasonable requests from the Purchaser from
time to time, it or the relevant member of the Vendor's
Group shall keep the Purchaser informed of the progress of
the Third Party Claim;
(c) it or the relevant member of the Vendor's Group shall
provide the Purchaser with copies of such documentation
relating to the Third Party Claim as the Purchaser may
reasonably request;
(d) it or the relevant member of the Vendor's Group shall give
the Purchaser such opportunities as the Purchaser may
reasonably request to make written or reasonable oral
representations regarding the conduct of the Third Party
Claim;
(e) neither it nor any relevant member of the Vendor's Group
shall take, permit or omit, or procure the taking,
permitting or omission of, any step or action in relation
to any Third Party Claim to the extent that (i) the Vendor
in good faith and acting reasonably considers, or (ii) the
Purchaser can demonstrate to the Vendor (acting reasonably
and in good faith), in each case, that the taking,
permitting or omission of the relevant step or action is
reasonably likely to have an adverse effect on any trading
relationship or the goodwill of any relevant member of the
Purchaser's Group or the US Business which would, in either
case, be material to the Transferring Business;
(f) without prejudice to the provisions of SUB-PARAGRAPH
(E)(iii), it or the relevant member of the Vendor's Group
shall give the Purchaser written notice, of such period as
is reasonable in the context of the Third Party Claim, the
proposal and the circumstances in which it is made, of any
proposal to settle or consent to the entry of judgment in
respect of the Third Party Claim, such notice to include
reasonable details of the proposed settlement or consent to
the entry of judgment; and
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(g) without prejudice to the provisions of SUB-PARAGRAPH E
(iii), neither it nor the relevant member of the Vendor's
Group shall settle or consent to the entry of judgment in
respect of the Third Party Claim during the period set out
in SUB-PARAGRAPH (E)(ii)(f) without the prior written
consent of the Purchaser.
(iii) the Vendor shall not be entitled to settle or consent to the
entry of any judgment in respect of the Third Party Claim
unless:
(a) such settlement or judgment provides for settlement or
relief solely in the form of monetary payment; or
(b) if the settlement or judgment is not of the type described
in SUB-PARAGRAPH (E)(iii)(a) above, without the prior
written consent of the Purchaser (such consent not to be
unreasonably withheld or delayed) and, for the purposes of
this PARAGRAPH E(iii)(b), it will be reasonable for the
Purchaser to withhold or delay its consent to a settlement
or judgment if such settlement or judgment is reasonably
likely to have an adverse effect on any trading
relationship or the goodwill of the relevant member of the
Purchaser's Group or the US Business which adverse effect
would be, in either case, material to the Transferring
Business.
(F) Notwithstanding the provisions of SUB-PARAGRAPHS (C), (D) and (E)
above, the Purchaser shall be entitled to take control of any Third
Party Claim the conduct of which has been assumed by the Vendor in
accordance with SUB-PARAGRAPH (C) above at any time after such
assumption and prior to the settlement, consent to the entry of
judgment of, or non-appealable decision of a court of competent
jurisdiction in respect of, such Third Party Claim provided that the
Purchaser:
(i) first waives irrevocably and unconditionally in writing and in a
legally binding manner any and all claims which it, or any other
member of the Purchaser's Group, may have against the Vendor or
any other member of the Vendor's Group (other than, in respect
of insurance matters, the Captive Insurer) in respect of such
Third Party Claim under this Agreement or any of the Specified
Agreements; and
(ii) undertakes in a deed that it will indemnify the Vendor and the
relevant members of the Vendor's Group (other than, in respect
of insurance matters, the Captive Insurer) against all
liabilities, costs, damages or expenses incurred (whether prior
to or after the date of such deed) by any member of the Vendor's
Group (other than, in respect of insurance matters, the Captive
Insurer) in respect of such Third Party Claim (including, for
the avoidance of doubt, the costs and expenses incurred by the
Vendor or any other member of the Vendor's Group (other than, in
respect of insurance matters, the Captive Insurer) in conducting
the Third Party Claim pursuant to the provisions of this
PARAGRAPH 3).
(G) If, in respect of a Third Party Claim, the Purchaser, or any other
member of the Purchaser's Group, is entitled to make a claim under any
policy of insurance (other than
132
an insurance claim with no reasonable prospect of success) such that
the provisions of SUB-PARAGRAPH 5(A) apply to the matter giving rise to
the Third Party Claim (an "INSURED THIRD PARTY CLAIM"), the provisions
of SUB-PARAGRAPHS (B) to (F) shall be subject to the provisions of the
relevant insurance policy or policies relating to such Insured Third
Party Claim and the directions of the relevant insurer or insurers
thereunder; PROVIDED that the Purchaser shall, and shall procure that
the other members of the Purchaser's Group shall, and the Vendor shall,
and shall procure that the other members of the Vendor's Group shall,
comply with the provisions of SUB-PARAGRAPHS (B) to (F) to such extent
as is permitted under the relevant insurance policy or policies with
respect to the Insured Third Party Claim or as the relevant insurer or
insurers thereunder may otherwise consent.
(H) If, in relation to any claim for any breach of the Tax Warranties there
is also a claim in respect of the same subject matter for a liability
under the Tax Covenant, Clause 8 of the Tax Covenant shall govern the
conduct of the relevant litigation and/or claim for breach of such Tax
Warranties in precedence to and notwithstanding the provisions of this
PARAGRAPH 3.
4. SINGLE RECOVERY
(A) No liability shall attach to the Vendor, the Share Sellers, the US
Business Seller, the IP Assets Sellers or any of them by reason of any
breach of any of the Warranties or pursuant to PARAGRAPH 16 of SCHEDULE
8 to the extent that the same loss has been recovered by the Purchaser
or any other Designated Purchaser under the Tax Covenant or any other
Warranty or term of this Agreement or the Specified Agreements and,
accordingly, the Purchaser and any other Designated Purchaser may only
be entitled to recover once in respect of the same loss.
(B) (i) In calculating the liability of the Vendor, the Share Sellers,
the US Business Seller and the IP Assets Sellers for any breach
of the Warranties or pursuant to PARAGRAPH 16 of SCHEDULE 8
there shall be taken into account any repayment in respect of
Tax or any Relief arising as a result of the matter giving rise
to such liability which the Purchaser or any member of the
Purchaser's Group obtains and utilises on or before the date of
calculating such liability.
(ii) To the extent that the Purchaser (or the relevant member of the
Purchaser's Group) obtains and utilises any repayment in respect
of Tax or any Relief arising as a result of the matter giving
rise to the liability of the Vendor, the Share Sellers, the US
Business Seller or the IP Assets Sellers for any breach of the
Warranties or pursuant to PARAGRAPH 16 of SCHEDULE 8, the
Purchaser (or the relevant member of the Purchaser's Group)
shall, except to the extent that such utilisation has been taken
into account in calculating the liability of the Vendor, the
Share Sellers, the US Business Seller or the IP Assets Sellers
pursuant to PARAGRAPH (i) of this SUB-PARAGRAPH (B), remit to
the Vendor, within 15 Business Days of actual receipt, an amount
equal to so much of the economic benefit from that repayment in
respect of Tax or Relief which the Purchaser (or the relevant
member of the Purchaser's Group) has actually received; PROVIDED
that nothing in this SUB-PARAGRAPH (B)(ii) shall restrict the
133
ability or discretion of the Purchaser (or the relevant member
of the Purchaser's Group) to order its Tax affairs in any way
which it sees fit and to keep its Tax affairs confidential. Any
question concerning whether the Purchaser (or the relevant
member of the Purchaser's Group) has actually realised any such
economic benefit or the quantum and timing of such benefit shall
be determined by the auditors for the time being of the
Purchaser (or the relevant member of the Purchaser's Group).
(C) No liability shall attach to the Vendor, the Share Sellers, the US
Business Seller, the IP Asset Sellers or any of them by reason of any
breach of the Warranty set out in PARAGRAPH 4(F) of SCHEDULE 6 to the
extent (and in respect of the period) that the Vendor or any other
member of the Vendor's Group provides to the relevant Company or
Designated Purchaser such goods, services or facilities as shall have
given rise to the breach of such Warranty for the period of 6 months
from the Completion Date (and, if the relevant Company or Companies or
other member of the Purchasers' Group, having unsuccessfully used all
reasonable endeavours to cease the use of such goods, services or
facilities (as appropriate) by the end of such 6 month period, upon
written notice from the Purchaser to the Vendor, a further 6 months
following the expiry of such 6 month period), on the same basis as such
goods, services or facilities were provided to the relevant Company or
Companies or to any other member of the Vendor's Group in respect of
the Transferring Business immediately prior to the Completion Date.
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 (other than an insurance claim with no
reasonable prospect of success) then, having notified the Vendor of the
claim in writing in accordance with PARAGRAPH 2, the Purchaser shall
not further pursue that claim under the Warranties unless and until the
appropriate member of the Purchaser's Group shall have made a claim
against its insurers and used all reasonable endeavours to pursue such
insurance claim including where reasonable and appropriate commencing
and prosecuting proceedings against insurers. There shall be no
liability under the Warranties to the extent of the amount recovered
under any such insurance claim except to the extent:
(i) of the reasonable costs and expenses and any Taxation incurred
or suffered by any member of the Purchaser's Group in connection
with the recovery; and/or
(ii) that the future insurance costs of the Purchaser or any other
member of the Purchaser's Group are increased by the matter
giving rise to the insurance claim or the claim itself.
(B) If having notified the Vendor of the relevant claim in writing in
accordance with PARAGRAPH 2 and (a) having used all reasonable
endeavours to pursue an insurance claim as contemplated by
SUB-PARAGRAPH (A), or (b) by the second anniversary of the notification
by the Purchaser to the Vendor in writing of the relevant Warranty
claim, the Purchaser (or the relevant other member of the Purchaser's
Group) shall not have recovered the full amount of its loss in respect
of the relevant matter, the provisions of
134
PARAGRAPH 2 and PARAGRAPH 5 shall not preclude it from pursuing any
claim under the Warranties in respect of such matter for the amount of
the loss not recovered from insurers and the proviso to PARAGRAPH 2
shall not apply to such claim; PROVIDED that in the circumstances set
out in (b) above, the provisions of this SUB-PARAGRAPH 5(B) shall not
limit in any way the obligations of the Purchaser or any member of the
Purchaser's Group under SUB-PARAGRAPH (A) to pursue such insurance
claim. The provisions of SUB-PARAGRAPH (A) shall not prejudice the
ability of the Purchaser to recover interest in respect of any claim
under the Warranties.
(C) Where the Purchaser or any member of the Purchaser's Group is at any
time entitled to recover from some third party, not being an insurer or
the Vendor or any member of the Vendor's Group, 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 make such recovery and in
the event that the Purchaser or any member of the Purchaser's Group
shall recover any amount from such third party prior to any member of
the Vendor's Group paying to the Purchaser or any member of the
Purchaser's Group any amount pursuant to the relevant claim under the
Warranties, the amount of the claim under the Warranties shall be
reduced by the amount recovered (except to the extent that such
recovery had been taken into account in the formulation of the claim
under the Warranties and except to the extent of the reasonable costs
and expenses and any Taxation incurred or suffered by any member of the
Purchaser's Group in connection with the recovery), provided that the
Purchaser shall not be required to commence any legal proceedings where
either:
(i) the Purchaser has effected a valid legal assignment of all its
rights in relation to the relevant claim to the Vendor; or
(ii) where SUB-PARAGRAPH (C)(i) does not apply, the Vendor has not as
soon as is reasonably practicable notified the relevant party
against whom such proceedings are brought that such proceedings
are being brought at the instruction of the Vendor.
For the avoidance of doubt, the provisions of this SUB-PARAGRAPH (C)
shall not require the Purchaser or any member of the Purchaser's Group
to take any steps to recover sums from a third party prior to taking
any action against the Vendor, the Share Seller, the US Business
Seller, the IP Assets Sellers or any of them and shall not require the
Purchaser or any member of the Purchaser's Group to take, permit or
omit from taking any step or action to recover sums from a third party
to the extent that the taking, permitting or omission of the relevant
step or action would have an adverse effect on any trading relationship
or the goodwill of any relevant member of the Purchaser's Group or the
US Business which would, in either case, be material to the
Transferring Business.
(D) If any member of the Vendor's Group 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 relevant member of the
Purchaser's Group subsequently recovers from a third party (including,
for the avoidance of doubt, any insurer, but excluding the
135
Vendor or a member of the Vendor's Group) any sum in respect of any
matter giving rise to such claim, the Purchaser shall, and shall
procure that the relevant member of the Purchaser's Group shall, repay
to the relevant member of the Vendor's Group the lesser of (i) the
amount paid by the relevant member of the Vendor's Group to the
Purchaser or other member of the Purchaser's Group, and (ii) the sum
(including interest (if any)) recovered from such third party LESS (a)
the reasonable costs and expenses and any Taxation incurred or suffered
by the relevant member of the Purchaser's Group in connection with such
recovery and (b) any amount (other than insurance premium) paid to any
insurer pursuant to any rights of subrogation or otherwise under any
relevant insurance policy or policies in connection with such recovery.
6. ACTS OF PURCHASER
(A) No claim shall lie against the Vendor, the Share Sellers, the US
Business Seller, the IP Assets Sellers or any of them under or in
relation to the Warranties or pursuant to PARAGRAPH 16 of SCHEDULE 8 to
the extent that such claim is attributable to:
(i) any voluntary act, omission, transaction or arrangement carried
out at the written request of or with the written consent of the
Purchaser or by a member of the Purchaser's Group (other than
the Companies) before Completion;
(ii) any voluntary act or transaction carried out or entered into by
the Purchaser or by a member of the Purchaser's Group on (save
for the taking of any steps set out in SCHEDULE 5 (Completion))
or after Completion unless such act or transaction (a) is
carried out or entered into by the Purchaser or another member
of the Purchaser's Group in the ordinary course of business, (b)
is required to be carried out or entered into by law or
regulation in any relevant jurisdiction, or (c) is carried out
or entered into pursuant to a legally binding commitment entered
into by a Company or a member of the Vendor's Group in respect
of the US Business prior to Completion; or
(iii) any failure by the Purchaser or any other member of the
Purchaser's Group to take, after Completion, an action which is
required of it (a) by law or regulation in any relevant
jurisdiction, or (b) otherwise under any legally binding
contract or agreement entered into by any Company or any member
of the Vendor's Group in respect of the US Business and (in the
case of (b) only) listed in the Data Room Index or forming part
of the Disclosure Bundle.
(B) Neither the Vendor, the Share Sellers, the US Business Seller, the IP
Assets Sellers nor any of them shall be liable for any breach of any
Warranty or pursuant to PARAGRAPH 16 of SCHEDULE 8 which would not have
arisen but for any change after Completion in any accounting basis on
which any member of the Purchaser's Group values its assets or in any
accounting basis, method, policy or practice of any member of the
Purchaser's Group.
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7. THE ACCOUNTS, THE MANAGEMENT ACCOUNTS AND THE COMPLETION ACCOUNTS
No matter shall be the subject of a claim under the Warranties or
pursuant to PARAGRAPH 16 of SCHEDULE 8 to the extent that allowance,
provision or reserve in respect of such matter shall have been
specifically identified in the Accounts or the Management Accounts or
to the extent such matter is taken into account in the calculation of
the Working Capital Amount.
8. RETROSPECTIVE LEGISLATION
No liability shall arise in respect of any breach of any of the
Warranties or pursuant to PARAGRAPH 16 of SCHEDULE 8 to the extent that
liability for such breach occurs or is increased directly or indirectly
as a result of (i) any legislation not in force on or prior to the date
of this Agreement or (ii) the withdrawal of any published
extra-statutory concession or other agreement or (in relation only to
the Tax Warranties) arrangement currently granted by or made with any
governmental authority, or (iii) any change after the date of this
Agreement of any published interpretation or (in relation only to the
Tax Warranties) published application of any legislation or (in
relation only to the Tax Warranties) in the enforcement policy or
practice of the relevant authorities, or (iv) the withdrawal of any
published extra-statutory concession or any other agreement or (in
relation only to the Tax Warranties) arrangement with any Tax Authority
(whether or not having the force of law) currently granted by or made
with any Tax Authority.
9. TAXATION
(A) Without prejudice to the generality of PARAGRAPH 8 above, the Vendor,
the Share Sellers, the US Business Seller and the IP Assets Sellers
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 practice of
the Inland Revenue or other Tax Authority announced (or if not so
announced in advance, being made) after the date hereof or the
withdrawal of any published extra-statutory concession currently
granted by any Tax Authority.
(B) None of the Vendor, the Share Sellers, the US Business Seller or the IP
Assets Sellers shall be liable for any claim to the extent that it
arises out of or is increased by virtue of a voluntary disclaimer by
any Company after Completion of any Relief available to any Company
(other than any such disclaimer made at the request of or with the
consent of the Vendor).
(C) None of the Vendor, the Share Sellers, the US Business Seller or the IP
Assets Sellers shall be liable in respect of any claims in respect of
any breach of the Tax Warranties (a "TAX CLAIM") if and to the extent
that any pre-Completion Relief not taken into account in computing the
provision for Tax in the Accounts is available or is made available to
relieve or otherwise mitigate the liability of the Company for Tax
which is the subject matter of such Tax Claim.
137
(D) None of the Vendor, the Share Sellers, the US Business Seller or the IP
Assets Sellers shall be liable in respect of any breach of the Tax
Warranties if such liability would have been excluded under the
provisions of clause 3 of the Tax Covenant had the relevant liability
been a Tax Liability for the purposes of the Tax Covenant.
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 or in any document contained in the Disclosure Bundle
or listed in the Data Room Index; PROVIDED that the only disclosures
that shall be relevant to the Warranty set out in PARAGRAPH 8(E) of
Schedule 6 (Warranties) are those specifically referenced to such
Warranty in the Disclosure Letter.
11. CLAIM TO BE REDUCTION OF CASH CONSIDERATION
Any payment made by a member of the Vendor's Group or any other person
in respect of any claim under the Warranties or pursuant to PARAGRAPH
16 of SCHEDULE 8 shall be deemed to be a reduction of the Cash
Consideration payable by the Purchaser (on behalf of the relevant
Designated Purchaser) and such reduction shall be allocated to the
greatest extent possible to the particular Shares, US Business Assets
or IP Assets to which the claim relates.
12. FRAUD
None of the provisions of this SCHEDULE 7 (other than PARAGRAPH 11)
shall apply in respect of any claim under the Warranties or under the
Tax Covenant where the giving of the relevant Warranties or the
relevant provision of the Tax Covenant or the preparation of the
relevant provisions of the Disclosure Letter involve or involved fraud
on the part of the Vendor or another member of the Vendor's Group.
13. MITIGATION
Nothing in this Agreement shall affect the obligation of the Purchaser
or any Designated Purchaser under the general law to mitigate the loss
in respect of which it may be entitled to make any claim under the
Warranties.
14. EXCLUSIONS
(A) None of the limitations set out in this SCHEDULE 7 (Limitations on
Liability) shall apply to:
(i) the Warranties set out in PARAGRAPH 2 (Capacity of the Vendor's
Group) of SCHEDULE 6 (Warranties); or
(ii) a claim under the Tax Covenant to the extent that the claim
relates to a Reorganisation Tax Liability.
138
(B) The limitations set out in PARAGRAPH 1 of this SCHEDULE 7 (Limitations
on Liability) shall not apply to a claim under the Tax Covenant to the
extent that the claim relates to a Current Year Tax Liability or a
Profit and Loss Equalisation Agreement Tax Liability.
(C) The limitations set out in PARAGRAPH 1 of this SCHEDULE 7 (Limitations
on Liability) shall not apply to a claim under PARAGRAPH 40 (Non
Deductible Royalty Payments) of SCHEDULE 6 (Warranties).
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SCHEDULE 8
(PENSIONS)
PART A UK PENSIONS
1. DEFINITIONS
(i) In this Part A of 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 10(D).
"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.
"HOLDING PERIOD" means, subject to paragraph 6(B), the period
commencing on and including the Completion
Date and ending immediately before the Scheme
Change Date.
"NET RELEVANT means the monthly contributions to the UPF
CONTRIBUTIONS" made in respect of the Transferring Members
during the Holding Period in accordance with
paragraph 3 less:
(a) 0.7% of Transferring Members'
Pensionable Pay payable in respect
of the Holding Period (for the
annual cost of lump sum benefits
payable in the event of death in
service);
(b) 1.6% of Transferring Members'
Pensionable Pay
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141
payable in respect of the Holding
Period (for the annual cost of
benefits payable in the event of ill
health retirement and benefits,
other than lump sum benefits,
payable in the event of death in
service);
(c) 1% of Transferring Members'
Pensionable Pay payable in respect
of the Holding Period (for the
annual cost of administration).
"1999 SERA" means the arrangements constituted by a
letter from Unilever UK Central Resources
Limited to the Pensionable Employee in
question, entitled "Senior Managers' Pension
Arrangements: 1999 SERA Letter".
"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 Vendor 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 Vendor 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 Part A of this Schedule.
"PURCHASER'S PENSION shall mean the retirement benefits scheme
SCHEME" providing 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
Vendor's Actuary and agreed with the
Purchaser's Actuary (or, in default of
agreement, as determined by the Actuary under
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142
paragraph 10) as being the transfer value at
the Scheme Change 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 3, 4, 5, 7
and 15 (insofar as those obligations have
arisen by the time in question).
"RELEVANT EMPLOYEES" means such of the UK Employees as are members
of the UPF on the Completion Date and where
the context requires, in relation to 1999
SERA, the Senior Managers.
"SCHEME CHANGE DATE" means, subject to paragraph 6(B), the date 12
months after the Completion Date or such
earlier date as the Purchaser may agree with
the Vendor.
"SENIOR MANAGERS" means Stephen Pepper and David Walton.
"TIMING ADJUSTMENT" means, in relation to a period and in respect
of each sum to which this definition applies,
the formula found by calculating:
(i) one-half of the proportionate change
during the period specified of the
FT/S&P Actuaries World Ex UK Pound
Sterling Index with 86 per cent. of
the gross dividend income reinvested
in the same index at the end of each
calendar month; and
(ii) one-half of the proportionate change
during the period specified of the
FTSE Actuaries All-Share Total
Return Index.
For the avoidance of doubt, if (for example),
the change in each of the Indices in (i) and
(ii) 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 FTSE Actuaries All-Share Total Return
Index or the FT/S&P Actuaries World Ex UK
Pound Sterling Index at a particular date is
the Index for that date. The Index for that
date shall be determined by the Vendor's
Actuary and agreed by the Purchaser's
Actuary. If the Vendor'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)
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143
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 Scheme Change
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 Vendor's
Group for any liability to or in
respect of that Relevant Employee to
provide any further benefits under
the UPF); and
(ii) if he is a Senior Manager who also
agrees in writing to a transfer of
his benefits under 1999 SERA in
respect of his or her interest
therein (such agreement in writing
to include a discharge in the Agreed
Form in favour of the Vendor's Group
for any liability to provide
benefits under 1999 SERA), and
(iii) who does not withdraw that agreement
before such benefits are transferred
to the Purchaser's Pension Scheme.
"UK COMPANY" means either or both of Unipath Limited and
Unipath Management Limited.
"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.
"VENDOR'S ACTUARY" means an Actuary appointed by or on behalf of
the Vendor to act on the Vendor's behalf for
the purposes of this Part A of this Schedule.
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144
"VOLUNTARY FUND" means a fund comprising voluntary
contributions paid by members and the
investments and moneys representing those
contributions and any income derived
therefrom.
(B) References in this Part A of this Schedule to paragraphs are
to paragraphs of this Part A of this Schedule.
(C) 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 Act 1988 or in the Pension
Schemes Act 1993 (as amended) shall have the same meanings in
this Part A.
2. CONTINUATION OF PARTICIPATION IN THE UPF
Subject to obtaining all necessary consents and approvals from:
(i) the Board of the Inland Revenue, and
(ii) the National Insurance Contributions Office on behalf of the
Inland Revenue,
the Vendor shall use all reasonable endeavours to ensure that the UK
Company may continue to participate in the UPF and 1999 SERA as a
participating employer in respect of the Relevant Employees and the
Senior Managers respectively for the duration of the Holding Period.
3. PURCHASER'S OBLIGATIONS IN RELATION TO THE UPF
(A) In respect of the period in which the UK Company is a
participating employer pursuant to paragraph 2 the Purchaser
shall:
(i) procure that the UK Company pays to the UPF
contributions in respect of the Relevant Employees
who remain active members of the UPF, at the rate of
16.7% of each Relevant Employee's Pensionable Pay in
accordance with paragraph 3(C), less the amount of
any employee contributions payable to the UPF by such
Relevant Employees; and
(ii) procure that the UK Company shall not permit any
person other than a Relevant Employee to become a
member of the UPF.
(B) No contributions shall be payable during the Holding Period by
Relevant Employees until such date (if any) on which all
active members of the UPF are required to contribute to the
UPF under the provisions of the UPF except for any voluntary
contributions or for any contributions due in respect of a
service credit under the UPF.
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(C) Contributions under paragraph 3(A)(i) shall be paid on the 1st
day of each month immediately following the month to which
they relate (or such other date as Vendor and Purchaser
agree).
4. PURCHASER TO PROVIDE BENEFITS FOR FUTURE SERVICE
(A) No later than the Scheme Change 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
Pension Schemes Act 1993 (as amended by the Pensions
Act 1995) 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 Scheme Change Date who would have been in
pensionable service on the Scheme Change 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
as of right 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
Scheme Change 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 Rules of the UPF at the Completion
Date 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:
(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:
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o a right to receive benefits
unreduced from age 60 except where,
prior to the Scheme Change Date,
Unilever PLC has withdrawn its
consent under the UPF to members
receiving benefits unreduced from
age 60, in which case, for the
purposes of this paragraph 4 and
paragraph 5, benefits in the UPF
shall be deemed not to include a
right to receive benefits unreduced
from age 60 other than to the
extent such a benefit is as of
right under the UPF as set out in
the note below; 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 Vendor's Actuary
comprised in Annex A to this
Schedule.
o where a Pensionable Employee has
elected, at any time before the
Scheme Change Date, under Rule C3
of the UPF to purchase a service
credit and the period over which
contributions are payable in
respect of the cost of that credit
has not expired before the Scheme
Change 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 Scheme Change Date the
balance of the 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. Notwithstanding paragraph
4(B)(i), once such an election has
been made, this obligation of the
Purchaser shall continue to apply
until the expiry of the period over
which contributions are payable in
respect of the cost of the service
credit.
(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
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member of the Vendor's Group has immediately prior to
the Completion Date.
(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
Vendor's Actuary referred to in paragraph 8, modified
to such extent as may be agreed in writing by the
Vendor's Actuary and the Purchaser's Actuary and the
procedure referred to in paragraph 10(D) to (G)
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,
equivalent 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
remains employed by a member of the Purchaser's Group
(whether or not continuing to accrue benefits under
the Purchaser's Pension Scheme).
(e) equivalent 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 Vendor. For this
purpose, it is agreed that it will be reasonable for
the Vendor's Actuary not to approve money purchase
benefits in place of benefits under the UPF and 1999
SERA.
(f) where benefits are provided under the UPF or 1999
SERA 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
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
or 1999 SERA under the provisions of the UPF or 1999
SERA in force immediately prior to the Completion
Date.
(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 (if any) at which:
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(a) he pays compulsory contributions at the Completion
Date, for a period of 1 year from the Completion Date
or, if shorter, the period expiring on the date on
which he is required to contribute to the UPF under
the provisions of the UPF, if he is then an active
member of the UPF, or on which he would have been
required to contribute to the UPF under the
provisions of the UPF, had he then been an active
member of the UPF; and
(b) he could have been required to contribute to the UPF
under the provisions of the UPF in force immediately
prior to the Completion Date but for any surplus or
deficit in the UPF, 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 Vendor'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 Vendor'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
Vendor'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 10(D) to (G) inclusive with all
necessary changes.
(E) Any announcement to be issued by the Vendor 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 Vendor 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
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is in breach of any of such provisions, the Vendor 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.
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 Scheme Change Date:
o ceased to be in employment of the Purchaser, or
o attained normal retirement age in the UPF,
shall, in respect of pensionable service up to the day before
the Scheme Change 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(A), OR
(b) a payment being made pursuant to paragraph 12(A),
the rights 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 under the Purchaser's Pension Scheme in
respect of pensionable service up to the day before the Scheme
Change Date will be no less favourable overall (as agreed or
determined in accordance with paragraph 4(D)) than the
benefits for and in respect of that Relevant Employee until
then provided under the UPF.
(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:
(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(A) 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
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(c) to comply with the applicable requirements
of Clause 19(b) (Bulk transfers-out) of the
UPF Trust Deed, being:
o any undertakings given by the UPF
to the Board of Inland Revenue;
o the preservation requirements of
the Pension Schemes Act 1993 (and
any regulations relating to the
preservation requirements made
under that Act); and
o the contracting-out requirements of
the Pension Schemes Act 1993 (and
any regulations relating to the
contracting-out requirements made
under that or any other Act),
in each case to the extent applicable;
(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 Pension Schemes Act 1993 (as amended by
the Pensions Act 1995) in relation to the Purchaser's
Pension Scheme; and
(iii) the Purchaser's Actuary delivers a certificate to the
Vendor and the UPF confirming that the Purchaser's
Pension Scheme has no liabilities as at the Scheme
Change Date (other than the liabilities in respect of
the benefits of the Transferring Members until then
provided under the UPF).
(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 Vendor and
the Purchaser.
6. VENDOR'S OBLIGATIONS DURING THE HOLDING PERIOD
(A) The Vendor shall use all reasonable endeavours to ensure that
during or in respect of the Holding Period:
(i) the UPF and 1999 SERA shall not be terminated, and
(ii) no amendments to the UPF or 1999 SERA shall be made
which will diminish or otherwise affect the benefits
of the Relevant Employees,
without the prior written agreement of the Purchaser.
(B) The Purchaser's agreement referred to in paragraph 6(A)
shall not be unreasonably withheld or delayed and if
withheld or delayed the Vendor shall be entitled to specify
by not less than one month's written notice to the Purchaser
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that the Holding Period shall terminate on such date as shall
be specified in the said notice.
7. RESTRICTION ON INCREASES TO PENSIONABLE PAY; PURCHASER TO COMPLY WITH
CERTAIN OTHER CONDITIONS
(A) The Purchaser undertakes that it shall procure that the UK
Company will not increase the Pensionable Pay of any Relevant
Employee during the Holding Period save that the annual
pensionable salary of any Relevant Employee may be increased
by up to the percentage (pro-rated to reflect the length of
the Holding Period) assumed for annual pensionable salary
increases in the Statement from the Vendor's Actuary comprised
in Annex A to this Schedule (such percentage being reduced by
the percentage amount of any increase awarded since the last
annual pensionable salary increase awarded prior to the
Completion Date) or such greater percentage agreed in writing
by the Vendor and the Purchaser.
(B) The Purchaser shall procure that the UK Company shall:
(i) comply during the Holding Period in all respects with
the provisions of the UPF;
(ii) not do or omit to do during the Holding Period any
act or thing whereby the approval of the UPF as an
exempt approved scheme or as a contracted-out scheme
would or might be prejudiced;
(iii) not exercise any power, right or discretion conferred
on the UK Company by the UPF except on such terms
(whether as to payment of additional contributions to
the UPF or otherwise) as the Vendor may agree;
(iv) complete promptly all contracting-out elections and
issue promptly all contracting-out notices which the
Vendor may reasonably require to be completed or
issued;
(v) supply to the Vendor and to the UPF copies of any
notices to be issued to the Relevant Employees in
connection with the matters contemplated by this Part
A of this Schedule before they are issued to the
Relevant Employees;
(vi) procure that no such notices as are referred to in
paragraph 7(B)(v) 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;
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(vii) use its best endeavours to help the Vendor and the
UPF meet any statutory obligations which relate to
the Relevant Employees during the Holding Period;
(viii) give the notice required under Clause 23(b)(i) of the
Trust Deed of the UPF to terminate its participation
in the UPF with effect from the day before the Scheme
Change Date; and
(ix) return the forms of consent referred to in paragraph
5(D) to the UPF.
8. METHOD OF CALCULATION OF THE RELEVANT CAPITAL SUM
(A) The Relevant Capital Sum shall be calculated as the sum of:
(i) the transfer payment in respect of the Transferring
Members, which is:
(a) the amount as at the Completion Date
calculated in accordance with the basis set
out in the Statement from the Vendor's
Actuary comprised in Annex A to this
Schedule;
(b) adjusted in respect of the period from the
Completion Date to 20th August, 2001 by
reference to interest at the rate of 7.5 per
cent. per annum to give its value as at 20th
August, 2001;
(c) multiplied by the Timing Adjustment for the
period from and including 20th August, 2001
to and excluding the Scheme Change Date, and
(ii) the Net Relevant Contributions paid to the UPF in
respect of Transferring Members during the Holding
Period, each such Net Relevant Contribution being
multiplied by the Timing Adjustment applicable to the
period from and including the date of payment of the
Net Relevant Contribution to and excluding the Scheme
Change Date.
(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 Vendor shall procure that there is provided promptly
to the Vendor'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 as at the
Completion Date (ignoring any adjustments under paragraph
8(A)(i)(b) and (c) and 8(A)(ii) and assuming that all Relevant
Employees become Transferring Members) and that this data is
in all material respects true, complete and accurate.
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(B) As soon as reasonably practicable following the Scheme Change
Date, the Vendor shall procure that there is provided promptly
to the Vendor'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.
(C) As soon as reasonably practicable following the Completion
Date, the Purchaser shall procure that there is provided
promptly to the Vendor's Actuary and the Purchaser's Actuary
all the necessary data within its or the UK Company's
possession or under its or the UK Company's power or control
for computation of the Relevant Capital Sum as at the
Completion Date (ignoring any adjustments under paragraph
8(A)(i)(b) and (c) and 8(A)(ii) and assuming that all Relevant
Employees become Transferring Members) and that this data is
in all material respects true, complete and accurate.
(D) As soon as reasonably practicable following the Scheme Change
Date, the Purchaser shall procure that there is provided
promptly to the Vendor's Actuary and the Purchaser's Actuary
all the necessary data within its or the UK Company's
possession or under its or the UK Company's 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(C), the Vendor shall use all reasonable endeavours
to cause the Vendor's Actuary to compute and certify to the
Purchaser's Actuary the Relevant Capital Sum as at the
Completion Date (ignoring any adjustments under paragraph
8(A)(i)(b) and (c) and 8(A)(ii) and assuming that all Relevant
Employees become Transferring Members) no later than 2 months
after the data has been provided to Vendor's Actuary by the
Purchaser and the Vendor.
(B) Subject to the Purchaser complying with its obligations under
paragraph 9(D), the Vendor shall use all reasonable endeavours
to cause the Vendor'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 Vendor's Actuary by
the Purchaser and the Vendor.
(C)
(i) The Purchaser's Actuary shall review the computation
referred to in paragraph 10(B).
(ii) The Purchaser undertakes to the Vendor to use all
reasonable endeavours to cause the Purchaser's
Actuary to conduct the review under (i) above
promptly.
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(D) If the Purchaser's Actuary is not satisfied with the
computation referred to in paragraph 10(B), the Purchaser's
Actuary and the Vendor's Actuary shall jointly appoint the
Actuary to certify the Relevant Capital Sum. 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.
(E) A certificate given by the Actuary under this paragraph 10
shall be conclusive and binding on the parties hereto.
(F) The Actuary shall act as an expert and not as an arbitrator.
(G) The costs of the Actuary shall be borne by the Purchaser and
the Vendor in equal amounts or in such other proportions as
the Actuary shall determine to be fair and reasonable in the
circumstances.
11. VENDOR TO USE REASONABLE ENDEAVOURS TO PROCURE PAYMENT OF RELEVANT
CAPITAL SUM
(A) The Vendor 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 UK Company being named in a contracting-out
certificate issued for contracting-out on the basis
specified in Section 9(2B) of the Pension Schemes Act
1993 (as amended by the Pensions Act 1995) 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:
o 105 per cent. of the Relevant Capital Sum adjusted by
the Timing Adjustment for the period from and
including the day before the Scheme Change Date to
and including the day before the Payment Date (or, if
earlier, to and including the day before the date of
actual payment); and
o an amount calculated by the Vendor'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
suitable for payment on Payment Date,
to the Purchaser's Pension Scheme on or before the Payment
Date.
(B) The payment of the amount referred to in paragraph 11(A) shall
be satisfied by the transfer of cash in an amount equal to
that amount.
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12. SHORTFALL
(A) Subject to the conditions in paragraph 11(A) (i), (ii) and
(iii) having been satisfied, if the UPF does not the full
amount referred to in paragraph 11(A) to the Purchaser's
Pension Scheme on or before the Payment Date, the Vendor
shall, no later than 14 days after the Payment Date, pay to
the Purchaser, so far as possible by way of repayment of the
Cash Consideration payable in respect of the Shares of Unipath
Limited, an amount in cash (the "Shortfall Payment")
calculated according to the formula:
(A-B) + C
where
A = the higher of:
o 105 per cent. of the Relevant Capital Sum (adjusted
by the Timing Adjustment for the period from and
including the day before the Scheme Change Date to
and including the day before the Payment Date); and
o an amount calculated by the Vendor'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
suitable for payment on 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 = interest at the Agreed Rate on (A-B) in respect of
the period from and including the Payment Date to and
excluding the date of payment;
The amount of the Shortfall Payment shall be determined by the
Vendor's Actuary and agreed by the Purchaser's Actuary or, in
default of agreement, be determined under paragraph 10.
(B)
(i) On receipt of the Shortfall Payment, the Purchaser
shall promptly pay an amount, or procure that the UK
Company 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
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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:
o in the accounting period (or accounting
periods) in which that deduction is obtained
or,
o 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 Vendor so far as
possible by way of repayment of the Cash
Consideration payable in respect of the Shares of
Unipath Limited an amount equal to:
o the aggregate amount by which the Shortfall
Contribution reduces the said taxable
profits in the accounting period (or
accounting periods) in question,
multiplied by
o 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 Vendor 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 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).
(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
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Purchaser of an amount equal to the Shortfall
Contribution is surrendered by way of group relief or
consortium relief in accordance with the provisions
of ss.402-413, Income and Corporation Taxes Act 1988.
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. ADJUSTMENTS IN RESPECT OF SENIOR MANAGERS
The following amendments shall apply in respect of the Senior Managers:
(A) in addition to the contributions required in paragraph 3, the
Purchaser shall procure that the UK Company shall, whilst the
UK Company remains a participating employer pursuant to
paragraph 2, pay to Unilever UK Central Resources Limited 7%
of Senior Managers' Pensionable Pay (as defined in the
governing documentation of 1999 SERA) plus the amount of any
VAT due thereon, as if that amount represented contributions
in respect of such Senior Managers,
(B) the letter issued to Senior Managers providing supplementary
retirement and death benefits shall be regarded as part of the
UPF for the purpose of paragraphs 4,5,6,7 and 8 (and
therefore, for the avoidance of doubt, for the purpose of
paragraph 12) which shall therefore be read as if reference to
the UPF in those paragraphs were also references to 1999 SERA
and the references to Net Relevant Contributions in paragraph
8(A)(ii) shall include any contributions referred to in (A)
above paid in respect of a Transferring Member,
(C) the Purchaser shall enter into an agreement with each Relevant
Employee who is a Senior Manager in a form satisfactory to the
Vendor to achieve the purposes of this paragraph 14, and
(D) the Purchaser must procure that the Purchaser's Pension Scheme
which provides benefits in respect of a transfer of benefits
from 1999 SERA and in respect of service after the Completion
Date which are equivalent to benefits under 1999 SERA is, to
the extent such benefits are capable of tax approval, funded.
15. NO ASSISTANCE TO BE GIVEN BY THE PURCHASER
(A) 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
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the UPF having to pay a larger amount than the amount payable
under paragraph 11 to the Purchaser's Pension Scheme (for this
purpose, the words "105 per cent." in paragraph 11 being
substituted by the words "100 per cent."). The Purchaser
agrees that this undertaking extends to the Purchaser and any
other company directly or indirectly controlled or connected
with the Purchaser and applies both during and after the
Holding Period.
(B) The Purchaser undertakes to the Vendor that:
(i) before and on and after the Payment Date the trust
deed and rules of the Purchaser's Pension Scheme will
include a condition that the Purchaser's approval is
required to the acceptance of any transfer payment to
be made by the UPF to the Purchaser's Pension Scheme,
and
(ii) it will not give such approval if the total payment
proposed to be made to the Purchaser's Pension Scheme
by the UPF exceeds the amount payable under paragraph
11.
16. VENDOR'S UNDERTAKINGS
(A) The Vendor agrees to indemnify and keep indemnified each of
the Purchaser, the Purchaser's Pension Scheme and the UK
Company against any losses, liabilities, costs, damages or
expenses to make any payments to the UPF beyond the rate of
16.7% pursuant to paragraph 3(A)(i), including and pursuant to
section 75 of the Pensions Act 1995. This indemnity shall not
extend to any liability of the Purchaser to make contributions
to the UPF as a result of its breach of paragraph 7(A).
(B) The Vendor will indemnify the Purchaser against any liability
to provide retirement benefits on the grounds that a UK
Employee or former employee of the UK Company was denied
access to the UPF or the Unilever Superannuation Fund in
breach of Article 141 prior to the Completion Date to the
extent such claim relates to the period prior to the
Completion Date.
17. AGREEMENT TO ACT PROMPTLY
The Purchaser and the Vendor will use their respective reasonable
endeavours to ensure that they comply with all their obligations under
this Schedule promptly.
18. PENSION WARRANTIES
(A) Save in respect of:
o the UPF;
o the letters issued to Senior Managers referred to in
paragraph 14;
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o the UK state scheme;
o any arrangement the sole purpose of which is to
provide benefits on injury or death; and
o any arrangement which only provides death benefits
secured by an insurance policy,
no member of the Vendor's Group nor the UK Company (in this paragraph
18, the "EMPLOYER"):
(i) has any obligation (whether legally binding or not)
to:-
(a) pay any pension; or
(b) make any other payment on or after
retirement or death; or
(c) otherwise to provide "relevant benefits"
(within the meaning of Section 612 of The
Income and Corporation Taxes Act 1988)
to, or in respect of, any UK Employee (or spouse or
dependant of any of them) such UK Employee; and
(ii) 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 provision of any such benefits to, or in respect
of, any UK 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:
o the deeds, documents and announcements (to extent not
already reflected in the trust deed) currently
governing the UPF which contain particulars of
benefits and entitlements and a copy of the latest
trustee report and accounts and actuarial valuation;
and
o a full list of Relevant Employees as at the 1st July,
2001.
(C) The UPF is an "exempt approved scheme" (within the meaning of
Chapter I of Part XIV of The Income and Corporation Taxes Act
1988) and has 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 Vendor is aware, there is no reason
why approval of the UPF by the Board of Inland Revenue should
be withdrawn.
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(D) The UK Company holds or is named in an appropriate
contracting-out certificate as defined in the Pension Schemes
Act 1993.
(E) Contributions to the UPF payable by the UK Company are not
paid in arrears and all contributions to, and expenses of, the
UPF which have fallen due for payment by the UK Company have
been paid.
(F) 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. For the avoidance of doubt, the Purchaser is
required, subject to the terms of paragraph 4(B) and 5(B), to
maintain established practices as to the exercise of
discretions in relation to benefits notwithstanding any breach
of this warranty (F) and that obligation shall be taken into
account for the purpose of assessing damages for any breach of
this warranty (F).
(G) There is no dispute with regard to the benefits payable under
the UPF to or in respect of any UK Employee which is material
in the context of the total liabilities in respect of the
pre-Completion pensionable service of the UK 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 Vendor is
aware there is no fact or circumstance likely to give rise to
such proceedings.
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[Annexes Omitted]
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PART B NON-UK PENSIONS
1. DEFINITIONS
(A) In this PART B of this Schedule the following expressions
shall have the meanings respectively assigned to them:
"BENEFITS" means any pension, lump sum, gratuity,
payment after termination of employment of
costs (including, without limitation,
medical, dental or other healthcare costs),
or other like benefit provided or to be
provided:
o on or after retirement;
o on death;
o on or after termination of
employment, except to the extent
the benefits referred to above are
enhanced where such termination is
on account of redundancy or at the
request of the employer;
o on or in connection with
disability,
but excluding:
o any risk benefit the payment of
which is insured with an external
insurance company; and
o any benefit provided under an
arrangement the sole purpose of
which is to provide benefits on
death.
"NON-UK COMPANY" means Unipath Diagnostics GmbH, Unipath
Scandinavia A. B and Unipath B.V;
"PURCHASER'S means any Plan of any member of the
GROUP PLAN" Purchaser's Group under which Benefits are
provided or, if the context so requires, the
trustees or managers of any such Plan.
"PURCHASER'S means such actuaries or firms of actuaries
NON-UK ACTUARY" as the Purchaser may determine for the
purpose
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of this PART B of this Schedule.
"RELEVANT means a Non-UK Employee and, if he becomes
NON-UK employed within 6 months of Completion by a
EMPLOYEE" member of the Purchaser's Group, each member
of the Dutch Sales Staff, with Benefits
under any Vendor's Non-UK Pension Plan.
"RETAINED means those Benefits under Vendor's Non-UK
BENEFITS" Pension Plans which are listed as "Retained"
in ANNEX A to this PART B.
"VENDOR'S means such actuaries or firms of actuaries
NON-UK as the Vendor may determine for the purpose
ACTUARY" of this PART B of this Schedule.
"VENDOR'S means those plans set out in ANNEX A to this
NON-UK PENSION PART B.
PLANS"
(B) References in this PART B of this Schedule to paragraphs
are to paragraphs of this PART B of this Schedule.
2. BENEFITS TO BE PROVIDED BY THE PURCHASER
(A) (i) In relation to each Relevant Non-UK Employee, the
Purchaser will continue to provide or procure to be
provided equivalent Benefits in respect of service:
(a) prior to the Completion Date, and
(b) for the period of 3 years on and after the
Completion Date
to the Benefits of that Relevant Non-UK Employee
immediately before the Completion Date and payable,
subject in the case of the exercise of discretions to
PARAGRAPH 2(A)(iv), as of right. The obligation under
(a) shall not apply to Benefits of a Relevant Non-UK
Employee which remain to be provided by a funded
Vendor's Non-UK Pension Plan or to Retained Benefits.
(ii) The Purchaser agrees that, where a Relevant Non-UK
Employee has Benefits in respect of service prior to
the Completion Date in a funded Vendor's Non-UK
Pension Plan (other than Retained Benefits), it will
establish or nominate an appropriate plan which,
subject to applicable law, is capable of accepting a
transfer of such Benefits, or in the case of the
Unicare Savings Plan in the United States, to which
an individual can elect to rollover benefits from the
relevant Vendor's Non-UK Pension Plan and the
Purchaser will, or will procure that, each Relevant
Non-UK Employee is offered the opportunity to
transfer or rollover such Benefits.
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(iii) Any transfer payment from a funded Vendor's Non-UK
Pension Plan to any such plan established or
nominated by the Purchaser shall be calculated by
Vendor's Non-UK Actuary in accordance with applicable
law and local practice in relation to the Plan in
question.
(iv) Where there is an established practice as to the
exercise of discretions in relation to Benefits, the
Purchaser shall continue that practice in relation to
the Benefits at (A)(i)(a) and (b) above. In relation
to each of the practices as to the exercise of
discretions referred to in ANNEX C to this PART B,
the Purchaser shall make an announcement to the
Relevant Non-UK Employees which is in form and
substance to the reasonable satisfaction of the
Vendor that it will continue that practice in
relation to the Benefits at (A)(i)(a) and (b) above.
However the Purchaser shall have the same rights of
variation and discontinuance of that practice as the
relevant member of the Vendor's Group has at the date
of this Agreement.
(v) The obligations under (i) to (iv) above 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 buyer concerned honours such
obligations in respect of each Relevant Non-UK
Employee concerned in such a disposal.
(B) The Purchaser shall procure that, in the satisfaction of its
obligation under PARAGRAPH 2(A), compulsory contributions
shall not be payable by a Relevant Non-UK Employee, except to
the extent otherwise expressly agreed in writing by that
Relevant Non-UK Employee, at a rate greater than the rate (if
any) at which:
(i) he pays compulsory contributions at the Completion
Date, for a period of 1 year from the Completion Date
or, if shorter, the period expiring on the date on
which he is required to contribute to the Vendor's
Non-UK Pension Plan of which he was a member
immediately prior to the Completion Date under the
provisions of that plan, if he is then an active
member of that plan, or on which he would have been
required to contribute to the relevant Vendor's
Non-UK Pension Plan under the provisions of that
plan, had he then been an active member of that plan;
and
(ii) he could have been required to contribute to the
Vendor's Non-UK Pension Plan in question under the
provisions of that Plan in force immediately prior to
the Completion Date but for any surplus or deficit in
that Plan, for the remainder of the period referred
to in PARAGRAPH 2(A)(i)(b) after the expiry of the
period in (I) above.
(C) For the purpose of (A) above:
(i) "EQUIVALENT" means with an equivalent or greater
value and will be determined, in the case of defined
benefit Benefits, using the following actuarial
valuation method and assumptions:
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(a) the same as those used in the most recent
actuarial valuation of the plan published on
or before the date of this Agreement to
which the Benefits relate and, in the case
of a funded plan, also used for actually
funding those benefits, modified to such
extent as may be agreed in writing by the
Vendor's Non-UK Actuary and the Purchaser's
Non-UK Actuary and the procedure referred to
in PARAGRAPH 3 shall apply if any such
modification is not so agreed, and
(b) if there is no such actuarial valuation,
such reasonable actuarial method and
assumptions as may be agreed between the
Vendor and the Purchaser or, in default of
agreement, as determined under PARAGRAPH 3
provided that:
o in the case of any Relevant Non-UK Employee with
Benefits under the UVO in Germany, equivalent
Benefits under the relevant Purchaser's Group Plan
will be identical to those under the UVO;
o in the case of any Relevant Non-UK Employee with
Benefits under the Vendor's Non-UK Pension Plan in
France which provides a lump sum benefit (the "FRENCH
LUMP-SUM PLAN"), equivalent Benefits under the
relevant Purchaser's Group Plan will be identical to
those under the French Lump Sum Plan;
o this PARAGRAPH 2(C)(i) does not apply in relation to
the Netherlands (see PARAGRAPH 2(D));
o this PARAGRAPH 2(C)(i) does not apply in relation to
the US (see PARAGRAPH 2(F)).
(ii) equivalent Benefits in respect of service prior to Completion
Date must, in addition to satisfying (C)(i) above, also be of
a type or form approved by the Vendor.
(iii) It is agreed that defined contribution or money purchase
benefits ("DC BENEFITS") in place of Benefits which are of a
defined benefit type will not normally be considered
"equivalent" except where the equivalent Benefits are in
respect of Employees in the Netherlands, France or the US.
(iv) For the purpose of this paragraph 2, where the Purchaser is
permitted to provide Benefits on a DC Benefit basis,
"equivalent" shall relate to Benefits exclusive of
administration costs and the Vendor and the Purchaser agree to
operate the provisions of this paragraph 2 in accordance with
that principle.
(D) (i) This paragraph 2(D) applies in respect of any Relevant Non-UK
Employee with Benefits under the Progress Pension Fund in the
Netherlands.
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(ii) In relation to each month of service on and after the
Completion Date, the employer contribution paid in respect of
each such Employee concerned for equivalent DC Benefits must
not be less than the aggregate of:
o the Unilever Dutch Accounting Cost for the Employee
in question in relation to the Progress Pension Fund;
and
o in relation to the period referred to in paragraph
2(B)(i), (A-B), where:
A represents the amount of monthly
contribution he could have been required to
contribute to the Progress Pension Fund in
question under the provisions of that Plan
in force immediately prior to the Completion
Date but for any surplus or deficit in that
Plan; and
B represents the amount (if any) of monthly
compulsory contribution he pays to the
Progress Pension Fund at the Completion
Date;
For this purpose, "UNILEVER DUTCH ACCOUNTING COST" means the
employer cost, expressed as a percentage of pensionable pay
(over the period referred to below), less any allowance
included for administration costs, calculated in accordance
with the latest actuarial method and assumptions in relation
to the Progress Pension Fund used for Vendor's Group
accounting purposes prior to the Completion Date, in respect
of the period of 12 months immediately prior to the Completion
Date divided by 12 on the assumption that the Progress Pension
Fund is neither in surplus nor in deficit or calculated on
such other basis as the Vendor and the Purchaser shall agree,
provided that the provisions of paragraph 3 shall apply in the
event that there is no such agreement.
(iii) In relation to service prior to the Completion Date, the
Vendor and the Purchaser shall use their respective reasonable
endeavors to agree a treatment of the Benefits in respect of
each such Employee that provides compensation for the loss of
continuous service under the Progress Pension Fund which shall
be delivered through a combination of:
o the deferred benefits of the Employee under the
Progress Pension Fund (where these remain to be
provided under the Progress Pension Fund) together
with any improvement made to them or, at the option of
the Employee concerned, the transfer of his benefits
under the Progress Pension Fund to the relevant
Purchaser's Group Plan; and
o a lump sum addition to the opening balance credited to
the Employee's DC Benefit account in the relevant
Purchaser's Group Plan and/or extra employer
contributions spread over a future period;
with the objective that the aggregate value as at the
Completion Date of all such elements, to the extent
applicable, in respect of each such Employee,
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calculated on the basis of the actuarial method and
assumptions in relation to the Progress Pension Fund used for
Vendor's Group accounting purposes prior to the Completion
Date, should be equivalent to the value as at Closing of that
Employee's benefits under the Progress Pension Fund on the
basis of that actuarial method and assumptions.
(iv) (a) To the extent so agreed, the Vendor's Non-UK Actuary
shall determine the value in local currency as at the
Completion Date of:
o the part of such aggregate value referred to
at (iii) above as at the Completion Date
provided under the Purchaser's Group Plan,
using the actuarial method and assumptions
used in the latest actuarial valuation of
the Progress Pension Fund used for Vendor's
Group accounting purposes before the date of
this Agreement; less
o the assets transferred from the Progress
Pension Fund to the Purchaser's Group Plan,
adjusted in respect of the period from the
date of transfer to the Completion Date
using a basis consistent with that adopted
by the Progress Pension Fund for adjusting
the value of assets transferred from the
Completion Date to the date of transfer,
and shall provide such calculation and the amount of
any resulting shortfall to the Purchaser's Non-UK
Actuary.
(b) Paragraph 9 of Part A of this Schedule shall apply
mutatis mutandis.
(c) Within 10 Business Days after the value referred to in
(a) has been agreed or determined, the Vendor shall
pay to the Purchaser, so far as possible by way of
repayment of the Cash Consideration payable in respect
of the Shares of Unipath B.V., an amount in pounds
sterling (converted from Euros at the closing
mid-point exchange rates appearing in The Financial
Times on the last Business Day prior to the date of
payment) equal to:
o any shortfall referred to at (a) above
multiplied by (1.0 less X), where X
represents the standard maximum corporate
tax rate for the Netherlands as at the
Completion Date (expressed as a percentage
rate divided by 100);
o adjusted by the discount rate used in the
actuarial assumptions referred to in (a)
above in respect of the period from the
Completion Date to the day before the date
of payment.
(E) (a) This paragraph 2(E) shall apply in place of paragraph
2(C)(i) in respect of Vendor's Non-UK Pension Plan in
France which provides a pension benefit (the "FRENCH
PENSION PLAN") in France.
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(b) The French Pension Plan will be replaced with effect
from 1st January, 2002 in relation to employees of
the Vendor's Group in France by a plan providing DC
Benefits, summary details of which are set out in the
Data Room at France Part A Legal 1.10 and 1.11 (the
"REPLACEMENT FRENCH DC PLAN"). "EQUIVALENT" Benefits
in respect of each Relevant Non-UK Employee with
Benefits under such Plan shall mean that the employer
contribution rate applicable in respect of him under
the Purchaser's Group Plan shall be equal to or
greater than the employer contribution rate that
would have applied to him under the Replacement
French DC Plan for the period referred to in
(A)(i)(b) above had he remained an employee of the
Vendor's Group.
(F) (a) This paragraph 2(F) shall apply in place of paragraph
2(C)(i) in respect of the US.
(b) In respect of the period referred to at 2(A)(i)(a)
above:
(1) no transfer of benefits shall be made from
the Unicare Retirement Plan or the Unicare
Retirement Preservation Plan;
(2) In relation to the Unicare Retirement Plan
and the Unicare Retirement Preservation
Plan, the Vendor and the Purchaser agree
that each US Employee who is a member of
either such Plan (or in a waiting period to
become such a member) and who becomes
employed by a member of the Purchaser's
Group with effect from the Completion Date
("UNICARE PENSION PLAN MEMBERS") shall be
compensated, by the provision of Benefits
under a Purchaser's Group Plan, in respect
of the loss of salary linkage to the
benefits accrued in respect of the service
prior to the Completion Date and retained by
the Unicare Retirement Plan and the Unicare
Retirement Preservation Plan. The Vendor and
the Purchaser agree that such compensation
shall be provided:
(aa) through a Buyer Group Plan which is
tax qualified in the US; and/or
(bb) to the extent all or part of such
compensation cannot in compliance
with applicable law be provided
under (aa) above, through a
Purchaser's Group Plan which is a
preservation plan; and/or
(cc) to the extent such compensation
cannot be provided under (aa)
and/or (bb) above in compliance
with applicable law, in cash.
(c) In relation to (b) above, the Vendor shall cause the
Vendor's Non-UK Actuary and the Purchaser shall cause
the Purchaser's Non-UK Actuary, using the actuarial
method and assumptions used in the latest actuarial
valuation of the
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applicable Plan used for Vendor's Group accounting
purposes before the date of this Agreement, to
calculate in respect of each Unicare Pension Plan
Member the value in local currency as at the
Completion Date of the compensation provided under
(aa), (bb) and/or (cc) above.
(d) In relation to the Unicare Retiree Medical Plan, the
Vendor and the Purchaser agree that with respect to
each U.S. Employee who becomes employed by a member
of the Purchaser's Group with effect from the
Completion Date and is in a class of employees
eligible for coverage under the Unicare Retiree
Medical Plan immediately prior to the Completion Date
("UNICARE MEDICAL EMPLOYEE"), the Vendor shall cause
the Vendor's Non-UK Actuary and the Purchaser shall
cause the Purchaser's Non-UK Actuary, using the
actuarial method and assumptions used in the latest
actuarial valuation of the Unicare Retiree Medical
Plan used for Vendor's Group accounting purposes
before the date of this Agreement, to calculate in
respect of each Unicare Medical Employee the
accumulated postretirement benefit obligation within
the meaning of FAS 106 ("APBO") in local currency as
at the Completion Date under the Unicare Retiree
Medical Plan and convert such amount into equivalent
service for retirement eligibility purposes for
retiree medical benefits under a retiree medical plan
to be established or maintained by the Purchaser or a
member of the Purchaser's Group. The Purchaser shall
also permit the Unicare Medical Employees to
participate in such retiree medical plan in respect
of service after the Completion Date.
(e) To the extent the value as at the Completion Date of
the credit in respect of past service referred to in
(d) above in respect of any U.S. Medical Employee,
calculated on the basis of the actuarial method and
assumptions referred to in (c) above, is less than
the APBO in respect of that Unicare Medical Employee,
the Purchaser shall provide compensation of an amount
equal to that loss of value to that Unicare Medical
Employee in the same manner as set out in (F)(b)(2)
above.
(f) Paragraph 9 of Part A of this Schedule shall apply
mutatis mutandis.
(g) Within 10 Business Days after the value referred to
in (c) above has been agreed or determined, the
Vendor shall pay to the Purchaser, so far as possible
by way of repayment of the Cash Consideration payable
in respect of the U.S. Business, an amount in pounds
sterling (converted from US dollars at the closing
mid-point exchange rates appearing in The Financial
Times on the last Business Day prior to the date of
payment)equal to:
o that value multiplied by (1.0 less X), where
X represents the standard maximum corporate
tax rate for the U.S. as at the Completion
Date (expressed as a percentage rate divided
by 100); and
o adjusted by the discount rate used in the
actuarial assumptions referred to in (c)
above in respect of the period from the
Completion Date to the day before the date
of payment.
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(h) In relation to each month of service on and after the
Completion Date, or, for those Unicare Pension Plan
Members who are at Completion in a waiting period
before they become eligible to become a member, on
and after the day immediately following the expiry of
such waiting period, the employer contribution paid
in respect of each Unicare Pension Plan Member
concerned for equivalent DC Benefits must not be less
than the Unilever US Pension Accounting Cost for the
Unicare Pension Plan Member in question in relation
to the relevant Vendor's Non-UK Pension Plan.
For this purpose, "UNILEVER US PENSION ACCOUNTING
COST" means the FAS 87 service cost, expressed as a
percentage of pensionable pay (over the period
referred to below),less any allowance included for
administration costs, calculated in accordance with
the latest actuarial method and assumptions used in
relation to the relevant Vendor's Non-UK Plan for
Vendor's Group accounting purposes prior to the
Completion Date, in respect of the period of 12
months immediately following the Completion Date
divided by 12 on the assumption that the Plan
concerned is neither in surplus nor in deficit or
calculated on such other basis as the Vendor and the
Purchaser shall agree, provided that the provisions
of paragraph 3 shall apply in the event that there is
no such agreement. For the purpose of this
calculation, the one year waiting period for
eligibility for membership of the relevant Vendor's
Non-UK Plan shall be disregarded.
(i) In relation to each month of service on and after the
Completion Date, the employer cost under the relevant
Purchaser's Group Plan (calculated on a basis
consistent with the Unilever US Medical Accounting
Cost) in respect of each Unicare Medical Employee
concerned for equivalent retiree medical benefits
must not be less than the Unilever US Medical
Accounting Cost for the Unicare Medical Employee in
question in relation to the Unicare Retiree Medical
Plan.
For this purpose, "UNILEVER US MEDICAL ACCOUNTING
COST" means the FAS 106 cost, expressed as a
percentage of pensionable pay (over the period
referred to below),less any allowance included for
administration costs, calculated in accordance with
the latest actuarial method and assumptions used in
relation to the Unicare Retiree Medical Plan for
Vendor's Group accounting purposes prior to the
Completion Date, in respect of the period of 12
months immediately following the Completion Date
divided by 12 or calculated on such other basis as
the Vendor and the Purchaser shall agree, provided
that the provisions of paragraph 3 shall apply in the
event that there is no such agreement.
(j) Payments under (h) and (i) above shall be made by the
Purchaser in accordance with the provisions of
paragraph 2(F)(b)(2), mutatis mutandis.
(k) the Purchaser must recognise or cause to be
recognised each U.S. Employee's service with a member
of the Vendor's Group prior to Completion for all
purposes under the Purchaser's Group Plan which
provides Benefits in respect of such U.S. Employees
in replacement of those provided under the Unicare
Health and Welfare Plan (post-retirement).
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(G) whether or not a transfer is made to a member of the
Purchaser's Group or a Purchaser's Group Plan in respect of
past service benefits, the Purchaser must recognise or cause
to be recognised each Relevant Non-UK Employee's service with
a member of the Vendor's Group prior to Completion for
eligibility, vesting, retirement eligibility and (where
related to length of service) benefit scales purposes and, in
particular, equivalent Benefits in respect of the service of
each Relevant Non-UK Employee for the period referred to in
PARAGRAPH 2(A)(i) must vest:
o on the same or shorter timescale; and
o at least in the same circumstances,
as if the Relevant Non-UK Employee concerned had continued to
be an active member of the Vendor's Non-UK Pension Plan in
question for so long as he remains employed by a member of the
Purchaser's Group or any buyer referred to in PARAGRAPH
2(A)(v) (whether or not continuing to accrue benefits under
the Purchaser's Group Plan in question).
(H) The mechanics of achieving (A) above will be determined by the
applicable laws of the jurisdiction in question and the legal
provisions conferring and governing the Benefits.
(I) Where any transfer of Benefits or assets in respect of those
Benefits requires the approval or consent of any regulatory
body or any third party (including the Relevant Non-UK
Employees), the Vendor and the Purchaser shall use their
respective reasonable endeavours to obtain such approvals and
consents.
(J) The Purchaser shall procure that admission of a Relevant
Non-UK Employee to the applicable Purchaser's Group Plan is
not conditional on his consenting to the transfer of his
Benefits in any Vendor's Non-UK Pension Plan in respect of his
past service.
(K) Where Benefits are provided under a Vendor's Non-UK Pension
Plan on the death or disability of a Relevant Non-UK Employee
or his spouse, child or dependant, 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 Vendor's Non-UK Pension Plan in
question under the provisions of that Plan in force
immediately prior to the Completion Date. For the purpose of
this PARAGRAPH 2(K), the benefit payable under the applicable
Purchaser's Group Plan in the US may be reduced by the amount
of any benefit payable on the same event in respect of the
individual concerned by the relevant Vendor's Non-UK Pension
Plan in the US.
(L) Any announcement to be issued by the Vendor or a member of the
Purchaser's Group in relation to Benefits the subject of this
PARAGRAPH 2 must be consistent with the terms of this
PARAGRAPH 2 and, prior to the issue of any such announcement,
the Vendor 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.
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(M) The Purchaser's agreement to the provisions of this PARAGRAPH
2 is given by the Purchaser on the express understanding that,
if the Purchaser is in breach of any of such provisions, the
Vendor 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.
(N) The Vendor shall use all reasonable endeavours to permit
Unipath Diagnostics GmbH to participate in the Berolina
Pensionskasse, in relation to those Relevant Non-UK Employees
who participate in the Berolina Pensionskasse immediately
prior to the Completion Date, for a temporary period after the
Completion Date not to exceed one year, subject to the
obtaining of appropriate consents and approvals and on the
basis that no employer or employee contributions are payable
in respect of that period.
(O) (i) In this paragraph 2(O), references to the "CHICOGO
INACTIVES" are references to those former employees
of Unipath Diagnostics GmbH who have Benefits under
the UVO immediately prior to the Completion Date
("UVO BENEFITS").
(ii) The Vendor shall use all reasonable endeavours to
procure that the consent of the Chicogo Inactives is
obtained, prior to the expiry of the period of one
year after the Completion Date, to the transfer of
the obligation to provide UVO Benefits in respect of
them to a member of the Vendor's Group.
(iii) The following provisions of this paragraph 2(N) apply
in respect of those Chicogo Inactives (if any) whose
consent referred to in (ii) above is not obtained
within the period referred to at (ii) above
("NON-CONSENTING CHICOGO INACTIVES").
(iv) As soon as reasonably practical after the expiry of
the period of one year after the Completion Date, the
Vendor's Non-UK Actuary shall determine the value in
Euros as at the Completion Date of the UVO Benefits
applicable in respect of the Non-Consenting Chicogo
Inactives in accordance with the actuarial method and
assumptions set out in Annex B to this Part B,
together with an appropriate adjustment to reflect
the value as at the Completion Date of any payments
made under (vii) below, and shall provide such
calculation to the Purchaser's Non-UK Actuary.
(v) Paragraph 9 of Part A of this Schedule shall apply
mutatis mutandis.
(vi) Within 10 Business Days after the value referred to
in (iv) has been agreed or determined, the Vendor
shall pay to the Purchaser, so far as possible by way
of repayment of the Cash Consideration payable in
respect of the Shares of Unipath Diagnostics GmbH, an
amount in pounds sterling (converted from Euros at
the closing mid-point exchange rates appearing in The
Financial Times on the last Business Day prior to the
date of payment)equal to (A + B) adjusted by C,
where:
A represents the part of that value which has
been recognised for tax purposes;
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B represents the part of that value which has
not been recognised for tax purposes,
multiplied by (1.0 less X), where X
represents the standard maximum corporate
tax rate for Germany as at the Completion
Date (expressed as a percentage rate divided
by 100); and
C represents the discount rate referred to in
Annex B to this Part B in respect of the
period from the Completion Date to the day
before the date of payment.
(vii) The Vendor shall, at its cost, administer and procure
the payment of any payment falling due to any Chicogo
Inactive during the period from the Completion Date
to the expiry of the period of one year after the
Completion Date. The Purchaser shall provide all
reasonable assistance to the Vendor in connection
with such payments, including the provision of any
relevant data or information in the possession or
control of the Purchaser.
3. DISPUTES
(A) Any dispute between the Vendor and the Purchaser or between
the Vendor's Non-UK Actuary and the Purchaser's Non-UK Actuary
concerning the determination or valuation or agreement of any
matter to be specifically determined, valued or agreed under
this PART B of this Schedule shall, in the absence of
agreement between them, be referred to an independent actuary
agreed by the Vendor and the Purchaser or, failing such
agreement, appointed by the President for the time being of
the Institute of Actuaries in England at the request of the
party first applying.
(B) Such independent actuary shall act as an expert and not as an
arbitrator. His decision shall be final and binding on the
parties and his expenses shall be borne between the Vendor of
the one part and the Purchaser of the other part as the
independent actuary may direct.
4. EXPATRIATE EMPLOYEES
The general principles to be applied in relation to those Employees who
are employed in the Transferring Business as at the Completion Date in
a country which is not their home country ("EXPATRIATES") are that:
(A) the Purchaser shall provide or procure the provision of
Benefits to Expatriates in accordance with the terms promised
to those Expatriates by the relevant member of the Vendor's
Group or any Company; and
(B) the Vendor and the Purchaser shall, in relation to each such
Expatriate, agree the most appropriate and cost effective way
for those Benefits to be provided having regard to applicable
laws and tax regimes.
5. PENSION WARRANTIES
(A) Save in respect of:
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o the Vendor's Non-UK Pension Plans;
o the relevant state scheme or any industry-wide
scheme;
o any arrangement the sole purpose of which is to
provide benefits on injury or death; and
o any arrangement which only provides death benefits
secured by an insurance policy,
no member of the Vendor's Group, nor any Non-UK Company (the
"EMPLOYER")
(i) has any obligation to:
o pay any pension;
o make any other payment on or after
retirement or death; or
o otherwise to provide Benefits
to, or in respect of, any Relevant Non-UK Employee or
spouse or dependant of such Relevant Non-UK Employee;
and
(ii) 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 provision of any such benefits to, or in respect
of, any Relevant Non-UK Employee or spouse or
dependant of such Relevant Non-UK Employee.
(B) Up-to-date and complete copies of the governing documentation
(including explanatory booklets and announcements to members
to the extent applicable) of each Vendor's Non-UK Pension Plan
(other then the ITP in Sweden) are comprised in the Data Room.
(C) Each Vendor's Non-UK Pension Plan has at all times complied
with applicable law and its governing documentation in all
material respects.
(D) There is no dispute with regard to the Benefits of the
Relevant Non-UK Employees in any country which is material in
the context of the total liabilities in respect of the
pre-Completion pensionable service of such Relevant Non-UK
Employees and no legal proceedings by or against the Employer
in respect of such Benefits is pending, threatened or
expected, and so far as the Vendor are aware there is no fact
or circumstance likely to give rise to such proceedings.
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[Annexes Omitted]
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SCHEDULE 9
(PROPERTIES)
[Intentionally Omitted]
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SCHEDULE 10
(COMPLETION ACCOUNTS AND VARIABLE INTRA-GROUP DEBT STATEMENT)
[Intentionally Omitted]
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SCHEDULE 11
(EMPLOYEES)
[Intentionally Omitted]
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SCHEDULE 12
(ALLOCATION OF CASH CONSIDERATION)
[Intentionally Omitted]
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SCHEDULE 13
(FIXED INTRA-GROUP DEBT AMOUNTS)
[Intentionally Omitted]
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SCHEDULE 14
(DOMAIN NAMES)
[Intentionally Omitted]
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SCHEDULE 15
(PATENT CASES)
[Intentionally Omitted]
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SCHEDULE 16
(INTELLECTUAL PROPERTY LICENCES)
1. SHARED RIGHTS
(A) Subject to the provisions of sub-clauses (D) and (E) below,
the Purchaser shall, with effect from Completion, procure the
grant to the Vendor of a non-exclusive, perpetual, worldwide,
assignable, irrevocable, royalty-free licence (with the right
to sub-license) in respect of any Company IPR (excluding all
trade marks) and know-how owned by any of the Companies which
has been used (but not exclusively used) in the twelve months
prior to Completion by a member of the Vendor's Group or the
Companies other than in connection with the Transferring
Business to use, manufacture, research, develop and/or sell
products outside the Defined Field and the field of human and
animal IN VITRO diagnostics, save that the Vendor shall have
no right to grant sub-licences in respect of any patents or
patent applications included within Company IPR except to
members of the Vendor's Group or for the purpose of having
products manufactured, researched and/or developed for it by
third parties.
(B) Subject to the provisions of sub-clauses (F) and (G) below,
the Vendor shall, with effect from Completion, grant or
procure the grant to the Purchaser of a non-exclusive,
perpetual, worldwide, assignable, irrevocable, royalty-free
licence (with the right to sub-license) in respect of the
Shared IPR to use, manufacture, research, develop and/or sell
products in the Defined Field and in the fields of human and
animal IN VITRO and IN VIVO diagnostics only (save to the
extent that the Shared IPR is licensed pursuant to the
Antibody Patent Licence, in which case the terms of the
Antibody Patent Licence shall apply), save that the Purchaser
shall have no right to grant sub-licences in respect of any
patents or patent applications included within Shared IPR
except to members of the Purchaser's Group or for the purpose
of having products manufactured, researched and/or developed
for it by third parties.
(C) Neither party shall disclose (other than to permitted
sub-licensees under obligations of confidentiality no less
onerous than this SUB-CLAUSE (C)) any know-how licensed to
such party pursuant to SUB-CLAUSE (A) or, as the case may be,
(B) to any third party except under an obligation of
confidence, provided that this obligation shall not apply to
know-how:
(i) which was already available to the public before the
date of this Agreement;
(ii) which subsequently becomes available to the public
through no fault of the receiving party;
(iii) which is lawfully disclosed to the receiving party by
a third party without obligation of confidence; or
(iv) which the receiving party can prove was developed by
that party wholly independently of the information
received from the donor.
(D) The Vendor shall identify and provide the Purchaser with a
list of all patents and patent applications ("PATENTS"),
within eighteen months from the date of this
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Agreement in respect of patent applications filed within (i)
six months prior to the date of this Agreement, or (ii) three
months after the date of this Agreement, and within twelve
months from the date of this Agreement in respect of all other
Patents (the "IDENTIFICATION PERIOD"), which are Company IPR
and which the Vendor claims are included within the licence
granted pursuant to SUB-CLAUSE (A), together with a brief
description of the use of such Patents by the member of the
Vendor's Group other than in connection with the Transferring
Business. At the Vendor's reasonable request, the Purchaser
shall provide reasonable assistance to the Vendor in
connection with such identification of Patents. If the
Purchaser disputes whether any Patent is included within that
licence, the Parties agree to submit such dispute to a
mutually acceptable, independent third party arbitrator for
final binding arbitration and the Party whose assertion is not
upheld in relation to any Patent shall pay all the arbitration
costs (including the other Party's costs) in relation to the
dispute in respect of that Patent.
(E) After the Identification Period, the licence granted to the
Vendor pursuant to SUB-CLAUSE (A) shall terminate insofar only
as it relates to Patents except for any Patent which has been
identified by the Vendor pursuant to Clause (D) and which the
Vendor has agreed is included within that licence or which an
arbitrator pursuant to SUB-CLAUSE (D) has determined is
included within that licence or which has been submitted for
resolution in accordance with SUB-CLAUSE (H).
(F) The Purchaser shall, within the Identification Period,
identify and provide the Vendor with a list of all Patents
owned by a member of the Vendor Group which the Purchaser
claims are included within the definition of Shared IPR
together with a brief description of the use of such Patents
by the Company or in the US Business. At the Purchaser's
reasonable request, the Vendor shall provide reasonable
assistance to the Purchaser in connection with such
identification of Patents. If the Vendor disputes whether any
Patent is included within the definition of Shared IPR the
Parties agree to submit such dispute to a mutually acceptable,
independent third party arbitrator for final binding
arbitration and the Party whose assertion is not upheld in
relation to any Patent shall pay all the arbitration costs
(including the other Party's costs) in relation to the dispute
in respect of that Patent.
(G) After the Identification Period, the licence granted to the
Purchaser to use Shared IPR pursuant to SUB-CLAUSE (B) shall
terminate insofar only as it relates to Patents except for any
Patent which has been identified by the Purchaser pursuant to
SUB-CLAUSE (F) and which the Vendor has agreed is included
within Shared IPR or which an arbitrator pursuant to
SUB-CLAUSE (F) has determined is included within Shared IPR or
which has been submitted for resolution in accordance with
SUB-CLAUSE (H).
(H) If a dispute or difference arises in connection with this
Schedule, the parties shall attempt to resolve such dispute or
difference through the following procedure:
(i) at the written request of either party, the
resolution of a dispute or difference shall be
escalated for good faith consideration, and where
possible, resolution by a senior patent attorney of
the Licensors' Group and the Chief Scientific Officer
of the Licensee; and
(ii) failing agreement by the persons in SUB-CLAUSE (H)(i)
above within 30 days of such written request such
dispute or difference may be referred at the written
request of either party to the Head of Patents of the
Licensors' Group and the
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Chief Executive Officer of the Licensee's Group. If
the dispute or difference is not resolved within 30
days of such request, either party may initiate
proceedings in accordance with SUB-CLAUSE 1(D) or
1(F) as appropriate,
provided that nothing in this sub-clause (H) shall prevent or restrict
either party's right to seek injunctive relief for any actual or
suspected unauthorised use or other unlawful act in respect of its
rights (and/or the rights of any member of its Group) in Intellectual
Property or know-how.
2. VITAMIN LICENCE AND ASSISTANCE
(A) The Vendor hereby grants the Purchaser and the Purchaser's
Group a non-exclusive, royalty-free, perpetual, irrevocable,
worldwide, assignable licence (including rights to grant
sub-licences) to use in the Defined Field and in the field of
human and animal IN VITRO and IN VIVO diagnostics (i) any
Intellectual Property or know-how owned by a member of the
Vendor's Group at the date of this Agreement arising from the
research on electrochemical detectors for the assessment of
vitamins in food products and in blood carried out (a) at the
Vendor's Colworth laboratory by Robert Porter and/or (b) which
is the subject of the IP assignment dated 18th December, 2001
between Unipath Limited and Unilever UK Central Resources
Limited as disclosed to the Purchaser (the "Research
Project"), and (ii) any patent or patent application whether
existing now or after the date of this Agreement, to the
extent covering (a) any such know-how owned by a member of the
Vendor's Group as at the date of this Agreement and/or (b) any
know-how received by the Unilever Group from Robert Porter
pursuant to this paragraph (A), save that the Purchaser shall
have no right to grant sub-licences in respect of any patents
or patent applications included within such licence except to
members of the Purchaser's Group or for the purpose of having
products manufactured, researched and/or developed for it by
third parties. The Purchaser shall at the Vendor's cost and
request use reasonable endeavours to procure that, during the
three months from Completion, Robert Porter, an employee of
the Company, provides the Vendor or a member of the Vendor's
Group with reasonable assistance in order for the Vendor or a
member of the Vendor's Group to prepare the documentation
reasonably necessary for the filing of patent applications on
the results of the Research Project. The reasonable assistance
to be provided by Robert Porter pursuant to this paragraph (A)
shall extend only to matters within his actual knowledge and
shall not include advising on the drafting of the relevant
patent applications, but shall include the provision of
relevant scientific or research information within his actual
knowledge for the relevant patent applications. The Vendor
acknowledges and agrees that no member of the Purchaser's
Group or Robert Porter shall be liable to any member of the
Vendor's Group in respect of any assistance given by Robert
Porter in accordance with this paragraph (A).
(B) The Vendor acknowledges and agrees on behalf of itself and
every member of the Vendor's Group that the Intellectual
Property assigned to Unilever UK Central Resources Limited
("Central Resources") by Unipath Limited pursuant to (i) the
assignment of affiniti solutions IPRs between Unipath Limited,
Central Resources, Steven Howell and Simon Alaluf dated on or
around the date of this Agreement; and (ii) the assignment of
electrochemical detectors IPRs between Central Resources and
Unipath Limited dated 18th December, 2001, (in each case as
disclosed to the Purchaser) shall be limited to such
Intellectual Property and know-how as is owned by Unipath
Limited at the date of this Agreement.
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Signed by RICHARD HAZELL )
for and on behalf of ) R.C. HAZELL
UNILEVER U.K. HOLDINGS LIMITED ) ____________________________
Signed by PAUL HEMPEL )
for and on behalf of ) PAUL HEMPEL
INVERNESS MEDICAL INNOVATIONS, INC. ) ____________________________