EXHIBIT 10.1
CONFORMED COPY
As of 15 April 1999
(as amended by Amending
Agreements dated 4 and 30 June 1999
and by a further Amending Agreement
dated 30 June 1999)
IMPERIAL CHEMICAL INDUSTRIES PLC
HUNTSMAN SPECIALTY CHEMICALS CORPORATION
HUNTSMAN ICI HOLDINGS, LLC
HUNTSMAN ICI CHEMICALS, LLC
=====================================
CONTRIBUTION AGREEMENT
in respect of the contribution of the
Polyurethanes, Tioxide, Relevant
Petrochemicals and PO/MTBE businesses
to Huntsman ICI Holdings, LLC
=====================================
CONTENTS
Clause Page
1. DEFINITIONS AND INTERPRETATION.............................................................. 1
2. SALE OF SALE SHARES AND LOCAL BUSINESSES................................................... 29
3. CONSIDERATION.............................................................................. 34
4. CONDITIONS................................................................................. 42
5. CONDUCT BEFORE CLOSING..................................................................... 47
6. CLOSING.................................................................................... 53
7. CLOSING STATEMENT.......................................................................... 69
8. PURCHASER INDEMNITIES...................................................................... 78
9. EMPLOYEES.................................................................................. 79
10. WARRANTIES AND INDEMNITIES................................................................. 81
11. OTHER PROVISIONS RELATING TO THE WARRANTIES AND INDEMNITIES................................ 84
12. LIMITATIONS ON CLAIMS...................................................................... 86
13. FURTHER LIMITATIONS ON CLAIMS.............................................................. 94
14. MANAGEMENT OF PRE-CLOSING TAX AFFAIRS AND CONDUCT OF OTHER TAX AFFAIRS..................... 99
15. CONTINUING ARRANGEMENTS BETWEEN THE RETAINED GROUP AND THE BUSINESS........................ 102
16. JOINT VENTURE INTERESTS.................................................................... 112
17. INSURANCE.................................................................................. 117
18. POST CLOSING UNDERTAKINGS.................................................................. 119
19. DOMAIN NAMES............................................................................... 123
20. COSTS...................................................................................... 123
21. PERFORMANCE BY GROUP MEMBERS............................................................... 126
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22. ANNOUNCEMENTS.............................................................................. 126
23. RESTRICTIONS ON THE VENDORS................................................................ 127
24. ENTIRE AGREEMENT........................................................................... 131
25. VARIATION.................................................................................. 133
26. ASSIGNMENT................................................................................. 133
27. SEVERABILITY............................................................................... 134
28. COUNTERPARTS............................................................................... 134
29. NOTICES.................................................................................... 135
30. INDIA AND PAKISTAN......................................................................... 136
31. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS......................................... 137
32. EXERCISE OF RIGHTS AND REMEDIES............................................................ 137
33. CONFIDENTIALITY............................................................................ 138
34. ANILINE PIPE............................................................................... 139
SCHEDULE 1....................................................................................... 140
SCHEDULE 2....................................................................................... 149
SCHEDULE 3....................................................................................... 151
SCHEDULE 4....................................................................................... 152
SCHEDULE 5....................................................................................... 176
SCHEDULE 6....................................................................................... 201
SCHEDULE 7....................................................................................... 203
SCHEDULE 8....................................................................................... 205
SCHEDULE 9....................................................................................... 208
SCHEDULE 10...................................................................................... 240
SCHEDULE 11...................................................................................... 244
SCHEDULE 12...................................................................................... 293
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SCHEDULE 13...................................................................................... 304
SCHEDULE 14...................................................................................... 319
SCHEDULE 14A..................................................................................... 358
SCHEDULE 15...................................................................................... 381
SCHEDULE 16...................................................................................... 383
SCHEDULE 17...................................................................................... 393
SCHEDULE 18...................................................................................... 426
SCHEDULE 19...................................................................................... 441
SCHEDULE 20...................................................................................... 452
SCHEDULE 21...................................................................................... 478
SCHEDULE 22...................................................................................... 482
SCHEDULE 23...................................................................................... 486
SCHEDULE 24...................................................................................... 489
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EXHIBIT 10.1
THIS CONTRIBUTION AGREEMENT was made as of 15 April 1999 and amended by Amending
Agreements dated 4 and 30 June 1999 and by a further Amending Agreement dated
30 June 1999
Between:
IMPERIAL CHEMICAL INDUSTRIES PLC, a company incorporated in England and Wales
whose registered office is at Imperial Chemical House, Millbank, London SW1P 3JF
(ICI);
HUNTSMAN SPECIALTY CHEMICALS CORPORATION, a corporation incorporated under the
laws of Delaware whose principal office is at 500 Huntsman Way, Salt Lake City,
Utah, USA (HSCC);
HUNTSMAN ICI HOLDINGS, LLC a limited liability company formed under the laws of
Delaware whose principal place of business is at 500 Huntsman Way, Salt Lake
City, Utah, USA (the Purchaser); and
HUNTSMAN ICI CHEMICALS, LLC a limited liability company formed under the laws of
Delaware, whose principal place of business is at 500 Huntsman Way, Salt Lake
City, Utah, USA (HIC).
Whereas:
(A) As at the date of this Agreement, members of ICI's Group carry on the ICI
Business (as defined below) and HSCC carries on the PO/MTBE Business (as defined
below).
(B) The parties are entering into this Agreement to set out the arrangements
agreed between them for the establishment of the Purchaser's Group and the
transfer to it of the relevant companies, businesses and/or assets comprising
the ICI Business and the PO/MTBE Business and, amongst other things, to set out
the terms governing their relationship between the signing of this Agreement and
the completion of those arrangements.
It Is Agreed as follows:
Definitions And Interpretation
1.1 In this Agreement, except so far as the context otherwise requires, the
following terms shall have the following meanings:
Accounting Period means any period by reference to which any income, profits or
gains, or any other amounts relevant for the purposes of Tax, are measured or
determined;
Accounts means, in relation to the year ended on the Accounts Date:
(a) in the case of the ICI Business, the audited special purpose accounts
relating to the ICI Business, together with any notes, reports or
statements included in or annexed to them, as set out in Exhibit A; and
(b) in the case of the PO/MTBE Business, the audited accounts relating to the
PO/MTBE Business, together with any notes, reports or statements included
in or annexed to them, as set out in Exhibit B;
Accounts Date means 31 December 1998;
Additional Employees means the Employees named as Additional Employees at
paragraph 1 of Schedule 19;
Ancillary Agreements means the agreements in the agreed form referred to in
clause 15 and the other agreements to be entered into pursuant to clause 15;
Assumed Liabilities means all debts, obligations and liabilities to the extent
that they relate to the carrying on of the ICI Business or the PO/MTBE Business,
as the case may be, by the Business Vendors, both prior to and after Closing but
other than the Excluded Liabilities;
Books and Records means all books and records of any Business Vendor containing
information which relates to the ICI Business or the PO/MTBE Business or on
which any such information is recorded, including all forms of computer or
machine readable material but excluding:
(a) all books and records which need to be retained for the purposes of VAT as
referred to in clause 3.12;
(b) any physical embodiments of the Business Information which are transferred
pursuant to clause 2.6(i); and
(c) the Tax Documents and other records referred to in clause 14.12;
BPCL means BP Chemicals Limited;
Business Assets has the meaning given in clause 2;
Business Cash Float means the cash held as petty cash by any of the Business
Vendors for the purposes of the ICI Business or the PO/MTBE Business;
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Business Contracts means all the contracts, arrangements and engagements
(including without limitation, in the case of the ICI Business, the benefit of
the Compensation Agreement dated 28 November 1997 between ICI and ICI Holland
BV) relating either exclusively to the ICI Business or the PO/MTBE Business or
relating in part to the ICI Business or the PO/MTBE Business (but then only to
the extent that the same do so relate) to which any Business Vendor is (itself
or through an agent) a party or the benefit of which is held in trust for or has
been assigned to it and which, in any case, are current or unperformed or in
respect of which it has any rights, liability or obligation as at Closing (or
the relevant Delayed Closing Date, as the case may be), but excluding:
(a) contracts with Business Employees and Excluded Employees relating to their
employment (save that any loans from members of the Vendor's Group to
Employees and any other contracts with Business Employees which do not
relate to their employment shall be Business Contracts);
(b) contracts of insurance relating to the ICI Business or the PO/MTBE Business
(which, for the avoidance of doubt, are subject to the provisions of clause
17);
(c) leases, licences and contracts (if any) to the extent they create interests
in land or (as the case may be) confer rights of occupation in relation to
the Properties;
(d) Business IP Licences and Business IT Licences;
(e) the Ancillary Agreements;
(f) the new Raw Materials Agreement dated 24 July 1996 between ICI Chemicals &
Polymers Limited, ICI Wilhelmshaven GmbH, EVC International NV, European
Vinyls Corporation (International) SA/NV, European Vinyls Corporation (UK)
Limited, European Vinyls Corporation (Deutschland) GmbH and European Vinyls
Corporation (Italia) S.p.A.;
(g) the agreement for the conversion of Raw Materials into Vinyl Chloride
Monomer for supply to ICI Chemicals & Polymers Limited dated 24 July, 1996
between European Vinyls Corporation UK Limited, European Vinyls Corporation
(Deutschland) GmbH and ICI Chemicals & Polymers Limited;
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(h) the agreement for the exclusive distribution of Vinyl Chloride Monomer
dated 15 November 1994 between ICI Chemicals & Polymers Limited and
European Vinyls Corporations (UK) Limited;
(i) naphtha contracts between ICI Chemical Industries Limited and Phillips
Petroleum Company and between ICI Chemical Industries Limited and Phillips
Imperial Petroleum Limited (as amended) dated 1st January, 1970, 1 October,
1971 and 5 August, 1980; and
(j) the Texaco Purchase Agreement; and
(k) bank accounts;
Business Day means a day (excluding Saturdays) on which banks generally are open
in London, Rotterdam, Salt Lake City and New York City for the transaction of
normal banking business;
Business Employee means any employee of any Business Vendor working for more
than 50% of his time in the ICI Business immediately prior to Closing (including
any employee temporarily absent from work), but does not include a Company
Employee or an Excluded Employee;
Business Goodwill means the goodwill of any Business Vendor in relation to the
ICI Business or, as the case may be, the PO/MTBE Business together with the
right for the Purchaser or the Designated Purchaser to represent itself as
carrying on any of the Polyurethanes Business, the Tioxide Business or the
Relevant Petrochemicals Business or, as the case may be, the PO/MTBE Business in
succession to the Business Vendors but excluding, for the avoidance of doubt,
any rights to the "ICI" name, the letters ICI and the ICI Roundel and any right
to the "Huntsman" name and Huntsman Logo;
Business Information means all Information that Relates to the ICI Business (in
the case of ICI) or to the PO/MTBE Business (in the case of HSCC) and is owned,
or the rights in which are owned, by any Business Vendor;
Business IPR means:
(a) all Intellectual Property Rights (excluding Intellectual Property Rights in
computer software) owned by or on behalf of any Business Vendor which
Relate to the ICI Business (in the case of ICI) or the PO/MTBE Business (in
the case of HSCC) including (without limitation) the Registered Rights of
each Business Vendor, brief details of which are set out in the IP Annex;
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(b) all Intellectual Property Rights in computer software owned by or on behalf
of HSCC which Relate to the PO/MTBE Business; and
(c) Business Owned Software;
Business IP Licences means all licences of Intellectual Property Rights or
Business Information granted to or by any Business Vendor or the benefit of
which are held in trust for or have been assigned to it and which, in any case,
are current or unperformed or in respect of which it has any rights, liability
or obligation as at Closing (or Delayed Closing, as the case may be) which
Relate to the ICI Business (in the case of ICI) or to the PO/MTBE Business (in
the case of HSCC) or relating in part to such business (but then only to the
extent that the same do so relate) including without limitation those licences
set out in the IP Annex, but excluding the Business IT Licences;
Business IT Licences means all licences of computer software granted to or by
any Business Vendor or the benefit of which are held in trust for or have been
assigned to it and which, in any case, are current or unperformed or in respect
of which it has any rights, liability or obligation as at Closing (or the
relevant Delayed Closing Date, as the case may be) used exclusively in the ICI
Business (in the case of ICI) or the PO/MTBE Business (in the case of HSCC) or
relating in part to the relevant Business (but then only to the extent that the
same do so relate);
Business Owned Software shall have the meaning set out in Schedule 20;
Business Plant and Machinery means all the plant, machinery and other equipment
including computer equipment but not software and related work in progress and
motor vehicles beneficially owned by any Business Vendor and used or to be used
exclusively or primarily in the ICI Business or, as the case may be, the PO/MTBE
Business;
Business Stocks means all Stocks beneficially owned by any Business Vendor
exclusively or primarily for the purposes of the ICI Business or the PO/MTBE
Business including items which, although subject to reservation of title by the
relevant sellers, are under the control of any Business Vendor (including where
held by a consignee), but excluding raw materials held on consignment from
suppliers;
Business Vendors means, in respect of the ICI Business, any member of ICI's
Group other than the Companies (and, for the avoidance of doubt, other than any
Non-Controlled Joint Venture), including the companies listed in column 1 of
Schedule 2 and, in respect of the PO/MTBE Business, HSCC (and Business Vendor
means any one of those companies);
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Claim means any Warranty Claim, any Tax Covenant Claim, any claim under the
Environmental Covenant, any claim under clauses 10.3, 10.4 or 12.17, any claim
under clauses 8.1(a), 9 or 18.13 (for the purposes of clauses 12.3, 12.8(e),
12.13 and 13 only) and any claim under clauses 8.1(b) and 10.2 (for the purposes
of clauses 12.8(e), 12.13 and 13 only);
Closing means the completion of the sale and purchase of the ICI Business and
the PO/MTBE Business and related matters in accordance with clause 6;
Closing Adjustments Date means the first day of the calendar month following the
calendar month in which the Closing Date falls;
Closing Date means the date on which Closing occurs pursuant to clause 6;
Closing Statement means, in relation to the ICI Business or, as the case may be,
the PO/MTBE Business, the closing statement as at 00.01 am, applicable local
time, on the first day of the calendar month following the calendar month in
which the Closing Date falls, prepared in accordance with the provisions of
clause 7 and Schedule 8, and Closing Statements shall be construed accordingly;
Closing Working Capital means, in relation to any Company or any Business
Vendor, the working capital of that Company (or, in the case of the Controlled
Joint Venture or LPC, the JV Percentage of such working capital) or Business
Vendor (only in relation to its Local Business), comprising the items referred
to in paragraph 2(c) of Schedule 8, expressed in dollars, as at 00.01 am,
applicable local time, on the Closing Adjustments Date as set out in the Closing
Statement;
Code means the US Internal Revenue Code of 1986, as amended;
Companies means the entities listed in column 2 of Part I, column 3 of Part A of
Part II and column 2 of Part B of Part II and column 2 of Part III of Schedule
1, together with such entities as become Companies from time to time in
accordance with Schedule 18, and Company means any one of them (provided that
LPC shall also be deemed to be a Company for the purpose of the definitions of
Provisional Cash Balance, Final Cash Balance, Provisional Financial Debt, Final
Financial Debt, Final Intra Group Cash Balance, Final Intra Group Debt, Closing
Working Capital and Intra Group Trading Indebtedness and of clauses 1.5, 3.4,
3.6, 3.7 and 7 and Schedule 8);
Company Employee means any employee of any of the Companies immediately prior to
Closing who is not an Excluded Employee;
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Computer Systems means IT systems (hardware, software and networks
infrastructure) and all embedded information technology contained in material
plant, machinery and equipment used exclusively or predominantly in the ICI
Business (in the case of ICI) or in the PO/MTBE Business (in the case of HSCC);
Conditions means the conditions set out in clause 4.1;
Confidentiality Agreements means (a) the agreement dated 25 September, 1997
between ICI (on behalf of ICI's Group (as defined in such agreement)) and
Huntsman Corporation relating to confidentiality and other related issues as
amended by a letter dated 24 October, 1997 between Huntsman Corporation and ICI,
a letter dated 27 February 1998 between Huntsman Corporation and ICI Chemicals
and Polymers and a letter dated 3 March, 1998 between Huntsman Corporation and
ICI (the First Confidentiality Agreement); and (b) the agreement entered into by
Huntsman Corporation on 18 February, 1999 between ICI and Huntsman Corporation
relating to confidentiality and other related issues (the Second Confidentiality
Agreement);
Controlled Joint Venture means the company listed in column 2 of Part III of
Schedule 1;
Co-operation Agreement means the agreement entered into between ICI and HSCC at
the same time as this Agreement, as amended;
Costs means liabilities, losses, damages, costs (including reasonable legal
costs), charges, penalties and expenses (including Tax);
Cracker means the plants at Wilton known as JVO6, JVB3 and GTU and the other
plant and related infrastructure listed in Schedule 24 which are used for (a)
the production of ethylene, propylene, butadiene and other co-products
(products) and (b) the storage, processing and distribution of feedstocks and
products;
Dames & Moore Reliance Agreement means an agreement in the agreed form entitling
certain persons (including, for the avoidance of doubt, the Purchaser, its
lenders and debt finance providers) to rely on the reports prepared by Dames &
Moore in respect of the environmental condition of certain properties of the ICI
Business;
Data Room means, in the case of the ICI Business, such of the contents of the
rooms made available to HSCC at the offices of ICI's Solicitors as are
identified in the index contained in Exhibit C (being the contents as at 6 p.m.
on 26 March 1999) and, in the case of the PO/MTBE Business, such of the
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contents of the rooms made available to ICI at the offices of ICI's Solicitors
as are identified in the index contained in Exhibit D (being the contents as at
6 p.m. on 26 March 1999);
Delayed Asset has the meaning given in clause 6.3;
Delayed Business has the meaning given in clause 6.3;
Delayed Closing Date means the date on which closing takes place of the transfer
of any Delayed Assets, Delayed Business or Delayed Company which is not
transferred at Closing or has not been transferred to TGL (as defined in
Schedule 18) or one of its Subsidiaries prior to Closing (which in each case,
unless the parties otherwise agree, shall be the last day in the relevant
calendar month which is both a working day in the relevant jurisdiction and is
also a Business Day) and Delayed Closing means the completion of the sale and
purchase of the relevant Delayed Assets, Delayed Business or Delayed Company;
Delayed Company has the meaning given in clause 6.3;
Designated Purchasers means (i) the companies (or companies to be incorporated)
listed in column 4 of Part I of Schedule 1 and column 3 of Schedule 2; (ii) in
relation to the Joint Venture Interests (other than those in NPU and Arabian
Polyol Co. Ltd), the Purchaser; and (iii) in relation to Business IP Licences
and Business IT Licences relating to the ICI Business, the Purchaser or its
nominee, and Designated Purchaser means any one of them;
Disclosed Matters means any fact, matter, event or circumstance which is fairly
disclosed in the relevant Disclosure Letter or:
(a) in respect of the Warranties in paragraphs 2.2, 5.3, 5.5, 5.6, 5.7, 8.1,
8.2, 9, 11, 12, 13.1, 13.2, 13.3, 13.5, 14, 15, 17.2, 17.5, 17.11, 17.13,
17.14, 17.15, 17.16 and 25.1, insofar as it relates to matters covered by
the foregoing paragraphs of Schedule 9 only, in the documents in the Data
Room;
(b) in respect of the Warranties given by ICI in paragraph 16 of Schedule 9, in
those documents in the Data Room relating to the ICI Business as follows:
(i) Polyurethanes
Part 1, Section 1.2; Part 1A, Section 1.2; Part 5; and Part 5A of
the Data Room;
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(ii) Tioxide
Any document which has as the second element of its code the
number 2 (Codes are as shown in the Tioxide Data Room index. For
example, document reference TEL 2.1/01);
(iii) Relevant Petrochemicals
Part 6 of Pheasant I and Part 6 of Pheasant V of the Data Room;
(c) in respect of the Warranties given by ICI in paragraphs 19, 20, 21 and 22
of Schedule 9, in those documents in the Data Room relating to the ICI
Business as follows:
(i) Polyurethanes
Part 4 and Part 4A of the Data Room;
(ii) Tioxide
Any document which has as the second element of its code the
number 13
Any document which has as the second element of its code the
number 14
(Codes are as shown in the Tioxide Data Room index. For example,
document reference TEL 13.1/07);
(iii) Relevant Petrochemicals
Project Pheasant (1), Part 2, Volume 1 of 1
Project Pheasant (3), Part 2, Volume 1 of 1
Project Pheasant (5), Part 2, Volume 1 of 1
(d) in respect of the Warranties given by HSCC in paragraph 16 of Schedule 9,
in those documents in the Data Room relating to the PO/MTBE Business;
(e) in respect of the Warranties given by HSCC in paragraphs 19, 20, 21 and 22
of Schedule 9, in documents 1 to 10 inclusive in the section headed "HSCC
Financial Index" in Volumes 2 and 3 of the Data Room relating to the
PO/MTBE Business;
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and/or which is deemed to be disclosed in the Disclosure Letters in accordance
with their respective terms or for which the relevant Vendor is stated not to be
liable in the Disclosure Letters;
Disclosure Letters means the disclosure letters in the agreed form from ICI to
the Purchaser and from HSCC to the Purchaser, in each case delivered immediately
before the signing of this Agreement;
dollar or $ means the lawful currency of the United States of America;
Employee means any Company Employee or Business Employee;
Environmental Consultants Agreements means the agreements between ICI and Dames
& Moore dated 10 March 1999 for the carrying out of certain environmental
consultancy services;
Environmental Covenant means the covenant set out in Schedule 14 and 14A as
applicable;
Environmental Matters means:
(a) pollution or contamination;
(b) the disposal, release, spillage, deposit, escape, discharge, leak or
emission of, Hazardous Materials or Waste;
(c) exposure of any person to Hazardous Materials or Waste;
(d) the creation or existence of any noise, vibration, radiation, common law or
statutory nuisance, or other material adverse impact on the Environment;
(e) use and recovery of packaging;
(f) matters relating to human health and safety or the condition or protection
of the Environment, arising out of the manufacturing, processing,
treatment, keeping, handling, use, possession, transportation or presence
of Hazardous Materials or Waste;
Euro/Dollar Rate has the meaning given to it in Clause 3.17;
Event means any event, transaction, action or omission, any change in the
residence of any person for the purposes of any Tax and shall also include
Closing;
Excluded Assets means the assets owned by the Business Vendors or the Companies
set out in Schedule 12;
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Excluded Employees means the Employees or groups of Employees described or named
at paragraph 2 of Schedule 19;
Excluded Liabilities means (a) any Tax or amounts in respect of Tax of any
Business Vendor or in relation to any Business Assets (which, for the avoidance
of doubt shall include ICI's US Business and ICI's US Assets) arising in respect
of any period of account for Tax purposes ending on or before Closing or in
respect of acts, events or occurrences occurring on or before Closing and with
respect to a Straddle Period the portion of such Straddle Period deemed to end
on and include the Closing Date; (b) all borrowings and indebtedness (including,
without limitation, by way of acceptance credits, discounting or similar
facilities, finance leases, loan stocks, bonds, debentures, notes, debt or
inventory financing or sale and lease back arrangements, overdrafts or any other
arrangement the purpose of which is to raise money) owed by a Business Vendor,
together with accrued interest on such amounts, to a Financial Institution
(other than indebtedness resulting from operating leases); (c) all amounts owed
to a member of ICI's or HSCC's Retained Group (apart from (i) indebtedness
resulting from operating leases and (ii) Intra Group Trading Indebtedness); (d)
any liability or obligation of any Business Vendor to the extent it arises out
of any business other than the ICI Business or the PO/MTBE Business, as the case
may be, and all liabilities and obligations under any guarantees, indemnities,
counter-indemnities and letters of comfort of any nature whatsoever given by any
of the Business Vendors in respect of any obligations or liabilities of any
other member of ICI's Retained Group or HSCC's Retained Group; (e) any liability
or obligation of ICI or of HSCC or any member of their respective Retained
Groups arising under this Agreement or the Ancillary Agreements or any other
agreement to be entered into pursuant to this Agreement; (f) any obligation of
either Vendor pursuant to clause 20; and (g) any liability or obligation of ICI
or of HSCC or any member of their respective Retained Group in relation to any
Environmental Matters existing or arising prior to or at Closing;
Excluded Properties has the meaning given to it in Schedule 17;
Final Cash Balance means, in relation to any Company, the aggregate amount (or,
in the case of the Controlled Joint Venture or LPC, the JV Percentage of such
aggregate amount), expressed in dollars and calculated as at 00.01 am,
applicable local time, on the Closing Adjustments Date, of its cash at bank,
cash in hand or cash equivalents and amounts owed to that Company by members of
ICI's Retained Group (apart from amounts representing Intra Group Trading
Indebtedness), in each case as reflected in the books of that Company, but
excluding all Tax assets or rights to
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repayments of Tax and amounts in respect of such Tax assets or rights to
repayments of Tax;
Final Consideration has the meaning given in clause 3.7;
Final Financial Debt means, in relation to any Company, the aggregate amount
(or, in the case of a Controlled Joint Venture or LPC, the JV Percentage of such
aggregate amount) expressed in dollars and calculated as at 00.01 am, applicable
local time, on the Closing Adjustments Date of (a) all borrowings and
indebtedness (including, without limitation, by way of acceptance credits,
discounting or similar facilities, finance leases, loan stocks, bonds,
debentures, notes, debt or inventory financing or sale and lease back
arrangements, overdrafts or any other arrangements the purpose of which is to
raise money), together with accrued interest on such amounts, of that Company
(as reflected in the books of that Company) owed to a Financial Institution
(apart from indebtedness resulting from operating leases); (b) all amounts owed
to a member of ICI's Retained Group by that Company (as reflected in the books
of that Company), other than amounts representing Intra Group Trading
Indebtedness and Prime Debt; and (c) the Prime Debt, but excluding all Tax
Liabilities and, for the avoidance of doubt, excluding the amount of any debt
created pursuant to Schedule 18 which remains outstanding;
Final Intra Group Cash Balance means, in relation to any Company, that part of
its Final Cash Balance which represents amounts owed to that Company by members
of ICI's Retained Group as at 00.01 am, applicable local time, on the Closing
Adjustments Date;
Final Intra Group Debt means, in relation to any Company, that part of its Final
Financial Debt which represents amounts owed by that Company to members of ICI's
Retained Group (including, for the avoidance of doubt, Prime Debt) as at 00.01
am, applicable local time, on the Closing Adjustments Date;
Financial Institution means any banking, financial, acceptance, credit, lending
or other similar institution or organisation and any institutional investor,
which in each case is not a member of ICI's Group;
Financing Agreements means the Senior Credit Agreement, the Senior Subordinated
Credit Agreement and the Senior Subordinated Indenture together with all notes,
guarantees, security agreements and other instruments issued or entered into
pursuant to or in connection therewith;
Group means, in relation to ICI or the Purchaser, that party and its
Subsidiaries for the time being and, in relation to HSCC, any undertaking
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which controls, is controlled by or is under common control with HSCC and HSCC
itself;
Group Information means all Information owned by, or the rights to which are
owned by, the Companies;
Group IPR means all Intellectual Property Rights owned by the Companies;
HSCC's Solicitors means Slaughter and May of 35 Basinghall Street, London EC2V
5DB;
Huntsman Logo means the logo used by HSCC and Huntsman Corporation as depicted
in the IP Annex;
Huntsman Trade Mark Licence means the trade mark licence between Huntsman Group
Intellectual Property Holdings Corporation and the Purchaser in the agreed form
set out in the IP Annex;
ICI/BP Joint Venture Agreements has the meaning given in the Co-operation
Agreement;
ICI Business means the Polyurethanes Business, the Tioxide Business and the
Relevant Petrochemicals Business;
ICI Retained Software shall have the meaning set out in Schedule 20;
ICI Roundel means the logo used by ICI as depicted in the IP Annex;
ICI's Accountants means KPMG Audit Plc;
ICI's Bank Account means an account or accounts to be nominated by ICI 5
Business Days before Closing;
ICI's Solicitors means Freshfields of 65 Fleet Street, London EC4Y 1HS;
ICI's US Assets means the Business Assets of ICI Americas Inc. and ICI Americas
Inc.'s Joint Venture Interest in Rubicon Inc. as well as ICI American Holdings
Inc.'s ownership interest in Tioxide Americas Inc. or its successor;
ICI's US Business means the Polyurethanes Business which is carried on by ICI in
the United States of America making use of ICI's US Assets;
ICI Trade Mark Licence means the trade mark licence between ICI and the
Purchaser in the agreed form appearing in the IP Annex;
Page 13
Income, Profits or Gains includes any standard or measure for the purposes of
any Tax and shall also include any income, profits or gains which are deemed to
be earned, accrued or received for the purposes of any Tax and a reference to
income, profits or gains as being earned, accrued or received on or before a
particular date or in respect of a particular period shall mean income, profits
or gains which are regarded as having been or are deemed to have been earned,
accrued or received on or before that date or in respect of that period for the
purposes of any Tax;
Independent Firm means Ernst & Young or, for the purposes of clauses 4.9 or 7,
such other independent firm as is appointed pursuant to clause 4.9(b) or clause
7.14 respectively;
Information means all information, know-how and techniques (whether or not
confidential and in whatever form held) including, without limitation, all:
(a) formulae, designs, specifications, drawings, data, manuals and
instructions;
(b) customer lists, sales, marketing and promotional literature;
(c) business plans and forecasts; and
(d) technical or other expertise;
Initial Consideration has the meaning given in clause 3.4 or 3.5, as applicable;
Institutional Lenders means Lenders as defined in the Senior Credit Agreement;
Intellectual Property Rights means patents, trade marks, service marks, trade
names, business names, rights in designs, copyright (including rights in
computer software and moral rights), database rights, rights in domain names and
all other intellectual property rights, in each case whether registered or
unregistered and including applications for the grant of any of the foregoing
rights, and all rights or forms of protection having equivalent or similar
effect to any of the foregoing which may subsist anywhere in the world but
excluding Information;
Interest Rate means 7% per annum;
Intra Group Guarantees means, as at the Closing Date (or, as the case may be,
the Delayed Closing Date), all guarantees, indemnities, counter-indemnities,
assurances, commitments and letters of comfort of any nature whatsoever:
Page 14
(a) given to any person by any Company or any entity in which a Joint Venture
Interest is held in respect of any liability of any member of the Retained
Group (other than Assumed Liabilities);
or (as the context may require)
(b) given to any person by any member of ICI's Retained Group in respect of any
liability of a Company or any entity in which a Joint Venture Interest is
held;
Intra Group Trading Indebtedness means all debts outstanding as at Closing
between the Companies and members of the Retained Group, or between the Local
Businesses, on the one hand, and other business units of the Retained Group on
the other, in respect of intra group trading activities in the ordinary and
usual course of business (comprising all accrued payment obligations in respect
of products, goods, services and support supplied, commissions for services
relating to sales and employment costs chargeable in connection with any such
trading activities);
IP Annex means the file of documents marked "IP Annex" and initialled by the
parties for the purposes of identification only;
IPR Assignments means the assignments of Business IPR referred to in clause 2.7;
Joint Venture Agreement means any contract or arrangement, including any
amendment or variation thereof, to which any member of ICI's Group is a party
with other persons who are not members of ICI's Group, in relation to its
holding of any Joint Venture Interest (including, without limitation, any
articles of association, by-laws or other constitutional documents of any
company in which a Joint Venture Interest is held);
Joint Venture Interests means the shares or limited partnership interests held
by members of ICI's Group which are identified in column 3 of Parts III and IV
of Schedule 1 (save that, for the purposes of clauses 16.1 to 16.5 and 16.7 to
16.15, it shall only mean such of those shares or limited partnership interests
as are held in Arabian Polyol Co Ltd and NPU);
JV Finco means a Delaware limited liability company;
JV Percentage means 60 per cent. in the case of the Controlled Joint Venture,
and 50 per cent. in the case of LPC;
LLC Agreement means the limited liability company agreement relating to the
Purchaser in the agreed form;
Page 15
Local Business means, in relation to each Business Vendor, that part of the ICI
Business which is carried on by that Business Vendor and, in relation to HSCC,
the PO/MTBE Business, and Local Businesses shall be construed accordingly;
LPC means Louisiana Pigment Company L.P.;
Material Adverse Change means an adverse change in the ICI Business or the
PO/MTBE Business, as the case may be, occurring before and continuing
immediately prior to Closing and whether occurring before or after the date of
this Agreement (provided that no account shall be taken of any event which
occurred before the date of this Agreement unless and to the extent only that
such event constitutes a breach of the Warranties given at the date of this
Agreement), such that the enterprise value of the ICI Business or PO/MTBE
Business, as the case may be, (as determined, in the event of any dispute
between the parties, by the Independent Firm pursuant to clause 4.9) is reduced
by (Pounds)125 million or more as a result of such change. For this purpose the
following shall be excluded from the calculation of the amount of the reduction
in enterprise value of the ICI Business or the PO/MTBE Business, as the case may
be:
(a) any effect resulting from industry consolidations or any adverse changes
affecting capital or foreign exchange markets in general or adverse changes
in general economic conditions in the economies and/or industries in which
the ICI Business or PO/MTBE Business, as the case may be, operates or by
which it is affected;
(b) the effects of any action or steps taken pursuant to and in accordance with
this Agreement;
(c) any loss, damage, cost or liability to the extent that:
(i) the relevant Vendor has, pursuant to an indemnity obligation,
compensated the Purchaser in respect of it by a payment in cash
which, in the bona fide opinion of the relevant Vendor, satisfies
in full the indemnity obligation;
(ii) the ICI Business or the PO/MTBE Business has otherwise been
compensated therefor by receipt of insurance proceeds; or
(iii) it has otherwise been fully and effectively remedied on or prior
to Closing;
material adverse effect on the relevant Business means:
Page 16
(a) in relation to the Polyurethanes Business, a present or future reduction of
the net assets of the Polyurethanes Business of (Pounds)5 million or more,
a present or future reduction in annual trading profits (after deducting
all charges except Taxation) of the Polyurethanes Business of (Pounds)1
million or more or a present or future reduction in annual turnover of the
Polyurethanes Business of (Pounds)8 million or more;
(b) in relation to the Tioxide Business, a present or future reduction of the
net assets of the Tioxide Business of (Pounds)5 million or more, a present
or future reduction in annual trading profits (after deducting all charges
except Taxation) of the Tioxide Business of (Pounds)1 million or more or a
present or future reduction in annual turnover of the Tioxide Business of
(Pounds)5 million or more;
(c) in relation to the Relevant Petrochemicals Business, a present or future
reduction of the net assets of the Relevant Petrochemicals Business of
(Pounds)1 million or more, a present or future reduction in annual trading
profits (after deducting all charges except Taxation) of the Relevant
Petrochemicals Business of (Pounds)1 million or more or a present or future
reduction in annual turnover of the Relevant Petrochemicals Business of
(Pounds)6 million or more;
(d) in relation to the PO/MTBE Business, a present or future reduction of the
net assets of the PO/MTBE Business of (Pounds)3.2 million or more, a
present or future reduction in annual trading profits (after deducting all
charges except Taxation) of the PO/MTBE Business of (Pounds)1 million or
more or a present or future reduction in annual turnover of the PO/MTBE
Business of (Pounds)3.5 million or more;
Material Contracts means contracts (save for any employment-related contracts)
to which any Relevant Company or, in respect of the Business, any Business
Vendor is a party or the benefit of which is held in trust or has been assigned
to any such person (a) which at Closing have in excess of 12 months to run and
which in that time can reasonably be expected to involve income or expenditure,
in respect of the Tioxide, Relevant Petrochemicals or PO/MTBE Businesses, in
excess of $200,000 per annum or, in respect of the Polyurethanes Business, in
excess of $1 million per annum (save that in respect of the Polyurethanes
Business it shall be those contracts which can reasonably be expected to involve
income or expenditure in excess of $8 million in respect of the Warranty in
paragraph 13.1 of Schedule 9 only); (b) which at Closing have less than 12
months to run and which in that time can reasonably be expected to involve
income or expenditure, in respect of the Polyurethanes, Tioxide, Relevant
Petrochemicals or PO/MTBE Businesses, in excess of $1,000,000 (save that in
respect of the Polyurethanes Business it
Page 17
shall be those contracts which can reasonably be expected to involve income or
expenditure in excess of $8,000,000 in respect of the Warranty in paragraph 13.1
of Schedule 9 only); or (c) which are material agency, distributorship or joint
venture agreements;
Members' Agreement means the agreement, in the form set out in Exhibit C to the
Subscription Agreement, to be entered into at Closing between the Purchaser,
HSCC, BT Capital Investors, L.P., Chase Equity Associates, L.P. and The Goldman
Sachs Group, Inc. relating, inter alia, to certain future rights in respect of
transfers of interests in the Purchaser;
Non-Controlled Joint Ventures means the companies and limited partnerships
details of which are set out in column 2 of Part IV of Schedule 1;
NPU means Nippon Polyurethane Industry Co. Ltd;
Olefins Agreements has the meaning given to it in the Co-operation Agreement;
Olefins Manufacturing Business has the meaning given to it in paragraph (e) of
the definition of Relevant Petrochemicals Business;
Polyurethanes Business shall have the meaning set out in Schedule 21;
Permitted Encumbrances means (a) security interests in the ordinary course of
business or by operation of law, security interests arising under sales
contracts with title retention provisions and equipment leases with third
parties entered into in the ordinary course of business and security interests
for Taxes and other governmental charges which are not due and payable or which
may thereafter be paid without penalty, and (b) other imperfections in title and
encumbrances, if any, which do not materially impair the continued use and
operation of the assets to which they relate;
Pie Crust Leases means the leases in the agreed form relating to the Aromatics
and North Tees Logistics Plants, Teesside, England;
PO/MTBE Business means
(i) the business, operations and assets owned by HSCC for the manufacturing of
propylene oxide and methyl tertiary butyl ether (MTBE) at its Port Neches,
Texas plant (PO/MTBE plant) and the marketing, sale and distribution of
MTBE and of propylene oxide from the PO/MTBE plant; and
Page 18
(ii) HSCC's right to have propylene glycol manufactured by Huntsman
Petrochemical Corporation (HPC) at HPC's Port Neches, Texas plant and the
marketing, sale and distribution of such propylene glycol.
For the avoidance of doubt, the PO/MTBE Business shall not include the MTBE
business, operations and assets of HPC at HPC's C4 plant in Port Neches, Texas,
or the manufacturing, marketing, sale or distribution of MTBE from such C4
plant;
PO/MTBE Technology Transfer Agreement means the agreement of that name in the
agreed form in the IP Annex;
Pre-Closing Tax Affairs means the Tax affairs of the Companies for which ICI or
its agent is responsible under clause 14.1;
Prime Debt means, in relation to Tioxide Americas Inc., Tioxide Europe SA
(France), Tioxide Europe Srl, Tioxide Europe SA (Spain) and ICI Holland BV, the
actual amount of inter-company indebtedness outstanding from any such company to
any of ICI, ICI Finance plc, ICI Omicron BV, ICI American Holdings Inc., or
Mortar Investments International Limited immediately prior to Closing, the
parties' estimates of which are set out in sub-paragraphs (a) to (e) of
paragraph 17 of Schedule 4;
Properties means the land and buildings used, owned or occupied exclusively or
primarily in relation to the ICI Business or, as the case may be, the PO/MTBE
Business at the date of this Agreement, short details of which are set out in
Part I of Schedule 17;
Provisional Cash Balance means, in relation to any Company, the provisional
amount of the Final Cash Balance (excluding any part of the Final Cash Balance
which represents amounts owed by members of ICI's Retained Group), expressed in
dollars, as estimated by ICI in accordance with clause 3.6;
Provisional Financial Debt means, in relation to any Company, the provisional
amount of the Final Financial Debt, expressed in dollars, as estimated by ICI in
accordance with clause 3.6;
Purchaser's Accountants means Deloitte and Touche;
Purchaser's Relief means, for the purposes of the Tax Covenant and provisions of
this Agreement relating thereto, a relief to the extent that it either arises in
respect of an Event occurring or period commencing after the Closing Date or in
respect of such part of a Straddle Period as falls after the Closing Date;
Page 19
Receivables means debtors of the Business Vendors for the purposes of, or in
connection with, the ICI Business or the PO/MTBE Business (including trade
debtors, other debtors, accrued income, prepayments and royalty receivables), in
each case including such part of such amounts as relates to VAT;
Registered Rights means in relation to any jurisdiction, any Group IPR or
Business IPR which is the subject of registration (or application for
registration) with any competent authority in that jurisdiction;
Regulatory Action means:
(a) any injunction, order or judgment of a court of competent jurisdiction; or
(b) any order, judgment, decision or conclusive determination made, given,
taken or expressed by a competent supranational, governmental, statutory or
regulatory authority, body or agency; or
(c) an enactment or direction of a legislative body;
Related Persons means, in relation to the relevant person, any of its agents,
directors, officers, employees, advisers or consultants and any other person
which the relevant person has engaged or instructed in connection with the
transactions contemplated by this Agreement;
Relates to means exclusively or predominantly used in, developed or acquired for
use in and Relate to shall be construed accordingly;
Relevant Competition Authority means any national, supranational, governmental
or other agency or body responsible for the application of anti-trust,
competition or merger control legislation in any jurisdiction other than the
United States where the receipt of anti-trust, competition or merger control
clearance or approval is mandatory prior to Closing and, for the avoidance of
doubt, shall include the German Bundeskartellamt and the Canadian Competition
Bureau;
Relevant Petrochemicals Business means the business comprising:
(a) the manufacture, marketing, distribution and sale of benzene, xylenes,
cyclohexane, cumene, ethyl benzene and paraxylene and other co-products
carried on by ICI Chemicals and Polymers Limited from the plants known as
Aromatics 1 and 2 at the North Tees site and the Paraxylene plant at the
Wilton site, Teesside, England (the Aromatics Business);
Page 20
(b) the storage, distribution and logistics business carried on by ICI
Chemicals and Polymers Limited from the facilities (excluding the Olefins
facilities) at the North Tees site, Teesside, England and known as North
Tees Logistics (the North Tees Logistics Business);
(c) the sourcing, purchasing and supply of feedstocks for the Cracker and the
marketing, distribution and sale of ethylene, propylene, butadiene and
other co-products of the Cracker carried on by ICI Chemicals and Polymers
Limited but excluding the Olefins Manufacturing Business (the Olefins
Business);
(d) the marketing, distribution and sale of hydrogen through the hydrogen
distribution infrastructure of ICI Chemicals and Polymers Limited at the
Billingham, North Tees and Wilton sites, Teesside, England (the Hydrogen
Business); and
(e) the manufacture of ethylene, propylene, butadiene and other co-products and
the related feedstock and product storage, processing and distribution
activities carried on by ICI Chemicals & Polymers Limited at the Cracker
both (a) for the purposes of the Olefins Business and (b) on behalf of BPCL
under the ICI/BP Joint Venture Agreements, but excluding the Olefins
Business (the Olefins Manufacturing Business);
Relevant VAT Jurisdiction means, in respect of each Business Vendor, the
jurisdiction in which it is incorporated or carries on business or in which
assets which are to be sold pursuant to this Agreement are located;
relief includes, unless the context otherwise requires, any allowance, credit,
deduction, exemption or set off in respect of any Tax or relevant to the
computation of any Income, Profits or Gains for the purposes of any Tax, or any
right to repayment of or saving of Tax, and any reference to the use or set off
of relief shall be construed accordingly;
Repeated Warranties means the Warranties set out in paragraphs 1, 2, 3, 4, 5.2,
5.3, 5.4, 5.6, 6, 7.1, 8.4, 8.5, 8.6, 8.7, 11, 12.1, 13.7, 16.2(A) and (B),
16.3(A) and (B), 17 (excluding the Warranty set out in paragraph 17.14), 18, 23
and 25.2 of Schedule 9;
Retained Group means ICI or HSCC, as the case may be, and each member of its
respective Group (apart, in the case of ICI's Group, from the Companies);
Retained Share Selling Company Group means the relevant Share Selling Company
and any other company or companies (other than the Companies)
Page 21
which either are or become, or have within the six years ending at Closing been,
Subsidiaries of the relevant Share Selling Company or treated as members of the
same group as the relevant Share Selling Company for any Tax purpose;
Retirement Benefits Schemes has the meaning given to that expression in Schedule
11 (Pensions);
Sale Shares means (a) the entire issued share capital of the Companies listed in
column 2 of Part I of Schedule 1 (excluding the Class A Shares in the capital of
TGL referred to in paragraph 1 of Schedule 18) and (b) the Joint Venture
Interests (other than those in NPU and Arabian Polyol Co Ltd);
Schedule 18 Business means any business which is to be transferred pursuant to
paragraphs 5 or 6 of Schedule 18;
Schedule 18 Company means any Company which is to be transferred pursuant to
paragraphs 2(c) or 4 of Schedule 18 by the transfer of shares or membership
interests in it or in its holding undertaking;
Selling Companies means (a) in respect of the ICI Business, the Share Selling
Companies and the Business Vendors and (b) in respect of the PO/MTBE Business,
HSCC (and, in each case, Selling Company means any one of them);
Senior Credit Agreement means the $1,940,000,000 Credit Agreement between HIC as
borrower, Bankers Trust Company as Administrative Agent and others dated as of
15 April 1999 as amended or supplemented from time to time;
Senior Subordinated Credit Agreement means the $800,000,000 Senior Subordinated
Credit Agreement between HIC as borrower, Goldman Sachs Credit Partners L.P. as
Joint Lead Agent and others dated as of 15 April 1999 as amended or supplemented
from time to time;
Senior Employee means any Employee employed at ICI Job Grade 40 and above;
Senior Subordinated Indenture has the meaning given to it in the Senior
Subordinated Credit Agreement;
Share Selling Companies means the companies listed in column 1 of Part I of
Schedule 1 and, in relation to the Joint Venture Interests other than those in
NPU and Arabian Polyol Co Ltd, means ICI Americas Inc. and Share Selling Company
means any one of them;
Page 22
Spot Rate means the spot rate of exchange (closing mid-point) on the relevant
date, as quoted in the London edition of the Financial Times first published
thereafter or, where no such rate of exchange is published in respect of that
date, at the rate quoted by Citibank N.A. as at the close of business in London
on that date;
Stock means the stocks of fuels, raw materials, consumables, stocks-in-process,
work-in-progress, finished stocks, goods for resale, stores, spare parts, loose
tools and fittings and packaging materials beneficially owned by any Company or
Business Vendor for the purpose of the ICI Business or the PO/MTBE Business (as
the case may be);
Straddle Period has the meaning set forth in clause 14.9;
Subscription Agreement means the agreement dated as of 3 June between the
Purchaser, BT Capital Investors, L.P., Chase Equity Associates, L.P. and The
Goldman Sachs Group, Inc. relating to the subscription by the latter three
parties for membership units in the Purchaser;
Systems House Entity means any Delayed Company or Delayed Business identified in
Schedule 6 as being a systems house;
Tax means (a) taxes on Income, Profits and Gains, and (b) all other taxes,
levies, duties, imposts, charges and withholdings of any nature, including any
excise, property, sales, transfer, franchise and payroll taxes and any national
insurance or social security contributions, together with all penalties, charges
and interest relating to any of the foregoing or to any late or incorrect return
in respect of any of them, regardless of whether such taxes, levies, duties,
imposts, charges, withholdings, penalties and interest are chargeable directly
or primarily against or attributable directly or primarily to any Company or any
other person and of whether any amount in respect of them is recoverable from
any other person;
Tax Authority means any taxing or other authority, in any jurisdiction,
competent to impose any liability to Tax;
Tax Claim means the issue of any notice, demand, assessment, letter or other
document by or on behalf of any Tax Authority or the taking of any other action
by or on behalf of any Tax Authority (including the imposition of any
withholding), from which notice, demand, assessment, letter, document or action
it appears that a Tax Liability may be imposed on any Company;
Tax Covenant Claim means any claim under the Tax Covenant or in respect of any
breach of a Tax Warranty;
Page 23
Tax Covenant means the covenant relating to Tax set out in Schedule 13;
Tax Documents means the Tax Returns, claims and other documents which ICI or its
agent is required to prepare on behalf of the Relevant Companies under clause
14.1(a) and (b);
Tax Liability means:
(a) a liability of any Company to make or suffer an actual payment of Tax (or
amounts in respect of Tax, which shall include, for the avoidance of doubt,
any payments for group relief or advance corporation tax and any payments
on account of Tax); and
(b) the use or set off of any Purchaser's Relief in circumstances where, but
for such use or set off, any Company would have had an actual liability to
Tax in respect of which the Purchaser would have been able to make a Tax
Covenant Claim (the amount of the Tax Liability for these purposes being
deemed to be:
(i) where the Purchaser's Relief was a deduction from or offset
against Tax, the amount of that Purchaser's Relief; and
(ii) where the Purchaser's Relief was a deduction from or offset
against Income, Profits or Gains, the amount of the Tax which has
been saved (ignoring for this purpose the availability of any
credit for advance corporation tax) in consequence of the use or
set-off of the Purchaser's Relief),
provided that the Purchaser shall procure that reliefs other than any
Purchaser's Relief are used, so far as reasonably practicable, to
offset any such actual liability to Tax;
Tax Return means any return, report, information return or other document
required to be made to any Tax Authority with respect to Tax or of any amount or
information relevant for the purposes of Tax, including any related accounts,
computations and attachments;
Tax Warranties means the warranties on the part of each Vendor set out in
paragraphs 19 to 22 (inclusive) of Schedule 9;
Taxes Act means the UK Income and Corporation Taxes Act 1988;
Technology Transfer Agreement means the agreement of that name in the agreed
form in the IP Annex;
Page 24
Texaco Environmental Losses means any "Environmental Losses" (as defined in
Section 6.1 of the Texaco Purchase Agreement) for which HSCC would be entitled
to indemnification under Part Six of the Texaco Purchase Agreement if such
losses were incurred by HSCC or the relevant member of HSCC's Group;
Texaco Purchase Agreement means the Purchase and Sale Agreement dated 21 March
1997 between Texaco Inc. and HSCC relating to the acquisition by HSCC of the
PO/MTBE Business;
TGL means Tioxide Group Limited;
Time Limit means the latest date on which a Tax Document can be executed or
delivered to a relevant Tax Authority either without incurring interest or a
penalty, or in order to ensure that such Tax Document is effective;
Tioxide Business means the development, manufacture, marketing, distribution and
sale of titanium dioxide pigments and coproducts and by-products and titanium
dioxide pigments that incorporate organometallic compounds as carried on by the
Companies listed under the heading "Tioxide" in column 2 of part I, column 3 of
part II and column 2 of part III of Schedule 1 and by any other member of ICI's
Group, but, for the avoidance of doubt, shall not include:
(a) the manufacture or sale of any organometallic compounds excepting that
manufacture, sale or disposal of a titanium dioxide pigment which
incorporates in its composition an organometallic compound shall not be
considered to be the manufacture, sale or disposal of an organometallic
compound as such;
(b) the manufacture (other than for subsequent sale to ACMA Ltd on agreed
terms) or sale (other than for transfer to ACMA Ltd on agreed terms as
aforesaid) of any form of Ultrafine Titanium Dioxide.
In this definition Ultrafine Titanium Dioxide means titanium dioxide of
ultraviolet-attenuating grade having a ratio of absorbance response at 308 nm
(A308) to absorbance response at 524 nm (A524) of not less than 5 as defined in
U.S. Pharmacopeia, amendment published in Pharmacopeia Forum, Volume 22, Number
4, Page 2636 which is set out in Exhibit E;
Title Deeds means the originals or (where appropriate) certified copies or
abstracts of such material deeds and documents relating to the title of the
estate or interest of the Companies or the Business Vendors, as the case may be,
to the Properties immediately prior to Closing (or, as the case may be,
Page 25
Delayed Closing) which are in the possession or under the control of the Vendor;
Transaction Agreements means this Agreement, the Ancillary Agreements, the
Disclosure Letters and any other agreements referred to in this Agreement and to
be entered into in accordance with this Agreement on the date of this Agreement
or on or prior to Closing (or, where applicable, any Delayed Closing);
Transferred Properties means the estates or interests of each Business Vendor in
the Properties which are denoted as such in Part I of Schedule 17 and each and
every part thereof and Transferred Property shall be construed accordingly;
Underwriters means Lenders as defined in the Senior Subordinated Credit
Agreement;
US Newco has the meaning given in Schedule 18;
VAT means value added tax or any similar sales or turnover tax;
VAT legislation means any relevant enactment in relation to VAT and all notices,
provisions and conditions made or issued thereunder including the terms of any
agreement reached with any relevant Tax Authority and any concession made by any
relevant Tax Authority in relation to VAT;
Vendors means ICI and HSCC and Vendor means either of them;
Warranted Joint Ventures means Rubicon Inc. and LPC;
Warranties means the warranties set out in Schedule 9 (and shall include, for
the avoidance of doubt, the warranty set out in paragraph 25 of Schedule 9 and
the Repeated Warranties);
Warranty Claim means any claim in respect of any breach of a Warranty; and
Working Capital Range means, in the case of the ICI Business, $451,338,300 to
$491,133,720 and, in the case of the PO/MTBE Business, $39.1 million to $44.1
million.
1.2 In this Agreement, unless the context otherwise requires:
(a) references to persons shall include individuals, bodies corporate (wherever
incorporated), unincorporated associations and partnerships;
Page 26
(b) the headings are inserted for convenience only and shall not affect the
construction of this Agreement;
(c) references to one gender include all genders;
(d) any reference to an enactment or statutory provision is a reference to it
as it may have been, or may from time to time be, amended, modified,
consolidated or re-enacted (with or without modification) and includes all
instruments or orders made under such enactment but, where any such
amendment, consolidation or re-enactment would increase or reduce either
Vendor's liability under the Warranties, such amendment, consolidation or
re-enactment of such legislation shall not be taken to increase or reduce
the liability of either Vendor under the Warranties;
(e) any reference to a document in the agreed form is to the form of the
relevant document agreed between the parties and initialled by them or on
their behalf for identification purposes;
(f) references to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or any
other legal concept shall, in respect of any jurisdiction other than
England, be deemed to include the legal concept which most nearly
approximates in that jurisdiction to the English legal term; and
(g) Subsidiary means, in relation to an undertaking (the holding undertaking),
any other undertaking in which the holding undertaking (or persons acting
on its or their behalf) for the time being directly or indirectly holds or
controls either:
(a) a majority of the voting rights normally exercisable at general
meetings of the members of that undertaking; or
(b) the right to appoint or remove directors having a majority of the
voting rights exercisable at meetings of the board of directors
or other body exercising management powers of that undertaking on
all, or substantially all, matters,
and any undertaking which is a Subsidiary of another undertaking is also a
Subsidiary of any further undertaking of which that other is a Subsidiary.
For this purpose, undertaking means a body corporate or partnership or an
unincorporated association carrying on trade or a business with or without
a view to profit. In relation to an undertaking which is not a company,
expressions in this Agreement appropriate to companies are to be construed
as references to the corresponding
Page 27
persons, officers, documents or organs (as the case may be) appropriate to
undertakings of that description.
(h) In determining whether or not there has been a material adverse change in
the financial position of the ICI Business or the PO/MTBE Business for the
purpose of paragraph 18(b) of Schedule 9, the following shall not be taken
into account:
(i) any effect resulting from industry consolidations or any adverse
changes affecting capital or foreign exchange markets in general
or adverse changes in general economic conditions in the
economies and/or industries in which the ICI Business or the
PO/MTBE Business, as the case may be, operates or by which it is
affected;
(ii) the effect of any action or steps taken pursuant to and in
accordance with this Agreement;
(iii) any loss, damage, cost or liability to the extent that:
(aa) ICI or, as the case may be, HSCC has, pursuant to an
indemnity obligation, compensated the Purchaser in respect
of it by a payment in cash which, in ICI's or, as the case
may be, HSCC's bona fide opinion, satisfies in full the
indemnity obligations;
(bb) the ICI Business or the PO/MTBE Business, as the case may
be, has otherwise been compensated therefor by receipt of
insurance proceeds; or
(cc) it has otherwise been fully and effectively remedied on or
prior to Closing.
1.3 The Schedules comprise schedules to this Agreement and form part of this
Agreement. Accordingly any reference to this Agreement shall include the
Schedules.
1.4 Agreed deletion
1.5 For the purposes of calculating the Final Financial Debt, Final Cash
Balance and Closing Working Capital for any Company and the Closing Working
Capital for any Business Vendor, any amounts which are to be included in the
calculation of that Final Financial Debt, Final Cash Balance or Closing Working
Capital and which are expressed in a currency other than dollars shall be
converted into dollars:
Page 28
(a) in the calculation of the Closing Working Capital for any Company or
Business Vendor, using the Spot Rate on the Closing Date; and
(b) in the calculation of any Final Financial Debt or Final Cash Balance for
any Company, using the Spot Rate on the Closing Date (save that any element
of any Final Financial Debt or Final Cash Balance which is a Final Intra
Group Debt (including, for the avoidance of doubt, any Prime Debt) or, as
the case may be, a Final Intra Group Cash Balance shall be converted from
the relevant currency into dollars at the Spot Rate on the date which is 2
Business Days before the date on which the payment for the purpose of which
such Final Intra Group Debt or Final Intra Group Cash Balance is being
calculated is to be made).
For the purposes of clauses 7.1, 7.2 and 7.2A, the Final Financial Debt and
Final Cash Balance in relation to any Company shall be deemed to have been
determined or agreed when the amounts of all relevant items have been agreed in
the applicable currency. Those items which are required by this clause 1.5 to
be converted into dollars using the Spot Rate on the date which is 2 Business
Days before the date of the relevant payment shall then be calculated prior to
the making of such payment.
1.6 Where it is necessary to determine whether a monetary amount, limit or
threshold set out in this Agreement has been reached or exceeded (as the case
may be) and the value of any sum to be taken into account in making that
determination is expressed in a currency other than the currency in which such
monetary amount, limit or threshold is expressed, such sum shall be translated
into the currency in which such monetary amount, limit or threshold is expressed
at the Spot Rate on the relevant date. The relevant date for the purposes of
any Claim shall be the Business Day on which the party against whom the Claim is
made receives written notification of that Claim or, if that day is not a
Business Day, the Business Day next following.
Sale Of Sale Shares and Local Businesses
2.1 On and subject to the terms set out in this Agreement:
(a) ICI agrees with HIC that ICI shall sell the Sale Shares in TGL with all
rights attaching or accruing to them at Closing and that HIC shall purchase
the Sale Shares in TGL;
(b) ICI agrees with the Purchaser as trustee for Huntsman ICI Polyurethanes
(UK) Limited that ICI shall sell the Sale Shares (other than those in TGL)
set opposite ICI's name in column 3 of Part I of Schedule 1 with all rights
attaching or accruing to them at Closing and that Huntsman ICI
Polyurethanes (UK) Limited shall purchase the
Page 29
relevant Sale Shares and the Purchaser undertakes to procure that Huntsman
ICI Polyurethanes (UK) Limited shall purchase the relevant Sale Shares; and
(c) ICI agrees with the Purchaser that ICI shall procure that the relevant
Share Selling Company shall sell the Sale Shares set opposite its name in
column 3 of Part IV of Schedule 1 with all rights attaching or accruing to
them at Closing and the Purchaser shall purchase the relevant Sale Shares.
Upon the transfer of any Sale Shares at Closing or, as the case may be, at
Delayed Closing, ICI, or the relevant Share Selling Company, shall transfer
legal and beneficial title to those Sale Shares.
2.2 The Sale Shares shall, without prejudice to and save as provided in clause
16 in relation to Joint Venture Interests, be sold or transferred free from all
liens, charges and encumbrances and all other rights exercisable by third
parties.
2.3 The Purchaser (or, as the case may be, the relevant Designated Purchaser)
shall, save as specifically provided herein, be entitled from Closing (or, as
the case may be, Delayed Closing) to exercise all rights attached or accruing to
the Sale Shares including, without limitation, the right to receive all
dividends, distributions or any return of capital declared, paid or made by any
of the Companies on or after Closing (or, as the case may be, Delayed Closing).
2.4 ICI (for itself and on behalf of the other members of its Group) waives all
rights of pre-emption and other similar or comparable rights over any of the
Sale Shares conferred upon it in any way and shall procure that no later than
Closing all rights of pre-emption and other similar or comparable rights over
and in respect of any Sale Shares (other than Joint Venture Interests, to which
the provisions of clause 16 shall apply) conferred upon or held by any other
person are waived so as to permit the sale and purchase of the Sale Shares under
this Agreement.
2.5 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.
2.6 On and subject to the terms set out in this Agreement, ICI agrees with the
Purchaser as trustee for each Designated Purchaser that ICI shall sell or
procure the sale by each Business Vendor of, and that each Designated Purchaser
shall purchase or procure the purchase of, the Business Assets listed below
which relate to the ICI Business and the Purchaser undertakes to
Page 30
procure that each Designated Purchaser shall purchase or acquire the Business
Assets listed below which relate to the ICI Business and HSCC shall sell or
procure the sale of, and the Purchaser shall purchase or procure the purchase
of, the Business Assets listed below which relate to the PO/MTBE Business, in
each case as at and with effect from Closing, or, as the case may be, Delayed
Closing but, subject to the ICI/BP Joint Venture Agreements, free from all
liens, charges and encumbrances and all other rights exercisable by third
parties (subject as indicated in this Agreement, including without limitation in
clauses 6.11 and 6.14 and Schedules 17 and 20):
(a) the Business Goodwill;
(b) the Business Plant and Machinery;
(c) the Business Stocks;
(d) the benefit (subject to the burden) of the Business Contracts;
(e) the Receivables;
(f) subject to the provisions of Schedule 17, the Transferred Properties;
(g) subject to clause 18.5, such of the Books and Records as relate exclusively
or primarily to the ICI Business (in the case of ICI) or the PO/MTBE
Business (in the case of HSCC);
(h) the Business Cash Float;
(i) the Business IPR (excluding the Business Owned Software) and the Business
Information including all physical embodiments of the Business Information
howsoever stored or held;
(j) subject to the provisions of Schedule 20, the Business Owned Software;
(k) the benefit, subject to the burden, of the Business IP Licences and the
Business IT Licences;
(l) all other property rights and all other assets of whatsoever nature to
which such Business Vendor is entitled and which are used exclusively or
primarily in the ICI Business (in the case of ICI) or the PO/MTBE Business
(in the case of HSCC),
(together the Business Assets of the ICI Business or the PO/MTBE Business, as
the case may be) but excluding the following assets:
Page 31
(i) cash at bank or other cash equivalents used in the ICI Business
or the PO/MTBE Business of each Business Vendor;
(ii) amounts recoverable in respect of Tax arising in respect of any
period of account for Tax purposes ending on or before Closing,
or in respect of any acts, events or occurrences occurring on or
before Closing and, with respect to a Straddle Period, the
portion of such Straddle Period deemed to end on and include the
Closing Date;
(iii) the benefit of any insurance policy of any Business Vendor or any
other member of the relevant Vendor's Retained Group relating to
the ICI Business or the PO/MTBE Business or any of the Business
Assets or Business Employees (any such policy, for the avoidance
of doubt, being subject to the provisions of clause 17);
(iv) any rights of any member of the relevant Vendor's Retained Group
arising under any of the Transaction Agreements;
(v) any Books and Records which comprise or contain information which
may be legally privileged to the extent they relate to the sale
or proposed sale of the whole or part of any of the ICI Business
or the PO/MTBE Business (including such information as relates to
the negotiations of the transactions contemplated by this
Agreement);
(vi) in relation to HSCC, all right, title and interest in and to the
"Huntsman" name and trade mark and Huntsman Logo (except, for the
avoidance of doubt, as licensed to the Purchaser under the HSCC
Trade Mark Licence);
(vii) in relation to ICI, all right, title and interest in and to the
"ICI" name and trade mark (excepting for the avoidance of doubt,
as licensed to the Purchaser under the ICI Trade Mark Licence),
the letters "I.C.I." and the ICI Roundel; and
(viii) the Excluded Assets listed in Schedule 12.
2.7 The Business IPR (other than the Registered Rights comprised in the
Business IPR) shall be assigned to the Purchaser (in the case of the Business
IPR relating to the PO/MTBE Business) or the relevant Designated Purchaser (in
the case of the Business IPR relating to the ICI Business) at Closing (or, as
the case may be, Delayed Closing) pursuant to this Agreement and the Registered
Rights comprised in the Business IPR shall be assigned to the
Page 32
Purchaser (in the case of the Business IPR relating to the PO/MTBE Business) or
the relevant Designated Purchaser (in the case of the Business IPR relating to
the ICI Business) at Closing (or, as the case may be, Delayed Closing) pursuant
to assignments in the form set out in the IP Annex or such other form as the
Purchaser may reasonably require to comply with any requirements of any
applicable local law. The Purchaser may require that separate assignments are
entered into in relation to Registered Rights in particular jurisdictions and
may specify what proportion of the consideration allocated to Business IPR shall
be attributed to any assignment entered into pursuant to this clause 2.7. ICI
and HSCC shall, and shall procure that each relevant member of their respective
Groups and each member of the Purchaser's Group shall, at the reasonable request
of the Purchaser or the relevant Designated Purchaser (as the case may be), do,
execute and deliver, all such further acts, deeds, documents, instruments of
assignment and transfer as may be necessary to complete the sale and purchase of
the Business IPR and the Business Information in accordance with the terms of
this Agreement.
2.8 ICI, HSCC and the Purchaser shall enter into the Technology Transfer
Agreement and HSCC and the Purchaser shall enter into the PO/MTBE Technology
Transfer Agreement at Closing pursuant to the agreed forms appearing in the IP
Annex.
2.9 The Purchaser shall, and shall procure that the relevant Designated
Purchaser shall, assume and be responsible for the Assumed Liabilities as at and
with effect from Closing (or, where such Assumed Liabilities relate to a Delayed
Business or Delayed Asset, as at and with effect from Delayed Closing).
2.10 Agreed Deletion.
2.11 Nothing in this Agreement shall transfer to the Purchaser or any
Designated Purchaser any of the assets set out in paragraphs 2.6(i) to (viii)
above or, save as otherwise provided in Schedules 14 and/or 14A, make the
Purchaser or any Designated Purchaser responsible for any of the Excluded
Liabilities.
2.12 The terms of Schedule 17 shall apply in relation to the Properties and the
Excluded Properties.
2.13 The parties shall comply with the provisions of Schedule 20. For the
avoidance of doubt the terms of Schedule 20 shall apply in relation to all
Intellectual Property Rights arising in Business Owned Software and ICI Retained
Software.
Page 33
Consideration
3.1 The aggregate consideration:
(a) for the ICI Business shall be the aggregate of the consideration payable
for the Sale Shares and each Local Business together with the assumption of
the relevant Assumed Liabilities; and
(b) for the PO/MTBE Business shall be the aggregate of the consideration
payable with respect to the relevant Local Business together with the
assumption of the relevant Assumed Liabilities,
in each case as more particularly determined with respect to each component
thereof in accordance with the subsequent provisions of this clause 3.
3.2 Subject to adjustment in accordance with clause 3.4, the consideration in
respect of the ICI Business is to be satisfied by:
(a) the payment by HIC of the sum of $343,989,155 to ICI in respect of the
transfer of the entire issued share capital of TGL (excluding the Class A
Shares);
(b) the payment by Huntsman ICI Polyurethanes (UK) Limited of $364,100,000 to
ICI in respect of the Sale Shares in Impkemix (No 46) Ltd, the Sale Shares
in ICI Europe Ltd and the Business Assets relating to the Polyurethanes
Business in the United Kingdom (other than those referred to in paragraph
(d) below);
(c) the payment by Huntsman ICI Petrochemicals (UK) Limited of $80,000,000 to
ICI Chemicals and Polymers Limited in respect of the transfer of the
Business Assets relating to the Relevant Petrochemicals Business (other
than the Olefins Manufacturing Business);
(d) the payment by HIC of the sum of $200,000,000 to ICI in respect of the
Business Information and Business IPR relating to the Polyurethanes
Business;
(e) the issue by the Purchaser of a membership interest of 30 per cent. of the
membership units in the Purchaser and the distribution by the Purchaser of
$250,000,000 to ICI Americas Inc. in respect of ICI's US Business, agreed
by the Vendors to have a net value of $520,000,000; and
(f) the payment by Huntsman ICI Petrochemicals (UK) Limited of $200,000,000 to
ICI Chemicals and Polymers Limited in respect of the
Page 34
transfer of the Business Assets relating to the Olefins Manufacturing
Business.
In addition to the consideration for the ICI Business, HIC is to pay the sum of
$115,474,000 (which is exclusive of any amount in respect of any applicable VAT)
to ICI in respect of its covenants set out in clause 23.
3.3 The consideration in respect of the PO/MTBE Business, agreed by the Vendors
to have a net value of $900,000,000, is to be satisfied by the issue to HSCC of
a membership interest of 70 per cent. of the membership units in the Purchaser
and the making of the distribution described in paragraph 8 of Schedule 4.
3.4 The initial consideration in respect of any Sale Shares shall be equal to
the amount set out in Part I of Schedule 6 in respect of them:
(a) less the Provisional Financial Debt (other than Prime Debt) in relation to
the Company whose issued share capital comprises the relevant Sale Shares
and to Companies which are its Subsidiaries at Closing (other than any
Schedule 18 Company); and
(b) plus the Provisional Cash Balance in relation to the Company whose issued
share capital comprises the relevant Sale Shares and Companies which are
its Subsidiaries at Closing (other than any Schedule 18 Company).
The amount of that initial consideration or agreed value in relation to the Sale
Shares is referred to as the Initial Consideration. The consideration payable
at Closing in respect of such Sale Shares under Schedule 4 shall be adjusted by
the amounts of such reduction and/or increase.
The consideration payable by the transferee to the transferor in respect of the
transfer of any Schedule 18 Company (where shares or membership interests are
being transferred in that Schedule 18 Company and not in its holding
undertaking), whether paid upon completion of the transfer of that Schedule 18
Company prior to Closing or paid at Closing pursuant to Clause 6.2, shall be:
(i) reduced by the amount of the Provisional Financial Debt (other than Prime
Debt) in relation to such Schedule 18 Company and to any other Schedule 18
Company which is its Subsidiary at the time the shares in such Schedule 18
Company are transferred; and
(ii) increased by the amount of the Provisional Cash Balance in relation to such
Schedule 18 Company
Page 35
and to any other Schedule 18 Company which is its Subsidiary at the time
the shares in such Schedule 18 Company are transferred.
3.5 The initial consideration in relation to each Local Business shall be the
amount set out in Part I of Schedule 6 opposite the name of the relevant
Business Vendor and shall be apportioned amongst its Business Assets as
appropriate or as agreed between the relevant Vendor (on its own behalf and as
agent for the Business Vendors) and the Purchaser (or, as the case may be, the
relevant Designated Purchaser), who shall negotiate in good faith with a view to
agreeing the allocation. The amount of that initial consideration or agreed
value in relation to the Local Business of each Business Vendor is referred to
as the Initial Consideration.
3.6 ICI shall, acting in good faith, estimate the Provisional Financial Debt
and the Provisional Cash Balance in relation to each Company as accurately as is
reasonably possible and shall notify the Purchaser in writing of such amounts
(and shall provide such other information and/or evidence in relation to such
amounts as the Purchaser may reasonably request), at least four (4) Business
Days prior to the Closing Date, each such amount being expressed in dollars
provided that, except in relation to Prime Debt, the amounts of which shall be
the estimated amounts set out in paragraph 17 of Schedule 4, amounts owed to
members of ICI's Retained Group shall be deemed to be nil for the purposes of
calculating Provisional Financial Debt. The Provisional Financial Debt and
Provisional Cash Balance in relation to each Company which does not become a
member of the Purchaser's Group at Closing shall be zero.
3.7 Following the finalisation of the Closing Statements and the agreement or
determination of the Final Financial Debt and the Final Cash Balance in relation
to each Company, and the Closing Working Capital in relation to each Company or
Local Business, in accordance with clause 7 and Schedule 8, the Initial
Consideration for the Sale Shares of a Company or for a Local Business shall be
adjusted to reflect the amount in dollars of any payment made in respect of that
Company and Companies which are its Subsidiaries at Closing (other than any
Schedule 18 Company) or Local Business (other than any Schedule 18 Business)
under clause 7.1 and/or clauses 7.4 and 7.5 or 7.6 (but not to reflect any
amount of interest paid pursuant thereto). The final consideration for the sale
of the Sale Shares of a Company or for a Local Business (the Final
Consideration) shall comprise the Initial Consideration for such sale as so
adjusted. The Final Consideration for any Joint Venture Interest (other than
those in NPU and Arabian Polyol Co Ltd) shall be the same as the Initial
Consideration for it. For the avoidance of doubt, in accordance with the second
paragraph of Schedule 18, this clause 3.7 applies to transfers of businesses and
companies
Page 36
pursuant to Schedule 18 to adjust the consideration in respect of the transfer
of any such company or business as if it were Initial Consideration for Sale
Shares or a Local Business.
3.8 The Final Consideration for the Sale Shares or for each Local Business as
so determined and as otherwise adjusted in accordance with this Agreement, shall
be adopted by the relevant Vendor (on behalf of itself and each of the other
Share Selling Companies and Business Vendors within its Group) and the Purchaser
(on behalf of itself and each of the Designated Purchasers) for all purposes
(including Tax) except: (i) as otherwise required by law; (ii) as agreed by the
parties in writing; (iii) as otherwise agreed by the parties in this Agreement;
or (iv) in the case of the values listed in Part II of Schedule 6 and in the
application of this clause 3.8 to transactions referred to in Schedule 18 only,
for the purposes of determining the quantum of liability (and whether or not any
financial threshold which determine whether or not there will be a liability
have been exceeded) in respect of any claim under the Transaction Agreements.
3.9 If any payment is made by ICI to the Purchaser pursuant to a claim under
the Tax Covenant, the Environmental Covenant or any indemnity under this
Agreement or pursuant to any Warranty Claim, the payment shall so far as
possible be made by way of reduction to the Final Consideration payable with
respect to the Sale Shares of the appropriate Company or the appropriate
Business Assets. If any payment is made by HSCC to the Purchaser pursuant to a
Warranty Claim or pursuant to any indemnity under this Agreement the payment
shall so far as possible be made by way of reduction in the Final Consideration
payable with respect to the PO/MTBE Business, which shall be deemed to have been
reduced by the amount of such payment.
3.10 Any sum payable by the Purchaser for itself or as agent for the Designated
Purchasers to either Vendor for itself or (on the basis described in clause
11.1) as agent for the Share Selling Companies or the Business Vendors within
its Group under this Agreement (including the payment for ICI's covenants
contained in clause 23) is exclusive of any amounts in respect of applicable
VAT.
3.11 The parties to this Agreement shall use all reasonable efforts to ensure,
if possible, that the transfers of the Local Businesses are treated as transfers
of businesses as going concerns for the purposes of any applicable VAT
legislation or fall within any other applicable exemption from VAT in accordance
with any relevant provision, to ensure that such transfers are not subject to
VAT in any Relevant VAT Jurisdiction. If it is not so treated, the Vendor shall
notify the Purchaser and the Purchaser (for itself where it is the
Page 37
Designated Purchaser and otherwise as agent for the Designated Purchaser) shall
pay to the Vendor as agent for the relevant Business Vendor by way of additional
consideration for the relevant Local Business a sum equal to the amount of VAT
determined to be chargeable against delivery by the relevant Business Vendor of
an appropriate VAT invoice. The Purchaser shall reimburse to the relevant Vendor
as agent for the Business Vendor any penalties and interest arising in
connection therewith except where the penalties and interest are attributable to
any delay or default on the part of the Vendor or the relevant Business Vendor.
3.12 Prior to Closing (or, in the case of any Delayed Business or Delayed
Assets, Delayed Closing) each Business Vendor shall apply to HM Customs & Excise
in the UK or the relevant Tax Authority in any Relevant VAT Jurisdiction for a
direction pursuant to section 49(1) of the Value Added Tax Act 1994 or any other
applicable VAT legislation that each Business Vendor be permitted to retain all
records of its Local Business for VAT purposes and shall supply a copy of such
application and the response to the Designated Purchaser.
3.13 Following Closing (or, in the case of any Delayed Business or Delayed
Assets, Delayed Closing), each Business Vendor shall procure that, if
appropriate, such records are preserved for period of not less than 6 years from
the date of the relevant record (or for such longer period as may be required by
law) and shall, if appropriate, procure that each Designated Purchaser (or its
agents) is given, on the giving of not less than 3 days' notice, reasonable
access to those records during normal business hours.
3.14 Prior to Closing each Business Vendor that is transferring land located in
the United Kingdom as part of the transfer of the Local Businesses, shall give
the Purchaser (for itself where it is the Designated Purchaser and otherwise as
agent for the Designated Purchaser) details of all elections which have been
made under any VAT legislation in respect of that land to waive the exemption
from VAT in respect of that land.
3.15 In the event that the Purchaser (for itself where it is the Designated
Purchaser and otherwise as agent for the Designated Purchaser) has paid an
amount in respect of VAT to either Vendor as agent for the relevant Business
Vendor in respect of the transfer of a Local Business or any asset in accordance
with clause 3.11 of this Agreement and an adjustment is made to the
consideration payable under this Agreement for that Local Business or asset
pursuant to any provision of this Agreement, with the effect that the relevant
Business Vendor has made a payment to the relevant Designated Purchaser, the
relevant Business Vendor shall in addition to the payment of the adjustment
amount refund an amount in respect of VAT on such
Page 38
adjustment amount provided that if the Business Vendor has already accounted for
such VAT to the relevant Tax Authority, no amount shall be refunded under this
clause unless and to the extent that the relevant Business Vendor has received
effective repayment or credit in respect of such VAT and such Business Vendor
shall take all reasonable steps to obtain such repayment or credit.
3.16 For valuable consideration given, ICI for itself and otherwise as agent
for the Share Selling Companies undertakes and agrees to covenant with the
Purchaser for itself where it is the Designated Purchaser and otherwise as agent
for the Designated Purchaser as set out in Schedule 13 and to perform the
obligations set out in such Schedule 13.
3.17 For the purposes of this clause 3.17, the following terms will have the
following meanings:
Available Euro Sum means the aggregate of the sums which, on or prior to
Closing, the Purchaser and its Subsidiaries (i) are entitled to receive in euros
under the Senior Credit Agreement and (ii) are entitled to receive in euros
under the Senior Subordinated Credit Agreement or, as the case may be, are
entitled to receive pursuant to the bonds constituted under the Senior
Subordinated Indenture and issued by the Purchaser or one of its Subsidiaries to
third party investors or are to receive pursuant to bonds to be so constituted
and issued;
Euro/Dollar Rate means 1 to $1.081061; and
Total Dollar Sum means the aggregate of the sums in dollars which the Purchaser
is obliged to pay (or of which the Purchaser is obliged to procure the payment
by any member of the Purchaser's Group or by any Company) to any member of ICI's
Retained Group under Schedule 4, being the sum resulting from the following
calculation:
$ 2,025,474,000 + a - (b + c)
where:
a is the aggregate of all Provisional Cash Balances;
b is the aggregate of all Provisional Financial Debts (other than Prime
Debts); and
c is the aggregate of the sums which result from making the calculations
set out in clause 6.3(c)(ii) in respect of any Delayed Companies or
Delayed Businesses which have been identified as
Page 39
such by the notification made by ICI to the Purchaser in accordance
with this clause.
Not later than 4 Business Days before Closing, (i) ICI shall notify the
Purchaser of any entities or businesses which will be Delayed Companies or, as
the case may be, Delayed Businesses and (ii) the parties shall calculate the
Total Dollar Sum and make the calculations necessary to implement the remainder
of this clause.
Notwithstanding that the payment obligations set out in Schedule 4 and the
corresponding provisions of clause 3.2 refer only to payments being made of
dollar amounts, the Purchaser shall in aggregate be obliged at Closing to pay,
or procure the payment of, (i) the sum in Euros (the Total Euros Paid) which is
the lesser of 938,649,160 and the sum arising from the calculation in paragraph
(a) below and (ii) the sum in dollars resulting from the calculation in
paragraph (b) below:
(a) c + ( 1/2 x (d - c))
where:
c is the Available Euro Sum; and
d is one half of the Total Dollar Sum, converted into euros at the
Euro/Dollar Rate;
(b) e - f
where:
e is the Total Dollar Sum; and
f is the Total Euros Paid, converted into dollars at the Euro/Dollar Rate.
The Total Euros Paid shall be allocated amongst the payments to be made pursuant
to the following paragraphs of Schedule 4 in the order stated (where a paragraph
of Schedule 18 is shown against a paragraph of Schedule 4, the allocation is
made to the element of the payment pursuant to that paragraph of Schedule 4
which constitutes repayment of the sum outstanding under the note created under
that paragraph of Schedule 18):
Schedule 4 Schedule 18
17(b)
17(c)
Page 40
17(d)
17(e)
39
47
49 5 (only the element of the sum payable under
the note which relates to the transfer of
assets by ICI Belgium NV/SA)
49 5 (only the element of the sum payable under
the note which relates to the transfer of
assets by ICI Espana SA)
49 5 (only the element of the sum payable under
the note which relates to the transfer of
assets by Deutsche ICI GmbH)
41
44
43 4(g)
35
11
Those payments to which the Total Euros Paid are allocated shall be paid in
euros rather than dollars and the amount of euros to be paid in each case shall
be the euro equivalent of the dollar amount of the payment concerned, converted
at the Euro/Dollar Rate. Where ICI makes any election under any of paragraphs 8
to 12 (inclusive) of Schedule 18, any euros which are allocated to a payment to
which that election relates shall be allocated to the repayment of the relevant
element of any loan made by ICI Finance plc as a result of that election. If,
when all of the euros comprising the Total Euros Paid have been allocated, a
particular payment can only partly be made in euros, that payment shall be made
by the payment of the aggregate amount of euros outstanding from the Total Euros
Paid (the Remaining Euros) and the balance shall be paid in dollars, such amount
being the sum in dollars which results from the following calculation:
g - h
where:
g is the sum in dollars which would have been paid in making the relevant
payment had no euros been left to allocate to it;
Page 41
h is the Remaining Euros converted into dollars at the Euro/Dollar Rate.
Conditions
4.1 The obligations of the parties under clause 2 are conditional upon the
following conditions being fulfilled (or waived):
(a) the passing on or before 25 June 1999 at a duly convened general meeting of
ICI of a resolution (or more than one if so required by the London Stock
Exchange) by the shareholders of ICI approving transactions contemplated by
this Agreement;
(b) any applicable waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act 1976 to the consummation of the transactions contemplated
by this Agreement having expired or terminated;
(c) there being:
(i) no conditions set out in Schedule 15 which remain to be
satisfied;
(ii) no outstanding Regulatory Action or other law or regulation which
makes unlawful or otherwise prohibits or restricts completion of
the transfer of any Sale Shares, Company, Local Business,
Business Assets or Non-Controlled Joint Venture (as such term is
read in accordance with clause 6.3(a)(i)) at Closing or the
transfer of any shares or assets before Closing pursuant to
Schedule 18 or the entering into or performance of any of the
Ancillary Agreements which are in the agreed form; and
(iii) no consents from any third party which are required in order to
transfer any Sale Shares, Company, Local Business, or Business
Assets (other than Business Contracts, Business IP Licences,
Business IT Licences and Transferred Properties) or Non-
Controlled Joint Venture (as such term is read in accordance with
clause 6.3(a)(i)) at Closing or to transfer any shares or assets
before Closing pursuant to Schedule 18 which have yet to be
obtained,
which will (aa) prevent the entering into, or performance of, any of the
Ancillary Agreements which are in the agreed form or (bb) prevent either
Vendor from being in a position to comply with its obligations under clause
6.2 and Schedule 4 (after taking account of the provisions of clause 6.3)
on the last Business Day of the then current calendar
Page 42
month (or at any time which is less than 3 Business Days before the end of
any calendar month, on the last Business Day of the next calendar month or
such earlier date as the parties agree);
(d) immediately prior to Closing:
(i) on or before 30 June 1999, the availability of financing to be
provided under or pursuant to the Financing Agreements; or
(ii) thereafter, the availability of financing sufficient to allow the
Purchaser to comply with its obligations at Closing, on terms
that are no less favourable, taken in the aggregate, than the
financing to be provided under or pursuant to the Financing
Agreements;
(e) the consent of HM Treasury having been obtained to those elements of the
matters referred to in this Agreement which require such consent; and
(f) no Material Adverse Change in the ICI Business or the PO/MTBE Business
having occurred and continuing immediately prior to Closing.
Each party (other than HSCC and the Purchaser in relation to Condition 4.1(f) in
the case of a Material Adverse Change in the ICI Business and other than ICI and
the Purchaser in relation to Condition 4.1(f) in the case of a Material Adverse
Change in the PO/MTBE Business) shall use all reasonable endeavours to procure
(so far as it lies within its respective powers to do so) that each of the
Conditions, to the extent that they are not waived, are fulfilled as soon as
possible, but in any event before 31 October 1999 (the Termination Date).
4.2 In each of the jurisdictions specified in Schedule 15, the transfer of
companies or businesses (as applicable) pursuant to Schedule 18 shall be subject
to the conditions specified in respect of that jurisdiction in that Schedule and
ICI and the Purchaser shall each use all reasonable endeavours to procure the
satisfaction of those conditions as soon as practicable after the date of this
Agreement.
4.3 Each of ICI and HSCC shall, so far is reasonably necessary, and as promptly
as practicable, provide the other with such reasonable assistance as the other
requests (a) in making or supporting the other and the members of the
Purchaser's Group in making applications for environmental and operational
change of control consents and (b) in providing information which is requested
by any governmental or regulatory body or other person whose consents, approvals
or other actions are required in order to complete the sale
Page 43
and purchase of the Sale Shares and the Local Businesses (including, for the
avoidance of doubt, the Federal Trade Commission (FTC) or other competition
authorities).
4.4 Without prejudice to the generality of their obligations under clauses 4.1,
4.2 and 4.3:
(a) each of ICI and HSCC shall, as soon as practicable and in any event no
later than 10 Business Days after the date of this Agreement, file with the
FTC the notification and report form, if any, required for the transactions
contemplated by this Agreement pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976; and
(b) as soon as practicable and in any event no later than 10 Business Days
after the date of this Agreement (or such later date as may be jointly
agreed by ICI and HSCC and permitted by the Relevant Competition
Authority), HSCC (and, in the event that a separate filing is required,
ICI) shall submit a merger or other competition or anti-trust filing, as
applicable, to each Relevant Competition Authority, save where ICI and HSCC
jointly agree otherwise.
4.5 ICI undertakes and agrees with HSCC that, on or before 8 June 1999, the
directors of ICI will post a circular to shareholders of ICI (the Circular)
containing (a) a notice duly convening the extraordinary general meeting of ICI
referred to in clause 4.1(a) to be held as soon as practicable after the date of
this Agreement and in any event on or before 25 June 1999 and including the text
of the resolution (or more than one if so required by the London Stock Exchange)
approving the arrangements envisaged by this Agreement and (b) (subject to the
fiduciary duties of the directors) a recommendation from the directors to the
shareholders of ICI to vote in favour of the resolution (or resolutions) and
that neither ICI nor any member of ICI's Group nor any of their respective
Related Persons will solicit or encourage any other offer for all or any part of
the ICI Business from the date of this Agreement until Closing, the Termination
Date or the date on which this Agreement is terminated in accordance with its
terms, whichever first occurs (provided that neither ICI nor any member of its
Group shall be required to contravene any Joint Venture Agreement). Without
prejudice to the generality of the foregoing, HSCC shall give ICI such
assistance as it shall reasonably require in connection with the preparation of
the Circular and in particular shall procure that the Purchaser's Accountants
shall provide such financial information as is necessary for the purpose of
preparing the Circular and any supporting documentation customarily prepared in
connection with such a circular.
Page 44
4.6 If the Conditions are not satisfied or waived on or before the Termination
Date, this Agreement shall automatically terminate.
4.7 If this Agreement terminates or is terminated in accordance with this
clause 4 then the obligations of each party under this Agreement (except for
obligations under clauses 12.17, 20, 22, 24, 25, 26, 28, 29, 31 and 33) shall
automatically terminate, provided that the rights and liabilities of the parties
which have accrued prior to termination (save for any under clause 5.1) shall
subsist.
4.8 No Condition may be waived except by written agreement of the parties, save
that HSCC shall be entitled to waive the Conditions set out in clause 4.1(c) and
(f) in relation to the ICI Business without obtaining the consent of the other
parties and ICI shall be entitled to waive the Conditions set out in clause
4.1(c) and (f) in relation to the PO/MTBE Business without obtaining the consent
of the other parties. In any event no Condition may be waived without obtaining
the prior consent of Bankers Trust Company and Goldman Sachs Credit Partners
L.P. (as representatives for these purposes of the providers of finance under
the Financing Agreements). If the parties agree that they wish to waive any
Condition (or, where any party can unilaterally waive a Condition in accordance
with the provisions of this clause 4.8, where it elects to do so) the parties
undertake to each other to use their respective reasonable endeavours to obtain
such consent of Bankers Trust Company and Goldman Sachs Credit Partners L.P.
The parties shall waive the Condition set out in clause 4.1(c) in relation to
the ICI Business if the ICI Transferred Value (as defined in clause 6.3) is at
least (Pounds)914.47 million but less than (Pounds)933.7 million and Bankers
Trust Company and Goldman Sachs Credit Partners L.P. have granted their consent
to such a waiver. HSCC shall not have an obligation under clause 4.1 to use
reasonable endeavours to procure such consent, but it agrees not to raise any
objection to the giving by Bankers Trust Company and Goldman Sachs Credit
Partners L.P. of such consent.
4.9 Each party shall notify the other parties as soon as reasonably practicable
after it becomes aware that any Condition has been satisfied. If either Vendor
considers at any time prior to Closing that a Material Adverse Change in the
others Business has occurred, it shall promptly serve a written notice on the
other Vendor (a MAC Notice) giving reasonable details thereof. If either Vendor
delivers a MAC Notice and the other Vendor does not accept that a Material
Adverse Change has occurred, either Vendor may instruct the Independent Firm to
determine whether there is a Material Adverse Change and if so shall notify the
other of such instruction. If the matter is so referred to the Independent
Firm:
Page 45
(a) each Vendor may make written representations to the Independent Firm in
relation to the alleged Material Adverse Change (with copies to the other
Vendor) within 5 Business Days of such referral. The Independent Firm
shall be instructed to notify the Vendors and the Purchaser of its
determination within 10 Business Days of such referral;
(b) if the Independent Firm shall for any reason be unable or unwilling to act,
another independent firm of chartered accountants shall be appointed to act
in its place, by agreement of the Vendors and, in default of such agreement
within 5 Business Days of the Vendors becoming aware that the Independent
Firm is unable or unwilling to act, at the request of either Vendor, by the
President of the Institute of Chartered Accountants in England and Wales
for the time being;
(c) in making its determination, the Independent Firm shall act as expert and
not as arbitrator and the determination by the Independent Firm shall, in
the absence of manifest error, be final and binding on the Vendors and the
Purchaser and shall be deemed to have been accepted and approved by each of
them. The fees and the costs of the Independent Firm shall be shared by
the Vendors equally unless otherwise directed by the Independent Firm
(which shall have the authority to make such direction if it deems it
equitable);
(d) each Vendor shall and shall procure that each other relevant member of its
Group shall give the Independent Firm reasonable access at all reasonable
times to all books and records, and all computer files relating to the
business of any Company or any Local Business, in their respective
possession or control and generally shall provide the Independent Firm with
such other information and assistance (including without limitation access
to senior operational executives) as the Independent Firm may reasonably
request.
4.10 If any fact which makes any of the Conditions incapable of being satisfied
on or before the Termination Date comes to the knowledge of any party at any
time prior to Closing, then that party shall notify the other parties of that
fact. The parties shall then first negotiate in good faith and use their
reasonable endeavours to agree an alternative set of arrangements which place
the Purchaser in no worse a position than it would have been in had the relevant
Condition been capable of being satisfied, so far as is practicable in the time
available before the Termination Date. If such endeavours and negotiations in
good faith have taken place and it has not been possible to agree to such an
alternative set of arrangements, then any party shall be entitled to treat this
Agreement as terminated by written notice to the other
Page 46
parties, provided that no party shall be entitled to treat this Agreement as
terminated where that party is in breach of its obligations under clauses 4.1 to
4.9 where such breach has contributed materially to the non-satisfaction of the
Condition.
4.11 Agreed deletion.
4.12 If the Olefins Manufacturing Business is a Delayed Business, then until
such time as a transfer of the Olefins Manufacturing Business takes place:
(a) the definition of Business under the Technology Transfer Agreement shall be
deemed modified to exclude that part of the Relevant Petrochemicals
Business comprised in the Olefins Manufacturing Business; and
(b) the provisions of the Technology Transfer Agreement in respect of
Collaboration Agreements, ICI Projects and ICI Technology Projects shall be
disapplied insofar as they relate to the Olefins Manufacturing Business.
Conduct before Closing
5.1 Subject to:
(a) such of the consents set out in Schedule 15 having been obtained and such
of the Conditions having been satisfied or waived as are (in each case)
required in relation to the implementation of the relevant transaction;
(b) there being no outstanding Regulatory Action which makes unlawful or
otherwise prohibits or restricts the implementation of the relevant
transaction; and
(c) such consents as are required from third parties to the implementation of
the relevant transaction having been obtained,
ICI shall take or procure that the necessary actions are taken in order to (or,
where so provided in Schedule 18, use reasonable endeavours to) implement the
transactions set out in Schedule 18 and ICI shall, and shall procure that each
member of its Group shall, do, execute and deliver all such acts, deeds,
documents, instruments of assignment and transfers as may be necessary to
implement such transactions and give effect to them, provided that if, in ICI's
reasonable opinion, the implementation of any one or more of those transactions
would have a prejudicial effect on any member of ICI's Retained Group, ICI
shall, subject to the prior consent of the Purchaser (such consent
Page 47
not to be unreasonably withheld or delayed), be entitled to implement such other
steps at its own cost as would achieve substantially the same position as
between the parties as would result from the implementation of the relevant
transaction and in addition ICI shall bear any incremental Tax costs arising by
reference to or as a result of the implementation of such alternative steps.
5.2 ICI (in relation to its Group) and HSCC (in relation to its Group) shall
ensure that neither the Purchaser nor any of the Purchaser's Subsidiaries nor
any company incorporated pursuant to Schedule 18 shall carry on any business or
have any assets or liabilities of any nature whatsoever before Closing, except
for any business, assets or liabilities transferred to or assumed by it pursuant
to any transaction contemplated by this clause 5. Each Vendor shall indemnify
the other Vendor on an after Tax basis (for itself and on behalf of each member
of such other Vendor's Group) against all costs suffered or incurred as a result
of a breach by it of its obligation under this clause 5.2.
5.3 Subject to clause 5.1, ICI (in relation to the ICI Business) and HSCC (in
relation to the PO/MTBE Business) will ensure that, until Closing (or, in the
case of Delayed Businesses, Delayed Companies or Delayed Assets, until Delayed
Closing):
(a) the ICI Business and the PO/MTBE Business (as the case may be) is conducted
in the ordinary and normal course of business as a going concern and
without any alteration in its nature or manner (save for routine and
unimportant matters), on sound commercial principles consistent with those
applied by that party during the financial period ended on the Accounts
Date; and
(b) all reasonable measures are taken, consistent with past practice, to
protect and maintain the assets comprised in the ICI Business and the
PO/MTBE Business, as the case may be.
5.4 For the purpose of this clause 5.4, the term "Company" includes any Non-
Controlled Joint Venture. Subject to clause 5.1, but without prejudice to the
generality of clause 5.3, until Closing (or, in the case of Delayed Assets,
Delayed Businesses or Delayed Companies, until Delayed Closing) each of ICI and
HSCC will ensure, in respect of the ICI Business or the PO/MTBE Business
respectively (and, in relation to any Controlled Joint Venture or Non-Controlled
Joint Venture, only in so far as ICI or HSCC (as the case may be) is able in
accordance with the terms of any joint venture agreement or legally permitted to
do so and provided that no member of ICI's Group shall be required by this
clause 5.4 to conduct its relationship with the Controlled Joint Venture or Non-
Controlled Joint Venture in a manner which
Page 48
is inconsistent with existing budgets, business plans, delegations of authority
and practices in place in relation to that Joint Venture at the date of this
Agreement), that without the prior written consent of the other:
(a) no Company changes, or agrees to change, its authorised or issued share
capital or issues, or agrees to issue, any shares, debentures or other
securities or grants, or agrees to grant, any options over any shares,
debentures or other securities;
(b) save for the redemption of its issued preference share capital by Tioxide
Canada, Inc., as disclosed in the Disclosure Letter, no Company declares or
pays any dividend or makes any other form of distribution to its members or
reduces its share capital or purchases its own shares;
(c) no Company acquires or disposes of any shares, debentures or other
securities in any other company or grants or acquires any option over any
shares, debentures or other securities or makes any commitment or enters
into any agreement to do so;
(d) no Company or Business Vendor (in relation to the ICI Business or the
PO/MTBE Business, as the case may be) will dispose of, or agree to dispose
of or grant or agree to grant any option or other right over or licence of,
any business or assets comprised in the relevant Business (except in the
ordinary course of business on normal arm's length terms);
(e) no Company or Business Vendor (in relation to the ICI Business or the
PO/MTBE Business as the case may be) will embark on a programme, submit any
bid or tender or make any contract or commitment in relation to the
relevant Business which is likely to involve more than US$25 million (save
for the renewal of an existing leasehold interest in any property on arm's
length terms) by reference to:
(i) value; or
(ii) capital expenditure or costs; or
(iii) liabilities,
or (whatever the sum involved) is likely (aa) to result in any material
change in the nature of the operations, liabilities and activities of the
ICI Business or the PO/MTBE Business or (bb) to involve any abnormal or
unusual commitment;
Page 49
(f) no Company or Business Vendor (in relation to the ICI Business or the
PO/MTBE Business) makes any contract with any other member of ICI's Group
(if it is a member of ICI's Group) or with any other member of HSCC's Group
(if it is a member of HSCC's Group) except for contracts on arm's length
terms and in the ordinary course of business or as otherwise contemplated
in this Agreement;
(g) there is no material change in the extent of the insurance cover relating
to the activities of the relevant Business and no failure to maintain
adequate insurance cover relating to the activities of the relevant
Business;
(h) no Company or Business Vendor shall make, terminate or materially vary any
employment agreement or terms or employment-related arrangement with any
director or Senior Employee or group of 20 or more Employees or hire
(except in the ordinary course of business or where reasonably necessary to
meet an identified business need or to replace departing employees) a
material number of additional employees. This does not apply to renewing
any existing agreements or arrangements and/or promotions and improvements
in terms and conditions awarded in the normal course of employment;
(i) no Company or Business Vendor (in relation to the ICI Business or the
PO/MTBE Business) will create, grant or issue, or agree to create, grant or
issue, any mortgages, charges (other than liens arising by operation of
law), debentures or other securities or redeem or agree to redeem any such
securities or (other than in the ordinary course of business) give, or
agree to give, any guarantees or indemnities;
(j) no Company or Business Vendor (in relation to the ICI Business or the
PO/MTBE Business) will borrow (other than by bank overdraft or similar
facility in the ordinary course of business and within limits subsisting at
the date of this Agreement and other than anything of the nature of Intra-
Group Financial Debt) any money or agree so to do;
(k) no Company shall alter the provisions of its constitutional documents or
adopt or pass further regulations or resolutions inconsistent therewith or
change its accounting reference date;
(l) save where the intention to do so has been disclosed in the Disclosure
Letter relating to the Tioxide Business, no Company shall discontinue or
cease to operate all or a material part of its business;
(m) no Company (excluding any Non-Controlled Joint Venture) shall pass any
resolutions in general meeting or by way of written resolution
Page 50
(save for the conduct of routine ordinary business at any annual general
meeting or, in the case of any Non Controlled Joint Venture for the conduct
of routine ordinary business by written resolution or at any general
meeting), including, without limitation, any resolution for winding-up, or
capitalise any profits or any sum standing to the credit of share premium
account or capital redemption reserve fund or any other reserve;
(n) no Company or Business Vendor shall make any material change to the
accounting procedures or principles by reference to which its accounts are
drawn up; and
(o) no Company or Business Vendor (in relation to the ICI Business (in the case
of ICI) and the PO/MTBE Business (in the case of HSCC)) will abandon,
cancel or allow to lapse any Registered Rights other than in the ordinary
course of business consistent with past practice.
HSCC and ICI shall each consider and provide a response to any request for such
consent as promptly as reasonably practicable.
5.5 Notwithstanding clauses 5.1 to 5.4, the Retained Olefins Business may be
transferred (in accordance with and subject to the terms of the Co-operation
Agreement) to the Operations Company (as defined therein).
5.6 ICI and HSCC shall each use reasonable endeavours to take or ensure that
the necessary actions are taken in order to procure that the A Notes (as defined
in Schedule 4) are available for marketing in accordance with the A Registration
Rights Agreement (as defined in Schedule 4) or at such earlier time as may be
agreed upon by the parties to such A Registration Rights Agreement, but no
earlier than the marketing of the most junior fixed-rate dollar-denominated
high-yield notes of HIC, including by providing all necessary assistance in the
preparation of the relevant registration statement or other marketing document
within such timetable, and that their respective accountants provide required
financial information and customary supporting documentation in connection
therewith.
5.7 ICI shall use its reasonable endeavours to minimise the level of the Final
Cash Balance of each Company at Closing, subject to any legal constraints on its
ability to do so, by the payment of any dividends or otherwise. For the
avoidance of doubt, ICI shall not be treated as being in breach of its
obligations under this clause 5.7 if it requests consent to the payment of a
dividend or any other step which it wishes to take in connection with its
obligations under this clause 5.7 from the Purchaser pursuant to clause 5.4 and
the Purchaser does not give such consent to the extent that
Page 51
failure to give such consent leads to a failure to minimise the Final Cash
Balance of any Company.
5.8 ICI shall as soon as reasonably practicable after the date of this
Agreement and in any event at least 15 Business Days prior to Closing provide
HSCC with a list of all filings and office actions required to be made in the 3
months after the Closing Date in respect of the Registered Rights.
5.9 ICI shall use all reasonable endeavours to procure the signing by Dames &
Moore of the Dames & Moore Reliance Agreement in favour of such persons as are
nominated by the Purchaser provided that nothing in this clause shall require
ICI to take any steps to procure such signature other than such signature as is
contemplated in the Environmental Consultant's Agreement.
5.10 HSCC undertakes to use its best endeavours to procure that the relevant
directors of each of TGL, Holdco 1, Holdco 2, UK Polyurethanes, UK Relevant
Petrochemicals and Tioxide UK (each as defined in clause 1, Schedule 4 or
Schedule 18) form the opinions, and make the statutory declarations, envisaged
in Sections 155 et seq of the Companies Act 1985 in relation to the financial
assistance identified in the draft board resolutions and statutory declarations
in the Exhibits to the Senior Credit Agreement, provided that nothing in this
clause (i) shall require any such director (or shall require HSCC to procure any
such director) to contravene any law or act in a manner inconsistent with his
fiduciary or other legal duties in relation to any such company, or (ii) shall
require HSCC to procure that any such company is capitalised or has assets or
other funds available to it to an extent which would allow any such director to
form such opinion or give such a statutory declaration. For the avoidance of
doubt, proviso (ii) above shall not affect any obligation which HSCC may have in
the absence of this clause.
5.11 The Purchaser and HSCC shall each procure that, without the prior written
consent of ICI:
(a) no amendment materially adverse to ICI is made to the Subscription
Agreement or to the Member's Agreement;
(b) no consent is given by or on behalf of the Purchaser to the assignment of
any rights or obligations of any party to the Subscription Agreement; and
(c) save for any agreement entered into to implement any transfer of interests
in the Purchaser made pursuant to and in accordance with the LLC Agreement
or the Members' Agreement, neither the Purchaser nor HSCC shall enter into
any agreement with any other person
Page 52
(including without limitation any other member of the Purchaser) relating
to the present or future transfer of interests of the Equity Investors (as
defined in the LLC Agreement) in the Purchaser,
in each case at any time on or prior to the date on which there ceases to be a
member of ICI's Group holding any interests (other than Class A Shares in TGL)
in any member of the Purchaser's Group.
Closing
6.1 Subject to clauses 6.11 and 6.14 and Schedule 16, beneficial ownership and
risk in respect of each of the Business Assets shall pass to the Designated
Purchaser on Closing. Closing shall take place at such place or places outside
the United Kingdom as are agreed between ICI and HSCC. Closing shall take place
on the final Business Day in the first calendar month in which, at least 3
Business Days before the end of that calendar month, Conditions 4.1(a), (b) and
(e) have been satisfied or waived provided that Condition 4.1(c) is satisfied or
waived at that time and further provided that Conditions 4.1(c), (d) and (f)
remain satisfied immediately prior to Closing, or on such other date as may be
agreed between the parties.
6.2 Subject to clause 6.3:
(a) ICI agrees (i) with HIC in relation to the transfer of the Sale Shares in
TGL, (ii) with the Purchaser as trustee for Huntsman ICI Polyurethanes (UK)
Limited in relation to the transfer of the Sale Shares (other than those in
TGL) set opposite ICI's name in column 3 of Part I of Schedule 1, (iii)
with the Purchaser in relation to the transfer of the Sale Shares set
opposite its name in column 3 of Part IV of Schedule 1 and (iv) with the
Purchaser as trustee for each other Designated Purchaser in relation to the
transfer of the Local Businesses that ICI and each Share Selling Company
and Business Vendor and each Designated Purchaser shall at Closing transfer
Sale Shares and Local Businesses and shall do, or procure the doing of, all
those things listed in relation to them in Schedule 4; and
(b) HSCC agrees with the Purchaser that HSCC shall at Closing transfer the
PO/MTBE Business and shall do, or procure the doing of, all those things
listed in relation to it in Schedule 4.
The parties shall also make the adjustments referred to in clause 3.4. If any
transaction is required to be implemented under Schedule 18 and has not been
implemented prior to Closing, then the Purchaser shall procure that, at Closing,
either it or a member of its Group or a Company shall pay to ICI or its designee
any sums which would have been paid pursuant to Schedules 4
Page 53
and/or 18 to a member of ICI's Group had such transaction been implemented (the
amount of such payment being reduced where applicable pursuant to clause
6.3(c)(ii), being adjusted pursuant to clause 3.4 and as otherwise provided in
this Agreement and being paid in dollars and/or euros as determined under clause
3.17). For the avoidance of doubt:
(i) subject to being reduced pursuant to clause 6.3(c)(ii) and being
adjusted pursuant to clause 3.4 and as otherwise provided in this
Agreement, any such sum which would have been paid pursuant to
Schedules 4 and/or 18 shall be paid to ICI or its designee
regardless of whether the business or share transfer to which it
relates has been effected and of whether any loan note of which
it is expressed to constitute the repayment has been issued; and
(ii) the provisions of this final paragraph of clause 6.2 shall apply
in respect of the sums to be paid pursuant to Schedule 4 in
relation to the transfers of the Joint Venture Interests in NPU
and Arabian Polyol Co Ltd and of the preference shares in the
capital of Tioxide (Malaysia) Sdn Bhd (to which neither clause
3.4 nor clause 6.3(c)(ii) apply).
If the Olefins Manufacturing Business is not transferred to a member of the
Purchaser's Group at Closing, then Huntsman ICI Petrochemicals (UK) Limited
shall nevertheless pay the sum of $200,000,000 to ICI Chemicals & Polymers
Limited as envisaged by paragraph 22 of Schedule 4, but such payment shall be
subject to a condition subsequent that Delayed Closing takes place in respect of
the Olefins Manufacturing Business.
6.3(a) For the purposes of this clause 6.3 only:
(i) any reference to a Non-Controlled Joint Venture shall be read as
a reference to Rubicon Inc. and LPC;
(ii) the Value of a Company, Non-Controlled Joint Venture or Local
Business shall mean the book value of the fixed assets of the
relevant entity or business at 31 December 1998, as identified in
Exhibit F.
(b) Where insufficient of the Business Assets of any Local Business are able
to be transferred at Closing for the relevant Local Business to be able
to continue to operate for all practical purposes in the manner in which
it operated immediately prior to Closing, then (i) none of the Business
Assets comprised in such Local Business shall be transferred at Closing,
(ii) the provisions of Schedule 16 shall apply in relation to
Page 54
such Local Business and (iii) for the purposes of paragraph (c) below,
that Local Business shall be treated as not having been transferred at
Closing. Where sufficient of the Business Assets of any Local Business
are able to be transferred at Closing for the relevant Local Business to
be able to continue to operate for all practical purposes in the manner
in which it operated immediately prior to Closing, then such Local
Business shall transfer at Closing and shall be treated as having done
so for the purposes of paragraph (c) below. The provisions of clause
6.3(b) shall also apply in respect of any transfer of a business which
is to be effected pursuant to Schedule 18 to determine whether that
business shall be treated as having been transferred at Closing for the
purposes of paragraph (c) below.
(c) ICI shall be deemed to have complied with its obligations under clause
6.2 and Schedule 4 to transfer Sale Shares and Local Businesses if the
aggregate of the Values of the Companies, Non-Controlled Joint Ventures
and Local Businesses (excluding the Olefins Manufacturing Business)
which have been transferred to a member of the Purchaser's Group (such
aggregate being the ICI Transferred Value) is more than (Pounds)933.7
million (and shall be deemed not to have complied with such obligations
if such aggregate is less than the ICI Transferred Value), in which
event:
(i) ICI shall, on the terms of Schedule 16, remain subject to a
continuing obligation to transfer any Company or Non-Controlled
Joint Venture (a Delayed Company) and any Local Business (a
Delayed Business) which it does not transfer at Closing (without
prejudice to the remaining provisions of this clause 6 and to the
provisions of Schedule 16). Any Schedule 18 Company or Schedule
18 Business the transfer of which to a member of the Purchaser's
Group has not taken place on or prior to Closing shall be treated
for the purposes of this Agreement as a Delayed Company or a
Delayed Business, as the case may be ;
(ii) the consideration to be paid or transferred in respect of any
such Delayed Company (or of its holding undertaking) or Delayed
Business under Schedule 18 (in the case of any Delayed Company or
Delayed Business which is a Schedule 18 Company or Schedule 18
Business) or, as the case may be, under Schedule 4 (in the case
of any Delayed Company or Delayed Business which is not a
Schedule 18 Company or Schedule 18 Business) shall be reduced by:
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(aa) in the case of any Delayed Company or Delayed Business which
is not a Systems House Entity, the sum resulting from the
following calculation:
a
1/4 x --------------------- x $2,426,550,000
(Pounds)962.6 million
where a is the Value of the relevant Delayed Company or
Delayed Business; and
(bb) in the case of any Delayed Company or Delayed Business which
is a Systems House Entity, the sum which is one-quarter of
the value shown against that Delayed Company or Delayed
Business in Part II of Schedule 6;
(iii) if Delayed Closing takes place in respect of any such Delayed
Company or Delayed Business on or before the second anniversary
of Closing, the Purchaser shall pay to the Vendor:
(aa) the sum resulting from the following calculation in the case
of an entity which is not a Systems House Entity:
c
1/4 x --------------------- x $2,426,550,000
(Pounds)962.6 million
where c is the Value of the relevant Delayed Company or
Delayed Business; and
(bb) in the case of any entity which is a Systems House Entity,
the sum which is one quarter of the value shown against that
entity in Part II of Schedule 6.
Such payment shall be by way of adjustment to the consideration
payable in respect of such Delayed Company or its holding
undertaking or in respect of such Delayed Business under Schedule
4 (where such Delayed Company or Delayed Business is not a
Schedule 18 Company or Schedule 18 Business) or Schedule 18
(where such Delayed Company or Delayed Business is a Schedule 18
Company or Schedule 18 Business).
(d) For the purpose of paragraph (c) above, Tioxide (Malaysia) Sdn Bhd (Tioxide
Malaysia) shall be deemed to have been transferred at Closing if the
ordinary shares in Tioxide Group Limited, have been transferred with
Tioxide Malaysia being a Subsidiary of it at the time
Page 56
of such transfer, regardless of whether the 24,200,000 Cumulative
Redeemable Preference Shares of US$1 each in the capital of Tioxide
Malaysia (the Preference Shares) have been transferred by ICI Omicron BV
pursuant to Schedule 18 on or prior to Closing. If the Preference Shares
have not been transferred on or prior to Closing pursuant to Schedule 18,
then, from Closing, ICI shall procure that ICI Omicron BV shall act in
accordance with the Purchaser's instructions in respect of such Preference
Shares and account for any dividend or other distribution made or paid by
Tioxide Malaysia in respect of them. Should the Preference Shares not have
been transferred to a member of the Purchaser's Group or to a transferee
nominated by the Purchaser on or before the second anniversary of Closing,
ICI shall pay to the Purchaser the Fair Value of the Preference Shares, as
determined in accordance with the process set out in paragraph 7 of
Schedule 16 (for which purpose, any reference to a Delayed Company shall be
read as a reference to the Preference Shares).
(e) HSCC shall be deemed to have complied with its obligations under clause 6.2
and Schedule 4 to transfer its Local Business only if the Business Assets
which it is able to transfer at Closing are sufficient for its Local
Business to be able to continue to operate for all practical purposes in
the manner in which it operated immediately prior to Closing.
(f) Where any consent or agreement of any third party is required to the
transfer of any of the Business Assets (other than a Property, Business
Contract, Business IP Licence or Business IT Licence) comprised in a Local
Business which has transferred and such consent or agreement has not been
obtained at or before Closing, the sale of the relevant Business Asset (a
Delayed Asset) shall not take effect, notwithstanding Closing, until that
consent or agreement has been obtained and the provisions of Schedule 16
shall apply in respect of it.
(g) For the purposes of this clause 6.3, ICI Chemicals & Polymers Limited shall
be treated as being a Business Vendor in respect of two separate Local
Businesses, being (i) on the one hand, the Olefins Manufacturing Business
and (ii) on the other hand, the remainder of the business which it is to
sell under this Agreement. For the avoidance of doubt, C&P's being unable
to transfer the Local Business comprising the Olefins Manufacturing
Business at Closing shall not prevent the Conditions being satisfied and
shall not prevent ICI from being deemed under this clause 6.3 to have
complied with its obligations under clause 6.2 and Schedule 4. If the
Olefins
Page 57
Manufacturing Business is not transferred to a member of the Purchaser's
Group at Closing, then:
(i) the Olefins Agreements shall be deemed to be Ancillary Agreements
and shall be entered into at Closing in accordance with the
applicable provisions of Schedule 4 and the Olefins Manufacturing
Business will be carried on, until Delayed Closing, subject to
and in accordance with the Co-operation Agreement and the Olefins
Agreements;
(ii) the Olefins Manufacturing Business shall constitute a Delayed
Business for the purposes of the definitions of "Delayed Closing
Date" and "Delayed Closing" (save where the latter term is used
in clause 7.5, which shall not apply in relation to any Delayed
Closing in respect of the Olefins Manufacturing Business),
clauses 2.9, 3.12, 3.13, 4.12 and this 6.3 (other than paragraphs
(c)(ii) and (iii)) and paragraphs 9 and 11 of Schedule 16;
(iii) for the avoidance of doubt, notwithstanding any provision to the
contrary in this Agreement, the provisions of clause 5 and of
Schedule 16 (other than those set out in paragraphs 9 and 11 of
that Schedule) shall not apply in respect of the Olefins
Manufacturing Business.
(h) BPCL has an interest in certain assets pursuant to the ICI/BP Joint Venture
Agreements, which interest (the BPCL Interest) the Purchaser, or another
member of its Group, is purchasing from BPCL under an asset sale agreement
(Asset Sale Agreement). It is acknowledged by the parties that the fact
that ICI is, by reason of the BPCL Interest, selling less than a 100%
interest in the Business Assets relating to the Olefins Manufacturing
Business is not relevant to the measure of the Costs of the Purchaser (or
the relevant member of the Purchaser's Group) and its ability to recover in
respect thereof if there is a breach of or claim under any of the
Warranties or any of the other provisions of this Agreement (and,
accordingly, no discount shall be applied to the assessment of the Costs of
the Purchaser (or the relevant member of the Purchaser's Group) and the
amount of its claim by reason of the BPCL Interest and the fact that ICI
is, by reason of the BPCL Interest, selling less than a 100% interest in
the Business Assets relating to the Olefins Manufacturing Business). In
reliance on this acknowledgement, the Purchaser has agreed with BPCL that
the Asset Sale Agreement will not contain equivalent warranties,
indemnities or other protections in respect of those matters which are
covered by
Page 58
warranties, indemnities and other protections given in this Agreement. For
the avoidance of doubt, the parties acknowledge that ICI undertakes no
obligation, makes no representation and gives no warranty in respect of or
relating to BPCL's ownership of, title to or interest in any assets.
(i) The use of ICI Group Ethylene Systems agreement dated 15 November, 1994
between ICI Chemicals & Polymers Limited, ICI Wilhelmshaven GmbH, European
Vinyls Corporation (International) SA/NV, European Vinyls Corporation
(Deutschland) GmbH and European Vinyls Corporation (UK) Limited shall be
excluded from the definition of Business Contracts save that upon and after
the transfer of the Olefins Manufacturing Business pursuant to this
Agreement, such agreement shall be a Business Contract to the extent that
it relates to the UK System (as defined therein) and shall continue to be
excluded from the definition of Business Contract to the extent that it
relates to the German System (as defined therein).
6.4 If, on the Delayed Closing in respect of any Delayed Company or Delayed
Business, or on the completion at any time after Closing of the transfer of the
Joint Venture Interest in NPU or Arabian Polyol Co Ltd or of the preference
shares in the capital of Tioxide (Malaysia) Sdn Bhd, it is necessary for the
consideration for such transfer to be paid within the relevant jurisdiction in
order to comply with the requirements of local law or in order for the
purchasing entity to be able to benefit from a relevant investment credit, then:
(a) if payment may be made in dollars, then the Purchaser shall procure that
the relevant purchasing entity shall pay to the relevant selling entity the
amount in dollars which would have been paid in respect of the transfer of
such shares or business pursuant to Schedule 4 or 18 had such transfer
taken place at or prior to Closing and had account been taken of any
adjustment made to that sum under clause 3.4 but not of the effect of
clause 6.3(c)(ii) or of clause 3.17 (the Dollar Price);
(b) if it is necessary for the payment to be made in the relevant local
currency, then the Purchaser shall instead procure the payment of the
amount resulting from converting the Dollar Price into that local currency
at the Spot Rate on the date which is three (3) Business Days prior to the
date of the relevant transfer;
Page 59
(c) ICI shall pay or procure the payment to the Purchaser of the amount in
Dollars paid at Closing pursuant to clause 6.2 in respect of the relevant
shares or business,
and, in the case of any Delayed Company or Delayed Business, the provisions of
clause 6.3(c)(iii) shall not apply on the Delayed Closing.
6.5 If either ICI or HSCC fails to comply with any of its obligations under
clause 6.2 (or to be deemed so to have complied pursuant to clause 6.3) then,
save where the failure relates to a minor or technical matter not going to
title, the other may at its option and without prejudice to any other remedies
available to it:
(a) defer Closing to a date not later than the end of the calendar month after
the calendar month in which Closing is required to take place under clause
6.1 (and so that the provisions of this clause 6 shall apply to Closing as
deferred), provided that, if such deferred Closing Date would fall after
the Termination Date, then the obligations of each party under this
Agreement (except for obligations under clauses 12.17, 20, 22, 24, 25, 26,
28, 29, 31 and 33) shall automatically terminate (save that the rights and
liabilities of the parties which have accrued prior to termination shall
subsist); or
(b) proceed to Closing so far as practicable (without prejudice to its rights
under this Agreement or any other agreement referred to herein).
All documents to be delivered by any party at Closing shall be held in escrow,
on a basis to be agreed between the parties in advance of Closing, such that
they will not become effective until the parties have complied with their
Closing obligations to such an extent that the agreed escrow condition is
satisfied.
6.6 Any cash sum to be paid by the Purchaser to ICI or any member of ICI's
Group at Closing shall be paid by the Purchaser (as agent for and on behalf of
itself and each of the Designated Purchasers) to ICI's Bank Account in
immediately available funds and ICI shall receive such payment on its own
account and as agent for each Selling Company.
6.7 The Tax Covenant and the Environmental Covenant shall each come into effect
at Closing.
6.8 At Closing, each Vendor shall procure that:
(a) the members of its Retained Group expressed to be parties thereto, and the
Purchaser shall procure that the members of the Purchaser's Group
Page 60
expressed to be parties thereto, shall enter into the Ancillary Agreements;
and
(b) those directors of each of the Companies (and Non-Controlled Joint Ventures
(where such directors are appointed by any member of ICI's Group))
nominated by the Purchaser in writing no later than 5 Business Days prior
to Closing shall resign and shall deliver a letter to the relevant Company
waiving all rights and claims they might have against such Company and the
Purchaser shall procure that each such Company shall grant to such
resigning directors full discharge of any claims it might have against such
resigning director (save in the case of fraud or any criminal matter).
6.9 Each party agrees with the other parties (on behalf of themselves and the
members of their respective Groups) to indemnify and keep indemnified the other
parties and each member of their respective Groups against any Cost which it may
incur or suffer as a result of any document delivered pursuant to this clause 6
being unauthorised, invalid or for any other reason ineffective for its purpose
or as a result of any document required to be delivered pursuant to clause 6.2
and Schedule 4 not being so delivered.
6.10 If the contract of employment of any Business Employee terminates or does
not transfer to a member of the Purchaser's Group at Closing (or, where
applicable, at the Delayed Closing Date relating to such Business Employee) by
operation of law, the Purchaser shall procure that the relevant member of the
Purchaser's Group shall immediately offer to employ any such person upon
becoming aware that his contract of employment has not transferred, or will not
transfer, or has terminated, such offer to be on terms and conditions that are
not less favourable to him as a whole than the terms and conditions applicable
to him immediately prior to Closing (or, as the case may be, the Delayed Closing
Date relating to such Business Employee or the date of termination) and as if
there was continuity of service, such employment to take effect at Closing (or,
where applicable, at the Delayed Closing Date) or, if later, as soon as the
relevant member of the Purchaser's Group has become so aware that the contract
of employment of such Business Employee has not transferred or will not transfer
and the relevant Vendor shall procure that, on the making of such an offer (or,
if later, at Closing or as the case may be at the Delayed Closing Date), any
such Business Employee who wishes to accept such offer is released from his
employment with that Vendor's Retained Group. In determining whether an offer
is on terms and conditions no less favourable as a whole for the purpose of this
clause 6.10, no account shall be taken of any success bonus or incentive paid or
provided to an Employee in relation to the sale of the Polyurethanes Business,
the Relevant Petrochemicals Business or the Tioxide Business insofar as such
bonus or
Page 61
incentive is in addition to (and not in substitution for) any other bonus or
incentive to which such Employee would otherwise have been eligible.
6.11 Save in relation to the Properties (to which the provisions of Schedule 17
shall apply) and Business IP Licences (to which clauses 6.12 to 6.16, 6.18 and
6.19 shall apply) and Business IT Licences (to which clauses 6.12 to 6.17 and
6.19 shall apply) insofar as the Business Assets comprise the benefit and burden
of Business Contracts which cannot effectively be or are not permitted to be
assigned or transferred by the relevant Business Vendor to the Purchaser or
relevant Designated Purchaser except by agreements of novation or without
obtaining a consent, approval or waiver from a third party (Consents) then the
following provisions shall apply:
(a) this Agreement shall not constitute an assignment or an attempted
assignment of the relevant Business Contract if, or to the extent that,
such an assignment or attempted assignment would constitute a breach of
such Business Contract;
(b) the relevant Vendor (on behalf of itself and each relevant Business Vendor)
and the Purchaser shall each use reasonable endeavours to procure that such
Business Contracts are novated or that the necessary Consents are obtained
and this Agreement shall constitute an assignment of such Business Contract
with effect from the time when all Consents required in respect of such
assignment have been obtained;
(c) unless or until each such Business Contract is so novated or assigned or
any necessary Consent is obtained, the relevant Business Vendor shall hold
any such Business Contract and any moneys, goods or other benefits received
thereunder as agent of the Purchaser (or the relevant Designated Purchaser)
and shall accordingly, promptly on receipt of the same, account for and pay
or deliver to the Purchaser (or the relevant Designated Purchaser) such
moneys, goods and other benefits less any reasonable direct out-of-pocket
costs and expenses of performance of that Business Contract incurred by
that Business Vendor (to the extent clause 6.11(d) does not apply)
(excluding, for the avoidance of doubt, management time) and the Vendor
shall comply with all reasonable requests of the Purchaser in relation to
that Business Contract or the performance thereof; and
(d) the Purchaser shall, or shall procure that the relevant Designated
Purchaser shall, at its cost, assist the relevant Business Vendor to
perform all its obligations (or, at the relevant Vendor's request, procure
the performance of all of the obligations of the Business
Page 62
Vendor) under any such Business Contract as sub-contractor of the relevant
Business Vendor provided that sub-contracting is permissible under the
terms of the relevant Business Contract and where sub-contracting is not
permissible, the Purchaser shall, provided that this is permissible under
the terms of the relevant Business Contract, perform any such Business
Contract as agent for the relevant Business Vendor, and in performing such
agency or sub-contracting role shall indemnify the relevant Business Vendor
(save to the extent that the Costs are caused by the Business Vendor's
failure to comply with its obligations under this clause or to take
reasonable care in performing any obligations under the relevant Business
Contract which remain to be performed by it and save in respect of the
Costs of third party claims in respect of such arrangement) on an after Tax
basis against all Costs suffered or reasonably incurred in connection with
any such Business Contracts provided that the Purchaser or relevant
Designated Purchaser shall not be obliged to indemnify the relevant
Business Vendor in respect of its internal administrative costs (including
costs of the time of its employees) the sub-contracting or agency or
arrangements described in this sub-paragraph;
(e) no effect shall however be given to sub-paragraphs (c) or (d) above if any
other party under the relevant Business Contract repudiates the contract,
refuses to deal with the relevant Business Vendor or the Purchaser or
relevant Designated Purchaser as contemplated by the said sub-paragraphs
(but then only for as long as it persists with such refusal) or if giving
effect thereto would constitute a breach of the relevant Business Contract
in which case the relevant Vendor, the relevant Business Vendor, the
Purchaser and any Designated Purchaser will use their respective reasonable
endeavours to make such other arrangements between themselves as may be
permissible to implement as far as possible the effective transfer of the
benefits and burden of such Business Contract to the Purchaser, or
Designated Purchaser or if such arrangements cannot be made in respect of
such Business Contract, the Business Vendor and the Purchaser (or the
relevant Designated Purchaser) shall use their respective reasonable
endeavours to procure that such Business Contract is terminated without
liability to either of them (in such a manner that the Purchaser or
Designated Purchaser may, if it so requires, negotiate a new contract on
its own behalf) and neither the Vendor, nor Business Vendor, the Purchaser
or the Designated Purchaser shall have any further obligation to the other
relating to the Business Contract after such termination.
Without prejudice to the generality of the preceding provisions of this clause
6.11 and of clause 18.2(a), ICI and the Purchaser shall each use their
Page 63
respective reasonable endeavours to procure the consent of Enron Teesside
Operations Limited (ETOL) and Enron Gas and Petrochemicals Trading Limited
(EGPTL) as may be required to the assignment (to the extent they relate to the
ICI Business) of (i) the Utilities Agreement relating to the Polyurethanes
Business dated 31 December 1998 between ETOL, EGPTL and ICI; (ii) the Services
Agreement relating to Services from the Teesside Utilities and Services Business
to the Polyurethanes Business dated 31 December 1998 between ETOL and ICI; (iii)
the Utilities Agreement relating to the ICI Hydrocarbons Business dated 31
December 1998 between ICI Chemicals and Polymers Ltd (C&P), EGPTL and ETOL; (iv)
the Services Agreement relating to Services from the Teesside Utilities and
Services Business to the ICI Hydrocarbons business dated 31 December 1998
between C&P and ETOL, and (v) the Services and the Utilities Agreement relating
to Services to the Teesside Utilities and Services Business of Enron from the
ICI Hydrocarbons Business dated 31 December 1998 between C&P and ETOL, and to
use such endeavours to procure the release of ICI (and any other members of
ICI's Group) from any guarantees of such agreements given by it in relation to
such Agreements. If ETOL's or EGPTL's consent to any such assignment or release
cannot be so obtained, or should ETOL's or EGPTL's consent to the assignment be
obtained only on the basis that a member of ICI's Group will continue to act as
guarantor in relation to any such Agreement(s), then ICI undertakes to continue
to act as guarantor (or to procure that any other member of ICI's group as is
currently such a guarantor so continues) in respect of any such Agreements until
the earlier of the date on which ETOL or EGPTL agrees to the release of such
guarantee or the second anniversary of Closing, provided that, with effect from
Closing, the Purchaser enters into a counter indemnity in favour of ICI in
respect of any liability which may arise under such guarantee.
6.12 Subject to clause 6.15, insofar as the benefit of any of the Business IP
Licences and Business IT Licences can effectively be assigned in favour of the
Purchaser (in the case of the PO/MTBE Business) or the relevant Designated
Purchaser (in the case of the ICI Business) with effect from the Closing Date,
the relevant Vendor shall at its own expense in respect of Business IP Licences
and Business IT Licences procure their assignment to or novation in favour of
the Purchaser (in the case of the PO/MTBE Business) or the relevant Designated
Purchaser (in the case of the ICI Business) with effect from the Closing Date.
6.13 Subject to clause 6.15, in relation to any Business IP Licences and
Business IT Licences referred to at clause 6.12, as part of the consideration
for the assignment of the Business IPR and the Business Information, the
Purchaser (in the case of the PO/MTBE Business) or the relevant Designated
Purchaser (in the case of the ICI Business) shall:
Page 64
(a) on the Closing Date accept assignments from the relevant Business Vendor
of, or enter into a novation agreement in respect of, such Business IP
Licences and Business IT Licences;
(b) from the Closing Date carry out, perform and discharge all the obligations
and liabilities created by or arising under such Business IP Licences and
Business IT Licences after the Closing Date (so far as the Purchaser or
Designated Purchaser, as applicable, is lawfully able to do so); and
(c) from the Closing Date indemnify ICI or the relevant Business Vendor as the
case may be against all costs, claims, charges, expenses, demands,
liabilities or penalties on an after Tax basis in respect of any failure
on the part of the Purchaser or Designated Purchaser, as applicable, to
carry out, perform and discharge those obligations and liabilities,
provided that this indemnity shall not apply to the extent that the
obligation or liability in question has arisen out of any breach of the
relevant Business IP Licence or Business IT Licence by ICI or the relevant
Business Vendor prior to the Closing Date.
6.14 Subject to clause 6.15, insofar as the benefit or burden of any of the
Business IP Licences or Business IT Licences cannot effectively be assigned to
the Purchaser (in the case of the PO/MTBE Business) or the relevant Designated
Purchaser (in the case of the ICI Business) except by an agreement or novation
with or consent to the assignment from the third party:
(a) the relevant Vendor shall use all reasonable endeavours with the co-
operation of the Purchaser to procure such novation or assignment either
prior to Closing or (i) with respect to Business IP Licences within 90
days after Closing and (ii) with respect to Business IT Licences within
270 days after Closing (with each of the relevant Vendor, the Purchaser
and any Designated Purchaser bearing its own internal administrative costs
(including the cost of employee time) in connection with any action taken
pursuant to this clause 6.14(a)). After a period of 90 days after Closing,
the parties shall review together on a month by month basis the progress
of the assignment and novation of Business IT Licences;
(b) this Agreement shall not constitute an assignment or an attempted
assignment of the Business IP Licence or Business IT Licence if, or to the
extent that such an assignment or attempted assignment would constitute a
breach of such licence;
Page 65
(c) until the relevant Business IP Licence or Business IT Licence is novated or
assigned, the Purchaser shall, or shall procure that the relevant
Designated Purchaser shall, at its cost as the relevant Business Vendor's
sub-contractor (if such sub-contracting is permissible under the relevant
Business IP Licence or Business IT Licence), or where such sub-contracting
is not permissible, as the relevant Business Vendor's agent (if such agency
arrangement is permissible under the relevant Business IP Licence or
Business IT Licence), perform all the obligations of the relevant Business
Vendor under the relevant Business IP Licence or Business IT Licence to be
discharged after the Closing Date, and shall indemnify the relevant
Business Vendor against all claims, charges, expenses, demands, liabilities
or penalties on an after Tax basis in respect of any failure on the part of
the Purchaser (in the case of the PO/MTBE Business) or the relevant
Designated Purchaser (in the case of the ICI Business) to perform those
obligations, provided that the Purchaser or relevant Designated Purchaser
shall not be obliged to indemnify the relevant Business Vendor in respect
of its internal administrative costs (including the costs of employee
time); and
(d) unless or until each such Business IP Licence or Business IT Licence is
novated or assigned, the relevant Business Vendor shall (if permissible
under the relevant licence) hold any such Business IP Licence or Business
IT Licence and any moneys, goods or other benefits received thereunder as
agent of the Purchaser (in the case of the PO/MTBE Business) or the
relevant Designated Purchaser (in the case of the ICI Business) and shall
accordingly, promptly on receipt of the same, account for and pay or
deliver to the Purchaser (in the case of the PO/MTBE Business) or the
relevant Designated Purchaser (in the case of the ICI Business) such
moneys, goods and other benefits;
(e) until the relevant Business IP Licence or Business IT Licence is novated or
assigned, the relevant Business Vendor shall (so far as it lawfully may)
give all reasonable assistance to the Purchaser (in the case of the PO/MTBE
Business) or the relevant Designated Purchaser (in the case of the ICI
Business) (at the Purchaser's request) to enable the Purchaser or relevant
Designated Purchaser to enforce its rights under the Business IP Licence or
Business IT Licence, provided always that:
(i) if the relevant Business IP Licence or Business IT Licence
prohibits the Purchaser (in the case of the PO/MTBE Business) or
the relevant Designated Purchaser (in the case of the ICI
Business) from acting as the relevant Business Vendor's
Page 66
sub-contractor or agent (as referred to in paragraph (c) above)
and/or prohibits the relevant Business Vendor from acting as the
Purchaser's or relevant Designated Purchaser's agent (as referred
to in paragraph (d) above) the relevant Business Vendor shall, to
the extent that the relevant Business Vendor is reasonably able
(and to the extent permitted by the relevant Business IP Licence
or Business IT Licence), do all such acts and things at the
Purchaser's or relevant Designated Purchaser's cost as the
Purchaser or relevant Designated Purchaser may reasonably require
to enable due performance of each such Business IP Licence or
Business IT Licence and to provide the Purchaser or relevant
Designated Purchaser with the benefits, subject to the burden, of
such Business IP Licence or Business IT Licence (including, for
the avoidance of doubt, by accounting to the Purchaser or relevant
Designated Purchaser for any money received after the Closing Date
by the relevant Business Vendor pursuant to any such Business IP
Licence or Business IT Licence, as soon as reasonably practicable
after receipt by the relevant Business Vendor);
(ii) where a third party refuses to give consent or agree to a novation
of a Business IP Licence or Business IT Licence or where a
Business IP Licence or Business IT Licence is used or relates in
or to the ICI Business (in the case of ICI) or the PO/MTBE
Business (in the case of HSCC) although not exclusively or
predominantly and where partial assignment or novation is not
permitted under the terms of such licence and, in each case, where
sub-licensing is permitted under the relevant licence, the
relevant Business Vendor shall on the request of the Purchaser
grant to the Purchaser or relevant Designated Purchaser a sub-
licence (with retrospective effect from Closing) of its rights
under the relevant Business IP Licence or Business IT Licence on
terms no less favourable to the Purchaser or relevant Designated
Purchaser than the terms of the relevant Business IP Licence or
Business IT Licence are to the relevant Business Vendor.
6.15 In relation to any Business IP Licences or Business IT Licences which are
used or relate in or to the ICI Business (in the case of ICI) or the PO/MTBE
Business (in the case of HSCC) although not exclusively or predominantly,
references to assignment or novation in clauses 6.12, 6.13, and 6.14 shall be
deemed to be references to partial assignment or novation where the same is
permitted under the terms of the relevant Business IP Licence or Business IT
Licence.
Page 67
6.16 The parties acknowledge that some of the data constituting Business
Information to be delivered by ICI to the Purchaser may be formatted using third
party software and may contain run-time elements of such third party software.
Subject always to the express provisions of this Agreement, the Purchaser
acknowledges that ICI will not be required to transfer or assign licences to the
Purchaser to use such third party software elements. For the avoidance of
doubt, ICI shall have no liability to the Purchaser in connection with the use
of such third party software elements by the Purchaser.
6.17 Any licence fees (other than internal administrative costs (including the
cost of employee time)) incurred in relation to the obtaining of new licences to
replace any Business IT Licence pursuant to clause 6.14(a) which have not within
270 days after Closing been assigned to or novated in favour of the Purchaser
shall be borne in equal proportions by the relevant Business Vendor and the
Purchaser.
6.18 Any expenses (other than internal administrative costs (including the cost
of employee time)) incurred in relation to the obtaining of third party consents
pursuant to clause 6.14(a) or incurred by the Purchaser or any member of the
Purchaser's Group in relation to the obtaining of new licences to replace any
Business IP Licence which has not within 90 days after Closing been assigned to
or novated in favour of the Purchaser or to replace any software licences
referred to in clauses 6.16 shall be borne in equal proportions by the relevant
Business Vendor and the Purchaser.
6.19 ICI shall indemnify the Purchaser and each member of the Purchaser's Group
against any costs, claims, charges, expenses, demands, liabilities or penalties
arising from the failure by ICI to comply with its obligations under clause
6.14(a).
6.20 ICI will as from Closing revoke the guarantee given by it pursuant to
Section 403 paragraph 1 sub f book 2 of the Dutch Civil Code (a Section 403
Guarantee) in respect of the Companies registered in The Netherlands.
6.21 Whenever this Agreement provides for a Vendor to contribute any US asset
to the Purchaser save for ICI American Holdings Inc.'s interest in Tioxide
Americas Inc. or its successor, such Vendor may transfer such US asset directly
to HIC and, for the purposes of calculating the Capital Accounts of any party
(as defined and determined in the LLC Agreement), such transfer shall be deemed
to have been made first to the Purchaser, followed by a contribution of such
assets by the Purchaser to HIC.
6.22 Notwithstanding any other provision of this Agreement, ICI shall be deemed
to be unable to comply with its obligations under clause 6.2
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(including for the purposes of clause 4.1(c)) where it is unable to transfer any
Joint Venture Interest (other than NPU or Arabian Polyol Company Ltd.) at
Closing.
6.23 The parties to this Agreement agree that, as between them, the aggregate
liability of each party to this Agreement and its respective Group in respect of
any Business Contract which is the subject of any novation agreement entered
into by any member(s) of their respective Groups shall be no greater and no less
than it would have been had no such novation been effected (provided that, for
the avoidance of doubt, this clause shall not be taken to deem such novation not
to have taken place for the purposes of any other provision of this Agreement)
and liabilities in respect of such Business Contract had, as between the parties
to this Agreement, only been governed by this Agreement and that each party to
this Agreement shall make, or procure that members of its Group make, such
payments to the other parties or to members of their respective Groups as are
necessary to ensure that is the case. The provisions of this clause 6.23 shall
apply in respect of any bank account of a Business Vendor which is novated in
favour of a Designated Purchaser as if such bank account were a Business
Contract, provided that the parties shall procure that effect is given to the
obligations of the relevant Business Vendor and Designated Purchaser in
paragraphs 1(g) and (k) of any such novation agreement entered into in the
agreed form.
Closing Statement
7.1 The following payments shall be made: (i) in the case of any Company which
has become a member of the Purchaser's Group on or prior to the date on which
the Final Financial Debt and the Final Cash Balance for that Company has been
determined, within five (5) Business Days of such determination; or (ii) in the
case of any Company which has not become a member of the Purchaser's Group on or
prior to the date on which the Final Financial Debt and the Final Cash Balance
is determined in relation to it, at the Delayed Closing (if any) in respect of
that Company. If:
(a) the Final Financial Debt in relation to any Company is greater than the
Provisional Financial Debt in relation to it, ICI shall pay to the
Purchaser an amount in dollars equal to the difference;
(b) the Final Financial Debt in relation to any Company is less than the
Provisional Financial Debt in relation to it, the Purchaser shall pay to
ICI an amount in dollars equal to the difference;
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(c) the Final Cash Balance in relation to any Company is greater than the
Provisional Cash Balance in relation to it, the Purchaser shall pay to ICI
an amount in dollars equal to the difference; and
(d) the Final Cash Balance in relation to any Company is less than the
Provisional Cash Balance in relation to it, ICI shall pay to the Purchaser
an amount in dollars equal to the difference.
In the case of Companies in respect of which Sale Shares are to be transferred
at Closing (or any Subsidiary of such a Company which is not a Schedule 18
Company), ICI shall make or receive any payment pursuant to paragraphs (a) to
(d) above on behalf of itself or the relevant other Share Selling Company and
the Purchaser shall make or receive any payment pursuant to paragraphs (a) to
(d) above on behalf of itself or the relevant other Designated Purchaser. In
the case of Schedule 18 Companies, ICI shall make or receive any payment
pursuant to paragraphs (a) to (d) above on behalf of itself or the relevant
other member of ICI's Group which is the transferor of such Schedule 18 Company
or of its holding company under Schedule 18 and the Purchaser shall make or
receive any payment pursuant to paragraphs (a) to (d) above on behalf of the
member of the Purchaser's Group which is the transferee of such Schedule 18
Company or of its holding company under Schedule 18, save that any payment under
paragraphs (a) to (d) above in relation to ICI Holland BV shall be made between
Huntsman ICI Investments (Netherlands) BV and ICI Omicron BV direct and not
between ICI and the Purchaser on their respective behalfs.
Any payment under paragraphs (a) to (d) above shall be made by way of adjustment
(aa) in the case of any such payment relating to a Schedule 18 Company, to the
consideration payable in respect of that Schedule 18 Company or its holding
undertaking under Schedule 18 or (bb) in the case of any Company which is not a
Schedule 18 Company, to the Initial Consideration paid for the Sale Shares in
that Company or its holding undertaking.
Any payment under paragraphs (a) to (d) above shall be made together with an
amount equal to interest on such payment at the Interest Rate (accrued daily)
for the period from and including the relevant Closing Adjustments Date to but
excluding the date of payment (save in relation to that part of any Final
Financial Debt which is a Final Intra Group Debt and to which clause 7.2(a) or
clause 7.2A applies, where the amount of interest to be paid shall be the
aggregate amount referred to in clause 7.2(a) or as the case may be clause 7.2A,
and save in relation to that part of any Final Cash Balance which is a Final
Intra Group Cash Balance and to which clause 7.2(b) applies, where the amount of
interest to be paid shall be the aggregate amount referred to in
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clause 7.2(b)). Where any payments are to be made pursuant to paragraphs (a) to
(d) of this clause 7.1 by the Purchaser (on behalf of itself or the relevant
other Designated Purchasers or transferees under Schedule 18) to ICI (on behalf
of itself or the relevant other Share Selling Companies or transferors under
Schedule 18) (or vice versa) on the same date, such payments shall be aggregated
(unless applicable local regulations require the payment concerned to be made in
the relevant jurisdiction between the relevant parties) and the net amount due
from the Purchaser to the Vendor (or vice versa) shall be paid. To the extent
that any such payments are aggregated and netted against each other, each of ICI
and the Purchaser undertakes to the other that it shall, immediately after the
making of such payments, enter into such transactions with any other member of
its Group as are necessary to ensure that such member of its Group receives and
pays all amounts which would have been received or paid on its behalf by the
Purchaser or ICI had the payments envisaged by paragraphs (a) to (d) been made
individually.
Any payments which fall to be made under this clause 7.1 and clause 7.2 in
respect of any sum outstanding as of the Closing Adjustments Date between ICI
Holland BV and ICI Finance plc shall only be made at such time as allows
Huntsman ICI Investments (Netherlands) B.V. to be in a position to make that
element of the payment it is required to make under clause 7.1 in a tax
efficient manner and to avoid the need for Huntsman ICI Investments
(Netherlands) B.V. to incur borrowings in order to make the payment, provided
that such payments shall in any event be made no later than the first
anniversary of Closing and, for the avoidance of doubt, they shall be made
simultaneously. The Purchaser shall consult with ICI as to the timing and
structure of the transactions necessary to allow Huntsman ICI Investments
(Netherlands) B.V. to make that element of the payment that it is required to
make under clause 7.1 and shall have due regard to the views expressed by ICI.
Further, the Purchaser shall procure that no step will be taken by any member of
its Group which, in ICI's reasonable opinion, would result in ICI having to
account separately in the ICI Group consolidated balance sheet for (i) any Intra
Group Cash Balance owed to ICI Holland BV by ICI Finance plc and (ii) any
obligation to any member of ICI's Group arising under clause 7.1 in respect of
that Intra Group Cash Balance.
7.2 Within five (5) Business Days of the agreement or determination of the
Final Financial Debt and the Final Cash Balance in relation to each of the
Companies:
(a) in the case of any Final Intra Group Debt owed by that Company other than
Prime Debt, the Purchaser shall procure that the amount of such debt,
together with the aggregate of the interest on each amount owed
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to ICI or any other member of ICI's Retained Group comprised in such Final
Intra Group Debt at the rate applicable to such amount owed in accordance
with the terms on which it was lent for the period from and including the
relevant Closing Adjustments Date to but excluding the date of payment,
shall be paid by the relevant Company to ICI (on behalf of itself or the
other member(s) of ICI's Retained Group to which such debt is owed); and
(b) in the case of any Final Intra Group Cash Balance, ICI shall procure that
the amount of such debt, together with the aggregate of the interest on
each amount owed by ICI or any other member of ICI's Retained Group
comprised in such Final Intra Group Cash Balance at the rate applicable to
such amount owed in accordance with terms on which it was lent for the
period from and including the relevant Closing Adjustments Date to but
excluding the date of payment, shall be paid by ICI or the relevant other
member of ICI's Retained Group to the Purchaser (on behalf of the Company
to which such debt is owed).
The parties acknowledge that, in certain jurisdictions, members of ICI's
Retained Group may be prohibited by law, regulations or by instruments or
agreements which are binding on them from lending money to companies which are
not part of ICI's Retained Group, or Companies may be subject to exchange
control restrictions which prevent them from repaying debts owed by them to
members of ICI's Retained Group, and the parties agree to co-operate in good
faith to procure that, in such jurisdictions, payments under this clause are
made at such a time (which may be before or after the time set out in this
clause) as is necessary to allow such members of ICI's Retained Group and
Companies to comply with such laws, regulations, instruments or agreements
binding on them. All payments referred in this clause 7.2 shall be made in
immediately available funds in dollars, converted from the relevant currency at
the Spot Rate on the date which is two Business Days before the date on which
the relevant payment is made. In the event that the repayment of a Final Intra
Group Debt or Final Intra Group Cash Balance is made for this reason at a
different time to when it would otherwise be required to be made under this
clause 7.2, the element of any payment which is required to be made pursuant to
clause 7.1 that reflects the existence of that amount shall instead be paid at
the same time as such amount is paid under this clause 7.2.
7.2A The Purchaser shall procure that the estimated amount of the Prime Debt is
repaid at Closing pursuant to paragraph 17 of Schedule 4. Within five (5)
Business Days of the determination of the Prime Debt in relation to any relevant
Company:
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(a) in the case that the Prime Debt owed by the Company to ICI or any other
member of ICI's Retained Group is greater than the estimated amount of the
Prime Debt of that Company repaid at Closing pursuant to paragraph 17 of
Schedule 4, the Purchaser shall procure that the difference, together with
the aggregate of the interest on each amount owed to ICI or any other
member of ICI's Retained Group comprised in such difference at the rate
applicable to such amount owed in accordance with the terms on which it was
lent for the period from and including the relevant Closing Adjustments
Date to but excluding the date of payment, shall be paid by the relevant
Company to ICI (on behalf of itself or the other member(s) of ICI's
Retained Group to which such debt is owed); and
(b) in the case that the Prime Debt owed by the Company to ICI or any other
member of ICI's Retained Group is less than the estimated amount of the
Prime Debt of that Company repaid at Closing pursuant to paragraph 17 of
Schedule 4, ICI shall procure that the difference, together with interest
on such payment at the Interest Rate (accrued daily) for the period from
and including the relevant Closing Adjustments Date to but excluding the
date of payment, shall be paid by ICI (on behalf of itself or the other
member(s) of ICI's Retained Group to whom the payment was made) to the
Purchaser (on behalf of itself or the relevant Company which made the
payment).
7.3 If the aggregate Closing Working Capital (in relation to the ICI Business)
for all of the Companies and Local Businesses (in relation to the ICI Business),
after taking account of the aggregate of the intra-business elimination of
profit on stock (in relation to each of the Polyurethanes Business and the
Tioxide Business) as set out in the Closing Statement, is within the Working
Capital Range (in relation to the ICI Business) then no payment shall be made in
respect of Closing Working Capital (in relation to the ICI Business) in respect
of any Companies and Local Businesses, whether at Closing or at the time of any
Delayed Closing.
7.4 If clause 7.3 does not apply, the lower end of the Working Capital Range
(in relation to the ICI Business) shall be adjusted by deducting the aggregate
of the figures shown in column 4 of Schedule 7 which relate to any Companies and
any Local Businesses (in relation to the ICI Business) which have not been
transferred to the Purchaser at Closing. The upper end of the Working Capital
Range (in relation to the ICI Business) shall be adjusted by deducting the
aggregate of the figures shown in column 6 of Schedule 7 which relate to any
Companies and any Local Businesses (in relation to the ICI Business) which have
not been transferred to the Purchaser at Closing. If the aggregate Closing
Working Capital (in relation to the ICI Business) in
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respect of Companies and Local Businesses which have been transferred at
Closing, after taking account of the aggregate of the intra-business elimination
of profit on stock (in relation to each of the Polyurethanes Business and the
Tioxide Business) as set out in the Closing Statement:
(a) falls within such adjusted Working Capital Range, then no payment shall be
made by ICI or the Purchaser in respect of the Closing Working Capital (in
relation to the ICI Business) of Companies and Local Businesses which are
transferred at Closing;
(b) is below such adjusted Working Capital Range (in relation to the ICI
Business), then ICI shall pay an amount in dollars equal to the difference
between such Closing Working Capital and the lower end of the Working
Capital Range (as so adjusted) to the Purchaser (on behalf of HIC) by way
of adjustment to the Initial Consideration payable with respect to the Sale
Shares in TGL within 5 Business Days of finalisation of the Closing
Statements for all of the Companies and Local Businesses (in relation to
the ICI Business); or
(c) is above such adjusted Working Capital Range (in relation to the ICI
Business), the Purchaser (on behalf of HIC) shall pay an amount in dollars
equal to the difference between such Closing Working Capital and the higher
end of the Working Capital Range (as adjusted) to ICI by way of adjustment
to the Initial Consideration payable with respect to the Sale Shares in TGL
within 5 Business Days of finalisation of the Closing Statement for all of
the Companies and Local Businesses (in relation to the ICI Business).
7.5 If clause 7.3 does not apply, if the Closing Working Capital (in relation
to the ICI Business) in relation to any Company or Local Business (in relation
to the ICI Business) which is transferred at a Delayed Closing:
(i) is equal to or greater than the figure specified in column 4 of Schedule 7
for that Company or Local Business (in relation to the ICI Business) and
less than or equal to the figure specified in column 6 of Schedule 7 for
that Company or Local Business (in relation to the ICI Business), then no
payment shall be made by ICI or the Purchaser in respect of the Closing
Working Capital of that Company or Local Business (in relation to the ICI
Business) at the time of such Delayed Closing;
(ii) is below the figure specified in column 4 of Schedule 7 for that Company or
Local Business (in relation to the ICI Business), ICI (for itself or as
agent for the relevant Share Selling Company or Business Vendor) shall pay
at the time of such Delayed Closing to the Purchaser
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(for itself or as agent for the Designated Purchaser) an amount in dollars
equal to the difference by way of an adjustment to the Initial
Consideration payable with respect to the Sale Shares in TGL; or
(iii) is above the figure specified in column 6 of Schedule 7 for that Company
or Local Business (in relation to the ICI Business), the Purchaser (for
itself or as agent for the Designated Purchaser) shall pay at the time of
such Delayed Closing to ICI (for itself or as agent for the relevant Share
Selling Company or Business Vendor) an amount in dollars equal to the
difference by way of an adjustment to the Initial Consideration payable
with respect to the Sale Shares in TGL.
7.6 If the Closing Working Capital for the PO/MTBE Business is within the
Working Capital Range (in relation to the PO/MTBE Business), then no payment
shall be made in respect of such Closing Working Capital in respect of the
PO/MTBE Business. If such Closing Working Capital is below such Working Capital
Range, then HSCC shall pay an amount in dollars equal to the amount of the
difference between such Closing Working Capital and the lower end of such
Working Capital Range and if such Closing Working Capital is above such Working
Capital Range, the Purchaser shall pay an amount in dollars equal to the
difference between such Closing Working Capital and the higher end of such
Working Capital Range to HSCC. Each such payment shall be by way of adjustment
to the Initial Consideration for the PO/MTBE Business and shall be made within
five Business Days of the finalisation of the Closing Statement for the PO/MTBE
Business.
7.7 Any payment under clauses 7.4, 7.5 or 7.6 shall be made together with an
amount equal to interest on such payment at the Interest Rate (accrued daily)
for the period from and including the Closing Adjustments Date to the date of
payment.
7.8 The Purchaser shall deliver to ICI as soon as practicable after Closing
and in any event within sixty (60) days after Closing, a draft Closing Statement
in relation to all of the Companies and Local Businesses (in relation to the ICI
Business) and a Draft Closing Statement in relation to the PO/MTBE Business (the
Draft Closing Statements).
7.9 ICI shall have a period of sixty (60) days (the Review Period) after the
date of delivery to it of the Draft Closing Statements, in conjunction with
ICI's Accountants, to review such Draft Closing Statements and to present to the
Purchaser in writing any objections (stating in reasonable detail, including
specific amounts, the matters in dispute) it may have to such Draft Closing
Statements and the Final Financial Debt, the Final Cash Balance and the
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Closing Working Capital set forth therein. The only grounds upon which ICI shall
be entitled to object to any Draft Closing Statement, Final Financial Debt,
Final Cash Balance or Closing Working Capital are arithmetical errors in the
computation of such amounts or that it has not been prepared in accordance with
the provisions of Schedule 8. Any such objections must be accompanied by a
recalculation of each amount in the Draft Closing Statement to which such
objections relate.
7.10 For the purposes of enabling ICI and ICI's Accountants to present any such
written objections referred to in clause 7.9, the Purchaser shall and shall
procure that each other relevant member of its Group shall, following the
presentation of the Draft Closing Statement, give ICI and ICI's Accountants
reasonable access at all reasonable times (until the Closing Statement has been
agreed or finally determined) to all books and records, and all computer files
relating to the business of Companies and Local Businesses (in relation to the
ICI Business), in their respective possession or control and generally shall
provide ICI and ICI's Accountants with such other information and assistance as
ICI and ICI's Accountants may reasonably request, provided that ICI and ICI's
Accountants shall not be entitled to any such access and information which goes
beyond that which is reasonably necessary to determine whether the Draft Closing
Statement has been prepared in accordance with the provisions of Schedule 8.
7.11 If no such written objections as are referred to in clause 7.9 are
properly presented to the Purchaser by the end of the Review Period, then the
Draft Closing Statement and the Final Financial Debt, the Final Cash Balance and
the Closing Working Capital set forth therein shall, as between ICI and the
Purchaser, be deemed to have been accepted and approved by ICI and the Purchaser
and the Draft Closing Statement shall be final and binding on all of the parties
to this Agreement and shall constitute a Closing Statement for the purposes of
this Agreement. If the Final Financial Debt or Final Cash Balance for any
Company is agreed at any time prior to the agreement or determination of the
Closing Statement in respect of that Company, then it shall constitute the Final
Financial Debt or, as the case may be, the Final Cash Balance for that Company.
7.12 If any such written objections as are referred to in clause 7.9 are
properly presented to the Purchaser by the end of the Review Period then ICI and
the Purchaser shall attempt to resolve the objections in good faith
negotiations. To facilitate the Purchaser's review of any such objections, ICI
shall procure that each other relevant member of ICI's Group shall provide the
Purchaser and the Purchaser's Accountants with such information and explanations
as the Purchaser and the Purchaser's Accountants may reasonably require for the
purpose of the review. If ICI and the Purchaser
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resolve all matters in dispute in relation to the Draft Closing Statement, then
such Draft Closing Statement (as adjusted to reflect the matters so resolved)
shall, as between ICI and the Purchaser, be deemed to have been accepted and
approved by ICI and the Purchaser and such Draft Closing Statement (as adjusted
to reflect the matters so resolved) shall be final and binding on all of the
parties to this Agreement and shall constitute the Closing Statement for the
purposes of this Agreement.
7.13 If there are any such objections which have not been resolved in good
faith negotiations within a period of sixty (60) days after the end of the
Review Period, then the specific matters in dispute shall be referred for
determination to the Independent Firm not later than ten (10) days after the end
of such period. The Independent Firm shall be instructed to notify the
Purchaser and ICI of its determination within thirty (30) days of such referral.
7.14 If the Independent Firm shall for any reason be unable or unwilling to act
or shall then maintain, or have at any time in the preceding five year period
maintained, any material business relationship (whether as auditor or otherwise)
with any member of any party's Group, another independent firm of chartered
accountants shall be appointed to act in its place, by agreement of ICI and the
Purchaser and, in default of such agreement, at the request of either ICI or the
Purchaser, by the President of the Institute of Chartered Accountants in England
and Wales for the time being.
7.15 In making its determination, the Independent Firm shall act as expert and
not as arbitrator and the determination by the Independent Firm and the Draft
Closing Statement, as adjusted to reflect the Independent Firm's determination,
shall, in the absence of manifest error, be final and binding on the parties and
shall be deemed to have been accepted and approved by the parties. The fees and
the costs of the Independent Firm shall be shared by the Vendor and the
Purchaser equally unless otherwise directed by the Independent Firm (which shall
have the authority to make such direction if it deems it equitable).
7.16 ICI shall, and shall procure that each other relevant member of ICI's
Retained Group shall, and the Purchaser shall and shall procure that each
Company and each other relevant member of the Purchaser's Group shall, give the
Independent Firm reasonable access at all reasonable times to all books and
records, and all computer files relating to the business of the relevant Company
or the relevant Local Business, in their respective possession or control and
generally shall provide the Independent Firm with such other information and
assistance as the Independent Firm may reasonably request.
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7.17 If either Vendor makes a payment to the Purchaser as contemplated by part
(i) of paragraph (c) of the definition of Material Adverse Change, then that sum
shall be held in escrow by the recipient on the basis that it is held to the
order of the paying Vendor pending Closing and to be repaid to the paying Vendor
if this Agreement is terminated or terminates, and is held to the order of the
Purchaser from Closing. Any such sum shall be excluded from the Final Cash
Balance of any Company which may receive it. If any loss, damage, cost or
liability is excluded from the calculation of the amount of the reduction in
enterprise value of the ICI Business or the PO/MTBE Business, for the purposes
of determining whether there has been a Material Adverse Change, because the ICI
Business or the PO/MTBE Business, as the case may be, has been compensated for
it by the receipt of insurance proceeds prior to Closing, then those proceeds
shall be excluded from the Final Cash Balance of the relevant Company which
receives such proceeds. If such loss, damage, cost or liability is instead
compensated by the payment of cash by either Vendor to a Company or Business
Vendor prior to Closing in the circumstances contemplated by the definition of
Material Adverse Change (or as otherwise agreed between the parties), but any
member of the Purchaser's Group (including the Companies after Closing) will be
entitled to recover all or any part of the relevant loss pursuant to any
applicable insurance policy, then the relevant member of the Purchaser's Group
shall account to the Vendor which paid the relevant sum for any such insurance
proceeds when received up to the amount paid by the Vendor to the Company or
Business Vendor.
Purchaser Indemnities
8.1 The Purchaser (for itself and as agent of the Designated Purchasers)
undertakes with each Vendor (for itself and as agent for all members of its
Retained Group) to indemnify and keep indemnified that Vendor and all members of
its Retained Group on an after Tax basis from and against any Costs incurred,
made or suffered by the Vendor or any member of its Retained Group to the extent
they arise from:
(a) the employment by the Purchaser's Group of the Employees on or after the
Closing Date and which are attributable to any breach or default by the
Purchaser's Group of its obligations or duties to or in relation to any of
the Employees, excluding any liability arising out of the termination or
dismissal of any Employee by reason of redundancy (to the extent such
liability is an obligation of ICI in accordance with clause 9.3 below) and
also excluding any liability for personal injury and other liability
arising from, in connection with, or as a result of any breach of any
health and safety obligations arising under any applicable statute,
subordinate legislation or other material, federal,
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state and local law (including common law) and which is attributable to
service after Closing, but including any failure by the Purchaser's Group
to offer or maintain terms and conditions of employment and working
conditions which are no less favourable than those which apply to the
Employees up to the Closing Date which is in breach of the provisions of
clause 9.1; and
(b) the Assumed Liabilities.
8.2 Clauses 12.8(e), 12.13 and 13 apply to claims under the indemnity in
clauses 8.1(a), 8.1(b) and 18.13 as if references to "either Vendor" or
"relevant Vendor" were references to the Purchaser, and references to "the
Purchaser" were references to either Vendor or the relevant Vendor (as
appropriate) and references to the "Purchaser's Group" were references to the
relevant Vendor's Group or either Vendor's Group as appropriate.
Employees
9.1 The Purchaser undertakes to each Vendor (for itself and each member of its
Retained Group) that it shall procure that for a period of 4 years from Closing
(the Applicable Period) each Employee shall be employed on terms and conditions
(taking full account of continuity of service) which are (save as agreed with
any Employee, group of Employees or their representatives in accordance with due
process) no less favourable as a whole than those applicable to him as at
Closing. For the purposes of this clause 9.1 only, terms and conditions shall
mean salary and benefits, including severance benefits but shall not include any
success bonus or incentive paid or provided to an Employee in relation to the
sale of the Polyurethanes Business, the Relevant Petrochemicals Business or the
Tioxide Business insofar as such bonus or incentive is in addition to (and not
in substitution for) any other bonus or incentive to which such Employee would
otherwise have been eligible. In this clause 9.1, any obligations in relation
to employees of Controlled Joint Ventures shall only arise in so far as the
Purchaser or any member of the Purchaser's Group is able in light of its powers
of control in relation to the relevant Controlled Joint Venture to comply with
its obligations under this clause 9.1.
9.2 ICI (for itself and as agent for the ICI Business Vendors) shall indemnify
and keep indemnified on an after Tax basis the Purchaser (for itself and as
agent of the Designated Purchasers) from and against any Costs (i) arising from
the employment of the Business Employees before Closing (or, where applicable,
Delayed Closing), and which are attributable to any breach or default by the
Vendor or any Business Vendor prior to Closing (or, where applicable, Delayed
Closing) in respect of any of the Vendor's or
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Business Vendor's obligations under their contracts of employment or duties to
or in relation to any of the Business Employees (save that this indemnity shall
not extend to any liability for personal injury and any other liability arising
from, in connection with, or as a result of any breach of any health and safety
obligations arising under any applicable statute, subordinate legislation or
other material, federal, state and local law (including common law)) and which
the Purchaser may incur or suffer as a result of the Purchaser succeeding to the
Vendor by operation of law in relation to the contracts of employment and/or
(ii) arise from the employment of any employee who is not a Business Employee by
any ICI Business Vendor (save that this indemnity shall not apply to any costs,
claims, charges, expenses, demands, liabilities or penalties reasonably and
properly incurred in connection with the termination of the employment by reason
of redundancy of any employee working in the ICI Business immediately prior to
the termination of his employment where such termination takes place between 31
December 1998 and Closing (or, where applicable, Delayed Closing)). Where the
Purchaser continues to employ such employee following Closing (or, where
applicable, Delayed Closing), this indemnity shall not extend to any ongoing
employment costs arising in respect of such employee.
9.3 If any Employee is given notice of termination of employment by reason of
redundancy at any time during the two year period immediately following Closing,
ICI undertakes with the Purchaser (for itself and as agent for each member of
the Purchaser's Group, including the Companies) to indemnify and keep
indemnified the Purchaser and each member of the Purchaser's Group, including
the Companies, on an after Tax basis from and against any costs, claims,
charges, expenses, demands, liabilities or penalties reasonably and properly
incurred by the Purchaser or any member of the Purchaser's Group or any Company
in connection with such termination (Termination Liabilities) provided that such
indemnity shall be limited to the first 500 redundancy terminations (Redundancy
Numbers) and further limited to a total cost of (Pounds)25 million (Redundancy
Cost).
Any termination liabilities reasonably and properly incurred in the period
between 31 December 1998 and Closing by any member of ICI's Retained Group or
any of the Companies in relation to the redundancy of any employee working in
the ICI Business immediately prior to the termination of his employment, shall
count towards both the Redundancy Numbers and the Redundancy Cost, and ICI's
liability under this clause 9.3 shall be reduced accordingly.
The Purchaser will provide ICI with a statement of the number of Employees
terminated and the relevant Termination Liabilities on a semi-annual basis and
ICI shall pay to the Purchaser (as agent of a Designated Purchaser or
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Company as appropriate) the Termination Liabilities in full within 45 days of
the receipt of such statement.
9.4 ICI (for itself and as agent for each member of ICI's Retained Group)
shall, in addition to the indemnity in clause 9.3, indemnify and keep
indemnified on an after Tax basis the Purchaser (for itself and as agent of the
Designated Purchasers and the Companies) from and against any costs, claims,
charges, expenses, demands, liabilities or penalties arising out of or in
connection with any termination of employment on the grounds of redundancy where
the redundancy arises from either (i) any sale of shares or assets by ICI or any
member of ICI's Group before Closing (other than the transactions contemplated
by this Agreement) or (ii) the temporary or permanent closure by Chlor-Chemicals
of its chlorine and EDC plants at Wilton.
9.5 ICI and HSCC shall use their respective reasonable endeavours to procure
that as at Closing sufficient key management employees shall be employed in the
ICI Business to enable the ICI Business to continue to be managed to at least
the level achieved immediately prior to Closing. For this purpose the parties
have agreed an indicative list of key management employees and the Purchaser,
HSCC and ICI undertake to use reasonable endeavours to agree individual terms
and conditions with each of the key management employees. If, for any reason,
the parties cannot agree terms and conditions with any number of the key
management employees, ICI will use reasonable endeavours to secure the
commitment of other key management employees.
9.6 Any secondee listed (whether by name or otherwise) in the Data Room or in
any of the Disclosure Letters who is on secondment at Closing from ICI or any
member of the ICI Retained Group to any Company or Business Vendor and who works
in the Polyurethanes Business or Relevant Petrochemicals Business (and who is
not an Excluded Employee) shall, for the avoidance of doubt, be treated as an
Employee for the purposes of this Agreement.
9.7 The provisions of Schedule 11 (Pensions) shall apply in relation to
Retirement Benefits Schemes.
9.8 The provisions of Schedule 22 shall apply in relation to national sales
companies.
Warranties and Indemnities
10.1 Subject to clauses 11, 12 and 13, ICI warrants to the Purchaser (on the
basis set out in clause 11) in relation to the ICI Business, the Business
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Vendors of the ICI Business, the Companies, the Sale Shares, the Share Selling
Companies, the Joint Venture Interests, the Warranted Joint Ventures and the
Non-Controlled Joint Ventures and HSCC warrants to the Purchaser in respect of
the PO/MTBE Business and the Business Vendor of that Business, that, in each
case, each of the Warranties is true and accurate as at the date of this
Agreement and that each of the Repeated Warranties will be true and accurate on
the Closing Date as if repeated immediately before Closing by reference to the
facts and circumstances subsisting at the Closing Date. For that purpose, any
reference in the Warranties to the "Business" shall be construed as a reference
to the ICI Business (in the case of the Warranties given by ICI) or the PO/MTBE
Business (in the case of the Warranties given by HSCC), as applicable.
10.2 Each Vendor, on behalf of itself and relevant Business Vendors, undertakes
with the Purchaser (for itself and as trustee for each member of the Purchaser's
Group) to indemnify and keep indemnified on an after Tax basis the Purchaser and
all members of the Purchaser's Group against any Costs incurred, made or
suffered by the Purchaser or any member of the Purchaser's Group to the extent
that they arise from the Excluded Liabilities (other than those Excluded
Liabilities referred to in (e) and (g) of the definition of Excluded
Liabilities) relating to the ICI Business (in the case of ICI) or the PO/MTBE
Business (in the case of HSCC).
10.3 Without prejudice to the rights of the Purchaser or any member of the
Purchaser's Group under any other provisions of this Agreement, ICI undertakes
to indemnify and to keep indemnified on an after Tax basis the Purchaser (for
itself and as trustee for each member of the Purchasers' Group (including, for
the avoidance of doubt, the Companies after Closing)) against all Costs
incurred, made or suffered by the Purchaser or any member of the Purchaser's
Group (including, for the avoidance of doubt, the Companies after Closing) to
the extent they arise from:
(a) any Company having had any interest in any dormant company prior to
Closing or any Company being a dormant company;
(b) any matter or claim to the extent that it relates to any business, asset
or liability (whether primary or secondary, direct or indirect, known or
unknown, fixed, absolute, crystallised or contingent) which is transferred
by a Company to a member of ICI's Retained Group prior to Closing and any
liability reflected in the provisions reflected in the Accounts in respect
of the disposal by members of ICI's Group of the Polyester and Melinex
businesses, ICI's shareholding in ICI Australia plc and the Alkathene
Plant and any liability reflected in the exceptional provisions reflected
in the Accounts of (Pounds)0.5 million in
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respect of the Polyurethanes Business and (Pounds)0.3 million in respect of
the Tioxide Business, in each case as set out in Exhibit J, and any other
exceptional provisions made since the Accounts Date;
(c) any product liability claim in respect of products sold or provided by any
Company or Business Vendor where such product was manufactured prior to
Closing;
(d) any litigation, arbitration, or criminal proceedings (other than any that
relate to any of the transactions contemplated in this Agreement or the Co-
operation Agreement, or to the extent it relates to the subject matter of
paragraphs (a), (b), (c), (e) or (f) of this clause 10.3 or to Schedule 23,
the Environmental Covenant or the Tax Covenant) in which any Company, or
Business Vendor (in relation to the ICI Business) is involved in any
capacity where such proceedings have commenced or are pending prior to
Closing (together with such proceedings for which ICI Americas Inc., ICI
American Holdings Inc. and/or ICI PLC has any liability pursuant to the
Liability and Indemnity Agreement made as of the 28th day of December,
1981, by and among those parties and Rubicon Inc., Rubicon Chemicals Inc.
and Uniroyal Inc., but only to the extent of such liability);
(e) any liability relating to the health and safety at work of any Employee,
former employee or contractor, or for death or personal injury in relation
to any Employee, former employee or contractor, in each case to the extent
that such Costs relate to the period prior to Closing when such Employee,
former employee or contractor was employed or engaged by any Company or any
Business Vendor and are not the subject matter of the Environmental
Covenant;
(f) any vicarious liability for the acts or omissions of any Employee, former
employee or contractor of any Company or Business Vendor where such acts or
omission were prior to Closing whilst such Employee, former employee or
contractor was employed or engaged by any member of the Vendor's Group
(other than to the extent that it is the subject matter of the
Environmental Covenant).
10.4 If the validity, binding nature or enforceability of the Financing
Agreements or this Agreement is challenged in litigation commenced by a
shareholder of ICI or a creditor of a member of ICI's Group (in each case acting
in their capacity as such) or another person before Closing or June 30 1999
(whichever is earlier) and, as a result of such aspects of the litigation as
relate to the validity, binding nature or enforceability of the Financing
Agreements or of this Agreement, a Court orders in a final
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judgment that any of the Sale Shares or Business Assets be re-transferred by the
Purchaser to a member of ICI's Group or such aspects of the litigation result in
damages payable by the Purchaser or its Subsidiaries in excess of (Pounds)20
million, ICI shall itself, or arrange for the relevant member of ICI's Group to,
indemnify the relevant member of the Purchaser's Group (the Indemnitee) by
repaying to the Indemnitee an amount equal to the Final Consideration received
by the relevant member of ICI's Group in respect of the asset in question, less
any amount a member of ICI's Group has already paid the Purchaser or its
Subsidiaries in connection with the transfer of the asset from the Indemnitee to
a member of ICI's Group (the shortfall) or the amount of such damages plus
reasonable legal costs and expenses. ICI shall only be liable under this clause
10.4 to the extent the shortfall exceeds (Pounds)20 million and its liability
shall not exceed amounts outstanding under or pursuant to the Financing
Agreements from time to time. This clause 10.4 shall not apply in relation to
any litigation arising in connection with a Joint Venture Interest or the Co-
operation Agreement or the Olefins Agreements and, for the avoidance of doubt,
in no circumstances shall ICI's Group be obliged to pay to an Indemnitee more
than the Final Consideration attributable in accordance with this Agreement to
the asset in question. This clause 10.4 shall terminate upon repayment or pre-
payment in full of all amounts outstanding under or pursuant to the Financing
Agreements and any refinancing thereof.
Other provisions relating to the Warranties and Indemnities
11.1 The Warranties and the indemnities given by ICI are given by ICI as
principal to the Purchaser for itself and as trustee for each relevant
Designated Purchaser, provided that, as between ICI and any member of its Group,
but without prejudice to ICI's liability as principal to the Purchaser (for
itself and as trustee for each Designated Purchaser), the Warranties and the
indemnities given by ICI under this Agreement are given by ICI for itself and
(i) as agent for the other Share Selling Companies in respect of the Joint
Venture Interests other than those in NPU and Arabian Polyol Company Limited and
(ii) as agent for each other Business Vendor in its Group in relation to the
Local Business carried on by that Business Vendor. ICI's liability to the
Purchaser in respect of any breach of the Warranties or under the indemnities
given by ICI under this Agreement shall be no greater, and no less, than such
liability would have been if such agency relationship between ICI and any member
of its Group had not existed. The Warranties and the indemnities given by ICI
shall only be enforceable by the Purchaser either for itself or as agent for the
relevant Designated Purchaser, as the case may be, against the Vendor.
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11.2 The Purchaser shall not be entitled to claim that any fact, matter or
circumstance causes any of the Warranties to be breached if such fact, matter or
circumstance is a Disclosed Matter.
11.3 Without prejudice to the other provisions of this clause 11 and the
provisions of clauses 12 and 13:
(a) ICI shall not be liable for any Warranty Claim to the extent that any of
the following employees of HSCC's Group had actual knowledge at the date of
this Agreement of the facts, matters, events or circumstances which are the
subject matter of the Claim in question and that such facts, matters,
events or circumstances constituted a breach of Warranty:
P. Huntsman, M. Kern, K. Ninow, D. Stanutz, T. Fisher, K. Esplin, L.
Tullos, R. Healy, R. Stolle, N. MacArthur, W Chapman, K. Kemper, R Monty,
B. Ridd, M. Dixon, J. Huffman, R. Lence, C. Dowd, L. Grossman, L. Skidmore,
D. Marley, C. Trievel, S. Scruggs,
and there shall be no implied requirement that such persons make any
enquiries of any other person, party, body or authority;
(b) HSCC shall not be liable for any Warranty Claim to the extent that any of
the persons set out in Part A of Schedule 10 had actual knowledge at the
date of this Agreement of the facts, matters, events or circumstances which
are the subject matter of the Claim in question and that such facts,
matters, events or circumstances constitute a breach of warranty and there
shall be no implied requirement that such persons make any enquiries of any
other person, party, body or authority.
11.4 Each of the Warranties shall be separate and independent and, save as
expressly provided to the contrary, shall not be limited by reference to or
inference from any other Warranty or any other term of this Agreement or any
Ancillary Agreement.
11.5 In the Warranties, unless the context otherwise indicates, where any
statement is qualified by the expression "to the best of the Vendor's knowledge
and awareness", "so far as the Vendor is aware" or similar expressions, that
statement shall be deemed made on the basis of the actual knowledge, at the date
of this Agreement and at Closing (in the case of the Repeated Warranties), of
the persons listed in Part A of Schedule 10 (or in the case of paragraph 25.1 of
the Warranties of the persons listed in Part B of Schedule 10) in relation to
ICI and of the persons listed in clause 11.3(a)
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above in relation to HSCC and such phrase shall carry no further or other
implication nor impose any requirement on such persons to make enquiries of any
other person, party, body or authority.
11.6 Neither Vendor shall have any liability in respect of any claim under
clause 10.1 in respect of the Repeated Warranties to the extent that such claim
arises (i) as a result of any action taken by that Vendor prior to Closing in
accordance with a written request made by the Purchaser or by the other Vendor
or (ii) as a result of any action omitted to be taken by that Vendor prior to
Closing due to the other Vendor withholding its consent to any such action being
taken pursuant to such other Vendor's rights under clause 5.4 if such other
Vendor either knew or ought reasonably to have known, when withholding such
consent, that doing so was likely to give rise to a breach of the Repeated
Warranties.
Limitations on Claims
12.1 The provisions of this clause 12 (except for clause 12.12 which shall
apply generally in its terms) shall operate to define and limit the liability of
each party in respect of any Claims and to establish the circumstances within
which Claims may be made, except that the provisions of this clause where they
are expressed to apply to Claims shall not apply to any Tax Covenant Claim or a
claim under the Environmental Covenant where it is expressly stated that the
provisions shall not apply to Tax Covenant Claims or claims under the
Environmental Covenant.
12.2 No Designated Purchaser shall make any Claim in any circumstances
whatsoever against either Vendor other than through the agency of the Purchaser
against the Vendor pursuant to the terms of this Agreement, and the Purchaser
undertakes to the Vendor to indemnify each Vendor and each other Selling Company
which is a member of its Group on an after Tax basis against any Claim made
against it or any Selling Company which is a member of its Group contrary to
this clause 12.2.
12.3 The maximum aggregate liability of ICI in respect of all Claims, except
for Claims pursuant to paragraphs (a) and (b) of clause 10.3 or clause 12.17 or
otherwise in respect of a breach of the Warranty contained in paragraph 25.2 of
Schedule 9 or Claims under Schedule 14 which are not subject to the cap in
paragraph 3.2(i) of Schedule 14, shall not exceed (Pounds)650 million and for
Claims under clause 12.17 or otherwise in respect of a breach of the Warranty
contained in paragraph 25.2 of Schedule 9 shall not exceed $275 million. The
maximum aggregate liability of HSCC (i) in respect of all Warranty Claims shall
not exceed $225m and (ii) in respect of claims under
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clause 18.13 shall not exceed $650 million. The maximum aggregate liability of
the Purchaser in respect of all Claims shall not exceed $650 million.
12.4 References to Claims in this clause 12.4 shall not apply to any claim under
the Tax Covenant. Neither Vendor shall have any liability in respect of:
(a) any individual Warranty Claim (other than a Claim pursuant to paragraph 1,
2, 3, 4, 5.3 or 25.1 of the Warranties) unless its liability in respect of
such Claim exceeds (Pounds)100,000;
(b) any individual claim in respect of a breach of the Warranty contained in
paragraph 25.1 of Schedule 9 unless its liability in respect of such claims
exceeds (Pounds)200,000;
(c) any individual claim pursuant to paragraph 1, 2, 3, 4, or 5.3 of the
Warranties or clause 10.3(c), (e) or (f) unless its liability in respect of
such claim exceeds (Pounds)50,000.
Where a series of Claims (other than a claim under the Environmental Covenant)
arise out of the same act, omission, fact or circumstances, they shall be
aggregated for the purposes of determining whether or not the relevant one of
these thresholds has been exceeded.
For the avoidance of doubt:
(a) amounts for which either Vendor has no liability, or by which its liability
is reduced, as a consequence of the operation of this clause 12 or clause
13 shall not be taken into account in determining whether the amount of
such Claim exceeds the threshold specified in this clause 12.4; and
(b) for the purpose of this clause 12.4, where a Claim is caused by more than
one event, circumstance, act or omission which event, circumstance, act or
omission would separately constitute, on the one hand, a breach of a
Warranty or, on the other hand, give rise to a claim under the Tax Covenant
or the Environmental Covenant, each such Claim shall be treated as a
separate claim when calculating whether the threshold referred to in this
clause 12.4 has been exceeded.
12.5(a) ICI shall not have any liability in respect of any Warranty Claim
(other than to the extent it arises under the Repeated Warranties or the
Warranty in paragraph 25.2 of Schedule 9) unless the aggregate amount of
its liability in respect of all Claims under the Warranties
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(other than to the extent they arise under the Repeated Warranties or the
Warranty in paragraph 25.2 of Schedule 9) exceeds (Pounds)10 million in
which case it shall only be liable for the excess.
(b) ICI shall not have any liability in respect of any Warranty Claim to the
extent that it arises under the Repeated Warranties and does not arise
under the Warranties (other than to the extent it arises under the Repeated
Warranty in paragraph 25.2 of Schedule 9) unless the aggregate amount of
its liability in respect of all such Claims exceeds (Pounds)30 million, in
which case it shall only be liable for the excess.
(c) HSCC shall not have any liability in respect of any Warranty Claim unless
the aggregate amount of its liability in respect of all Claims under the
Warranties relating to the PO/MTBE Business exceeds $3.5 million in which
case, it shall only be liable for the excess.
(d) For the avoidance of doubt, amounts for which a Vendor has no liability, or
by which a Vendor's liability is reduced, as a consequence of the operation
of this clause 12 and/or clauses 11 or 13 shall not be capable of being
aggregated as a Claim or part thereof with other Claims for the purposes of
this clause 12.5.
12.6 Neither Vendor shall be liable for any Claim (other than a claim under the
Environmental Covenant) unless the Vendor shall have received from the Purchaser
written notice containing specific reasonable details of the Claim, including
the Purchaser's estimate (on a without prejudice basis) of the amount of such
Claim:
(a) in the case of a Claim in respect of any of the Warranties (other than the
Tax Warranties and the Warranty in paragraph 25.2 of Schedule 9), on or
before the date falling two (2) years after the Closing Date;
(b) in the case of a Tax Covenant Claim, on or before the date which is the
earlier of (i) three (3) calendar months after the seventh anniversary of
the Closing Date and (ii) three (3) calendar months after the expiry of the
applicable limitation period (including any extensions) in the relevant
country for the raising of a Tax assessment in relation to the particular
liability to Tax giving rise to the Tax Covenant Claim provided that in the
case of a Tax Covenant Claim relating to any jurisdiction other than the
UK, sub clause (i) shall not apply;
(c) in the case of a Claim under clause 10.3, on or before the date falling (i)
three (3) calendar months after the expiry of the relevant statutory
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period of limitation for the relevant Claim or, if earlier, (ii) the sixth
anniversary of the Closing Date;
(d) in the case of Claim under clause 12.17 (or otherwise in relation to the
Warranty in paragraph 25.2 of Schedule 9) on or before the date falling
three years after the Closing Date.
Other than in the case of a Tax Covenant Claim (to which paragraph 9 of Schedule
13 shall apply) or a claim under the Environmental Covenant (to which Schedule
14 and/or 14A shall apply) the Purchaser shall give notice to the Vendor of the
relevant facts or matter that may give rise to a Claim as soon as practicable
after it becomes aware of such facts or matter. Failure to give such notice
shall not of itself prevent the Purchaser from bringing the relevant Claim, but
the relevant Vendor shall not be liable to the Purchaser in respect of such
Claim to the extent that the amount of it is increased, or is not reduced, as a
result of such failure.
12.7 Any Claim, other than a Tax Covenant Claim or a claim under the
Environmental Covenant, shall (if it has not been previously satisfied, settled
or withdrawn) be deemed to have been withdrawn (and no new claim may be made in
respect of the facts giving rise to such withdrawn claim) unless legal
proceedings in respect of it have been commenced by both being issued and served
within nine (9) months of the rejection in writing of such Claim by the relevant
Vendor.
12.8 The liability of either Vendor for any Claim in respect of any fact,
matter, event or circumstance shall be reduced or extinguished:
(a) (i) where such fact, matter, event or circumstance relates to bad
debts, to the extent that allowance has been made for such fact,
matter, event or circumstance relating to bad debts in the
Accounts or the Closing Statement;
(ii) where such fact, matter, event or circumstance relates to Stocks,
to the extent that allowance has been made for such fact, matter,
event or circumstance relating to Stocks in the Accounts or the
Closing Statement; or
(iii) in the case of the ICI Business, where such fact, matter, event or
circumstance relates to non-exceptional other provisions as
identified in Exhibit G, to the extent such fact, matter, event or
circumstance relates to the subject matter of such provisions;
(iv) where such fact, matter, event or circumstance relates to
creditors due after more than one year, to the extent that
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allowance has been made for such fact, matter, event or
circumstance relating to creditors due after more than one year in
the Accounts;
(b) to the extent that such Claim arises or, such Claim otherwise having
arisen, is increased as a result of any change made after Closing in any
accounting or taxation policies or practice, or the length of any
Accounting Period of any Company, the Purchaser, the Designated Purchaser
or any other member of the Purchaser's Group other than in order to comply
with Statements of Standard Accounting Practice or generally accepted
accounting principles in the United States or any other relevant
jurisdiction or International Accounting Standards;
(c) to the extent that such Claim arises or, such Claim otherwise having
arisen, is increased as a result of any legislation not in force at the
date hereof or any change of law, regulation, directive, requirement or
administrative practice having the force of law or the practice of any Tax
Authority or any change in rates of tax made after the Closing Date;
(d) to the extent that such Claim would not have arisen but for, or is
increased as a result of, a voluntary act, omission, transaction or
arrangement (other than any voluntary act, omission, transaction or
arrangement which is contemplated by this Agreement or any omission which
is caused by ICI exercising its powers of control or other rights in
relation to the Purchaser or by directors appointed to the Board of the
Purchaser by ICI not voting in favour of any resolution of the Board in
respect of a Reserved Board Matter (as defined in the LLC Agreement) where
the resolution would have been passed but for such directors not voting in
favour of it) carried out after the Closing Date by the Purchaser, any
Designated Purchaser or any Company (other than any such voluntary act,
omission, transaction or arrangement which is carried out or effected by a
Company pursuant to a legally binding commitment created on or before
Closing) or any other member of the Purchaser's Group or their respective
directors, employees or agents where such person had actual knowledge that
such act, omission, transaction or arrangement would or would be likely to
give rise to or increase a Claim and a reasonable alternate course of
action was available which would not be expected to give rise to a claim;
(e) to the extent that the amount of such Claim is recovered under any policy
of insurance;
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(f) if the Purchaser or any Designated Purchaser failed to comply or procure
compliance with the terms of any provision of this Agreement (provided that
such failure to comply is not caused by any directors appointed to the
Board of the Purchaser by ICI not voting in favour of any resolution of
that Board in respect of a Reserved Board Matter (as defined in LLC
Agreement) where the resolution would have been passed but for such
directors not voting in favour of it), to the extent that the Vendor could
have avoided or mitigated the loss arising from the subject matter of the
Claim if the Purchaser or Designated Purchaser had complied with such
provision; or
(g) subject to paragraph 9.10 of the Environmental Covenant, to the extent that
the Claim or breach would not have arisen but for an act, omission,
transaction or arrangement carried out by the relevant Vendor or any member
of the relevant Vendor's Group at the written request or with the written
approval of the Purchaser or any other member of the Purchaser's Group or
any of their respective authorised representatives except when any employee
of the relevant Vendor's Group who either receives such request or seeks
such approval has actual knowledge at the relevant time that the Claim will
arise or increase as a result of the matter in respect of which the
request, consent or approval is made or given and fails to disclose that
fact to the Purchaser,
provided that:
(i) in respect of Tax Covenant Claims, only paragraph (c) applies;
(ii) paragraph (c) does not apply to claims under clause 10.3; and
(iii) paragraphs (a) and (c) do not apply to Environmental Covenant
claims.
12.9 If any Claim shall arise by reason of some liability which at the time
that the Claim is notified to a Vendor is contingent only, that Vendor shall be
under no obligation to make any payment to the Purchaser in respect of such
Claim until such time as such contingent liability ceases to be so contingent.
Clause 12.7 shall be amended in relation to such Claim (other than in relation
to a Tax Covenant Claim or a claim under the Environmental Covenant) so that the
Claim shall not be deemed to be withdrawn unless legal proceedings have not been
commenced within nine months from the later of (i) the date on which the said
liability ceases to be contingent; and (ii) the rejection in writing of such
Claim by the Vendor.
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12.10 Each party's Group (which shall, for the avoidance of doubt, include the
relevant party), taken together, shall not be entitled to recover any Costs more
than once to the extent that this could lead to double-recovery of the same
Costs in relation to the claims under more than one of the Warranties, the Tax
Covenant, the Environmental Covenant and/or indemnities provided by any party or
otherwise under, or in connection with, this Agreement or by any party to the
Co-operation Agreement or any of the Ancillary Agreements. The parties hereby
agree with each other that, to the extent that a benefit or saving obtained by
any member of the Purchaser's Group has been taken into account in reducing any
claim or has given rise to a payment by the Purchaser's Group under this
Agreement, it shall not be so taken into account again or give rise to another
such payment.
12.11 Before making a Claim in respect of any breach of the Warranties (other
than Warranty 25.2) which is capable of remedy, the Purchaser shall allow the
relevant Vendor thirty (30) days after the date on which notice of the relevant
facts or matter that may give rise to a Claim is given in accordance with clause
12.6 in order to allow the relevant Vendor to remedy the breach unless to do so
would prejudice the Purchaser to any significant extent.
12.12 Each party hereby waives and relinquishes any right of set off or
counterclaim, deduction or retention which it might otherwise have in respect of
any Claim other than a Tax Covenant Claim or a claim under the Environmental
Covenant or out of any payments which it may be obliged to make (or procure to
be made) to any other party pursuant to this Agreement.
12.13 The limitations on liability set out in this clause 12 shall not apply to
any liability for any Claim to the extent such Claim is attributable to, or such
Claim is increased as a result of, fraud or deceit on the part of the relevant
Vendor or any of its Related Persons.
12.14 The sole remedy against either Vendor for any breach by it of any of the
Warranties shall be an action for damages (save in the case of the Warranty in
paragraph 25.2 of Schedule 9, where the sole remedy against ICI shall be such
claim as exists under clause 12.17). The Purchaser shall not be entitled to
rescind this Agreement before or after Closing in any circumstances.
12.15 Nothing in this clause 12 or clauses 11 and 13 shall in any way restrict
or limit the general obligation at law of the Purchaser to mitigate any loss or
damage which it may suffer in consequence of any breach by either Vendor of the
terms of this Agreement or any fact, matter, event or circumstance giving rise
to a Warranty Claim.
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12.16 Except for the Warranty set out in paragraph 10 of Schedule 9, the only
Warranties which shall apply in relation to:
(a) the Properties are those set out in paragraph 16 of Schedule 9;
(b) Environmental Matters are those set out in paragraph 9 of Schedule 9;
(c) Intellectual Property Rights are those set out in paragraphs 1.1, 1.2,
1.3, 8, 10, 12, 17, 18(a) and (d), 19, 21 and 22 of Schedule 9;
(d) Computer Systems and agreements relating to Computer Systems are those set
out in paragraphs 1.1, 1.2, 1.3(a) and (b), 5.3, 17, 18(a) and (d), 19, 21
and 22 of Schedule 9; and
(e) Tax matters are those set out in paragraphs 19, 20, 21 and 22 of Schedule
9.
12.17 With respect to the Warranty in paragraph 25.2 of Schedule 9, subject
(save as provided in this clause 12.17) to the other provisions of this
Agreement:
(a) ICI hereby undertakes to indemnify and keep indemnified from and after the
date hereof (regardless of whether Closing occurs) on an after Tax basis
the Indemnified Parties from and against:
(i) any and all Costs made, incurred or suffered by the Indemnified
Parties as a direct or reasonably foreseeable result of any
breach of that Warranty; and
(ii) all reasonable legal and other out-of-pocket costs and expenses
which the Indemnified Parties have reasonably incurred in
connection with a breach of the Warranty in paragraph 25.2 of
Schedule 9 or in connection with any action, suit, proceeding or
claim which, if adversely determined, would result in such a
breach;
(b) ICI's liability under this clause 12.17 shall be reduced to the extent
that the Indemnified Parties shall not use reasonable endeavours to
mitigate their loss. For the avoidance of doubt, account shall be taken in
calculating loss of any value received by the Purchaser's Group on the
sale or transfer by the Purchaser's Group of membership interests in the
Warranted Joint Ventures;
(c) for the purposes of this clause 12.17, clause 12.8(d) shall be taken to
apply to each of the Indemnified Parties;
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(d) in the event of a breach of the Warranty in paragraph 25.2 of Schedule 9,
the remedy shall be under this clause 12.17 and not otherwise.
In addition, ICI undertakes to pay on an after Tax basis to the Indemnified
Parties any shortfall in the recovery under this clause 12.17 which would
otherwise have been available but for the operation of Disclosed Matters, clause
11.3 or equivalent common law principles (including, for the avoidance of doubt,
any such shortfall in recovery arising due to the actual, constructive or
imputed knowledge of any Indemnified Party of a fact or circumstance which could
give rise to a breach of the Warranty in paragraph 25.2 of Schedule 9).
In this clause 12.17, Indemnified Parties means, collectively, (a) the Purchaser
(for itself and as trustee for each member of the Purchaser's Group, including,
for the avoidance of doubt, the Companies after the Closing, and each of its and
their Related Persons); and (b) HSCC (for itself and as trustee for each member
of HSCC's Group and each of its and their Related Persons).
ICI's liability under clause 12.17(a)(i) shall be reduced in accordance with the
following sliding scale:
Year after Closing in which notice of Reduction in ICI's liability
claim is first given
1 0%
2 10%
3 20%
12.18 None of the Warranties shall apply to any Protected Matters, Pre-Closing
Soil and Groundwater Contamination, Pre-Closing Health and Safety Issues or
North Tees Soil and Groundwater Contamination each as defined in Schedule 14 to
this Agreement.
Further Limitations on Claims
13.1 Where the Purchaser or any other member of the Purchaser's Group is
entitled or becomes entitled by virtue of an assignment under clause 18.11
(whether by payment, discount, credit, relief or otherwise) to recover from a
third party (including any insurance company or Tax Authority) any sum in
respect of any matter giving rise to a Claim or (irrespective of whether such
matter gives rise to a Claim) giving rise to Texaco Environmental Losses
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(other than a Tax Covenant Claim) or to obtain any relief, saving or benefit
which is in respect of any matter (in each case whether before or after the
relevant Vendor has made payment hereunder), the Purchaser shall (or, as
appropriate, shall procure that the relevant member of the Purchaser's Group
shall):
(a) as soon as reasonably practicable notify the relevant Vendor and provide
such information as the relevant Vendor may reasonably require relating to
such potential recovery from that third party or to obtaining such relief,
saving or benefit and the steps taken or to be taken by the Purchaser or
the relevant member of the Purchaser's Group in connection with it (failure
to make such notification or provide such information shall not prevent the
Purchaser from making the relevant Claim, but the relevant Vendor shall not
be liable to the Purchaser in respect of such Claim to the extent that the
amount of it is increased, or is not reduced, as a result of such failure);
(b) if so required by the relevant Vendor (subject to the Purchaser being fully
indemnified to its reasonable satisfaction by the relevant Vendor against
all reasonable out-of-pocket costs and expenses incurred by the Purchaser
or the relevant member of the Purchaser's Group) take all steps (whether by
way of a claim against its insurers or otherwise including but without
limitation proceedings) as the relevant Vendor may reasonably require to
enforce such recovery or obtain such relief, saving or benefit and comply
with the relevant Vendor's reasonable requests as to the timing of such
steps; and
(c) shall keep the Vendor informed of the progress of any action taken,
and thereafter either:
(i) any Claim (other than a Tax Covenant Claim) against the relevant
Vendor shall be limited (in addition to the limitations on its
liability referred to in clauses 11 and 12 and this clause 13) to
the amount by which the loss or damage suffered by the Purchaser
or any relevant member of the Purchaser's Group as a result of
such breach shall exceed the amount so recovered from the third
party (net of Tax paid by the Purchaser or relevant member of the
Purchaser's Group on such sum and the reasonable costs incurred in
recovering such amount) or the value of the relief, saving or
benefit obtained, calculated by reference to the amount saved
(less the reasonable costs of obtaining such relief, saving or
benefit); or
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(ii) if the relevant Vendor has paid to the Purchaser an amount in
discharge of a Claim (other than a Tax Covenant Claim) and the
Purchaser or any other member of the Purchaser's Group
subsequently recovers (whether by payment, discount, credit,
relief or otherwise) from a third party (including any insurance
company or Tax Authority) a sum which is referable to the matter
giving rise to the Claim or obtains any relief, saving or benefit
which is so referable, the Purchaser shall (or, as appropriate,
shall procure that the relevant Designated Purchaser shall) repay
to the relevant Selling Companies:
(A) an amount equal to the sum recovered from the third party (net
of tax paid by the Purchaser or the Designated Purchaser on
such sum and the reasonable costs incurred in recovering such
sum) or the value of the relief, saving or benefit obtained,
calculated by reference to the amount saved (less the
reasonable costs of obtaining such relief, saving or benefit);
or
(B) if the figure resulting under sub-paragraph (A) above is
greater than the amount paid by the relevant Vendor to the
Purchaser or other members of the Purchaser's Group in respect
of the relevant Claim, such lesser amount as shall have been
so paid by the relevant Vendor.
13.2 Any payment required to be made by the Purchaser, pursuant to clause 13.1
shall be made:
(a) in a case where any member of the Purchaser's Group receives a payment,
within ten (10) Business Days of the receipt thereof; and
(b) in a case where any member of the Purchaser's Group obtains a relief,
saving or benefit, within ten (10) Business Days of the date on which such
relief, saving or benefit gives rise to an increased receipt or reduced
payment by the Purchaser's Group.
13.3 If the Purchaser, or any other member of the Purchaser's Group, becomes
aware of any third party claim, matter or event (a third party claim) which
might reasonably be expected to lead to a Claim other than a Tax Covenant Claim
or a claim under the Environmental Covenant (to which Schedule 14 and/or
Schedule 14A shall apply, as applicable) being made or which might reasonably be
expected to lead to a member of the Purchaser's Group being held liable in
relation to an Excluded Liability, the Purchaser shall (subject to being fully
indemnified by the relevant Vendor against all
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reasonable out of pocket costs and expenses incurred by the Purchaser or any
member of the Purchaser's Group as a result of so acting):
(a) procure that notice thereof is promptly given to the relevant Vendor as
soon as is reasonably practicable;
(b) not make (or, as appropriate, shall procure that no other member of the
Purchaser's Group shall make) any admission of liability, agreement or
compromise with any person, body or authority in relation to any such third
party claim without prior consultation with and the prior agreement of the
relevant Vendor, which agreement shall not be unreasonably withheld or
delayed;
(c) not take any action which reduces the amount recoverable in respect of such
third party claim under any policy of insurance under which any such third
party claim would be covered if such action had not been taken;
(d) take such action as the relevant Vendor may reasonably request to avoid,
dispute, resist, appeal, compromise or defend such third party claim;
(e) ensure, at the request in writing of the relevant Vendor, that the relevant
Vendor is placed in a position to take on or take over the conduct of all
proceedings and/or negotiations of whatsoever nature arising in connection
with the third party claim in question, provided that the Purchaser shall
not be required to commence any legal proceedings where it or the relevant
member of the Purchaser's Group has validly assigned all of its rights in
relation to the relevant Claim other than a Tax Covenant Claim or a claim
under the Environmental Covenant to the Vendor in a manner which entitles
the Vendor to the same benefits in respect of such rights as the Purchaser
or the relevant member of the Purchaser's Group had; and
(f) if the relevant Vendor does not elect to take control of the conduct of
proceedings under clause 13.3(e), the Purchaser shall ensure that the
relevant Vendor is kept fully informed of any actual or proposed
developments (including any meetings) and shall be provided with copies of
all material correspondence and documentation relating to such third party
claim or action, and such other information, assistance and access to
records and personnel as it reasonably requires,
and, without prejudice to any other limitation of liability contained in this
Agreement, if the Purchaser fails to comply with any of the obligations
contained in this clause 13.3, the relevant Vendor shall not be liable in
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respect of any such Claim other than a Tax Covenant Claim or a claim under the
Environmental Covenant to the extent that the relevant Vendor's liability is
increased or, as the case may be, not reduced as a result of the Purchaser's
failure. Notwithstanding the foregoing, the Vendor shall not be entitled to
assume the defence of any claim, action or demand of a third party (but shall
continue to be entitled to exercise the remainder its rights under the above
sub-paragraphs) if such claim, action or demand seeks any relief other than
damages (including any order, injunction or other equitable relief) against the
Purchaser or relevant member of the Purchaser's Group which the Purchaser
reasonably determines cannot be separated from a related claim for damages. If
such claim for other relief can be separated from the claim for damages at any
stage, the Vendor shall be entitled to assume the defence of the claim for
damages from that point on.
13.4 Upon any Claim other than a Tax Covenant Claim or a claim under the
Environmental Covenant being made, or notification from the Purchaser to the
relevant Vendor of any third party claim which might lead to such a Claim other
than a Tax Covenant Claim or a claim under the Environmental Covenant, being
made, the Purchaser shall, and shall co-operate to procure that each other
member of the Purchaser's Group shall:
(a) make available to accountants and other professional advisers appointed by
the relevant Vendor such access to relevant personnel and properties and
to any relevant records and information as the relevant Vendor may
reasonably request in connection with such Claim other than a Tax Covenant
Claim or a claim under the Environmental Covenant or third party claim
provided that neither the Purchaser nor any member of the Purchaser's
Group nor any of their Related Persons shall be required to disclose any
legally privileged information; and
(b) use reasonable endeavours to procure that the auditors (both past and then
current) of the relevant member of the Purchaser's Group make available
their audit working papers in respect of audits of that company's accounts
for any relevant Accounting Period in connection with such Claim, other
than a Tax Covenant Claim or a claim under the Environmental Covenant, or
third party claim, subject to the relevant Vendor entering into a release
in a form satisfactory to such auditors in relation to such working papers
being made available and provided that such auditors shall not be required
to reveal any information which is legally privileged.
This clause 13 shall not apply to the extent that recovery has been obtained
pursuant to the Tax Covenant or a claim under the Environmental Covenant or any
other provision of this Agreement.
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Management of Pre-Closing Tax Affairs and conduct of other Tax affairs
Rights and obligations of ICI
14.1 Subject to and in accordance with the provisions of this clause 14, ICI or
its duly authorised agents shall, in respect of all Accounting Periods ending on
or before the Closing Date, and at its own cost:
(a) prepare and submit the Tax Returns of each of the Companies;
(b) prepare and submit on behalf of the Companies all claims, elections,
surrenders, disclaimers, notices and consents for the purposes of Tax; and
(c) subject to paragraph 9 of the Tax Covenant deal with all matters relating
to Tax which concern or affect any of the Companies, including the conduct
of all negotiations and correspondence and the reaching of all agreements
relating thereto or to any Tax Documents.
14.2 Except with the Purchaser's written consent (not to be unreasonably
withheld or delayed), ICI shall not, and shall procure that its duly authorised
agents do not, prepare or submit any Tax Document (or any similar document
relating to the Tax affairs of ICI or any company under its control) which
comprises or includes a claim, election, surrender, disclaimer, notice or
consent, or withdraw any such item unless the making, giving or withdrawal of it
(as the case may be) either has been taken into account in preparing the
Accounts, or should not have a material adverse effect on the liability to Tax
of any of the Companies in respect of any Accounting Period ending after the
Closing Date.
14.3 Subject to clause 14.7, ICI or its duly authorised agent shall deliver all
Tax Documents which are required to be signed by or on behalf of any Company to
the Purchaser for authorisation, signing and submission to the relevant Tax
Authority. If a Time Limit applies in relation to any Tax Document, ICI will
use reasonable endeavours to ensure that the Purchaser receives the Tax Document
no later than 10 Business Days before the expiry of the Time Limit.
14.4 ICI shall procure that the Purchaser is kept informed of the progress of
all matters relating to the Pre-Closing Tax Affairs and in the event that the
Purchaser considers that the manner in which ICI is proposing to conduct the
Pre-Closing Tax Affairs is likely materially adversely to affect the Purchaser's
future Tax position or that of any Company in the Purchaser's Group the
Purchaser shall be afforded the opportunity to comment within a
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reasonable period of time on any Tax Document prior to its submission to the
relevant Tax Authority and ICI will take the Purchaser's reasonable comments
into account.
Obligations of the Purchaser
14.5 The Purchaser shall procure that:
(a) ICI and its duly authorised agents are afforded such access (including the
taking of copies) to the books, accounts and records of the Companies and
such other assistance as it or they reasonably require to enable ICI to
discharge its obligations under clause 14 and to enable ICI and any member
of the ICI Retained Group to comply with its own Tax obligations or
facilitate the management or settlement of its own Tax affairs;
(b) ICI is promptly sent a copy of any communication from any Tax Authority
insofar as it relates to the Pre-Closing Tax Affairs;
(c) no voluntary action is taken by any Company after Closing by disclaiming
any relief or withdrawing any claim or consent which has or is likely to
have the effect of prejudicing or reducing the availability of any relief
surrendered or to be surrendered by way of group relief, or any relief
otherwise made available, to any member of the Retained Group or which
could in any way materially prejudice the Pre-Closing Tax Affairs other
than such action as is required by law;
(d) there is given to such person or persons as may for the time being be
nominated by ICI authority (including as requested by ICI, powers of
attorney) to conduct Pre-Closing Tax Affairs, and that such authority is
confirmed to any relevant Tax Authority.
14.6 The Purchaser shall (subject to clause 14.7) be obliged to procure that the
Companies shall cause any Tax Document delivered to it under clause 14.3 to be
authorised, signed and submitted to the appropriate Tax Authority without delay
(and in any event within any relevant Time Limit), and without amendment.
Rights of the Purchaser
14.7 The Purchaser shall be under no obligation to procure the authorisation,
signing, or submission to a Tax Authority of any Tax Document delivered to it
under clause 14.3 which it considers in its reasonable opinion to be false,
misleading, incomplete or inaccurate in any respect, but for the avoidance of
doubt shall be under no obligation to make
Page 100
any enquiry as to the completeness or accuracy thereof and shall be entitled to
rely entirely on ICI and its agents.
Conduct of other tax affairs
14.8 The Purchaser or its duly authorised agents shall have sole conduct of all
Tax affairs of each of the Companies which are not Pre-Closing Tax Affairs.
14.9 In respect of any Accounting Period commencing prior to the Closing Date
and ending after the Closing Date (the Straddle Period) the Purchaser shall
procure that the Tax Returns of the Companies shall be prepared on a basis which
is consistent with the manner in which the Tax Returns of the Companies were
prepared for all Accounting Periods ending prior to or on the Closing Date.
14.10 The Purchaser shall procure that the Companies provide to ICI in draft
form all Tax Returns relating to the Straddle Period no later than 20 Business
Days before the date on which such Tax Returns are required to be filed with the
appropriate Tax Authority without incurring interest or penalties. The
Purchaser shall further procure that the Companies shall take ICI's reasonable
comments into account before the Tax Returns are submitted to the appropriate
Tax Authority.
14.11 Notwithstanding the provisions of clauses 14.8 to 14.10 (inclusive), the
Purchaser shall not, and shall procure that no Company shall, without the
written consent of ICI, take any action under the provisions of any enactment or
regulation relating to Tax if such action could adversely affect the liability
of ICI under the Tax Covenant or the Tax Warranties.
Retention of Tax Documents
14.12 ICI and the Share Selling Companies will be entitled to retain all Tax
Documents and other records relevant for Tax purposes in relation to the
Companies. ICI will procure that, if appropriate, such records are preserved
for a period of not less than six (6) years from the date of the relevant record
and shall, if appropriate, procure that the Purchaser is given, on the giving of
not less than three (3) business days' notice, reasonable access to those
records (to inspect them or make copies of them) during normal business hours.
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Continuing Arrangements between the retained Group and the Business
Definitions
15.1 In this clause the following additional definitions shall apply:
Agreed Form Interface Agreements means those agreements which are in the agreed
form, being:
(a) the Co-operation Agreement;
(b) the Product Supply Agreement;
(c) the contracts and side letters referred to in sub-clause 15.14(a)(i) and
(ii); and
(d) the Technology Transfer Agreement, PO/MTBE Technology Transfer Agreement,
HSCC Trade Mark Licence and ICI Trade Mark Licence;
Deferred Interface Agreement means (subject to clause 15.4(c)(ii)) any Interface
Agreement which is not an Agreed Form Interface Agreement;
Existing Services means all products, utilities or services which are actually
being supplied or provided at the date of this Agreement:
(a) to any Local Business or Company by any member of ICI's Group (or vice
versa); or
(b) to the PO/MTBE Business by any member of HSCC's Group (or vice versa
(HSCC/PO/MTBE Services);
Expiry Date means:
(a) in the case of an Interface Agreement relating to Major Interface Services,
the date which falls 24 months after Closing (save where a valid
Termination Notice has been served in accordance with sub-clause 15.7 below
or where that date has been extended under sub-clause 15.6 below); and
(b) in the case of an Interface Agreement relating to Minor Interface Services,
the date which falls 12 months after Closing (save where a valid
Termination Notice has been served in accordance with sub-clause 15.7 below
or where that date has been extended under sub-clause 15.6 below);
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Interface Agreements means the agreements containing the terms on which
Interface Services are to be provided and which are to be entered into in
accordance with this clause;
Interface Services means (i) those Existing Services which are, in accordance
with this clause, to continue to be provided after Closing and (ii) those New
Services which are, in accordance with this clause, to be provided after
Closing:
(a) to the Purchaser's Group by any member of ICI's Retained Group (or vice
versa); or
(b) to the Purchaser's Group by any member of HSCC's Retained Group (or vice
versa);
IT Services means those information technology services which are referred to in
sub-clause 15.15 below;
Major Interface Services means any Interface Service the subject matter of which
is the supply or provision of:
(a) any product or utility; or
(b) any service which is material to the continuing operation after Closing of
the business carried on by the Purchaser's Group;
Minor Interface Services means any Interface Service other than a Major
Interface Service;
New Services has the meaning given to it in sub-clause 15.4 below;
Product Supply Agreement means the agreement in the form initialled by the
parties and which is to be entered into between a Subsidiary of ICI and the
Purchaser (or another member of the Purchaser's Group) for the provision of
feedstocks or products by members of the ICI Retained Group;
Property Services means such property services as are referred to in Schedule 17
Part VII;
Same Terms means the price and other terms on which an Existing Service was
being provided or supplied at 31st December, 1998 provided that:
(a) where a price was at 31st December, 1998 not an absolute fixed price but
was or was to be calculated or varied by a price formula or other price
mechanism, that formula or mechanism (rather than the absolute price which
would be determined on 31 December, 1998 by
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application of the price formula or price mechanism on that day) shall
form part of the Same Terms so that, while there shall be no change made
in the price formula or price mechanism itself in the period to 31st
December, 1999, the price payable under the relevant Interface Agreement
shall in that period be subject to variation in accordance with the
application of the price formula or price mechanism;
(b) where a Third Party Element forms part of an Interface Service (and is
not otherwise within paragraph (a) above), to the extent that the cost of
that Third Party Element has changed since 31st December, 1998 or changes
after the date of this Agreement, the impact of that change in the cost
of supplying or providing the Interface Service shall be passed through
to the charge for the relevant Interface Service and the price payable
under the relevant Interface Agreement shall vary accordingly;
(c) for the avoidance of doubt, references in paragraph (b) above to a Third
Party Element shall include circumstances in which a member of the
relevant Group acts as a buying or other agent in obtaining an Interface
Service (or a part thereof) for itself or other members of its Group as
well as for the party to whom the Interface Service is to be provided;
and
(d) any agency, handling or similar fee payable as at 31st December, 1998 to
another member of the same Group for the provision of buying or other
agency services as referred to in paragraph (c) above shall remain fixed
for the period from Closing to 31st December, 1999;
Termination Notice has the meaning given in sub-clause 15.7 below;
Third Party Element means that part or any Existing Service or Interface Service
which is provided by or sourced from (directly or indirectly) a provider or
supplier other than a member of the relevant Vendor's Group; and
Unresolved Interface Agreement means any Deferred Interface Agreement the final
terms of which the parties have not agreed by Closing.
General
15.2.1 Each of ICI and HSCC shall, and shall procure that the members of their
respective Groups shall, at their own expense, comply with the terms of this
clause 15 and, at all times from the date of this Agreement, do all things as
may be required to give effect to this clause and to all other agreements
contemplated by this clause, including, without limitation, the execution of all
deeds and documents, procuring the convening of all meetings, the giving of
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all necessary waivers and consents and the passing of all resolutions and
otherwise exercising all powers and rights available to them.
15.2.2 Notwithstanding the fact that the Product Supply Agreement envisages
only supplies of products or feedstocks by members of ICI's Group to members of
the Purchaser's Group, those provisions in this clause which require Interface
Agreements to be agreed by reference to the Product Supply Agreement shall
apply.
15.2.3 At Closing ICI and HSCC shall procure that ICI Chemicals & Polymers
Limited and the Designated Purchaser of the Property at North Tees Works enter
into an agreement relating to repair of leaks at the Property at North Tees
Works. The body of such agreement shall be in the form approved by ICI and HSCC
prior to the date of this Agreement. The Schedule to such agreement shall be
agreed between ICI and HSCC in accordance with the principles set out in the
attachment to the approved form of such agreement. Any dispute shall be
resolved in accordance with the dispute resolution provisions of this clause.
Interface Agreements
15.3 The parties agree that the Agreed Form Interface Agreements shall
continue (in relation to the Co-operation Agreement and in relation to the
contracts and side letters referred to in sub-clause 15.14(a)(i) and (ii)) or
(in relation to the remaining Agreed Form Interface Agreements) shall be entered
into at Closing, in each case subject to and in accordance with the terms of the
Co-operation Agreement and/or this Agreement where applicable.
15.4 ICI and HSCC agree that:
(a) with effect from Closing, and subject to the remaining provisions of this
clause, all Existing Services shall (except as provided in sub-clause
15.3 and subject to the provisions of this clause which relate
specifically to IT Services, NSC Companies and Property Services)
continue as Interface Services except where the provision of an Interface
Service cannot be provided after Closing by reason of law or applicable
regulations and the parties will use their best endeavours to identify
before Closing those Interface Services which cannot be so provided in
order that replacement arrangements can be put in place with effect from
Closing;
(b) from the date of this Agreement onwards, the parties will, and will
procure that the members of the respective Groups will, subject to the
recipient keeping that information confidential, make available to one
another such personnel, books, records and information as any of them
Page 105
reasonably require in order to carry out the provisions of this clause;
and
(c) following signature of this Agreement they shall, and will procure that
the members of their respective Groups shall:
(i) use their best endeavours to identify and agree the nature and
scope of those new arrangements (not being Existing Services) to
be put in place from Closing between any member of their Retained
Groups on the one hand and any member of the Purchaser's Group on
the other hand which are reasonably required by a member of their
respective Groups as a result of the separation of the ICI
Business from ICI's Group or from the separation of the PO/MTBE
Business from the HSCC Group or which is otherwise a result of the
transactions contemplated by this Agreement and which they cannot
reasonably be expected to obtain from another source (New
Services); and
(ii) in good faith negotiate, and use their best endeavours to agree
before Closing, definitive documentation in respect of all
Deferred Interface Agreements. To the extent that terms have
already been agreed (as reflected in the Agreed Form Interface
Agreements), those terms will constitute terms of the Interface
Agreement for those products, utilities or services (as the case
may be) and, to the extent only that terms have not been so agreed
and/or remain to be completed, those terms (but only those terms)
will be subject to the provisions of this clause which relate to
Deferred Interface Agreements.
15.5 In relation to Unresolved Interface Agreements, ICI and HSCC agree that
(subject to sub-clauses 15.6 and 15.7) the following shall apply:
(a) during the six months after Closing in relation to Major Interface
Services and three months after Closing in respect of Minor Interface
Services, ICI and HSCC shall continue to negotiate in good faith, and use
their best endeavours to agree, definitive documentation in respect of all
Unresolved Interface Agreements; and
(b) until agreement if any between the parties, the product, utility or
service shall be supplied between members of the HSCC Group or members of
ICI's Group (as the case may be) on the one hand and members of the
Purchaser's Group on the other hand:
(i) on the terms of the Product Supply Agreement (in relation to all
products) or (in relation to the provision of utilities or
services)
Page 106
on the terms of agreements which shall be negotiated in good
faith, with both parties using their best endeavours to agree by
Closing, on the basis that such agreements shall (excluding the
terms particular to each individual product in their Schedules and
elsewhere where they appear) be on substantially the same terms as
the Product Supply Agreement save only:
(A) where those terms cannot rationally be applied in the context
of an agreement for the provision of that utility or service;
or
(B) where additional terms would be normal in the context of a
supply of the utilities or services which are to be the
subject matter of such agreements; and
(C) to incorporate provisions for the liability of the provider
which do not call for replacement supplies but instead contain
reasonable financial caps on the provider's liability; and
(ii) (subject to the terms contained in the applicable agreement
referred to in subparagraph (i)) (x) on the Same Terms in respect
of the period up to and including 31st December, 1999 and (y)
after 31st December, 1999 on the terms set out in paragraph (c)
below;
(c) after 31st December, 1999 the price chargeable for the supply of any
product, utility or service shall cease to be on the Same Terms. If by
30th September, 1999 ICI and HSCC have not agreed the price which shall
apply to the relevant Interface Agreements with immediate effect after
31st December, 1999 for a period of 12 months (or, if shorter, the residue
of the term of the relevant Interface Agreement), then ICI and HSCC shall
continue to negotiate in good faith, and use their best endeavours to
agree, the price on the basis that such price should be an arm's length
open market price having regard to:
(i) the subject matter of the relevant Interface Service; and
(ii) the volume, specification, service levels, quality, duration and
other terms of the relevant Interface Service;
(d) if products, utilities or services are to continue being provided under an
Interface Agreement after 31st December, 2000 or after 31st December, 2001
then if by 30th September in the year preceding each 31st December date
ICI and HSCC have not agreed the price and other
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terms which shall apply to the relevant Interface Agreement with immediate
effect after 31st December, 2000 (or 31st December, 2001 as the case may
be) for a period of 12 months (or, if shorter, the residue of the term of
the relevant Interface Agreement) then ICI and HSCC shall continue to
negotiate in good faith, and use their best endeavours to agree, the price
and those other terms on the basis that such price should be an arm's
length open market price having regard to:
(i) the subject matter of the relevant Interface Service; and
(ii) the volume, specification, service levels, quality, duration and
other terms of the relevant Interface Service.
15.6 Save where a definitive Interface Agreement has been agreed or determined
containing terms to the contrary:
(a) in the case of Major Interface Services the recipient of each product,
utility or service shall use its best endeavours to find an alternative
source of supply for the period after the date falling 24 months from
Closing and if, notwithstanding its best endeavours to find an alternative
source of supply, the recipient of a product, utility or service is unable
to obtain (or is unable to obtain on open market price terms) that
product, utility or service from another source for the period commencing
on the date falling 24 months after Closing, that recipient may (by
written notice served on the provider of that product, utility or service
no earlier than 21 months after Closing and no later than 22 months after
Closing) require an extension to the period of that supply of up to a
further 12 months beyond the date which falls 24 months after Closing
provided that (in the absence of express written agreement) in no
circumstances shall the provider of that product, utility or service be
obliged to continue providing that product, utility or service for more
than 36 months from Closing; and
(b) in the case of Minor Interface Services the provisions of paragraph (a)
shall apply save that:
(i) references therein to 24 months shall be read as references to 12
months;
(ii) references therein to 21 months and 22 months shall be read as
references to 9 and 10 months respectively;
(iii) references therein to 12 months shall be read as references to 6
months; and
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(iv) references therein to 36 months shall be read as references to 18
months.
15.7 Save where a definitive Interface Agreement has been agreed or determined
containing terms to the contrary, each Major Interface Agreement shall continue
for 24 months from Closing (or such longer period as may result from sub-clause
15.6) and each Minor Interface Agreement shall continue for 12 months from
Closing (or such longer period as may result from sub-clause 15.6), unless
terminated earlier in accordance with the remaining provisions of this sub-
clause. Either HSCC or ICI may where it (or a member of its Group) is the
recipient of the product, utility or service in question) at any time after
Closing serve a written notice (a Termination Notice) on the other terminating,
with effect from the date falling twelve months (in the case of Major Interface
Services) and three months (in the case of Minor Interface Services) after
service of such Termination Notice, the supply to it (or to the relevant member
of its Group) of any product, utility or service which is the subject of that
Unresolved Interface Agreement.
15.8 If there is a Disputed Matter (as defined below), the Disputed Matter
shall be referred to the parties' respective senior management for resolution.
If any such matter has not been resolved within 30 days after such referral
either ICI or HSCC may refer the Disputed Matter to such independent expert as
may be nominated by the Chairman for the time being of the Institute of
Arbitrators in the UK, with the Chairman being required to have regard to the
nature of the Disputed Matter when deciding on the qualifications of the
Independent Expert. For the purposes of this sub-clause a Disputed Matter shall
mean any dispute between the parties as to:
(a) what constitutes the Same Terms (if not agreed between the parties by the
date falling six months after Closing in relation to Major Interface
Services or three months after Closing in relation to Minor Interface
Services);
(b) whether an Interface Service is a Major Interface Service or a Minor
Interface Service (if not agreed by Closing);
(c) whether a recipient is unable to obtain (or is unable to obtain on open
market terms) a product, utility or service for the purposes of sub-clause
15.6 (if not agreed by the date falling 23 months after Closing in the
case of a Major Interface Service or 11 months following Closing in the
case of a Minor Interface Service);
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(d) the price to apply to an Interface Agreement for the purposes of sub-
clause 15.5(c) (if not agreed by 31st October, 1999) or for the purposes
of sub-clause 15.5(d) (if not agreed by 31st October, 2000).
(e) the definitive form of any Agreed Form Interface Agreement (if not agreed
between the parties by Closing); or
(f) the Terms applicable generally (meaning those terms other than details
which are specific to a particular utility or service) to Interface
Agreements for the provision of services or utilities (if not agreed by
Closing).
15.9 If the Independent Expert delays or becomes unwilling or incapable of
acting or if for any other reason the Chairman for the time being of the
Institute of Arbitrators thinks fit he may discharge the Independent Expert and,
in the absence of agreement between ICI and HSCC, appoint another in his or her
place (and such replacement shall thereafter become the Independent Expert).
15.10 The Independent Expert shall act as an expert and not as an arbitrator and
his or her decision shall (in the absence of manifest error) be final and
binding on the parties. The Independent Expert shall give ICI and HSCC the
opportunity of making written representations to him or her and he or she shall
make a decision after taking into account such representations and the remaining
provisions of this clause. The parties agree that the Independent Expert shall
be given access to all such personnel, books, records and information as he or
she may reasonably require.
15.11 The fees and expenses of the Independent Expert shall be borne by ICI and
HSCC in equal shares unless the Independent Expert otherwise determines.
15.12 In agreeing and implementing the terms of any Interface Agreement the
parties shall, and shall procure that the members of their respective Groups
shall, act in such a way so that the recipient of any product, service or
utility under an Interface Agreement shall be treated fairly and equitably in
comparison with any other members of the provider's own Group who may receive
the same product, service or utility.
Status of Schedule 5 and New Services
15.13 Without prejudice to the parties' rights in relation to Warranty 23, due
to the time available and the need to preserve confidentiality to protect the
ICI Business and the PO/MTBE Business, it is acknowledged that Schedule 5 has
been prepared by ICI in an attempt to identify the Interface Services it
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believes will be required in relation to the ICI Business and the PO/MTBE
Business. It is acknowledged that it does not contain a complete list of the
Interface Services that will be required. ICI and HSCC agree that following
signature of this Agreement each of them, and the members of their respective
Groups, shall use their best endeavours in good faith to agree by Closing a list
of the Interface Agreements that will be required.
15.14 Notwithstanding any other provision of this Agreement:
(a) the following contracts and/or side letters shall be treated as Agreed
Form Interface Agreements for the purpose of this clause:
(i) the contract dated 3rd July, 1997 between ICI (Paints Division)
and Tioxide Group Limited for the supply of titanium dioxide
(Document Q&A9.3.2) (the Paints Contract) and the first side
letter between the said parties dated 29th March 1999 relating to
the extension of the term of the Paints Contract (the First
Amendment Letter) and the second side letter between the said
parties dated 29th March 1999 relating to additional volumes (the
Second Amendment Letter); and
(ii) the contract dated 22nd March, 1999 between ICI Chemicals &
Polymers Ltd (C&P) and TEL relating to Greatham waste disposal via
C&P's site at Cowpen Bewley, Billingham (Document TEL 3.1/70) (the
Cowpen Bewley Contract);
(b) the preceding provisions of this clause shall not apply to Property
Services (for which the provisions contained in Schedule 17 shall apply
exclusively to the subject matter of Property Services);
(c) the preceding provisions of this clause shall not apply to the provisions
relating to the NSC Companies contained in clause 9 of this Agreement; and
(d) the preceding provisions of this clause shall not apply to IT Services for
which, except as expressly stated in Schedule 20, the provisions of
Schedule 20 shall apply exclusively to the subject matter of IT Services.
15.15 Nothing in this clause 15 shall require any change to any of the terms of
HSCC/PO/MTBE Services if any consent to such change is required from any bank or
other financiers under the terms or covenants (Covenants) in any Huntsman
Petrochemical Corporation financing documents which are in place at the date of
this Agreement and:
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(a) where such Covenants exist HSCC shall (and shall procure that the relevant
members of the HSCC Retained Group shall) promptly inform ICI and shall use
its best endeavours to obtain that third party consent;
(b) if (notwithstanding HSCC having complied with its obligations under
paragraph (a) above) the third party consent is not obtained then HSCC
undertakes to ensure that:
(i) any price increase in relation to HSCC/PO/MTBE Services shall be
fair and reasonable having regard to market prices and conditions
prevailing at that time;
(ii) to the extent that the Covenants do not permit paragraph (i) to
operate, HSCC will use its best endeavours to mitigate the effect
on the Purchaser's Group of any price increases which are not
fair and reasonable; and
(iii) if the price payable by the relevant member of the Purchaser's
Group is greater than that which it could obtain in the market at
the relevant time, HSCC will (so far as it is able and if ICI so
agrees) procure that the contract for such services is terminated
at the next available opportunity in accordance with its terms;
(c) HSCC shall ensure that ICI (or to the extent that confidentiality
restrictions prevent this, another person nominated by ICI to whom such
information can be given) is provided promptly with evidence reasonably
satisfactory to ICI of the requirement for such consent and of HSCC having
complied with its obligations under paragraph (a) above;
(d) nothing in paragraph (b) shall require HSCC to do anything which would
cause the Covenants to be breached.
Joint Venture Interests
16.1 Each Joint Venture Interest shall be transferred subject to and on the
terms of the relevant Joint Venture Agreement.
16.2 Where any consent or agreement of any party to a Joint Venture Agreement
(other than a member of ICI's Group) is required prior to the transfer of any
Joint Venture Interest and such consent or agreement has not been obtained at or
before Closing, the relevant Joint Venture Interest shall not be transferred to
the Purchaser, notwithstanding Closing, until the consent or agreement has been
obtained.
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16.3 Where any party to a Joint Venture Agreement (other than a member of ICI's
Group) is entitled to be offered or to elect to acquire all or any part of a
Joint Venture Interest before that interest may be transferred directly or
indirectly to a member of the Purchaser's Group (and has not waived that right)
then, unless the procedures laid down by the relevant Joint Venture Agreement
have been completed and the relevant offer period or periods have expired at or
prior to Closing, such interest shall not be transferred, notwithstanding
Closing, until the relevant procedures have been completed and the relevant
offer periods have expired.
16.4 ICI agrees to procure that each Share Selling Company which is a party to
a Joint Venture Agreement in relation to a Joint Venture Interest promptly seeks
such consents from, and gives such notices to, the other parties to that
agreement and complies with such other formalities as may be required under that
agreement prior to any transfer of the relevant Joint Venture Interest to a
member of the Purchaser's Group or to permit such transfer without giving any
other person rights to acquire or to offer to acquire the Joint Venture
Interest.
16.5 ICI shall, and shall procure that the relevant Share Selling Companies
shall, use their respective reasonable endeavours to obtain any necessary
consents and (if so requested in writing by the Purchaser in relation to any
particular Joint Venture Interest) the release or waiver of any rights of pre-
emption or other rights which would, if exercised, prevent the relevant Share
Selling Company from transferring any Joint Venture Interest to a member of the
Purchaser's Group. The Purchaser shall, and shall procure that all members of
the Purchaser's Group shall, give such assistance and co-operation as may be
reasonably required by any member of ICI's Group in seeking any such consent,
release or waiver (including, without limitation,
(a) providing any other party to a Joint Venture Agreement with such financial
and other information as it may reasonably require to enable it to decide
whether to grant any such consent or agreement; and
(b) giving any assurance, undertaking or guarantee of any nature which any
other party to a Joint Venture Agreement may reasonably require in respect
of the obligations of the proposed transferee of any Joint Venture
Interest); and
(c) entering into, or procuring that the relevant member of its Group enters
into such deeds of adherence or novation or other equivalent agreements as
may be required pursuant to the terms of the relevant Joint Venture
Agreement in order for the Purchaser or the relevant member of its Group
to become bound by any Joint Venture
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Agreement in place of the relevant Share Selling Company and to facilitate
the transfer of any Joint Venture Interest,
provided that no member of ICI's Group or the Purchaser's Group shall be under
any obligation to make any payment (in money or money's worth) to, or release
any right against, any such party for the purpose of obtaining any such consent,
release or waiver.
16.6 If, under the terms of any Joint Venture Agreement, any Share Selling
Company would be obliged to offer its Joint Venture Interest (or any part
thereof) to any person upon forming any intention or desire to dispose of that
interest or upon entering into any agreement relating to the sale of that
interest or upon giving any notice required under the terms of the Joint Venture
Agreement in question, then the relevant Share Selling Company shall not be
obliged to enter into any agreement, or to give any such notice or to take any
other step which may be required under the terms of the relevant Joint Venture
Agreement in relation to any transfer of that interest, until each of the
Conditions and any relevant conditions in Schedule 15 have been satisfied or
waived and, for the avoidance of doubt, for these purposes only the Vendor shall
not be deemed to act as the agent of the relevant Share Selling Company in
entering into this Agreement.
16.7 If:
(a) any party to a Joint Venture Agreement (other than a member of ICI's
Group) exercises its rights to acquire all or any part of a Joint Venture
Interest; or
(b) any consent or agreement which is required for the transfer of a Joint
Venture Interest has not been obtained from another party to any Joint
Venture Agreement (other than a member of ICI's Group) on or before the
second anniversary of the Closing Date,
then the relevant Joint Venture Interest shall thereupon be excluded from the
sale contemplated by this Agreement and ICI shall promptly (and in any event
within 15 Business Days of such exclusion) pay to the Purchaser a sum equal to
the higher of (i) the value of such Joint Venture Interest as set out in
Schedule 6; or (ii) the Joint Venture Value of that Joint Venture Interest. The
Joint Venture Value of a Joint Venture Interest shall be the sum resulting from
the following calculation:
a % x b
a = the percentage which the relevant Joint Venture Interest represents of the
issued share capital of the company in which it is held; and
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b = the Fair Value of the company in which the relevant Joint Venture Interest
is held, as agreed or determined in accordance with the provisions of
paragraph 7 of Schedule 16 as if such company were a Delayed Company.
Any sum paid by ICI pursuant to this clause 16.7 shall be by way of adjustment
to the consideration paid by the relevant transferee to the relevant Current
Parent (as identified in column 1 of Part IV of Schedule 1) pursuant to Schedule
18 and/or clause 6.2.
16.8 The Purchaser agrees to indemnify each member of ICI's Group on demand on
an after Tax basis (which may be made at any time after the transfer to the
Purchaser's Group of the relevant Joint Venture Interest) in respect of any
liability arising from actions taken by the relevant member of ICI's Group at
the request of the Purchaser (and in accordance with the Purchaser's written
instructions) in relation to any Joint Venture Interest or from liabilities
necessarily incurred by such member of ICI's Group in order to comply with the
terms of the Joint Venture Agreement or as required by law at any time after
Closing and prior to the transfer of such Joint Venture Interest to a member of
the Purchaser's Group, but not in relation to third party claims in respect of
matters contemplated by this clause, and ICI agrees to procure that any
distribution, return of capital or payment received from any Joint Venture
Interest (net of Tax thereon) after Closing is paid or delivered to the
Purchaser, or as it may direct, within five Business Days after the receipt of
the same by any member of the ICI's Group (for the avoidance of doubt:
(a) ICI's obligation to procure any such payment or delivery shall cease in
respect of any Joint Venture Interest immediately that Joint Venture
Interest is excluded from the sale contemplated by this Agreement pursuant
to clause 16.7 above, save that ICI shall be obliged to procure the
payment to the Purchaser (net of Tax) of any such distribution, return of
capital or payment received by any member of ICI's Group from any Joint
Venture Interest after the date of exclusion of that Joint Venture
Interest from the sale if that member's right to receive it accrues on or
prior to the date of such exclusion; and
(b) the Purchaser's obligations to indemnify each member of ICI's Group under
this clause 16.8 shall cease in respect of any Joint Venture Interest
immediately that Joint Venture Interest is excluded from the sale
contemplated by this Agreement pursuant to clause 16.7 above, save that
(i) the Purchaser shall continue to be obliged to indemnify each member of
ICI's Group in respect of any liability which is within the scope of the
Purchaser's indemnity obligations under this clause
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16.8 and accrues prior to the date on which the relevant Joint Venture
Interest is excluded from the sale and (ii) the Purchaser's obligation to
indemnify each member of ICI's Group in respect of any liability arising
from actions taken by the relevant member of ICI's Group at the request of
the Purchaser shall subsist notwithstanding such exclusion).
16.9 The Purchaser shall use its reasonable endeavours to procure that each
member of ICI's Group is released from all of its obligations and liabilities
under each Joint Venture Agreement with effect from the time at which the
relevant Joint Venture Interest is transferred to a member of the Purchaser's
Group and shall perform or procure performance of all such obligations and
indemnify each member of ICI's Group on an after Tax basis in respect of all
such liabilities following such transfer pending such release. At such time,
the Vendor shall procure that the relevant Share Selling Companies assign their
rights under the relevant Joint Venture Agreements, to the extent that it is
necessary to do so, to vest those rights in a member of the Purchaser's Group.
16.10 Pending completion of the acquisition of any Joint Venture Interest by any
member of the Purchaser's Group, the relevant Share Selling Company or Company
shall comply with all reasonable requests of the Purchaser (including reasonable
requests for information) in relation to such Joint Venture Interest to the
extent that it is able to do so in compliance with all applicable laws and
regulations and to the extent that such information is not confidential to the
relevant Share Selling Company or disclosure of such information is not
prohibited by any law, applicable shareholders' agreement, by-laws or other
similar document and (i) the relevant Share Selling Company shall comply in all
material respects with the provisions of the relevant Joint Venture Agreement;
and (ii) the relevant Share Selling Company shall enter into such arrangements
as the Purchaser may reasonably request in order to give to the Purchaser the
economic benefit and all rights of control which arise from the holding of the
Joint Venture Interest and from being a party to the Joint Venture Agreement
(including, without limitation, executing a trust in favour of the Purchaser or
a person nominated by the Purchaser in relation to such Joint Venture Interest
or such Joint Venture Agreement or any benefit arising thereunder).
16.11 If, with the consent of the Purchaser prior to Closing (or the relevant
Delayed Closing Date), any member or members of ICI's Group shall acquire any
further shares in any company in which a Share Selling Company holds a Joint
Venture Interest, then the Purchaser shall be obliged to purchase all the shares
in such company at the same time as that Joint Venture Interest and the price in
respect of such aggregate increased shareholding shall be the
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aggregate of the Initial Consideration for that Joint Venture Interest (as
adjusted pursuant to clause 3) plus the amount paid by the relevant members of
ICI's Group for such additional shares.
16.12 If, under any Joint Venture Agreement relating to a Joint Venture
Interest, any part of the ICI Business which has been fully and effectively
transferred to the Purchaser or any member of the Purchaser's Group is obliged
to provide any technical assistance or other services to the company in which
the relevant Joint Venture Interest is held, then the Purchaser shall provide or
shall procure that such technical assistance or other services are provided to
the relevant company from the Closing Date (or, as applicable, the relevant
Delayed Closing Date).
16.13 On the Delayed Closing Date in respect of any transfer of any Joint
Venture Interest, completion of the sale of the Joint Venture Interest shall
take place in accordance with clause 6 (and the provisions of clause 6 shall
apply to such completion as if the Delayed Closing Date were the Closing Date).
16.14 To the extent that any member of ICI's Group is obliged under this
Agreement to procure that any act is done by a company in which it holds a Joint
Venture Interest, the relevant member of the Vendor's Group shall be obliged to
take such action only to the extent that it is permitted to do so under the
terms of any relevant Joint Venture Agreement.
16.15 Notwithstanding any other provision of this Agreement, where the Purchaser
is obliged under this Agreement to procure that any Controlled Joint Venture or
Non-Controlled Joint Venture does any thing (including where the Purchaser
undertakes to procure that any Company does any thing) or that anything is done
in relation to such Controlled Joint Venture or Non-Controlled Joint Venture,
such undertaking shall be limited to such things as the Purchaser is able to do
by exercising its powers of control over the relevant Controlled Joint Venture
or Non-Controlled Joint Venture taking account of any restrictions in the Joint
Venture Agreement.
Insurance
17.1 Each Vendor (on behalf of itself and each of the Share Selling Companies
and Business Vendors) shall use all reasonable endeavours to procure that the
interests of the Purchaser in the ICI Business and the PO/MTBE Business are,
where necessary to secure the benefit of the cover and if permitted to do so by
the terms of the relevant policy, noted on all policies of insurance maintained
by them in respect thereof from the date of this Agreement until (and including)
the Closing Date. Each Vendor shall
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keep the Purchaser informed in a reasonable and timely manner about the status
of any such policies and the extent to which the interests of the Purchaser have
been noted.
17.2 Subject to clause 17.1, the Purchaser acknowledges and agrees (on behalf of
itself and each member of the Purchaser's Group) that upon Closing all insurance
cover provided in relation to the ICI Business pursuant to policies maintained
by ICI's Group (whether such policies are maintained with third party insurers
or with other members of that Vendor's Group) shall cease and that no further
liability shall arise under such policies provided however that (subject to the
terms of any relevant policy):
(a) the foregoing is without prejudice to any insurance claims which the
Companies or the Business Vendors (in relation to the ICI Business or the
PO/MTBE Business) may have made to insurers prior to Closing (and in
relation to any claim other than third party liability and product
liability claims, which shall be paid directly by the insurer to third
parties, such Companies or Business Vendors shall account to the Purchaser
for any proceeds to the extent that any receivables for such claims are
included in the Closing Working Capital); and
(b) such insurance cover shall continue in respect of matters occurring prior
to Closing in accordance with the terms of the relevant policy provided
that (and the Purchaser agrees that) the deductibles for each claim in
relation to such cover shall be $5 million on property damage and business
interruption, $3 million on North American liability (including products
liability) and zero on the rest of the world liability provided also that
the relevant claim is notified to the relevant insurer within 60 days of
Closing.
The Purchaser agrees to procure that each member of the Purchaser's Group shall
not after Closing bring any claim under such insurance cover in respect of
matters occurring prior to Closing except for claims notified to the relevant
insurer within 60 days of Closing (Notified Claims).
The Purchaser shall procure insurance coverage for claims incurred but not
reported to the relevant insurers prior to Closing, other than Notified Claims.
HSCC undertakes to the Purchaser that if any member of the Purchaser's Group is
subject to an insurance programme to which an entity or entities in HSCC's Group
(outside the Purchaser's Group) are also subject, HSCC shall reinstate the
policies and their limits. If any additional premium becomes payable where any
members of the Purchaser's Group or HSCC's Group exhaust the limits of such
insurance programmes pursuant to such
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reinstatement: (a) HSCC shall bear the additional premium in the proportion
which the aggregate claims of the HSCC Group in the period in which the limits
were exhausted bears to the aggregate claims of the Purchaser's Group and HSCC's
Group in such period; and (b) the Purchaser shall bear the additional premium in
the proportion which the aggregate claims of the Purchaser's Group in the period
in which the limits were exhausted bears to the aggregate claims of the
Purchaser's Group and the HSCC Group in such period.
The Purchaser undertakes to procure that the interests of the Vendor's Group
shall be noted on all relevant insurance policies relating to either or both of
the ICI Business and the PO/MTBE Business.
Post Closing Undertakings
18.1 ICI undertakes to the Purchaser for itself and as trustee (for each member
of the Purchaser's Group) that it will:
(a) use all reasonable endeavours to obtain, as soon as reasonably practicable
after Closing (or, as the case may be, Delayed Closing) and in any event
within one (1) month afterwards, the release of each of the Companies and
of any entity in which a Joint Venture Interest is held from any Intra
Group Guarantees to which it is a party and, pending such release, to
indemnify each such Company or entity on an after Tax basis against all
amounts paid by it to any person pursuant to any such Intra Group Guarantee
in respect of any liability of any member of ICI's Retained Group (and all
Costs incurred in connection with such liability) whether arising before or
after Closing; and
(b) procure the repayment in the ordinary and usual course of business by the
members of its Retained Group of all Intra Group Trading Indebtedness owed
as at Closing.
18.2 The Purchaser undertakes to ICI (for itself and as trustee for each other
member of its Retained Group) that it will:
(a) use all reasonable endeavours to obtain, as soon as is reasonably
practicable after Closing (or, as the case may be, Delayed Closing) and in
any event within one (1) month afterwards, the release of each member of
ICI's Retained Group from any Intra Group Guarantees to which it is a party
and, pending such release, to indemnify the relevant member on an after Tax
basis against all amounts paid by it to any third party pursuant to any
such Intra Group Guarantee in respect of any liability of any of the
Companies or of any entity in which a Joint
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Venture Interest is held (and all Costs incurred in connection with such
liability) whether arising before or after Closing;
(b) procure that:
(i) as soon as reasonably practicable after Closing and, in any event
within 12 months afterwards, the Purchaser's Group shall cease in
any manner whatsoever to use or display the ICI Roundel;
(ii) each member of the Purchaser's Group shall cease all use of the
ICI name and trade mark and shall take all necessary steps to
change its company name to a name not including the ICI name or
any confusingly similar name after the Closing Date in accordance
with the provisions of clause 9 of the ICI Trade Mark Licence;
and
(iii) each member of the Purchaser's Group in any event complies with
the terms of the ICI Trade Mark Licence; and
(c) procure the repayment in the ordinary and usual course of business by the
Companies of all Intra Group Trading Indebtedness (except for Intra Group
Trading Indebtedness owed by Louisiana Pigment Company L.P) owed as at
Closing.
18.3 After Closing (or, as the case may be, the relevant Delayed Closing Date),
each Vendor shall and shall procure that each relevant member of its Retained
Group shall, and the Purchaser shall and shall procure that each relevant member
of the Purchaser's Group shall from time to time, do, execute and deliver, (in
each case at its own cost) at the reasonable request of the other party and in a
form which is reasonably satisfactory to the other party, all such further acts,
deeds, documents, instruments of assignment and transfer as may be necessary to
complete the sale and purchase of the Sale Shares, the Local Businesses and the
Business IPR in accordance with the terms of this Agreement and otherwise to
give effect to the terms of this Agreement and to secure to the parties the full
benefit of the rights, powers and remedies conferred upon the parties in this
Agreement.
18.4 The Purchaser shall, and it shall procure that each member of its Group
shall, provide ICI at ICI's cost excluding any costs of management time spent
with such information and the services of such relevant employees as it
reasonably requests and as is necessary for the purposes of preparing business
accounts in respect of the period up to the Closing Date in accordance with
ICI's reporting requirements and timetable and all other assistance as ICI shall
reasonably require for those purposes.
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18.5 For a period of ten (10) years after Closing, the Purchaser shall and
shall procure that each member of the Purchaser's Group shall give each Vendor,
the Business Vendors and ICI's Accountants reasonable access at all reasonable
times, and provide copies of, all books and records delivered to the Purchaser
on or after Closing relating to the ICI Business or, as the case may be, the
PO/MTBE Business in their respective possession or control as are reasonably
required for the purposes of drawing up the accounts of the Business Vendors and
any other purposes including Tax matters, and the Purchaser shall procure that
none of such books, records or files is destroyed or disposed of without the
prior written consent of the relevant Vendor.
ICI shall, and shall procure that each member of the Group shall, provide the
Purchaser (at the Purchaser's cost, excluding any costs of management time
spent) with such information and the services of such relevant employees as it
reasonably requests and as is necessary for the purposes of preparing business
accounts in respect of the period of two years from the Closing Date in
accordance with the Purchaser's reporting requirements and timetable and all
other assistance as the Purchaser shall reasonably require for those purposes.
18.6 HSCC shall assign to HIC all of its rights under the consolidation
agreement dated 21 March 1997 (the Consolidation Agreement). If HSCC's rights
under the Consolidation Agreement are not assigned to HIC, or if such rights are
assigned but Huntsman Petrochemical Corporation ceases at any time to credit to
HIC an annual amount of $12 million as a consolidation fee credit pursuant to
that agreement, HSCC shall either pay or, at its option, procure that Huntsman
Petrochemical Corporation pays, the sum of $12 million to HIC annually through
15 April 2008.
18.7 Other than a claim under the Environmental Covenant (to which Schedule 14
and/or Schedule 14A shall apply), the Purchaser acknowledges and agrees that it
shall, and shall procure that any member of the Purchaser's Group shall, provide
each Vendor's Group, from time to time (at the cost of such Vendor's Group),
with all cooperation and assistance as may be reasonably requested by the
relevant Vendor or any member of its Group in connection with its Group's
review, investigation or defence of any matter in relation to third party
claims, proceedings or litigation (whether pending or threatened) involving that
Vendor or any member of its Group. The obligations of the Purchaser shall be
subject to the qualification that it shall not be required to render any co-
operation or assistance which in its reasonable opinion would or would be likely
to prejudice the interests of the Purchaser or any member of its Group.
18.8 Notwithstanding any other provision of this Agreement, the Vendor and
other members of the Vendor's Group shall be entitled to retain originals
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or copies of all files, books, personnel, and records relating to litigation
existing at Closing, whether or not currently in their possession.
18.9 If in consequence of a mistake any property rights or liabilities of
either Vendor or any Business Vendor are transferred contrary to the terms of
this Agreement to the Purchaser or a member of the Purchaser's Group then the
Purchaser and, if applicable, the relevant Vendor or Business Vendor shall
execute such documents and take such other steps as may be reasonably requested
by the other party to remedy the mistake.
18.10 ICI acknowledges that certain of the Business IP Licences relating to the
ICI Business provide for licences of the "ICI" and ICI Roundel trade marks and
agrees to grant to the Purchaser such rights in these marks as are necessary for
the purposes of fulfilling the Purchaser's obligations under such licences for
the term of such licences, provided always that the Purchaser agrees to use its
reasonable endeavours within a reasonable period to agree amendments to such
licences such that the "ICI", "ICI Roundel" and ICI Roundel trade marks cease to
be the subject of such licences.
18.11 In the event that the Purchaser or any member of the Purchaser's Group
incurs any Texaco Environmental Losses, HSCC shall, to the extent permitted
under Section 10.4(c) of the Texaco Purchase Agreement, assign to the Purchaser
or such member of the Purchaser's Group all of HSCC's rights under Part 6 of the
Texaco Purchase Agreement in respect of such Texaco Environmental Losses.
18.12 Each of HSCC and the Purchaser or any such member of the Purchaser's
Group agrees to co-operate with the other in connection with the pursuit by
either party of any indemnity from Texaco under Part 6 of the Texaco Purchase
Agreement with respect to any Texaco Environmental Losses or potential or
threatened Texaco Environmental Losses; provided, however, that notwithstanding
the foregoing, nothing contained herein shall require the Purchaser or any such
member of the Purchaser's Group to perform or assume any of HSCC's liabilities
under Section 6.3 of the Texaco Purchase Agreement.
18.13 HSCC has disclosed to ICI that HSCC is a party to a continuing agreement
dated March 21, 1997 with a third party relating to the supply of propylene
oxide (the POS Agreement). For reasons of confidentiality HSCC has not
disclosed the terms and conditions of the POS Agreement (other than clause 25)
to ICI which has not been able to assess the risks and liabilities associated
with the POS Agreement and therefore without prejudice to the right of the
Purchaser or any member of the Purchaser's Group under any other provisions of
this Agreement, HSCC undertakes to indemnify and to
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keep indemnified on an after Tax basis the Purchaser for itself and as agent for
each member of the Purchaser's Group (including, after Closing, the Companies)
against all Costs incurred, made or suffered by the Purchaser or any member of
the Purchaser's Group (including, after Closing, the Companies) to the extent
that such Costs arise from termination of the POS Agreement by this third party
because of any violation of the terms of the POS Agreement, including without
limitation clause 25 thereof, resulting from the assignment of the POS Agreement
to the Purchaser.
18.14 If, at any time after Closing, it is necessary for the Purchaser or any
Designated Purchaser to prove its entitlement to the benefit of a debt the
benefit of which is assigned to it under or pursuant to this Agreement, then at
the request of any party the relevant Vendor and the Purchaser shall execute, or
shall procure that the relevant members of their respective Groups shall
execute, a separate document to provide for the assignment of that debt on terms
consistent with this Agreement.
Domain Names
19.1 ICI shall take all reasonable steps to transfer any domain name
registrations in the name of any member of its Retained Group which Relate to
the ICI Business into the name of the Purchaser or its nominee and agrees that
the Purchaser or its nominee shall take over operation of the relevant web
sites, in each case as soon as practicable after the Closing Date.
19.2 In respect of any domain name transferred pursuant to clause 19.1, the
Purchaser shall as soon as reasonably practicable change the name or cancel the
name as necessary so as to remove any and all references to the "ICI" name.
19.3 HSCC shall take all reasonable steps to transfer any domain name
registrations in the name of any member of its Retained Group which Relate to
the PO/MTBE Business into the name of the Purchaser or its nominee and agrees
that Purchaser or its nominee shall take over operation of the relevant web
sites, in each case as soon as practicable after the Closing Date.
Costs
20.1 Subject to clauses 20.2 and 20.3 and save as otherwise provided in this
Agreement, each party shall pay (on behalf of itself and members of its Group)
any costs and expenses (including without limitation, and save as otherwise
provided in this Agreement, any stamp or other documentary or transaction duties
and any other transfer taxes) incurred by it or by any member of its Group in
connection with the negotiation, preparation,
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completion and implementation of the transactions contemplated by this Agreement
and each of the agreements referred to herein.
20.2 The costs incurred prior to the date of this Agreement in instructing
lawyers in relevant jurisdictions (other than England and Wales, the USA,
Belgium, the Netherlands and France) in connection with the transactions
contemplated by this agreement shall be borne by the Purchaser. If this
Agreement terminates or is terminated (save for the survival of certain
specified clauses including this clause) the following costs and expenses shall
be shared equally between ICI and HSCC:
(a) fees payable to the lenders under the Senior Credit Agreement or the
Senior Subordinated Credit Agreement;
(b) out-of-pocket expenses and legal fees of the lenders under the Senior
Credit Agreement or the Senior Subordinated Credit Agreement as agreed
pursuant to the terms of such agreements;
(c) all obligations derived from currency and interest rate hedging
instruments entered into in the normal course of business as agreed by ICI
and HSCC.
20.3 The costs (excluding, for the avoidance of doubt, any stamp or other
documentary or transaction duties and any other transfer taxes) incurred by any
party in implementing the steps set out in Schedule 4 and 18 shall be borne by
the parties as set out below:
(a) Schedule 4
- --------------------------------------------------------------------------------
Paragraph Party who shall bear costs
- --------------------------------------------------------------------------------
1 HSCC
- --------------------------------------------------------------------------------
2 ICI
- --------------------------------------------------------------------------------
2A Equity Investors
- --------------------------------------------------------------------------------
3 n/a
- --------------------------------------------------------------------------------
4 Each party shall bear its own costs
- --------------------------------------------------------------------------------
5 the Purchaser
- --------------------------------------------------------------------------------
5A & 6A HSCC
- --------------------------------------------------------------------------------
6 the Purchaser
- --------------------------------------------------------------------------------
7-10 (inclusive) the Purchaser
- --------------------------------------------------------------------------------
11-22 (inclusive) Each party shall bear its own costs
- --------------------------------------------------------------------------------
23-49 (inclusive) the Purchaser
- --------------------------------------------------------------------------------
50 ICI
- --------------------------------------------------------------------------------
51 the Purchaser
- --------------------------------------------------------------------------------
52 the Purchaser
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
53 the Purchaser
- --------------------------------------------------------------------------------
54 ICI
- --------------------------------------------------------------------------------
(b) Schedule 18
- --------------------------------------------------------------------------------
Paragraph Party who shall bear costs
- --------------------------------------------------------------------------------
1(a) ICI
- --------------------------------------------------------------------------------
1(b), (c), (d), (e), (ee), (f), (g) the Purchaser
- --------------------------------------------------------------------------------
2(a)-(d) (inclusive) ICI
- --------------------------------------------------------------------------------
2(e) and (f) the Purchaser
- --------------------------------------------------------------------------------
3(a)-(m) ICI
- --------------------------------------------------------------------------------
3(n) the Purchaser
- --------------------------------------------------------------------------------
4 Each party shall bear its own costs
- --------------------------------------------------------------------------------
5 & 6 Each party shall bear its own costs
- --------------------------------------------------------------------------------
7 the Purchaser
- --------------------------------------------------------------------------------
8 Purchaser (save as otherwise expressly
provided in paragraph 8 of Schedule 18)
- --------------------------------------------------------------------------------
9 Purchaser
- --------------------------------------------------------------------------------
10 Purchaser
- --------------------------------------------------------------------------------
11 Purchaser
- --------------------------------------------------------------------------------
12 Purchaser
- --------------------------------------------------------------------------------
13 ICI
- --------------------------------------------------------------------------------
20.4 If either Vendor or any member of its Group incurs any expenditure which
is to be borne by the Purchaser under the terms of this Agreement, then the
parties shall procure that, as soon as reasonably practicable after Closing, the
Purchaser shall reimburse the relevant members of their respective Groups for
the costs and expenses so incurred.
20.5 The Purchaser shall pay all costs and expenses (including, without
limitation, any stamp or other documentary or transaction duties and other
transfer taxes) resulting from the transfer to it of the Business IPR, save for
any incremental costs and expenses which are incurred by the Purchaser or any
other member of the Purchaser's Group as a result of any of the Registered
Rights not having been registered in the name of the correct registered
proprietor or applicant within the relevant Vendor's Retained Group as at
Closing, which incremental costs shall promptly be reimbursed to the Purchaser
by the relevant Vendor.
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Performance by Group Members
21.1 Each party shall procure (in respect of any member of its Group which is
not wholly-owned, only insofar as it is able) that the members of its Group
perform:
(a) all obligations under this Agreement which are expressed to relate to
members of its respective Group; and
(b) all obligations under any agreement entered into by any member of its
Group pursuant to this Agreement (including, without limitation, all of
the Transaction Agreements).
The liability of a party under this clause 21 shall not be discharged or
impaired by any amendment to or variation of this Agreement, any release of or
granting of time or other indulgence to any member of its Group or any third
party or any other act, event or omission which but for this clause would
operate to impair or discharge the liability of such party under this clause 21.
21.2 ICI Polyurethanes (Asia Pacific) Pte Ltd is party to a letter agreement
dated 8 December 1998, a copy of which is contained in the Data Room at
Reference FS6/30/3. The Purchaser undertakes to ICI that it shall be bound by
the terms of the said letter agreement and ICI hereby agrees that it shall
provide the Purchaser with all reasonable assistance in implementing such letter
agreement.
Announcements
22.1 From the date of this Agreement until Closing or termination of this
agreement no formal public announcement or press release in connection with the
signature or subject matter of this Agreement shall (subject to clause 22.2) be
made or issued by or on behalf of any party or any member of its Group upon the
signing of this Agreement or at any time between the date hereof and Closing
(or such other date, if any, upon which this Agreement terminates in accordance
with clause 4) without the prior written approval of the other parties (such
approval not to be unreasonably withheld or delayed).
22.2 If a party has an obligation to make or issue any announcement required by
law or by any stock exchange or by any governmental authority, the relevant
party shall give the other parties every reasonable opportunity to comment on
any announcement or release before it is made or issued (provided that this
shall not have the effect of preventing the party making the announcement or
release from complying with its legal and/or stock exchange obligations).
Page 126
22.3 No formal public announcement or press release in relation to the
termination of this Agreement shall be made or issued by or on behalf of any
party or any member of its Group save that ICI may make such announcement as is
required by applicable law and regulations containing the minimum amount of
information necessary to comply with the relevant requirements. HSCC may make
an announcement in relation to such termination provided that it contains only
the issues addressed in ICI's announcement to a level of detail which is
consistent with that in ICI's announcement. ICI and HSCC shall each give the
other every reasonable opportunity to comment on the respective announcement
referred to above (provided that this could not have the effect of preventing
ICI from complying with its obligations under applicable law and regulations).
Restrictions on the vendors
23.1(A) ICI undertakes to the Purchaser that it shall not, and shall procure
that each other member of its Retained Group shall not, for a period of five
years from the date hereof, carry on or be engaged in or control any business
which competes directly or indirectly with the ICI Business and/or the PO/MTBE
Business as conducted immediately prior to Closing in the countries in which
either of the ICI Business or the PO/MTBE Business, respectively, is carried on
at Closing.
23.1(B) If, at any time on or after the expiry of three years after Closing,
there ceases to be any member of ICI's Group holding, directly or indirectly,
any shareholding or other membership interest (other than Class A Shares issued
by a Subsidiary of the Purchaser as referred to in paragraph 1 of Schedule 18)
(membership interest) in the Purchaser or any member of the Purchaser's Group or
any holding company of the Purchaser, the undertaking set out in clause 23.1(A)
above shall terminate and, in replacement therefor, ICI undertakes to the
Purchaser that it shall not, and shall procure that each other member of its
Retained Group shall not, until the expiry of two years after it ceases to hold,
directly or indirectly, such membership interest, carry on or be engaged in or
control any business which competes directly or indirectly with the ICI Business
and/or the PO/MTBE Business as conducted at the time there ceases to be any
member of ICI's Group holding, directly or indirectly, such membership interest,
in the countries in which either of the ICI Business or the PO/MTBE Business,
respectively, is carried on at such time.
23.1(C) Nothing in clause 23.1(A) or (B) shall prevent any member of ICI's Group
from:
Page 127
(a) carrying on or being engaged in or economically interested in any business,
(not being part of the ICI Business), which, in the case of clause 23.1(A),
at the time of Closing or, in the case of clause 23.1(B), at the time ICI
ceases to hold, directly or indirectly, a membership interest in the
Purchaser or any member of the Purchaser's Group or any holding company of
the Purchaser, it carries on or is engaged in or economically interested in
or any reasonable extension or development thereof. For the avoidance of
doubt, it is agreed that neither the manufacture nor the sale of
Isocyanates is a reasonable extension or development of any business which
any member of ICI's Group currently carries on or is engaged in or
economically interested in; provided however that, nothing contained in
this clause 23 shall operate to prevent any member of ICI's Group from
continuing to purchase Isocyanates for formulation by ICI's Group into
systems sold by ICI's Group within the fields of coatings, adhesives,
sealants, encapsulants and paper. For the purposes of this clause 23,
Isocyanates means those isocyanates described in subparagraphs (iv) to
(vii) of the definition of "Polyurethanes Business" together with
hexamethylenediisocyanate and isophoronediisocyanate;
(b) carrying on or being engaged in or economically interested in any business
of a like nature to the whole or any part of the Polyurethanes Business,
the Relevant Petrochemicals Business, the Tioxide Business or the PO/MTBE
Business after such time as the Purchaser has ceased and indicated an
intention permanently to cease carrying on or being engaged or economically
interested in a substantial part of the relevant one of such businesses, as
the case may be, provided that this sub-clause (b) shall only apply if the
part of the relevant one of such businesses, as the case may be, to be
continued by the Purchaser is insignificant in the context of the relevant
one of such businesses taken as a whole;
(c) being the holder of shares (conferring not more than 5 per cent. of the
votes which would normally be cast at a general meeting of that company) or
debentures or other securities listed, quoted or dealt in on any securities
or investment exchange or quotation system of a company which is engaged in
any business of a like nature to the whole or any part of the businesses
referred to in clause 23.1(A) or clause 23.1(B);
(d) acquiring by acquisition or merger the whole or any part of a business that
includes activities the carrying on of which would otherwise amount to a
breach of the undertakings contained in clause 23.1(A)
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and clause 23.1(B) if the turnover of such activities does not exceed the
greater of $150 million per annum or 15 per cent. of the aggregate turnover
of the business concerned;
(e) throughout the period during which ICI retains any interest in the Olefins
Manufacturing Business, carrying on the Olefins Manufacturing Business in
accordance with the Olefins Agreements (as defined in the Co-operation
Agreement) and the Co-operation Agreement, provided that, on any disposal
of its interest in the Olefins Manufacturing Business, the undertakings in
clause 23.1(A) and clause 23.1(B) shall, after such disposal, apply in
accordance with the entirety of this clause 23;
(f) continuing to hold interests in businesses to which clause 16 or Schedule
16 apply.
23.2(A) HSCC undertakes to the Purchaser that it shall not, and shall procure
that each other member of its Retained Group shall not, for a period of five
years from the Closing Date or until the date on which ICI ceases to hold,
directly or indirectly, any membership interest in the Purchaser, whichever
shall be the earlier, carry on or be engaged in or control any business which
competes directly or indirectly with the ICI Business and/or the PO/MTBE
Business as conducted immediately prior to Closing in the countries in which
either of the ICI Business or the PO/MTBE Business, respectively, is carried on
at Closing.
23.2(B) Nothing in sub-clause (A) shall prevent any member of the HSCC Group
from:
(a) carrying on or being engaged in or economically interested in any business,
(not being part of the PO/MTBE Business), which at Closing it carries on or
is engaged in or economically interested in or any reasonable extension or
development thereof;
(b) carrying on or being engaged in or economically interested in any business
of a like nature to the whole or any party of the Polyurethanes Business,
the Relevant Petrochemicals Business, the Tioxide Business or the PO/MTBE
Business after such time as the Purchaser ceased and indicated an intention
permanently to cease carrying on or being engaged or economically
interested in a substantial part of the relevant one of such businesses, as
the case may be, provided that this sub-clause (b) shall only apply if the
part of the relevant one of such businesses, as the case may be, to be
continued by the Purchaser is
Page 129
insignificant in the context of the relevant one of such businesses taken
as a whole;
(c) being the holder of shares (conferring not more than 5 per cent. of the
votes which would normally be cast at a general meeting of that company) or
debentures or other securities listed, quoted or dealt in on any securities
or investment exchange or quotation system of a company which is engaged in
any business of a like nature to the whole or any part of the businesses
referred to in clause 23.2(A);
(d) acquiring by acquisition or merger 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 clause 23.2(A) if the turnover of
such activities does not exceed the greater of $150 million per annum or 15
per cent. of the aggregate turnover of the business concerned;
(e) continuing to hold interests in businesses to which clause 16 or Schedule
16 apply.
23.3 Each Vendor undertakes that it shall not, and shall procure that each other
member of its Group shall not for as long as it remains such a member, directly
or indirectly, and for one year thereafter, solicit or entice away from any
member of the Purchaser's Group any Senior Employee or persuade any such Senior
Employee to leave the employment of any member of the Purchaser's Group except
that this shall not prevent any member of either Retained Group from offering
employment to:
(a) any Senior Employee whose employment with the relevant member of the
Purchaser's Group has then ceased or who has given (or received) notice
terminating such employment; and
(b) any Senior Employee who responds to any public recruitment advertisement
placed by or on behalf of that member.
23.4 ICI shall not and shall procure that no member of its Retained Group shall
do or authorise any other person to use any trade mark, trade name or business
name which Relates to the ICI Business as at the Closing Date in a manner which
is likely to cause confusion.
23.5 HSCC shall not and shall procure that no member of its Retained Group
shall do or authorise any other person to use any trade mark, trade name or
business name which Relates to the PO/MTBE Business as at the Closing Date in a
manner which is likely to cause confusion.
Page 130
23.6 HSCC shall not and shall procure that no member of its Retained Group
shall use or disclose (or authorise any person to use or disclose) within the
period of 5 years after Closing any of the confidential customer lists, sales,
marketing and promotional literature, business plans and forecasts comprised in
the Business Information to the extent that the same are used exclusively in the
PO/MTBE Business as at Closing.
23.7 ICI undertakes to the Purchaser that it shall not, and shall procure that
no member of its Retained Group shall, use or disclose (or authorise any person
to use or disclose) within the period of 5 years after Closing or, if longer,
until the date which is two years after there ceases to be any member of ICI's
Group holding, directly or indirectly, any shareholding or other membership
interests (other than Class A Shares issued by a Subsidiary of the Purchaser, as
referred to in clause 1 of Schedule 18) in the Purchaser or any member of the
Purchaser's Group or any holding company of the Purchaser, any of the
confidential customer lists, sales, marketing and promotional literature,
business plans and forecasts comprised in the Business Information to the extent
that the same are used exclusively in the ICI Business as carried on at Closing.
23.8 The obligations in clauses 23.6 and 23.7 shall not apply to any
information which: (i) is already part of the public domain; or (ii) after the
Closing Date becomes part of the public domain otherwise than as a result of a
breach of clause 23.6 or 23.7; or (iii) is independently developed by the
relevant party or lawfully acquired by the relevant party from a third party.
23.9 Each undertaking contained in this clause shall be construed as a separate
undertaking and if one or more of the undertakings is held to be against the
public interest or unlawful or in any way an unreasonable restraint of trade,
the remaining undertakings shall continue to bind each Vendor.
Entire Agreement
24.1 This Agreement, the Ancillary Agreements, the Confidentiality Agreements,
the Disclosure Letters and all other contracts, agreements and arrangements to
be entered into pursuant to the terms of this Agreement (together the Relevant
Agreements) together constitute the whole and only agreement between the parties
relating to the sale and purchase of the ICI Business and the PO/MTBE Business
and any prior drafts, agreements, undertakings, representations, warranties and
arrangements of any nature whatsoever, whether or not in writing, relating
thereto are superseded and extinguished.
Page 131
24.2 Each party acknowledges and agrees (for itself and on behalf of each other
member of its Group) with each other party (for itself and as agent for each
other member of its Group and for any of its or their respective Related
Persons) that:
(a) it does not rely on and has not been induced to enter into this Agreement
or any other Relevant Agreement the basis of any assurance, representation
or warranty (express or implied) made or given by or on behalf of any
member of either of the other two parties' Groups or any of their
respective Related Persons (save as may be expressly agreed with the
relevant Related Person) other than those expressly set out in this
Agreement or in such other Relevant Agreement or document expressly
referred to herein or, to the extent that it has so relied and/or been so
induced, it has (in the absence of fraud) no rights or remedies in relation
thereto and shall make no claim in relation thereto against such parties;
(b) no member of either of the other two parties' Groups, or any of their
respective Related Persons, owes any duty of care to any member of that
party's Group other than those expressly set out in this Agreement or any
other Relevant Agreement; and
(c) any warranty or other rights which may be implied by law in any
jurisdiction in relation to the sale of the Sale Shares, the Local
Businesses the Business IPR in such jurisdiction shall be excluded or, if
incapable of exclusion, irrevocably waived and it agrees to indemnify each
member of either of the other two parties' Groups and their respective
Related Persons in respect of any Costs arising or incurred as a result of
claims under any such implied warranties and other rights by that party or
any other member of its Group or their respective successors in title (in
the case of the Purchaser, including without limitation any providers of
finance to the Purchaser).
24.3 This clause shall not exclude any liability for, or remedy in respect of,
fraudulent misrepresentation by a party or any of its Related Persons or where
it is otherwise unlawful to do so.
24.4 The parties hereby agree that the provisions of this Agreement shall
prevail over the terms of any local sale agreement in any jurisdiction and that
any terms of any such local sale agreement which are adverse to the position of
any party or member of its Group pursuant to this Agreement shall not be given
effect as between the parties to this Agreement and shall not operate to reduce
or increase in any way the Purchaser's rights or obligations hereunder
Page 132
or to reduce or increase either Vendor's rights or obligations hereunder (or the
rights or obligations of any member of their respective Groups).
Variation
25.1 No variation of this Agreement (or of any of the documents referred to in
this Agreement) shall be valid unless it is in writing and signed by or on
behalf of each of the parties to it. The expression "variation" shall include
any variation, supplement, deletion or replacement however effected.
25.2 Any variation prior to Closing which would have a material adverse impact
on the position of the providers of finance under the Financing Agreements (in
relation to their rights and obligations thereunder) shall only be made with the
prior consent of Bankers Trust Company and Goldman Sachs Credit Partners L.P.
Assignment
26.1 No party shall be entitled to assign the benefit of any provision of this
Agreement without the prior written approval of the other party except that:
(a) the Purchaser may, upon giving written notice to each party, 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 Permitted Assignee) subject to the
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
Vendors) to another member of the Purchaser's Group;
(b) the Purchaser may, upon giving written notice to each party, assign the
benefit of this Agreement in whole or in part to a person to whom it
transfers the ICI Business (or any part thereof) at the direction of the
providers of finance or their representatives pursuant to the Financing
Agreements and any such successor may effect assignments (including the
benefit of this clause) in the same manner;
(c) the Purchaser may, upon giving written notice to each party, assign the
benefit of this Agreement in whole to the providers of finance or their
representative(s) pursuant to the Financing Agreements and any
Page 133
such providers of Finance or representatives may effect assignments
(including the benefit of this clause) in the same manner,
PROVIDED THAT:
(1) the assignee (including successors) undertakes in writing to the
Vendors to be bound by and (where applicable) to perform all the
relevant obligations and limitations of the Purchaser under this
Agreement in relation to the benefits assigned;
(2) any such assignment (including to successors) shall for the
avoidance of doubt, be subject to all limitations contained herein,
including, without limitation, limitations on Claims;
(3) if there is an assignment (including to successors) of part of the
benefit of this Agreement, such assignment shall only be effective
if: (A) such assignee(s) and the Purchaser shall have first
appointed a single person (the Agent, who may be the Purchaser or
one of the assignees) to be their agent for the purpose of bringing
claims against the Vendor, and informed the Vendor in writing of
the identity of such Agent; and (B) all claims by the Purchaser or
any of the assignees under this Agreement against the Vendor shall
be made by the Agent;
Any purported assignment in contravention of this clause shall be void.
26.2 If any assignment is made pursuant to clause 26.1 above, the liability of
ICI under this Agreement shall be no greater, and no less, than such liabilities
would have been had such assignment not occurred.
Severability
27. If any provision of this Agreement is held to be invalid or unenforceable,
then such provision shall (so far as it is invalid or unenforceable) be given no
effect and shall be deemed not to be included in this Agreement but without
invalidating any of the remaining provisions of this Agreement.
Counterparts
28. This Agreement may be executed in any number of counterparts and by the
parties to it on separate counterparts, each of which is an original but all of
which together constitute one and the same instrument.
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Notices
29.1 Any notice or other communication to be given by one party to another
under, or in connection with, this Agreement shall be in writing and signed by
or on behalf of the party giving it. It shall be served by sending it by fax to
the number set out in clause 29.2, or delivering it by hand to the address set
out in clause 29.2 and in each case marked for the attention of the relevant
party set out in clause 29.2 (or as otherwise notified from time to time in
accordance with the provisions of this clause 29). Any notice so served by hand
to or fax shall be deemed to have been duly given:
(a) in the case of delivery by hand, when delivered;
(b) in the case of fax, when received;
provided that in each case where delivery by hand or by fax occurs after 6pm on
a Business Day or on a day which is not a Business Day, service shall be deemed
to occur at 9am on the next following Business Day.
References to time in this clause are to local time in the country of the
addressee.
29.2 The addresses and fax numbers of the parties for the purpose of clause
29.1 are as follows:
ICI
Address: Imperial Chemical House
Millbank
London SW1P 3JF
United Kingdom
Fax: 0171 798 5834
For the attention of: The Company Secretary
HSCC
Address: 500 Huntsman Way
Salt Lake City
Utah 84108
USA
Fax: 001 801 584 5781
For the attention of: President
Page 135
With a copy to: General Counsel (fax: 001 801 584 5782)
HIC
Address: 500 Huntsman Way
Salt Lake City
Utah 84108
USA
Fax: 001 801 584 5781
For the attention of: President
With a copy to: General Counsel (fax: 001 801 584 5782)
Purchaser
Address: 500 Huntsman Way
Salt Lake City
Utah 84108
USA
Fax: 001 801 584 5782
For the attention of: Chief Executive Officer
With a copy to: General Counsel (fax: 001 801 584 5782)
29.3 A party may notify the other parties to this Agreement of a change to its
name, relevant addressee, address or fax number for the purposes of this clause
29, provided that, such notice shall only be effective on:
(a) the date specified in the notice as the date on which the change is to take
place; or
(b) if no date is specified or the date specified is less than five (5)
Business Days after the date on which notice is given, the date following
five (5) Business Days after notice of any change has been given.
India and Pakistan
30. The parties have agreed that the businesses conducted by ICI India and ICI
Pakistan are not to be transferred to the Purchaser. ICI and HSCC nevertheless
each undertake to use reasonable endeavours to ensure that as soon as reasonably
practicable each of those companies separately enter into a commercial
arrangement with the Purchaser or a member of the Purchaser's Group which would
create a relationship between the Purchaser's Group
Page 136
relating to the Polyurethanes Business and that company the economic effect of
which on the Purchaser's Group on the one hand and on ICI India or, as the case
may be, ICI Pakistan on the other hand is substantially the same as the economic
effect which the existing arrangements between the members of ICI's Group and
ICI India or, as the case may be, ICI Pakistan have at the date of this
Agreement.
Governing law, jurisdiction and Service of Process
31.1 This Agreement and the relationship between the parties shall be governed
by, and interpreted in accordance with, English law.
Jurisdiction
31.2 All parties agree that the Courts of England are to have exclusive
jurisdiction to settle any dispute (including claims for set off and
counterclaim) which may arise in connection with the creation, validity, effect,
interpretation or performance of, or the legal relationships established by this
Agreement or otherwise arising in connection with this Agreement and for such
purposes irrevocably submit to the jurisdiction of the English Courts.
Service of process
31.3 Each of HSCC and the Purchaser shall at all times maintain an agent for
service of process and any other documents in proceedings in England. The agent
for each of HSCC and the Purchaser shall be Trusec Limited currently of 35
Basinghall Street London. Any writ, judgment or other notice of legal process
shall be sufficiently served on HSCC or the Purchaser if delivered to its agent
at its address for the time being. If, for any reason the agent for HSCC or the
Purchaser ceases to act as such, HSCC or the Purchaser as the case may be shall
promptly appoint another such agent with an address in England and so advise
ICI. Failing such appointment and notification, ICI shall be entitled to
appoint an agent on behalf of either HSCC or the Purchaser at the expense of
either HSCC or the Purchaser. A copy of any document served on the agent of
HSCC or the Purchaser shall also be sent to HSCC or the Purchaser (as the case
may be) in accordance with the provisions of clause 29.
Exercise of Rights and Remedies
32.1 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.
Page 137
32.2 The single or partial exercise of any right, power or remedy provided
under this Agreement or any document referred to in it shall not preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy except where expressly stated in this Agreement.
Confidentiality
33.1 Subject to clauses 33.2 and 33.3, each of the Confidentiality Agreements
shall remain in full force and effect notwithstanding the execution of this
Agreement, provided that:
(a) ICI or, as the case may be, HSCC shall be entitled to disclose information
to any of its Representatives (as defined in the First Confidentiality
Agreement) in the period between the execution of this Agreement and
Closing to enable them to familiarise themselves with the operation,
management and administration of the PO/MTBE Business or, as the case may
be, the ICI Business in anticipation of Closing subject to such disclosure
being made on the terms of the First Confidentiality Agreement and/or the
Second Confidentiality Agreement;
(b) neither ICI nor HSCC shall be entitled to require the other to procure the
return or destruction of information pursuant to clause 2.3 of the First
Confidentiality Agreement or clause 2.3 or 3.3 of the Second
Confidentiality Agreement save in circumstances where this Agreement has
been terminated in accordance with its terms;
(c) nothing in clause 2.2 of the First Confidentiality Agreement or clause 2.2
or 3.2 of the Second Confidentiality Agreement shall prevent ICI or, as the
case may be, HSCC disclosing information to the extent reasonably necessary
or desirable in order to comply with its respective obligations under
clauses 4.3 and 4.4;
(d) nothing in clause 3 of the First Confidentiality Agreement or clause 2.5 or
3.5 of the Second Confidentiality Agreement shall in any way affect or
prejudice any warranty, representation, covenant, undertaking or assurance
contained in this Agreement or any agreement to be entered into pursuant to
this Agreement; and
(e) the provisions of clauses 4 and 6 of the First Confidentiality Agreement
and clauses 2.6, 2.8, 3.6 and 3.8 of the Second Confidentiality Agreement
shall cease to have effect (but without prejudice to any antecedent breach
thereof) save in circumstances where this Agreement has been terminated in
accordance with its terms.
Page 138
33.2 Upon Closing, each of the Confidentiality Agreements shall be terminated
save to the extent that it relates to any business other than the ICI Business
or the PO/MTBE Business (but without prejudice to any antecedent breach
thereof).
33.3 In the event that this Agreement is terminated in accordance with its
terms, each of the Confidentiality Agreements shall remain in full force and
effect and the proviso to clause 33.1 shall cease to have effect.
Aniline Pipe
34. The provisions of Schedule 23 shall apply in relation to the Aniline Pipe
at Wilton.
Page 139
SCHEDULE 1
COMPANY AND SHARE DETAILS
Part I: Share Sales on Closing
Polyurethanes
- ------------------------------------------------------------------------------------------------------------------------
Share Selling Company Name of Company Number and Class of Designated Purchaser Jurisdiction
shares owned and to be
sold (if applicable)
- ------------------------------------------------------------------------------------------------------------------------
ICI PLC ICI Europe Limited 100 Ordinary Shares of Huntsman ICI England
(Pounds)1 each Polyurethanes (UK) Ltd
- ------------------------------------------------------------------------------------------------------------------------
ICI PLC Impkemix (No 46) Ltd 2 Ordinary Shares of Huntsman ICI England
(Pounds)1 each Polyurethanes (UK) Ltd
- ------------------------------------------------------------------------------------------------------------------------
Tioxide
- -----------------------------------------------------------------------------------------------------------------
Share Selling Company Name of Company Number and Class of Designated Purchaser Jurisdiction
shares owned and to be
sold (if applicable)
- -----------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd 280,999,000 fixed rate HIC England
preference shares of
(Pounds)1 each
100 ordinary shares of
- -----------------------------------------------------------------------------------------------------------------
Page 140
- ------------------------------------------------------------------------------------------------------------
(Pounds)1 each
- ------------------------------------------------------------------------------------------------------------
Page 141
Part II: Wholly owned subsidiary undertakings
Part A: Subsidiary Undertakings at the date of this Agreement and on Closing
Polyurethanes
- ----------------------------------------------------------------------------------------------------------------------------------
Current Parent Shareholder[s] Subsidiary Undertakings Jurisdiction of Incorporation of
Subsidiary Undertaking
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Omicron BV ICI Holland BV ICI IOTA BV Netherlands
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Theta BV ICI Polyurethanes (China) ICI Polyurethanes (China) Ltd. China
Holdings BV
- ----------------------------------------------------------------------------------------------------------------------------------
Tioxide
- ----------------------------------------------------------------------------------------------------------------------------------
Current Parent Shareholder[s] Subsidiary Undertakings Jurisdiction of Incorporation of
Subsidiary Undertaking
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd Tioxide Europe NV/SA Belgium
Tioxide Europe SA (France)
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd Tioxide Canada Inc Canada
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd Tioxide Europe Ltd England
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd Tioxide Overseas Holdings Ltd England
- ----------------------------------------------------------------------------------------------------------------------------------
Page 142
- ----------------------------------------------------------------------------------------------------------------------------------
Current Parent Shareholder[s] Subsidiary Undertakings Jurisdiction of Incorporation of
Subsidiary Undertaking
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd Tioxide Group Services Ltd England
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd (5 shares Tioxide Europe SA France
are held by Tioxide Group Ltd
directors as nominees for
Tioxide Group Ltd)
Tioxide Europe Ltd
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd Tioxide Europe SRL Italy
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd British Titan Products Republic of South Africa
Southern Africa (Proprietary)
Ltd
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd Tioxide Europe AB Sweden
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Group Ltd Tioxide Europe Titanium Turkey
(500 Ordinary shares are held Pigmentleri Ticaret Ltd Sirketi
by Mustafa Hayri Baratcru as
Nominee for Tioxide Group Ltd)
- ----------------------------------------------------------------------------------------------------------------------------------
Page 143
Part B: Additional Subsidiary Undertakings on Closing
Polyurethanes
- ----------------------------------------------------------------------------------------------------------------------------------
Current Parent Subsidiary Undertaking Jurisdiction of Incorporation of
Subsidiary Undertaking
- ----------------------------------------------------------------------------------------------------------------------------------
Gruppo ICI Mexico SA DE CV ICI Mex SA DE [C]V Mexico
Atlas DE Mexico SA DE CV
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Omicron BV ICI Holland BV Netherlands
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Theta BV ICI Polyurethanes (China) Netherlands
Holdings BV
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Omicron BV Chemical Blending Holland BV Netherlands
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Theta BV ICI Polyurethanes (Asia Singapore
Pacific) Pte Ltd
- ----------------------------------------------------------------------------------------------------------------------------------
Tioxide
- ----------------------------------------------------------------------------------------------------------------------------------
Current Parent Subsidiary Undertaking Jurisdiction of Incorporation of
Subsidiary Undertaking
- ----------------------------------------------------------------------------------------------------------------------------------
Page 144
- ----------------------------------------------------------------------------------------------------------------------------------
ICI American Holdings Inc. Tioxide Americas Inc. Delaware, USA
- ----------------------------------------------------------------------------------------------------------------------------------
Deutsche ICI GmbH Tioxide Europe GmbH Germany
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Omicron BV Tioxide (Malaysia) Sdn Bhd Malaysia
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Espana SA Tioxide Europe SA Spain
- ----------------------------------------------------------------------------------------------------------------------------------
Please note that this list is not exhaustive and does not include newcos being
established pursuant to Schedules 4 and 18
Page 145
Part III: Controlled Joint Ventures
Tioxide
- ----------------------------------------------------------------------------------------------------------------------------------
Current Parent Name of Company Number and Class of Jurisdiction Immediate ICI
shares owned and to Parent
be sold (if
applicable)
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Tioxide Southern Africa - Republic of South British Titan
(Proprietary) Ltd Africa Products Southern
Africa
(Proprietary) Ltd.
- ----------------------------------------------------------------------------------------------------------------------------------
Page 146
Part IV: Non-Controlled Joint Ventures
Polyurethanes
- ----------------------------------------------------------------------------------------------------------------------------------
Current Parent Name of Company Number and Class of Jurisdiction Immediate Parent
shares owned and to be
sold (if applicable)
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Nippon Polyurethane 750,000 Ordinary Shares Japan ICI PLC
Industry Co Ltd of (Yen)500 each
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Omicron BV Steamelec BV (general - Netherlands ICI Holland BV
partner of Eurogen CV)
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Omicron BV Eurogen CV - Netherlands ICI Iota BV
This is a limited
partnership.
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Arabian Polyol Co Ltd 12,800 Ordinary Shares Saudi Arabia ICI PLC
of SAR 100 each
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Americas Inc. Rubicon Inc. 400,000 Common Class B Louisiana, USA ICI Americas Inc.
Shares of USD 1 each
- ----------------------------------------------------------------------------------------------------------------------------------
Page 147
Tioxide
- ----------------------------------------------------------------------------------------------------------------------------------
Current Parent Name of Company Number and Class of Jurisdiction Immediate ICI Parent
shares owned and to be
sold (if applicable)
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC Pacific Iron Products - Malaysia Tioxide (Malaysia) Sdn Bhd
Sdn Bhd
ICI Omicron BV
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Espana SA Oligo S.A. - Spain Tioxide Europe SA
- ----------------------------------------------------------------------------------------------------------------------------------
ICI American Holdings Louisiana Pigment - Delaware, USA Tioxide Americas Inc.
Inc. Company L.P.
This is a limited
partnership.
- ------------------------------------------------------------------------------------------------------------------------------
Page 148
SCHEDULE 2
LOCAL BUSINESSES
BUSINESS ASSETS
Polyurethanes
- ----------------------------------------------------------------------------------------------------------------------------------
Business Vendor Jurisdiction in which assets are Designated Purchaser
located
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC (other than in relation to Business UK Huntsman ICI Polyurethanes (UK) Ltd
IPR and Business Information)
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Americas Inc. USA (and others in respect of The Purchaser
Business IPR)
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC (in relation to Business IPR and Various HIC
Business Information only)
- ----------------------------------------------------------------------------------------------------------------------------------
Relevant Petrochemicals
- ----------------------------------------------------------------------------------------------------------------------------------
Business Vendor Jurisdiction in which assets are Designated Purchaser
located
- ----------------------------------------------------------------------------------------------------------------------------------
ICI Chemicals and Polymers Limited UK (and others in respect of Huntsman ICI Petrochemicals (UK) Ltd
Business IPR)
- ----------------------------------------------------------------------------------------------------------------------------------
ICI PLC (in relation to Business IPR only) Various Huntsman ICI Petrochemicals (UK) Ltd
- ----------------------------------------------------------------------------------------------------------------------------------
Page 149
Please refer to Schedules 4, 18 and 22 for details of assets otherwise to be
transferred.
Page 150
SCHEDULE 3
[Agreed deletion]
Page 151
SCHEDULE 4
CLOSING
PART 1
Closing Steps
The parties to the Agreement agree that this Part 1 of Schedule 4 reflects the
intention of the parties as at the date of this Agreement. It is expressly
agreed that the parties may agree amendments to the provisions of this Part 1 of
Schedule 4 and any consequential amendments required to any other provisions of
this Agreement.
At Closing, the following steps will (unless otherwise stated) occur in the
order listed and in accordance with the terms of this Agreement, except that (i)
the steps in paragraphs 2 and (if applicable) 2A shall occur simultaneously; and
(ii) the steps in paragraphs 4 to 10 will occur simultaneously.
Words and expressions defined in Schedule 18 shall have the same meaning in this
Schedule.
Funding of the Purchaser
1. HSCC will transfer the Business Assets comprised in the PO/MTBE Business
(the PO/MTBE Assets) (valued at $900,000,000) to the Purchaser in exchange for
the issue by the Purchaser to HSCC of such number of membership units of the
Purchaser as shall result in HSCC holding in aggregate 600 membership units of
the Purchaser. At the Purchaser's option, the Purchaser, HSCC and Huntsman
Specialty Chemicals Holdings Corporation may enter into a novation agreement in
the agreed form by which the Purchaser shall, subject to completion of the
subscription described in paragraph 2A below, assume all or some part of the
obligation to pay the outstanding principal and accrued interest under a
promissory note in favour of Huntsman Specialty Chemicals Holdings Corporation
(the Promissory Note).
2. ICI Americas Inc. (IAI) will transfer its Business Assets comprised in the
Polyurethanes Business and its Joint Venture Interest in Rubicon, Inc. (the
Polyurethanes US Assets) (valued at $520,000,000) and $500 to the Purchaser, in
exchange for 300 membership units of the Purchaser.
2A. The subscription by each of BT Capital Investors, L.P. (BTCI) and Chase
Equity Associates, L.P. (CEA) for the number of membership units
Page 152
which is four ninths of one hundred membership units, in each case for an
aggregate subscription price of $40,000,074.22, and the subscription by The
Goldman Sachs Group, Inc. (GSG) for the number of membership units which is one
ninth of one hundred units for an aggregate subscription price of $10,000,018.56
(together the Equity Investor Closing), shall take place in accordance with the
terms of the Subscription Agreement (the aggregate of such sums to be subscribed
by BTCI, CEA and GSG, being $90,000,167, being the Investor Subscriptions). If
any or all of BTCI, CEA and GSG (each an Equity Investor) do not subscribe for
the relevant number of membership units at Closing, Closing shall nevertheless
take place, but on the basis that the following amendments are made to the
parties' Closing obligations as set out in this Schedule 4:
(a) under paragraph 1, HSCC will, in addition to receiving such number of
membership units of the Purchaser as shall result in HSCC holding in
aggregate 600 membership units of the Purchaser, receive those membership
units of the Purchaser which would have been subscribed for by the Equity
Investor(s) who have not subscribed for membership units at Closing (the
Relevant Investors);
(b) under paragraph 1, the amount (if any) of outstanding principal and accrued
interest under the Promissory Note which the Purchaser assumes the
obligation to pay shall not exceed the amount in dollars (the Invested Sum)
which is the aggregate of the subscription prices paid by those Equity
Investors who have subscribed for membership units at Closing (for the
avoidance of doubt, the Purchaser shall not assume any obligations under
the Promissory Note if none of the Equity Investors subscribe for
membership units at Closing) and, if the Purchaser has assumed a greater
obligation under paragraph 1 than is permitted by this sub-paragraph (b),
the relevant entities shall enter into a novation agreement pursuant to
which HSCC shall assume such part of the obligation as exceeds the amount
permitted by this sub-paragraph (b);
(c) the cash sum to be transferred by the Purchaser under paragraph 5 shall be
reduced by the amount in dollars (the Shortfall) which is the aggregate of
the subscription prices which the Relevant Investors would have paid under
the Subscription Agreement had they subscribed for membership units at
Closing;
(d) under paragraph 6A, HIC will only discharge the obligations (if any) under
the Promissory Note that it has assumed under sub-paragraph (b) above;
Page 153
and the parties shall, prior to its execution, make such modifications to the
agreed form of the LLC Agreement as are necessary to remove any reference to the
rights and participation of the Relevant Investors.
3. Agreed Deletion.
Borrowing and Distribution by the Purchaser
4.(a) The Purchaser will issue Senior Discount Notes (the A Notes) to ICI
Finance plc for an aggregate consideration of $242,700,000 pursuant to an
indenture in substantially the same form as the agreed form Senior
Discount Notes Indenture containing only such revisions as are
contemplated in Section 9.7 thereof and otherwise such other changes as
are necessary to provide for the form of public or private offering and
depository mechanics selected by ICI in connection with the resale by ICI
Finance plc of such A Notes and containing the terms set forth in the
agreed form A Notes Termsheet.
(b) The Purchaser will issue the Subordinated Discount Notes due 2009 (the B
Notes) to ICI Finance plc for an aggregate consideration of $265,300,000
pursuant to an indenture in substantially the same form as the agreed form
Senior Discount Notes Indenture containing only such revisions as are
contemplated in Section 9.7 thereof and otherwise such other changes as
are necessary to provide for flexibility in the form of offering and
depository mechanics to be selected by ICI in connection with the resale
by ICI Finance plc of the Exchange Notes described in the agreed form B
Notes Term Sheet and containing the terms set forth in the agreed form B
Notes Term Sheet.
(c) The Purchaser and ICI Finance plc will execute and deliver (i) the
Registration Rights Agreement (the A Registration Rights Agreement) in the
form of the agreed form Registration Rights Agreement and (ii) the
Registration Rights Agreement (the B Registration Rights Agreement) in the
form of the agreed form Registration Rights Agreement except with such
revisions as contemplated in the agreed form B Notes Term Sheet.
5. The Purchaser will transfer all of its operating assets, consisting of the
PO/MTBE Assets, the Polyurethanes US Assets and $598,001,667, to HIC.
5A. Conditional on the Purchaser, HSCC, HIC and Huntsman Specialty Chemicals
Holdings Corporation having entered into a novation agreement pursuant to
paragraph 1, the Purchaser, HIC and Huntsman Specialty Chemicals Holdings
Corporation shall enter into a novation agreement in the
Page 154
agreed form by which HIC shall assume the obligations assumed by the Purchaser
pursuant to paragraph 1.
6. HIC will borrow an aggregate of $1,692,000,000 pursuant to the Senior
Credit Agreement entered into on the same date as this Agreement, and
$800,000,000 either (i) pursuant to the Senior Subordinated Credit Agreement
entered into on the same date as this Agreement; or (ii) from the sale of the
Senior Subordinated Notes to be issued pursuant to the Senior Subordinated
Indenture and sold to the initial purchasers pursuant to a purchase agreement.
6A. HIC will transfer an amount equal to the outstanding principal plus the
aggregate amount of interest accrued and outstanding as at Closing under the
Promissory Note to Huntsman Specialty Chemicals Holdings Corporation in
satisfaction of the obligations (if any) assumed by it under paragraph 5A and
HSCC shall thereupon procure the cancellation of the Promissory Note (or such
part thereof) with immediate effect.
7. HIC will distribute to the Purchaser:
(a) the sum of $520,000,000; plus
(b) the Investor Subscriptions less the aggregate of (i) the Shortfall and (ii)
the sum transferred by HIC pursuant to paragraph 6A (if any).
8. The Purchaser will distribute to HSCC $270,000,000 plus the amount of the
Investor Subscriptions less the aggregate of (i) the Shortfall and (ii) the sum
transferred by HIC pursuant to paragraph 6A (if any).
9. The Purchaser will distribute $250,000,000 to IAI.
10. HIC will transfer $1,473,639,501 to JV Finco.
The Purchases by HIC and Other Matters
11. HIC will transfer $343,989,155 to ICI as adjusted in accordance with the
provisions of clause 3.4 in exchange for the transfer to HIC of beneficial
interest (and procuring the transfer to HIC of the legal interest) in the issued
ordinary shares and the issued Preference Shares of TGL (but not the issued
Class A Shares of TGL).
12. HIC will transfer $200,000,000 to ICI in exchange for the Business IPR and
Business Information relating to the Polyurethanes Business.
13. Agreed deletion.
Page 155
14. HIC will transfer $115,474,000 to ICI in exchange for ICI's covenants
contained in clause 23 of this Agreement.
Prime Debt
15. JV Finco will transfer $161,427,181 to UK Holdings in exchange for a
$161,427,181 intercompany note which constitutes a normal commercial loan as
defined in Schedule 18 to the Taxes Act (the UK Holdings/JV Finco Intercompany
Note).
16A. JV Finco will transfer a total of $316,241,055 to Tioxide Americas Inc
(TAI), Tioxide Europe SA (France), Tioxide Europe Srl and ICI Holland BV, in
exchange for the issue of intercompany notes to JV Finco in the following
amounts:
(a) $111,928,656 in the case of TAI;
(b) $82,801,951 in the case of Tioxide Europe SA (France);
(c) $33,208,894 in the case of Tioxide Europe Srl; and
(d) $88,301,554 (non-interest bearing) in the case of ICI Holland BV.
The amounts to be transferred pursuant to this paragraph 16A are subject to
adjustment to mirror the intercompany indebtedness outstanding and to be repaid
pursuant to paragraph 17 below.
16B. UK Holdings will transfer a total of $161,427,181 to Tioxide Europe SA
(Spain) and ICI Holland BV in exchange for the issue of intercompany notes to UK
Holdings in the following amounts:
(a) $18,035,007 in the case of Tioxide Europe SA (Spain); and
(b) $143,392,174 in the case of ICI Holland BV.
The amounts to be transferred pursuant to this paragraph 16B are subject to
adjustment to mirror the intercompany indebtedness outstanding and to be repaid
pursuant to paragraph 17 below.
17. The Purchaser will procure that, on Closing, each of TAI, Tioxide Europe SA
(France), Tioxide Europe Srl, Tioxide Europe SA (Spain) and ICI Holland BV will
repay to ICI on behalf of itself, ICI Finance plc, ICI Omicron BV (Omicron), ICI
American Holdings Inc. (IAHI) and Mortar Investments International Limited (as
the case may be) the following sums, being in each case the estimated amount of
its Prime Debt:
Page 156
(a) $111,928,656 in the case of TAI;
(b) $82,801,951 in the case of Tioxide Europe SA (France);
(c) $33,208,894 in the case of Tioxide Europe Srl;
(d) $18,035,007 in the case of Tioxide Europe SA (Spain); and
(e) $231,693,728 in the case of ICI Holland BV.
The Prime Debt amounts shown above are indicative of the estimated inter-company
indebtedness in existence as at Closing. ICI shall use all reasonable
endeavours to procure that the Prime Debt amounts are no less than the figures
set out in this paragraph 17.
18. Dutch Mixer will issue a $88,301,554 intercompany note (the Dutch Mixer/JV
Finco Intercompany Note) to JV Finco in exchange for the $88,301,554 non-
interest bearing intercompany note from ICI Holland BV.
The Holdco Transfers
19. ICI Finance plc will transfer the amount referred to in paragraph 21 to
Huntsman ICI Polyurethanes (UK) Limited in exchange for an intercompany note in
that amount which is capable of being conveyed without UK stamp duty (the UK
Polyurethanes/ICI Finance Note).
20. ICI Finance plc will transfer the amounts referred to in paragraph 22 to
Huntsman ICI Petrochemicals (UK) Limited in exchange for an intercompany note in
that amount which is capable of being conveyed without UK stamp duty (the UK
Petrochemicals/ICI Finance Note).
21. When the step described in paragraph 11 above has occurred, Huntsman ICI
Polyurethanes (UK) Limited will transfer $364,100,000 (as adjusted to reflect
any adjustment made to such figure pursuant to clause 3.4) to ICI in exchange
for the remaining U.K. Business Assets of the Polyurethanes Business and the
Sale Shares in ICI Europe Ltd and Impkemix (No 46) Ltd.
22. When the step described in paragraph 11 above has occurred, Huntsman ICI
Petrochemicals (UK) Limited will transfer $80,000,000 (as adjusted to reflect
any adjustment made to such figure pursuant to clause 3.4) to ICI Chemicals and
Polymers Ltd (C&P) in exchange for the Business Assets (other than those
relating to the Olefins Manufacturing Business) held by C&P and it will also
transfer $200,000,000 to C&P as consideration for the Business Assets relating
to the Olefins Manufacturing Business.
Page 157
23. HIC will transfer $150,371,344 to TGL for the issue of $150,371,344 of
Preference Shares of TGL.
24. TGL will transfer $3,071,344 to IAHI in repayment of the TGL/IAHI Temporary
Note.
25. TGL will transfer $147,300,000 to UK Holdings for the issue of $95,745,000
of additional UK Holdings Class 1 ordinary shares and $51,555,000 of additional
UK Holdings Class 2 ordinary shares.
26. JV Finco will transfer $995,971,265 to UK Holdings in exchange for an
increase of $995,971,265 in the UK Holdings /JV Finco Intercompany Note, for a
total of $1,157,398,446 (which shall constitute a normal commercial loan as
defined in Schedule 18 to the Taxes Act).
The Holdco Assignments
27. UK Holdings will transfer $364,100,000 (as may have been adjusted to
reflect any adjustment made pursuant to clause 3.4) to ICI Finance plc in
exchange for the assignment to UK Holdings of the benefit of the UK
Polyurethanes/ICI Finance Note (which note shall for the remainder of this
Schedule be referred to as the Huntsman ICI Polyurethanes (UK) Limited/UK
Holdings Intercompany Note).
28. UK Holdings will transfer $200,000 to Huntsman ICI Polyurethanes (UK)
Limited in exchange for an increase in the Huntsman ICI Polyurethanes (UK)
Limited/UK Holdings Intercompany Note to an aggregate amount of $364,300,000.
29. UK Holdings will transfer $80,000,000 (as may have been adjusted to reflect
any adjustment made pursuant to clause 3.4) as well as $200,000,000 to ICI
Finance plc in exchange for the assignment to UK Holdings of the benefit of the
UK Petrochemicals/ICI Finance Note (which note shall for the remainder of this
Schedule be referred to as the Huntsman ICI Petrochemicals (UK) Limited/UK
Holdings Intercompany Note).
30. Huntsman ICI Polyurethanes (UK) Limited will transfer $200,000 to Huntsman
ICI Polyurethanes Sales Limited in exchange for an intercompany note in that
amount (the Huntsman ICI Polyurethanes (UK) Limited/Huntsman ICI Polyurethanes
Sales Limited Intercompany Note).
31. Huntsman ICI Polyurethanes Sales Limited will transfer a total of $200,000
to PT ICI Indonesia in satisfaction of intercompany indebtedness.
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The Refinancing
32. UK Holdings will transfer $407,006,272 to Huntsman ICI (UK) Limited in
exchange for additional shares in Huntsman ICI (UK) Limited save that, in the
event ICI has elected to procure that the foregoing is funded and performed
prior to Closing pursuant to paragraph 12 of Schedule 18, UK Holdings will
instead pay to ICI Finance plc the sum of [$407,006,272] in satisfaction of the
UK Holdings/ICI Finance $407,006,272 Temporary Note.
33. Huntsman ICI (UK) Limited will transfer $407,006,272 to Dutch Mixer in
exchange for additional Dutch Mixer shares and/or as a capital contribution
unless the foregoing has been funded and performed prior to Closing pursuant to
paragraph 12 of Schedule 18 in which case no action shall be required.
34. Dutch Mixer will transfer $1,043 to Dutch Holdco in exchange for additional
Dutch Holdco shares and/or as a capital contribution.
35. Dutch Mixer will transfer $188,306,272 to Omicron in satisfaction of the
Dutch Mixer/Omicron Temporary Note.
36. Dutch Holdco will transfer $1,043 to Atlas DE Mexico SA DE CV in
satisfaction of intercompany indebtedness.
37. Dutch Mixer will subscribe for additional shares in Huntsman ICI Espana
Limitada for a subscription price of $33,000,000 save that, in the event that
ICI has elected to procure that such subscription is funded prior to Closing
pursuant to paragraph 10(a) of Schedule 18, Dutch Mixer will instead pay to ICI
Finance plc the sum in euros which equates to $33,000,000 (on the basis of the
Euro/Dollar Rate) in satisfaction of the Dutch Mixer/ICI Finance Spanish Second
Temporary Note.
38. UK Holdings will transfer $81,964,993 (as adjusted to reflect any
adjustment made pursuant to clause 3.4) to Huntsman ICI Espana Limitada in
exchange for a $81,964,993 intercompany note secured by all of the assets of
Huntsman ICI Espana Limitada (the Huntsman ICI Espana Limitada/ UK Holdings
Intercompany Note) save that, in the event ICI has elected to procure that such
payment is made prior to Closing pursuant to paragraph 10(b) of Schedule 18, UK
Holdings will instead pay to ICI Finance plc the sum in euros which equates to
$81,964,993 (on the basis of the Euro/Dollar Rate) in satisfaction of the UK
Holdings/ICI Finance Spanish Temporary Note.
39. Huntsman ICI Espana Limitada will, unless it has already paid the
consideration due under paragraph 4(b) of Schedule 18 pursuant to
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paragraph 10(i) of Schedule 18, transfer $114,964,993 to ICI Espana SA in
satisfaction of the Huntsman ICI Espana Limitada/ICI Spain Temporary Note.
40. Dutch Mixer will transfer $65,000,000 to Omicron in satisfaction of the
Dutch Mixer/Omicron Malaysian Temporary Note and Dutch Mixer will transfer a
further $200,000 to Omicron in satisfaction of the Dutch Mixer/Omicron Chemical
Blending Temporary Note.
41. Dutch Mixer will transfer $5,000,000 to Deutsche ICI GmbH in satisfaction
of intercompany indebtedness.
42. Dutch Mixer will transfer $25,998,957 to Grupo ICI Mexico SA DE CV in
satisfaction of intercompany indebtedness.
43. Dutch Mixer will transfer $34,000,000 to ICI in satisfaction of
intercompany indebtedness.
44. Dutch Mixer will transfer $10,700,000 to ICI Theta BV (Theta) in
satisfaction of intercompany indebtedness.
45. Dutch Mixer will transfer $4,500,000 to Huntsman ICI (Italy) Srl in
exchange for additional shares of Huntsman ICI (Italy) Srl save that, in the
event ICI has elected to procure that such subscription is funded prior to
Closing pursuant to paragraph 11(a) of Schedule 18, Dutch Mixer will instead pay
to ICI Finance plc the sum in euros which equates to $4,500,000 (on the basis of
the Euro/Dollar Rate) in satisfaction of the Dutch Mixer/ICI Finance Italian
Temporary Note.
46. UK Holdings will transfer $10,000,000 to Huntsman ICI (Italy) Srl in
exchange for a $10,000,000 intercompany note (the Huntsman ICI (Italy) Srl/UK
Holdings Intercompany Note) save that, in the event ICI has elected to procure
that such payment is made prior to Closing pursuant to paragraph 11(b) of
Schedule 18, UK Holdings will instead pay to ICI Finance plc the sum in Euros
which equates to $10,000,000 (on the basis of the Euro/Dollar Rate) in
satisfaction of the UK Holdings/ICI Finance Italian Temporary Note.
47. Huntsman ICI (Italy) Srl will, unless it has already paid the consideration
due under paragraph 4(l) of Schedule 18 pursuant to paragraph 11(i) of Schedule
18, transfer $14,500,000 to ICI Italia SpA in satisfaction of intercompany
indebtedness.
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48. Dutch Mixer will transfer a total of $40,300,000 to the Other
Polyurethanes Opcos for additional shares of the Other Polyurethanes Opcos, save
that:
(i) in the case of Huntsman ICI (Canada) Corporation, Dutch Mixer will
transfer the relevant sum ($3,600,000) to Huntsman ICI (Canadian
Investments) BV for additional shares in that company and/or as a capital
contribution, and Huntsman ICI (Canadian Investments) BV will transfer the
same amount to Huntsman ICI (Canada) Corporation for additional shares in
that company;
(ii) in the case of Huntsman ICI (Germany) GmbH, Dutch Mixer will transfer the
relevant sum ($5,500,000) by way of a contribution to the capital reserves
of that company; and
(iii) in the event that ICI has elected to procure that any of the subscriptions
for additional shares in any of the Other Polyurethanes Opcos is funded
prior to Closing pursuant to paragraphs 8(a), 8(b), 8(c), 9(a) and/or 9(b)
of Schedule 18, Dutch Mixer will instead pay to ICI Finance plc:
. where the subscription for shares in Huntsman ICI (Brazil) Limitada
has been funded pursuant to paragraph 8(a) of Schedule 18, the sum of
$3,200,000 in satisfaction of the Dutch Mixer/ICI Finance Brazilian
Temporary Note;
. where the subscription for shares in Huntsman ICI Colombia Limitada
has been funded pursuant to paragraph 8(b) of Schedule 18, the sum of
$7,000,000 in satisfaction of the Dutch Mixer/ICI Finance Colombian
Temporary Note;
. where the subscription for shares in Huntsman ICI (Taiwan) Limited has
been funded pursuant to paragraph 8(c) of Schedule 18, the sum of
$8,000,000 in satisfaction of the Dutch Mixer/ICI Finance Taiwan
Temporary Note;
. where the subscription for shares in Huntsman ICI (Belgium) SPRL has
been funded pursuant to paragraph 9(a) of Schedule 18, the sum in
euros which equates to $500,000 (on the basis of the Euro/Dollar Rate)
in satisfaction of the Dutch Mixer/ICI Finance Belgium Temporary Note;
and
. where the subscription for shares in Huntsman ICI Espana Limitada has
been funded pursuant to paragraph 9(b) of Schedule 18, the sum in
euros which equates to $500,000 (on
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the basis of the Euro/Dollar Rate) in satisfaction of the Dutch
Mixer/ICI Finance Spanish First Temporary Note.
49. The Other Polyurethanes Opcos will transfer moneys to various ICI
subsidiaries, in full satisfaction of the Other Polyurethanes Temporary Notes.
Tioxide Share Transfers
50. TGL shall enter into an agreement or agreements with UK Holdings whereby
TGL agrees to sell, and UK Holdings agrees to purchase, with immediate effect
the entire issued share capitals of each of Tioxide Europe Limited, Tioxide
Overseas Holdings Limited and Tioxide Group Services Limited.
51. TGL shall enter into an agreement or agreements with UK Holdings whereby
TGL agrees to sell, and UK Holdings agrees to purchase, with immediate effect
the entire issued share capitals of each of Tioxide Europe SAS (France), Tioxide
Europe NV SA (Belgium), Tioxide Canada Inc (Canada), British Titan Products
Southern Africa (Pty) Limited (South Africa), Tioxide Europe AB (Sweden),
Tioxide Europe Srl (Italy) and Tioxide Europe Titanium Pigmente Ticaret Limited
Sirketi (Turkey).
Distribution by the Purchaser
52. HIC will transfer $10,000,000 to the Purchaser as a distribution.
53. Pursuant to the LLC Agreement, the Purchaser will make the following
transfers as distributions with respect to member interests:
(a) $6,000,000 to HSCC;
(b) $3,000,000 to IAI;
(c) $444,444.44 to BTCI;
(d) $444,444.44 to CEA; and
(e) $111,111.12 to GSG.
Transfer of Membership Units to US Newco
54. IAI will (following the distribution referred to in paragraph 53(b) above)
transfer 300 membership units of the Purchaser to US Newco.
Page 162
Agreements
The Ancillary Agreements in the agreed form and the Ancillary Agreements the
form of which has been agreed in accordance with the provisions of clause 15 of
this Agreement and any other agreement which pursuant to the terms of this
Agreement is to be entered into on or before Closing (to the extent that such
agreements have not been entered into) shall be entered into (subject to the
provisions of this Agreement in relation to, inter alia, Delayed Closing).
PART 2
2. Closing Obligations
I General Provisions in relation to the Vendors and the Purchaser
(A) Vendors' obligations
At Closing, each of the Vendors shall:
(a) deliver to the Purchaser a copy of minutes of a duly held meeting of the
directors of each of the Vendors (or a duly constituted committee thereof)
authorising the execution by the relevant Vendor of this Agreement, the LLC
Agreement, the Ancillary Agreements in the agreed form and the Ancillary
Agreements the form of which has been agreed in accordance with the
provisions of clause 15 of this Agreement and any other agreement which
pursuant to the terms of this Agreement is to be entered into on or before
Closing to which the relevant Vendor is a party and, in the case where such
execution is authorised by a committee of the board of directors of the
relevant 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 relevant Vendor);
(b) deliver to the Purchaser a copy of minutes of a duly held meeting of the
directors of each of the relevant members of each Vendor's Retained Group
(or a duly constituted committee thereof) authorising the execution by the
relevant member of each Vendor's Retained Group of the Ancillary Agreements
in the agreed form and the Ancillary Agreements the form of which has been
agreed in accordance with the provisions of clause 15 of this Agreement and
any other agreement which pursuant to the terms of this Agreement is to be
entered into on or before Closing to which the relevant member of each
Vendor's Retained Group is a party and, in the case where such
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execution is authorised by a committee of the board of directors of the
relevant member of each Vendor's Retained Group, 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 relevant member of each Vendor's Retained
Group);
(c) deliver (or procure the delivery of) to the Purchaser, executed
counterparts of the LLC Agreement, the Ancillary Agreements in the agreed
form and the Ancillary Agreements the form of which has been agreed in
accordance with the provisions of clause 15 of this Agreement and any other
agreement which pursuant to the terms of this Agreement is to be entered
into on or before Closing (subject to the provisions of this Agreement)
duly executed by the Vendors and/or the relevant members of each Vendor's
Retained Group;
(d) procure that all Title Deeds relating to the Transferred Properties are
either delivered to the Purchaser or are held to the order of the Purchaser
at the offices of the relevant Selling Company or its solicitors (to the
extent that legal completion occurs in relation to such Transferred
Properties at Closing in accordance with Schedule 17; and
(e) delivery to the Designated Purchaser deeds of assignment in relation to the
Business Goodwill of each Local Business duly executed by the relevant
Business Vendor.
(B) Purchaser's obligations
At Closing, the Purchaser shall:
(a) deliver to each of the Vendors:
(i) a copy 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
LLC Agreement, the Ancillary Agreements in the agreed form and the
Ancillary Agreements, the form of which has been agreed in
accordance with the provisions of clause 15 of this Agreement and
any other agreement which pursuant to the terms of this Agreement
is to be entered into on or before Closing to which the Purchaser
is a party 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
Page 164
relevant extract thereof (in each case such copy minutes being
certified as correct by the secretary of the Purchaser);
(ii) a copy of the minutes of a duly held meeting of the directors of
each of the relevant members of the Purchaser's Group (or a duly
constituted committee thereof) authorising the execution by the
relevant member of the Purchaser's Group of the LLC Agreement, the
Ancillary Agreements in the agreed form and the Ancillary
Agreements the form of which has been agreed in accordance with
the provisions of clause 15 of this Agreement and any other
agreement which pursuant to the terms of this Agreement is to be
entered into on or before Closing to which the relevant member of
the Purchaser's Group is a party and, in the case where such
execution is authorised by a committee of the board of directors
of the relevant member of the Purchaser's Group, 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
relevant member of the Purchaser's Group);
(iii) a receipt acknowledging delivery of all documents required to be
delivered by the Vendors pursuant to this Schedule 4;
(iv) deliver (or procure the delivery of) to the Vendors of executed
counterparts of the Ancillary Agreements in the agreed form and
the Ancillary Agreements the form of which has been agreed in
accordance with the provisions of clause 15 of this Agreement and
any other agreement which pursuant to the terms of this Agreement
is to be entered into on or before Closing (subject to the
provisions of this Agreement); and
(b) pay the Initial Consideration to ICI in respect of the ICI Business in
accordance with the provisions of clause 3.2.
II General Provisions in relation to completion of the transfer of any
Business Assets
Business Vendors' Obligations
At Closing, or the relevant Delayed Closing Date, as the case may be, the
Vendors shall deliver or shall procure that the relevant Business Vendor shall
deliver to the Purchaser or its nominee all the assets of the ICI Business or
the PO/MTBE Business (as the case may be) which are capable of transfer by
Page 165
delivery with the intent that title in such assets shall pass by and upon such
delivery.
Subject to the provisions of Schedule 17 which shall apply in respect of such
transfers and Separation Documents and save to the extent already transferred
pursuant to Schedule 18, at Closing, the relevant Delayed Closing Date, or on
legal completion (referred to in Schedule 17) as the case may be, the Vendors
and the Purchaser shall deliver or shall procure that the relevant Business
Vendor and (as the case may be) the relevant Designated Purchaser shall deliver
to each other or such nominee as each shall nominate, executed transfers,
assignments or other Separation Documents for all of the Properties which are to
be transferred or otherwise dealt with pursuant to Schedule 17, Part VII.
At Closing, the Vendors shall deliver, or shall procure that the relevant
Business Vendor shall deliver to the Purchaser, the relevant executed IPR
Assignments.
III Specific Provisions in relation to the particular Local Businesses
In the following provisions of this paragraph III any reference to Closing shall
be deemed to be a reference to the Closing Date, any relevant pre-Closing Date
or any Delayed Closing Date (as applicable) pursuant to the provisions of this
Schedule 4 and Schedule 18 and in relation to the transfer or other disposition
of any of the Properties (which shall in any event be subject to the provisions
of Schedule 17) a reference to the date of legal completion pursuant to the
provisions of Schedule 17.
At Closing, the Vendors shall or shall procure that, if required by local law in
any of Argentina, Brazil, Canada, Colombia, Germany, Italy, Mexico, Netherlands,
Spain, Taiwan, Thailand and the USA, a notarial deed of transfer of the relevant
Business Assets shall be delivered to the Purchaser or its nominee.
At Closing, the Vendors and the Purchaser shall or shall procure that, if
required by local law in any of Argentina, Belgium, Brazil, Canada, Colombia,
Germany, Italy, Mexico, Netherlands, Spain, Taiwan, Thailand and the USA, a
transfer agreement in relation to relevant Business Assets shall be executed in
the presence of a public notary.
In addition to the obligations referred to above, the Vendors and the Purchaser
(as applicable) shall procure that the following events occur:
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Argentina
At Closing the relevant Vendor shall deliver (or shall procure the delivery of)
to the relevant purchaser any required approval of the Inspection of Corporation
to any asset transfer.
Belgium
At Closing, the relevant purchaser shall execute and the relevant Vendor shall
execute (or procure the execution of) a confirmation agreement in the agreed
form.
Brazil
As soon as practicable following Closing:
(a) the relevant purchaser shall register (or procure the registration of) the
minutes of the Shareholders Meeting with the Commercial Registry and the
competent Real Estate Registry; and
(b) the relevant purchaser shall notify (or procure the notification to) the
Central Bank of Brazil of the transfer of investment within 30 days of
Closing.
Canada
After Closing:
(a) the relevant purchaser shall register (or procure the registration of)
transfer deeds for all real or immovable property; and
(b) the relevant Vendor shall notify (or procure the notification of) the
transfer to the appropriate Ministry of Labour jointly with the relevant
purchaser and the relevant purchaser shall assist the relevant Vendor with
the notification.
Colombia
After Closing, the relevant purchaser shall register (or procure the
registration of) the notarial deed of transfer with the local Registrars Office.
Italy
Prior to Closing, the relevant Vendor undertakes to use reasonable endeavours to
provide the purchaser with a copy of the tax certificate issued by the Italian
Tax Authority confirming whether the relevant Vendor has any Tax debts.
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After Closing the relevant Vendor and the relevant purchaser shall file (or
procure the filing of) the notarised transfer agreement with the Companies
Register at the applicable Chamber of Commerce.
Mexico
At Closing, the relevant Vendor shall deliver (or procure the delivery of) to
the relevant purchaser any notarised shareholder minutes required.
Spain
At Closing the relevant Vendor shall deliver (or procure the delivery of) to the
relevant purchaser any required approvals of the Spanish Exchange Control
Authorities.
Taiwan/Thailand
At Closing, the relevant Vendor shall cause to be delivered or made available to
the relevant purchaser:
(a) such documents as the relevant purchaser may reasonably require to complete
the sale and purchase of the relevant Business Assets together with all
deeds and documents of title relating thereto;
(b) possession of such of the relevant Business Assets as are tangible.
UK
At Closing, the relevant Vendor shall cause to be delivered or made available to
the relevant purchaser:
(a) such documents as the relevant purchaser may reasonably require to complete
the sale and purchase of the relevant Business Assets together with all
deeds and documents of title relating thereto;
(b) possession of such of the relevant Business Assets as are tangible; and
(c) counterpart originals of deeds of assignment in relation to the assignment
of any trade debtors and trade creditors, duly executed by the relevant
parties.
After legal completion of the transfers and other disposition of the Properties
located in England, the relevant purchaser shall duly and expeditiously at its
own cost deal with all stamping and land registration formalities.
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The relevant Vendor shall deliver the Pie Crust Leases duly executed by it and
the Designated Purchaser shall deliver counterpart Pie Crust Leases duly
executed by it.
USA
At Closing, the relevant Vendor shall cause to be delivered or made available to
the relevant purchaser:
(a) such documents as the relevant purchaser may reasonably require to complete
the sale and purchase of the relevant Business Assets together with all
instruments and documents of title relating thereto;
(b) possession of such of the relevant Business Assets as are tangible; and
(c) counterpart originals of bills of sale and instruments of assignment in
relation to the transfer or assignment of any Business Assets which are
intangible, including any trade debtors and trade creditors, duly executed
by the relevant parties.
IV General Provisions in relation to the Companies
In the following provisions of this paragraph IV any reference to Closing shall
be deemed to be a reference to the Closing Date, any relevant pre-Closing Date
or any delayed Closing Date (as applicable) pursuant to the provisions of this
Schedule 4 and Schedule 18.
(A) ICI's Obligations
At Closing, ICI shall (subject to clauses 6.8 and 16) deliver or cause to be
delivered to the Purchaser:
(a) duly executed transfers in respect of the relevant shares duly completed by
or on behalf of all persons required to execute such transfers in favour of
the Purchaser or such nominee of the Purchaser as the Purchaser may
nominate (subject to written notification to ICI not less than 10 Business
Days prior to the Closing Date) together with the certificates for such
shares (or an indemnity in a form reasonably satisfactory to the Purchaser
to be given by ICI for itself and on behalf of relevant members of its
Retained Group in lieu thereof) and any power of attorney under which any
transfer is executed;
(b) the certificate of incorporation (or equivalent) and other constitutional
documents of each of the Companies being transferred hereunder;
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(c) such waivers or consents as the Purchaser may require to enable the
Purchaser or its nominees to be registered as holders of the shares; and
(d) resignations of each of the relevant resigning directors of the Companies,
such resignations to be expressed to take effect on the Closing Date.
(B) Purchaser's Obligations
At least 10 Business Days prior to Closing, the Purchaser shall deliver to ICI
the names of all individuals to be elected directors of the Companies being
transferred hereunder.
V Specific Provisions in relation to the Companies
In the following provisions of this paragraph V any reference to Closing shall
be deemed to be a reference to the Closing Date, any relevant pre-Closing Date
or any delayed Closing Date (as applicable) pursuant to the provisions of this
Schedule 4 and Schedule 18.
At Closing, the Vendors shall or shall procure that, if required by local law in
any of Argentina, Brazil, Canada, Colombia, Germany, Italy, Mexico, Netherlands,
Spain, Taiwan, Thailand and the USA, a notarial deed of transfer of the relevant
shares shall be delivered to the Purchaser or its nominee.
At Closing, the Vendors and the Purchaser shall or shall procure that, if
required by local law (or as agreed by the parties) in any of Argentina,
Belgium, Brazil, Canada, Colombia, Germany, Italy, Mexico, Netherlands, Spain,
Taiwan, Thailand and the USA, (or as agreed by the parties) a transfer agreement
in relation to relevant shares shall be executed in the presence of a public
notary.
In addition to the obligations referred to above, the Vendors and the Purchaser
(as applicable) shall procure that the following events shall occur at Closing.
It is agreed by the parties that the provisions marked in square brackets will
not apply at Closing where a Company in the specified jurisdiction does not
transfer pursuant to the provisions of Schedules 4, 18 and 22, but that they
shall apply (i) in respect of the transfer of any company in the specified
jurisdiction prior to Closing under Schedule 18 and (ii) in respect of the
transfer of any Delayed Company in the specified jurisdiction after Closing, in
each case upon the completion of the relevant transfer.
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[Argentina
At Closing:
(a) the relevant purchaser shall deliver to the relevant Vendor proof of the
registration of the relevant purchaser at the Argentine Inspection of
Corporations;
(b) the relevant Vendor or its nominee shall notify the Company of the transfer
of its Sale Shares in the Company; and
(c) the Company shall hold a board meeting to note the transfer of the Sale
Shares and to register the transfer in the corporate books and share
certificates.]
[Brazil
At Closing the relevant Vendor shall deliver (or procure the delivery of) to the
relevant purchaser or its nominee a share transfer form and shall procure the
registration of the transfer of the Sale Shares in the relevant corporate books.
Within 30 days of Closing the relevant purchaser shall register the transfer
with the Central Bank of Brazil.]
[Canada
As soon as practicable following Closing:
(a) the relevant purchaser shall register (or procure the registration of) all
deeds required for the transfer of real or immovable property; and
(b) the relevant Vendor shall notify (or procure the notification of) the
transfer to the appropriate Ministry of Labour jointly with the relevant
purchaser and the relevant purchaser shall assist the relevant Vendor with
the notification.]
[Colombia
At Closing:
(a) the relevant Vendor shall execute (or procure the execution of) and the
relevant purchaser shall execute a local sale/purchase agreement;
(b) the relevant Vendor shall execute (or procure the execution of) a power of
attorney appointing a representative to procure a provisional tax
assessment; and
Page 171
(c) the relevant Vendor shall deliver (or procure the delivery of) to the
relevant purchaser duly endorsed share certificates.
As soon as practicable following Closing:
(a) The relevant purchaser shall procure that the Company registers the share
transfer in the Stock Registry Book;
(b) the relevant Vendor shall procure that a provisional tax assessment is
requested under Colombian law; and
(c) the relevant purchaser shall apply to the Central Bank of Colombia to list
the relevant purchaser as a foreign investor.]
Germany
At Closing:
the relevant Vendor shall deliver (or procure the delivery of) to the
relevant purchaser, notarial deed[s] of transfer in respect of each
relevant entity duly completed by or on behalf of all persons required to
execute such notarial deed of transfer in favour of the relevant purchaser
and any power of attorney under which any notarial deed of transfer is
executed.
[Italy
At Closing:
(a) the relevant Vendor shall deliver (or procure the delivery of) to the
relevant purchaser duly endorsed share certificates; and
(b) the relevant Vendor shall deliver (or procure the delivery of) to the
company of the Company Share Certificate.]
Japan
At Closing:
(a) the relevant Vendor shall deliver (or procure the delivery of) to the
relevant purchaser:
(i) the relevant share certificates; and
(ii) any required approvals of the Board of Directors;
Page 172
(b) the relevant purchaser shall procure that the shareholders register is
amended to reflect the name of the relevant purchaser.
Malaysia
At Closing, the relevant Vendor shall deliver (or procure the delivery of) to
the relevant purchaser:
(a) the consent from the Malaysian Ministry of International Trade and Industry
and the Bank Negara Malaysia to the transfer of shares in the Company;
(b) the consent from the Bank Negara Malaysia to settlement of the
consideration in $US through accounts located outside Malaysia;
(c) board minutes of the Company approving the transfer; and
(d) the relevant share certificates.
Mexico
At Closing:
(a) the relevant Vendor shall deliver (or procure the delivery of) to the
relevant purchaser a copy of any required notification to the Mexican
National Foreign Investment Registry of the transfer of the Mexican
Companies; and
(b) the relevant Vendor shall:
(i) endorse the share certificates in favour of the transferee; and
(ii) procure that a notation is made in the relevant Stock Registry
Book reflecting the transfer of the shares in the Company.
Netherlands
At Closing, the relevant Vendor shall deliver (or procure the delivery of) to
the relevant purchaser notarial deeds of transfer in respect of all the shares
of the Companies incorporated in the Netherlands being transferred hereunder
duly completed by or on behalf of all persons required to execute such notarial
deeds of transfer in favour of the relevant purchaser together with any power of
attorney under which any notarial deed of transfer is executed.
Page 173
Saudi Arabia
At Closing the relevant Vendor shall deliver (or procure the delivery of) to the
relevant Purchaser:
(a) a copy of the notification to the Saudi Arabian Commercial Register of the
transfer of the shares in Arabian Polyol Co. Ltd and of the changes in
their boards of directors;
(b) a copy of the local agreement transferring the shares; and
(c) a notarised copy of the shareholders resolution approving the transfer.
Singapore
At Closing, the relevant Vendor shall deliver (or procure the delivery of) to
the relevant purchaser:
(a) board minutes of the company approving the transfer; and
(b) the relevant share certificates.
After Closing the relevant purchaser shall deliver executed share transfer
instrument and property statement to the IRAS for stamp duty assessment.
Spain
At Closing, the relevant Vendor shall deliver (or procure the delivery of) to
the relevant purchaser notarial deed[s] of transfer/1/ in respect of all of the
shares in the relevant Company duly completed by or on behalf of all persons
required to execute such notarial deed of transfer in favour of the relevant
purchaser together with the certificates for such shares in the name of the
relevant transferors and any power of attorney under which any notarial deed of
transfer is executed.
United Kingdom
At Closing (or as soon as reasonably practicable thereafter) the relevant Vendor
shall:
(a) deliver (or procure the delivery of) to the relevant purchaser the
statutory books (which shall be written up to but not including the Closing
Date), the certificate of incorporation (and any certificate of
incorporation on change of name) and common seal (if any) of the
________________________________________________________________________________
/1/ These cannot be executed until receipt of payment is confirmed.
Page 174
English Companies transferred pursuant to the provisions of this Agreement;
and
(b) procure that board meetings of the relevant Companies transferred pursuant
to the provisions of this Agreement be held at which:
(i) it shall be resolved that the transfer of the issued shares shall
be approved for registration and (subject only to the transfer
being duly stamped) the relevant transferee registered as the
holder of the relevant shares in the Register of Members;
(ii) each of the persons nominated by the relevant purchaser shall be
appointed directors and/or secretary, as the relevant purchaser
shall direct; and
(iii) the resignations of the relevant Resigning Directors shall be
tendered and accepted so as to take effect at Closing,
and the relevant Vendor shall deliver to the relevant purchaser a duly
certified copy of the Minutes of such meetings.
VI Further Assurance
Each of ICI, the Purchaser and HSCC shall, and shall procure that the members of
their respective Group shall, comply with the provisions of this Schedule 4 and
Schedule 18 and at all times from Closing, do all things as may be required to
give effect to the provisions of this Schedule 4, including, without limitation,
the execution of all deeds and documents, procuring the convening of all
meetings, the giving of all necessary waivers and consents and the passing of
all resolutions and otherwise exercising all powers and rights available to
them.
Page 175
SCHEDULE 5
INTERFACE AGREEMENTS
Page 176
Relevant Petrochemicals
INTERFACES
Category 1
Agreed Form Term Sheets for schedules to the Product Supply Agreement initialled
on signing
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- ------------------------------------------------------------------------------------
ICI Purchaser North Tees Product Naphtha *2 1
- ------------------------------------------------------------------------------------
ICI Purchaser North Tees Product Mixed LPG *2 1
- ------------------------------------------------------------------------------------
Purchaser ICI North Tees Feedstock Naphtha *3 1
Sched 1
- ------------------------------------------------------------------------------------
Purchaser ICI North Tees Feedstock Propane *3 1
Sched 2
- ------------------------------------------------------------------------------------
Purchaser ICI North Tees Feedstock Butane *3 1
Sched 3
- ------------------------------------------------------------------------------------
Purchaser ICI Wilton Feedstock Mixed LPG *3 1
Sched 4
- ------------------------------------------------------------------------------------
Purchaser ICI Teesport Feedstock Mixed C4's *3 1
Sched 5
- ------------------------------------------------------------------------------------
Purchaser ICI Teesport Feedstock Raw Pygas *3 1
Sched 6
- ------------------------------------------------------------------------------------
Purchaser ICI Wilton Feedstock RPGP *3 1
Sched 7
- ------------------------------------------------------------------------------------
Page 177
- ------------------------------------------------------------------------------------
ICI Purchaser Various Co-Product Propylene *1 1
Sched 2
- ------------------------------------------------------------------------------------
ICI Purchaser Wilton Co-Product Mixed C4's *1 1
Sched 5
- ------------------------------------------------------------------------------------
ICI Purchaser Various Co-Product Others eg. Butadiene 1
*1
Sched 4
- ------------------------------------------------------------------------------------
ICI Purchaser Wilton Co-Product Hydrogen *1 1
From JV06 Sched 3
- ------------------------------------------------------------------------------------
ICI Purchaser Various Co-Product Raw Pygas *1 1
Sched 10
- ------------------------------------------------------------------------------------
ICI Purchaser Wilton Co-Product C5's (HT) *1 1
Sched 8
- ------------------------------------------------------------------------------------
ICI Purchaser North Tees Co-Product DPHG *1 1
Sched 9
- ------------------------------------------------------------------------------------
ICI Purchaser Wilton Co-Product Cracker *1 1
Residue oil
Sched 11
- ------------------------------------------------------------------------------------
ICI Purchaser Wilton Co-Product Ethane *1 1
Sched 12
- ------------------------------------------------------------------------------------
ICI Purchaser Wilton Co-Product Methane *1 1
Sched 14
- ------------------------------------------------------------------------------------
Page 178
- ----------------------------------------------------------------------------------------------------
ICI Purchaser Teesport Co-Product C5's*1 1
(not HT)
Sched 7
- ----------------------------------------------------------------------------------------------------
ICI Purchaser Various Co-Product Ethylene *1 1
Sched 1
- ----------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Co-Product Propane *1 1
Sched 13
- ----------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Co-Product Raffinate (mixed 1
butenes) *1
Sched 6
- ----------------------------------------------------------------------------------------------------
ICI (purchased Purchaser Wilton Product Raw Pygas *2 1
from Blue) Sched 3
- ----------------------------------------------------------------------------------------------------
*1 All in E&C Supply Agreement
*2 All in PS Agreement
*3 All in FS Agreement
Page 179
Relevant Petrochemicals
INTERFACES
Category 2/3
Not Agreed Form
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Utility Electricity 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Utility Potable Water 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Utility Raw Water (including 2/3
HP fire water)
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Utility Steam 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Utility Compressed Air 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Utility Nitrogen 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Utility Slops & Deballast 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Service Various services 2/3
provided by North
Tees
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Service Effluent Treatment 2/3
- -------------------------------------------------------------------------------------------------------------
180
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Utility Fuel Gas 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Service Cavity Storage 2/3
Operation and
Maintenance
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI (CLC) North Tees Service Gas storage and 2/3
Brinefields
Operation and
Maintenance
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Service Brine Sales 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Service Jetty Services 2/3
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser North Tees Service Cavity Support 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Service Leak repair 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Service Propylene storage 2
[cavity 74]
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI NTL Service Storage tanks, 2/3
operation and
maintenance
- -------------------------------------------------------------------------------------------------------------
ICI (CLC) Purchaser Holford/Lostock Service Ethylene storage - 2
cavities 213/215@
@ Compression/
Drying Plant,
Lostock
- -------------------------------------------------------------------------------------------------------------
Page 181
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Billingham Product Hydrogen 2
(Methanol Plant)
- -------------------------------------------------------------------------------------------------------------
Purchaser PIP (J.V.) North Tees Product Hydrogen 2
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Product Hydrogen 2
(Chlor-Chemicals)
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI Wilton Services (SHE) Flare stack 2
connection/
pressure relief
services via flare
stack B1205
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Service (SHE) Flare stack 2
connection/
pressure relief
services via flare
stacks B450 and
B205
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI/PIP North Tees Service Storage facilities 2
(warehousing) in accordance with
ICI/PIP warehousing
agreement
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Product Catalyst supply - 2
spot basis
- -------------------------------------------------------------------------------------------------------------
Page 182
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Product/Service ICI Chlor- 2
Chemicals cavity
sonar scanning
and mapping
services/products
- -------------------------------------------------------------------------------------------------------------
Page 183
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser North Tees Service Well dipping 2/3
services provided
by Tracerco for
Brinefields
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI (Vinamul) Warrington Product Ethylene 2/3
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI (Chlor-Chemicals) Runcorn and Product Ethylene 2
Wilton
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Product Ethylene *1 2
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI (Uniquema) Wilton Product Ethylene 2
- -------------------------------------------------------------------------------------------------------------
Purchaser ICI North Tees Service Pump boundary 2
containment system
at North Tees
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Service High Sulphur 2/3
Fuel Oil Pumping
- -------------------------------------------------------------------------------------------------------------
Page 184
Relevant Petrochemicals
TRANSITIONAL ARRANGEMENTS
Category 2/3
Not Agreed Form
- -------------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser North Tees Service Payroll 3
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Service Purchasing/stores 3
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Engineering 2
Services including
engineering
department
services,
procedures, guides
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Process 2
Engineering/library
Licence
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Process Safety guides 2
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Group Engineering 2
Procedures
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Group Engineering 2
- -------------------------------------------------------------------------------------------------------------
Page 185
- -------------------------------------------------------------------------------------------------------------
Guides
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Aspen flowsheeting 2
licences
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Analytical services 2
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Teesside Management 2
Procedures
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Eutech and ICI 2
Technology services
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Distribution services 3
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Waste disposal 3
- -------------------------------------------------------------------------------------------------------------
Relevant Petrochemicals
PROPERTY INTERFACES
Not Agreed Form
- -------------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- -------------------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Accommodation - Licence to occupy 2
to include office Wilton Centre
and admin services
- -------------------------------------------------------------------------------------------------------------
Page 186
PO/MTBE
INTERFACES/TRANSITIONAL ARRANGEMENTS
- -------------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- -------------------------------------------------------------------------------------------------------------
HSCC Purchaser Port Neches, Product HSCC Petrochemical
Texas Corporation toll manufacture
(PO/MTBE) all PG sold by the
PO/MTBE business.
------------------------------------------------------------------------------------------------------------------
Product HSCC Corporation is an
important customer of the
PO/MTBE business for the
products PG (propylene
glycol) and PO (propylene
oracle).
- ------------------------------------------------------------------------------------------------------------------
Product Propylene and glycol are
(raw material) exclusively supplied to the
PO/MTBE business by other
HSCC entities.
- ------------------------------------------------------------------------------------------------------------------
Product The oxygen and steam
(raw material) supplied by Air Liquide to
the Port Neches plant is
legally purchased by HSCC
Corporation and resold to
PO/MTBE.
- ------------------------------------------------------------------------------------------------------------------
Page 187
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Port Neches, Services Utilities The PO/MTBE plant at Port
Texas Neches is totally dependent
on HSCC for:
- supply of raw materials
(see above)
- utilities
- ------------------------------------------------------------------------------------------------------------------
- disposal of by products
- personnel:
- ------------------------------------------------------------------------------------------------------------------
- management and
operation of the plant
[overhead costs?] [caps
on liability of HSCC.]
- sales activities
- technical and product
research and development
- Offtake of products (see
above)
- ------------------------------------------------------------------------------------------------------------------
Product Services HSCC has second
PO/MTBE plant on a
different site; services,
personnel, supplies common
to both plants need to be
allocated to the JV in the
best interest of the JV.
- ------------------------------------------------------------------------------------------------------------------
Page 188
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Port Neches Product Nitrogen supply agreement;
Terms covers both PO/MTBE
(PO/MTBE) plants of HSCC; could also
apply to the Methanol supply
contract (which were not in
the dataroom)
- ------------------------------------------------------------------------------------------------------------------
Services
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Service Operating and Maintenance
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Product Propylene Supply
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Service Management Services
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Product Glycol Supply
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Service Process Development Area
Operations and Technical
Services for Propylene
Oxide/MTBE
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Product Propylene Oxide Purchase
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Product Propylene Glycol Toll
Conversion
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Consolidation Agreement
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Utility Steam, Oxygen and Utilities
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Service Tax Sharing
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Product Purchase of Ethylene Oxide
- ------------------------------------------------------------------------------------------------------------------
Page 189
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Product PG Supply
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Product Propane Sales to Huntsman
[PO-041]
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Utility Steam [PO-055]
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Service Co-generation [PO-050]
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Port Neches, Pipeline administration
Texas (docks)
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Operation of Joint
Wastewater Treatment Plant
- ------------------------------------------------------------------------------------------------------------------
HSCC Purchaser Service Use of Pipeline Pipe Rack
- ------------------------------------------------------------------------------------------------------------------
Page 190
PO/MTBE
PROPERTY ARRANGEMENTS
- --------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- --------------------------------------------------------------------------------------------------------
HSCC Purchaser Port Neches, Pipeline Lease
Texas (docks)
- --------------------------------------------------------------------------------------------------------
HSCC Purchaser Ownership of Joint
Wastewater Treatment Plant
- --------------------------------------------------------------------------------------------------------
HSCC Purchaser Lease PO/TBA Pilot Plant
Facility
- --------------------------------------------------------------------------------------------------------
HSCC Purchaser License Agreement for
MTBE Bldg. No. 4
- --------------------------------------------------------------------------------------------------------
HSCC Purchaser Sub-lease of GATX Rail
Cars
- --------------------------------------------------------------------------------------------------------
Page 191
Polyurethanes
INTERFACES
Category 2/3
Not Agreed Form
- ------------------------------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- ------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Product Caustic Soda (20%) 2
((Pounds)145K pa)
- ------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Product Sulphuric Acid 2
((Pounds)20K pa)
- ------------------------------------------------------------------------------------------------------------------------------
ICI (Aromatics) Purchaser North-East Services Benzene Pipeline important 2
- ------------------------------------------------------------------------------------------------------------------------------
Purchaser ICI (Acrylics) Rozenburg Services Engineering Maintenance and Site 3
Infrastructure; Purchasing for [possible
Engineering Maintenance and Site interface]
Infrastructure including external
services but not raw materials,
packaging or logistics. Possible
transitional service.
- ------------------------------------------------------------------------------------------------------------------------------
ICI (Eutech) Purchaser Various Services Process Engineering Licence 3
- ------------------------------------------------------------------------------------------------------------------------------
ICI (Argentina) Purchaser St. Lorenzo Service Tolling Agreement re blending 2
- ------------------------------------------------------------------------------------------------------------------------------
Page 192
- ------------------------------------------------------------------------------------------------------------------------------
Argentina operation
- ------------------------------------------------------------------------------------------------------------------------------
Purchaser ICI (Quest) Rozenburg Utilities Water 2
- ------------------------------------------------------------------------------------------------------------------------------
Purchaser ICI (Quest) Rozenburg Utilities Electricity 2
- ------------------------------------------------------------------------------------------------------------------------------
Purchaser ICI (Quest) Rozenburg Utilities Effluent 2
- ------------------------------------------------------------------------------------------------------------------------------
Page 193
Polyurethanes
TRANSITIONAL ARRANGEMENTS
Category 2/3
Not Agreed Form
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- -----------------------------------------------------------------------------------------------------------------------------------
ICI (ICI Technology) Purchaser Various Services Project Management & 3
Engineering Consultancy,
Manufacturing Technology,
R&T Management
- ------------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Services R&T (unlikely to continue) 3
- ------------------------------------------------------------------------------------------------------------------------------------
Purchaser ICI Various Services R&T (unlikely to continue) 3
- ------------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Sao Paulo, Services Use of Paints laboratory 3
Brazil
- ------------------------------------------------------------------------------------------------------------------------------------
ICI (Eutech) Purchaser Wilton (and Services Project Management and 3
others?) Engineering including
Purchasing - current position
but presumably not intended
to continue post-Completion
- ------------------------------------------------------------------------------------------------------------------------------------
ICI (P&L) Purchaser Worldwide Services Management of shipping 3
contracts and expert advice
for transportation and [possible
- ------------------------------------------------------------------------------------------------------------------------------------
Page 194
- ------------------------------------------------------------------------------------------------------------------------------------
distribution worldwide interface]
- ------------------------------------------------------------------------------------------------------------------------------------
Purchaser (Ternate) ICI Milan Services HQ/Accounts Services 3
- ------------------------------------------------------------------------------------------------------------------------------------
Purchaser (Singapore) ICI Malaysia Services Cost Sharing 3
- ------------------------------------------------------------------------------------------------------------------------------------
ICI (Symphony) and Purchaser and Various Products "Symphony" - products are 3
Purchaser ICI purchased under ICI global
contracts and in certain
circumstances Polyurethanes is
lead buyer:-
-Ethylene Oxide
-UV additives
-Adipic Acid
-BDO
-drums
-Propylene Glycol
-PO
This is current position but
presumably not intended to
continue post-Completion
- ------------------------------------------------------------------------------------------------------------------------------------
ICI (Uniquema) Purchaser Wilton (?) Services Overhauls and Maintenance 3
(terminates July 99)
- ------------------------------------------------------------------------------------------------------------------------------------
ICI (US) Purchaser ICI Services Corporate SHE -current 3
Wilmington position but presumably not
intended to continue post-
Completion
- ------------------------------------------------------------------------------------------------------------------------------------
Page 195
- ------------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Belgium Services Cash Pooling Services (Cash 3
Management) and Intra
Group Bank (for loans etc),
Tax Treasury and internal
audit services - current
position but presumably not
intended to continue post-
Completion
- ------------------------------------------------------------------------------------------------------------------------------------
Purchaser (ICI ICI (Acrylics/ Everberg Services Everberg site services 3
Holland) Uniquema)
- ------------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Services Occupational health 3
- ------------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Wilton Services Mail and Printing 3
- ------------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Services ICI Coordination Centre NV 3
Finance Services - expected
to cease on Completion
- ------------------------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Services SHE 3
- ------------------------------------------------------------------------------------------------------------------------------------
Page 196
Tioxide
INTERFACES
Category 1
Agreed Form Term Sheets - initialled on signing
- -----------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- -----------------------------------------------------------------------------------------
HSCC ICI (ACMA Greatham to Product Titanium tetrachloride 1
Ltd) East site
- -----------------------------------------------------------------------------------------
Tioxide
INTERFACES
Category 2/3
Not Agreed Form
- ------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- ------------------------------------------------------------------------------------------------------
ICI Purchaser East site, Utility (electricity metered) 3
Billingham
- ------------------------------------------------------------------------------------------------------
ICI Purchaser East site, Utility Steam/water (via 3rd 3
Billingham party)
- ------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service ICI Technology 2
- ------------------------------------------------------------------------------------------------------
Page 197
- ------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service ICI Eutech 2
- ------------------------------------------------------------------------------------------------------
ICI Purchaser Grimbsy, Calais, Service ICI Eutech Raman 2
Huelva, Analyser
Umbogintwini
- ------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service ICI Medical Services 2
- ------------------------------------------------------------------------------------------------------
ICI Purchaser North East Product Sulphur 2
- ------------------------------------------------------------------------------------------------------
ICI Purchaser North East Products Chlorine liquid 2
- ------------------------------------------------------------------------------------------------------
ICI Purchaser North East Products Caustic soda 2
- ------------------------------------------------------------------------------------------------------
Purchaser ICI Billingham Products Sulphuric acid 2
(Acrylics)
- ------------------------------------------------------------------------------------------------------
Purchaser ICI North East Products Sodium Hypochlorite 2
- ------------------------------------------------------------------------------------------------------
ICI (Eutech) Purchaser Various Service Process Engineering 3
Licence
- ------------------------------------------------------------------------------------------------------
Tioxide
TRANSITIONAL ARRANGEMENTS
Category 2/3
Not Agreed Form
- -----------------------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- ----------------------------------------------------------------------------------------------------------------------
Page 198
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service EPP advice 3
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Product stewardship - 3
(Girona Centre) emergency tel no re
copperas transport
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser East site, Utilities TEL pay for security and 3
Billingham refuse costs to Synetix
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service AMEX (Travel) 3
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service AMEX (Corporate card) Terminate on
NB: ICI Contract completion
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Engineering standards 3
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Billingham Service ICI waste disposal 3
service
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Internal audit 3
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Treasury/tax/corporate 3
finance
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various ICI Loan LPC loan/EB/Midland/ Paid off on
Agreement Montague/Lloyds completion?
- ----------------------------------------------------------------------------------------------------------------------
Purchaser ICI Greatham Service Pilot plant services for 3
ACMA Ltd
- ----------------------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service ICI learning 3
Inappropriate
to continue?
- ----------------------------------------------------------------------------------------------------------------------
Page 199
Tioxide
TRANSITIONAL PROPERTY ARRANGEMENTS
Property - Not Agreed Form
- -------------------------------------------------------------------------------------------------------
SELLER BUYER SITE TYPE INTERFACE CATEGORY
- -------------------------------------------------------------------------------------------------------
Purchaser ICI East site/ Property ACMA Ltd require 2 year 3
Billingham lease, determinable on 3
months notice by ACMA Ltd
- -------------------------------------------------------------------------------------------------------
ICI Purchaser East site/ Property TEL informal access route 3
Billingham over ICI land
- -------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service Security advisory service 3
- -------------------------------------------------------------------------------------------------------
ICI Purchaser Various Service ICI SHE standards guidance 3
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Page 200
SCHEDULE 6
ALLOCATION OF CONSIDERATION
PART I. SALE SHARES AND LOCAL BUSINESSES TO BE TRANSFERRED AT CLOSING
$
Tioxide Group Ltd (shares) 343,989,155
ICI Europe Ltd (shares) 44,000,000
ICI PLC (Polyurethanes Business intellectual property) 200,000,000
ICI PLC (Polyurethanes Business Assets) 320,000,000
ICI Americas Inc. (Polyurethanes Business Assets plus 520,000,000
shares in Rubicon Inc.)
ICI Chemicals and Polymers Ltd (Relevant Petrochemicals 80,000,000
Business except for the Olefins Manufacturing Business)
Impkemix (No. 46) Ltd (shares) 100,000
ICI Chemicals and Polymers Ltd (Olefins Manufacturing 200,000,000
Business)
PART II. ALLOCATIONS FOR OTHER TRANSFERS
COMPANIES/JOINT VENTURES $
Tioxide Business
Tioxide Americas Inc. (shares) 3,071,344
Tioxide Americas Inc. (note) 111,928,656
Tioxide Europe SA - Spain (shares) 114,964,993
Tioxide Europe SA - Spain (note) 18,035,007
Tioxide Europe GmbH (shares) 5,000,000
Tioxide (Malaysia) Sdn Bhd (shares) 65,000,000
Tioxide Group Ltd (notes) 116,010,845
Polyurethanes Business
ICI Holland BV (shares) 188,306,272
ICI Holland BV (note) 231,693,728
Nippon Polyurethane Industry Co Ltd (shares) 31,000,000
Arabian Polyol Co Ltd (shares) 3,000,000
Chemical Blending Holland BV (shares) 200,000
Systems Houses
- --------------
ICI Mex SA DE DV (shares) 26,000,000
ICI PU (China) Holdings BV (shares) 10,000,000
Selling Operations
- ------------------
PT ICI Indonesia (assets) 200,000
ICI PU (Asia Pacific) Pte Ltd (shares) 700,000
BUSINESSES
Systems Houses
- --------------
ICI Argentina S.a.i.c. 7,000,000
ICI Colombia SA 7,000,000
Deutsche ICI GmbH 5,500,000
ICI Italia Spa 14,500,000
ICI Taiwan Ltd 8,000,000
ICI 1996 (Thailand) Ltd 5,000,000
Selling Operations
- ------------------
ICI Belgium NV/SA 500,000
ICI Brasil Quimica Ltda 3,200,000
ICI Canada Inc 3,600,000
ICI Espana SA 500,000
PART III. NON-COMPETE COVENANT
ICI PLC 115,474,000
TOTAL 2,803,474,000
-------------
Page 202
SCHEDULE 7
WORKING CAPITAL
- -----------------------------------------------------------------------------------------------------------------------
Local Business/Company Jurisdiction ICI Reporting Lower End of Net Working Upper End of
Source Code Working Capital Capital at Working Capital
Range 30 June 1998 Range
(Pounds)'m (Pounds)'m (Pounds)'m
- -----------------------------------------------------------------------------------------------------------------------
Polyurethanes
Companies
ICI Europe Ltd England 6114 7.3 7.7 8.0
PT ICI Indonesia Indonesia 7240 -0.1 -0.1 -0.1
ICI Mex SA de CV Mexico 7187 2.2 2.3 2.4
ICI Holland BV Netherlands 6033/ 6047 -33.0 -34.7 -35.9
(including Chemical
Blending Holland BV)
ICI Polyurethanes China 7182 1.2 1.3 1.3
(China) Ltd
ICI Polyurethanes (Asia Singapore 7235 -0.3 -0.3 -0.3
Pacific) Pte Ltd
ICI PU (China) Holdings Netherlands 6241 0.0 0.0 0.0
BV
ICI Iota BV Netherlands 6325 0.0 0.0 0.0
Impkemix (No 46) Ltd England 3566 0.0 0.0 0.0
Local Businesses/2/
ICI PLC England 1055 98.1 103.3 106.8
ICI Canada Inc. Canada 5366 0.3 0.3 0.3
ICI Americas Inc. U.S.A 5656 34.0 35.8 37.0
(including Rubicon Inc)
Deutsche ICI GmbH Germany 6005 0.1 0.1 0.1
ICI Espana SA Spain 6036 0.0 0.0 0.0
ICI Italia Spa Italy 6038 0.6 0.6 0.6
ICI Belgium NV/ SA Belgium 6053 -0.3 -0.3 -0.3
ICI Argentina Saic Argentina 7188 1.4 1.5 1.6
ICI Brasil Quimica Ltda Brasil 7196 1.1 1.2 1.2
ICI Taiwan Ltd Taiwan 7366 0.3 0.3 0.3
ICI 1996 (Thailand) Ltd Thailand 7318 0.6 0.6 0.6
Intra-business - 1132 -0.6 -0.6 -0.6
elimination of profit
on stock
- -----------------------------------------------------------------------------------------------------------------------
Polyurethanes Business 113.1 119.0 123.0
Total
- -----------------------------------------------------------------------------------------------------------------------
Tioxide
Companies
Tioxide Americas Inc. U.S.A. 5606 12.6 13.2 13.7
Tioxide Europe GmbH Germany 6235 -0.2 -0.3 -0.3
Tioxide (Malaysia) Sdn Malaysia 7356 5.7 6.1 6.3
Bhd
Tioxide Europe SA Spain 6001 12.6 13.3 13.8
Tioxide Group Ltd England 3000 39.2 41.2 42.6
(including Tioxide
Europe Ltd)
- -----------------------------------------------------------------------------------------------------------------------
/2/ Identified by member of ICI's Group which conducts this business at the
date of this Agreement.
Page 203
- -----------------------------------------------------------------------------------------------------------------------
Local Business/Company Jurisdiction ICI Reporting Lower End of Net Working Upper End of
Source Code Working Capital Capital at Working Capital
Range 30 June 1998 Range
- -----------------------------------------------------------------------------------------------------------------------
Tioxide Canada Inc. Canada 5000 6.1 6.4 6.7
- -----------------------------------------------------------------------------------------------------------------------
Tioxide Europe SA France 6230 24.1 25.4 26.2
(including Tioxide
- -----------------------------------------------------------------------------------------------------------------------
Europe NV/ SA)
Tioxide Europe Srl Italy 6000 27.5 29.0 29.9
- -----------------------------------------------------------------------------------------------------------------------
Tioxide Europe AB Sweden 6234 -0.4 -0.5 -0.5
Tioxide Europe Titanium Turkey 6530 0.0 0.0 0.0
Pigmentleri Ticaret
Ltd Sirketi
Tioxide Southern Africa Rep. South Africa 7000 3.9 4.1 4.2
(Proprietary) Ltd (60%
share) (including
British Titan Products
Southern Africa
(Proprietary) Ltd)
Louisiana Pigment U.S.A. 5654 8.7 9.2 9.5
Company L.P. (50%
share)
Business adjustment (UK - 1067 -0.8 -0.9 -0.9
related)
Intra-business - 1115 -4.4 -4.6 -4.8
elimination of profit
on stock
- -----------------------------------------------------------------------------------------------------------------------
Tioxide Business Total 134.6 141.7 146.5
- -----------------------------------------------------------------------------------------------------------------------
Relevant Petrochemicals
Local Business/3/
ICI Chemicals and - 31.3 32.9 34.1
Polymers Ltd
- -----------------------------------------------------------------------------------------------------------------------
TOTAL WORKING CAPITAL 279.0 293.7 303.6
BALANCES
- -----------------------------------------------------------------------------------------------------------------------
For the purposes of clause 7 of this Agreement, all of the figures
expressed in sterling in this Schedule 7 shall be converted into dollars at
the rate of (Pounds)1/$1.6177.
/3/ Identified by the member of ICI's Group which conducts this business as
at the date of this Agreement.
Page 204
SCHEDULE 8
CLOSING STATEMENT
IN RESPECT OF FINAL FINANCIAL DEBT, FINAL CASH BALANCES AND CLOSING WORKING
CAPITAL
1. The Closing Statement shall be prepared and agreed in accordance with the
provisions of this Schedule.
2. The Closing Statement shall:
(a) be based on the books and records of the relevant Companies and the
Business Vendors;
(b) in relation to any Local Business exclude all Taxes and all Tax assets or
rights to repayments of Tax, and in relation to any Company exclude all Tax
Liabilities other than VAT, payroll taxes or amounts in respect thereof and
all Tax assets or rights to repayments of Tax other than such Tax assets or
rights to repayments of Tax relating to VAT or payroll taxes or amounts in
respect thereof;
(c) include a statement of the Closing Working Capital for each Company and
each Local Business:
(i) comprising the following line items in the Accounts:
In respect of the ICI Business:
(aa) stocks;
(bb) debtors, excluding loans receivable from other members of
ICI's Retained Group;
(cc) creditors due within one year, excluding deferred tax,
pension liabilities, short-term borrowings and current
instalments of loans; and
In respect of the PO/MTBE Business:
(vv) inventories;
(ww) accounts receivable;
(xx) other current assets;
(yy) accounts payable; and
Page 205
(zz) accrued liabilities excluding accrued interest on long-term
debt and miscellaneous accruals in respect of unamortised
original acquisition costs;
but (in relation to the Companies) excluding Final Financial Debt and Final
Cash Balances and (in relation to the Local Businesses) excluding Excluded
Assets and Excluded Liabilities;
(ii) as at 00.01 am (applicable local time) on the Closing Adjustments
Date;
(iii) being reported in sterling (in the case of the ICI Business) or in
dollars (in the case of the PO/MTBE Business);
(d) subject to sub-paragraphs (b) and (c) and paragraphs 3 to 8, be prepared on
the same basis and in accordance with the same principles, policies,
procedures, methods and practices of accounting as were applied for the
purposes of the Accounts and on the basis that the application of
principles, policies, procedures, methods and practices of accounting will
be consistent with such exercise as applied in relation to the Accounts,
Provided that there shall be no requirement to perpetuate an error made in
preparing the Accounts and, for the avoidance of doubt, this paragraph (d)
shall not prevent changes in circumstances that have taken place between
the Accounts Date and the end of the Review Period (as defined in clause 7)
from being taken into account in the preparation of the Closing Statement);
(e) subject to sub-paragraphs (b), (c) and (d) and paragraphs 3 to 8, be
prepared in accordance with principles, policies, procedures, methods and
practices of accounting generally accepted in the United Kingdom (in the
case of the ICI Business) or the United States (in the case of the PO/MTBE
Business);
(f) include, in relation to each Company, a statement of the Final Financial
Debt (including separate identification of the Final Intra Group Debt) and
the Final Cash Balance (including separate identification of the Final
Intra Group Cash Balance) for that Company;
(g) include (in relation to each of the Polyurethanes Business and the Tioxide
Business) the sum representing the total intra-business elimination of
profit on stock calculated on the same basis as such sum was calculated for
the purposes of the Accounts.
Sub-paragraphs (d) and (e) of paragraph 2 are intended to be applied as a
hierarchy, with paragraph (d) being applied first and with paragraph (e) being
applied only where ambiguity remains following application of the previous
paragraph.
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3. The Closing Statement shall be prepared on the basis that it relates to the
Companies and the Local Businesses as going concerns and exclude any effects of
the change of control or ownership of any of them contemplated by this Agreement
or any other effect of this Agreement.
4. All balances relevant for the calculation of the Final Intra Group Debt and
the Final Intra Group Cash Balance in the Closing Statement shall be reconciled
to the extent practicable between the records of the payer and those of the
payee; in the event of any discrepancy the records of the payee shall, unless
otherwise agreed, prevail.
5. In determining the Closing Working Capital for any Company or Local
Business, no account shall be taken of any event which occurs after the end of
the Review Period (as defined in clause 7), but account may be taken of events
occurring before this date.
6. For the purposes of the Closing Statement, the valuation of stocks (other
than engineering spares) of any Company or Local Business shall be based on a
physical stock-take conducted on the Closing Date, which both Vendors and their
respective Accountants will be entitled to attend.
7. The Closing Working Capital for the Local Business of ICI Americas Inc.
will, for the avoidance of doubt, include, the working capital of Rubicon, Inc.
on a basis consistent with the basis on which such working capital was included
in the Accounts.
8. Payments due to be made by Companies to members of ICI's Retained Group for
the surrender of ACT or losses are to be reflected in the Closing Statement
under Creditors.
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SCHEDULE 9
WARRANTIES
For the purposes of the Warranties:
(a) Share Selling Company shall mean:
(i) as at the date of this Agreement, those companies identified as
"Shareholders" in column 2 of Part A of Part II of Schedule 1 and
as "Current Parent" in column 1 of Part B of Part II of Schedule
1 or in column 1 of Part IV of Schedule 1;
(ii) as at Closing, those companies identified as Share Selling
Companies in column 1 of Part I of Schedule 1;
(b) Sale Shares shall mean:
(i) as at the date of this Agreement, the entire issued share capital
of the "Subsidiary Undertakings" listed in column 3 of Part A of
Part II of Schedule 1, column 2 of Part B of Part II of Schedule
1 or the "Number and Class of shares owned and to be sold" as
shown in column 3 of Part IV of Schedule 1;
(ii) as at Closing, the entire issued share capital of the company
listed in column 2 of Part 1 of Schedule 1.
General
Capacity and conduct of business
1.1 Each of the Vendors and each Share Selling Company and Business Vendor and
any other party to any Transaction Agreement (other than the Purchaser or any
other member of the Purchaser's Group) is duly incorporated and validly existing
under the laws of the jurisdiction in which it is incorporated and has (or will
have at the time such agreements are entered into and performed) the necessary
corporate power and corporate authority to enter into and to perform those of
the Transaction Agreements to which it is a party.
1.2 Those of the Transaction Agreements to which they are party constitute
valid and binding obligations of the Vendor and each Share Selling Company,
Business Vendor and any other party to any Transaction Agreement (other than the
Purchaser or any other member of the Purchaser's Group).
1.3 The execution, delivery and compliance with the terms of those of the
Transaction Agreements to which they are party by the Vendor, the Share Selling
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Companies, the Business Vendors and any other party to any Transaction Agreement
(other than the Purchaser or any other member of the Purchaser's Group) will:
(a) not constitute a breach of any Material Contract or entitle any person to
terminate or avoid any such contract, where such breach, termination or
avoidance (or such breaches, terminations or avoidances collectively) will
cause a material adverse effect on the relevant Business;
(b) be in compliance with the memorandum and articles of association, bye-laws
or other equivalent constitutional documents of the Vendor and of each
Share Selling Company and Business Vendor;
(c) not contravene any order, judgement, decree, law or regulation by which the
Vendor or any Company, Share Selling Company or Business Vendor (in respect
of any Local Business only) is bound where any such contravention(s),
individually or collectively, will cause a material adverse effect on the
relevant Business; and
(d) not require any consent from any party to any Material Contract which is
not a member of the Vendor's Group.
The Companies
2.1 The information relating to the Companies and Subsidiaries contained in
Schedule 1 and Exhibit G is true and accurate in all respects.
2.2 Compliance has been made with all legal requirements in connection with the
formation of each of the Companies and all issues and grants of shares,
debentures or other securities of any of them, in each case other than de
minimis or technical requirements.
Ownership of Shares
3.1 Each Share Selling Company is the sole legal and beneficial owner of the
Sale Shares set out next to its name in Schedule 1.
3.2 Each Share Selling Company is entitled to sell and procure the transfer of
the full legal and beneficial ownership in the Sale Shares set out next to its
name in Schedule 1 free from any encumbrance, equity or third party right of any
nature.
3.3 The Sale Shares are fully paid up or credited as fully paid up and, in the
case of the companies listed in Parts I and II of Schedule 1, represent the
whole of the issued share capital of the relevant company and, in the case of
companies listed in Parts III and IV of Schedule 1, the entire issued Share
capital of each such company is as set out in Exhibit G and the relevant Sale
Shares represent all of the share capital of those companies held by any member
of the Vendor's Group.
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3.4 No agreement or contract has been entered into which requires or may
require any Company to allot or issue any share or loan capital and no Company
has allotted or issued any securities which are convertible into share or loan
capital.
3.5 There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance or equity on, over or affecting any of the
Sale Shares and there is no agreement or commitment to give or create any of the
foregoing and there are no rights of pre-emption or restrictions on transfer in
relation to the Sale Shares.
Subsidiaries
4.1 Except as set out in Parts II, III and IV of Schedule 1, no Company is the
holder or beneficial owner of (nor has agreed to acquire) any class of any
shares or loan capital or other securities of any other corporation.
4.2 Except in relation to the Joint Venture Interests, no Company and, in
relation to the Business, no Business Vendor is or has agreed to become a member
of any partnership, unincorporated association, joint venture or consortium
(other than recognised trade associations).
Assets and Insurance
5.1 Except for the Excluded Assets and those assets that are leased, each
Company and each Business Vendor has full legal and beneficial title to the
fixed and current assets of the Business reflected in the Accounts (save for
fixed and current assets worth less than $100,000, as defined for the purposes
of the Accounts, and save for fixed and current assets disposed of by the
Company or Business Vendor in the ordinary course of its business since the
Accounts Date) and to all fixed and current assets acquired by that Company or
Business Vendor since the Accounts Date (save for fixed assets and current
assets worth less than $100,000, as defined for the purposes of the Accounts and
save for any such fixed or current assets disposed of by the Company or Business
Vendor in the ordinary course of business). Except for the Excluded Assets and
those assets that are leased, the fixed and current assets individually worth
less than $100,000 to which the Companies and Business Vendors do not have full
legal and beneficial title have an aggregate value of $6,000,000 or less. A
Company or a Business Vendor either has in its possession, or is entitled
(subject to any Permitted Encumbrance) to take possession of, each of the assets
of the Business capable of possession other than those which are leased.
5.2 None of the assets of any Company or, in respect of the Business, of any
Business Vendor, is subject to any encumbrance (including without limitation any
debenture, mortgage, charge, lien, deposit by way of security, bill of sale,
option or right of pre-emption) other than any Permitted Encumbrances and there
is no agreement or commitment to give or create any.
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5.3 Save for Intellectual Property Rights (which for the avoidance of doubt
are dealt with in paragraph 17 below), the Business Assets together with the
property rights, assets and facilities owned by the Companies comprise all the
property rights, assets and facilities now used exclusively or primarily in the
Business, and such properties, rights, assets and facilities together with those
to be provided under the arrangements which are the subject matter of clause 15
and/or Schedules 17, 20 or 22 comprise all the assets which are necessary as at
Closing for the carrying on of the Business at Closing in the manner in which it
is presently conducted.
5.4 So far as the Vendor is aware, all key items of Plant and Equipment are in
reasonable working order (subject to fair wear and tear, having regard to their
age and use, taken as a whole) so as to be capable of operating on a comparable
basis as they have been operated by the Business during the last 12 months.
5.5 Save for fluctuations and variations in Stock due to normal business
factors including, without limitation, production schedules and market demand
(including seasonal factors affecting the same) and save for, in the case of
Tioxide, excess Stock arising out of the settlement arrangements between QIT and
TGL following the arbitration proceedings disclosed in the Disclosure Letter,
the Stock taken as a whole comprises broadly the same mix of types and grades of
products as are required for the trading requirements of the Business and the
Stock has been maintained at levels which in the ordinary course of business
have been appropriate to meet the current level of sales in the Business.
5.6 The statutory books (including registers and minute books) of each Company
have been properly kept and contain in all material respects bona fide and
accurate records of all matters customarily or required to be dealt with
therein.
5.7 The Data Room contains details of the current insurance arrangements
applicable to each Company and the Business. All premiums in relation to those
arrangements have been duly paid and, so far as the Vendor is aware all such
policies are in full force and effect and are not void or voidable. There is no
claim for an amount in excess of $150,000 outstanding under any such arrangement
and, so far as the Vendor is aware, no event has occurred which is likely to
give rise to any claim for an amount in excess of $150,000.
Compliance with law
6. No Company or, in respect of the Business, any Business Vendor is in
contravention of any law, statute, order or regulation of any relevant
jurisdiction (other than any anti-trust or similar legislation), where such
contravention when taken together with contraventions arising out of the same or
related acts, omissions, facts or circumstances will cause a material adverse
effect on the relevant Business.
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Licences and consents
7.1 The Companies and, in respect of the Business, the Business Vendors
together have all governmental authorisations, licences, consents, permissions,
approvals and qualifications (being qualifications which the Company or Business
Vendor concerned is required to have for such purpose by applicable law)
necessary to carry on the Business in all material respects in the manner in
which such Business is now carried on and such authorisations, licences,
consents, permissions, approvals or qualifications as are so necessary are in
full force and effect and, so far as the Vendor is aware, there are no
circumstances which are likely to cause any such authorisation, licence,
consent, permission or approval not to be renewed or revoked, where its
revocation or non-renewal (or such revocations or non-renewals collectively)
will cause a material adverse effect on the relevant Business.
7.2 All the authorisations, licences and consents referred to in paragraph 7.1
are valid and subsisting and have been complied with in all material respects.
Litigation, insolvency and product liability
8.1 No Company and, in respect of the Business, no Business Vendor is engaged
in any litigation, arbitration, administrative or criminal proceedings likely to
involve that Company or Business Vendor paying any sum in excess of $150,000 or
which otherwise will, individually or collectively, cause a material adverse
effect on the relevant Business and, so far as the Vendor is aware, there are no
such proceedings pending or threatened in writing.
8.2 There are no orders, decrees, judgments or agreements with any Court or
governmental authority or agency to which any Company or Business Vendor or the
Vendor is a party or by which any Company, Business Vendor or the Vendor is
bound and which will, individually or collectively, cause a material adverse
effect on the relevant Business.
8.3 No member of the Vendor's Group is engaged in any litigation or
arbitration proceedings which are likely, individually or collectively, to have
a material effect on the capacity of the Vendor or any Share Selling Company or
Business Vendor to perform its obligations under this Agreement and, so far as
the Vendor is aware, no such legal or arbitration proceedings have been
threatened in writing.
8.4 No administrator, receiver or administrative receiver or any other
equivalent officer has been appointed in respect of any Company or Business
Vendor or in respect of any part of the assets or undertakings of any such
company.
8.5 No petition has been presented, no order has been made, no resolution has
been passed and no meeting has been convened for the winding-up of any Company
or Business Vendor or for an administration order or the equivalent in the
relevant
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jurisdiction of incorporation to be made in relation to any Company or Business
Vendor.
8.6 No Company or Business Vendor is unable to pay its debts as they fall due.
8.7 No distress, distraint, charging order, garnishee order, execution or
other equivalent process in the jurisdiction of incorporation has been levied
or, so far as the Vendor is aware, applied for in respect of the whole or any
material part of the property, assets and/or undertaking of any Company or
Business Vendor and remains outstanding.
Environmental matters
9. For the purposes of the warranties in this paragraph 9, where applicable
the definitions in Schedule 14 and/or Schedule 14A (as applicable) shall apply.
9.1 So far as the Vendor is aware, during the period of three years expiring
on the date of this Agreement, each Company or, in respect of its Local
Business, each Business Vendor has complied with all material Environmental
Permits and Environmental Laws except where failure to comply would not have a
material adverse effect on the relevant Business.
9.2 All material Environmental Permits have been obtained and are in full
force and effect and, so far as the Vendor is aware, no circumstances exist
which are likely to result in (a) the variation, limitation or revocation of any
such Environmental Permit; or (b) any such Environmental Permit not being
extended, renewed or granted (provided that the transactions provided for in
this Agreement do not constitute a "circumstance" for the purpose of this
Agreement) except where such circumstances, or the matters referred to in (a) or
(b) would not have a material adverse effect on the relevant Business.
9.3 No Company or, in respect of its Local Business, no Business Vendor is
involved in any litigation, proceedings or claim by any relevant authority or
other person under Environmental Laws or in relation to Environmental Matters
and, so far as the Vendor is aware, none is threatened except, in each case,
where such actual or threatened litigation, proceedings or claim would not have
a material adverse effect on the relevant Business.
9.4 So far as the Vendor is aware, there are no audits or other assessments,
reviews, or reports in its possession or the release of which is in its control
relating to Environmental Matters which have not been disclosed to the Purchaser
the contents of which would reveal facts or circumstances likely to give rise to
a material adverse effect on the relevant Business.
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Accounts
10. In respect of the ICI Business, the Accounts were, save as specified
therein, prepared in all material respects in accordance with accounting
principles generally accepted in the United Kingdom. On that basis, and subject
as described in the Accounts, such Accounts present fairly, in all material
respects, in accordance with the basis of preparation set out in Note 1 to the
Accounts, the aggregate financial position of the ICI Business as at the
Accounts Date and the aggregate results of its operations for the year ended on
the Accounts Date. Without prejudice to the generality of the foregoing, there
are no material fixed assets and investments included in the Accounts which are
not part of the ICI Business. In respect of the PO/MTBE Business, the Accounts
were prepared in all material respects in accordance with accounting principles
generally accepted in the United States. On that basis, subject as described in
such Accounts, such Accounts present fairly, in all material respects, the
financial position of the PO/MTBE Business at the Accounts Date and the results
of its operations for the year ended on the Accounts Date. Without prejudice to
the generality of the foregoing, there are no material fixed assets and
investments included in the Accounts which are not part of the PO/MTBE Business.
Grants
11. No Company has received any grant, subsidy, payment or allowance from any
governmental authority, body or agency (whether supranational, national,
regional or local) (but always excluding any relating to Taxation) during the
last six years of $500,000 or more (or $2,000,000 or more in aggregate for all
Companies) which would be repayable as a result of the sale of the Sale Shares
and Local Businesses under this Agreement.
Anti Competitive Arrangements
12.1 So far as the Vendor is aware, the Vendor is not and has not been in the
last three years, and no Company or Business Vendor is or has been in the last
three years, a party to any agreement, arrangement, concerted practice or course
of conduct which infringes any anti-trust or similar legislation in any
jurisdiction in which the Company or Business Vendor carries on the Business,
where the consequences of such infringement(s), individually or collectively,
will cause a material adverse effect on the relevant Business.
12.2 The Vendor has not and no Company or Business Vendor (in relation to its
Local Business) has received in the last three years any process, notice or
written communication from any local, national or supranational authority having
jurisdiction in competition matters in relation to any aspect of the Business or
any agreement, arrangement, concerted practice or course of conduct to which
they are alleged to be a party in relation to the Business the nature or subject
matter of which is, individually or collectively, likely to cause a material
adverse effect on the
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relevant Business. So far as the Vendor is aware, no such process, notice or
communication is likely to be received.
Material Contracts and Guarantees
13.1 No Company or Business Vendor, in relation to its Local Business, is party
to any Material Contract.
13.2 Other than in the ordinary course of business, no Business Contract, or
contract to which any Company is a party (or the benefit of which is held in
trust for or has been assigned to any of the Companies), restricts the freedom
to carry on the whole or any part of the Business in any part of the world where
the consequences of such restriction when taken together with any related
restrictions applying to the Business, will cause a material adverse effect on
the relevant Business.
13.3 No Company or, in respect of the Business, any Business Vendor has
received written notice of any breach of, or default under, any Material
Contract and, so far as the Vendor is aware, no other party to a Material
Contract is in breach of, or in default under, any Material Contract, the
consequence of which in each case (when taken together with any similar or
related breach or default) will cause a material adverse effect on the relevant
Business.
13.4 No Company and no Business Vendor (in relation to the Business) is a party
to or has any liability (present or future) under any guarantee by it of the
obligations of any third party which is not a Company or a member of the
Retained Group, being a guarantee under which it has a liability of more than
(Pounds)500,000 or, other than in the ordinary course of business, any letter of
credit, hire purchase, credit sale, conditional sale agreement, leasing or
hiring agreement.
13.5 Neither in the financial period ending on the Accounts Date nor in the
period since the Accounts Date has any person (together with other persons
connected with him so far as the Vendor is aware) purchased from or sold to each
of the Polyurethanes, Relevant Petrochemicals, PO/MTBE or Tioxide Business more
than 5 per cent. of the aggregate amount of all sales or purchases made by each
such Business during such period.
13.6 In respect of the PO/MTBE Business, the POS Agreement (as defined in
clause 18.13) is a Material Contract which is expected to continue to be
profitable for the foreseeable future and its terms and conditions will not be
changed as a result of its assignment to the Purchaser. No consent is required
from the counterparty for the assignment of the POS Agreement to the Purchaser
and others.
13.7 Each Material Contract is valid and enforceable in accordance with its
terms.
Employees
14.1 For the purposes of this section:
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(a) Site means any one of the Companies' or Business Vendors' sites at
which there are more than 30 Employees together with all manufacturing
facilities (including systems houses and finishing plants); and
(b) Warranted Employees means Employees or Business Employees who are
employed at a Site and all Senior Employees.
14.2 Particulars of the material terms of employment applicable to the
Warranted Employees (other than senior management team members) of the Companies
or Business Vendors (other than those terms and conditions imposed by any
national collective agreements, industry-wide collective agreements or by any
applicable national law or custom and practice) are disclosed in the Data Room.
Particulars of the material terms of employment applicable to the senior
management team members will be provided to the Purchaser not later than 10
business days after the date of this Agreement.
14.3 Other than national collective agreements and industry-wide collective
agreements, the collective agreements (details of which will be provided to the
Purchaser prior to Closing) and union recognition agreements disclosed in the
Data Room are all the material current written or other material agreements
between each Company or Business Vendor and trade unions or representative
bodies relating to the Warranted Employees or any of them.
14.4 There is and has been within the last 12 months no material industrial
action involving the Warranted Employees in relation to the Companies or the
Business Vendors.
14.5 So far as the Vendor is aware, no Senior Employee employed by a Company or
Business Vendor has given or been given notice of termination of his employment
by the Company or Business Vendor.
14.6 No more than 15 Employees at any one Site have within the last 12 months
been given notice of termination of their employment by the Company or Business
Vendor.
14.7 Particulars of any individual loan other than travel advances made in the
ordinary course of business, relocation packaging or advances in accordance with
the terms of any employee benefit plan made by any Company or Business Vendor to
a Warranted Employee which is in excess of $100,000 and which shall remain
outstanding at Closing, together with particulars of any individual sum owed by
a Company or Business Vendor to any Warranted Employee (other than in relation
to remuneration and other contractual or customary benefits) which is in excess
of $100,000, are set out in the Data Room.
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14.8 An up to date list of all Employees employed by a Company or Business
Vendor and seconded to the Vendor from any Company or any Business Vendor or
from the Vendor to any Company or any Business Vendor is disclosed in the Data
Room.
14.9 The Data Room contains lists of all Employees at each Site as at the date
that such list was compiled and the number of Employees on each such list has
not changed by more than 2% since the date that such list was compiled
(excluding changes due to resignations and terminations for cause). To the
extent contained in each list, information relating to salary, date of birth (or
age) and date of commencement of continuous employment (or length of service)
with a Company or Business Vendor is accurate in all material respects. To the
extent that the Data Room contains additional information in relation to all
Senior Employees, including name and job title, it is accurate in all material
respects. The Data Room also contains approximate numbers of Employees of each
Company or Business Vendor who are employed at locations which are not Sites.
14.10 Since the Accounts Date no change has been made in the emoluments or
other terms of engagement to any group of 20 or more Employees except for
increases made in accordance with normal industry and company practice, and no
such change and, except as aforesaid, no negotiation or request for such change
is due or expected within 6 months from the date of this agreement.
14.11 A list containing each consultancy agreement of an equivalent annual
value of US$150,000 between any individual and a Company or Business Vendor
(where relevant to the Business or any part of it) with an annual cost to the
Business of $150,000 or more is disclosed in the Data Room.
Pensions
15.1 In this paragraph 15:
Pension Schemes means the following arrangements for the provision of Retirement
Benefits to and in respect of Employees employed by a Company or Business
Vendor:
Polyurethanes
. ICI Pension Fund (including the ICI Supplementary Pension Fund)
. ICI International Pension Plan
. Avalon Pension Scheme
. Deutsche ICI Pension Plan
. ICI Holland Pension Scheme
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. ICI Holland Pre-pension Scheme
. Supplementary Pre-pension Plan
. PET/Melinar VUT Scheme
. ICI Pension Fund VZW
. The Plan de Prevision de ICI Espana SA
. East Europe Regional Pension Plan (insured under an Insurance Policy with
Cigna)
. ICI China Ltd Retirement Benefit Scheme
. ICI Singapore Group Retirement Scheme
. ICI Malaysia Retirement Benefits Scheme
. ICI Taiwan Polyurethanes Employment Retirement Scheme
. ICI Thailand Provident Fund
. PT ICI Indonesia Pension Plan
. ICI Japan Ltd Pension Plan
. ICI Americas Pension Plan (will not cover Polyurethanes employees after 31
March 1999)
. Polyurethanes Pension Plan (spin-off from ICI Americas Pension Fund)
. ICI Excess Benefit Plan
. Executive Pension Plan
. Executive Retirement Plan for Key Employees of ICI's Group
. Retiree Medical and Dental Coverage under the ICI Americas Health and
Dental Care Plan
. Executive Supplemental Benefits Plan
. Executive Split Dollar Insurance Plan
. Executive Supplemental Death Benefit Arrangement
. Bonus Conversion Plan of ICI American Holdings Inc.
. Unfunded Pension Arrangements of Robert Reen and Ron Wyatt
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. Trust for the Unfunded Deferred Compensation Plan of ICI American Holdings,
Inc.
. The Trust Deed for the Defined Benefit Plans of ICI American Holdings Inc.,
dated May 1993.
. The Trust Deed for Certain Defined Contribution Plans of ICI American
Holdings, Inc., dated May 1993.
. The Trust Deed for the Unfunded Deferred Compensation Plans of ICI American
Holdings Ltd Inc., dated June 1993.
. ICI Canada Pension Plan
. ICI Canada Senior Managers Pension Plan
Relevant Petrochemicals
. ICI Pension Fund (including the ICI Supplementary Pension Fund)
. ICI International Pension Plan
Tioxide
. Tioxide Pension Fund
. Tioxide Offshore Pension Fund
. The Progefond - fondo pensione
. The FONCHIM Associazone fonde Pensione Complemetare a Capitalizzazione per
i Lavoratori dell'Industra Chimica e Farmaceucitica e del Settorie Affini
. Plan de Prevision Social
. Convenio Colectivo de Centro
. AECI Pension Fund
. Tioxide Southern Africa Provident Fund
. Tioxide Southern Africa Pension Fund
. Tioxide Malaysia and Group Companies Expatriate Retirement Fund
. Tioxide Malaysia Retirement Fund
. Tioxide America Inc. (TAI) Retirement Plan
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. TAI Savings Plan
. TAI Supplemental Employees Retirement Plan
. Tioxide Canada Inc. (TCI) Staff Employees' Pension Plan
. TCI Hourly Employees Pension Plan
. TCI Supplemental Employees Retirement Plan
Retirement Benefits means any benefits payable in respect of retirement, death,
invalidity or long service, including:
(a) pensions, lump sums and gratuities provided on retirement or death; and
(b) post-retirement dental or medical benefits;
Transferring Pension Schemes means those of the Pension Schemes which will
transfer to the Purchaser by operation of law on the Closing Date.
15.2 The Pension Schemes are the only arrangements (other than those under any
public law, statute or regulation) under which any Company or Business Vendor
provides or is liable to provide any Retirement Benefits in respect of any
Employee employed by a Company or Business Vendor or former employee of a
Company.
15.3 The Data Room contains:
(a) all material documents containing the provisions currently governing the
Pension Schemes;
(b) the latest actuarial valuation of each Transferring Pension Scheme.
(c) the latest audited accounts of each Pension Scheme where such accounts
exist.
15.4 Each Pension Scheme has been approved by the appropriate taxation, social
security and supervisory authorities in the relevant country or state.
15.5 Except in relation to contributions due to any Pension Scheme in respect
of the last month, all amounts due to be paid by the Companies or Business
Vendor to the Pension Schemes have been paid and those which fall due for
Closing will have been paid by that date.
15.6 So far as the Vendor is aware, the Companies and Business Vendor[s] and
the trustees, managers and administrators of the Pension Schemes have complied
in all material respects at all material times with their respective obligations
under the Pension Schemes and all applicable laws and regulations in respect of
the Pension Schemes in relation to the Employees employed by a Company or
Business Vendor.
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15.7 There is no liability to make any payment to any occupational pension
scheme established in the United Kingdom (UK Plan) in respect of any Employee
under Section 75 of the Pensions Act 1995.
15.8 The appropriate Company or Business Vendor in respect of each UK Plan
which is contracted-out holds or is named in and will until Closing continue to
hold or be named in an appropriate contracting-out certificate (within the
meaning of the Pension Schemes Act 1993) in respect of those of the Employees
who are members of any UK Plan. All age-related payments which are due and
payable to any UK Plan in respect of any Employee or former employee of any
Company or Business Vendor under the Occupational Pension Schemes (Contracting-
out) Regulations 1996 (the Contracting Out Regulations) have been received and
properly allocated in respect of such Employee or former employee and no age-
related payments have been received in breach of the Occupational Pension
Schemes (Age-related Payment) Regulations 1997 or Regulation 37 of the
Contracting-out Regulations.
15.9 There are not in respect of any of the Transferring Pension Schemes, or
the benefits under any of the Pension Schemes in respect of any of the
Employees, any material actions, suits or claims pending or threatened.
15.10 No surplus payment within the meaning of the Pension Scheme Surpluses
(Administration) Regulations 1987 has been or will be before Closing be made out
of any UK Plan. No such payment is proposed to be made out of any such UK Plan
to any employer participating in such UK Plan.
15.11 The representations and warranties in 15.2 through 15.10 shall not apply
to any Pension Scheme that is a U.S. Benefit Plan. Anything fairly disclosed in
the Data Room or the Disclosure Letter is an exception to the representations
and warranties applicable to the US Benefit Plans. For the avoidance of doubt,
no representations or warranties are being made with respect to the US Benefit
Plans of Louisiana Pigment Company or Rubicon Inc.
15.11.1 For purposes of the representation and warranties applicable to US
Benefit Plans, the following definitions shall apply
Assumed US Benefit Plans means the US Benefit Plan of a Company and the US
Benefit Plan of a Business Vendor transferred
to the Purchaser by means of this Agreement.
Code means Internal Revenue Code of 1986, as amended.
ERISA means the Employee Retirement Income Security Act of
1974, as amended.
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ERISA Affiliate means any person with respect to whom the Vendor,
Business Vendor or Company is treated as
"single employer" under section 4001(b) of
ERISA on the date hereof.
Title IV Plan means a US Benefit Plan subject to Title IV of
ERISA.
PBGC means the Pension Benefit Guaranty Corporation
US Benefit Plan means (i) each employee pension benefit plan, as
defined in section 3(2) of ERISA that is
subject to ERISA; and
(ii) each material employee welfare benefit
plan, as defined in section 3(1) of ERISA
that is subject to ERISA;
that in each case, is sponsored, maintained or
contributed to or required to be contributed
to by a Vendor, Business Vendor, Company or
ERISA Affiliate for the benefit of the US
Employees. For the avoidance of doubt, any
plan excluded from ERISA by means of section
4(b)(4) is not a US Benefit Plan.
US Employee means an Employee of a Company or Business Vendor
incorporated in the United States.
15.11.2 The Disclosure Letter contains a true and complete list of each US
Benefit Plan.
15.11.3 With respect to each US Benefit Plan (other than the Polyurethanes
Pension Plan), Vendor has delivered or made available to Purchaser through the
Data Room, the Disclosure Letter or otherwise, true and complete copies of:
(i) the most recent plan document and amendments thereto;
(ii) any trust or other funding medium document; and
(iii) the most recently disseminated summary plan description and/or
summary of material modification.
15.11.4 With respect to each Assumed US Benefit Plan (other than the
Polyurethanes Pension Plan), Vendor has delivered or made available to Purchaser
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through the Data Room, the Disclosure Letter or otherwise, true and complete
copies of:
(i) the most recently filed Form 5500, required by ERISA or the
Code, to include any required accountant's report;
(ii) the most recently prepared actuarial valuation required by ERISA
or the Code; and
(iii) the most recent determination letter received from the Internal
Revenue Service (the IRS) with respect to each such plan
intended to qualify under Code section 401(a).
15.11.5 With respect to the Polyurethanes Pension Plan, Vendor has delivered or
made available to Purchaser through the Data Room, the Disclosure Letter or
otherwise, true and complete copies of:
(i) the 1997 Form 5500 of the ICI Americas Pension Plan;
(ii) the January 1, 1998 actuarial valuation of the ICI Americas
Pension Plan; and
(iii) the most recent IRS determination letter of the ICI Americas
Pension Plan.
15.11.6 With respect to any Assumed US Benefit Plan that is a Title IV Plan, no
liability under Title IV of ERISA has been incurred by the Company or the
applicable Business Vendor that has not been satisfied in full, other than
liability for PBGC premiums provided that any failure to pay such premium does
not constitute a breach of 15.11.12.
15.11.7 With respect to the Title IV Plans (other than the Assumed US Benefit
Plans), neither the Vendor nor any of its ERISA Affiliates have failed to comply
with Title IV of ERISA in such a manner that would reasonably be expected to
impose liability on Purchaser under Title IV of ERISA). Insofar as the
representation made in this 15.11.7 applies to sections 4064, 4069 or 4204 of
Title IV of ERISA, it is made with respect to any employee pension benefit plan
(other than an Assumed US Benefit Plan) subject to Title IV of ERISA to which
the Relevant Companies, the Vendor, the Business Vendor, or any ERISA Affiliate
made, or were required to make, contributions during the five (5) year period
ending on the last day of the most recent plan year ended prior to the Closing
Date.
15.11.8 With respect to any Title IV Plan that is an Assumed US Benefit Plan:
(i) there is no accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or
not waived, on
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the last day of the most recent plan year ending prior to the
date hereof;
(ii) as of the Closing Date no proceedings have been initiated by the
PBGC to terminate such Title IV Plan; and
(iii) all contributions required to be made prior to the date hereof
have been made or are reflected in the Accounts.
15.11.9 With respect to each Assumed US Benefit Plan that is a Title IV Plan,
the present value of accrued benefits under such plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such plan's actuary with respect to such plan, did not exceed, as of
its latest valuation date, the then current value of the assets of such plan
allocable to such accrued benefits.
15.11.10 No Assumed US Benefit Plan is a multiemployer pension plan within the
meaning of section 3(37) of ERISA or a plan described in section 4063(a) of
ERISA. Neither Vendor nor its ERISA Affiliates have suffered prior to Closing a
"complete withdrawal" or a "partial withdrawal" as such terms are respectively
defined in sections 4203 and 4205 of ERISA, that could reasonably be expected to
impose a liability on Purchaser or a Company.
15.11.11 No fiduciary of an Assumed US Benefit Plan has committed a breach of
fiduciary duty that could reasonably be expected to impose a liability upon
Purchaser or a Company under ERISA for breach of fiduciary duty. Prior to
Closing no party in interest has engaged in a prohibited transaction with
respect to an Assumed US Benefit Plan that could reasonably be expected to
impose a liability upon Purchaser or a Company for a tax, penalty or fine under
ERISA section 4975 or ERISA section 502(i). No tax, fine or penalty is pending
or to Vendor's knowledge, threatened with respect to an Assumed US Benefit Plan
under Code section 4976 or 4980B.
15.11.12 Each Assumed US Benefit Plan has been operated and administered in all
material respects in accordance with its terms and ERISA, the Code and other
applicable law.
15.11.13 Each Assumed US Benefit Plan (other than the Polyurethanes Pension
Plan) intended to be "qualified" within the meaning of (S) 401(a) of the Code
has received a favourable IRS determination letter with respect to such
qualification. As of the date hereof the remedial amendment period for the
Polyurethanes Pension Plan has not expired.
15.11.14 No US Benefit Plan provides to US Employees medical, surgical,
hospitalisation, death or similar benefits (whether or not insured) for periods
extending beyond their retirement or other termination of service, other than
(i)
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coverage mandated by applicable law, (ii) death benefits under any "pension
plan," or (iii) benefits the full cost of which (based on COBRA rates for
medical benefits) is borne by the US Employee or his or her dependants or
beneficiaries.
15.11.15 There are no pending, or to the best of the Vendor's knowledge,
threatened claims by or on behalf of any Assumed US Benefit Plan by any US
Employees or beneficiary or alternate payee thereof covered under any such
Assumed US Benefit Plan (other than routine claims for benefits) against Vendor,
the Relevant Companies or the Business Vendor. With respect to a U.S. Benefit
Plan (other than an Assumed Benefit Plan) no claims are pending or to Vendors
knowledge threatened (other than routine claims for benefits) which would
reasonably be expected to impose a material liability on the Purchaser or a
Company after the Closing.
15.11.16 The consummation or announcement of any transaction contemplated by
this Agreement will not (either alone or in conjunction with additional or
further acts in events) result in any (A) additional material payments (whether
of severance pay or otherwise) becoming due from a Company, Vendor or Business
Vendor, or the Purchaser to any officer, Employee, former employee, retiree,
partner, director or former director thereof or to the trustee under any "rabbi
trust" or similar arrangement or to any dependent beneficiary or alternate payee
thereof or, (B) material benefits under any Assumed US Benefit Plan being
established or becoming accelerated, vested or payable. For the avoidance of
doubt there is no breach of this 15.11.16 with respect to any payments made or
benefits provided that would have been made or provided if the consummation or
announcement had not occurred.
Properties
16.1 The Properties and the Excluded Properties constitute the only land or
buildings owned, leased, used or occupied by the relevant Companies or (as the
case may be) used or occupied for the purposes of the ICI Business and/or the
PO/MTBE Business as at the date of this Agreement.
16.2:
(A) A Company or a Business Vendor (as the case may be) is or will at Closing
be legally and (where appropriate) beneficially entitled to each of the
Properties and has or will at Closing have good title to the estate or
interest denoted in respect of each Property in Part I of Schedule 17
subject to Permitted Encumbrances.
(B) A Company or a Business Vendor (as the case may be) has in its possession
or under its control all material deeds and documents or (where
appropriate) certified, examined, notarised or similar copies relating to
[the title the interest] of the relevant Company or (as the case may be)
Business Vendor to the Properties.
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(C) Each of the Properties is free from any leases, underleases, tenancies or
licences in favour of third parties which have a material adverse effect
on the relevant Business.
16.3:
(A) Except for Permitted Encumbrances there are no mortgages or charges, legal
or equitable, fixed or floating, affecting any of the Properties and there
is no agreement or binding commitment on the part of the relevant Company
or Business Vendor to give or create any;
(B) There are no agreements for sale, estate contracts, enforceable options or
rights of pre-emption affecting any of the Properties which if exercised
would have a material adverse affect on the relevant Business.
(C) The Properties are not subject to any covenants, restrictions or other
encumbrances which have a material adverse effect on the relevant Business
and there is no outstanding written notice of a breach of any covenants,
restrictions or other encumbrances which will have a material adverse
effect on the relevant Business.
16.4 The existing principal use of each Property at the date of this Agreement
is in all material respects a permitted or lawful use under applicable planning
legislation or is otherwise immune from enforcement action thereunder and there
is no outstanding written notice of a material breach of applicable planning
legislation which will have a material adverse affect on the relevant Business.
16.5 No relevant Company or (as the case may be) Business Vendor has received
any written notice of a subsisting material breach of any statutes, orders or
regulations (other than environmental statutes, orders or regulations) relating
to any of the Properties from any competent or statutory authority which will
have a material adverse effect on the relevant Business.
16.6 There are no material outstanding and current disputes, actions, claims,
demands or complaints in respect of any Properties which have a material adverse
effect on the relevant Business.
16.7 No relevant Company or (as the case may be) Business Vendor has received
any subsisting written notice alleging absence of any material rights, easements
and services which are necessary for the use of the Properties for their actual
use at the date on which this warranty is given and none is anticipated by the
relevant Company or (as the case may be) Business Vendor.
16.8 In relation to each of the Properties which is leasehold there are no
material arrears of rent or other sums payable under the lease under which such
Property is held and no Business Vendor or (as the case may be) relevant Company
has received
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a subsisting written notice of a material breach of any covenants and conditions
contained in such lease.
16.9 No Relevant Company has received a subsisting written notice of a material
breach of any covenants and conditions contained in any material leases,
tenancies, licences or agreements to which the Properties are subject.
16.10 No relevant Company has within the 5 years preceding the date of this
Agreement entered into (as an original contracting party or a guarantor thereof)
a lease, licence or other similar interest in land and buildings (other than in
respect of the Properties and the Excluded Properties) in respect of which it
has (actual or contingent) liability other than in respect of Environmental
Matters.
16.11 Reference to the Properties in warranties 16.2 to 16.9 (inclusive) shall
be deemed to exclude any Properties which are or will at Closing be owned leased
occupied or used by a Non-Controlled Joint Venture. The provisions of paragraph
25 of this Schedule shall apply in respect of the application of warranties 16.2
to 16.10 (inclusive) to the Properties owned leased occupied or used at Closing
by a Warranted Joint Venture.
16.12 Reference in warranty 16.1 to land and buildings used or occupied for the
purposes of the ICI Business shall be deemed to exclude any used or occupied by
any Non-Controlled Joint Venture.
Intellectual Property & Information Technology
17.1 In this clause 17:
material means:
(a) in relation to Intellectual Property Rights, Intellectual Property Rights
or related agreements the absence of which would have a significant
adverse impact on the conduct of the Business;
(b) in relation to Computer Systems, Computer Systems or related agreements
the absence of which would have a materially detrimental effect on the
conduct of the Business and does not include a Computer System which can
be replaced (for example, by the purchase of a new software package or new
hardware):
(i) at a cost in respect of that Computer System being replaced not
exceeding (Pounds)25,000 (including out-of-pocket expenses and
the cost of internal management time); and
(ii) without the need for any material disruption to the relevant
Business and without the need for material development or
configuration; and
Business means the ICI Business (in the case of ICI) and the PO/MTBE Business
(in the case of HSCC). For the avoidance of doubt, "significant adverse impact"
shall mean a lesser effect than material adverse effect on the relevant Business
as defined in this Agreement.
17.2 Brief details of all Registered Rights are set out in the IP Annex. The
relevant Company or Business Vendor as set forth opposite the Registered Rights
in question in the IP Annex is the sole registered proprietor of, or applicant
in respect of, such Registered Rights unless otherwise indicated therein.
17.2A All renewal fees required for the maintenance of the Registered Rights
have been paid or instructions given for payment to be made in the ordinary
course of business and no Registered Rights have been abandoned or allowed to
lapse except in the ordinary course of business.
17.3 The Group IPR, the Business IPR, Business Information and Group
Information are owned both legally and beneficially by the relevant Company or
Business Vendor free from all liens, charges, encumbrances and other security
interests and are not subject to any assignment or agreement to assign by any
relevant Company or Business Vendor (other than to the Purchaser).
17.4 Neither the Selling Companies nor any Company have received written
notification within the 12 months prior to the date of this Agreement that any
of the rights comprised in the Group IPR or the Business IPR are the subject of
any opposition or revocation proceedings (or other similar or equivalent
proceedings in any other jurisdiction) and no Company or Business Vendor is
currently a party to such proceedings in relation to any Intellectual Property
Rights owned by any third party (insofar as such proceedings relate to the
Business).
17.5 Brief details of all material agreements entered into by any Company or
Business Vendor in relation to any Business IPR, Business Information, Group IPR
or Group Information or in relation to any Intellectual Property Rights or
Information which, or the rights in which, are owned by any third party and
which Relate to the Business are set out in the IP Annex and, in the case of all
of such agreements as are written, true copies are disclosed in the Data Room.
17.6 No Company or Business Vendor or, so far as the Vendor is aware, any
other party thereto is in material breach of any agreement required to be
disclosed pursuant to paragraph 17.5.
17.7 So far as the Vendor is aware, the carrying on of the Business does not
infringe or make unauthorised use of any Intellectual Property Rights or
confidential Information of any third party and no written communications have
been received within the 24 months preceding the date of this Agreement by any
relevant Company or Business Vendor from any third party asserting the same.
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17.8 So far as the Vendor is aware, no third party is infringing or making
unauthorised use of the Group IPR, the Business IPR, the Business Information or
the Group Information.
17.9 Each member of the Purchaser's Group will immediately following Closing
either solely legally and beneficially own or (subject to the need to obtain
third party consents pursuant to clause 6.14 of this Agreement) have a valid
licence to use all Intellectual Property Rights necessary to carry on the
Business in the manner carried on prior to Closing.
17.10 There are no current claims or, so far as the Vendor is aware, any
threatened claims by any current or former employee of the relevant Business for
compensation pursuant to section 40 Patents Act 1977 (or any similar or
equivalent provision in any other jurisdiction) and no claim has been made for
such compensation which has resulted in any award of compensation which remains
unpaid as at the date of this Agreement.
17.11 Details of all material written agreements to which a Company or a
Business Vendor is a party relating to the use, development, maintenance,
support and disaster recovery of material Computer Systems are disclosed in the
Data Room.
17.12 No member of the Retained Group nor any Company is in material dispute
with any supplier of material Computer Systems or related services in connection
with the Business which could have a materially detrimental effect on the
Business.
17.13 No member of the Retained Group nor any Company nor, so far as the
Vendors are aware, any other party thereto is in material breach of any
agreement required to be disclosed pursuant to paragraph 17.11 which could have
a materially detrimental effect on the Business.
17.14 For the purposes of this paragraph 17.14, a Computer System is Year 2000
Compliant if neither its performance nor functionality is or will be affected by
dates prior to, during or after the year 2000 and in particular (but without
limitation):
(a) no value for current date causes or will cause any interruption in
operation;
(b) date-based functionality behaves and will behave consistently for dates
prior to, during and after the year 2000;
(c) in all interfaces and data storage, the century in any date is and will
be specified either explicitly or by unambiguous algorithms or
inferencing rules; and
(d) the year 2000 is and will be recognised as a leap year,
and Year 2000 Compliance shall be construed accordingly.
17.14.1 As part of the Retained Group's Year 2000 Project, the Business has
developed and established a written plan concerning the Year 2000
Compliance of the material Computer Systems (the Year 2000 Plan). The
Business has developed its Year 2000 Plan with reasonable skill and
care, to address the particular circumstances of, and the risks to the
Business and to identify the material Computer Systems critical to the
Business (in this paragraph 17.14 the Critical Computer Systems).
17.14.2 To date, the Business has implemented its Year 2000 Plan with reasonable
skill and care including:
17.14.2.1 identifying those Critical Computer Systems that may be Year
2000 non-Compliant;
17.14.2.2 carrying out appropriate testing of such Critical Computer
Systems as are referred to in paragraph 17.14.2.1. above, to
determine whether such Computer Systems are Year 2000
Compliant;
17.14.2.3 reasonably determining the appropriate method of remediation
to the Business in respect of such Critical Computer Systems
as are referred to in paragraph 17.14.2.1 above and which the
Business reasonably determines as a result of any testing
under paragraph 17.14.2.2 above, require remediation and has
used or is using reasonable endeavours to complete such
remediation prior to 31 August 1999;
17.14.2.4 if the Business reasonably determined under paragraph
17.14.2.3 above that any Critical Computer Systems require
remediation to be undertaken by or on behalf of the Business,
then the Business has undertaken or is undertaking such acts
of remediation to date with reasonable skill and care or has
procured a third party to undertake such remediation on its
behalf;
17.14.2.5 has used reasonable endeavours or is using reasonable
endeavours to obtain confirmation from the third party
suppliers of such Critical Computer Systems as are referred to
in paragraph 17.14.2.1 above that such Critical Computer
Systems are Year 2000 Compliant or (where such confirmation
has not been forthcoming) has used or is using reasonable
endeavours to obtain assurances from such third party
suppliers regarding appropriate remediation of such Critical
Computer Systems prior to 30 June 1999; and
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17.14.2.6 has used reasonable endeavours to obtain confirmation about
the impact that Year 2000 non-Compliance may have upon third
party critical utilities providers and material sole-source
suppliers to the Business (each a Critical Supplier for the
remainder of this paragraph 17.14).
17.14.3 Details of the Business's Year 2000 Plan together with an up-to-date
report of the status of its implementation and an estimate of the
Business's planned external costs to complete its Year 2000 Plan are
disclosed in the Data Room.
17.14.4 Details of those Critical Computer Systems referred to in paragraph
17.14.2.1 above which either:
17.14.4.1 having exercised its reasonable skill and care, the Business
has identified as being Year 2000 non-Compliant; or
17.14.4.2 as a result of using its reasonable endeavours to obtain
confirmation from third party suppliers of the Year 2000
Compliance of such Critical Computer Systems under paragraph
17.14.2.5 above, the Business has been informed by such
third party suppliers that such Critical Computer Systems
are not Year 2000 Compliant
are contained in the Data Room.
17.14.5 As a result of using its reasonable endeavours to obtain information
about the impact of Year 2000 non-Compliance from Critical Suppliers to
the Business under paragraph 17.14.2.6 above, the Business has not been
informed by any Critical Supplier that such Critical Supplier will not
be able to continue to supply the Business without interruption as a
result of the internal Year 2000 non-Compliance of that Critical
Supplier.
17.14.6 To Closing the Business will employ reasonable adequate resources in
its continuing implementation of its Year 2000 Plan.
17.14.7 To Closing the Vendor will continue to implement its Year 2000
programme and procure that the other members of the Retained Group
shall continue to implement their respective Year 2000 plans with
reasonable skill and care.
17.15 Details of any domain name registered by any Company or any member of
the Retained Group in connection with the Business are disclosed in the
Disclosure Letter.
17.16 So far as Steve Roberts in respect of the Relevant Petrochemicals
Business, Ian Machin in respect of the Tioxide Business, Paul Hulme in respect
of the
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Polyurethanes Business and Mark Beard in respect of the PO/MTBE Business are
aware at the date of this Agreement and without any additional investigation or
enquiry by them, there are no material defects in the material Computer Systems
which if the Relevant Petrochemicals Business, the Tioxide Business, the
Polyurethanes Business or the PO/MTBE Business (as the case may be) is carried
on in all material respects in the manner in which it is carried on at the date
of this Agreement, would have a material adverse effect on the relevant
Business.
Events since the Accounts Date
18. Since the Accounts Date and except for the purpose of giving effect to the
transactions contemplated by this Agreement, the ICI Business or the PO/MTBE
Business (as the case may be):
(a) has been conducted in all material respects in the ordinary course
consistent with its past practices;
(b) there has been no material adverse change in the financial position of the
ICI Business or the PO/MTBE Business (as the case may be);
(c) no asset of a value in excess of (Pounds)5 million has (and assets with an
aggregate value in excess of (Pounds)20 million have not) been disposed
of, or been agreed to be disposed of, on capital account and no contract
involving expenditure by it on capital account in excess of (Pounds)5
million has been entered into, and no contracts which collectively involve
expenditure on capital account in excess of (Pounds)20 million has been
entered into by any Company or any Business Vendor in relation to the
Business, in each of the above cases, otherwise than in the ordinary
course of business;
(d) no debts or other receivables of any Company or any Business Vendor in
relation to the ICI Business or the PO/MTBE Business (as the case may be)
have been factored or sold or agreed to be sold;
(e) no resolution of any Company in general meeting has been passed; and
(f) no change in the accounting reference period of any Company has been made.
Taxation
19.1(a) Each Company has duly made all proper returns required to be made for
any Tax purpose and has supplied or caused to be supplied all notices and
other information required by law to be supplied to any Tax Authority.
(b) There is no dispute or disagreement (not including routine queries
relating to the Tax returns of a Company) outstanding at the date of this
Agreement with any Tax Authority regarding the proper method of computing
the profits of
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the Company (or any part of it) for Tax purposes or the proper treatment
for VAT purposes of any supplies of goods or services made (or treated as
made) by the Company or in respect of any other Tax matter and there are
no circumstances of which the Share Selling Companies are aware which make
it likely that any such dispute or disagreement will commence.
(c) The amount of Tax chargeable on any Company in respect of any accounting
period ending on or within 6 years before the Accounts Date has not to any
material extent depended on any concession, agreement, dispensation or
other formal or informal arrangement with any Tax Authority in
circumstances where either:
(i) the availability of any such arrangement will be prejudiced as a
result of the change of control of the Company resulting from this
Agreement; or
(ii) the Company has not acted in accordance with the terms of the
arrangement in question.
Duties etc.
19.2 All customs duties and VAT payable to any Tax Authority upon the
importation of any of the Company's assets and all excise duties payable to any
Tax Authority in respect of any of these assets have (to the extent that they
are due and payable) been paid in full, and no asset is liable to confiscation
or forfeiture by virtue of non-payment or underpayment of any Tax or duty.
Stamp Duty and Stamp Duty Reserve Tax
19.3 All documents which are in the possession or control of the Company and
which are subject to stamp duty or similar duty or charges and which establish
or are necessary to establish the title of any Company to any material asset or
by virtue of which any Company has any right have been duly stamped and all
stamp duty or similar duty or charges properly paid thereon. Since the last
Accounts Date no Company has incurred any liability to stamp duty reserve tax or
any other similar duty or Tax.
Contracts
19.4 No contracts to which a Company is a party involve any future liabilities
of a revenue nature which when incurred will not be deductible in computing
profits for the purposes of corporation tax (or any corresponding Tax on profits
in any relevant jurisdiction) otherwise than as a result of any future changes
in the law or as a result of any voluntary act after Closing.
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Distributions and payments
19.5 Each Company has deducted and (insofar as they are due and payable)
properly accounted to the appropriate Tax Authority for all amounts which it has
been obliged to deduct in respect of or on account of Tax.
Employee benefits
19.6(a) All amounts payable to any Tax Authority or other appropriate authority
in respect of any employee (including any Tax deductible from any amounts
paid to an employee, and any national insurance, social fund or similar
contributions required to be made in respect of employees) due and payable
by any Company up to the date hereof have been duly paid and each Company
has made all such deductions and retentions as should have been made under
applicable laws or regulations.
(b) The Disclosure Letter contains details of all share incentive schemes,
profit sharing schemes and profit related pay schemes established by any
Company.
Close companies
19.7 No Company is, or has within the last 6 years been, a close company as
defined in section 414 of the Taxes Act.
Group transactions
19.8 No Company has in the last 6 years acquired any asset (other than trading
stock) from any company which at the time of the acquisition was a member of the
same group of companies in circumstances such that section 171 of the Taxation
of Chargeable Gains Act 1992 was applicable.
VAT
19.9 Each Company:
(a) has complied in all material respects with all VAT legislation, has made,
given, obtained and kept full, complete, correct and up-to-date returns,
records, invoices and other documents appropriate or required for those
purposes and is not liable to any abnormal or non-routine payment of VAT,
or any forfeiture or penalty, or to the operation of any penal provision
in relation to VAT;
(b) has not been required by the Commissioners of Customs and Excise or other
relevant Tax Authority to give security under paragraph 4 Schedule 11 of
the Value Added Tax Act 1994 or any other VAT legislation as a condition
of making supplies for the purposes of VAT;
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(c) is not and has not been treated as a member of a group for the purposes of
VAT legislation and has not applied for such treatment, and no transaction
has been effected in consequence of which a Company is or may be held
liable for any VAT arising from supplies made by another company;
(d) has not and nor has any relevant associate made any election under any VAT
legislation in respect of any land in, over or in respect of which the
Company has any interest, right or licence to occupy.
19.10 [Agreed deletion]
Residence and offshore interests
19.11 Each Company is and has at all times been resident for Tax purposes in
its place of incorporation and is not and has not been treated as resident in
any other jurisdiction for any Tax purpose (including any double taxation
arrangement).
Additional U.S. Tax Warranties
20. Except as set forth in the Disclosure Letter:
(a) there are no liens for Taxes upon the assets or properties of ICI's US
Business or upon ICI's US Assets or upon the PO/MTBE Business (as
appropriate) except for statutory liens for Taxes not yet due and payable
or Taxes being contested in good faith in appropriate proceedings;
(b) no US federal, state, local or non-US audits, claims, assessments,
examinations, investigations, actions, suits or other administrative
proceedings or court proceedings (Audit) exist or have been initiated with
regard to any Taxes or Tax Returns in respect of ICI's US Business and
ICI's US Assets or upon the PO/MTBE Business (as appropriate), and none of
ICI or any of its Subsidiaries or HSCC or its Subsidiaries (as
appropriate) has received any written notice that such an Audit is
pending, proposed, or threatened with respect to any Taxes due in respect
of ICI's US Business and ICI's US Assets or upon the PO/MTBE Business (as
appropriate) or any Tax Return filed by or with respect to ICI or any of
its Subsidiaries or HSCC or its Subsidiaries (as appropriate);
(c) none of ICI or any of its Subsidiaries or HSCC or its Subsidiaries (as
appropriate) has requested or received an adverse ruling from any Tax
Authority in respect of ICI's US Business or ICI's US Assets or in respect
of the PO/MTBE Business (as appropriate), or signed a closing or other
agreement with any Tax Authority, in respect of ICI's US Business or ICI's
US Assets or in respect of the PO/MTBE Business (as appropriate), which
could have an adverse effect on ICI's US Business or ICI's US Assets or
upon the PO/MTBE Business (as appropriate) after the Closing Date;
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(d) none of ICI's US Business or ICI's US Assets or the PO/MTBE Business (as
appropriate) is subject to any obligation under any Tax sharing agreement,
Tax indemnification agreement or similar contract or arrangement. None of
ICI or any of its Subsidiaries or HSCC or its Subsidiaries (as
appropriate) is aware of any potential liability or obligation in respect
of ICI's US Business or ICI's US Assets or in respect of the PO/MTBE
Business (as appropriate), to any person as a result of, or pursuant to,
any such agreement, contract or arrangement;
(e) no claim has been made in writing, or to the knowledge of ICI or any of
its Subsidiaries or HSCC or its Subsidiaries (as appropriate) within the
past 2 years, by a Tax Authority in a jurisdiction where ICI or any of its
Subsidiaries or HSCC or its Subsidiaries (as appropriate) does not file
Tax Returns in respect of ICI's US Business or ICI's US Assets or in
respect of the PO/MTBE Business (as appropriate), to the effect that ICI
or any of its Subsidiaries or HSCC or its Subsidiaries (as appropriate) is
or may be subject to Tax in respect of ICI's US Business or ICI's US
Assets or in respect of the PO/MTBE Business (as appropriate);
(f) no transferor of any of ICI's US Assets or of the PO/MTBE Business (as
appropriate) is a non-US person within the meaning of Section 1445 of the
Code.
Dutch Tax Warranties
21.1 All Companies that are incorporated in the Netherlands form part of a
fiscal unity as meant in Article 15 of the Netherlands Corporate Income Tax Act,
1969 (Wet op de vennootschapsbelasting 1969) or as meant in Article 7(4) of the
Netherlands Value Added Tax Act, 1968 (Wet op de amzetbelasting 1968). The
Companies that form part of the fiscal unity comprise ICI Holland BV, Chemical
Blending Holland BV, ICI Iota BV, ICI Polyurethanes (China) Holding BV with the
parent company being ICI Theta BV.
21.2 Within the fiscal unity of which the Companies have formed part until the
Closing Date no transactions as meant in the so-called "16 standard condition of
Resolution of September 30, 1991 no DB91-230 (as amended)" have taken place.
21.3 As of the Closing Date there are no tax liabilities for which the
Companies can be held liable pursuant to Article 39 of the Tax Collection Act.
Tax Events since The Accounts Date
22.1 Since the Accounts Date:
(A) no Company has declared, made or paid any distribution;
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(B) no accounting period by reference to which Income, Profits or Gains are
measured or determined of any Company has ended;
(C) there has been no disposal of any asset (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) for a consideration in excess of (Pounds)10
million in circumstances where the consideration actually received or
receivable for such disposal or supply was less than the consideration
which is deemed to have been received for Tax purposes;
(D) no Company has been a party to any transaction for which any Tax clearance
provided for by statute could have been obtained but was refused;
(E) no Company has paid or become liable to pay 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.
22.2 Each Company has or has reasonable access to sufficient records relating
to past events, including any elections made, to calculate the Tax liability or
relief which would arise on any disposal or on the realisation of any asset
owned at the Accounts Date by that Company or acquired by that Company since
that date but before Closing.
22.3 No Company has received any notice from any Tax Authority which required
or will require such member to withhold Tax from any payment made since the
Accounts Date or which will be made after the date of this Agreement.
Other Interests of Vendor's Group
23. Save in relation to the arrangements which are the subject matter of
clause 15 and/or Schedules 17, 20 or 22 there is no agreement or contract to
which any Company or any Business Vendor (in relation to any Local Business) is
a party and to which any member of the Vendor's Group (as constituted following
Closing) is a party or in which any such member is otherwise interested in any
way whatsoever which shall continue beyond the Closing Date and which is not on
arm's length commercial terms.
Borrowings
24. The Disclosure Letter sets out for each Company details of all outstanding
loan capital and all borrowings and indebtedness of that company owed to a
Financial Institution which it had not repaid or satisfied as at 31 March, 1999
which are of a long term nature (long term for this purpose meaning that their
maturity date is more than one year after that date).
Page 237
Joint Ventures
25.1 So far as the Vendor is aware, paragraphs 1 (other than paragraph 1.3(a)),
2, 3, 4, 5, 6, 7, 8, 10, 11, 17 and 18 (with references therein to the Companies
being replaced by references to the Warranted Joint Ventures are true and
accurate, or (other than in relation to paragraph 3.3, in the case of LPC, or
paragraph 3.1, in the case of Rubicon) to the extent that the matters referred
to therein are not true and accurate, they will not cause a material adverse
effect on the Tioxide Business in relation to Louisiana Pigment Company L.C. or
on the Polyurethanes Business in relation to Rubicon, Inc.
25.2 Paragraph 1.3(a) (in relation to Warranted Joint Ventures and with the
deletion of "will cause a material adverse effect on the relevant business") is
true and correct.
25.3 Other than in relation to Warranted Joint Ventures:
(a) Each of the Share Selling Companies specified in Part IV of Schedule 1 is
the sole legal and beneficial owner of the Joint Venture Interests set
alongside its name in column 3 of such Part IV of Schedule 1 free from any
encumbrance, equity or third party rights, other than (and subject to) the
terms of the Joint Venture Agreements and the constitution of the Non-
Controlled Joint Ventures.
(b) So far as the Vendor is aware, no Share Selling Company is in breach of,
or default under, any Joint Venture Agreement, the consequence of which
will cause a material adverse effect on the relevant Business.
(c) There are no outstanding (or anticipated during the next 183 days) cash
calls, capital calls or other material liabilities affecting the Share
Selling Companies in relation to their shareholdings in any Non-Controlled
Joint Ventures.
US Embargoes
26.1 So far as the Vendor is aware each Company and Business Vendor which is a
US subsidiary of ICI or other form of US entity has been in compliance in all
material respects for at least the last three years with applicable US laws
regarding (1) export licensing, and (2) embargoes or similar restrictions
relating to Iran, Iraq, Libya, Sudan, Cuba and North Korea save to the extent,
if any, that any such non-Compliance would not have a material adverse effect on
the relevant Business.
26.2 So far as the Vendor is aware no Relevant Company or Business Vendor
derives 20 per cent. or more, or in the case of Cuba and North Korea, any of its
profits from sales of goods, services and/or technology to countries, or to
nationals or "Specially Designated nationals" of countries, individually or
collectively, that
Page 238
are subject to commercial embargoes or similar restrictions by the United States
in respect of Iran, Iraq, Libya, Sudan, Cuba and North Korea.
Page 239
SCHEDULE 10
LIST OF INDIVIDUALS - VENDOR'S AWARENESS
PART A:
Patrick Thomas, Chief Executive Officer
Martin Casey, Planning Director
David Payne, Business Director EAME
Gordon Ross, President Polyurethanes Americas
Tony Hankins, Business Director APAC
Arun Watts, Technical Director
John O'Neill, HR & Operations Director
Graham Thompson, International Business Controller
David Carter, Chief Financial Officer
David Anderson, HR
John Dawson, Pensions
Martin Bell, Environment (for non-US only)
Sam Malovhr, Environment (for US only)
Bob Walker, Business Development Manager
Peter Cornes, Hydrocarbons Director
Duncan Emerson, Finance Manager
Guido Steinbach, Commercial Manager
David Flett, Technical Manager
Dave Wilkins, Manufacturing Manager
Richard Westlake, Business Manager
Rob Cooper, Commercial Manager
Hugh Brown, Pensions
Page 240
Phil Roberts, Environment
Doug Coombs, Chief Executive Officer
David Croft, Chief Financial Officer
Brian Thomas, Planning & YK2 Manager
John Russell, Commercial & Technical Director
Steve Ward, Regional Director, Europe, Middle East and Africa
John Collingwood, Regional Director, Americas
Mahomed Maiter, General Manager, Materials
Rob Louw, Group Supply Manager
David Porter, Environment
Ian Machin, Information Technology
David Allen, HR Tioxide
Peter Gill, Estates Manager
Arie Plaisier, Business SHE Manager
Michael Herlihy
Andy Ransom
Dr Henk Lans - only SHE and only Rozenburg
John Billington, Site Manager Umbogintwini
Rojano Saad, General Manager, Telkk Kalag
A G Spall - CFO.
Wayne Damacal, Site Manager Greatham
Colin Deas, Site Manager- Grimsby
Eric Barents, Rozenburg
Dominique Vannents, Site Manager - Calais
Luigi Cutrane, Site Manager - Scarlino
Page 241
Gerardo Rojas, Site Manager - Huelva
Rob Margetts
Peter Shaw
David Gee
Michael Maughan - Tioxide only
Rick Carter - Relevant Petrochemicals only
Peter Whittle - Tioxide only
Mike Smith
Paul Hulme
Charles Miller Smith
John Nevard
Max White, HR Relevant Petrochemicals
Michael Gardner, CCO Relevant Petrochemicals
Steve Roberts, IT Relevant Petrochemicals
Rachel Draper
Page 242
PART B
Gordon L Ross, President Polyurethanes Americas
Steve Hostetter, Americas Director Finance & IT
William Hutchinson, Vice President Law
James McCarty, Director, Business Resource Group Americas
John Collingwood, President and CEO Tioxide Americas
Rene Lachance, VP Finance and Admin Tioxide Americas
Guy Gauthier, VP Operations Tioxide Americas
John Gush, Director of Marketing and Supply Chain Tioxide Americas
Page 243
SCHEDULE 11
PENSIONS
Part 1: Global Pensions Provisions
PART A: GENERAL PENSIONS PRINCIPLES
Interpretation
1.1 In this Schedule the following expressions shall have the following
meanings unless otherwise provided in any other Part of this Schedule:
Actuarial Method and Assumptions has the meaning given to that expression in
paragraph 6.3 of the Valuation Principles;
General Principles means the provisions of Part 1A of this Schedule;
Interim Period Adjustment has the meaning given to that expression in paragraph
5 of the General Principles;
Local Interest Rate means the rate determined by the Vendor as equivalent to the
cost to the Vendor of borrowing in the currency in question for the period in
question and agreed by the Purchaser or the cost to the Purchaser as agreed by
the Vendor (as the case may be) and, in default of agreement, as may be
determined under paragraph 8;
Local Timing Adjustment means:
(a) in the case of a Retirement Benefit Scheme to which Part 2, 3 or 4 of this
Schedule relates the adjustment or interest rate (if any) specified in the
relevant Part (Relevant Part)
(b) if (a) does not apply, in the case of a Retirement Benefit Scheme where a
timing adjustment in respect of the period from the Closing Date until the
date of payment of assets, based on a portfolio or notional portfolio of
investments, is made to a transfer amount calculated as at the Closing Date
transferred to a Purchaser's Scheme, the inverse of the timing adjustment
in the case concerned, provided that the timing adjustment:
(i) is identified in the Relevant Part; or
(ii) is otherwise agreed in writing by the Vendor and the Purchaser;
(c) if (a) or (b) do not apply, the Local Interest Rate;
Market Adjustment Factor means:
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(a) in respect of a Retirement Benefit Scheme identified in the Relevant Part
as being one to which a market value adjustment is to apply, the market
adjustment factor stated in that Relevant Part or, if none is stated, a
market adjustment factor agreed by the Vendor and the Purchaser (or, in
default of agreement, determined in accordance with paragraph 8) which is
consistent with the Actuarial Method and Assumptions used under the
Valuation Principles for valuing liabilities in respect of the Retirement
Benefit Scheme to which the defined benefit Retirement Benefit Rights in
question relate;
(b) if (a) does not apply, one;
Pensions Principles means Parts 1A and 1B of this Schedule;
Purchaser's Actuary means such actuary or firm of actuaries as the Purchaser may
determine for the purposes of these Pension Principles;
Purchaser's Scheme means any scheme, plan, fund or arrangement of any member of
the Purchaser's Group relating to the provision of Retirement Benefit Rights;
Regular Pension Cost has the meaning given to that expression in paragraph 6.4;
Retirement Benefit Rights means any pension, lump sum, gratuity, or a like
benefit other than benefits provided under 401K plans in the USA provided or to
be provided on retirement or on death in respect of an employee's employment.
Post-retirement medical or dental benefits are deemed to be Retirement Benefit
Rights but benefits provided under an arrangement the sole purpose of which is
to provide benefits on injury or death by accident occurring while an Employee
are not Retirement Benefit Rights;
Retirement Benefit Scheme means each scheme, plan, fund or arrangement (other
than 401K plans in the USA) of any member of the Vendor's Group for the
provision of Retirement Benefit Rights to or in respect of Employees (or former
employees of any of the Relevant Companies) and, for the avoidance of doubt,
includes any such scheme, plan, fund or arrangement which has not been disclosed
in the Data Room. Retirement Benefit Scheme shall in addition include, for the
purposes of Parts 1B and 1C of this Schedule 11 only, each scheme, plan, fund or
arrangement (other than 401K plans in the USA) in which the Employees or former
employees of a company in which there is a Joint Venture Interest participate;
Transferring Employee means an Employee with Retirement Benefit Rights;
Valuation Principles means the provisions set out in Part 1B of this Schedule;
Vendor's Actuary means such actuary or firm of actuaries as the Vendor may
determine for the purposes of these Pension Principles;
Page 245
1.2 Unless the context requires otherwise, references to paragraphs are to
paragraphs of the same part of these Pension Principles.
1.3 These Pension Principles shall apply separately to each Relevant Part.
Retirement Benefit Rights to be provided by the Purchaser
2.1 In relation to each Transferring Employee, the Purchaser will continue to
provide or procure to be provided:
(a) equivalent Retirement Benefit Rights in respect of service prior to
Closing, and
(b) equivalent Retirement Benefit Rights in respect of service for the period
of four years on and after the Closing Date,
to the Retirement Benefit Rights of that Transferring Employee immediately
before the Closing Date. The obligation under (a) shall not apply to Retirement
Benefit Rights of a Transferring Employee which remain to be provided by a
member of the Vendor's Group.
2.2 For the purpose of paragraph 2.1:
(a) equivalent means equivalent in value and will be determined, in the case of
defined benefit Retirement Benefit Rights, using the Valuation Principles,
and
(b) the Purchaser will prior to Closing or, if later, the end of any
participation period (as appropriate) consult with the Vendor with regard
to the provisions of equivalent Retirement Benefit Rights.
Accrued Retirement Benefit Rights to transfer to the Purchaser
3.1 The Vendor and the Purchaser shall co-operate fully with each other in the
transfer mechanics with the aim of ensuring that, subject to legal requirements
and paragraph 3.3, the Retirement Benefit Rights of all Transferring Employees
transfer to the Purchaser's Group.
3.2 Where following Closing or, where applicable, the Delayed Closing Date, no
active members of a Retirement Benefit Scheme will be retained as employees of a
member of the Vendor's Group , the transaction shall be structured, subject to
the agreement of the Purchaser and legal requirements, so as to transfer that
Retirement Benefit Scheme to the Purchaser's Group.
3.3 The mechanics of achieving paragraphs 2, 3.1 and 3.2 will be determined by
the applicable laws of the jurisdiction in question and the legal provisions
conferring and governing the Retirement Benefit Rights.
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3.4 Where any transfer of Retirement Benefit Rights or assets in respect of
those Retirement Benefit Rights requires the approval or consent of any
regulatory body or any third party (including the Transferring Employees), the
Vendor and the Purchaser shall use their respective reasonable endeavours to
obtain such approvals and consents.
References to Transferring Employees to include former employees in certain
circumstances
4. Where the Purchaser's Group assumes, or the Purchaser's Scheme assumes,
responsibility not only for the accrued Retirement Benefit Rights for
Transferring Employees but also for accrued Retirement Benefit Rights of former
employees and those whose Retirement Benefit Rights arise or have arisen on
death, references to Transferring Employees in these Pension Principles shall be
construed as including references to former employees and those whose benefits
arise on death of employees or former employees.
Transfer Payment from Funded Retirement Benefit Scheme
5.1 Subject to paragraph 5.2, in relation to the transfer of Retirement Benefit
Rights provided under a funded Retirement Benefit Scheme:
(a) the Vendor shall use its reasonable endeavours to procure that, subject to
paragraph 3.3, a transfer of assets equal to the aggregate of:
(i) the value of those Retirement Benefit Rights calculated in
accordance with the Valuation Principles (Unadjusted Transfer
Amount), adjusted for the period from and including the Closing
Date to the date of transfer by the Local Timing Adjustment
(Transfer Amount), and
(ii) the Interim Period Adjustment (if any) applicable to those
Retirement Benefit Rights,
is made from that Retirement Benefit Scheme to a Purchaser's Scheme;
(b) the Purchaser shall use its reasonable endeavours to procure, subject to
paragraph 3.3, that the Purchaser's Scheme has all necessary powers,
approvals and consents to accept that transfer, and accepts that transfer;
and
(c) subject to paragraph 3.3, the Vendor and the Purchaser shall use reasonable
endeavours to procure that the transfer takes place promptly after the
valuation required for the purposes of the Valuation Principles has been
completed. The date of transfer shall be agreed by the Vendor and the
Purchaser (or, in default of agreement, determined under paragraph 8).
5.2 Where on the Closing Date or, where applicable, the Delayed Closing Date a
Retirement Benefit Scheme transfers to the Purchaser's Group (whether by
operation
Page 247
of law or pursuant to paragraph 3.2) and, accordingly, the Retirement Benefit
Rights of the Transferring Employees transfer to the Purchaser's Group then
paragraph 5.1 does not apply in respect of the Retirement Benefit Rights
provided under that Retirement Benefit Scheme.
5.3 Where, in accordance with paragraph 5.1, a transfer of assets is being made
from a Retirement Benefit Scheme in relation to any Transferring Employee, and
paragraph 6 applies to that Retirement Benefit Scheme, the Interim Period
Adjustment referred to in paragraph 5.1 will be an amount equal to:
(a) those payments in respect of that Transferring Employee which have been
paid under paragraph 6 and which relate to the period from the day after
the Closing Date to the date on which the pensionable service of the
Transferring Employee ceases to accrue in that Retirement Benefit Scheme,
less
(b) a reasonable adjustment to reflect the cost of insuring or self-insuring
any risk benefits after the Closing Date and a reasonable deduction in
respect of administration expenses after the Closing Date, in each case, as
specified in the Relevant Part or if none is specified, as agreed between
the Vendor and Purchaser (or in default of agreement, as determined under
paragraph 8),
such net contributions being adjusted in accordance with the Local Timing
Adjustment from and including the respective actual date of payment of the same
to and excluding the date of actual payment under paragraph 5.1.
Funded Retirement Benefit Scheme: Interim Participation
6.1 The member of the Purchaser's Group (the Participating Employer) which
employs a Transferring Employee immediately after Closing or where the
appropriate Delayed Closing Date may participate in a funded Retirement Benefit
Scheme to which paragraph 5.1 applies in respect of that Transferring Employee
if:
(a) the Vendor and the Purchaser agree in writing and to the extent permitted
by law and the relevant Retirement Benefit Scheme, or
(b) such participation is required by law,
for a period agreed between them in writing (or such lesser period as may be
required by law or the relevant Retirement Benefit Scheme) and on such terms as
the Vendor may reasonably require. The remainder of this paragraph 6 shall
apply if any period of participation is agreed.
6.2 The Purchaser undertakes to procure that the Participating Employer shall
cease to participate in the applicable Retirement Benefit Scheme on or before
the end of the period agreed under paragraph 6.1.
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6.3 Unless the Vendor and the Purchaser otherwise agree there shall be paid to
the Retirement Benefit Scheme contributions equal to the Regular Pension Cost of
the Transferring Employees of that member of the Purchaser's Group in respect of
the period from and including the day after the Closing Date to and including
the date pensionable service in the Retirement Benefit Scheme ends.
6.4 The Regular Pension Cost is the regular cost of the Retirement Benefit
Rights accruing from time to time determined by reference to the Valuation
Principles before any reduction to take account of any surplus and before any
increase to take account of any deficit. For the avoidance of doubt, such
regular cost shall include an amount in respect of the insurance or self
insurance of risk benefits and administration expenses.
6.5 The contributions in respect of the Regular Pension Cost shall be payable
on the same dates as they would otherwise normally have been paid but for the
sale (and but for any surplus).
6.6 In respect of any contributions which are paid after the due date, an
amount calculated as if it were interest on those contributions at the Local
Interest Rate for the period from and including the due date to and excluding
the date of actual payment shall be payable.
6.7 The Purchaser shall procure that with effect from the Closing Date the
Participating Employer shall pay promptly the amounts under paragraphs 6.3 to
6.5 to the Retirement Benefit Scheme in question in respect of periods after the
Closing Date together with any amount calculated as if it were interest which
may be payable in accordance with paragraph 6.6.
Voluntary Fund
7.1 In this paragraph 7 the expression Voluntary Fund means a fund comprising
those voluntary contributions, or the investment or moneys representing them and
any income derived from them, in respect of which the entitlements of the
members who have paid them are not related to earnings (however defined) but are
based on the respective parts of such Voluntary Fund which are attributable to
them.
7.2 Notwithstanding the other provisions of these Pension Principles, if within
any Retirement Benefit Scheme there is a Voluntary Fund, the Voluntary Fund and
the benefits payable from it and the contributions payable to it and any
transfer payment made from it shall be disregarded for all the other provisions
of the Valuation Principles.
7.3 Where the Retirement Benefit Rights of Transferring Employees are provided
under a Retirement Benefit Scheme which does not transfer to the Purchaser's
Group on or after the Closing Date, the Vendor shall use its reasonable
endeavours to procure that the part of the Voluntary Fund attributable to the
Transferring
Page 249
Employees in question in accordance with the provisions of the Retirement
Benefit Scheme is transferred to the Purchaser's Scheme at the same time as the
transfer amount in respect of the Retirement Benefit Rights of those
Transferring Employees in the Retirement Benefit Scheme is transferred to the
Purchaser's Scheme.
Disputes
8.1 Any dispute between the Vendor and the Purchaser or between the Vendor's
Actuary and the Purchaser's Actuary concerning the determination or valuation or
agreement of any matter to be specifically determined, valued or agreed under
these Pension Principles shall, in the absence of agreement between them within
three months from when the dispute first arose, 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.
8.2 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.
No third party rights
9. Nothing contained in these Pension Principles confers or is intended to
confer any rights or remedies upon any person other than the parties to this
Agreement.
Purchaser not to cause increase in transfers of assets
10. The Purchaser undertakes to the Vendor 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 a Retirement Benefit Scheme from which a transfer of
assets is made to a Purchaser's Scheme having to pay a larger amount to the
Purchaser's Scheme than the amount which is such that the assets transferred in
respect of those Retirement Benefit Rights which transfer to the Purchaser's
Scheme are equal in value as at the Closing Date, adjusted in accordance with
the remaining provisions of these Pension Principles. The Purchaser agrees that
this undertaking extends to the Purchaser and the members of the Purchaser's
Group and applies both before and after the time when the pensionable service of
the Transferring Employees concerned ceases to accrue in that Retirement Benefit
Scheme.
Vendor and Purchaser to undertake not to increase the regular pension cost or
pension liabilities
11.1 The Vendor undertakes to the Purchaser that, except to the extent required
by law, insofar as it is within its power or under its control, it will procure
that no change will be made to the Retirement Benefit Rights of any Transferring
Employee
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in respect of the period from the date of signing of this Agreement to the
Closing Date (or, where paragraph 6 applies, the date on which that Transferring
Employee's pensionable service ends in the Retirement Benefit Scheme of which he
is a member, if later) without the consent of the Purchaser (such consent not to
be unreasonably withheld or delayed). Where a change is required by law the
Vendor shall, insofar as it is within its power or under its control, notify the
Purchaser of that change prior to its implementation and, if the Purchaser so
requests, consult with the Purchaser if there is an alternative to the proposed
change.
11.2 If the Vendor is in breach of the undertaking in paragraph 11.1, the cost
to the Purchaser shall be agreed between the Vendor and the Purchaser by
applying the Valuation Principles with necessary changes (and, in default of
agreement, paragraph 8 shall apply).
11.3 With effect from Closing Date, the Purchaser undertakes that, except to
the extent required by law, insofar as it is within its power or under its
control, neither the Purchaser nor any member of the Purchaser's Group nor any
company acquired by any member of the Purchaser's Group from any member of the
Vendor's Group will, without the consent of the Vendor (such consent not to be
unreasonably withheld or delayed), take any action or exercise or permit the
exercise of any right, power or discretion which would have the consequence of
increasing the cost to a member of the Vendor's Group or to any Retirement
Benefit Scheme in respect of the Retirement Benefit Rights of any Employee (or
former employee or any one claiming through or by reference to any Employee or
former employee) whether as a result of creating new liabilities or increasing
existing liabilities in a Retirement Benefit Scheme or otherwise, save that the
remuneration of Transferring Employees may be increased by the percentage
assumed for salary increases under the Valuation Principles or such greater
percentage as may be agreed by the Vendor and the Purchaser. Where a change is
required by law the Purchaser shall, insofar as it is within its power or under
its control, notify the Vendor of that change prior to its implementation and,
if the Vendor so requests, consult with the Vendor if there is an alternative to
the proposed change.
11.4 If the Purchaser is in breach of the undertaking in paragraph 11.3, the
cost to any member of the Vendor's Group or to any Retirement Benefit Scheme
shall be agreed between the Vendor and the Purchaser by applying the Valuation
Principles with necessary changes (and, in default of agreement, paragraph 8
shall apply).
Reverse Transfers
12.1 Where a funded Retirement Benefit Scheme transfers to the Purchaser's
Group but there are employees to be retained in the Vendor's Group who are
members of that Retirement Benefit Scheme (Retained Employees), these Pension
Principles (with such necessary changes as may be agreed between the Vendor and
the Purchaser or, in default of agreement, as determined under paragraph 8)
shall
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apply in relation to the transfer of the Retirement Benefit Rights of the
Retained Employees back to a Retirement Benefit Scheme, or to any other plan of
any member of the Vendor's Group (the Receiving Scheme).
12.2 For the avoidance of doubt the provisions of:
(a) paragraph 6 will apply with the necessary changes to any period of
continued participation requested by a member of the Vendor's Group in the
transferred Retirement Benefit Scheme in respect of any Retained Employee;
and
(b) paragraph 5 shall, in particular, apply in respect of any transfer of
funded Retirement Benefit Rights of Retained Employees so that the value
(calculated as at the Closing Date in accordance with the Valuation
Principles) of those Retirement Benefit Rights shall be transferred to the
Receiving Scheme with appropriate adjustments being calculated, with any
necessary changes, in accordance with paragraph 5(a) in respect of the
period from the Closing Date.
Position where Retirement Benefit Rights are split
13.1 Where the Retirement Benefit Rights of a Transferring Employee are in part
transferred to a Purchaser's Scheme or a member of the Purchaser's Group and in
part retained by a member of the Vendor's Group or a Retirement Benefit Scheme
which does not transfer to the Purchaser's Group, these Pension Provisions shall
apply separately to the Retirement Benefit Rights which transfer and to the
Retirement Benefit Rights which do not transfer. This is to the intent that it
is only the Retirement Benefit Rights which transfer to which paragraph 5.1 is
applicable and to which the Valuation Principles apply.
13.2 Where paragraph 13.1 applies, the remaining provisions of these Pension
Provisions shall be modified accordingly.
Expatriate Arrangements
14.1 The Purchaser and the Vendor agree that, where the Retirement Benefit
Rights of a Transferring Employee working in a jurisdiction other than his home
jurisdiction include a Home Country Guarantee, any transfer of assets from the
Home Retirement Benefit Scheme will, unless it is not permitted by local law or
by the relevant regulatory authority and subject to paragraphs 3.3 and 3.4, and
to the extent necessary include a transfer of assets in respect of any
additional benefit required to meet the Home Country Guarantee.
14.2 The Purchaser and the Vendor agree that, if a transfer in accordance with
paragraph 14.1 is not permitted by local law or by the relevant regulatory
authority, they will use all reasonable endeavours to reach agreement on an
alternative method of transferring the whole of the Transferring Employee's
Retirement Benefit Rights
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in accordance with these Pension Principles with such changes as may be
necessary to give effect to that agreement.
14.3 For the purposes of this paragraph 14:
Home Country Guarantee means a promise that the Transferring Employee will
receive the better of:
(a) Retirement Benefit Rights calculated as if the Transferring Employee had
always worked in his home jurisdiction; and
(b) actual Retirement Benefit Rights in respect of his periods of membership of
Retirement Benefit Schemes;
Home Retirement Benefit Scheme means the Retirement Benefit Scheme in the
Transferring Employee's home jurisdiction from which the Home Country Guarantee
is intended to be provided.
Industry-wide Retirement Benefit Schemes
15.1 Nothing in these Pension Principles or Part 1C shall apply to any
Industry-wide Scheme in which any member of the Vendor's Group participates in
respect of Transferring Employees.
15.2 For the purposes of this paragraph 15:
Industry-wide Scheme means any multi-employer scheme, plan, fund or arrangement
for the provision of Retirement Benefit Rights in which employers which are not
Subsidiaries of the same holding undertaking (unassociated employers) may
participate (other than a scheme, plan, fund or arrangement in which
unassociated employers may participate only for a limited period following a
financial transaction).
Purchaser's general covenant
16.1 For the purposes of this paragraph 16:
Relevant Claim means a claim brought by a Relevant Person which relates to
Retirement Benefit Rights which are attributable to any period of employment
prior to the Closing Date (or, if later, the date pensionable service in a
Retirement Benefit Scheme ends), and which have transferred to the Purchaser's
Group, save that no claim in respect of Retirement Benefit Rights shall
constitute a Relevant Claim on the grounds that a Relevant Person was denied
access to a Retirement Benefit Scheme prior to the Closing Date or where the
claim arises out of any default of the Vendor prior to the Closing Date in
circumstances where and in relation to a Retirement Benefit Scheme which does
not transfer to the Purchaser's Group.
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Relevant Person means any person:
(a) who is a Transferring Employee (or any person whose benefits arise on the
death of such a Transferring Employee or, where paragraph 4 of the General
Principles applies, former employees and those whose benefits arise on the
death of employees or former employees), and
(b) whose Retirement Benefit Rights in respect of any period of service prior
to Closing Date, or, if later, the date pensionable service in a
Retirement Benefit Scheme ends, transfer from a funded Retirement Benefit
Scheme to a Purchaser's Scheme.
Liability means any liability, loss, damage, cost, claim or reasonable expense
arising out of or in connection with any Relevant Claim.
16.2 The Purchaser covenants with the Vendor to pay to the Vendor forthwith
upon demand an amount equal to any Liability which is incurred or sustained by
the Vendor or a Retirement Benefit Scheme arising out of or in connection with
any Relevant Claim brought by a Relevant Person.
16.3 Insofar as any Liability relates to the value of any Retirement Benefit
Rights, the amount of such Liability shall be calculated using such reasonable
actuarial method and assumptions as may be agreed between the Vendor and
Purchaser or, in default of agreement, as may be determined in accordance with
paragraph 8.
16.4 Where any Liability is determined in a currency other than dollars it
shall be converted into dollars at the date of payment by the Purchaser in
accordance with clause 1.4 of this Agreement.
16.5 The time value of the amount payable under paragraph 16.2 shall be
maintained by increasing it by an amount calculated as if it were interest at
the Local Interest Rate on the amount under paragraph 16.2 for the period from
the date as at which the amount of the Liability has been quantified to the date
of payment of the amount in question to the Vendor.
16.6 Where the Vendor becomes aware of any claim or proceeding or any threat
thereof (Proceedings) the Vendor shall give notice to the Purchaser as soon as
reasonably practicable together with all information in the Vendor's possession
and which is, in its reasonable opinion, relevant to the Proceedings.
16.7 The Vendor shall not respond in any way (save as reasonably directed or
allowed by the Purchaser or by way of acknowledgement) to the Proceedings and in
particular (without prejudice to the generality of this condition) make any
admission of any kind. This is subject to the Purchaser giving the appropriate
direction within a reasonable time (and in any event in good time for the Vendor
to meet any applicable time limits).
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16.8 The Purchaser shall be allowed the sole conduct of any matter to which the
indemnity under paragraph 16.2 relates (including all communication and
negotiation with the person or persons concerned in the Proceedings or their
representatives), having due regard to any continuing relationship the Vendor
may have with the said person or persons. The Vendor shall render to the
Purchaser all such assistance in relation thereto as the Purchaser reasonably
requires and as lies within the Vendor's power to provide (provided the
Purchaser reimburses the Vendor the costs and expenses of doing so).
16.9 The Purchaser shall, in the conduct of any matter to which this indemnity
relates, keep the Vendor fully informed and act in a prompt and proper manner.
16.10 The Vendor may take such action as is necessary to prevent it losing the
right to defend any claim if the Purchaser, having received notification under
paragraph 16.6, has not provided the Vendor with evidence of the Purchaser
having taken action necessary to defend or settle the claim or confirmation that
such action is being duly taken.
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PART B: VALUATION PRINCIPLES
Transferring Retirement Benefit Rights to be valued
1. The provision of this Part B shall apply only:
(a) for the purpose of valuing Retirement Benefit Rights and assets where there
is a transfer of such rights provided under a funded Retirement Benefits
Scheme; and
(b) if the Purchaser makes an election under paragraph 10.1 of Part C.
2. Unless the Vendor and the Purchaser otherwise agree, the valuations
required for the purpose of paragraph 1 will be undertaken by the Vendor's
Actuary and agreed by the Purchaser's Actuary or, in default of agreement,
determined in accordance with paragraph 8 of the General Principles.
3. The Vendor and the Purchaser shall each:
(a) use all reasonable endeavours to procure that any information which may
reasonably be required by the Vendor's Actuary or the Purchaser's Actuary
for the purpose of undertaking and agreeing such valuation shall, to the
extent that it is within the power or control of the Vendor or the
Purchaser, as the case may be, be supplied to such actuary and that any
such information so supplied shall be true, complete and accurate in all
material respects, and
(b) use all reasonable endeavours to procure that its actuary acts promptly and
that such valuations are completed promptly.
Valuation basis
4. The following provisions of these Valuation Principles will be applied for
the purposes of valuing Retirement Benefit Rights and assets.
Defined contribution Retirement Benefit Rights
5.1 Subject to paragraph 5.2, in relation to defined contribution Retirement
Benefit Rights, the value of those Retirement Benefit Rights shall be calculated
on the basis that those rights are fully vested.
5.2 Where an Employee is able to elect for a return of moneys to him in respect
of funded defined contribution Retirement Benefit Rights, paragraph 5.1 does not
apply to any Employee in relation to those Retirement Benefit Rights where he
elects for a return of moneys.
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Defined benefit Retirement Benefit Rights
6.1 In relation to defined benefit Retirement Benefit Rights, the Transfer
Value equals the value of the defined benefit Retirement Benefit Rights
calculated on the basis of the Actuarial Method and Assumptions.
6.2 For the purpose of paragraph 6.1, the valuation of all funded defined
benefit Retirement Benefit Rights and the value of all assets referred to in
paragraph 6.1 will be determined as at the Closing Date. No value shall be
attributed to such rights in respect of post-Closing Date service or to
contributions in respect of post-Closing Date service.
6.3 For the purpose of paragraph 6.1, the Actuarial Method and Assumptions for
valuing defined benefit Retirement Benefit Rights will be:
(a) those specified in the Actuary's Letter specified in the Relevant Part in
respect of the particular Retirement Benefit Scheme;
(b) to the extent that (a) does not apply, subject to paragraph 6.4, the same
as those most recently disclosed to the Purchaser prior to 27 March 1999 in
relation to the Retirement Benefit Scheme to which the Retirement Benefit
Rights relate;
(c) to the extent that (a) and (b) do not apply, subject to paragraph 6.4, the
same as those used in the most recent actuarial valuation of the Retirement
Benefit Scheme published on or before the date of this Agreement to which
the Retirement Benefit Rights relate or disclosed in draft form in the Data
Room and, in the case of a funded plan, also used for actually funding
those benefits;
(d) to the extent that (a), (b) and (c) do not apply, subject to paragraph 6.4,
the same as those used to determine the pension costs in relation to those
Retirement Benefit Rights for the purposes of the Accounts;
(e) to the extent that (a), (b), (c) and (d) do not apply, subject to paragraph
6.4 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 8 of the General Principles.
6.4 As regards any established practice referred to in paragraph 2.2 of the
General Principles, where explicit allowance is made for such established
practice in the Relevant Part or in relation to the Retirement Benefit Rights in
question, that allowance (and no further or other allowance) shall be made in
determining the value of those Retirement Benefit Rights. Where no explicit
allowance is made, then no allowance shall be made in determining their value.
Page 257
6.5 References to defined benefit Retirement Benefit Rights in these
Valuation Principles include unfunded defined contribution Retirement Benefit
Rights and post-retirement medical and dental benefits which are Retirement
Benefit Rights.
Valuation of assets
7.1(a) Subject to (b) below and paragraph 7.2, for the purpose of paragraph 6.1
the value of assets shall be taken as the market value of those assets
multiplied by the Market Adjustment Factor.
(b) Insurance policies shall be valued in accordance with the method
specified in paragraph 6.3, or if there is no method specified, by such
method as may be agreed between the Vendor and the Purchaser or in
default of agreement, determined under paragraph 8 of the General
Principles.
7.2 Where there is a transfer of assets from a Retirement Benefit Scheme to a
Purchaser's Scheme, before applying paragraph 7.1, the value in local currency
of the assets transferred, subject to paragraph 7.3, as at the date of transfer
will be adjusted in respect of the period from date of transfer to the Closing
Date by reference to the Local Timing Adjustment to give the value of those
assets as at the Closing Date.
7.3 Where the assets transferred include an amount in respect of the Regular
Pension Cost, that amount shall, to the extent it has been paid as required
under paragraph 6 of the General Principles, be deducted for the purpose of
paragraph 7.3.
General
8. If the valuation method referred to in paragraph 6.3 would otherwise
value the accrual of Retirement Benefit Rights by reference to service after the
Closing Date, it shall instead be based on service up to the Closing Date and
any contributions in respect of post-Closing Date service shall be disregarded.
9. The preceding provisions of these Valuation Principles are subject, where
applicable, to paragraph 13 of the General Principles.
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PART C: NETTING
Interpretation
1.1 In this Part of this Schedule, the following expressions shall have the
following meanings:
Excess means the Gross Excess multiplied by the Tax Adjustment Factor;
Gross Excess has the meaning given to that expression in paragraph 3.1 or 4.1,
as appropriate;
Gross Shortfall has the meaning given to that expression in paragraph 3.2 or
4.3, as appropriate;
Shortfall means the Gross Shortfall multiplied by the Tax Adjustment Factor;
Tax Adjustment Factor means 0.65;
1.2 Except where the context requires otherwise references to paragraphs are to
paragraphs of this Part of this Schedule.
Calculation of a shortfall and excess
2.1 This paragraph 2 shall apply separately in relation to the Retirement
Benefit Rights of Transferring Employees under each Retirement Benefit Scheme.
2.2 For the purpose of determining any values under paragraphs 3.1, 3.2, 4.1,
4.2, or 4.3, the provisions of paragraphs 5 to 9 of the Valuation Principles and
paragraph 5 will apply.
Retirement Benefit Scheme transfers to the Purchaser's Group and Joint Venture
Interests
3.1 In relation to the defined benefit Retirement Benefit Rights of
Transferring Employees of a company or business where a Retirement Benefit
Scheme transfers to the Purchaser's Group or in relation to a Retirement Benefit
Scheme containing Retirement Benefit Rights of Transferring Employees of a
company in which there is a Joint Venture Interest, where:
(a) the aggregate of:
(i) the value as determined in accordance with paragraph 7 of the
Valuation Principles as at the Closing Date of the assets of that
Retirement Benefit Scheme, plus
(ii) (subject to paragraph 10.7) the amount of any provision, as
adjusted in accordance with paragraph 5, in respect of those
defined benefit
Page 259
Retirement Benefit Rights under that Retirement Benefit Scheme made
in the Accounts,
exceeds
(b) the aggregate of:
(i) the value of those defined benefit Retirement Benefit Rights as
determined in accordance with the Valuation Principles, plus
(ii) the amount of any prepayment, as adjusted on a basis consistent
with paragraph 5, in respect of those defined benefit Retirement
Benefit Rights under that Retirement Benefit Scheme in the
Accounts,
(iii) to the extent not already included in (i) or (ii) above, the
amount (if any) determined under paragraph 12.2 of the General
Principles,
the amount by which (a) exceeds (b) is referred to as the Gross Excess.
3.2 Where the aggregate of paragraph 3.1(a) is less than the aggregate of
paragraph 3.1(b), the amount by which paragraph 3.1(a) is less than paragraph
3.1(b) is referred to as the Gross Shortfall.
3.3. In calculating the Gross Excess or Gross Shortfall in relation to a
Retirement Benefit Scheme in which a company in which there is a Joint Venture
Interest participates:
(a) the Retirement Benefit Rights, assets, provisions and prepayments relating
to employees who are not Employees or former employees of a company in
which there is a Joint Venture Interest shall be disregarded; and
(b) only the appropriate JV Percentage of the Gross Shortfall or Gross Excess
shall apply for the purposes of paragraph 10.
Retirement Benefit Scheme does not transfer to the Purchaser's Group
4.1 In relation to the defined benefit Retirement Benefit Rights of
Transferring Employees of a company or business where a Retirement Benefit
Scheme does not transfer to the Purchaser's Group, where:
(a) the aggregate of:
(i) the value as determined in paragraph 7 of the Valuation
Principles and paragraph 4.2 as at the Closing Date of the assets
transferred to a Purchaser's Scheme in respect of those defined
benefit Retirement Benefit Rights, plus
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(ii) (subject to paragraph 10.7) the amount of any provision, as
adjusted in accordance with paragraph 5, in respect of those
defined benefit Retirement Benefit Rights under that Retirement
Benefit Scheme made in the Accounts,
exceeds
(b) the aggregate of:
(i) the value of those defined benefit Retirement Benefit Rights as
determined in accordance with the Valuation Principles, plus
(ii) the amount of any prepayment, as adjusted on a basis consistent
with paragraph 5, in respect of those defined benefit Retirement
Benefit Rights under that Retirement Benefit Scheme in the
Accounts,
(iii) to the extent not already included in (i) or (ii) above, the
amount (if any) determined under paragraph 12.2 of the General
Principles,
the amount by which (a) exceeds (b) is referred to as the Gross Excess.
4.2 The value of the assets for the purposes of paragraph 4.1(a)(i) shall be
adjusted in accordance with the following principle:
the value in local currency of the assets transferred as at the date of
transfer will be adjusted by reference to the Local Timing Adjustment to
give its value as at the Closing Date.
4.3 Where the aggregate of paragraph 4.1(a) is less than the aggregate of
paragraph 4.1(b), the amount by which paragraph 4.1(a) is less than paragraph
4.1(b) is referred to as the Gross Shortfall.
Adjustment of Accounts provisions and prepayments
5. A provision or prepayment made in the Accounts must be adjusted in respect
of the period from the Accounts Date to the Closing Date by reference to:
(a) the rate of interest specified in the Relevant Part for the relevant
Retirement Benefit Scheme,
(b) if (a) does not apply, the rate of interest determined under paragraph
6.3(b) of the Valuation Principles, or
(c) if (a) and (b) do not apply, the Local Interest Rate.
Page 261
General
6. Where a Shortfall or Excess has been determined in a currency other than
dollars, it shall be translated into dollars as at the Closing Date in
accordance with clause 1.4 of this Agreement.
7. Where:
(a) a transfer of assets is being made from a Retirement Benefit Scheme to a
Purchaser's Scheme, and that transfer of assets is made by instalments, or
(b) assets are being transferred from a Retirement Benefit Scheme to a
Retirement Benefit Scheme which transfers to the Purchaser's Group and such
transfer has not been completed by the Closing Date,
the preceding provisions of this paragraph 2 shall be applied with such changes
as the parties may agree to be fair to preserve the time value of the
transferred assets as at the Closing Date or, in default of agreement, as may be
determined under paragraph 8 of the General Principles.
8. The preceding provisions of paragraphs 2 to 7 are subject, where
applicable, to paragraph 13 of the General Principles.
9. References to a provision or prepayment in the Accounts in paragraphs 2 to
8 shall not include a provision or prepayment arising due to a contribution to a
funded Retirement Benefit Scheme being paid after or before the due date for
payment of that contribution.
Global Netting Arrangements
10.1 If the Purchaser elects by the giving of written notice to the Vendor
within three (3) months after the receipt of such relevant information as the
Purchase may reasonably request, the provisions of this paragraph will apply.
10.2 Paragraphs 2 to 9 of this Part shall apply in relation to each of the
Retirement Benefit Schemes.
10.3 An account shall then be taken of the Shortfalls and Excesses arising
under paragraph 2 to 9 in respect of the Retirement Benefit Schemes as at such
date as may be agreed between the Vendor and the Purchaser, or in default of
agreement, as at the last day of the calendar month following the calendar month
in which the last of such Excesses or Shortfalls (whichever is the later) has
been determined in relation to the Retirement Benefit Schemes (the Calculation
Date).
10.4 To preserve the time value of each such Shortfall and each such Excess in
respect of the period from the Closing Date to the Calculation Date, there shall
be added to each such Shortfall and each such Excess an amount calculated as if
it were
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interest at the Interest Rate (accrued daily) in respect of the period from and
including the Closing Date to but excluding the Calculation Date.
10.5 Where the aggregate Shortfalls are greater than the aggregate Excesses a
sum equal to the net difference between the Shortfalls and the Excesses shall be
paid promptly by the Vendor to the Purchaser with an additional amount
calculated as if it were interest on the net difference at the Interest Rate
(accrued daily) in respect of the period from and including the Calculation Date
to and excluding the date of actual payment.
10.6 The payment under paragraph 10.5 shall constitute an adjustment to the
Final Consideration.
10.7 The aggregate of the all the provisions which shall be taken into account
in accordance with paragraphs 3.1(a)(ii) and 4.1(a)(ii) shall be limited to a
maximum of (Pounds)26,000,000.
Position where Retirement Benefit Rights are split
11.1 For the purposes of paragraphs 2 to 9, where the Retirement Benefit Rights
of a Transferring Employee are in part transferred to a Purchaser's Scheme or a
member of the Purchaser's Group and in part retained by a member of the Vendor's
Group or a Retirement Benefit Scheme which does not transfer to the Purchaser's
Group, a deduction will be made from the entire Retirement Benefit Rights of the
Transferring Employee in respect of those which do not transfer.
11.2 The deduction in respect of those which do not transfer will be calculated
on the basis set out in the Valuation Principles.
Purchaser's covenant in respect of breach of obligation not to increase costs
12.1 If the Purchaser is in breach of the undertaking in paragraph 11.3 of the
General Principles, the Purchaser shall pay promptly to the Vendor or otherwise
as the Vendor may direct any amount determined under paragraph 11.4 of the
General Principles, together with an amount calculated as if it were interest by
applying the Local Timing Adjustment from the date as at which the amount under
paragraph 11.4 of the General Principles has been calculated to the date of
payment of that amount.
12.2 The amount under paragraph 12.1 shall be calculated in the currency in
which the cost would ordinarily be paid and shall be converted into dollars
(unless otherwise calculated in dollars) on the date of actual payment in
accordance with clause 1.4 of this Agreement.
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Part 2: United Kingdom
The Pension Principles shall apply to all Retirement Benefit Schemes established
in the United Kingdom but in the case of the Vendor's Scheme the Pension
Principles shall apply subject to the modifications in this Part 2.
1. Interpretation
In this Part 2 of Schedule 11 the following further expressions shall have the
following meanings:
Actuary's Letter means the letter from the Vendor's Actuary to the Purchaser's
Actuary dated 30 March 1999, relating to the Vendor's Scheme established in the
United Kingdom a copy of which is annexed in the Annex to this Part 2 of
Schedule 11 .
Consenting Member means a person:
(a) who is an Employee and a Member at Closing;
(b) who begins to accrue retirement benefits as stated in paragraph 2 under the
Purchaser's Scheme as of Closing and who continues to accrue those benefits
at the Due Payment Date; and
(c) in respect of whom the Vendor's Scheme receives within one month of the
distribution of election forms to Members, a signed election that a
transfer payment be made from the Vendor's Scheme to the Purchaser's Scheme
and who does not withdraw his election.
Due Payment Date means a date notified by the Vendor to the Purchaser which is
not later than one month after all the Transfer Conditions have been satisfied
provided they then remain satisfied.
Exempt Approved Scheme has the same meaning as in section 592 of the Income and
Corporation Taxes Act 1988 and Exempt Approved is construed accordingly.
Member means, at any time or during any period specified in this schedule, an
active member of the Vendor's Scheme (including a member who is temporarily
absent under the Rules on maternity leave).
Purchaser's Scheme means the occupational pension scheme or schemes described in
paragraph 2 and, where the context requires, includes its or their trustees.
Rules means, in relation to the Vendor's Scheme, the trust deeds, rules and
other documents governing the Vendor's Scheme as identified in the Disclosure
Letter.
Page 264
Transfer Conditions means all of the following:
(a) The Board of the Inland Revenue has given written approval to the transfer
of assets from the Vendor's Scheme and to the Purchaser's Scheme in respect
of the Consenting Members and any condition to which that approval is
subject is satisfied.
(b) The Purchaser has complied with its obligations under paragraph 2.
(c) The Vendor's Scheme has received the written elections that a transfer
payment be made from the Vendor's Scheme to the Purchaser's Scheme
completed and signed by the Consenting Members.
(d) The calculation referred to in paragraph 3.5 has become final and binding
as mentioned in that paragraph.
Vendor's Scheme means the retirement benefit scheme established by deed dated 22
July 1927 and governed by a deed dated 5 March 1996 (as amended) known as the
ICI Pension Fund. Where the context requires, the Vendors Scheme includes its
trustees.
2. Purchaser's Scheme
2.1 In complying with its obligations under paragraph 2 of the General
Principles the Purchaser shall procure that as from Closing the Purchaser's
Scheme:
(a) is an Exempt Approved Scheme at Closing (or is designed so as to be capable
of being Exempt Approved with effect from Closing) and at the Due Payment
Date is a scheme to which the Vendor's Scheme can by law, and in accordance
with Inland Revenue practice relating to Exempt Approved Schemes, make a
transfer payment in respect of the Consenting Members' entire rights under
the Vendor's Scheme (including rights to guaranteed minimum pensions);
(b) is contracted-out by virtue of section 9(2B) of the Pension Schemes Act
1993 with effect from Closing;
(c) contains the same terms and provides a benefit structure which are the same
as those in the Rules; and
(d) shall on receipt of the transfer payment envisaged by paragraph 4, grant to
each Consenting Member benefits (in the form of additional service credits
equal to his pensionable service in or credited in the Vendor's Scheme)
calculated in accordance with the rules of the Purchaser's Scheme.
2.2 The Purchaser will before Closing offer to each person who is an Employee
and a Member or eligible to be a Member at Closing, in relation to employment
Page 265
from and after Closing, membership of the Purchaser's Scheme on the terms in
paragraph 2.1(c). The Purchaser will also offer to each such person the ability
to transfer past service rights from the Vendor's Scheme to the Purchaser's
Scheme on terms complying with paragraph 2.1(d).
2.3 The Purchaser shall assume full responsibility for the provision of pension
and death benefits for or in respect of each person who is an Employee and a
Member at Closing in respect of service from Closing and shall ensure that it or
the Purchaser's Scheme or the trustees of the Purchaser's Scheme (as
appropriate):-
(a) shall with effect from Closing (and until such time as the Purchaser
receives formal confirmation from each such person that he does not wish to
accept membership of the Purchaser's Scheme) arrange for each such person
to be covered for lump sum death in service benefit of an amount equal to
four year's salary;
(b) shall forthwith upon the written request of Vendor reimburse Vendor in
respect of the cost (as agreed between Vendor's Actuary and the Purchaser's
Actuary) of augmenting the deferred pension entitlement under the Vendor's
Scheme of any such person who dies after Closing but before he has made a
decision to transfer his accrued rights under the Vendor's Scheme to the
Purchaser's Scheme so that the amount of the widow's or widower's and any
dependants' pensions which are payable in those circumstances from the
Vendor Scheme shall be increased to the level of the pensions which would
have been payable had that person died in the service of Vendor.
2.4 The Purchaser will offer arrangements for additional voluntary
contributions of a similar type to those available under the Vendor's Scheme at
Closing. The Purchaser will procure that the Purchaser's Scheme will provide
under those arrangements, in respect of any Consenting Member's AVCs transferred
to the Purchaser's Scheme, benefits which are at least equal in value at the
date of transfer to the value so transferred.
2.5 The Purchaser shall consult with the Vendor regarding the contents of
notice which are to be issued to employees and contains the options available to
them in respect of pensions.
3. Calculation of Transfer Amount
This paragraph shall apply as regards the calculations of the Unadjusted
Transfer Amount and the Transfer Amount referred to in paragraph 5.1(a) of Part
1B of this Schedule.
3.1 The Vendor will procure that the Vendor's Actuary will calculate the
Transfer Amount within 6 weeks of receipt by the Vendor's Actuary of all
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information reasonably requested of the Purchaser to enable the calculations to
be completed.
3.2 The Unadjusted Transfer Amount shall be calculated in accordance with the
Actuary's Letter, that calculation will assume that article 119 does not apply
to guaranteed minimum pensions.
3.3 In calculating the Transfer Amount any benefits under the Vendor's Scheme
which are attributable to AVCs paid by the Consenting Members and in respect of
which the Consenting Members are not entitled to benefits based on their final
pensionable earnings, and the AVCs themselves, are disregarded.
3.4 As soon as reasonably practicable (within 14 days) after the Vendor's
Actuary has calculated the unadjusted Transfer Amount the Vendor (or the
Vendor's Actuary) will notify the Purchaser (or the Purchaser's Actuary) in
writing of the result of that calculation and to supply to him the particulars
of the calculation and sufficient data on which it is based to enable the
Purchaser's Actuary to check that the calculation is mathematically correct and
in accordance with this Schedule. The Vendor's Actuary will provide such
further particulars or data which the Purchaser's Actuary reasonably requests
within 21 days of receipt of the result of the calculation from the Vendor's
Actuary. The Purchaser's Actuary has one month from the date on which those
particulars and data have been supplied to him to raise any objection in writing
that the calculation is incorrect or not in accordance with this Schedule.
3.5 The calculation referred to above is final and binding on the Vendor and
the Purchaser on the later of (i) if the Purchaser's Actuary raises no objection
within the terms of paragraph 3.4 above, the expiry of the period mentioned
above in which he may raise any objection, and (ii) if the Purchaser's Actuary
raises an objection within the terms of paragraph 3.4 above, the date of a
subsequent written agreement between the Vendor's Actuary and the Purchaser's
Actuary that the calculation (or revised calculation) is mathematically correct
or not in accordance with this Schedule.
4. Transfer of Transfer Amount
4.1 In complying with the obligations contained in paragraph 5.1(b) and (c) of
the General Principles the following provisions shall apply.
4.2 The obligation of the Vendor under paragraph 5.1 of the General Principal
shall only apply after the Transfer Conditions have been satisfied and for the
purposes of paragraph 5.1(c) the date of transfer shall be the Due Payment Date.
4.3 The Vendor and the Purchaser will use all reasonable endeavours to secure
agreement between the Vendor's Scheme and the Purchaser's Scheme respectively as
to the particular equities to be transferred representing the Transfer Amount.
If agreement is not reached by the Due Payment Date, the transfer will be in the
form
Page 267
of equities of the Vendor's Scheme selected by the Vendor's Scheme and agreed by
the Purchaser's Scheme as being a representative sample of the equities held by
the Vendor's Scheme. Any equities to be transferred will be valued at the mid-
market price at the close of business on the London Stock Exchange on the day
before the date of transfer.
4.4 The Purchaser will seek promptly from the Board of the Inland Revenue
approval to the transfer of assets from the Vendor's Scheme to the Purchaser's
Scheme in respect of the Consenting Members and, at the Vendor's request, will
supply promptly to the Vendor the documents and information which the Vendor
reasonably requires to enable the Vendor's Scheme to obtain a corresponding
approval.
5. Shortfall payments
5.1 In the event that the amount actually transferred on the Due Payment Date
from the Vendor's Scheme to the Purchaser's Scheme is less than the Transfer
Amount (the Shortfall), the Vendor shall subject to the proviso below forthwith
following a written demand from the Purchaser, pay within 7 days to the
Purchaser (for onward transmission to the Purchaser's Scheme) by way of
adjustment to the consideration hereunder, a cash sum equal to 100 per cent. of
the Shortfall together with interest from and including the date upon which the
aforesaid transfer to the Purchaser's Scheme is made, to but excluding the date
upon which payment is made in full in accordance with this paragraph, at the
Interest Rate compounded monthly, provided that this paragraph shall not apply
if the reason for the Transfer Amount (or part thereof) not having been
transferred to the Purchaser's Scheme in accordance with paragraph 4 above is
the failure of the Purchaser's Scheme to accept the Transfer Amount (or part
thereof) or failure by the Purchaser to comply with the Transfer Conditions.
5.2 If, after the payment of the Shortfall under paragraph 5.1, any member of
the Purchaser's Group achieves a reduction in liabilities to corporation tax as
a result of being able to treat a payment of an amount equal to the Shortfall as
deductible for corporation tax purposes, then the Purchaser shall pay to the
Vendor within 7 days after the relevant member of the Purchaser's Group achieves
such a reduction, a sum equal to that corporation tax saving.
6.1 If the aggregate of the amounts paid to the Purchaser's Scheme by the
Vendor's Scheme in respect of the Consenting Employees (excluding the AVC Fund),
as adjusted, is an amount which exceeds the Transfer Amount at the Due Payment
Date (the amount of such difference being referred to in this paragraph as the
Excess), then the Purchaser shall, by way of an adjustment to the consideration
paid under this Agreement pay to the Vendor within 14 days of the Due Payment
Date a sum in cash equal to the Excess together with interest thereon at the
Interest
Page 268
Rate in respect of the period from the Due Payment Date to the date of final
payment under this paragraph.
Page 269
ANNEX TO PART 2: UK ACTUARY'S LETTER
Page 270
Part 3: USA
The Pension Principles shall apply to the Retirement Benefit Schemes providing
Retirement Benefit Rights of Polyurethanes Employees subject to the
modifications contained in this Part 3 of this Schedule 11.
1. Interpretation
In this Schedule the following expressions shall have the following meanings:
Actuarial Annex means Annex 1 to this Part containing the Actuarial Methods and
Assumptions to be used for purposes of applying the Pension Principles (to
include the Valuation Principles) with respect to the Retirement Benefit Schemes
providing Retirement Benefit Rights to the Transferring Polyurethanes Employees.
APBO means the Financial Accounting Standards Board Statement 106 accumulated
post retirement benefit obligation.
Code means the Internal Revenue Code of 1986, as amended.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Polyurethanes Employees means the Business Employees of the Polyurethanes
business of ICI Americas Inc. and the former employees identified in Annex 2 to
this Part 3. For the avoidance of doubt Polyurethanes Employees do not include
the Employees of Rubicon Inc or any other joint venture.
Polyurethanes Nonqualified DB Plan means the unfunded employee pension benefit
plan, as defined in Section 3(2) of ERISA, established by Vendor for
Polyurethane Employees to include the following:
(i) Polyurethanes Excess Benefit Plan which will assume the liability of
Polyurethanes Employees under the ICI Excess Benefit Plan prior to
Closing;
(ii) Polyurethanes Employee Pension Plan which will assume the liability of
the Polyurethanes Employees under the Employee Pension Plan prior to
Closing;
(iii) Polyurethanes Executive Supplemental Benefits Plan which will assume the
liability of the Polyurethanes Employees under the ICI Executive
Supplemental Benefits Plan prior to Closing;
(iv) Unfunded pension of Robert Reen; and
(v) Unfunded pension of Ron Wyatt.
In addition, the term Polyurethanes Nonqualified DB Plan includes the unfunded
arrangements of, Gordon Ross, to include, without limitation, the Supplemental
Page 271
Death Benefit Arrangement, Supplemental Disability Arrangement and the Split
Dollar Insurance Plan.
Polyurethanes UDC Plan means a plan identical to the Executive Retirement Plan
for Key Employees of ICI's Group established by Vendor prior to Closing for the
Polyurethanes Employees.
Polyurethanes UDC Trust means the grantor trust established by Vendor prior to
Closing to hold the assets of the Polyurethanes UDC Plan.
Purchaser DB Trust means a trust exempt from federal income taxation under Code
sections 401(a) and 501(a) which was established or maintained by Purchaser to
hold the assets of the Vendor DB Plan.
Purchaser DC Plan means a defined contribution plan established or maintained by
Purchaser which is qualified under Code section 401(a) and contains a qualified
cash or deferred arrangement meeting the requirements of Code section 401(k).
Purchaser PRB Plan means the plan established or maintained by the Purchaser to
provide post retirement medical, dental and other welfare benefits to the
Transferring Employees equivalent to those provided to Transferring
Polyurethanes Employees under Vendor's PRB Plan.
Vendor means for purposes of this Part 3 A. ICI Americas Inc
Vendor's Group means any member of ICI's Group to include their officers,
directors, employees, agents, successors and assigns.
Vendor DB Trust means the Trust for Defined Benefit Plans of ICI American
Holdings Inc.
Vendor DB Plan means the Polyurethanes Pension Plan.
Vendor DC Plan means the ICI Deferred Compensation Plan.
Vendor PRB Plan means the retiree medical and dental coverage provide under the
ICI Americas Health and Dental Care Plan.
2. Tax Qualified Defined Benefit Plans
A. Transfer of Liability and Plan Sponsorship
In complying with its obligations under paragraphs 2 and 3 of the General
Principles, the Purchaser, effective the Closing Date, shall take all
appropriate action to become the plan sponsor of the Vendor DB Plan so that the
liability for providing Retirement Benefit Rights to the Polyurethanes Employees
under the Vendor DB Plan transfers to the Purchaser. Effective the Closing Date
the Vendor
Page 272
shall take all appropriate action so that neither the Vendor nor any member of
Vendor's Group is acting as a plan sponsor, plan administrator, named fiduciary,
or other fiduciary with respect to the Vendor DB Plan.
B. Transfer of Pension Trust Assets
On or before Closing, the Purchaser shall establish the Purchaser DB Trust.
With respect to the Vendor DB Plan, the Vendor shall cause to be transferred
from the Vendor DB Trust to the Purchaser DB Trust by the end of the calendar
month following the calendar month in which the Closing Date occurs an amount
equal to the fair market value of the assets of the Vendor DB Plan determined by
the trustee of the Vendor DB Trust as of the valuation date of the Vendor DB
Trust coincident with or next following the Closing Date along with interest
from but not including said valuation date through the date of transfer at a
rate equal to Closing Date rate for thirty day U.S. Treasury Bills. The
Purchaser covenants that the Purchaser DB Trust will be qualified under Code
section 401(a) and exempt from taxation under Code section 501(a) when the
assets of the Vendor DB Plan are transferred to the Purchaser DB Trust from the
Vendor DB Trust.
3. Post Retirement Welfare Benefits
A. In complying with its obligations under paragraphs 2 and 3 of the General
Principles, the Purchaser shall establish effective as of the Closing Date the
Purchaser PRB Plan which shall provide eligibility and coverage for retiree
medical and dental benefits that is comparable to the Vendor's PRB Plan on the
Closing Date and otherwise equivalent in value for the period prescribed by the
General Principles.
B. Effective the Closing Date, the Purchaser assumes all liabilities and
obligations of the Vendor and the Vendor's Group relating to the provision of
retiree medical and dental benefits to the Polyurethanes Employees and their
dependents (to include a person who is granted benefits under a medical support
court order by reason of his or her relationship to a Polyurethanes Employee).
Notwithstanding the preceding sentence, neither the Purchaser nor the Purchaser
PRB Plan will be liable for any claims of Polyurethanes Employees or their
dependents for reimbursement of expenses for medical or dental services or
procedures covered under the terms of the Vendor PRB Plan which were performed
prior to the Closing Date but billed on or after the Closing Date.
C. The Purchaser shall give full past service credit to the Polyurethanes
Employees for their pre-closing service to the same extent such service was
credited by the Vendor's PRB Plan.
Page 273
4. Nonqualified DB Plans
Effective the Closing, the Purchaser shall become the sponsor of the
Polyurethanes Nonqualified DB Plans and assume all liabilities and obligations
of the Vendor and Vendor's Group with respect thereto.
5. Defined Contribution Plans
A. 401(k) Plan
(i) The Purchaser shall establish on or before the Closing Date the Purchaser
DC Plan and extend coverage to the Polyurethanes Employees on the Closing
Date.
(ii) The Vendor shall cause the trustee of the Vendor DC Plan to transfer
assets equal to the account balances that are to be transferred,
including outstanding loan balances, of the Polyurethane Employees (to
include any alternate payee of a Polyurethanes Employee) under the Vendor
DC Plan to the trustee designated by the Purchaser under the trust
agreement forming a part of the Purchaser DC Plan. Such account balances
will have been credited with appropriate earnings or losses attributable
to the period from the Closing Date to a valuation date of the Purchaser
DC Plan's trust preceding the date of transfer, reduced by any necessary
benefit or withdrawal payments to or in respect of the Polyurethanes
Employees occurring during the period from the Closing Date to the date
of transfer. The transfer of assets from the Vendor DC Plan to the
Purchaser DC Plan shall be made solely in cash and notes evidencing plan
loans to Transferring Employees. The valuation date used to calculate the
transfer amount shall not be more than 30 business days prior to the date
of transfer. The Purchaser covenants that the Purchaser DC Plan will be
qualified under Code section 401(a) and that is attendant trust will be
exempt from taxation under Code section 501(a) on the date(s) the account
balances of any Polyurethanes Employees are transferred from the Vendor
DC Plan to the Purchaser DC Plan. No loans or withdrawals requested by
Polyurethanes Employee on or after the Closing Date will be permitted or
processed by the Vendor DC Plan.
(iii) In consideration for the transfer of assets from the Vendor DC Plan to
the Purchaser DC Plan, the Purchaser shall, effective as of the date of
transfer, assume all of the obligations of the Vendor in respect of the
account balances accumulated by the Polyurethanes Employees under the
Vendor DC Plan (exclusive of any portion of such account balances which
are paid or otherwise withdrawn prior to the date of transfer).
(iv) In the event that the Vendor DC Plan fails the actual deferral percentage
test of Code section 401(k) or the actual contribution percentage test of
Code section 401(m) for the plan year in which Closing occurs, so as to
require an
Page 274
excess or excess aggregate distribution, as the case may be, from the
account balance of a Polyurethanes Employee whose account balance was
transferred to the Purchaser DC Plan, the Purchaser shall cause the
Purchaser DC Plan to make such distribution.
B. UDC Plan
Effective the Closing, the Purchaser shall become the sponsor of the UDC Plan
and shall assume all obligations and liabilities of Vendor and Vendor's Group
with respect thereto. The Vendor shall cause ownership of the Polyurethanes UDC
Trust to transfer to Purchaser so that the Purchaser shall become the grantor of
said trust. Effective the transfer of ownership of the Polyurethanes UDC Trust
to the Purchaser, the Purchaser shall assume all liabilities and obligations of
the Vendor and Vendor's Group with respect thereto.
C. For the avoidance of doubt, the Vendor DC Plan, the Purchaser DC Plan,
Polyurethanes UDC Plan, are not Retirement Benefit Schemes
6. Valuation Principle
A. For purposes of applying the Valuation Principles, the value of the
Retirement Benefit Rights under the Vendor DB Plan and the Vendor
Nonqualified DB Plans shall be determined using the Actuarial Methods and
Assumptions set out in Part I of the Actuarial Annex.
B. For purpose of applying the Valuation Principles, the value of Retirement
Benefit Rights under the Vendor PRB Plan will be the APBO determined as
of the Closing Date using the Actuarial Methods and Assumption set out in
Part II of the Actuarial Annex.
Page 275
ANNEX I TO PART 3 OF THE PENSIONS SCHEDULE
U.S. ACTUARIAL ANNEX
PART I
I. PENSION ASSUMPTIONS & METHODS
1. Discount Rate Ten percent (10%)
2. Salary Increases Five percent (5%)
3. Mortality For healthy lives: 1983 Group Annuity
Mortality Table for males and females
For disabled lives:
Sample rates (per 100) of recovery or mortality from disability:
----------------------------------------
Age All Disableds
----------------------------------------
25 2.60
----------------------------------------
35 2.60
----------------------------------------
45 2.70
----------------------------------------
55 4.90
----------------------------------------
65 7.30
----------------------------------------
75 10.60
----------------------------------------
85 23.60
----------------------------------------
4. Termination Rates varying by age normally used by
Watson Wyatt for the ICI Americas
Pension Plan
----------------------------------
Sample rates (per 100):
----------------------------------
Age Males All
Females
----------------------------------
20 12.50 17.50
----------------------------------
25 10.0 11.5
----------------------------------
Page 276
----------------------------------
30 7.5 8.0
----------------------------------
35 4.0 5.0
----------------------------------
40 3.0 2.5
----------------------------------
45 2.0 2.0
----------------------------------
50 1.0 1.5
----------------------------------
55 0.5 1.0
----------------------------------
60+ 0 0
----------------------------------
--------------------------------
5. Disability Rates varying by age
normally used by Watson
Wyatt for the ICI Americas
Pension Plan
--------------------------------
Age Salaried All
Male Females
--------------------------------
25 0.12 0.18
--------------------------------
30 0.12 0.18
--------------------------------
35 0.13 0.19
--------------------------------
40 0.15 0.22
--------------------------------
45 0.20 0.30
--------------------------------
50 0.36 0.54
--------------------------------
55 0.68 1.02
--------------------------------
60 1.38 2.07
--------------------------------
--------------------------------
6. Retirement Age Rates varying by age:
--------------------------------
Age Rate Per 100
--------------------------------
50 4
--------------------------------
51 2
--------------------------------
52 2
--------------------------------
53 2
--------------------------------
54 2
--------------------------------
55 4
--------------------------------
56 4
--------------------------------
Page 277
--------------------------------
57 4
--------------------------------
58 4
--------------------------------
59 4
--------------------------------
60 10
--------------------------------
61 15
--------------------------------
62 40
--------------------------------
63 30
--------------------------------
64 30
--------------------------------
65 50
--------------------------------
66 50
--------------------------------
67 100
--------------------------------
7. Form of Payment Minimum Lump Sum Benefit With
Residual Single Life Annuity using
the conversion rate used by Watson
Wyatt and Co for the 1/1/98
valuation of the ICI Americas
Pension Plan.
8. Proportion of Married 80% of participants are assumed to
Participants be married with wives assumed to be
three years younger than husbands.
Actual data for retirees.
9. Maximum Benefit Code (S)415 limit for 1999 for the
normal form of benefit, payable at
Social Security Retirement Age,
reduced/(increased) as appropriate
for earlier/(later) ages.
10. Maximum Pensionable $160,000
11. Limit on Compensation and Fixed at 1999 level
Benefits
12. Social Security Wage Base Four percent (4%)
13. Cost-of-Living Increase for Three percent (3%)
Page 278
PIA offered calculation under
14. Future plan amendments Not assumed (to include ad hoc cost
of living amendments to retiree
benefits)
15. Layoff Benefits Not valued
16. Data Compensation, adjusted hire date,
birth date and similar data
submitted to Watson Wyatt for the
January 1, 1998, valuation of the
ICI Americas Pension Plan will be
the primary source of data for
calculations.
17. Date of Calculation Liability is to be calculated with
respect to the service accrued under
the Polyurethanes Pension Plan at
the Closing Date.
18. Actuarial Cost Method Projected Unit Credit
19. Other Methods and Assumptions Such other methods, practices and
assumptions that Watson Wyatt and Co
used in the January 1, 1998 funding
actuarial valuation of the ICI
American Pension.
Page 279
PART II
II. APBO ASSUMPTIONS
1. Discount Rate 7% per year
2. Mortality: 1983 Group Annuity Mortality Table
for males and females
3. Termination: Annual Rate of Withdrawal (Per 100)
Age Male Female
20 12.50 17.50
25 10.00 11.50
30 7.50 8.00
35 4.00 5.00
40 3.00 2.50
45 2.00 2.50
50 1.00 1.50
55 0.50 1.00
60 0.00 0.00
4. Medical Cost Trend Rate:
Year Rate
1998 9.0%
1999 8.5%
2000 8.0%
2001 7.5%
2002 7.0%
2003 6.5%
2004 6.0%
2005 5.5%
2006 5.0%
2007 + 4.5%
Page 280
5. Dental Cost Trend Rates
Year Rate
1998 6.4%
1999 6.2%
2000 6.0%
2001 5.8%
2002 5.6%
2003 5.4%
2004 5.2%
2005 5.0%
2006 4.8%
2007 + 4.5%
6. Per Capita Claims Medical: Prior to eligibility for medicare:
$3,539 After eligibility for
medicare: $535
7. Per Capita Claims Dental: Pre age 65: $373
Post age 65: $211
8. Retirement: Rates varying by age:
Age Rate Per 100
50 4
51 2
52 2
53 2
54 2
55 4
56 4
57 4
58 4
59 4
Page 281
60 10
61 15
62 40
63 30
64 30
65 50
66 50
67 100
9. Spouse coverage: 70% for current actives; actual data
for election current retirees
10. Spouses ages: Wives 3 years younger than husbands
11. Participation rates: At retirement: 95% for medical and
dental. Retirees who reach 65: 25%
opt out for reimbursement plan.
12. Actuarial Cost Method Projected unit credit
13. Other Methods and Assumptions: Such other methods, practices, and
assumptions used by Watson Wyatt in
the calculations of the FAS 106 APBO
of the ICI American health and
Dental Care Plan.
Page 282
ANNEX II TO PART 3 OF PENSIONS SCHEDULE
1. Terminated Vested Transferring Polyurethanes Employees; [To be completed by
Closing]
2. Retired Polyurethanes Employees. [To be completed by Closing].
Page 283
Part 4: Belgium
The Pension Principles shall apply to all Retirement Benefit Schemes established
in Belgium subject to the modifications in this Part 4.
PART A :GENERAL PENSION PRINCIPLES
1. Interpretation
In this Part 4 of Schedule 11 the following expressions shall have the following
meanings:
Employee means any employee of the Transferred Business, who is bound under the
terms of an employment contract with a company in the Vendor's Group as well as
any directors active in the Transferred Business, provided they continue to work
in the Transferred Business with effect on the Closing Date for the Purchaser's
Group and on the condition that they are active participants in the Retirement
Benefit Schemes on the Closing Date.
Retirement Benefit Rights means any pension, lump sum, gratuity, or a like
benefit provided or to be provided on retirement, on early retirement,
invalidity or on death in respect of an Employee's employment
Retirement Benefit Schemes means each scheme, plan, fund, arrangement or
contractual undertaking of any member of the Vendor's Group for the provision of
Retirement Benefit Rights to or in respect of one or more Employees or one or
more former employees of any of the Companies and, for the avoidance of doubt,
includes any such scheme, plan, fund or arrangement which has not been disclosed
in the Data Room;
2. Paragraph 2.1 of the Pension Principles shall not apply but in relation to
each Transferring Employee, the Purchaser will continue to provide or
procure to be provided :
(i) same Retirement Benefit Rights in respect of service prior to Closing,
and
(ii) equivalent Retirement Benefit Rights in respect of service for the
period of four years on and after the Closing date, to the Retirement
Benefit Rights of the Transferring Employee, unless the Retirement
Benefit Scheme is based on a collective bargaining agreement, in which
event the Purchaser will continue to provide or procure to be provided
the same Retirement Benefit Rights in respect of service after the
Closing until the expiry or cessation of the applicable collective
bargaining agreement(s).
Page 284
3. Paragraph 2.2 of the Pensions Principles shall not apply but for the
purposes of paragraph 2.1 "equivalent" means equivalent in value and will
be determined, in the case of defined benefit Retirement Benefit Rights,
using the Valuations Principles.
4. Paragraph 4 of the Pensions Principles shall not apply.
5. Paragraph 5.1 (a) (i) of the Pension Principles shall be modified as
follows:
" (i) the value of those Retirement Benefit Rights calculated in accordance
with the Valuation Principles, adjusted for the period from and including
the Closing Date to the date of transfer by the Local Timing Adjustment,
and increased by that part of the surplus relating to the Transferring
Employees whose Retirement Benefit Rights will be or have been transferred,
and which are available in the Vendor's Retirement Benefit Scheme as
calculated in accordance with the Valuation Principles, and
(ii)..."
6. Paragraph 6.1(a) of the Pensions Principles shall be modified as follows:
"(a) the Vendor and the purchaser agree in writing and to the extent
permitted by law, the relevant Retirement Benefit Scheme and the
bylaws of the relevant retirement benefit institutions/vehicles"
7. Paragraph 12 of the Pensions Principles shall not apply.
8. Paragraph 14.1 of the Pensions Principles shall be modified as follows:
"The Purchaser and the Vendor agree that, where the Retirement Benefit
Rights of a Transferring Employee working in a jurisdiction other than his
home jurisdiction include a Home Country Guarantee and/or are based on one
or more Retirement Benefit Schemes, it is intended that the transfer of
assets from one or more relevant Retirement Benefit Schemes, including the
Home Retirement Benefit Scheme will, subject to paragraphs 3.3 and 3.4.
include a transfer of assets in respect of the Home Country Guarantee and,
where applicable and agreed, a transfer of assets from one or more relevant
Retirement Benefit Schemes."
Page 285
PART B: VALUATION PRINCIPLES
9. Paragraph 6.3 (a) of the Pension Principles shall be modified as follows:
" (a) those specified in the Annex I (Actuary Assumptions and Methodology)
and Annex II (Actuary Assumptions, Methodology and Transfer Value for
Surplus Funding) attached to the present Part 4 in respect of the
particular Retirement Benefit Scheme;
Page 286
ANNEX I TO PART 4: BELGIUM
Actuarial Assumptions and Methodology - Transferred Members in Active Service
Cost method
The pension liabilities are equal to the Projected Benefit Obligation (PBO)
using a Unit Credit valuation method in application of FAS-87. Valuation date
is equal to Closing date.
Economic assumptions
Discount rate 7.00 %
Salary increases 4.00 % + LION salary scale (see annex A)
Social security increases 3.00 %
Pension increase rate 3.00 %
Demographic assumptions
Mortality MR (males) / FR (females) without age
adjustment. However, in application of
the pension rules, for the conversion of
lump sums into pensions, the mortality
table to be used is MR for males and
females.
Withdrawal Age-related scale with as representative
values (see annex B for full age-related
scale):
Retirement Age 60
Disability None
Proportion married 100%
Number of children 2 children of age 11
Age spouse Females are two years younger than males
Page 287
Some general remarks on the assumptions
Retirement
It is assumed that 50% of the retirees convert their lump sum at age 60 entirely
into a lifetime pension and 50% of the retirees convert 2/3 of their lump sum at
age 60 into a lifetime pension. It is assumed that all retirees that convert
their lump sum (partly) into a pension opt for a reversibility of 0%. Those
pensions are assumed to increase annually at the above-mentioned pension
increase rate of 3.0%.
Withdrawal
It is assumed that in case of withdrawal, the employee leaves the deferred
entitlement with the ICI pension fund, i.e. the rights are not transferred nor
cashed in. Between date of withdrawal and age 60, the deferred entitlement will
be indexed. It is assumed that at age 60 50% of the retirees convert their
lump sum at age 60 entirely into a lifetime pension and 50% of the retirees
convert 2/3 of their lump sum at age 60 into a lifetime pension.
The death coverage to the spouse between date of leaving and age 60 will be
included in the present value calculations.
Death in service
Survivor capital
It is assumed that there is a survivor capital to all employees of which 100%
convert their survivor capital entirely into a lifetime pension. The lifetime
survivor pension will be indexed at 3.0%.
Orphan pension
Orphan pensions are assumed to be paid until age 25.
Death lump sum
Other remarks
(1) The PBO for each individual is at least equal to the present value of the
vested benefits under the Colla legislation.
(2) The PBO amount for each individual includes the PBO for the death in
service benefits.
Page 288
(3) In addition to the PBO mentioned above, the accrued insurance reserves
under the group insurance contract with De Vaderlandsche will be
transferred, subject to obtaining the consent of the employees concerned.
Enclosures
. Annex A to Annex I :
Salary scale for white-collar employees
. Annex B to Annex I :
Age related withdrawal
Decrements scale
Page 289
Annex A to Annex I
Salary Scale for White-Collar Employees
leeftijd Man Vrouw IPP
- ----------------------------------------------------
20 0.3 0.462 0.07
21 0.334 0.5 0.105
22 0.367 0.538 0.14
23 0.4 0.572 0.172
24 0.433 0.606 0.205
25 0.467 0.64 0.237
26 0.5 0.674 0.27
27 0.533 0.708 0.302
28 0.56 0.733 0.333
29 0.587 0.757 0.363
30 0.613 0.782 0.394
31 0.64 0.806 0.424
32 0.667 0.831 0.455
33 0.69 0.849 0.499
34 0.713 0.868 0.543
35 0.737 0.886 0.586
36 0.76 0.905 0.63
37 0.783 0.923 0.674
38 0.8 0.932 0.676
39 0.817 0.941 0.705
40 0.833 0.951 0.733
41 0.85 0.96 0.762
42 0.867 0.969 0.791
43 0.884 0.975 0.819
44 0.9 0.981 0.847
45 0.917 0.988 0.874
46 0.933 0.994 0.902
47 0.95 1 0.93
48 0.96 1 0.944
49 0.97 1 0.958
50 0.98 1 0.972
51 0.99 1 0.986
52 1 1 1
53 1 1 1
54 1 1 1
55 1 1 1
56 1 1 1
57 1 1 1
58 1 1 1
59 1 1 1
60 1 1 1
61 1 1 1
62 1 1 1
63 1 1 1
64 1 1 1
65 1 1 1
Remark: IPP means International Pension Plan.
Page 290
Annex B to Annex I
Age related withdrawal decrements scale
The table below states for each given age the assumed number of people leaving
service per hundred : for example 6% of the 20 year olds.
- ----------------------------------------------------------------------------------------------------------------
Age Decrement Age Decrement Age Decrement
- ----------------------------------------------------------------------------------------------------------------
20 0.06 35 0.022 50 0.003
21 0.057 36 0.020 51 0.0024
22 0.054 37 0.018 52 0.002
23 0.051 38 0.017 53 0.001
24 0.048 39 0.015 54 0.0005
25 0.045 40 0.014 55 0
26 0.042 41 0.013 56 0
27 0.040 42 0.012 57 0
28 0.037 43 0.011 58 0
29 0.034 44 0.009 59 0
30 0.032 45 0.008 60 0
31 0.03 46 0.007 61 0
32 0.028 47 0.006 62 0
33 0.026 48 0.005 63 0
34 0.024 49 0.004 64 0
- ----------------------------------------------------------------------------------------------------------------
Page 291
ANNEX II TO PART 4: BELGIUM
Actuarial Assumptions and Methodology - Transfer Value for Surplus Funding -
(Members in active service only)
Overfunding
Overfunding is the situation were the total Market Value of Assets (MVA) of the
LION Belgium Pension Fund as at the Closing Date is higher than the Projected
Benefit Obligation (PBO) calculated with the above-mentioned actuarial
assumptions on the total population of members in the LION Belgium Pension Fund.
Transfer value for Surplus Funding
When there is Overfunding as at the Closing Date, the Transfer Value for Surplus
Funding will be a proportional part of the Overfunding. The Transfer Value for
Surplus Funding will be determined as at completion date as follows:
Overfunding x (PBO Transferred Members / PBO All Members)
With Overfunding = MVA - PBO All Members
PBO All Members is the total liability as at Closing Date for all members of the
LION Belgium Pension Fund, determined using the assumptions and methodology
described in annex I, excluding the reserves accrued with De Vaderlandsche.
PBO Transferred Members is the total liability as at Closing Date for all
Transferred Members (in active service), determined using the assumptions and
methodology described in annex I, excluding the reserves accrued with De
Vaderlandsche.
MVA is the market value of assets as at Closing Date of the LION Belgium Pension
Fund, excluding the reserves accrued with De Vaderlandsche.
Page 292
SCHEDULE 12
EXCLUDED ASSETS
I. General
(a) Any assets of ICI's Group other than (i) the Business Assets of the
Business Vendors; and (ii) the assets of the Companies (insofar as they are
not excluded pursuant to the terms of this Agreement); and (b) the assets
set out in the remaining paragraphs of this Schedule 12.
II. Assets to be removed prior to Closing
Any shares or assets which are to be transferred by a Company to any member of
ICI's Retained Group prior to Closing in accordance with paragraph 3 of Schedule
18, including, without limitation:
(a) assets of ICI Europe Ltd other than assets of the Polyurethanes Business
conducted by ICI Europe Ltd;
(b) assets of ICI Mex SA DE CV other than assets of the Polyurethanes Business
conducted by ICI Mex SA DE CV;
(c) assets of ICI Holland BV other than assets of the Polyurethanes Business
conducted by ICI Holland BV;
(d) shares in, the business of and any assets of Australian Titanium Products
Proprietary Ltd;
(e) shares in, the business of and any assets of BTP Tioxide Ltd;
(f) shares in, the business of and any assets of TIL Ltd;
(g) shares in, the business of and any assets of Technical and Analytical
Services Ltd;
(h) shares in, the business of and any assets of Tioxide Investment Holdings
Ltd;
(i) shares in, the business of and any assets of Tioxide Overseas Investments
Ltd; and
(j) the outstanding preferred shares in Tioxide Canada Inc.
Page 293
III. Non transferring assets
Without prejudice to the provisions of Schedule 22 the following assets shall
not transfer:
(a) shares in, the business of and any assets of the Boripol Joint Venture,
Yugoslavia;
(b) shares in, the business of and any assets of ICI India Ltd;
(c) shares in, the business of and any assets of ICI Pakistan Ltd;
(d) shares in, the business of and any assets of AO ICI, Russia;
(e) shares in, the business of and any assets of ICI International Ltd;
(f) shares in, the business of and any assets of ICI Polska Sp.zo.o;
(g) shares in, the business of and any assets of ICI Slovakia sro;
(h) shares in, the business of and any assets of ICI Cz sro;
(i) shares in, the business of and any assets of ICI Hungary Kft;
(j) shares in, the business of and any assets of ICI Korea Ltd;
(k) shares in, the business of and any assets of ICI Japan Ltd;
(l) shares in, the business of and any assets of ICI (Malaysia) Holdings Sdn
Bhd;
(m) shares in, the business of and any assets of ICI China Ltd;
(n) shares in, the business of and any assets of ICI France SA;
(o) shares in, the business of and any assets of ICI Norden;
(p) shares in, the business of and any assets of ICI Co-ordination Centre
excluding the Business Employees;
(r) shares in, the business of and any assets of ICI (Singapore) Private Ltd;
and
(s) shares in, the business of and any assets of ICI Bahia S.A.
For the avoidance of doubt, if any of the above companies holds Stock at Closing
which it does not beneficially own and which it holds in the capacity of agent
for a Company or Business Vendor or in connection with a service it provides to
a Company or Business Vendor, then that Stock is not an Excluded Asset.
Page 294
IV. Specific assets
A. General
Excluded Properties
Excluded Employees
ICI Retained Software
Page 295
B. Polyurethanes
- --------------------------------------------------------------------------------------------
Business Vendor Excluded Asset
- --------------------------------------------------------------------------------------------
ICI PLC Disused plant and site at Hillhouse, UK
- --------------------------------------------------------------------------------------------
ICI Americas Inc. Any assets located at Wilmington, USA other than Business
Information, Business IPR, Business IP Licences and Business IT
Licences
- --------------------------------------------------------------------------------------------
Assets excluded from Transfer of the Relevant Petrochemicals Business
NB: The following list of excluded assets in this Schedule is not necessarily
complete.
1. NORTH TEES WORKS
- --------------------------------------------------------------------------------------------
Assets Comments
- --------------------------------------------------------------------------------------------
Ethylene Liquefaction Unit number 4 This shall transfer to BPCL.
- --------------------------------------------------------------------------------------------
2. TRANS-PENNINE ETHYLENE PIPELINE
- -------------------------------------------------------------------------------------------
Assets Comments
- -------------------------------------------------------------------------------------------
Hillhouse section and LDS/metering at Hillhouse
- -------------------------------------------------------------------------------------------
Ethylene Cavities at Holford (2) (H213, H215) See Key Principles.
- -------------------------------------------------------------------------------------------
3. WILHELMSHAVEN
- -------------------------------------------------------------------------------------------
Assets Comments
- -------------------------------------------------------------------------------------------
Ethylene storage tanks and all associated equipment Assets owned by ICI Wilhelmshaven
on site (and on the jetty owned by the State) for GmbH who provide service to ICI
import of ethylene and delivery of EVC plant Olefins. ICI Olefins currently
pays costs thereof.
- -------------------------------------------------------------------------------------------
ASSETS AT NORTH TEES EXCLUDED FROM TRANSFER OF RELEVANT PETROCHEMICAL BUSINESS
NB: The following list of excluded assets in this Schedule is not necessarily
complete.
- -----------------------------------------------------------------------------------------------------
EXCLUDED
- -----------------------------------------------------------------------------------------------------
REFERENCE DUTY INFORMATION COMMENTS
- -----------------------------------------------------------------------------------------------------
Page 296
- -----------------------------------------------------------------------------------------------------
PIP refinery
- -----------------------------------------------------------------------------------------------------
PIP Road/rail loading
- -----------------------------------------------------------------------------------------------------
Ammonia storage
- -----------------------------------------------------------------------------------------------------
Ammonia loading facilities are Contracts will be required to
owned by Terra. allow use by others.
- -----------------------------------------------------------------------------------------------------
Contracts will be required to
allow use by others.
- -----------------------------------------------------------------------------------------------------
Jetty 4 with loading facilities See Services Schedule relating to
is owned by PIP. Jetty services (HICI to ICI (PIP))
- -----------------------------------------------------------------------------------------------------
P-157F Sour Crude Oil
- -----------------------------------------------------------------------------------------------------
P-158F Sour Crude Oil
- -----------------------------------------------------------------------------------------------------
P-159F Sour Crude Oil
- -----------------------------------------------------------------------------------------------------
N-3100F Sweet Crude Oil
- -----------------------------------------------------------------------------------------------------
2101FA Sweet Crude Oil
- -----------------------------------------------------------------------------------------------------
2101FB Sweet Crude Oil
- -----------------------------------------------------------------------------------------------------
P-154F LSAR
- -----------------------------------------------------------------------------------------------------
P-155F LSAR
- -----------------------------------------------------------------------------------------------------
P-160F LSAR
- -----------------------------------------------------------------------------------------------------
P-167F LSAR
- -----------------------------------------------------------------------------------------------------
P-168F LSAR
- -----------------------------------------------------------------------------------------------------
P-150F Derv
- -----------------------------------------------------------------------------------------------------
P-153F Derv
- -----------------------------------------------------------------------------------------------------
P-161F Derv
- -----------------------------------------------------------------------------------------------------
P-162F Derv
- -----------------------------------------------------------------------------------------------------
2102FA Gasoil
- -----------------------------------------------------------------------------------------------------
2102FB Gasoil
- -----------------------------------------------------------------------------------------------------
2101FC Unmarked Kerosene
- -----------------------------------------------------------------------------------------------------
2103FA Marked Kerosene
- -----------------------------------------------------------------------------------------------------
2103FB Marked Kerosene
- -----------------------------------------------------------------------------------------------------
2012FA LDD
- -----------------------------------------------------------------------------------------------------
2012FB LDD
- -----------------------------------------------------------------------------------------------------
175F Naphtha . PIP run down
- -----------------------------------------------------------------------------------------------------
176F Naphtha . PIP run down
- -----------------------------------------------------------------------------------------------------
ROAD & RAIL TERMINAL
- -----------------------------------------------------------------------------------------------------
P-850F Marked Kerosene
- -----------------------------------------------------------------------------------------------------
P-851F Marked Kerosene
- -----------------------------------------------------------------------------------------------------
Page 297
- -----------------------------------------------------------------------------------------------------
P-852F Marked Kerosene
- -----------------------------------------------------------------------------------------------------
P-853F Middle Dist.
- -----------------------------------------------------------------------------------------------------
P-854F Middle Dist.
- -----------------------------------------------------------------------------------------------------
P-855F Middle Dist.
- -----------------------------------------------------------------------------------------------------
P-856F Middle Dist.
- -----------------------------------------------------------------------------------------------------
P-857F Middle Dist.
- -----------------------------------------------------------------------------------------------------
P-858F Dirty Slops
- -----------------------------------------------------------------------------------------------------
P-859F Fire Water
- -----------------------------------------------------------------------------------------------------
P-862F Derv
- -----------------------------------------------------------------------------------------------------
P-863F Derv
- -----------------------------------------------------------------------------------------------------
All tubing and surface Contract required with PIP
equipment on cav 47
- -----------------------------------------------------------------------------------------------------
All tubing and surface Contract required with PIP
equipment on cav 48.
- -----------------------------------------------------------------------------------------------------
All tubing and surface Contract required with PIP
equipment on cav 49.
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
53 Leased to British Gas Contract required for access &
operation.
- -----------------------------------------------------------------------------------------------------
89 Leased to British Gas Contract required for access &
operation.
- -----------------------------------------------------------------------------------------------------
90 Leased to British Gas Contract required for access &
operation.
- -----------------------------------------------------------------------------------------------------
132 Leased to British Gas Contract required for access &
operation.
- -----------------------------------------------------------------------------------------------------
All water abstraction and brine Contract required for access &
winning equipment including operation by others, or for HICI
associated buildings. to operate on other's behalf.
Requires contract for water supply
and brine disposal.
- -----------------------------------------------------------------------------------------------------
That part of the reservoirs Will require contract.
owned by PIP
- -----------------------------------------------------------------------------------------------------
Brine main from reservoirs 1 & Owned by PIP. Will need contract
2 to cavities for use.
- -----------------------------------------------------------------------------------------------------
3 LSAR
- -----------------------------------------------------------------------------------------------------
4 LSAR
- -----------------------------------------------------------------------------------------------------
All pipelines listed on the System 36 is owned by Chlor Chem:
attached table maintenance contract required.
- -----------------------------------------------------------------------------------------------------
Page 298
- -----------------------------------------------------------------------------------------------------
All pipeline supports in link The HSFO system used by Aromatics
corridors owned by ETOL includes plant within PIP's land
which is owned and operated by
PIP. A separate agreement will be
needed. One of the site main
drains runs beneath PIP land.
- -----------------------------------------------------------------------------------------------------
Railway to road/rail loading
- -----------------------------------------------------------------------------------------------------
The Flowmetering Workshop which is owned by SGS (adjacent to the Paraxylene
plant) and all material items of obsolete or decommissioned assets or plant (to
include, without limitation, Olefins 5 and Butadiene 2) shall be excluded.
Page 299
EXCLUDED LINKLINES
NB: The following list of excluded assets in this Schedule is not necessarily
complete.
- -----------------------------------------------------------------------------------------------------------------------------------
Syst Conveyed Owning Plant/Area - Site - Plant/Area - Site - GEP SRP Budget RME RME's
em Product Business Start of System Start of End of System End of Operating Owner nominee
No. System System Mgr
- -----------------------------------------------------------------------------------------------------------------------------------
36 Brine Chlor Brine reservoirs North Bain Works Wilton Chatha C Chatha C Chatha Tyrie J Cruickshank
Chem Tees S S C S C I D
- -----------------------------------------------------------------------------------------------------------------------------------
63 Crude Oil PIP Phillips Seal Crude Storage North Tideswell Walgate M J H J C Cruickshank
Petroleum Seal Sands Tanks Tees S J A Smith Tyrie I D
Sands
- -----------------------------------------------------------------------------------------------------------------------------------
64 Brine PIP Brine Reservoir Brinefiel Brinefields Cavities Chatha C Chatha C M J H J C Cruickshank
ds (Cavities) S S Smith Tyrie I D
- -----------------------------------------------------------------------------------------------------------------------------------
65 Contaminat PIP Brine Reservoir Brinefiel Brinefields Cavities Chatha C Chatha C M J H J C Cruickshank
ed Brine ds (Cavities) S S Smith Tyrie I D
- -----------------------------------------------------------------------------------------------------------------------------------
72 Derv PIP COU Site Tank North Road/Rail Tank Road/Rail Tideswell Walgate M J H J C Cruickshank
Farm Tees Farm S J A Smith Tyrie I D
- -----------------------------------------------------------------------------------------------------------------------------------
73 Gas Oil PIP COU Site Tank North Road/Rail Tank Road/Rail Tideswell Walgate M J H J C Cruickshank
Farm Tees Farm S J A Smith Tyrie I D
- -----------------------------------------------------------------------------------------------------------------------------------
74 Kerosene PIP No 2 Pump Bay North Road Rail Road/Rail Tideswell Walgate M J H J C Cruickshank
Tees Filling S J A Smith Tyrie I D
- -----------------------------------------------------------------------------------------------------------------------------------
75 Crude Oil PIP COU Site Tank North Brinefields Cavities Tideswell Walgate M J H J C Cruickshank
Farm Tees Cavities S J A Smith Tyrie I D
- -----------------------------------------------------------------------------------------------------------------------------------
87 Redundant PIP Crude Unit, North Cavity 56 Cavities Tideswell Walgate M J H J C Cruickshank
(was Crude Spine Road Tees Brinefields S J A Smith Tyrie I D
Oil)
- -----------------------------------------------------------------------------------------------------------------------------------
Page 300
EXCLUDED NORTH TEES VEINLINES
- -----------------------------------------------------------------------------------------------------------------------------------
System Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP Budget RME RME's
No. Product Business Start of End of Operating Owner nominee
System System Mgr
- -----------------------------------------------------------------------------------------------------------------------------------
SD952 170 psig PIP Tideswell S Walgate A M J H Tyrie J C Smith D J
Steam J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
SD958 PIP Treated PIP Tideswell S Walgate A M J H Tyrie J C Smith D J
Water J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
SD972 150 psig PIP Tideswell S Walgate A M J H Tyrie J C Smith D J
Steam J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V874 Kerosene PIP 82 Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V875 Kerosene PIP 00083,84 Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V876 Kerosene PIP 85 Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V878 Crude Oil PIP Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V879 Crude Oil PIP 00108,10 Tideswell S Walgate A M J H J C Tyrie Smith D J
9,111 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V880 Crude Oil PIP Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V881 Crude Oil PIP 00129,130 Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V882 Crude Oil PIP 00123,124 Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
Page 301
- -----------------------------------------------------------------------------------------------------------------------------------
System Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP Budget RME RME's
No. Product Business Start of End of Operating Owner nominee
System System Mgr
- -----------------------------------------------------------------------------------------------------------------------------------
V883 Crude Oil PIP 00198,19 Tideswell S Walgate A M J H J C Tyrie Smith D J
9,200 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V897 Naphtha PIP 57 Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V898 Naphtha PIP 00058.59. Tideswell S Walgate A M J H J C Tyrie Smith D J
60 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V899 Crude Oil PIP Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V900 Crude Oil PIP Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V901 Fuel Oil PIP 00157,15 Tideswell S Walgate A M J H J C Tyrie Smith D J
8,159 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V902 Fuel Oil PIP Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V903 Fuel Oil PIP 00161,16 Tideswell S Walgate A M J H J C Tyrie Smith D J
2 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V904 Fuel Oil PIP 00163,16 Tideswell S Walgate A M J H J C Tyrie Smith D J
4,165,166 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V907 Fuel Oil PIP 00183,18 Tideswell S Walgate A M J H J C Tyrie Smith D J
4 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V908 Fuel Oil PIP Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V910 Fuel Oil PIP 00173,17 Tideswell S Walgate A M J H J C Tyrie Smith D J
4,175,176 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
Page 302
- -----------------------------------------------------------------------------------------------------------------------------------
System Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP Budget RME RME's
No. Product Business Start of End of Operating Owner nominee
System System Mgr
- -----------------------------------------------------------------------------------------------------------------------------------
V911 Gas Oil PIP 00001,2,3, Tideswell S Walgate A M J H J C Tyrie Smith D J
4,5,6,7,8, J Smith
9,10,0020
6,207,208
,209,0014
4
- -----------------------------------------------------------------------------------------------------------------------------------
V912 Gas Oil PIP 00150,15 Tideswell S Walgate A M J H J C Tyrie Smith D J
1,152 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V913 Gas Oil PIP 00177,17 Tideswell S Walgate A M J H J C Tyrie Smith D J
8,179 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V914 Gas Oil PIP 215 Tideswell S Walgate A M J H J C Tyrie Smith D J
J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
V925 Crude Oil PIP 00141,14 Tideswell S Walgate A M J H J C Tyrie Smith D J
2 J Smith
- -----------------------------------------------------------------------------------------------------------------------------------
Page 303
SCHEDULE 13
TAX COVENANT
Interpretation
1.1. Persons shall be treated as connected for the purposes of this Schedule if
they are connected within the meaning of section 839 of the Taxes Act.
1.2 The headings in this Schedule shall not affect its interpretation.
1.3 The provisions of paragraphs 3, 4, 9 and 11 of this Schedule shall apply
to all claims made by the Purchaser under the Tax Warranties contained in
paragraphs 19 to 22 (inclusive) of Schedule 9 as they apply to all claims made
under this Schedule.
Covenant to Pay
2.1 ICI hereby covenants for itself and otherwise as agent for the Share
Selling Companies with the Purchaser to pay to the Purchaser for itself where it
is the Designated Purchaser and otherwise as agent for the Designated Purchaser,
by way (to the extent that it is possible to do so) of adjustment to the Final
Consideration for the sale of the Sale Shares, an amount equal to any Tax
Liability arising in respect of, by reference to or in consequence of:
(a) any Income, Profits or Gains earned, accrued or received on or before
Closing or in respect of a period ending on or before Closing;
(b) any Event which occurred on or before Closing or was deemed to occur on or
before Closing for the purposes of any Tax; and
(c) ICI's US Business and ICI's US Assets, (to the extent that it is not
covered by (a) or (b) above) for any taxable year or period that ends on or
before the Closing Date and with respect to a Straddle Period, the portion
of such Straddle Period deemed to end on and including the Closing Date;
but excluding any Tax Liability, other than the Tax Liability described in
paragraphs 2.2(b) and (c) below, arising in TGL in respect of the transfer of
subsidiaries of TGL in respect of the transfer of subsidiaries of TGL out of TGL
to UK Holdings as described in paragraphs 50 and 51 of Part 1 of Schedule 4;
together with any costs and expenses referred to in paragraph 5 and so that, in
the case of any Tax Liability arising in respect of a Controlled Joint Venture,
the Purchaser shall be paid that proportion of the Tax Liability and
Page 304
related costs and expenses of that Controlled Joint Venture as corresponds to
the JV Percentage and in relation to the Purchaser's costs and expenses those
costs and expenses referred to in paragraph 5.
2.2 ICI hereby covenants for itself and otherwise as agent for the Share
Selling Companies with the Purchaser to pay to the Purchaser for itself where it
is the Designated Purchaser and otherwise as agent for the Designated Purchaser,
by way (to the extent that it is possible to do so) of adjustment to the Final
Consideration for the sale of the Sale Shares, an amount equal to:
(a) any stamp duty payable on the transfer of the Sale Shares of TGL to HIC as
described in paragraph 11 of Part 1 of Schedule 4;
(b) any stamp duty arising in respect of the transfer of the Subsidiaries of
TGL out of TGL as described in paragraph 50 of Part 1 of Schedule 4; and
(c) 50 per cent. of the liability to corporation tax on chargeable gains
arising in TGL in respect of the transfer of the Subsidiaries of TGL out of
TGL as described in paragraph 50 of Part 1 of Schedule 4,
together with any costs and expenses referred to in paragraph 5.
2.3 For the purposes of paragraph 2.1(c) above, where it is necessary to
apportion any Tax Liability relating to any Straddle Period, such liability
shall be apportioned between the period deemed to end at the close of the
Closing Date and the period deemed to begin at the beginning of the day
following the Closing Date on the basis of an interim closing of the books,
except that (i) exemptions allowances or deductions that are calculated on a
time basis, such as the deductions for depreciation, shall be apportioned on a
time basis and (ii) Taxes (such as real property Taxes) imposed on a periodic
basis shall be allocated on a daily basis.
2.4 For the purposes of this Schedule, other than paragraph 2.1(c), any relief
or Tax Liability arising in respect of an accounting period falling partly
before and partly after the Closing Date shall be apportioned on a time basis,
unless some other basis is more reasonable
Exclusions
3. The covenant contained in paragraph 2 shall not cover any Tax Liability to
the extent that:
(a) provision or reserve in respect of that Tax Liability has been made or
appears in the Closing Statement; or
Page 305
(b) the Tax Liability was paid or discharged before the Closing Date; or
(c) the Tax Liability arises in respect of Income, Profits or Gains actually
earned or received by or actually accrued to any Company before Closing but
which were not reflected in the Closing Statement; or
(d) the Tax Liability arises as a result of any change in rates of Tax made
after Closing with retrospective effect or of any change in law, regulation
or directive applicable in the corresponding country of residence of each
Company or the country where a branch is established, or the practice of
any Tax Authority in the corresponding country of residence of each
Company or the country where a branch is established, occurring after the
Closing Date with retrospective effect; or
(e) the Tax Liability would not have arisen but for a voluntary transaction,
action or omission carried out or effected by any of the Purchaser, the
Company or any other person connected with any of them other than ICI and
members of ICI's Group, at any time after the Closing Date, except that
this exclusion shall not apply where any such transaction, action or
omission:
(i) is carried out or effected by the Company concerned pursuant to a
legally binding commitment created on or before the Closing Date;
or
(ii) is carried out or effected by the Purchaser or the Company
concerned in the ordinary course of business of the Company as
carried on at the Closing Date; or
(f) the Tax Liability arises as a result of a change after the Closing Date in
any accounting policy or the length of any Accounting Period of the Company
other than a change required by law or in order to comply with generally
accepted accounting practice of the country in which the Company is
incorporated or resident for Tax purposes; or
(g) the Tax Liability comprises interest or penalties arising by virtue of an
underpayment of Tax prior to the Closing Date, insofar as such underpayment
would not have been an underpayment but for any Event or Events occurring
after the Closing Date; or
(h) such Tax Liability arises as a result of the Company failing to submit the
returns and computations required to be made by it or not submitting such
returns and computations within the appropriate Time Limits or submitting
such returns and computations otherwise than on
Page 306
a proper basis, in each case after the Closing Date and otherwise than as a
result of any default or failure of ICI in carrying out, or in failing to
carry out, ICI's obligations under clause 14 of the Agreement; or
(i) the Tax Liability is increased as a result of the failure of the Purchaser
to comply with its obligations contained in paragraph 9 hereof or clauses
14.5 and 14.6 of the Agreement; or
(j) any relief other than a Purchaser's Relief is available, or is for no
consideration made available by ICI, to the Company to set against or
otherwise mitigate the Tax Liability (including but not limited to any such
relief available under any of sections 393, 393A, 402 to 413, or section
240 of the Taxes Act or section 102 of the Finance Act 1989); or
(k) the Tax Liability would not have arisen but for:
(i) the making of a voluntary claim, election, surrender or
disclaimer, or the giving of a notice or consent under the
provisions of any enactment or regulation relating to Tax, in
each case after the Closing Date and by the Purchaser, the
Company or any person connected with any of them other than ICI
and members of ICI's Group and otherwise than at the direction of
ICI pursuant to clause 14 of the Agreement; or
(ii) the failure or omission on the part of the Company otherwise than
at the direction of ICI pursuant to clause 14 of the Agreement to
make any valid claim, election, surrender or disclaimer, or to
give any such notice or consent as ICI may require in respect of
periods or matters for which ICI has conduct under clause 14 of
the Agreement; or
(l) recovery is made in respect of the Tax Liability pursuant to any Warranty;
or
(m) the Tax Liability would not have arisen but for the winding up of, or the
cessation of any trade or business by the Company after the Closing Date,
or any change in the nature or conduct of such trade or business after the
Closing Date; or
(n) the Tax Liability arises in any company which becomes a Company as a result
of the transactions contemplated by Schedule 18 in respect of any
transactions or steps implemented in accordance with the restructuring
steps set out in Schedules 4 and 18 of the Agreement or the different or
substituting steps that may be agreed upon between the
Page 307
parties where so provided in Schedule 4 or 18 (as the case may be) provided
that this exclusion shall not apply to any Tax arising as a result of (or
which would not have arisen but for) the implementation or carrying out of
any of the steps referred to in paragraph 3 of Schedule 18 and provided
further, that this exclusion shall not apply to a Tax Liability falling
within paragraph 2.2; or
(o) the Tax Liability is increased as a result of the wilful or negligent delay
or default of any Company after the Closing Date.
3.2 None of the Share Selling Companies as principal or ICI as agent shall have
a liability to the Purchaser for itself where it is the Designated Purchaser and
otherwise as agent for the Designated Purchaser under any part of this Agreement
in respect of any non-availability, inability to use, or loss or restriction of
any relief (failure of relief) where such failure of relief does not give rise
to a Tax Liability to which paragraph 2 applies.
Overprovisions
4.1 ICI may require the auditors for the time being of the Company to certify,
at its request and expense, the existence and amount of any overprovision for
Tax in the Closing Statement (excluding any provision for deferred Tax but
including receipts for group relief and advance corporation tax surrenders) (an
Overprovision) and the Purchaser shall provide, or procure that the Company
provides, any information or assistance required for the purpose of production
by the auditors of a certificate to that effect.
4.2 Subject to paragraph 4.4 below:
(a) any Overprovision shall first be set against any payment then due from ICI
(whether for itself or as an agent for the Share Selling Companies) under
any Tax Covenant Claim;
(b) to the extent there is an excess, a refund shall be made to ICI (as agent
for the Share Selling Companies) of any previous payment or payments made
by ICI (whether for itself or as an agent for the Share Selling Companies)
under any Tax Covenant Claim (and not previously refunded pursuant to
another provisions of this Agreement or this Schedule) up to the amount of
the excess; and
(c) to the extent that the excess referred to in sub-paragraph (b) is not
exhausted under that sub-paragraph, the remainder of that excess shall be
carried forward and set against any future payment or payments which become
due from ICI (whether for itself or as an agent for the Share Selling
Companies) under any Tax Covenant Claim.
Page 308
4.3 Either ICI or the Purchaser may, at its expense, require any certificate
produced in accordance with paragraph 4.1 above to be reviewed by the auditors
for the time being of the Company in the event that there are relevant
circumstances or facts of which it was not aware, and which were not taken into
account, at the time when such certificate was produced, and to certify whether
the certificate remains correct or whether it should be amended.
4.4 If following a request under paragraph 4.1 the certificate is amended, the
revised amount of Overprovision shall be substituted for the purposes of
paragraph 4.2, and any adjusting payment that is required shall be made
forthwith.
Costs and Expenses
5. The covenant contained in this Schedule shall extend to all reasonable
costs and expenses properly incurred by the Purchaser or the Company in
connection with a valid claim made under this Schedule, or in satisfying or
settling any Tax Liability in accordance with paragraph 9.
Double Recovery
6. The Purchaser shall not be entitled to recover any amount pursuant to this
Schedule in respect of any claim to the extent that the Purchaser, any
Designated Purchaser or any Company has already recovered any amount in respect
of such claim under the Warranties or pursuant to any other agreement with ICI
or any company connected with ICI, or to the extent that recovery has already
been made under this Schedule in respect of the same subject matter. No Tax
relief, saving or benefit is to be taken into account more than once in reducing
a Purchaser's claim or in increasing or giving rise to a payment by the
Purchaser to the Vendor under this Agreement.
Tax Refunds
7.1 The Purchaser shall promptly notify ICI of any right to repayment or actual
repayment of Tax to which any Company is or becomes entitled or receives in
respect of an Event occurring or period (or part period) prior to the Closing
Date (including any repayment attributable to the surrender of group relief or
advance corporation tax in respect of a period ending on or before the Closing
Date whenever such surrender is effected) (a tax refund), where or to the extent
that such right or repayment was not a Purchaser's relief and is not a payment
or relief to which paragraph 11 or 12 below applies.
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7.2 Any tax refund actually obtained (less any reasonable costs of obtaining it
but including any interest or repayment supplement net of Tax thereon) shall be
dealt with as follows:
(a) the amount of the tax refund shall be set against any payment then due from
ICI (whether for itself or as an agent for the Share Selling Companies)
under any Tax Covenant Claim; and
(b) to the extent that there is an excess, a payment shall promptly be made to
ICI (as agent for the Share Selling Companies) equal to the aggregate of
any previous payment or payments previously made by ICI (whether for itself
or as an agent for the Share Selling Companies) under any Tax Covenant
Claim (and not previously refunded pursuant to another provision of the
Agreement or this Schedule) up to the amount of the excess (any remaining
excess being carried forward to offset any further payment that may become
due from ICI (whether for itself or as an agent for the Share Selling
Companies) under any Tax Covenant Claim.
7.3 Notwithstanding anything to the contrary stated in this paragraph 7 or in
the Agreement, the Purchaser shall pay or cause to be paid to ICI by way of
adjustment to the Initial Consideration payable with respect to the Sale Shares
in TGL the refund of Tax which is due to TAI and which is attributable to
periods (or portions thereof) ending on or before the Closing Date (and which is
in an amount of approximately $8.0 million). The provisions of paragraph 7.2(a)
shall apply to this refund but, to the extent that there is an excess (after
setting the refund against payments due from ICI under the Tax Covenant), a
payment shall promptly be made to ICI of the excess.
Secondary Liabilities
8.1 The Purchaser hereby covenants for itself where it is the Designated
Purchaser or as agent for the Designated Purchaser with ICI for itself or as
agent for the Share Selling Companies to pay to ICI, by way of adjustment to the
Final Consideration for the sale of the Sale Shares, an amount equal to:
(a) any Tax for which ICI or any other member of the Retained Share Selling
Company Group falling within section 767A(2) of the Taxes Act becomes
liable by virtue of the operation of section 767A and 767B of the Taxes Act
in circumstances where the taxpayer company (as referred to in section
767A(1)) is any Company;
(b) any Tax for which ICI or any other member of the Retained Share Selling
Company Group falling within section 767AA(4) of the Taxes
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Act becomes liable by virtue of the operation of section 767AA of the Taxes
Act in circumstances where the transferred company (as referred to in
section 767AA(1)(a)) is any Company; and
(c) any other Tax for which ICI or any other member of the Retained Share
Selling Company Group becomes liable as a result of a failure by the
Company, or any person connected with or associated in any way with the
Company after the Closing Date, to discharge it.
8.2 The covenant contained in paragraph 8.1 shall:
(a) extend to any costs reasonably incurred by ICI, or any member of the
Retained Share Selling Company Group in connection with such Tax or a claim
under paragraph 8.1;
(b) not apply to Tax to the extent that the Purchaser could claim payment in
respect of it under paragraph 2, except to the extent a payment has been
made pursuant to paragraph 2 and the Tax to which it relates was not paid
by the Company; and
(c) not apply to Tax which has been recovered under section 767B(2) of the
Taxes Act or any other relevant statutory provision (and ICI shall procure
that no such recovery is sought to the extent that payment is made
hereunder).
8.3 Paragraphs 9.1, 9.2 and 10 (conduct of disputes and due date for payment)
shall apply to the covenant contained in paragraph 8.1 as they apply to the
covenants contained in paragraph 2, replacing references to ICI by the Purchaser
(and vice versa) and making any other necessary modifications.
Notification of claims and conduct of disputes
9.1 If the Purchaser or any Company becomes aware of any Tax Claim which could
give rise solely to a Tax Covenant Claim, the Purchaser shall give notice to ICI
of that Tax Claim (including reasonably sufficient details of such Tax Claim,
the due date for any payment and the time limits for any appeal, and so far as
practicable the amount of the claim under this Schedule in respect thereof) as
soon as possible (and in any event not more than 10 days after the Purchaser or
the Company concerned becomes aware of such claim) and shall take (or procure
that the Company concerned shall take) such action as ICI may reasonably request
to avoid, dispute, resist, appeal, compromise or defend the Tax Claim and any
adjudication in respect thereof. ICI shall have the right (if it wishes) to
control any proceedings taken in connection with such action, and shall in any
event be kept fully informed of any actual or proposed developments (including
any meetings) and shall be
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provided with copies of all correspondence and documentation relating to such
Tax Claim or action, and such other information, assistance and access to
records and personnel as it reasonably requires provided that the Purchaser
shall not be obliged to procure that the Company concerned takes any action
under this clause which involves contesting any Tax assessment before any court
or other appellate body (excluding the authority or body demanding the Tax in
question) unless ICI furnishes the Company concerned with the written opinion of
leading Tax counsel to the effect that an appeal against the Tax assessment in
question will, on a balance of probabilities, be won.
9.2 ICI shall reimburse to the Purchaser and the Company concerned the
reasonable costs and expenses properly incurred in connection with any such
action or proceedings as are referred to in paragraph 9.1 including but not
limited to the cost of the guarantees that the Companies or the Purchaser should
have to file before the relevant Tax Authority in the event that a suspension of
the Tax Claim is requested.
9.3 Subject to paragraph 9.4, the Purchaser shall procure that no Tax Claim,
action or issue in respect of which ICI could be required to make a payment
under this Schedule is settled or otherwise compromised without ICI's prior
written consent, such consent not to be unreasonably withheld, and the Purchaser
shall, and shall procure that the Company and its advisers shall, not submit any
correspondence or return or send any other document to any Tax Authority where
the Purchaser or any such person is aware or could reasonably be expected to be
aware that the effect of submitting such correspondence or return or sending
such document would or could be to put such Tax Authority on notice of any
matter which could give rise to, or could increase, a claim under this Schedule,
without first affording ICI a reasonable opportunity to comment thereon and
without taking account of such comments so far as it is reasonable to do so.
9.4 If ICI does not request the Purchaser to take any appropriate action
within 15 days of notice to ICI, the Purchaser shall be free to satisfy or
settle the relevant Tax Liability on such terms as it may reasonably think fit.
Due date of payment and interest
10.1 Subject to paragraph 5 and 10.2 ICI shall pay to the Purchaser any amount
payable under this Schedule on or before the date which is the later of the date
ten Business Days after demand is made therefor by the Purchaser and five
Business Days before the first date on which the Tax in question becomes
recoverable by the Tax Authority demanding the same,
Provided that
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(a) if the date on which the Tax can be recovered is deferred following
application to the relevant Tax Authority, the date for payment by ICI
shall be five Business Days before such later date when the amount of Tax
is finally and conclusively determined (and for this purpose, an amount of
Tax shall be deemed to be finally determined when, in respect of such
amount, an agreement under section 54 of the Taxes Management Act 1970 or
any legislative provision corresponding to that section is made or a
decision of a court or tribunal is given from which either no appeal lies
or in respect of which no appeal is made within the prescribed time
limit); and
(b) if a payment or payments to the relevant Tax Authority prior to the date
otherwise specified by this paragraph would avoid or minimise interest or
penalties, ICI may at its option pay the whole or part of the amount due
to the Purchaser on an earlier date or dates, and the Purchaser shall
procure that to the extent that it has received such amount the Tax in
question (or the appropriate part of it) is promptly paid to the relevant
Tax Authority.
ICI may, with the Purchaser's consent, not to be unreasonably withheld or
delayed, make a direct payment in respect of the Tax Liability in question to
the relevant Tax Authority (including through use of certificates of tax deposit
or the equivalent) and ICI's liability to the Purchaser shall be treated as
reduced or eliminated accordingly.
10.2 Where a claim under this Schedule relates to the use or set off of a
Purchaser's Relief, ICI shall pay to the Purchaser the amount due under this
Schedule in respect thereof on the later of the date which is five Business Days
before the first date on which Tax which would have been payable but for such
use or set off would have become recoverable by the Tax Authority demanding the
same, and ten Business Days after demand is made therefor by the Purchaser, such
demand to be accompanied by a copy of a certificate from the auditors of the
Purchaser or the Company concerned (obtained or procured to be obtained by and
at the expense of the Purchaser) that ICI has a liability of a stated amount in
respect of such claim and that Tax has, or will on a specified date, become
payable as aforesaid, and by reasonably sufficient evidence of such use or set
off and of such Tax Liability.
10.3 Any sum not paid by ICI on the due date for payment specified in paragraph
10.1 or 10.2 shall bear interest (which shall accrue from day to day after as
well as before any judgment for the same) at the Interest Rate from the due date
to and including the day of actual payment of such sum, provided that such
interest shall not accrue to the extent that ICI's liability under paragraph 2
or paragraph 5 extends to interest or penalties arising after
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the due date. Any interest due under this paragraph shall be paid forthwith on
the demand of the Purchaser.
Recovery from third parties
11.1 If any payment is made by ICI under this Schedule or the Tax Warranties in
respect of a Tax Liability and the Purchaser or the Company (or any person
connected with any of them other than any member of ICI's Retained Group) either
receives, or is entitled or may be entitled either immediately or at some future
date to recover or obtain, from any person (other than the Purchaser, the
Company or any such connected person) a payment or relief in respect of the Tax
Liability in question, then:
(a) the Purchaser shall notify ICI of that fact as soon as possible and if so
required by ICI shall take (or shall procure that the Company or other
person concerned shall take) at ICI's expense such action as ICI may
reasonably request to enforce such recovery or to obtain such payment or
relief (keeping ICI fully informed of the progress of any action taken and
providing it with copies of all relevant correspondence and
documentation); and
(b) if the Purchaser, the Company or other person concerned receives or
obtains a payment or relief in respect of the Tax Liability in question,
the Purchaser shall pay to ICI the amount received or the amount that the
Purchaser, the Company or other person concerned saves by virtue of the
payment or the relief (less any reasonable costs of recovering or
obtaining such payment or relief and any Tax suffered thereon) (the
Benefit) to the extent that the amount of the Benefit does not exceed the
aggregate payments previously made by ICI in respect of any Tax Covenant
Claims which have not previously been refunded pursuant to another
provision of this Agreement or this Schedule and except where any amount
so saved would otherwise have given rise to a claim under this Schedule
(in which event no such claim shall be made). Any amount of the Benefit
not so paid to ICI shall to the extent that it has not previously been
refunded pursuant to another provision of this Agreement or this Schedule
be carried forward and set off against any future Tax Covenant Claims. For
the avoidance of doubt, nothing in this paragraph shall require the
Purchaser to pay a Benefit to ICI if such Benefit has already reduced a
Claim.
11.2 Any payment required to be made by the Purchaser pursuant to paragraph
11.1 shall be made:
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(a) in a case where the Purchaser, the Company or other person concerned
receives a payment, within five Business Days of the receipt thereof; and
(b) in a case where the Purchaser, the Company or other person concerned
obtains a relief, within five Business Days of the date on which Tax would
have become recoverable by the appropriate Tax Authority but for the use
of such relief.
11.3 Any sum not paid by the Purchaser on the due date of payment specified in
paragraph 11.2 shall bear interest (which shall accrue from day to day after as
well as before any judgment for the same) at the Interest Rate from the due date
to and including the day of actual payment of such sum. Such interest shall be
paid on the demand of ICI.
Surrenders between the Retained Share selling company Group and the Company
12.1 Subject to the following provisions of this paragraph 12, and without
prejudice to the generality of clause 14 of the Agreement, the Purchaser shall
procure that each Company resident in the United Kingdom for Tax purposes shall,
in respect of any Accounting Period for United Kingdom corporation tax purposes
ended on or before the Closing Date (which for the purposes of this paragraph 12
shall include any overlapping period pursuant to section 403A of the Taxes Act),
make, give or enter into such claims, elections, surrenders, notices or consents
(whether unconditional or conditional, whether or not forming part of any other
return or Tax Document, whether provisional or final, and including amendments
to or withdrawals of earlier claims, elections, surrenders, notices or consents)
as ICI shall direct in writing in connection with the surrender (in accordance
with Chapter IV of Part X of the Taxes Act or section 240 of that Act, as
appropriate) of:
(a) losses or other amounts eligible for group relief (within the meaning of
that Chapter); and/or
(b) the benefit of any amount of advance corporation tax,
by or to any member of the Retained Share Selling Company Group to or by (as the
case may be) any of the Companies. Where surrenders are made by any of the
Companies to any member of the Retained Share Selling Company Group, then ICI
shall procure that a payment shall be made by the member of the Retained Share
Selling Company Group to the Company making the surrender in an amount equal to
the amount of Tax that the member of the Retained Share Selling Company Group
actually saves (ignoring for this purpose the availability of any credit for
advance corporation tax) as a result
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of the surrender. Payment shall be made to the Company making the surrender on
the date on which the Tax which the member of the Retained Share Selling Company
Group would have had to pay were it not for the surrender, would have been due.
No payment shall be made in respect of any such surrender to any of the
Companies by any member of the Retained Share Selling Company Group except to
the extent set out in the following provisions of this paragraph 12.
12.2 If, in respect of any Accounting Period of the Company ended on or before
Closing the Company has paid corporation tax (otherwise than in circumstances
where a claim has been or could be made under paragraph 2 of this Schedule in
respect thereof), and a surrender effected pursuant to paragraph 12.1 has the
effect of causing a repayment of some or all of that corporation tax (with or
without any repayment supplement within the meaning of section 825 of the Taxes
Act or interest under section 826 of that Act) the Purchaser shall procure that,
in respect of any such surrender as is made to the relevant Company pursuant to
paragraph 12.1, a payment for group relief (within the meaning of section 402(6)
of the Taxes Act) or a payment within section 240(8) of the Taxes Act (as the
case may be) shall be made to the member of the Retained Share Selling Company
Group making the surrender.
12.3 The amount of any such payment as is referred to in paragraph 12.2 shall
be equal to the amount of corporation tax so repaid (together with any repayment
supplement or interest net of Tax thereon).
12.4 Any payment under paragraph 12.3 shall be made on the date two Business
Days after the date on which such repayment is received, or would be received
but for some event or action within paragraph 12.5 and interest shall be charged
on any amount not paid on the due date as provided in paragraph 11.3.
12.5 In ascertaining the amount of any payment under paragraph 12.3, and the
time of such payment, no account shall be taken of any event or action occurring
after the Closing Date (including any loss arising in a period commencing after
the Closing Date or in respect of the portion of any Straddle Period commencing
after the Closing Date) which has or could have the effect of deferring,
reducing or eliminating any repayment to the Company (or the receipt of any
repayment supplement or interest), and in such a case paragraph 12.2 shall apply
as if such event or action had not occurred.
12.6 Where in respect of a relevant accounting period (within the meaning of
section 102 of the Finance Act 1989) ended on or before the Closing Date
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section 102(4) applies in relation to a surrendering company in the Retained
Share Selling Company Group and a recipient company which is a Company, then to
the extent that an amount corresponding to Tax which the recipient company is
deemed to have paid by virtue of section 102(4)(a) has previously been paid by
the recipient company (otherwise than in circumstances where a claim has been or
could be made under paragraph 2 of this Schedule in respect thereof) (the amount
saved), the Purchaser shall procure that a payment for a transferred tax refund
(within the meaning of section 102(7)) shall be made to the relevant member of
the Retained Share Selling Company Group of an amount equal to the amount saved.
12.7 Any payment for a transferred tax refund pursuant to paragraph 12.6 above
shall be made on the later of the day following the day on which the amount
saved is repaid by the Inland Revenue (or if such date is not a Business Day the
next following Business Day) and five Business Days after demand is made
therefor by the relevant member of the Retained Share Selling Company Group and
interest shall be charged on any amount not paid on the due date as provided in
paragraph 11.3.
12.8 If a payment is made under paragraph 12.2 or 12.6 and the surrender to
which it relates is subsequently determined to have been invalid or ineffective
to any extent or excessive, then the payment so made (or so much of it as
relates to such part of the surrender found to be invalid or ineffective or
excessive) shall be refunded as soon as practicable thereafter, together with
interest from the date of payment until the date of the refund at the Interest
Rate.
Illegality
13. If at any time any provision of this Schedule is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision under the
law of any other jurisdiction shall in any way be affected or impaired thereby.
Assignment
14. The provisions of clause 26 of the Agreement shall apply to this Schedule
as well.
Withholding and Grossing up
15.1 All the sums payable by ICI under this Schedule shall be paid free and
clear of all deductions or withholdings unless the deduction or withholding is
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required by law, in which event (and except in respect of interest) ICI shall
pay such additional amount as shall be required to ensure that the net amount
received by the Purchaser (for itself or as agent for the relevant Designated
Purchaser) under this Schedule shall equal the full amount which would have been
received by it had no such deduction or withholding been required to be made.
15.1 If a payment under this Agreement for breach of a Warranty or a payment
under this Schedule is subject to Tax in the hands of the Purchaser or a
Designated Purchaser (except in the case of interest payable under this
Agreement) ICI for itself (where it is the Share Selling Company) and otherwise
as agent for the Selling Company shall within 7 days of notice in writing being
served on it by the Purchaser pay to the Purchaser (for itself as agent for the
relevant Designated Purchaser) such amount as will ensure that the net amount
received in respect of any payment due from ICI under this Agreement after the
payment of such Tax (and after taking account of any reliefs available to the
Purchaser or the Company in respect of the matter giving rise to the payment) is
the same as it would have been were the payment not so subject to Tax in the
hands of the Purchaser or the Designated Purchaser and were the Purchaser or the
Company not so entitled to any relief in respect of the matter giving rise to
the payment.
15.3 To the extent that the Purchaser or the Designated Purchaser subsequently
receives any Tax credit, allowance, repayment or relief (the Purchaser or the
Designated Purchaser having used all reasonable endeavours to obtain such Tax
credit, allowance, repayment or relief) as a result of ICI paying to the
Purchaser an amount under paragraphs 15.1, or 15.2 the Purchaser (for itself or
as agent for the relevant Designated Purchaser) shall, as and when the Purchaser
or Designated Purchaser obtains the Tax repayment or a reduction in its actual
Tax payments as a result of such Tax credit, allowance or relief pay to ICI for
itself (where it is the Share Selling Company) and otherwise as agent of the
Selling Company so much of that Tax repayment or Tax saving which the Purchaser
or the Designated Purchaser has received as does not exceed the sum payable
under paragraph 15.1 or 15.2 provided that nothing in this paragraph 15 shall
require the Purchaser or any member of the Purchaser's Group to disclose any of
its confidential Tax affairs.
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SCHEDULE 14
ENVIRONMENTAL INDEMNITIES
PART A
Interpretation
1.1 In this Schedule 14:
Criteria means:
(i) the nature of the legal obligation which has been or which may be breached
or the legal liability which has or may have arisen or may arise;
(ii) the legal powers and remedies available to the Governmental Authority or
third party to bring Environmental Proceedings (including any limitations
on those powers);
(iii) the likelihood of Environmental Proceedings being commenced and
successfully completed by a Governmental Authority or third party acting
under Environmental Law in the jurisdiction in question having regard to
applicable enforcement practice therein;
(iv) the likelihood of a notice, order or requirement to carry out Remedial
Action falling on any Protected Person, JV Business, ICI and/or any member
of ICI's Group as the case may be;
(v) in relation to soil or groundwater contamination, the nature and extent of
the impact or risk of impact to the Environment; and
(vi) the costs and benefits of carrying out the proposed Remedial Action (where
applicable) (including the consequences of not carrying out the proposed
Remedial Action at that time);
Closed Site Liabilities means any Losses arising from soil or groundwater
contamination only under Future Environmental Law in respect of any property
owned, or occupied by any of the Companies or the Tioxide Business, the Relevant
Petrochemicals Business or the Polyurethanes Business at Closing at which
business operations, industrial processes or other uses carried on at any time
prior to Closing have as at Closing permanently ceased including for the
avoidance of doubt, Burnie (Closed Sites);
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Conduct Party means the party having the conduct of Environmental Proceedings,
Remedial Action and any other matter the subject of a notice given pursuant to
paragraph 9.1 only;
Disclosed Pre-Closing Compliance Issues means Pre-Closing Compliance Issues
fairly disclosed in the Data Rooms or otherwise disclosed by and in accordance
with the Disclosure Letters in either case pursuant to this Agreement (provided
that, for the purposes of this definition, any such disclosure against any
particular warranty shall be deemed to be disclosure for the purposes of
determining whether a Pre-Closing Compliance Issue is a Disclosed Pre-Closing
Compliance Issue).
Disposal to Off-Site Landfills means the presence of Hazardous Materials or
Waste prior to Closing in, at or under and (if present prior to Closing) at any
time before or thereafter, migrating, escaping, leaking or emanating from:
(i) any off-site facility or property which prior to Closing but not thereafter
was used in whole or in part as a landfill site for the disposal of
Hazardous Materials or Waste from any Relevant Property or Relevant Shared
Property or any other site at any time occupied, owned or used by the
Relevant Petrochemicals Business, the Tioxide Business or the Polyurethanes
Business (including such businesses as they may have been carried on at any
time prior to Closing and any predecessor of any such business) (Closed
Off-Site Landfills); and
(ii) any off-site facility or property which prior to Closing and thereafter was
used in whole or in part as a landfill site for the disposal of Hazardous
Materials or Waste from any Relevant Property or Relevant Shared Property
or any other site at any time occupied, owned or used by the Relevant
Petrochemicals Business, the Tioxide Business or the Polyurethanes Business
(including such businesses as they may have been carried on at any time
prior to Closing and any predecessor of any such business) provided that
this sub-paragraph (ii) applies in relation to such use prior to Closing
only (On-going Disposal Sites);
Emergency means in respect of Pre-Closing Soil or Groundwater Contamination
only, a fire, explosion, act of God or flood or other sudden and catastrophic
event where such an event would result in significant Environmental Losses or
would significantly increase Environmental Losses;
Environment means all or any of the following media, namely air (excluding media
within buildings or other natural or man made structures above or below ground),
water or land and any living organisms or systems supported by those media;
Page 320
Environmental Law means any applicable statutes, subordinate legislation and
other national, federal, state and local laws (including common law and any
contractual obligations), rules, regulations, orders, ordinances, judgments or
injunctions and codes of practice, guidance notes and judicial and
administrative interpretation of each of the foregoing each as is valid and
enforceable on the relevant Protected Person or JV Business at Closing in the
relevant jurisdiction (or, in relation to contractual obligations or
liabilities, after Closing as a direct consequence of the completion of the
transactions provided for in this Agreement) and the New Contaminated Land Power
each as relate to Pre-Closing Environmental Conditions. For the avoidance of
doubt, any enactment or statutory provision being an Environmental Law is as it
may have been, or may from time to time be, amended, modified, consolidated or
re-enacted (with or without modification) and includes all instruments or orders
made under such enactment, but only insofar as such amendment, consolidation or
re-enactment of such legislation does not increase the liability of ICI under
this Schedule 14;
Environmental Losses means all fines, penalties, damages, losses, liabilities,
costs and expenses (including reasonable professional and consultants' fees)
(Losses) incurred under or to the extent necessary to comply with Environmental
Proceedings or a settlement or agreement as referred to in paragraph 4.2(ii) or
an emergency as provided for in paragraph 10(ii) (but excluding indirect,
consequential or incidental Losses (including any loss of anticipated profits or
revenue and costs attributable to the loss of use or business interruption or
disruption (Indirect Losses) provided that Losses shall not be Indirect Losses
merely because they arise or are imposed under contract law);
Environmental Permit means any Permit under Environmental Law;
Environmental Proceedings means any criminal, civil, judicial, regulatory or
administrative proceeding, suit or claim of any Governmental Authority or third
party or Final notice, order or requirement of any Governmental Authority or
third party in each case under Environmental Law (or Future Environmental Law in
the case of Protected Matters, North Tees Soil or Groundwater Contamination and
the Post-Closing Counter-Indemnity only);
Final means, in relation to a notice, order or requirement that it is binding
and is either not capable of appeal, review or challenge, or there is no
reasonable prospect of a successful appeal, review or challenge;
Former Sites means any property not owned, occupied or used in connection with
any of the Companies or the Polyurethanes Business, Tioxide Business or Relevant
Petrochemicals Business at Closing, but formerly so owned,
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occupied or used (including in connection with such businesses as they may have
been carried on at any time prior to Closing and any predecessor of any such
business);
Former Sites Liabilities means any Losses under Future Environmental Law arising
from the occupation, ownership or use by any of the Companies and/or any of the
Relevant Petrochemicals Business, Tioxide Business or the Polyurethanes Business
(including in connection with such businesses as they may have been carried on
at any time prior to Closing and any predecessor of any such business) of any
Former Sites;
Future Environmental Law means all applicable statutes, subordinate legislation
and other national, federal, state and local laws (including the common law and
any contractual obligations), rules, regulations, orders, ordinances, judgments
or injunctions and codes of practice, guidance notes and judicial and
administrative interpretation of each of the foregoing each as is valid and
enforceable on the relevant Protected Person, ICI and/or any member of ICI's
Group as the case may be from time to time and each as relate to Protected
Matters, North Tees Soil and Groundwater Contamination or the Post-Closing
Counter-Indemnity;
Governmental Authority means any governmental agency, regulatory body, court of
law or tribunal with jurisdiction under Environmental Law or, in the case of
Protected Matters, North Tees Soil and Groundwater Contamination or the Post-
Closing Counter-Indemnity only and in relation to paragraphs 8.1(ii) and 11(a),
Future Environmental Law;
Hazardous Materials means a substance which alone or in combination with other
things is or are capable of causing significant harm or damage to property or to
man or to the Environment or which are specified to be hazardous under
Environmental Law or Future Environmental Law, as applicable in the relevant
jurisdiction;
High Likelihood has the meaning given in paragraph 8.1(iv);
Investigative Works means inspections, investigations, assessments, audits,
sampling or monitoring;
JV Business means any company or business in respect of which a Protected Person
is subject to the terms of a Joint Venture Agreement;
JV Environmental Losses means (i) only that proportion of Environmental Losses
in respect of which the relevant Protected Person is under a contractual
obligation to pay to any JV Business in respect of that Protected Person's Joint
Venture Interest and (ii) Environmental Losses for which the
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relevant Protected Person is directly liable under Environmental Law or Future
Environmental Law (as applicable);
Leak Repair Programme means the programme identified in Schedule 1 to the agreed
form leak repair services agreement between ICI and the Purchaser for the
carrying out of certain drainage and pipe repairs in respect of the North Tees
Site (the Leak Repair Services Agreement);
New Contaminated Land Powers means the powers introduced by Section 57 and
paragraphs 161 and 162 of Schedule 22 of the Environment Act 1995 and the Draft
Statutory Guidance on Contaminated Land (dated October 1998) (the Draft
Guidance) or the first set of guidance and regulations adopted under those
powers but only to the extent that the latter are enacted in a form no more
onerous to ICI in relation to the matters to which this Schedule 14 applies than
as set out in the Draft Guidance;
North Tees Site means the property edged in red on Agreed Plan 3, Agreed Plan 6
and Agreed Plan OM2;
North Tees Soil or Groundwater Contamination means in relation only to soil or
groundwater contamination at or from the North Tees Site any soil or groundwater
contamination existing at or migrating, leaching or escaping (a) at or prior to
Closing (b) arising after Closing from any structure or item to which the Leak
Repair Programme applies, on or before completion of the Leak Repair Programme
in relation to that structure or item (by certification or as otherwise provided
for in the Leak Repair Services Agreement) as the case may be or, if sooner, the
third anniversary of Closing; including any subsequent migration, leaking or
escape of any such contamination, other than any soil or groundwater
contamination attributable in whole or in part to, arising from or increased by
the negligent acts or omissions after Closing of the relevant Protected Person
(its employees, contractors, agents, sub-tenants or licensees) or third parties
(except, in the case of third parties only, to the extent such acts or omissions
occur off site and are attributable to Pre-Closing Soil or Groundwater
Contamination the presence of which was caused by any acts or omissions of ICI
or a member of ICI's Group and not (for the avoidance of doubt) any third party
("Off Site Third Party Negligence")) or any spillages after Closing by the
relevant Protected Person (its employees, contractors, agents, sub-tenants or
licensees) or third parties (except Off Site Third Party Negligence);
Off Site Third Party Negligence has the meaning given in the definition of North
Tees Soil or Groundwater Contamination;
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Permit means any authorisation, licence, permission, consent or approval issued
by a Governmental Authority acting lawfully;
Post-Closing Counter Indemnity means the indemnity contained in paragraph 14
below;
Post-Closing Environmental Conditions means:
(a) any soil or groundwater contamination first in, at, on or under any
Relevant Property or Relevant Shared Property (not being North Tees Soil or
Groundwater Contamination) after Closing; or
(b) the exposure of employees, contractors, agents or licensees to any
Hazardous Materials first in existence at, on, over or under any Relevant
Property or Relevant Shared Property after Closing; or
(c) any post-Closing breach of or non-compliance with Future Environmental Law
or Environmental Permits except to the extent resulting from Pre-Closing
Environmental Conditions,
which is in any case increased, exacerbated, enhanced, caused or permitted as a
result of circumstances occurring after Closing as the result of any act or
omission of the relevant Protected Person or JV Business (its employees,
contractors, agents, sub-tenants or licensees of the same); or
(d) any post-Closing migrating, leaching or escaping of any Pre-Closing Soil or
Groundwater Contamination to the extent attributable in whole or in part
to, arising from or increased by the negligent acts or omissions or any
spillages after Closing of or by the relevant Protected Person or JV
Business (its employees, contractors, agents, sub-tenants or licensees) or
third parties (except Off Site Third Party Negligence) or the carrying out
or failure to carry out routine maintenance by the relevant Protected
Person or JV Business (its employees, contractors, agents, sub-tenants or
licensees) or third parties (except Off Site Third Party Negligence);
Pre-Closing Environmental Conditions means the following:
(i) in relation to the Relevant Properties or Relevant Shared Properties soil
or groundwater contamination existing at or migrating, leaching or escaping
from any such Relevant Property or Relevant Shared Property at or prior to
Closing including any subsequent migration leaking or escape of any such
pre-Closing contamination (Pre-Closing Soil or Groundwater Contamination);
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(ii) any pre-Closing breach of or non-compliance with Environmental Law or
Environmental Permits (excluding, for the avoidance of doubt, any Pre-
Closing Soil or Groundwater Contamination or Pre-Closing Health and Safety
Issues) by any of the Companies or the JV Businesses or, in relation to
the Tioxide Business, the Polyurethanes Business or the Relevant
Petrochemicals Business, by ICI or any other member of ICI's Group within
the period of three years prior to Closing (except Disclosed Pre-Closing
Compliance Issues) (Pre-Closing Compliance Issues);
(iii) the exposure of employees, contractors, agents or licensees to any
Hazardous Materials prior to Closing as the result of their work for the
Tioxide Business, the Relevant Petrochemicals Business or the
Polyurethanes Business or their presence on any property at any time used,
occupied or owned in connection with any of those businesses including in
connection with such businesses as they may have been carried on at any
time prior to Closing and any predecessor of any such business (Pre-
Closing Health and Safety Issues);
excluding in each case any Post-Closing Environmental Conditions;
Plant Closure Sites means those sites listed in Part B of this Schedule 14;
Protected Matters means the following:
(i) the matters referred to in Part C of this Schedule 14;
(ii) Former Sites Liabilities;
(iii) Closed Sites Liabilities;
(iv) Disposal to Off-Site Landfills;
or any of them;
Protected Person means the Companies and any member of the Purchaser's Group
from time to time excluding, for the avoidance of doubt, any JV Business;
Reasonable and Prudent Operator means a person exercising that degree of skill,
diligence, prudence and foresight which would reasonably and ordinarily be
expected from a skilled and experienced operator in substantial compliance with
all applicable laws engaged in the same type of undertaking in the same locality
and under the same or similar circumstances and conditions, and any reference to
the standard of a Reasonable and Prudent
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Operator herein shall be a reference to such degree of skill, diligence,
prudence and foresight as aforesaid;
Relevant Property means Properties listed in Part D(i) of this Schedule 14;
Relevant Shared Property means those Shared Properties listed in Part D (ii) of
this Schedule 14;
Remedial Action means works for preventing, removing, remedying, cleaning-up,
containing or ameliorating soil or groundwater contamination including
Investigative Works and in relation to any Pre-Closing Compliance Issue means
works to remedy or recover from such non-compliance (a) which works are required
by a Governmental Authority acting lawfully under Environmental Law to have been
carried out at or prior to Closing only or, (b) which non-compliances were prior
to Closing an existing breach of Environmental Law;
Significant Environmental Impact means any Pre-Closing Soil or Groundwater
Contamination only (i) which represents a significant existing impact on the
Environment; or (ii) in respect of which there is a very high probability that
it will give rise to a significant impact on the Environment and in either case
would be likely to result in a Governmental Authority acting lawfully under
Environmental Law issuing or making a notice, order or requirement for Remedial
Action to be taken in respect of the same matter;
Tracy Site means the Tioxide Business site at 1690 and 1694 Marie-Victorin
Boulevard, Tracy, Quebec, Canada;
Umbogintwini Site means the Tioxide business site at 33, Umlazi Native Location,
No. 4676, Umbogintwini, South Africa;
Waste means any waste including anything which is abandoned, unwanted or
surplus:
(i) including any such thing which is capable of any beneficial use or of being
recovered or recycled or has any value (Re-use Material); but
(ii) excluding any Re-use Material which has, in fact been put to beneficial use
or recovered or recycled.
Indemnities
2.1 Subject to the limitations set out in paragraphs 3 to 16 insofar as
applicable below ICI for itself and otherwise as agent for the Share Selling
Companies shall indemnify, defend and hold the Purchaser harmless for itself
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(and as agent for and for the benefit of the Protected Persons) on an after Tax
basis from and against:
(A) Protected Matters
all Environmental Losses incurred, suffered or sustained by any Protected Person
at any time after Closing in respect of Protected Matters;
(B) Pre-Closing Environmental Conditions
all Environmental Losses incurred, suffered or sustained by any Protected Person
at any time after Closing in respect of Pre-Closing Environmental Conditions;
(C) North Tees Soil or Groundwater Contamination
all Environmental Losses incurred, suffered or sustained by any Protected Person
at any time after Closing in respect of North Tees Soil or Groundwater
Contamination.
Limitations on liability
3.1 The limitations on liability set out in Clauses 11.1, 12.2 , 12.8(b) (as if
in each case the reference therein to Designated Purchaser was to Protected
Person) 12.8(e), 12.8(g), 12.10, 12.13, 13.1 and 13.2 of the Agreement inclusive
shall apply to any claim made in respect of paragraph 2.1 above.
3.2 Subject always to the limitations in paragraph 3.3 below, the maximum
aggregate liability of ICI in respect of claims made under paragraph 2.1(B)
(Pre-Closing Environmental Conditions) above after paragraph 3.4 has been
applied shall not in any event exceed:
(i) an amount equal to (Pounds)312,500,000 which cap is included in the overall
cap in Clause 12.3 of this Agreement; and
(ii) the following percentage of Environmental Losses in relation to claims made
in the identified year:
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- ------------------------------------------------
Relevant Year ICI's Share
- ------------------------------------------------
Each year on or after 100%
Closing up to the tenth
anniversary of Closing
Date
- ------------------------------------------------
Year commencing on the 67%
tenth anniversary of
Closing Date
- ------------------------------------------------
Year commencing on the 33%
eleventh anniversary of
Closing Date
- ------------------------------------------------
On or after the twelfth 0%
anniversary of Closing
Date
- ------------------------------------------------
such annual percentage in each case being applied in respect of all
claimable Environmental Losses in respect of each valid claim made in the
relevant year.
3.3 The maximum aggregate liability of ICI in respect of any Environmental
Losses in respect of any JV Business shall not exceed the relevant JV
Environmental Losses.
3.4 ICI shall have no liability unless and until:
(i) in the case of any individual claim under paragraph 2.1(B) (Pre-Closing
Environmental Conditions) or 2.1(A) (Protected Matters) in relation to the
Tracy Site and the Umbogintwini Site the Environmental Losses arising from
such claim exceed (Pounds)100,000 in which event ICI shall only be liable
for the excess of the Environmental Losses over and above (Pounds)100,000;
(ii) in the case of any claims under paragraph 2.1(B) (Pre-Closing Environmental
Conditions), the aggregate of all Environmental Losses in respect of all
valid claims made in a Relevant Year (in accordance with the table in
paragraph 3.2(ii)) and, for the purpose of this sub-paragraph only,
disregarding sub-paragraph 3.4(i) exceeds (Pounds)3,000,000 in which event
ICI shall only be liable in relation to those claims for the excess of the
relevant Environmental Losses over and above (Pounds)3,000,000.
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3.5 For the avoidance of doubt:
(i) any amount for which ICI has no liability under paragraph 3.1 or by which
ICI's liability is reduced as a consequence of the operation of paragraphs
3.6 to 15 below shall not be capable of constituting a claim or increasing
the amount thereof for the purpose of this paragraph 3;
(ii) for the purpose of this paragraph 3 where a claim is caused by more than
one event, circumstance, act or omission (not being one sequence or set
(where the members of the set are substantially similar in nature to each
other and have a common cause) of like events, acts or omissions at a
single site) which event, circumstance, act or omission would separately
give rise to a right to claim under paragraph 2.1 each such claim shall be
treated as a separate claim when calculating whether the thresholds in
paragraph 3.4 have been exceeded.
3.6 ICI shall not be liable for any claim under paragraph 2.1(A) (Protected
Matters), (B) (Pre-Closing Environmental Conditions) or (C) (North Tees Soil or
Groundwater Contamination) unless the Purchaser shall have given ICI written
notice containing (so far as reasonably available) specific details of the
claim, including the Purchaser's estimate (on a without prejudice basis and so
far as it can reasonably be made at the date of the notice) of the amount of
such claim. The Purchaser shall not be disentitled from claiming under this
Schedule 14 as a result of any reasonable delay in providing such notice or
reasonable failure to provide information in such notice, where such delay or
failure has not prejudiced ICI.
3.7 Subject to paragraph 3.8, ICI shall not be liable unless:
(i) in the case of Pre-Closing Soil or Groundwater Contamination and Pre-
Closing Health and Safety Issues such written notice has been given before
the twelfth anniversary of Closing;
(ii) in the case of Pre-Closing Compliance Issues such written notice has been
given before the third anniversary of Closing.
3.8 The liability of ICI in respect of such claim under paragraph 2.1(A)
(Protected Matters) 2.1(B) (Pre-Closing Environmental Conditions) and (C) (North
Tees Soil or Groundwater Contamination) under this Schedule 14 shall absolutely
determine (if such claim has not been satisfied, settled, or withdrawn) if,
after the relevant Final notice, order or requirement referred to in paragraph
4.1 exists, legal proceedings in respect of such claim shall not have been
commenced by the Purchaser against ICI within 12 months of the service of notice
by ICI requiring commencement of proceedings (a Claim Commencement Notice) and
for this purpose proceedings shall not be deemed
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to have been commenced unless they shall have been properly issued and validly
served upon ICI.
Trigger conditions
4.1 Subject to paragraphs 4.2 and 4.3 below, the Purchaser shall not be
entitled to make a claim under paragraph 2.1(A) (Protected Matters), (B) (Pre-
Closing Environmental Conditions) or (C) (North Tees Soil and Groundwater
Contamination) unless and to the extent that:
(i) in the case of any Protected Matters or North Tees Soil or Groundwater
Contamination, Environmental Proceedings have been commenced or issued
under Future Environmental Law by a Governmental Authority or any other
person in respect of the same subject matter and such Environmental
Proceedings would (even if contested) result in a notice, order or
requirement which is Final;
(ii) in the case of any Pre-Closing Soil or Groundwater Contamination or any
Pre-Closing Health and Safety Issue, Environmental Proceedings have been
commenced or issued under Environmental Law by a Governmental Authority or
any other person in respect of the same subject matter and such
Environmental Proceedings would (even if contested) result in a notice,
order or requirement which is Final;
(iii) in the case of any Pre-Closing Compliance Issues the subject matter of the
claim constitutes an actual breach of or non-compliance with Environmental
Law and any Environmental Proceedings have been commenced or issued under
Environmental Law by a Governmental Authority or any other person in
respect of the same subject matter and such Environmental Proceedings
would (even if contested) result in a notice, order or requirement which
is Final;
4.2 Sub-paragraphs 4.1(i) to (iii) (as applicable) shall be deemed to have
been satisfied if:
(i) notice has been given to ICI as required under paragraphs 3.6 and
9.1;
(ii) Environmental Proceedings would have been commenced or issued,
and would (even if contested) have resulted in a notice, order or
requirement which is Final, but for a settlement or agreement
reached with the relevant Governmental Authority or other person
in accordance with paragraphs 7 and 9, to the extent such
settlement or agreement results in Environmental
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Losses no greater than would have been the case were any such Final
notice, order or requirement to have been imposed.
4.3 Where ICI has assumed conduct under paragraph 9 and sub-paragraph
4.2(ii) is satisfied in relation to the relevant matter at any subsequent time,
any right of the Purchaser to claim under this Schedule 14 shall not be
adversely affected or reduced as a result of any unreasonable delay or failure
by ICI thereafter in reaching the relevant settlement or agreement, the
assessment of reasonableness to take account of the effect of any such delay or
failure both on the terms of any settlement or agreement which may be reached
and on the Purchaser's claim under this Schedule 14.
4.4 The requirements of paragraph 4.1 are deemed to be satisfied by an
Emergency unless the final determination by an expert under paragraph 13 is that
the matter which is the subject of the claim is not an Emergency.
Post-completion conduct
5. ICI shall not be liable under paragraph 2.1(A) (Protected Matters), (B)
(Pre-Closing Environmental Conditions) or (C) (North Tees Soil or Groundwater
Contamination) in respect of any matter to the extent that such claim would not
have arisen but for, results from or is increased by:
(i) the cessation after Closing (or, in the case of Plant Closure Sites
only, after the third anniversary of Closing) of any operations at any
of the Relevant Properties or Relevant Shared Properties; or
(ii) any new or different mode or form of industrial process outside the
current production methods of the business as at Closing (Changed
Industrial Process) at any Relevant Property or Relevant Shared Property
after Closing except to the extent that a valid claim under this
Schedule 14 could have arisen irrespective of the Changed Industrial
Process, had the existence of the relevant matter been known; or
(iii) demolition or de-commissioning of plant and equipment by or on behalf of
a Protected Person or JV Business; or
(iv) any development, extension, expansion, construction or intensification
or any change of use (Development), except to the extent that (a) such
Development amounts (in aggregate from Closing) to no more than 20 per
cent of the built footprint at any Relevant Property or Relevant Shared
Property after Closing (Permitted Development) or (b) if the information
revealed by the Development had become known through some other means,
(not involving any Development) it would have given rise to a valid
claim under this Schedule 14 provided that, in
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relation to any Development which could affect, disturb or reveal Pre-
Closing Soil or Groundwater Contamination:
(a) the Purchaser shall give prior written notice to ICI;
(b) the Purchaser shall consult in good faith with ICI and shall take
account of any reasonable requests of ICI made in relation to the
process of obtaining permission for and carrying out the
Development; and
(c) the Protected Person or JV Business (its employees, contractors,
agents, sub-tenants and licensees) shall in relation to such
Development act at all times non-negligently and in accordance
with the standards of a Reasonable and Prudent Operator; or
(v) any Remedial Action required by any Governmental Authority under or as a
condition of any Permit issued by or informal or formal agreement with a
Authority in connection with Development except to the
extent that if the information revealed by the Development had become
known through some other means, (not involving any Development) it would
have given rise to a valid claim under this Schedule 14; or
(vi) any Remedial Action required by a Governmental Authority at any Relevant
Property or Relevant Shared Property under or as a condition of any
Permit or informal or formal agreement issued by or made with a
Governmental Authority in connection with any Development after Closing
at any property other than any Relevant Property or Relevant Shared
Property; or
(vii) subject to paragraph 16, any sale or change of occupier or grant of any
right of interest in relation to all or part of any Relevant Property or
Relevant Shared Property after Closing ;or
(viii) any voluntary modification, renewal, termination, surrender or variation
by a Protected Person or JV Business (its employees, contractors,
agents, sub-tenants and licensees) after Closing of any lease or other
agreement or arrangement under which any Designated Purchaser occupies
or uses all or any part of any Relevant Property or Relevant Shared
Property; or
(ix) ownership or occupation by any Protected Person or JV Business (in the
case of the Companies or JV Business, after Closing) of any adjacent or
affected property (except for the Relevant Properties or Relevant Shared
Properties); or
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(x) any direct or indirect interest of any Protected Person or JV Business
(in the case of the Companies or JV Business, not existing at Closing)
in any present or former owner of any adjacent or affected property
(except for the Relevant Properties or the Relevant Shared Properties);
or
(xi) the instigation or initiation by any Protected Person or JV Business of
any Environmental Proceedings, actions or claims by a Governmental
Authority, without prejudice in all cases (a) to any permitted act or
right of a Protected Person or JV Business under this Schedule 14; (b)
to a Protected Person or JV Business acting as a Reasonable and Prudent
Operator balancing the potential Environmental Losses which may be
sustained as a result of its conduct against the potential benefits of
such conduct (such balance to be assessed on the hypothetical assumption
that any such Environmental Losses would not be recoverable under this
Schedule 14 or otherwise);
(xii) the deliberate taking by a Protected Person or JV Business of any action
or step which is calculated or designed to give rise to Environmental
Proceedings in order to trigger a claim under this Schedule 14; or
(xiii) any intrusive Investigative Works by a Protected Person or JV Business
(its employees, contractors, sub-tenants and licensees) which either:
(a) do not satisfy the requirements of paragraph 11; or
(b) do not fall within (a) and are undertaken otherwise than for the
purpose of Development as referred to in paragraph 5(iv) or,
though carried out for that purpose, are not carried out in
accordance with paragraph 5(iv); or
(xiv) any admission of liability (in whole or part) or settlement of any claim
by any Protected Person or JV Business other than in accordance with
paragraph 9; or
(xv) any contractual obligation entered into, varied, amended or otherwise
modified after Closing other than pursuant to this Agreement so as to
establish or increase the Environmental Losses of any Protected Person
or JV Business.
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Specific exclusions
6.1 The Purchaser shall not be entitled to claim for any Environmental Losses
under paragraph 2.1(A) (Protected Matters), (B) (Pre-Closing Environmental
Conditions) or (C) (North Tees Soil or Groundwater Contamination) to the extent
that the relevant claim would not have arisen but for, results from or is
increased by matters which relate to:
(a) except in relation to soil or groundwater contamination, the carrying out
of or the failure to carry out works which are routine or recurring as a
result of the normal and lawful operation of the business of the
Protected Person or JV Business in a negligent manner or other than in
accordance with the standards of a Reasonable and Prudent Operator;
(b) use and recovery of packaging or packaging waste;
(c) town and country planning (in the United Kingdom) or comparable land use
planning or zoning systems in other jurisdictions except to the extent
relating to Hazardous Materials or Waste;
(d) any tax, duty or levy imposed or calculated in relation to claims under
paragraph 2.1(B);
(e) to the extent that any allowance, provision or reserve made for such
fact, matter, event, circumstance or Tax Liability in the Accounts or the
Closing Statements or the Tax Liability which has been noted in or was
taken into account in the preparation of the Accounts or the Closing
Statements, or to the extent that payment or discharge of the relevant
matter has been taken into account therein.
6.2 In respect of any claim under paragraph 2.1(B) (Pre-Closing Environmental
Conditions) and except in relation to paragraphs 8.1(ii) and 11(a), ICI shall
not be liable to the extent that the relevant claim would not have arisen but
for, results from or is increased by Future Environmental Laws, provided that
ICI shall not be entitled to exclude, avoid or reduce its liability under this
Schedule 14 as a result of Future Environmental Laws which are no more onerous
than Environmental Laws and references to Environmental Laws shall be
interpreted accordingly.
6.3 Any reference to liability under Environmental Laws or Future
Environmental Laws (as applicable) shall be deemed to include any contractual
obligation by which a Protected Person is responsible for or to contribute to
that liability, to the extent such obligation is in force and binding on the
relevant Protected Person at or prior to Closing or as the direct result of the
transactions provided for in this Agreement.
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Mitigation
7.1 The Purchaser and any relevant Protected Person or JV Business shall
mitigate any Environmental Losses under this Schedule 14 including, without
limitation, using all reasonable endeavours to (i) avoid Off Site Third Party
Negligence and (ii) pursue claims against third parties (including insurers) who
may have some liability to the Purchaser in respect of Off Site Third Party
Negligence.
7.2 The Purchaser shall not be entitled to claim under paragraph 2.1(A)
(Protected Matters), (B) (Pre-Closing Environmental Conditions) or (C) (North
Tees Soil and Groundwater Contamination) in respect of Environmental Losses
incurred in obtaining professional services in relation to the subject matter,
conduct or validity of the claim during the period prior to making that claim in
accordance with paragraph 3.6 above.
Disclosure to governmental authorities
8.1 Subject to paragraph 8.2 and 9 neither the Purchaser nor any member of
the Purchaser's Group or JV Business shall disclose any information in relation
to any matter which could reasonably be expected to be the subject of a claim
under paragraph 2.1 to any Governmental Authority without the prior written
consent of ICI except following prior written notice to and consultation with
ICI in relation to sub-paragraphs (ii), (iii) and (iv) below:
(i) in an Emergency where, because of the circumstances it is impracticable
to obtain the prior written consent of ICI; or
(ii) as required by law;
(iii) following the final determination by the expert under paragraph 13 (or
earlier agreement between the parties) that there is a Significant
Environmental Impact; or
(iv) in relation to Pre-Closing Compliance Issues but only insofar as these
are issues of discharges to controlled waters or sewers or emissions to
air following the final determination by the expert under paragraph 13
(or earlier agreement between the parties) that there is a high
likelihood that a Governmental Authority would require the relevant
Protected Person or JV Business to carry out Remedial Action at a cost in
excess of (Pounds)100,000 (excluding for these purposes the cost of
Investigative Works (High Likelihood).
8.2 The notice referred to in paragraph 8.1 shall contain specific reasonable
details of the matter proposed to be disclosed, the identity of the
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Governmental Authority and individual officers to whom the disclosure is to be
made and the proposed manner and timetable for disclosure (including any
documents or presentations or drafts of the same). ICI shall be given 30 days
(or such lesser period which allows compliance with the relevant law where
paragraph 8.1(ii) applies) in which to review and comment on the proposals for
disclosure and the Purchaser shall have regard to and incorporate the reasonable
requests of ICI in relation to the proposed disclosure.
8.3 In the event that ICI withholds its consent to a disclosure in
circumstances where the Purchaser notifies ICI in writing that it is of the
opinion that there is a Significant Environmental Impact or High Likelihood (as
applicable) then the provisions of paragraph 13.1 shall apply.
8.4 In the event that such disclosure is made, the provisions of paragraph
9.4 and 9.6 below shall apply mutatis mutandis.
Claims procedure
9.1 Upon the Purchaser becoming aware of a matter which could reasonably be
expected to give rise to a claim for Environmental Losses under this Schedule 14
the Purchaser shall as soon as reasonably practicable thereafter notify ICI by
written notice. Without limiting the obligation of the Purchaser to comply with
this paragraph 9.1, the purpose of such notice shall be to alert ICI to the
existence of the relevant matter in order that ICI may decide to exercise its
rights in relation to conduct and such notice shall (if the Purchaser wishes to
proceed with a claim under this Schedule 14) be accompanied by or followed by a
notice under clause 3.6.
9.2 ICI shall have the right to conduct Environmental Proceedings and
Remedial Action in respect of any matter which could reasonably be expected to
become a claim under paragraph 2.1(A) (Protected Matters) or (C) (North Tees
Soil or Groundwater Contamination), unless ICI (i) notifies the Purchaser in
writing within a reasonable time thereafter, that it declines the right to
conduct under this paragraph; or (ii) is in breach of paragraph 9.10 in
circumstances which would result in any material Environmental Losses being
incurred by the relevant Protected Person which are not covered by a valid claim
under this Schedule 14 and/or would materially adversely affect the value of the
Relevant Property or Relevant Shared Property or the goodwill or good name of
such Protected Person , in which event the Purchaser shall have conduct. For the
avoidance of doubt the provisions of paragraph 9.6 shall not apply to such
conduct by ICI of Environmental Proceedings or Remedial Action under this
paragraph.
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9.3 Subject to paragraph 9.10 below ICI shall have the right at any time to
assume by written notice to the Purchaser conduct of all or any part of any
Environmental Proceedings or the carrying out of any Remedial Action relating to
or affecting any Pre-Closing Environmental Conditions provided that if ICI has
assumed any such conduct and ICI is in breach of paragraph 9.10 in the
circumstances described in paragraph 9.2 above the Purchaser shall be entitled
to have conduct.
9.4 The Purchaser shall promptly provide ICI with such reports, documents,
correspondence, information, assistance and facilities relating to any
Environmental Proceedings or Remedial Action or other matter for which written
notice has been given under paragraph 3.6 or 9.1 as ICI may reasonably require
the Purchaser to provide (including if required by ICI reasonable access to any
Relevant Property or Relevant Shared Property or so far as practicable adjacent
or affected property) except that nothing in this paragraph shall require any
waiver of legal privilege or breach of any duty of confidentiality excluding any
duty of confidentiality between the Purchaser (or the relevant Protected Person)
and any consultant in respect of or relating to Environmental Proceedings or
Remedial Action or other matter the subject of written notice under paragraph
9.1. Each party shall use its reasonable endeavours to avoid assuming any duty
of confidentiality which would impede the efficient operation of this paragraph
9.
9.5 The Conduct Party shall be entitled to avoid, dispute, deny, defend,
resist, appeal, compromise or contest any Environmental Proceedings, or any
matter the subject of the relevant written notice (including, without
limitation, making counterclaims or other claims against third parties in its
own name) and to have the conduct of any Environmental Proceedings, and any
related Remedial Action or appeals or other matter the subject of the relevant
written notice but no admission of liability shall be made by or on behalf of
the Conduct Party and the Environmental Proceedings or other matter the subject
of written notice under paragraph 9.1 shall not be compromised, disposed of or
settled without, in each case, the consent of the other party (such consent not
to be unreasonably withheld or delayed and provided that such consent shall not
be withheld where the relevant settlement or agreement satisfies the criteria in
paragraph 4.2(ii) (including as to quantum of Environmental Losses) and has been
reached in accordance with this paragraph 9).
9.6 The Conduct Party (where the Purchaser is the Conduct Party) shall use
its reasonable endeavours to ensure that:
(i) the other party shall be informed promptly of any information which comes
to the knowledge of the Conduct Party other than information which the
Conduct Party reasonably considers to be immaterial to the
Page 337
Environmental Proceedings or any other matter the subject of the relevant
written notice;
(ii) the other party shall be allowed a reasonable opportunity to review and
to comment upon any material reports documents and correspondence to be
prepared and provided by the Conduct Party to the other parties to, or to
any Governmental Authority hearing, administering or involved in such
Environmental Proceedings or matter the subject of the relevant written
notice and the Conduct Party shall have regard to the views of the other
party on such reports, documents or correspondence;
(iii) the other party shall be provided with advance notice of and be allowed
to attend and participate in any material site visit meeting or
negotiation involving the Conduct Party (or any subsidiary of the Conduct
Party) and any other parties to, or the Governmental Authority hearing,
administering or involved in, any Environmental Proceeding or matter the
subject of the relevant written notice under paragraph 9.1 and if it so
requests and undertakes to pay for the reasonable cost of taking and
providing such notes the other party shall be provided promptly with
reasonably full and accurate but not verbatim notes of such visit
meetings negotiations which it does not attend and participate in;
(iv) if the other party so requests, copies of all material correspondence and
documents passing between the Conduct Party and other parties to the
Environmental Proceedings or matter the subject of the relevant written
notice under paragraph 9.1 or provided by the Conduct Party to the
Governmental Authority hearing, administering or involved in the
Environmental Proceedings or matter the subject of the relevant written
notice under paragraph 9.1 shall be provided promptly to the other party;
(v) subject to the other party undertaking to pay the reasonable cost thereof
detailed written reports shall be provided to the other party regarding
the status and progress of any Environmental Proceedings or any other
matter the subject of the relevant written notice under paragraph 9.1 as
frequently and in such form and detail as the other party shall
reasonably require;
(vi) the other party shall be provided with reasonable notice of any proposal
by the Conduct Party or any third party (to the extent the Conduct Party
is aware of such proposal) to undertake Remedial
Page 338
Action Provided that this obligation shall not apply in case of an
Emergency;
(vii) any Remedial Action carried out by the Conduct Party or any contractor or
subcontractor of the Conduct Party shall be carried out using all
reasonable skill and care;
(viii) the other party shall be allowed to send such representatives as the
other party may reasonably require to attend and inspect the carrying out
of Remedial Action whilst they are being carried out Provided that such
representatives shall not interfere with the proper undertaking of the
Remedial Action or the operation of the relevant business or the
activities of any third party;
(ix) where an environmental expert is to be appointed the Conduct Party shall
consult with the other party and have regard to the other party's views
on whom to appoint, the scope of the appointment and the terms and
conditions of appointment.
9.7 Each party shall comply with the reasonable requests of the other for
arrangements or procedures to maintain confidentiality or legal privilege in
relation to any matters arising out of or relating to any Environmental
Proceedings, Remedial Action or other matter the subject of written notice under
paragraph 9.1.
9.8 The other party shall give the Conduct Party or its agents or contractors
access to personnel, premises, chattels, documents and records as the Conduct
Party may reasonably request and allow without limitation entry to premises to
make such examination and investigations as the Conduct Party may consider
necessary, the taking of samples, measurements, photographs and recordings of
soil, air, water or substances and combinations of substances at any Relevant
Property or Relevant Shared Property, with the full co-operation of the other
party, the interviewing of any person the Conduct Party has reasonable cause to
believe to be able to give relevant information and the production of extracts,
papers and records in relation to any matter which is or is likely to be the
subject of a claim under paragraph 2.1.
9.9 The other party shall in a timely fashion:
(i) provide the Conduct Party with such information as it may reasonably
require to enable it to assist in the conduct of Environmental
Proceedings;
Page 339
(ii) consult in good faith with the Conduct Party in relation to Environmental
Proceedings; and
(iii) provide the Conduct Party with such material information as comes to the
knowledge of the other party and which relates to the Environmental
Proceedings.
9.10 Where ICI has conduct of all or any part of Environmental Proceedings
pursuant to paragraph 9.2 above, or assumes conduct of all or any part of
Environmental Proceedings pursuant to paragraph 9.3 above, ICI shall (subject to
appropriate arrangements to maintain confidentiality and privilege):
(i) provide reasonably frequent and reasonably detailed reports to
the other party regarding the progress of Environmental
Proceedings or Remedial Action;
(ii) allow the other party a reasonable opportunity to review and
comment in advance on proposals for Remedial Action;
(iii) develop in consultation with the other party, proposals for
Remedial Action, having regard to ICI's obligation at sub-
paragraph (vi) below;
(iv) have regard to and incorporate the reasonable requests of the
other party in relation to such Environmental Proceedings or
Remedial Action (unless any such request of the other party would
in excess of the cost of complying with (v) and (vi) increase the
amount of Purchaser's claim or the cost of the Remedial Action in
excess of the cost of complying with (v) and (vi) in which case
the Purchaser shall be liable to ICI for any such increase in
relation to such request which is accepted by ICI);
(v) carry out Remedial Action in a proper and workmanlike manner and
proceed with the same in a timely manner and with due diligence;
(vi) so far as reasonably practicable avoid or minimise interruption
or disruption to the business carried on at any of the Relevant
Properties or Relevant Shared Properties;
(vii) if so requested by the Purchaser (a) carry out any intrusive
Investigative Works where and to the extent that the criteria in
paragraph 11 are satisfied; and (b) make any disclosure where
Page 340
and to the extent that the criteria in paragraph 8 are satisfied.
Any right of the Purchaser to claim under this Schedule 14 which
would have arisen had the Purchaser retained conduct and carried
out such work or made such disclosure shall not be adversely
affected or reduced as a result of any unreasonable delay in
complying with any such request (the assessment of reasonableness
to take account of all relevant matters including the effect of
any such delay on the Purchaser's claim under this Schedule 14,
or the claim which the Purchaser would have had, but for such
delay having regard to when the Purchaser might reasonably have
been expected to have carried out such work or made such
disclosure had the Purchaser retained conduct.
9.11 In relation to JV Environmental Losses, all obligations and rights in
this paragraph 9 are subject to the extent and exercise of such rights as the
relevant Protected Person may have in relation to the operation of the relevant
JV Business.
Standard of works
10. The Purchaser shall not be entitled to claim under paragraph 2.1 in
respect of the cost of carrying out Remedial Action except for the reasonable
costs of such Remedial Action which are the minimum necessary:
(i) to comply with the Final notice, order or requirement of a Governmental
Authority acting under Environmental Law or (in relation to Protected
Matters or North Tees Soil or Groundwater Contamination) Future
Environmental Law or a settlement or agreement under paragraph 4.2; or
(ii) to address the Emergency (which for the avoidance of doubt excludes
anything other than such works as are necessary at the time of the
Emergency to (a) remove the direct cause of and (b) control the immediate
effects of the Emergency).
Investigative works
11. The Purchaser shall not be entitled to claim under paragraph 2.1 for any
Investigative Works in relation to any Protected Matters, Pre-Closing
Environmental Conditions or North Tees Soil or Groundwater Contamination except
where and to the extent that such Investigative Works:
(a) are specifically and lawfully ordered or required by the relevant
Governmental Authority under law; or
Page 341
(b) are carried out in accordance with paragraph 7 and 9 in relation to a
matter where:
(i) a notice has been served under paragraph 3.6;
(ii) ICI has not assumed conduct under paragraph 9;
(iii) on the basis of the available information (prior to the relevant
Investigative Works) there are reasonable grounds to believe that
Significant Environmental Impact or High Likelihood may exist.
Statements
12. In the event of any circumstances arising which do or could reasonably be
expected to give rise to a claim for Environmental Losses neither the Purchaser,
Protected Persons or JV Businesses nor ICI or any member of ICI's Group shall
make any public statements (including, for the avoidance of doubt, any statement
to any Governmental Authority, unless required by law or in an Emergency)
regarding such circumstances without first discussing with the other party and
reaching written agreement on the text of any such public statement before it is
made, such agreement not to be unreasonably withheld or delayed by either party
and without prejudice to paragraph 8.1.
Disputes
13.1 If any dispute arises between ICI and the Purchaser as to:
(i) whether or not an Emergency arose; or
(ii) whether or not High Likelihood exists; or
(iii) whether or not a Significant Environmental Impact has occurred,
the matter shall be referred for final determination in accordance with the
Criteria, at the request of either of ICI or the Purchaser to an independent
environmental consultant having experience relevant to the matter in dispute as
agreed between ICI and the Purchaser or in default of any such agreement within
seven days of such request by ICI or the Purchaser, nominated in accordance with
the criteria set out below at the request of either ICI or the Purchaser by or
on behalf of the Chief Executive of the Environmental Auditors Registration
Association or their equivalent in the relevant jurisdiction or, if he or she is
unable to make a nomination within 28 days of the request made to him or her, by
the President for the time being of the Chartered Institute of Arbitrators.
Such independent environmental
Page 342
consultant shall act as an expert and not as an arbitrator and his fees and
expenses shall be borne as he shall direct.
13.2 The criteria referred to and to be applied in the nomination of the
independent environmental consultant shall be that he shall not have less than
10 years experience relevant to the matter in issue and he shall be a member of
a company or firm which has been established for at least three years preceding
the date of the nomination.
13.3 The said environmental consultant shall be offered the appointment within
seven business days of the parties reaching agreement on the appointment or upon
nomination by the Chief Executive of the Environmental Auditors Registration
Association or President of the Chartered Institute of Arbitrators as the case
may be, he can only be dismissed by the mutual agreement of ICI and the
Purchaser. The said environmental consultant shall present his written
determination within four weeks of his appointment or nomination or such longer
period as ICI and the Purchaser may mutually agree.
13.4 The terms of appointment of the environmental consultant will include a
provision that neither ICI nor the Purchaser will engage the environmental
consultant or any consultancy firm with which he is associated after his
nomination in relation to the relevant matter without the written consent of the
other party.
13.5 The decision of the said environmental consultant in relation to the
matters referred to in Clause 13.13 shall in the absence of manifest error be
final and binding on the parties hereto.
Post-Closing Counter Indemnity
14.1 The Purchaser, for itself and as agent for the Designated Purchasers
shall indemnify, defend and hold ICI for itself and for the Share Selling
Companies harmless on an after Tax basis (Post-Closing Counter Indemnity) from
and against:
(i) Environmental Losses incurred, suffered or sustained by ICI after Closing
in respect of Post-Closing Environmental Conditions; and
(ii) the Purchaser's percentage share of Environmental Losses (not being ICI's
share) as calculated under paragraph 3.2(ii) above.
14.2 The Post-Closing Counter Indemnity in paragraph 14.1 shall be subject to
the provisions of Part E and, for the avoidance of doubt, shall not include
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or be subject to the provisions contained in paragraphs 2, 3.1, 3.2 (i), 3.3 to
3.8 and 4 to 13 inclusive of this Part A of this Schedule 14.
Payment
15. Any sums for which either party is liable under this Schedule 14 shall be
due and payable 30 days from the day following service of a proper invoice in
accordance with this Agreement.
Further Protected Persons
16.1 In this paragraph 16.1:-
Asset Transaction means the sale or other disposal of all or any part of the
Tioxide Business, the Relevant Petrochemicals Business or the Polyurethanes
Business after Closing or the sale or other disposal of all or any part of any
Relevant Property or Relevant Shared Property after Closing;
Further Protected Person means:
(i) in the context of an Asset Transaction, the new owner of the Tioxide
Business, the Relevant Petrochemicals Business the Polyurethanes Business
or the relevant part of such business or of any Relevant Property or
Relevant Shared Property or part of it following the Asset Transaction;
and
(ii) in the context of a Share Transaction, the entity which was the subject
of the Share Transaction and also the person who has acquired the
relevant shares interest in such entity;
in either case not being a member of the HSCC Group;
Share Transaction means the sale or disposal of all or a controlling interest in
the shares in any entity forming part of the Tioxide Business, the Relevant
Petrochemicals Business or the Polyurethanes Business after Closing;
Transaction means an Asset Transaction or a Share Transaction, as applicable.
16.2 The Vendor agrees that, in the event of a Transaction, the Purchaser
shall be entitled in its sole discretion to claim under this Schedule 14 in
respect of Environmental Losses of Further Protected Persons, as if such Further
Protected Persons were Protected Persons, provided that this 16.2 shall cease to
apply in relation to any Further Protected Person upon the occurrence of any
subsequent Transaction, to the extent such subsequent Transaction relates to a
Further Protected Person or to any Relevant Property
Page 344
or Relevant Shared Property or part of it which was subject to the first
Transaction.
16.3 It is a condition of any claim by the Purchaser in relation to
Environmental Losses of a Further Protected Person that the Purchaser shall
comply with and shall procure that each Further Protected Person shall comply
with and in all respects be bound by paragraphs 3 to 15 of this Schedule 14.
16.4 For the avoidance of doubt, no Further Protected Person shall acquire any
right against the Vendor by virtue of this paragraph 16 and this paragraph 16
shall not extend or increase the Vendor's liabilities under this Schedule 14.
Page 345
PART B
Plant Closure Sites
North Tees Site
Tracy
Page 346
PART C
Protected Matters
- -------------------------------------------------------------------------------
Property Issues
- -------------------------------------------------------------------------------
1. Rozenburg Remedial Actions in relation to
Pre-Closing Soil or Groundwater
Contamination at leasehold reserved
property on Britannia Harbour
- -------------------------------------------------------------------------------
2. Umbogintwini The pre-Closing soil or groundwater
contamination (irrespective of whether
it is Pre-Closing Soil or Groundwater
Contamination) associated with the
slimes dams treatment areas and other
pre-Closing activities on or affecting
the site including the unlicensed
waste dump and on-site coal
gasification plant
- -------------------------------------------------------------------------------
3. Grimsby Remedial Actions in relation to
Pre-Closing Soil or Groundwater
Contamination at the West Field Site
shown for identification purposes only
edged black on agreed plan 7
- -------------------------------------------------------------------------------
4. Tracy Remedial Actions in relation to
Pre-Closing Soil or Groundwater
Contamination
- -------------------------------------------------------------------------------
5. Greatham Any fine, penalty or damages or other
liabilities which are paid to a
regulatory authority or third party
resulting from the acid leak on 17
February 1999 into Greenabella Marsh,
not including the cost of Remedial
Actions.
- -------------------------------------------------------------------------------
Page 347
PART D
Part I: Relevant Properties
- --------------------------------------------------------------------------------
Property Address
- --------------------------------------------------------------------------------
POLYURETHANES BUSINESS
- --------------------------------------------------------------------------------
Polyurethanes Shepton facility Hitchin Lane Shepton Mallett Somerset England
- --------------------------------------------------------------------------------
Betriebsstatte der Deutsche ICI Land Au 30 94469 Deggendorf Germany
- --------------------------------------------------------------------------------
Polyurethanes Ternate facility Ternate Italy
- --------------------------------------------------------------------------------
286 Mantua Grove Road West Deptford New Jersey 08066 USA
- --------------------------------------------------------------------------------
6555 15 Mile Road Sterling Heights Michigan USA
- --------------------------------------------------------------------------------
Auburn Hills USA
- --------------------------------------------------------------------------------
Polyurethanes Cartegna facility Cartegna Columbia
- --------------------------------------------------------------------------------
No. 19 Industrial 3rd Road Kuan Yin County Taoyuan 328 Taiwan
- --------------------------------------------------------------------------------
RELEVANT PETROCHEMICALS BUSINESS
- --------------------------------------------------------------------------------
No. 4 and No. 6 Brinefields at Seal Sands Stockton-on-Tees England
- --------------------------------------------------------------------------------
Saltholme Brine Reservoirs, Saltholme, Stockton-on-Tees.
- --------------------------------------------------------------------------------
TIOXIDE BUSINESS
- --------------------------------------------------------------------------------
Factory at Tees Road Greatham England
- --------------------------------------------------------------------------------
Factory at Sub L of 33 Umlazi Native Location No 4676 Umbogintwini South Africa
- --------------------------------------------------------------------------------
East and West Sites Billingham England
- --------------------------------------------------------------------------------
Factory at Pyewipe Road Grimsby (excluding Westfield) England
- --------------------------------------------------------------------------------
Nettleton Bottom Quarry Caistor England
- --------------------------------------------------------------------------------
Land at North Killingholme England
- --------------------------------------------------------------------------------
Factory at 1 Rue des Garennes 62102 Calais France
- --------------------------------------------------------------------------------
Factory at Kawasan Industri Teluk Kalong 24000 Chukai Kemaman Terengganu
Malaysia
- --------------------------------------------------------------------------------
Factory at Loc Casome Scarlino Grosseto Italy
- --------------------------------------------------------------------------------
Factory at Poligano Industrial Nuevo Porto Palos de la Frontera Huelva Spain
- --------------------------------------------------------------------------------
Factory 1690 & 1694 Marie-Victorin Boulevard Tracy Quebec Canada
- --------------------------------------------------------------------------------
Plant Site (known as Farquhar Heirs Property) Northwest quarter of the Northeast
Quarter of Section 17, Township 10 South, Range 9 West, Calcasleu Parish
Louisiana USA
- --------------------------------------------------------------------------------
Landfill Site (known as Relly-Pujo "Rose-Bluff" property) Tract of land in
Section 17, Township 10 South, Range 9 West, Calcasleu Parish Louisiana USA
- --------------------------------------------------------------------------------
Northwest quarter of the North East quarter of Section 17 Cadcasley Parish
Louisiana
- --------------------------------------------------------------------------------
Page 348
- --------------------------------------------------------------------------------
Property Address
- --------------------------------------------------------------------------------
Mitigation Property Site. Hieman Property
- --------------------------------------------------------------------------------
Landfill/Parking Lot, Sulphur City
- --------------------------------------------------------------------------------
Orr Storage Facility, Lake Chartes
- --------------------------------------------------------------------------------
Brinston Rentals Lease
- --------------------------------------------------------------------------------
Part II: Relevant Shared Properties
- --------------------------------------------------------------------------------
Property Address
- --------------------------------------------------------------------------------
POLYURETHANES BUSINESS
- --------------------------------------------------------------------------------
Everslaan 45 B 3078 Everberg Belgium
- --------------------------------------------------------------------------------
Polyurethanes Wilton facility PO Box 90 Middlesborough Cleveland England
- --------------------------------------------------------------------------------
Polyurethanes Rozenburg facility Rotterdam Holland
- --------------------------------------------------------------------------------
9156 Highway 75 PO Box 517 Geismar Louisiana USA
- --------------------------------------------------------------------------------
2795 Slough Street Peel County Missisauga Canada
- --------------------------------------------------------------------------------
Reconquista 2780 1617 El Talar de Pacheo Buenos Aires Argentina
- --------------------------------------------------------------------------------
452 Wenjing Road Minhang Economic & Technical Development Zone Shanghai China
- --------------------------------------------------------------------------------
303 moo 3 Bangpoo Industrial Estate Sukhumvit Road Sumutprakam 10280 Thailand
- --------------------------------------------------------------------------------
RELEVANT PETROCHEMICALS BUSINESS
- --------------------------------------------------------------------------------
Paraxylene V Plant at Wilton Works Wilton Redcar and Cleveland England
- --------------------------------------------------------------------------------
Aromatics Plant and North Tees Logistics Site at North Tees Works Stockton-on
Tees England
- --------------------------------------------------------------------------------
Salt Mines at Salholme, Stockton on Tees
- --------------------------------------------------------------------------------
Boat Jettings and Jetties No 1, 2 and 3, North Tees Works, Stockton on Tees
- --------------------------------------------------------------------------------
Olefins 6 Plant at Wilton Works, Wilton, Redcar and Cleveland, England (in the
agreed form transfer)
- --------------------------------------------------------------------------------
Butadiene Storage, Ethylene Control and Olefins 5 Plant at Wilton Works, Wilton,
Redcar and Cleveland, England (in the agreed form transfer)
- --------------------------------------------------------------------------------
Central Control Area, Wilton Works, Wilton, Redcar and Cleveland, England (in
the agreed form transfer)
- --------------------------------------------------------------------------------
Brine Reservoirs to the south of Wilton Works, Wilton, Redcar and Cleveland,
England (in the agreed form transfer)
- --------------------------------------------------------------------------------
Part of Teesport Works, Redcar and Cleveland, England (shown edged and cross-
hatched red on agreed plan OM1)
- --------------------------------------------------------------------------------
Part of North Tees Works, Stockton on Tees, England (shown edged and cross-
hatched
- --------------------------------------------------------------------------------
Page 349
- --------------------------------------------------------------------------------
Property Address
- --------------------------------------------------------------------------------
red on agreed plan OM2)
- --------------------------------------------------------------------------------
Jetty A, North Tees Works, Stockton on Tees, `England
- --------------------------------------------------------------------------------
Easement rights in relation to Trans Pennine Ethylene Pipeline (excludes Hill
House spur)
- --------------------------------------------------------------------------------
Easement rights in relation to Wilton - Grangemouth Ethylene Pipeline
- --------------------------------------------------------------------------------
Lima Compound 8 (in the agreed form transfer)
- --------------------------------------------------------------------------------
Compound 38, Wilton Works, Wilton
- --------------------------------------------------------------------------------
Ethylene Pipeline Garage, Wilton
- --------------------------------------------------------------------------------
Offices and Store at Castner-Kelner, Cheshire
- --------------------------------------------------------------------------------
Ethylene Conditioning Compound, Lostock, Cheshire (shown on agreed plan OM3)
- --------------------------------------------------------------------------------
Easement rights in relation to Trans Pennine Ethylene Pipeline (Runcorn to
Holford Spur and Shell Interchange)
- --------------------------------------------------------------------------------
PART E
Post-Closing Indemnity
Limitations on liability
1.1 The limitations on liability set out in Clauses 11.1, 12.2, 12.8(b),
12.8(e), 12.8(g), 12.10, 12.13, 13.1 and 13.2 of the Agreement inclusive shall
apply to any claim made in respect of the Post-Closing Counter Indemnity.
1.2 The Purchaser shall not be liable for any claim under this Post-Closing
Counter Indemnity unless ICI shall have given the Purchaser written notice
containing (so far as reasonably available) specific details of the claim,
including ICI's estimate (on a without prejudice basis and so far as it can
reasonably be made at the date of the notice) of the amount of such claim. ICI
shall not be disentitled from claiming under this Post-Closing Counter Indemnity
as a result of any reasonable delay in providing such notice or reasonable
failure to provide information in such short notice, where such delay or failure
has not prejudiced the Purchaser.
Trigger conditions
2.1 Subject to paragraph 2.2 below, ICI shall not be entitled to make a claim
under sub-paragraph 14.1(i) of Part A of Schedule 14 of the Post-Closing Counter
Indemnity unless and to the extent that Environmental Proceedings have been
commenced or issued under Environmental Law or
Page 350
Future Environmental Law by a Governmental Authority or any other person in
respect of the same subject matter and such Environmental Proceedings would
(even if contested) result in a notice, order or requirement which is Final.
2.2 Paragraph 2.1 shall be deemed to have been satisfied if:
(i) notice has been given to the Purchaser as required under paragraphs 1.2 and
6.1;
(ii) Environmental Proceedings would have been commenced or issued, and would
(even if contested) have resulted in a notice, order or requirement which
is Final, but for a settlement or agreement reached with the relevant
Governmental Authority or other person in accordance with paragraphs 4 and
6, to the extent such settlement or agreement results in Environmental
Losses no greater than would have been the case were any such Final notice,
order or requirement to have been imposed.
2.3 Where the Purchaser has conduct under paragraph 6.2 and sub-paragraph
2.2(ii) is satisfied in relation to the relevant matter at any subsequent time,
any right of ICI to claim under this Post-Closing Counter Indemnity shall not be
adversely affected or reduced as a result of any unreasonable delay or failure
by the Purchaser thereafter in reaching the relevant settlement or agreement,
the assessment of reasonableness to take account of the effect of any such delay
or failure both on the terms of any settlement or agreement which may be reached
and on the ICI's claim under this Post-Closing Counter Indemnity.
2.4 The requirements of paragraph 2.1 are deemed to be satisfied by an
Emergency unless the final determination by an expert under paragraph 10 is that
the matter which is the subject of the claim is not an Emergency.
Post-completion conduct
3. The Purchaser shall not be liable under this Post-Closing Counter Indemnity
in respect of any matter to the extent that such claim would not have arisen but
for, results from or is increased by:
(i) ownership or occupation by ICI of any adjacent or affected property (except
for the Relevant Properties, the Relevant Shared Properties and the North
Tees Works as defined in the Pie Crust Leases as defined in this
Agreement); or
Page 351
(ii) any direct or indirect interest of ICI in any present or former owner of
any adjacent or affected property (except for the Relevant Properties,
the Relevant Shared Properties and the North Tees Works as defined in the
Pie Crust Leases as defined in this Agreement);
(iii) any Remedial Action required by any Governmental Authority at any
properties owned or occupied by ICI or any member of ICI's Group at any
time and adjacent to any Relevant Property or Relevant Shared Property
under or as a condition of any Permit or informal or formal agreement
issued by or made with a Governmental Authority in connection with any
development, extension, expansion, construction or intensification or any
change of use (Development) after Closing at any property other than any
Relevant Property or Relevant Shared Property or North Tees Works; or
(iv) the deliberate taking by ICI or any member of ICI's Group of any action
or step which is calculated or designed to give rise to Environmental
Proceedings in order to trigger a claim under this Post-Closing Counter
Indemnity; or
(v) any intrusive Investigative Works by ICI or any member of ICI's Group
(their employees, contractors, sub-tenants and licensees) which either do
not (a) satisfy the requirements of paragraph 8, or (b) are undertaken
otherwise than for Development; or
(vi) any admission of liability (in whole or part) or settlement of any claim
by ICI or any member of ICI's Group other than in accordance with
paragraph 6; or
(vii) any tax, duty or levy imposed or calculated in relation to claims under
paragraph 14 of Part A of Schedule 14; or
(viii) town and country planning (in the United Kingdom) or comparable land use
planning or zoning systems in other jurisdictions except to the extent
relating to Hazardous Materials or Waste.
Mitigation
4.1 ICI and any relevant Protected Person shall mitigate any Environmental
Losses under this Post-Closing Counter Indemnity.
4.2 ICI shall not be entitled to claim under this Post-Closing Counter
Indemnity in respect of Environmental Losses incurred in obtaining professional
services in relation to the subject matter, conduct or validity of
Page 352
the claim during the period prior to making that claim in accordance with
paragraph 1.2 above.
Disclosure to Governmental Authorities
5.1 Subject to paragraph 5.2, neither ICI nor any member of ICI's Group shall
disclose any information in relation to any matter which could reasonably be
expected to be the subject of a claim under this Post-Closing Counter Indemnity
to any Governmental Authority without the prior written consent of the Purchaser
except (following prior written notice to and consultation with the Purchaser in
relation to sub-paragraphs (ii), (iii) and (iv)) as provided for below:
(i) in an Emergency where, because of the circumstances it is impracticable to
obtain the prior written consent of the Purchaser; or
(ii) as required by law;
(iii) following the final determination by the expert under paragraph 10 (or
earlier agreement between the parties) that there is a Significant
Environmental Impact; or
(iv) in relation to Post-Closing Environmental Conditions but only insofar as
these are issues of discharges to controlled waters or sewers or emissions
to air following the final determination by the expert under paragraph 10
(or earlier agreement between the parties) that there is a high likelihood
that a Governmental Authority would require ICI or any member of ICI's
Group to carry out Remedial Action at a cost in excess of (Pounds)100,000
(excluding for these purposes the cost of Investigative Works (High
Likelihood).
5.2 The notice referred to in paragraph 5.1 shall contain specific reasonable
details of the matter proposed to be disclosed, the identity of the Governmental
Authority and individual officers to whom the disclosure is to be made and the
proposed manner and timetable for disclosure (including any documents or
presentations or drafts of the same). The Purchaser shall be given 30 days in
which to review and comment on the proposals for disclosure and the Vendor shall
have regard to and incorporate the reasonable requests of the Purchaser in
relation to the proposed disclosure.
5.3 In the event that the Purchaser withholds its consent to a disclosure in
circumstances where ICI notifies the Purchaser in writing that it is of the
opinion that there is a Significant Environmental Impact or High Likelihood (as
applicable) then the provisions of paragraph 10 shall apply.
Page 353
Claims Procedure
6.1 Upon ICI becoming aware of a matter which could reasonably be expected to
give rise to a claim for Environmental Losses under this Post-Closing Counter
Indemnity ICI shall as soon as reasonably practicable thereafter notify the
Purchaser by written notice.
6.2 The Purchaser shall have conduct of any Environmental Proceedings or
Remedial Action in respect of any matter which could reasonably be expected to
become a claim under this Post-Closing Counter Indemnity unless the Purchaser is
in breach of paragraph 6.3 in circumstances which would result in any material
Environmental Losses being incurred by ICI which are not covered by a valid
claim under this Schedule and/or would materially adversely affect the value of
the Relevant Property or Relevant Shared Property or the goodwill or good name
of ICI, in which event ICI shall be entitled to have conduct.
6.3 The Purchaser shall (subject to appropriate arrangements to maintain
confidentiality and privilege):
(i) provide reasonably frequent and reasonably detailed reports to ICI
regarding the progress of any Environmental Proceedings or Remedial
Action;
(ii) allow ICI a reasonable opportunity to review and comment in advance on
proposals for Remedial Action;
(iii) develop in consultation with ICI, proposals for Remedial Action, having
regard to the Purchaser's obligation at sub-paragraph (vi) below;
(iv) have regard to and incorporate the reasonable requests of ICI in relation
to such Environmental Proceedings or Remedial Action (unless any such
request of ICI would in excess of the cost of complying with (v) and (vi)
increase the amount of ICI's claim or the cost of the Remedial Action in
excess of the cost of complying with (v) and (vi) in which case ICI shall
be liable to the Purchaser for any such increase in relation to such
request which is accepted by the Purchaser);
(v) carry out Remedial Action in a proper and workmanlike manner and proceed
with the same in a timely manner and with due diligence;
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(vi) so far as reasonably practicable avoid or minimise interruption or
disruption to the business carried on at any of the affected properties
adjacent to the Relevant Properties or Relevant Shared Properties.
6.4 In the event that ICI shall be entitled to have conduct of any
Environmental Proceedings or Remedial Action on the grounds as provided for in
paragraph 6.2 ICI shall have the right at any time to assume by written notice
to the Purchaser conduct of all or any part of any Environmental Proceedings or
the carrying out of any Remedial Action relating to or affecting any Post-
Closing Environmental Conditions provided that if ICI has assumed any such
conduct the provisions of paragraph 6.3 shall apply mutatis mutandis.
Standard of Works
7. ICI shall not be entitled to claim under the Post-Closing Counter Indemnity
in respect of the cost of carrying out Remedial Action except for the reasonable
costs of such Remedial Action which are the minimum necessary:
(i) to comply with the Final notice, order or requirement of a Governmental
Authority acting under Environmental Law or Future Environmental Law or a
settlement or agreement under paragraph 2.2; or
(ii) to address the Emergency (which for the avoidance of doubt excludes
anything other than such works as are necessary at the time of the
Emergency to (a) remove the direct cause of, and (b) control the immediate
effects of the Emergency).
Investigative Works
8. ICI shall not be entitled to claim under this Post-Closing Counter
Indemnity for any Investigative Works except where such Investigative Works:
(a) are specifically and lawfully ordered or required by the relevant
Governmental Authority under law;
(b) are carried out in accordance with paragraph 6 in relation to a matter
where:
(i) a notice has been served under paragraph 1.2; and
(ii) ICI has assumed conduct under paragraph 6.4;
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(iii) on the basis of the available information (prior to the relevant
Investigative Works) there are reasonable grounds to believe
that Significant Environmental Impact or High Likelihood may
exist.
Statements
9. In the event of any circumstances arising which do or could reasonably be
expected to give rise to a claim for Environmental Losses under this Post-
Closing Counter Indemnity neither the Purchaser nor ICI nor any member of ICI's
Group shall make any public statements (including, for the avoidance of doubt,
any statement to any Governmental Authority, unless required by law or in an
Emergency) regarding such circumstances without first discussing with the other
party and reaching written agreement on the text of any such public statement
before it is made, such agreement not to be unreasonably withheld or delayed by
either party and without prejudice to paragraph 5.1.
Disputes
10.1 If any dispute arises between ICI and the Purchaser as to:
(i) whether or not an Emergency arose; or
(ii) whether or not High Likelihood exists; or
(iii) whether or not a Significant Environmental Impact has occurred,
the matter shall be referred for final determination in accordance with the
Criteria, at the request of either of ICI or the Purchaser to an independent
environmental consultant having experience relevant to the matter in dispute as
agreed between ICI and the Purchaser or in default of any such agreement within
seven days of such request by ICI or the Purchaser, nominated in accordance with
the criteria set out below at the request of either ICI or the Purchaser by or
on behalf of the Chief Executive of the Environmental Auditors Registration
Association or their equivalent in the relevant jurisdiction or, if he or she is
unable to make a nomination within 28 days of the request made to him or her, by
the President for the time being of the Chartered Institute of Arbitrators.
Such independent environmental consultant shall act as an expert and not as an
arbitrator and his fees and expenses shall be borne as he shall direct.
10.2 The criteria referred to and to be applied in the nomination of the
independent environmental consultant shall be that he shall not have less than
10 years experience relevant to the matter in issue and he shall be a member
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of a company or firm which has been established for at least three years
preceding the date of the nomination.
10.3 The said environmental consultant shall be offered the appointment within
seven business days of the parties reaching agreement on the appointment or upon
nomination by the Chief Executive of the Environmental Auditors Registration
Association or President of the Chartered Institute of Arbitrators as the case
may be, he can only be dismissed by the mutual agreement of ICI and the
Purchaser. The said environmental consultant shall present his written
determination within four weeks of his appointment or nomination or such longer
period as ICI and the Purchaser may mutually agree.
10.4 The terms of appointment of the environmental consultant will include a
provision that neither ICI nor the Purchaser will engage the environmental
consultant or any Consultancy firm with which he is associated after his
nomination in relation to the relevant matter without the written consent of the
other party.
10.5 The decision of the said environmental consultant in relation to the
matters referred to in Clause 10.1 shall in the absence of manifest error be
final and binding on the parties hereto.
Payment
11. Any sums for which either party is liable under this Post-Closing Counter
Indemnity shall be due and payable 30 days from the day following service of a
proper invoice in accordance with this Agreement.
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SCHEDULE 14A
HSCC Environmental Indemnity
PART A
Interpretation
1.1 In this Schedule 14A:
Closed Site Liabilities means any liabilities arising from soil and groundwater
contamination only under Future Environmental Law in respect of any property
owned, or occupied by the PO/MTBE Business at Closing at which business
operations, industrial processes or other uses carried on at any time prior to
Closing have as at Closing permanently ceased (Closed Sites);
Conduct Party means the party having the conduct of Environmental Proceedings,
Remedial Action and any other matter the subject of a notice given pursuant to
paragraph 9.1 only;
Criteria means:
(i) the nature of the legal obligation which has been or which may be
breached or the legal liability which has or may have arisen or may
arise;
(ii) the legal powers and remedies available to the Governmental Authority or
third party to bring Environmental Proceedings (including any limitations
on those powers);
(iii) the likelihood of Environmental Proceedings being commenced and
successfully completed by a Governmental Authority or third party acting
under Environmental Law in the jurisdiction in question having regard to
applicable enforcement practice therein;
(iv) the likelihood of any notice order or requirement to carry out Remedial
Action falling on the Purchaser;
(v) in relation to soil or groundwater contamination, the nature and extent
of the impact or risk of impact to the Environment; and
(vi) the costs and benefits of carrying out the proposed Remedial Action
(where applicable) (including the consequences of not carrying out the
proposed Remedial Action at that time);
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Disclosed Pre-Closing Compliance Issues means Pre-Closing Compliance Issues
fairly disclosed in the Data Room or otherwise disclosed by and in accordance
with the Disclosure Letters in either case pursuant to this Agreement (provided
that for the purposes of this definition, any such disclosure against any
particular warranty shall be deemed to be disclosure for the purposes of
determining whether a Pre-Closing Compliance Issue is a Disclosed Pre-Closing
Compliance Issue);
Disposal to Off-Site Landfills means the presence of Hazardous Materials or
Waste prior to Closing in, at or under and (if present prior to Closing) at any
time before or thereafter, migrating, escaping, leaking or emanating from:
(i) any off-site facility or property which prior to Closing but not thereafter
was used in whole or in part as a landfill site for the disposal of
Hazardous Materials or Waste from the PO/MTBE Properties or any other site
at any time occupied, owned or used by the PO/MTBE Business (including such
businesses as they may have been carried on at any time prior to Closing
and any predecessor of any such business) (Closed Off-Site Landfills); and
(ii) any off-site facility or property which prior to Closing and thereafter was
used in whole or in part as a landfill site for the disposal of Hazardous
Materials or Waste from the PO/MTBE Properties or any other site at any
time occupied, owned or used by the PO/MTBE Business (including such
businesses as they may have been carried on at any time prior to Closing
and any predecessor of any such business) provided that this sub-paragraph
(ii) applies in relation to such use prior to Closing only (On-going
Disposal Sites);
Emergency means in respect of Pre-Closing Soil or Groundwater Contamination
only, a fire, explosion, act of God or flood or other sudden and catastrophic
event where such an event would result in significant Environmental Losses or
would significantly increase Environmental Losses;
Environment means all or any of the following media, namely air (excluding media
within buildings or other natural or man made structures above or below ground),
water or land and any living organisms or systems supported by those media;
Environmental Law means any applicable statutes, subordinate legislation and
other national, federal, state and local laws (including common law and any
contractual obligations), rules, regulations, orders, ordinances, judgments or
injunctions and codes of practice, guidance notes and judicial and
administrative interpretation of each of the foregoing each as is valid and
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enforceable on the Purchaser at Closing (or, in relation to contractual
obligations or liabilities, after Closing as a direct consequence of the
completion of the transactions provided for in this Agreement) each as relate to
Pre-Closing Environmental Conditions. For the avoidance of doubt, any enactment
or statutory provision being an Environmental Law is as it may have been, or may
from time to time be, amended, modified, consolidated or re-enacted (with or
without modification) and includes all instruments or orders made under such
enactment, but only insofar as such amendment, consolidation or re-enactment of
such legislation does not increase the liability of HSCC under this Schedule
14A;
Environmental Losses means all fines, penalties, damages, losses, liabilities,
costs and expenses (including reasonable professional and consultants' fees)
(Losses) incurred under or to the extent necessary to comply with Environmental
Proceedings or a settlement or agreement as referred to in paragraph 4.2(ii) or
an emergency as provided for in paragraph 10(ii) (but excluding indirect,
consequential or incidental Losses (including any loss of anticipated profits or
revenue and costs attributable to the loss of use or business interruption or
disruption (Indirect Losses)) provided that Losses shall not be Indirect Losses
merely because they arise or are imposed under contract law);
Environmental Permit means any Permit under Environmental Law;
Environmental Proceedings means any criminal, civil, judicial, regulatory or
administrative proceeding, suit or claim of any Governmental Authority or third
party or Final notice, order or requirement of any Governmental Authority or
third party in each case under Environmental Law (or Future Environmental Law in
the case of Protected Matters only);
Final means, in relation to a notice, order or requirement that it is binding
and is either not capable of appeal, review or challenge, or there is no
reasonable prospect of a successful appeal, review or challenge;
Former Sites means any property not owned, occupied or used in connection with
the PO/MTBE Business at Closing, but formerly so owned, occupied or used
(including such businesses as they may have been carried on at any time prior to
Closing and any predecessor of any such business);
Former Sites Liabilities means any losses under Future Environmental Law arising
from the occupation, ownership or use by the PO/MTBE Business (including such
businesses as they may have been carried on at any time prior to Closing and any
predecessor of any such business) of any Former Sites;
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Future Environmental Law means all applicable statutes, subordinate legislation
and other national, federal, state and local laws (including the common law and
any contractual obligations), rules, regulations, orders, ordinances, judgments
or injunctions and codes of practice, guidance notes and judicial and
administrative interpretation of each of the foregoing each as is valid and
enforceable on the Purchaser from time to time and each as relate to Protected
Matters;
Governmental Authority means any governmental agency, regulatory body, court of
law or tribunal with jurisdiction under Environmental Law or, in the case of
Protected Matters only and in relation to paragraphs 8.1(ii) and 11(a), Future
Environmental Law;
Hazardous Materials means a substance which alone or in combination with other
things is or are capable of causing significant harm or damage to property or to
man or to the Environment or which are specified to be hazardous under
Environmental Law or Future Environmental Law;
High Likelihood has the meaning given in paragraph 8.1(iv);
Investigative Works means inspections, investigations, assessments, audits,
sampling or monitoring;
Permit means any authorisation, licence, permission, consent or approval issued
by a Governmental Authority acting lawfully;
PO/MTBE Properties means the two properties listed in Part I of Schedule 17 of
the Agreement under the heading PO/MTBE Business;
Post-Closing Environmental Conditions means:
(a) any soil or groundwater contamination first in existence, at, in, on, over
or under the PO/MTBE Properties after Closing; or
(b) the exposure of employees, contractors, agents or licensees to any
Hazardous Materials first in existence at, in, on, over or under the
PO/MTBE Properties after Closing; and
(c) any post-Closing breach of or non-compliance with Future Environmental Law
or Environmental Permits except to the extent resulting from Pre-Closing
Environmental Conditions:
which is in any case increased, exacerbated, enhanced, caused or permitted as a
result of circumstances occurring after Closing as the result of any act or
omission of the Purchaser (its employees, contractors, agents, sub-tenants or
licensees of the same); or
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(d) any post-Closing migrating, leaching or escaping of any Pre-Closing Soil
or Groundwater Contamination to the extent attributable in whole or in
part to, arising from or increased by the negligent acts or omissions or
any spillages after Closing of or by the Purchaser (its employees,
contractors, agents, sub-tenants or licensees) or third parties, or the
carrying out or failure to carry out any routine maintenance by the
Purchaser (its employees, contractors, agents, sub-tenants or licensees)
or third parties;
Pre-Closing Environmental Conditions means the following:
(i) in relation to the PO/MTBE Properties soil or groundwater contamination
existing at or migrating, leaching or escaping from any such property at
or prior to Closing including any subsequent migration leaking or escape
of any such pre-Closing contamination (Pre-Closing Soil or Groundwater
Contamination);
(ii) any pre-Closing breach of or non-compliance with Environmental Law or
Environmental Permits (excluding, for the avoidance of doubt, any Pre-
Closing Soil or Groundwater Contamination or Pre-Closing Health and
Safety Issues) in relation to the PO/MTBE Business by HSCC within the
period of three years prior to Closing (Pre-Closing Compliance Issues)
excluding, for the avoidance of doubt, any Disclosed Pre-Closing
Compliance Issues;
(iii) the exposure of employees, contractors, agents or licensees to any
Hazardous Materials prior to Closing as the result of their work for the
PO/MTBE Business or their presence on any property at any time used,
occupied or owned in connection with such business (including such
businesses as they may have been carried on at any time prior to Closing
and any predecessor of any such business) (Pre-Closing Health and Safety
Issues);
excluding in each case any Post-Closing Environmental Conditions;
Protected Matters means the following:
(i) Former Sites Liabilities;
(ii) Closed Sites Liabilities;
(iii) Disposal to Off-Site Landfills;
or any of them;
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Reasonable and Prudent Operator means a person exercising that degree of skill,
diligence, prudence and foresight which would reasonably and ordinarily be
expected from a skilled and experienced operator in substantial compliance with
all applicable laws engaged in the same type of undertaking in the same locality
and under the same or similar circumstances and conditions, and any reference to
the standard of a Reasonable and Prudent Operator herein shall be a reference to
such degree of skill, diligence, prudence and foresight as aforesaid;
Remedial Action means works for preventing, removing, remedying, cleaning-up,
containing or ameliorating soil or groundwater contamination including
Investigative Works and in relation to any Pre-Closing Compliance Issue means
works to remedy or recover from such non-compliance (a) which works are required
by a Governmental Authority acting lawfully under Environmental Law to have been
carried out at or prior to Closing only or, (b) which non-compliances were prior
to Closing an existing breach of Environmental Law;
Significant Environmental Impact means any Pre-Closing Soil or Groundwater
Contamination only (i) which represents a significant existing impact on the
Environment; or (ii) in respect of which there is a very high probability that
it will give rise to a significant impact on the Environment and in either case
would be likely to result in a Governmental Authority acting lawfully under
Environmental Law issuing or making a notice, order or requirement for Remedial
Action to be taken in respect of the same matter;
Waste means any waste including anything which is abandoned, unwanted or
surplus:-
(i) (including any such thing which is capable of any beneficial use or of
being recovered or recycled or has any value (Re-use Material)); but
(ii) excluding any Re-use Material which has in fact been put to beneficial use
or recovered or recycled.
Indemnities
2.1 Subject to the limitations set out in paragraphs 3 to 15 insofar as
applicable below HSCC shall indemnify, defend and hold the Purchaser harmless on
an after Tax basis from and against:
(A) Protected Matters
all Environmental Losses incurred, suffered or sustained by the Purchaser at any
time after Closing in respect of Protected Matters;
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(B) Pre-Closing Environmental Conditions
all Environmental Losses incurred, suffered or sustained by the Purchaser at any
time after Closing in respect of Pre-Closing Environmental Conditions.
2.2 For the avoidance of doubt, nothing in this Schedule 14A and in particular
any limitations set out hereunder shall effect, impact or otherwise
prejudice any other rights or entitlements of ICI (whether for itself or on
behalf of the Purchaser) under this Agreement and, in particular, Clause
8.2 thereto.
Limitations on Liability
3.1 The limitations on liability set out in Clauses 11.1, 12.2, 12.8(b) (as if
in each case the reference therein to Designated Purchaser was to the
Purchaser), 12.8(e), 12.8(g), 12.10, 12.13, 13.1 and 13.2 of the Agreement
inclusive shall apply mutatis mutandis to any claim made in respect of
paragraph 2.1 above.
3.2 Subject always to the limitations in paragraph 3.3 below the maximum
aggregate liability of HSCC in respect of claims made under paragraph
2.1(B) (Pre-Closing Environmental Conditions) above after paragraph 3.4 has
been applied shall not in any event exceed:
(i) an amount equal to (Pounds)100,000,000; and
(ii) the following percentage of Environmental Losses in relation to claims made
in the identified year:
----------------------------------------------------------
Relevant Year Vendor's Share
----------------------------------------------------------
Each year on or after Closing up to 100%
the tenth anniversary of Closing
Date
----------------------------------------------------------
Year commencing on the tenth 67%
anniversary of Closing Date
----------------------------------------------------------
Year commencing on the eleventh 33%
anniversary of Closing Date
----------------------------------------------------------
On or after the twelfth anniversary 0%
of Closing
----------------------------------------------------------
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----------------------------------------------------------
Date
----------------------------------------------------------
such annual percentage in each case being applied in respect of all
claimable Environmental Losses in respect of each valid claim made in the
relevant year.
3.3 HSCC shall have no liability unless and until:
(i) in the case of any individual claim under paragraph 2.1(A) (Protected
Matters) or 2.1(B) (Pre-Closing Environmental Conditions) the Environmental
Losses arising from such claim exceed (Pounds)100,000 in which event HSCC
shall only be liable for the excess of the Environmental Losses over and
above (Pounds)100,000;
(ii) in the case of any claims under paragraph 2.1(B) (Pre-Closing Environmental
Conditions), the aggregate of all Environmental Losses in respect of all
valid claims made in a Relevant Year (in accordance with the table in
paragraph 3.2(ii) and for the purpose of this sub-paragraph only
disregarding sub-paragraph 3.3(i) exceeds (Pounds)1,000,000 in which event
HSCC shall only be liable in relation to those claims for the excess of the
relevant Environmental Losses over and above (Pounds)1,000,000.
3.4 For the avoidance of doubt:
(i) any amount for which HSCC has no liability under paragraph 3.1 or by which
HSCC's liability is reduced as a consequence of the operation of paragraphs
3.5 to 14 below shall not be capable of constituting a claim or increasing
the amount thereof for the purpose of this paragraph 3;
(ii) for the purpose of this paragraph 3 where a claim is caused by more than
one event, circumstance, act or omission (not being one sequence or set
(where the members of the set are substantially similar in nature to each
other and have a common cause) of like events, acts or omissions at a
single site) which event, circumstance, act or omission would separately
give rise to a right to claim under paragraph 2.1 each such claim shall be
treated as a separate claim when calculating whether the thresholds in
paragraph 3.3 have been exceeded.
3.5 HSCC shall not be liable for any claim under paragraph 2.1(A) (Protected
Matters) or 2.1 (B) (Pre-Closing Environmental Conditions) unless ICI shall have
given HSCC written notice containing (so far as reasonably
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available) specific details of the claim, including the Purchaser's estimate (on
a without prejudice basis and so far as it can reasonably be made at the date of
the notice) of the amount of such claim. The Purchaser shall not be disentitled
from claiming under this Schedule 14A as a result of any reasonable delay in
providing such notice or reasonable failure to provide information in such
notice, where such delay or failure has not prejudiced HSCC.
3.6 Subject to paragraph 3.7 HSCC shall not be liable unless:
(i) in the case of Pre-Closing Soil or Groundwater Contamination and Pre-
Closing Health and Safety Issues each written notice has been given before
the twelfth anniversary of Closing;
(ii) in the case of Pre-Closing Compliance Issues such written notice has been
given before the third anniversary of Closing.
3.7 The liability of HSCC in respect of such claim under paragraph 2.1(A)
(Protected Matters) or 2.1(B) (Pre-Closing Environmental Conditions) under this
Schedule 14A shall absolutely determine (if such claim has not been satisfied,
settled, or withdrawn) if, after the relevant Final notice, order or requirement
referred to in paragraph 4.1 exists, legal proceedings in respect of such claim
shall not have been commenced by the Purchaser against HSCC within 12 months of
the service of notice by HSCC requiring commencement of proceedings (a Claim
Commencement 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 HSCC.
Trigger Conditions
4.1 Subject to paragraphs 4.2 and 4.3 below, the Purchaser shall not be
entitled to make a claim under paragraph 2.1(A) (Protected Matters) or 2.1 (B)
(Pre-Closing Environmental Conditions) unless and to the extent that:
(i) in the case of any Protected Matters, Environmental Proceedings have been
commenced or issued under Future Environmental Law by a Governmental
Authority or any other person in respect of the same subject matter and
such Environmental Proceedings would (even if contested) result in a
notice, order or requirement which is Final;
(ii) in the case of any Pre-Closing Soil or Groundwater Contamination or any
Pre-Closing Health and Safety Issue, Environmental Proceedings have been
commenced or issued under Environmental Law by a Governmental Authority or
any other person in respect of the same
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subject matter and such Environmental Proceedings would (even if
contested) result in a notice, order or requirement which is Final;
(iii) in the case of any Pre-Closing Compliance Issues, the subject matter of
the claim constitutes an actual breach of or non-compliance with
Environmental Law and any Environmental Proceedings have been commenced
or issued under Environmental Law by a Governmental Authority or any
other person in respect of the same subject matter and such Environmental
Proceedings would (even if contested) result in a notice, order or
requirement which is Final;
4.2 Sub-paragraphs 4.1(i) to (iii) (as applicable) shall be deemed to have
been satisfied if:
(i) notice has been given to HSCC as required under paragraphs 3.5 and 9.1;
(ii) Environmental Proceedings would have been commenced or issued, and would
(even if contested) have resulted in a notice, order or requirement which
is Final, but for a settlement or agreement reached with the relevant
Governmental Authority or other person in accordance with paragraphs 7
and 9, to the extent such settlement or agreement results in
Environmental Losses no greater than would have been the case were any
such Final notice, order or requirement to have been imposed.
4.3 Where HSCC has assumed conduct under paragraph 9 and sub-paragraph
4.2(ii) is satisfied in relation to the relevant matter at any subsequent time,
any right of the Purchaser to claim under this Schedule 14A shall not be
adversely affected or reduced as a result of any unreasonable delay or failure
by HSCC thereafter in reaching the relevant settlement or agreement, the
assessment of reasonableness to take account of the effect of any such delay or
failure both on the terms of any settlement or agreement which may be reached
and on the Purchaser's claim under this Schedule 14A.
4.4 The requirements of paragraph 4.1 are deemed to be satisfied by an
Emergency unless the final determination by an expert under paragraph 13 is that
the matter which is the subject of the claim is not an Emergency.
Post-Completion Conduct
5. HSCC shall not be liable under paragraph 2.1(A) (Protected Matters) or
2.1(B) (Pre-Closing Environmental Conditions) in respect of any matter to the
extent that such claim would not have arisen but for, results from or is
increased by:
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(i) the cessation after Closing of any operations at any of the PO/MTBE
Properties; or
(ii) any new or different mode or form of industrial process outside the
current production methods of the business as at Closing (Changed
Industrial Process) at any of the PO/MTBE Properties after Closing except
to the extent that a valid claim under this Schedule 14A could have
arisen irrespective of the Changed Industrial Process, had the existence
of the relevant matter been known; or
(iii) demolition or de-commissioning of plant and equipment by or on behalf of
the Purchaser; or
(iv) any development, extension, expansion, construction or intensification or
any change of use (Development), except to the extent that (a) such
Development amounts (in aggregate from Closing) to no more than 20 per
cent of the built footprint at any PO/MTBE Property after Closing
(Permitted Development) or (b) if the information revealed by the
Development had become known through some other means, (not involving any
Development) it would have given rise to a valid claim under this
Schedule 14A provided that, in relation to any Development which could
affect, disturb or reveal Pre-Closing Soil or Groundwater Contamination:
(a) the Purchaser shall give prior written notice to HSCC;
(b) the Purchaser shall consult in good faith with HSCC and shall take
account of any reasonable requests of HSCC made in relation to the
process of obtaining permission for and carrying out the
Development; and
(c) the Purchaser (its employees, contractors, agents, sub-tenants and
licensees) shall in relation to such Development act at all times
non-negligently and in accordance with the standards of a
Reasonable and Prudent Operator; or
(v) any Remedial Action required by any Governmental Authority under or as a
condition of any Permit issued by or informal or formal agreement with a
Governmental Authority in connection with Development except to the
extent that if the information revealed by the Development had become
known through some other means, (not involving any Development) it would
have given rise to a valid claim under this Schedule 14A; or
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(vi) any Remedial Action required by any Governmental Authority at any PO/MTBE
Property under or as a condition of any Permit or informal or formal
agreement issued by or made with a Governmental Authority in connection
with any Development after Closing at any property other than any PO/MTBE
Property; or
(vii) subject to paragraph 16, any sale or change of occupier or grant of any
right of interest in relation to all or part of any of the PO/MTBE
Properties after Closing; or
(viii) any voluntary modification, renewal, termination, surrender or variation
by the Purchaser (its employees, contractors, agents, sub-tenants and
licensees) after Closing of any lease or other agreement or arrangement
under which the Purchaser occupies or uses all or any part of any PO/MTBE
Property; or
(ix) ownership or occupation by the Purchaser of any adjacent or affected
property (except for the PO/MTBE Properties); or
(x) any direct or indirect interest of the Purchaser in any present or former
owner of any adjacent or affected property (except for the PO/MTBE
Properties); or
(xi) the instigation or initiation by the Purchaser of any Environmental
Proceedings, actions or claims by a Governmental Authority, without
prejudice in all cases (a) to any permitted act or right of the Purchaser
under this Schedule 14A; (b) to the Purchaser acting as a Reasonable and
Prudent Operator balancing the potential Environmental Losses which may
be sustained as a result of its conduct against the potential benefits of
such conduct (such balance to be assessed on the hypothetical assumption
that any such Environmental Losses would not be recoverable under this
Schedule 14A or otherwise); or
(xii) the deliberate taking by the Purchaser of any action or step which is
calculated or designed to give rise to Environmental Proceedings in order
to trigger a claim under this Schedule 14A; or
(xiii) any intrusive Investigative Works by the Purchaser (its employees,
contractors, sub-tenants and licensees) which either:
(a) do not satisfy the requirements of paragraph 11; or
(b) do not fall within (a) and are undertaken otherwise than for the
purpose of Development as referred to in paragraph 5(iv) or,
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though carried out for that purpose, are not carried out in
accordance with paragraph 5(iv); or
(xiv) any admission of liability (in whole or part) or settlement of any claim
by the Purchaser other than in accordance with paragraph 9; or
(xv) any contractual obligation entered into, varied, amended or otherwise
modified after Closing other than pursuant to this Agreement so as to
establish or increase the Environmental Losses of the Purchaser.
Specific Exclusions
6.1 The Purchaser shall not be entitled to claim for any Environmental Losses
under paragraph 2.1(A) (Protected Matters) or 2.1 (B) (Pre-Closing Environmental
Conditions) to the extent that the relevant claim would not have arisen but for,
results from or is increased by matters which relate to:
(a) except in relation to soil or groundwater contamination the carrying out
of or the failure to carry out works which are routine or recurring as a
result of the normal and lawful operation of the business of the Purchaser
in a negligent manner or other than in accordance with the standards of a
Reasonable and Prudent Operator;
(b) use and recovery of packaging or packaging waste;
(c) land use planning or zoning systems except to the extent relating to
Hazardous Materials or Waste;
(d) any tax, duty or levy imposed or calculated in relation to claims under
paragraph 2.1(B);
(e) to the extent that any allowance, provision or reserve made for such fact,
matter, event, circumstance or Tax Liability in the Accounts or the
Closing Statements or the Tax Liability which has been noted in or was
taken into account in the preparation of the Accounts or the Closing
Statements, or to the extent that payment or discharge of the relevant
matter has been taken into account therein.
6.2 In respect of any claim under paragraph 2.1(B) (Pre-Closing Environmental
Conditions) and except in relation to paragraphs 8.1(ii) and 11(a), HSCC shall
not be liable to the extent that the relevant claim would not have arisen but
for, results from or is increased by Future Environmental Laws, provided that
HSCC shall not be entitled to exclude, avoid or reduce its liability under this
Schedule 14A as a result of Future Environmental Laws
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which are no more onerous than Environmental Laws and references to
Environmental Laws shall be interpreted accordingly.
6.3 Any reference to liability under Environmental Laws or Future
Environmental Laws (as applicable) shall be deemed to include any contractual
obligation by which the Purchaser is responsible for or to contribute to that
liability, to the extent such obligation is in force and binding on the
Purchaser at or prior to Closing or as the direct result of the transactions
provided for in this Agreement.
Mitigation
7.1 The Purchaser shall mitigate any Environmental Losses under this Schedule
14A.
7.2 The Purchaser shall not be entitled to claim under paragraph 2.1(A)
(Protected Matters) or 2.1(B) (Pre-Closing Environmental Conditions) in respect
of Environmental Losses incurred in obtaining professional services in relation
to the subject matter, conduct or validity of the claim during the period prior
to making that claim in accordance with paragraph 3.5 above.
Disclosure To Governmental Authorities
8.1 Subject to paragraph 8.2 and 9, neither ICI, any member of ICI's Group nor
the Purchaser shall disclose any information in relation to any matter which
could reasonably be expected to be the subject of a claim under paragraph 2.1 to
any Governmental Authority without the prior written consent of HSCC except
following prior written notice to and consultation with HSCC in relation to sub-
paragraphs (ii), (iii) and (iv) below:
(i) in an Emergency where, because of the circumstances it is impracticable to
obtain the prior written consent of HSCC; or
(ii) as required by law;
(iii) following the final determination by the expert under paragraph 13 (or
earlier agreement between the parties) that there is a Significant
Environmental Impact; or
(iv) in relation to Pre-Closing Compliance Issues but only insofar as these are
issues of discharges to controlled waters or sewers or emissions to air
following the final determination by the expert under paragraph 13 (or
earlier agreement between the parties) that there is a high likelihood
that a Governmental Authority would require the Purchaser to carry out
Remedial Action at a cost in excess of (Pounds)100,000
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(excluding for these purposes the cost of Investigative Works (High
Likelihood).
8.2 The notice referred to in paragraph 8.1 shall contain specific reasonable
details of the matter proposed to be disclosed, the identity of the Governmental
Authority and individual officers to whom the disclosure is to be made and the
proposed manner and timetable for disclosure (including any documents or
presentations or drafts of the same). HSCC shall be given 30 days (or such
lesser period which allows compliance with the relevant law where paragraph
8.1(ii) applies) in which to review and comment on the proposals for disclosure
and the Purchaser shall have regard to and incorporate the reasonable requests
of HSCC in relation to the proposed disclosure.
8.3 In the event that HSCC withholds its consent to a disclosure in
circumstances where the Purchaser notifies HSCC in writing that it is of the
opinion that there is a Significant Environmental Impact or High Likelihood (as
applicable) then the provisions of paragraph 13.1 shall apply.
8.4 In the event that such disclosure is made, the provisions of paragraph
9.4 and 9.6 below shall apply mutatis mutandis.
Claims Procedure
9.1 Upon the Purchaser becoming aware of a matter which could reasonably be
expected to give rise to a claim for Environmental Losses under this Schedule
14A the Purchaser shall as soon as reasonably practicable thereafter notify HSCC
by written notice. Without limiting the obligation of the Purchaser to comply
with this paragraph 9.1, the purpose of such notice shall be to alert HSCC to
the existence of the relevant matter in order that HSCC may decide to exercise
its rights in relation to conduct and such notice shall (if the Purchaser wishes
to proceed with a claim under this Schedule 14A) be accompanied by or followed
by a notice under clause 3.5.
9.2 HSCC shall conduct any Environmental Proceedings or Remedial Action in
respect of any matter which could reasonably be expected to become a claim under
paragraph 2.1(A) (Protected Matters), unless the Purchaser (i) notifies HSCC in
writing within a reasonable time thereafter, that it is in breach of paragraph
9.10 in circumstances which would result in any material Environmental Losses
being incurred by the Purchaser which are not covered by a valid claim under
this Schedule 14A and/or would materially adversely affect the value of the
PO/MTBE Property or the goodwill or good name of the Purchaser in which event
the Purchaser shall be entitled to have conduct but in any event such right of
conduct shall
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immediately cease upon ICI disposing of its interest in the Purchaser at which
time conduct shall immediately revert to HSCC. For the avoidance of doubt the
provisions of paragraph 9.6 shall not apply to such conduct by HSCC of
Environmental Proceedings or Remedial Action under this paragraph.
9.3 Subject to paragraph 9.10 below HSCC shall have conduct of all or any part
of any Environmental Proceedings or the carrying out of any Remedial Action
relating to or affecting any Pre-Closing Environmental Conditions as set out in
paragraph 9.2 above.
9.4 The Purchaser shall promptly provide HSCC with such reports, documents,
correspondence, information, assistance and facilities relating to any
Environmental Proceedings or Remedial Action or other matter for which written
notice has been given under paragraph 3.6 or 9.1 as HSCC may reasonably require
the Purchaser to provide (including if required by HSCC reasonable access to any
PO/MTBE Property or so far as practicable adjacent or affected property) except
that nothing in this paragraph shall require any waiver of legal privilege or
breach of any duty of confidentiality excluding any duty of confidentiality
between the Purchaser and any consultant in respect of or relating to
Environmental Proceedings or Remedial Action or other matter the subject of
written notice under paragraph 9.1. Each party shall use its reasonable
endeavours to avoid assuming any duty of confidentiality which would impede the
efficient operation of this paragraph 9.
9.5 The Conduct Party shall be entitled to avoid, dispute, deny, defend,
resist, appeal, compromise or contest any Environmental Proceedings, or any
matter the subject of the relevant written notice (including, without
limitation, making counterclaims or other claims against third parties in its
own name) and to have the conduct of any Environmental Proceedings, and any
related Remedial Action or appeals or other matter the subject of the relevant
written notice but no admission of liability shall be made by or on behalf of
the Conduct Party and the Environmental Proceedings or other matter the subject
of written notice under paragraph 9.1 shall not be compromised, disposed of or
settled without, in each case, the consent of the other party (such consent not
to be unreasonably withheld or delayed and provided that such consent shall not
be withheld where the relevant settlement or agreement satisfies the criteria in
paragraph 4.2(ii) (including as to quantum of Environmental Losses) and has been
reached in accordance with this paragraph 9);
9.6 The Conduct Party (where the Purchaser is the Conduct Party) shall use its
reasonable endeavours to ensure that:
Page 373
(i) the other party shall be informed promptly of any information which comes
to the knowledge of the Conduct Party other than information which the
Conduct Party reasonably considers to be immaterial to the Environmental
Proceedings or any other matter the subject of the relevant written
notice;
(ii) the other party shall be allowed a reasonable opportunity to review and to
comment upon any material reports documents and correspondence to be
prepared and provided by the Conduct Party to the other parties, or to any
Governmental Authority hearing administering or involved in, any
Environmental Proceedings or matter the subject of the relevant written
notice under paragraph 9.1 and the Conduct Party shall have regard to the
views of the other party on such reports, documents or correspondence;
(iii) the other party shall be provided with advance notice of and be allowed to
attend and participate in any material site visit meeting or negotiation
involving the Conduct Party (or any subsidiary of the Conduct Party) and
any other parties to, or the Governmental Authority hearing, administering
or involved in, any Environmental Proceeding or matter the subject of the
relevant written notice under paragraph 9.1 and if it so requests and
undertakes to pay for the reasonable cost of taking and providing such
notes the other party shall be provided promptly with reasonably full and
accurate but not verbatim notes of such visit meetings negotiations which
it does not attend and participate in;
(iv) if the other party so requests, copies of all material correspondence and
documents passing between the Conduct Party and other parties to the
Environmental Proceedings or matter the subject of the relevant written
notice under paragraph 9.1 or provided by the Conduct Party to the
Governmental Authority hearing, administering or involved in the
Environmental Proceedings or matter the subject of the relevant written
notice under paragraph 9.1 shall be provided promptly to the other party;
(v) subject to the other party undertaking to pay the reasonable cost thereof
detailed written reports shall be provided to the other party regarding
the status and progress of any Environmental Proceedings or any other
matter the subject of the relevant written notice under paragraph 9.1 as
frequently and in such form and detail as the other party shall reasonably
require;
Page 374
(vi) the other party shall be provided with reasonable notice of any proposal
by the Conduct Party or any third party (to the extent the Conduct Party
is aware of such proposal) to undertake Remedial Action Provided that
this obligation shall not apply in case of an Emergency;
(vii) any Remedial Action carried out by the Conduct Party or any contractor or
subcontractor of the Conduct Party shall be carried out using all
reasonable skill and care;
(viii) the other party shall be allowed to send such representatives as the
other party may reasonably require to attend and inspect the carrying out
of Remedial Action whilst they are being carried out Provided that such
representatives shall not interfere with the proper undertaking of the
Remedial Action or the operation of the relevant business or the
activities of any third party;
(ix) where an environmental expert is to be appointed the Conduct Party shall
consult with the other party and have regard to the other party's views
on whom to appoint, the scope of the appointment and the terms and
conditions of appointment.
9.7 Each party shall comply with the reasonable requests of the other for
arrangements or procedures to maintain confidentiality or legal privilege in
relation to any matters arising out of or relating to any Environmental
Proceedings, Remedial Action or other matter the subject of written notice under
paragraph 9.1.
9.8 The other party shall give the Conduct Party or its agents or contractors
access to personnel, premises, chattels, documents and records as the Conduct
Party may reasonably request and allow without limitation entry to premises to
make such examination and investigations as the Conduct Party may consider
necessary, the taking of samples, measurements, photographs and recordings of
soil, air, water or substances and combinations of substances at any PO/MTBE
Property, with the full co-operation of the other party, the interviewing of any
person the Conduct Party has reasonable cause to believe to be able to give
relevant information and the production of extracts, papers and records in
relation to any matter which is or is likely to be the subject of a claim under
paragraph 2.1.
9.9 The other party shall in a timely fashion:
(i) provide the Conduct Party with such information as it may reasonably
require to enable it to assist in the conduct of Environmental
Proceedings;
Page 375
(ii) consult in good faith with the Conduct Party in relation to Environmental
Proceedings; and
(iii) provide the Conduct Party with such material information as comes to the
knowledge of the other party and which relates to the Environmental
Proceedings.
9.10 Where HSCC has conduct of all or any part of Environmental Proceedings
pursuant to paragraph 9.2 above, HSCC shall (subject to appropriate arrangements
to maintain confidentiality and privilege):
(i) provide reasonably frequent and reasonably detailed reports to the other
party regarding the progress of Environmental Proceedings or Remedial
Action;
(ii) allow the other party a reasonable opportunity to review and comment in
advance on proposals for Remedial Action;
(iii) develop in consultation with the other party, proposals for Remedial
Action, having regard to HSCC's obligation at sub-paragraph (vi) below;
(iv) have regard to and incorporate the reasonable requests of the other party
in relation to such Environmental Proceedings or Remedial Action (unless
any such request of the other party would in excess of the cost of
complying with (v) and (vi) increase the amount of the Purchaser's claim
or the cost of the Remedial Action in excess of the cost of complying
with (v) and (vi) in which case the Purchaser shall be liable to HSCC for
any such increase in relation to such request which is accepted by HSCC);
(v) carry out Remedial Action in a proper and workmanlike manner and proceed
with the same in a timely manner and with due diligence;
(vi) so far as reasonably practicable avoid or minimise interruption or
disruption to the business carried on at any of the PO/MTBE Properties.
(vii) if so requested by the Purchaser (a) carry out any intrusive
Investigative Works where and to the extent that the criteria in
paragraph 11 are satisfied; and (b) make any disclosure where and to the
extent that the criteria in paragraph 8 are satisfied. Any right of the
Purchaser to claim under this Schedule 14A which would have arisen had
the Purchaser retained conduct and carried out such work or made such
disclosure shall not be adversely affected or reduced as a
Page 376
result of any unreasonable delay in complying with any such request (the
assessment of reasonableness to take account of all relevant matters
including the effect of any such delay on the Purchaser's claim under
this Schedule 14A or the claim which the Purchaser would have had, but
for such delay having regard to when the Purchaser might reasonably have
been expected to have carried out such work or made such disclosure had
the Purchaser retained conduct.
Standard of Works
10. The Purchaser shall not be entitled to claim under paragraph 2.1 in
respect of the cost of carrying out Remedial Action except for the reasonable
costs of such Remedial Action which are the minimum necessary:
(i) to comply with the Final notice, order or requirement of a Governmental
Authority acting under Environmental Law or (in relation to Protected
Matters) Future Environmental Law or a settlement or agreement under
paragraph 4.2; or
(ii) to address the Emergency (which for the avoidance of doubt excludes
anything other than such works as are necessary at the time of the
Emergency to (a) remove the direct cause of, and (b) control the
immediate effects of the Emergency).
Investigative Works
11. The Purchaser shall not be entitled to claim under paragraph 2.1 for any
Investigative Works in relation to any Protected Matters or Pre-Closing
Environmental Conditions except and to the extent that such Investigative Works:
(a) are specifically and lawfully ordered or required by the relevant
Governmental Authority under law; or
(b) are carried out in accordance with paragraph 7 and 9 in relation to a
matter where:
(i) a notice has been served under paragraph 3.6;
(ii) HSCC has not assumed conduct under paragraph 9;
(iii) on the basis of the available information (prior to the relevant
Investigative Works) there are reasonable grounds to believe that
Significant Environmental Impact or High Likelihood may exist.
Page 377
Statements
12. In the event of any circumstances arising which do or could reasonably be
expected to give rise to a claim for Environmental Losses neither HSCC, the
Purchaser, ICI nor any member of ICI's Group shall make any public statements
(including, for the avoidance of doubt, any statement to any Governmental
Authority, unless required by law or in an Emergency) regarding such
circumstances without first discussing with the other party and reaching written
agreement on the text of any such public statement before it is made, such
agreement not to be unreasonably withheld or delayed by either party and without
prejudice to paragraph 8.1.
Disputes
13.1 If any dispute arises between HSCC and the Purchaser as to:
(i) whether or not an Emergency arose; or
(ii) whether or not High Likelihood exists; or
(iii) whether or not a Significant Environmental Impact has occurred,
the matter shall be referred for final determination in accordance with the
Criteria, at the request of either the Purchaser or HSCC to an independent
environmental consultant having experience relevant to the matter in dispute as
agreed between the Purchaser and HSCC or in default of any such agreement within
seven days of such request by the Purchaser or HSCC, nominated in accordance
with the criteria set out below at the request of either the Purchaser or HSCC
by or on behalf of the Chief Executive of the Environmental Auditors
Registration Association or their equivalent in the relevant jurisdiction or, if
he or she is unable to make a nomination within 28 days of the request made to
him or her, by the President for the time being of the Chartered Institute of
Arbitrators. Such independent environmental consultant shall act as an expert
and not as an arbitrator and his fees and expenses shall be borne as he shall
direct.
13.2 The criteria referred to and to be applied in the nomination of the
independent environmental consultant shall be that he shall not have less than
10 years experience relevant to the matter in issue and he shall be a member of
a company or firm which has been established for at least three years preceding
the date of the nomination.
13.3 The said environmental consultant shall be offered the appointment within
seven business days of the parties reaching agreement on the appointment or upon
nomination by the Chief Executive of the Environmental
Page 378
Auditors Registration Association or President of the Chartered Institute of
Arbitrators as the case may be and he can only be dismissed by the mutual
agreement of the Purchaser and HSCC. The said environmental consultant shall
present his written determination within four weeks of his appointment or
nomination or such longer period as the Purchaser and HSCC may mutually agree.
13.4 The terms of appointment of the environmental consultant will include a
provision that neither the Purchaser nor HSCC will engage the environmental
consultant or any consultancy firm with which he is associated after his
nomination in relation to the relevant matter without the written consent of the
other party.
13.5 The decision of the said environmental consultant in relation to the
matters referred to in Clause 13.1 shall in the absence of manifest error be
final and binding on the parties hereto.
Payment
14. Any sums for which either party is liable under this Schedule 14A shall
be due and payable 30 days from the day following service of a proper invoice in
accordance with this Agreement.
Further Protected Person
15.1 In this paragraph 15.1:-
Asset Transaction means the sale or other disposal of all or any part of the
PO/MTBE Business after Closing or the sale or other disposal of all or any part
of any PO/MTBE Property after Closing;
Further Protected Person means:
(i) in the context of an Asset Transaction, the new owner of the PO/MTBE
Business or the relevant part of such business or of any PO/MTBE Property
or part of it following the Asset Transaction; and
(ii) in the context of a Share Transaction, the entity which was the subject
of the Share Transaction and also the person who has acquired the
relevant shares interest in such entity;
in either case not being a member of the HSCC Group;
Share Transaction means the sale or disposal of all or a controlling interest in
the shares in an entity forming part of the PO/MTBE Business after Closing;
Page 379
Transaction means an Asset Transaction or a Share Transaction, as applicable.
15.2 HSCC agrees that, in the event of a Transaction, the Purchaser shall be
entitled in its sole discretion to claim under this Schedule 14A in respect of
Environmental Losses of Further Protected Persons, as if such Further Protected
Persons were Protected Persons, provided that this 15.2 shall cease to apply in
relation to any Further Protected Person upon the occurrence of any subsequent
Transaction, to the extent such subsequent Transaction relates to a Further
Protected Person or to any PO/MTBE Property or part of it which was subject to
the first Transaction.
15.3 It is a condition of any claim by the Purchaser in relation to
Environmental Losses of a Further Protected Person that the Purchaser shall
comply with and shall procure that each Further Protected Person shall comply
with and in all respects be bound by paragraphs 3 to 14 of this Schedule 14A.
15.4 For the avoidance of doubt, no Further Protected Person shall acquire any
right against HSCC by virtue of this paragraph 15 and this paragraph 15 shall
not extend or increase HSCC's liabilities under this Schedule 14A.
Page 380
SCHEDULE 15
LOCAL CONDITIONS
The transfers referred to below shall be subject to the condition identified in
respect of them or it and ICI, HSCC and the Purchaser shall use reasonable
endeavours to procure the satisfaction of each such condition. Reference in
this Schedule 15 to any transfer shall be deemed to include all proposed steps
(as set out in Schedules 4 and 18) required or proposed to effect such transfer
and shall, in the case of a transfer of shares or assets include (without
limitation) where relevant the establishment of a new legal entity in the
relevant jurisdiction:
(a) the transfer of the assets of ICI Argentina S.a.i.c. is subject to the
approval of the General Inspection of Justice to the formation of a new
company in Argentina and the approval of the Inspection of Corporations to
the required asset transfer as a "going concern" or through a "spin-off" of
the assets of ICI Argentina S.a.i.c. to an Argentine newco;
(b) the transfer of the shares in PT. ICI Indonesia is subject to the approval
of the following authorities in Indonesia: the Badan Koordinasi Penanaman
Modal, the Ministry of Justice, and the Ministry of Industry and Trade;
(c) the transfer of the shares in PT. ICI Indonesia is subject to all
publications required to be made by Indonesian law having been duly made,
no objections having been made by PT. ICI Indonesia's creditors and to the
approval of the transfer by the shareholders of PT. ICI Indonesia;
(d) the transfer of the shares in ICI Mex SA de DV is subject to all required
notifications to the National Foreign Investment Registry in Mexico having
been made;
(e) the transfer of the shares in Arabian Polyol Company Ltd is subject to the
approval of the shareholders and all relevant governmental authorities in
Saudi Arabia, including (without limitation):
(i) the Foreign Investment Committee at the Ministry of Industry and
Electricity; and
(ii) the Ministry of Commerce; and
the making of all necessary filings with the relevant Saudi authorities;
Page 381
(f) the transfer of the shares in Tioxide Malaysia is subject to the approval
of the Bank Negara Malaysia and the Ministry of International Trade and
Industry in Malaysia and to the approval of the transfer by the
shareholders of Tioxide Malaysia;
(g) the transfer of the assets of ICI Espana S.A. is subject to the prior
approval of the Exchange Control Authorities in Spain;
(h) the transfer of the shares of Tioxide Europe S.A. is subject to the prior
approval of the Exchange Control Authorities in Spain;
(i) the transfer of the assets of ICI Taiwan Ltd is subject to the prior
approval of the Investment Commission of the Ministry of Foreign Affairs in
Taiwan and all other necessary governmental or regulatory approvals;
(j) the transfer of the assets of ICI 1996 (Thailand) Ltd is subject to the
prior approval of the Board of Investment and/or the Department of
Commercial Registration (as appropriate) and the Industrial Estates
Authority in Thailand (if required);
(k) the transfer of the shares in ICI Holland BV, ICI Polyurethanes (China)
Holdings BV and Chemical Blending BV is subject to the relevant works
council (ondernemingsraad) of ICI in The Netherlands having rendered its
advice pursuant to section 25 of the Works Council Act (Wet op de
Ondernemingsraden) and, if such advice is negative, no appeal having been
lodged by the relevant works council with the Companies Chamber of the
Amsterdam Court within one month after the date of such advice; and
(l) the transfer of the Olefins Manufacturing Business of ICI Chemicals and
Polymers Limited is subject to the condition(s) precedent set out in clause
3.1 of the Tripartite Agreement dated 30 June 1999 made between BP
Chemicals Limited, ICI, HSCC, the Purchaser and HIC and others (other than
the element of such condition(s) which requires Closing to have taken place
or the closing meetings for Closing to have commenced and there being no
reasonable prospect that Closing will not take place in order to be
satisfied) having been fulfilled or waived.
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SCHEDULE 16
DELAYED CLOSINGS
1. Where any Delayed Company, Delayed Business or Delayed Assets have not been
acquired by the relevant Designated Purchaser at Closing, the following
provisions shall apply until they are acquired. The provisions of this Schedule
16 shall not apply to those of the Joint Venture Interests to which clause 16
applies which shall, in the event of a Delayed Closing in respect thereof, be
dealt with in accordance with the provisions of that clause. The provisions of
this Schedule 16 shall apply to those pre-Closing steps which are set out in
Schedule 18 and which are intended to be effected prior to Closing but which are
not effected prior to Closing. In such circumstances, the parties to the pre-
Closing step shall use all reasonable endeavours to effect the transfer and/or
acquisition of the shares or assets by the same parties that were initially
envisaged and companies to which such shares relate shall be treated as Delayed
Companies (and the Current Parent of any such company (as identified in column 1
of Part II of Schedule 1) shall constitute a Share Selling Company) and such
assets shall be treated as Delayed Assets (unless they comprise all of the
assets of a Business Vendor which are required for a Local Business to continue
to operate for all practical purposes in the manner in which it operated prior
to Closing, in which case all the assets of that Business Vendor will not be
transferred and such assets shall be treated as a Delayed Business for the
purposes of this Schedule 16).
2. The relevant Share Selling Company or Business Vendor and the Purchaser
shall continue to use all reasonable endeavours to effect the acquisition of any
Delayed Shares, Delayed Business or Delayed Assets by the Designated Purchaser
as soon as reasonably practicable including, without limitation, using all
reasonable endeavours to obtain the consent or agreement of any third party
which is required to the transfer of any Business Asset. For the avoidance of
doubt, no Share Selling Company or Business Vendor shall be obliged to effect
the transfer of any Delayed Shares, Delayed Business or Delayed Assets all the
while such transfer would be in breach of any Regulatory Action.
3. The risk in any such Delayed Company, Delayed Business or Delayed Asset
shall pass to the Designated Purchaser with effect from Closing. The relevant
Share Selling Company or Business Vendor shall, if so requested by the
Designated Purchaser, execute a declaration of trust pursuant to which it will
hold the benefit of such Delayed Companies, Delayed Businesses or Delayed Assets
on trust for the Designated Purchaser. The relevant Business Vendor or Share
Selling Company shall account to that member of the
Page 383
Purchaser's Group for all sums received, less any direct costs (not including
management time) which relate to any Delayed Company, Delayed Business or
Delayed Asset. If the benefit of it cannot be held on trust for the relevant
member of the Purchaser's Group, the parties will use their respective
reasonable endeavours to make such other arrangements between themselves to
implement the transfer of the benefit of it as far as possible. During that
period, the relevant Business Vendor or Share Selling Company shall comply with
all reasonable requests of the relevant member of the Purchaser's Group in
relation to such Delayed Company, Business or Asset. The Purchaser on behalf of
the Designated Purchaser shall indemnify the relevant Business Vendor or Share
Selling Company on an after Tax basis against all Costs (including Tax
Liabilities) suffered or reasonably incurred by it in connection with such
Delayed Company, Business or Asset, provided that the Purchaser shall not be
obliged to indemnify the relevant Business Vendor or Share Selling Company in
respect of its internal administrative costs, nor to indemnify it to the extent
that the Costs are caused by the Business Vendor's or Share Selling Company's
failure to comply with its obligations under this Schedule.
In the case of any Delayed Company or Delayed Business which is shown in
Schedule 6 as containing a systems house for the purposes of the Polyurethanes
Business, without prejudice to its general obligation under clause 5 in relation
to the operation of the business, the relevant Business Vendor or Company shall
not purchase from any other supplier raw materials which are within the product
range of the Purchaser's Group, save where the Purchaser's Group is unable to
supply and, in the reasonable opinion of the relevant member(s) of ICI's Group,
it is commercially sensible for it to purchase those raw materials from other
sources in order for it to maintain its product range.
4. If the Designated Purchaser has not acquired any Delayed Company or Delayed
Business, and the Purchaser has not been able to nominate a person who is able
to acquire it, on or before the second anniversary of Closing, then the
Purchaser shall be entitled to elect either:
(a) to require ICI to continue the arrangement then existing in relation to it
on the same basis, in which case, in the case of an entity which is not a
Systems House Entity, the Purchaser as agent for the relevant Designated
Purchaser shall pay to ICI the sum resulting from the following
calculation:
1/4 of ( X )x$2,426,550,000
-------------------
pounds962.6 million
Page 384
where x is the Value (as defined in clause 6.3) of the relevant Delayed
Company or Delayed Business and, in the case of an entity which is a
Systems House Entity, the sum which is one quarter of the value shown
against that entity in Schedule 6. Any sum paid by the Purchaser pursuant
to this paragraph 4(a) shall be by way of adjustment to the consideration
that has been paid or transferred in respect of the relevant Delayed
Company (or of its holding undertaking) or Delayed Business under Schedule
18 (in the case of any Delayed Company or Delayed Business which is a
Schedule 18 Company or Schedule 18 Business) or, as the case may be, by way
of adjustment to the Final Consideration payable in respect of the Sale
Shares of the appropriate Delayed Company or the appropriate Business
Assets (in the case of any Delayed Company or Delayed Business which is not
a Schedule 18 Company or Schedule 18 Business);
(b) to terminate the existing arrangement then existing in relation to it, in
which case:
(i) such Delayed Company or Delayed Business shall from that time be
excluded from the transaction contemplated by this Agreement and
ICI shall pay the sum resulting from the following calculation to
the Purchaser as agent for the relevant Designated Purchaser:
y - (1/4 X z
------------------- X $2,426,550,000)
pounds962.9 million
where y is the Fair Value of the relevant Delayed Company or
Delayed Business and z is, in the case of an entity which is not a
Systems House Entity, the Value of the relevant Delayed Company or
Delayed Business and, in the case of an entity which is a Systems
House Entity, the value shown against the entity in Schedule 6. Any
sum paid by ICI pursuant to this paragraph 4(b)(i) shall be by way
of adjustment to the consideration to be paid or transferred in
respect of the relevant Delayed Company (or of its holding
undertaking) or Delayed Business under Schedule 18 (in the case of
any Delayed Company or Delayed Business which is a Schedule 18
Company or Schedule 18 Business) or, as the case may be, by way of
adjustment to the Final Consideration payable in respect of the
Sale Shares of the appropriate Delayed Company or the appropriate
Business Assets (in the case of any Delayed
Page 385
Company or Delayed Business which is not a Schedule 18 Company or
Schedule 18 Business);
(ii) in the case of any Delayed Company, the Final Cash Balance and
Final Financial Debt for that Company on the second anniversary of
Closing shall be calculated (for which purpose references to the
Closing Adjustments Date in the definitions of those terms shall be
read as references to the second anniversary of Closing) and if:
(aa) the Final Cash Balance as at the Closing Adjustments Date less
the Final Financial Debt as at the Closing Adjustments Date (the
Original Cash/Debt) is greater than the Final Cash Balance on the
second anniversary of Closing less the Final Financial Debt on the
second anniversary of Closing (the Return Cash/Debt) then the
Purchaser as agent for the relevant Designated Purchaser shall pay
the amount of the difference in dollars to ICI on behalf of the
relevant Selling Company; or (bb) if the Return Cash/Debt is
greater than the Original Cash/Debt, then ICI on behalf of the
relevant Selling Company shall pay the amount of the difference in
dollars to the Purchaser as agent for the relevant Designated
Purchaser the difference; and
(iii) in the case of any Delayed Company or Delayed Business, the Closing
Working Capital in respect of it shall be calculated (again,
treating any reference to the Closing Adjustments Date in the
definition of that term as a reference to the second anniversary of
Closing) and, if the resulting sum exceeds the Closing Working
Capital for that Delayed Company or Delayed Business as at the
Closing Adjustments Date, then ICI on behalf of the relevant
Selling Company shall pay the amount of the difference in dollars
to the Purchaser as agent for the relevant Designated Purchaser
and, if the resulting sum is less than the Closing Working Capital
for that Delayed Company or Delayed Business as at the Closing
Adjustments Date, then the Purchaser as agent for the relevant
Designated Purchaser shall pay the amount of the difference in
dollars to ICI on behalf of the relevant Selling Company.
ICI will then be entitled to retain such Delayed Company or Business and to
conduct the relevant business, or to transfer it to any person selected by
it in its absolute discretion.
5. If a Delayed Asset has not been transferred to a member of the Purchaser's
Group within 3 months of Closing and the Purchaser considers in
Page 386
good faith that such Delayed Asset has a Fair Value of (Pounds)2.5 million or
more, then it shall be entitled to serve a notice on the relevant Vendor with a
view to requiring a rebate under this paragraph. If the relevant Vendor agrees
that the Delayed Asset in question has a Fair Value of (Pounds)2.5 million or
more, or if the Independent Firm determines the Fair Value to be (Pounds)2.5
million or more, then the Purchaser shall be entitled to require the relevant
Vendor to pay the sum representing one quarter of that Fair Value to the
Purchaser. If the relevant Delayed Asset is subsequently transferred to a member
of the Purchaser's Group, then the Purchaser shall repay that sum to the
relevant Vendor.
6. If any Delayed Asset has not been transferred to a member of the
Purchaser's Group by the second anniversary of Closing, then the Purchaser shall
be entitled to elect either:
(a) to require the relevant Vendor to continue the arrangement then existing in
relation to that Delayed Asset on the same basis, in which case the
Purchaser shall account to the relevant Vendor for the amount of any
payment previously made in respect of such Delayed Asset pursuant to
paragraph 5 above; or
(b) to terminate the arrangement then existing in relation to that Delayed
Asset, in which case the relevant Vendor shall pay to the Purchaser the
Fair Value of that Delayed Asset (or, if the Purchaser has previously
required a payment to be made in respect of that Delayed Asset pursuant to
paragraph 5 above, the Fair Value of that Delayed Asset less the amount of
the payment pursuant to paragraph 5).
7. For the purposes of paragraphs 4(b), 5 and 6 above and clause 6.3(d), the
Fair Value of a Delayed Company, Delayed Business or Delayed Asset shall be what
would have been the open market value of the relevant Delayed Company, Delayed
Business or Delayed Asset between a willing seller and a willing third party
buyer (in the context of a disposal of the ICI Business or the PO/MTBE Business,
as applicable) as at the Closing Date. Each of ICI and the Purchaser shall
notify each other of what it considers in good faith to be the Fair Value of
such Delayed Company, Delayed Business or Delayed Asset and they shall use
reasonable endeavours to agree upon the Fair Value. If they have been unable to
agree it within 10 Business Days, then either of them may refer the question of
the valuation to the Independent Firm to certify the Fair Value. The
Independent Firm shall determine the Fair Value within 15 Business Days of being
so instructed. In doing so, it shall assume that the relevant Delayed Company,
Delayed Business or Delayed Asset is capable of transfer. The parties shall
provide the Independent Firm with all the information it reasonably requires in
order to determine the Fair Value.
Page 387
The Independent Firm shall act as an expert and not an arbitrator and its
decision shall be final and binding on the parties. The relevant Vendor and the
Purchaser shall bear the cost of obtaining the Independent Firm's valuation
equally.
8. Pending completion of the acquisition of any Delayed Companies, Businesses
or Assets by the Purchaser as agent for the Designated Purchaser, the relevant
Share Selling Company or Business Vendor shall comply with all reasonable
requests for information in relation to such Delayed Companies, Businesses or
Assets to the extent that it is able to do so in compliance with all applicable
laws and regulations.
9. On the Delayed Closing Date in respect of any Delayed Shares or Delayed
Business, completion of the sale of such Delayed Shares or Delayed Business
shall take place in accordance with clause 6 (and the provisions of clause 6
shall apply to such completion as if the Delayed Closing Date were the Closing
Date).
10. The Purchaser and the relevant Share Vendor or Business Vendor shall keep
each other reasonably informed of matters within their knowledge which are
reasonably likely to affect the other in relation to Companies and Local
Businesses to which this Schedule applies. In particular, the Purchaser and the
relevant Share Selling Company or Business Vendor shall inform the other of
significant events known to them in relation to health and safety and
environmental matters of such Companies and Local Businesses.
11. Where in respect of any Delayed Company, Delayed Business or Delayed Asset
it is proposed that completion of its sale and purchase should take place after
the Closing Date, the Purchaser and the relevant Share Selling Company or
Business Vendor shall be entitled to amend any notifications given by them and
to serve any notifications not previously given by them in relation to the sale
and purchase which are, in each case, notifications required to be given a
certain number of days or Business Days prior to the Closing Date, at any time
prior to the date falling such number of days or Business Days prior to the date
for which such completion is scheduled to take place as such notification is
required to be given prior to the Closing Date.
12. Where all or a substantial part of the Business Assets in a particular
jurisdiction owned by a Business Vendor have not been acquired at Closing, the
relevant Vendor shall procure that the relevant Business Vendor holding such
Business Assets shall from the Closing Date until the Delayed Closing Date in
relation to those Business Assets establish (if not already established) and
maintain separate books of account:
Page 388
(i) corresponding to such part of the ICI Business or PO/MTBE Business, as the
case may be, as is conducted by or on behalf of that Business Vendor using
those Business Assets (the Acquired Business); and
(ii) corresponding to the other businesses of that Business Vendor,
and the books of account referred to in paragraph (i) are referred to in this
Agreement as Purchaser Local Accounts and shall be maintained at the expense of
the Acquired Business and the books of account referred to in paragraph (ii) are
referred to in this Agreement as Business Vendor Local Accounts.
13. The Business Assets referred to in paragraph 12 above and the associated
Assumed Liabilities shall be reflected in the Purchaser Local Accounts and all
other assets and liabilities of such Business Vendor shall be reflected in the
Business Vendor Local Accounts.
14. From the Closing Date until the Delayed Closing Date all such assets and
liabilities (which shall include Tax assets and all Tax liabilities) and all
such profits and losses of the Business Vendor to the extent they relate to the
Acquired Business shall be reflected in the Purchaser Local Accounts. All other
assets and liabilities and profits and losses of such Business Vendor shall be
reflected in the Business Vendor Local Accounts. Without prejudice to clause
2.11, at Closing of the sale and purchase of the Delayed Business, the assets
and liabilities and profits and losses reflected in the Purchaser Local Accounts
shall be transferred to the Purchaser or as it may direct, for no additional
consideration. From the Closing Date to the Delayed Closing Date and unless
otherwise agreed by the relevant Vendor and the Purchaser, the Purchaser and the
relevant Vendor shall procure that the assets, liabilities, profits and losses
reflected in the Purchaser Local Accounts shall be used only for the purposes of
the Acquired Business and assets, liabilities, profits and losses reflected in
the Business Vendor Local Accounts shall be used only for purposes of the other
businesses of the Business Vendor.
15. From the Closing Date until the Delayed Closing Date, any dividend or
distribution declared, made or paid or any return of capital or repurchase or
redemption of share capital of the Business Vendor made or any equivalent
transactions in other jurisdictions and any other transaction in respect of the
share capital of the Business Vendor shall be reflected in the Business Vendor
Local Accounts.
16. If at any time after the Closing Date but before the Delayed Closing Date:
Page 389
(i) any asset is acquired or disposed of by the Business Vendor then, in either
case, to the extent that such asset relates to the Acquired Business the
acquisition or disposal shall be reflected in the Purchaser Local Accounts
and to the extent that such asset does not so relate the acquisition or
disposal shall be reflected in the Business Vendor Local Accounts; and
(ii) any liability (contingent or otherwise) is incurred by the Business Vendor
or where any liability (contingent or otherwise) of the Business Vendor is
satisfied, compromised or released then, in either case, to the extent that
such liability relates to the Acquired Business the incurrence,
satisfaction, compromise or release shall be reflected in the Purchaser
Local Accounts and to the extent that such liability does not so relate the
incurrence, satisfaction or release shall be reflected in the Business
Vendor Local Accounts.
17. If at any time it appears to the Purchaser or the Vendors that there has
been a misapplication of income, expenses, assets, credits or liabilities as
between the relevant Purchaser Local Accounts and the relevant Business Vendor
Local Accounts, the allocation to such accounts may be varied with the agreement
of both the Purchaser and the relevant Vendor.
18. If the Purchaser and the relevant Vendor are unable to reach agreement as
to the variation of the Purchaser Local Accounts or the Business Vendor Local
Accounts in respect of any apparent misallocation, then either of the Purchaser
or the relevant Vendor may by notice in writing to the other and the relevant
Business Vendor require that any such allocation be varied so as to accord with
a certificate (which shall be provided to the other at the same time as notice
in writing is given) prepared by its auditors setting out the size and nature of
the variation that is required to place the Purchaser Local Accounts and the
Business Vendor Local Accounts in the position they would have been in if all
allocations had been properly reflected in those accounts.
19. Within 10 Business Days of a certificate being provided to the relevant
Vendor or the Purchaser in accordance with paragraph 18, such party may serve a
notice on the other disputing the certificate, stating the reasons for such
dispute and endorsed by its auditors, whereupon the matter shall be referred for
determination to the Independent Firm who shall be instructed to notify both the
relevant Vendor and the Purchaser of its determination and of the reasons for it
within 10 Business Days of such referral. In making its determination the
Independent Firm shall act as expert and not arbitrator and his determination
shall, in the absence of manifest error, be final and binding and deemed to have
been accepted and approved by the relevant Vendor and
Page 390
the Purchaser. The fees and costs of the Expert incurred under this paragraph
shall be paid as to one-half by the relevant Vendor and one-half by the
Purchaser unless otherwise directed by the Independent Firm (who shall have the
authority to make such direction if it deems it equitable).
20. The Purchaser Local Accounts and the Business Vendor Local Accounts shall
be prepared on the basis and in accordance with the principles, policies,
procedures, methods and practices of accounting set out in the relevant Vendor's
accounting manual and using month ends and reporting timetables of the relevant
Vendor's Group and no member of the relevant Vendor's Group (except for
employees of the relevant Business Vendor engaged in the Acquired Business)
shall be responsible for preparing accounts in relation to the Acquired Business
to meet the requests of the Purchaser's Group other than such Purchaser Local
Accounts. The cost of preparing the Purchaser Local Accounts shall be for the
account of the Acquired Business.
21. The Purchaser shall not be entitled to access to the Business Vendor Local
Accounts. The Purchaser's auditor shall be entitled to reasonable access to the
Business Vendor Local Accounts for the purposes only of determining whether or
not there has been any misallocation of income, expenses, assets, credits or
liabilities as between the Purchaser Local Accounts and Business Vendor Local
Accounts in accordance with paragraph 16 or for preparing accounts in relation
to the Acquired Business required by the Purchaser subject to such auditor
executing a confidentiality undertaking to the reasonable satisfaction of the
relevant Vendor.
22. The Vendors shall take reasonable steps, insofar as they are able, to keep
confidential all confidential information in relation to any Delayed Company or
Business including, without limitation, from other members of the relevant
Vendor's Group and, in the case of Delayed Businesses, from employees of the
Business Vendor who are not employed in relation to the ICI Business or the
PO/MTBE Business, as the case may be, except where it is reasonably necessary
for such employees to have access to such information. For the purposes of this
paragraph, actions or omissions of employees of any such Company or Business
Vendor (where such employees are engaged in relation to the Delayed Business)
shall not constitute actions or omissions of the relevant Vendor. This paragraph
shall not operate to restrict or prevent information being made available where
this is required by any law, regulatory authority or securities exchange in any
jurisdiction or by the relevant Vendor's auditors in connection with the
preparation of accounts for any member of the relevant Vendor's Group and, in
such circumstances, the Purchaser shall take all steps reasonably requested by
the relevant Vendor to ensure that information is made available provided that,
in any such case,
Page 391
such information is made available (to the extent practicable) subject to an
obligation to use it only for the purposes of such requirements and subject to a
duty of confidentiality.
23. Subject to clause 5.3, between the Closing Date and the relevant Delayed
Closing Date, the Vendors shall take no steps which would result in any Delayed
Companies and Delayed Businesses carrying on business otherwise than in the
ordinary course. Subject to clause 5.3 in particular (but without prejudice to
the generality of the foregoing), the Vendors shall take no steps between the
Closing Date and the relevant Delayed Closing Date which would result in the
acts or matters specified in clause 5.4 occurring in relation to the relevant
Delayed Company or Delayed Business without the prior written consent of the
Purchaser (such consent not to be unreasonably withheld or delayed). For the
purposes of this paragraph, steps taken by employees of either the ICI Business
or the PO/MTBE Business, as the case may be, shall not constitute steps taken by
the Vendors.
Page 392
SCHEDULE 17
Part I
The Properties
- -----------------------------------------------------------------------------------------------------
Property Address Interest Legal Owner of Transferred
relevant Interest Property
Yes/No
- -----------------------------------------------------------------------------------------------------
POLYURETHANES BUSINESS
- -----------------------------------------------------------------------------------------------------
Everslaan 45 B 3078 Everberg Belgium Freehold ICI Europe Ltd No
- -----------------------------------------------------------------------------------------------------
Polyurethanes Wilton facility PO Freehold ICI C&P Limited Yes
Box 90 Middlesborough Cleveland
England - shown on agreed Plan 1
- -----------------------------------------------------------------------------------------------------
Polyurethanes Wilton facility PO Leasehold ICI Plc Yes
Box 90 Middlesborough Cleveland
England - shown on agreed Plan 1
- -----------------------------------------------------------------------------------------------------
Polyurethanes Shepton facility Freehold ICI Plc Yes
Hitchin Lane Shepton Mallet
Somerset England
- -----------------------------------------------------------------------------------------------------
Polyurethanes Rozenburg facility Leasehold ICI Holland BV No
Rotterdam Holland
- -----------------------------------------------------------------------------------------------------
Betriebsstatte der Deutsche ICI Freehold Deutche ICI GmbH Yes
Land Au 30 94469 Deggendorf Germany
- -----------------------------------------------------------------------------------------------------
Polyurethanes Ternate facility Freehold ICI Italia SpA Yes
Ternate Italy
- -----------------------------------------------------------------------------------------------------
9156 Highway 75 PO Box 517 Geismar Freehold Rubicon Inc No
Louisiana USA
- -----------------------------------------------------------------------------------------------------
9156 Highway 75 PO Box 517 Geismar Freehold ICI Americas Inc Yes
Louisiana USA
- -----------------------------------------------------------------------------------------------------
Undeveloped land in vicinity of Freehold ICI Americas Inc Yes
Polyurethanes Geismar facility
Geismar Louisiana USA
- -----------------------------------------------------------------------------------------------------
286 Mantua Grove Road West Deptford Freehold ICI Americas Inc Yes
New Jersey 08066 USA
- -----------------------------------------------------------------------------------------------------
6555 15 Mile Road Sterling Heights Leasehold ICI Americas Inc Yes
Michigan USA
- -----------------------------------------------------------------------------------------------------
Auburn Hills USA Leasehold/ ICI Americas Inc Yes
Agreement for
lease
- -----------------------------------------------------------------------------------------------------
Suite 1037 8201 Greensboro Drive Leasehold ICI Americas Inc Yes
McClean Virginia USA
- -----------------------------------------------------------------------------------------------------
Page 393
- -----------------------------------------------------------------------------------------------------
Property Address Interest Legal Owner of Transferred
relevant Interest Property
Yes/No
- -----------------------------------------------------------------------------------------------------
2795 Slough Street Peel County Leasehold ICI Canada Inc Yes
Missisauga Canada
- -----------------------------------------------------------------------------------------------------
Polyurethanes Cartegna facility and Freehold ICI Columbia SA Yes
adjoining vacant land Cartegna
Columbia
- -----------------------------------------------------------------------------------------------------
Rio Lerma 32 Fraccionamiento Freehold ICI Mex Sa de DV No
Industrial Tlazcolpan CP 54030
Edo. de Mexico
- -----------------------------------------------------------------------------------------------------
Reconquista 2780 1617 El Talar de Leasehold ICI Argentia Saic Yes
Pacheco Buenos Aires Argentina
- -----------------------------------------------------------------------------------------------------
Laboratory at Av. dos Estatos 4826 Leasehold ICI Brasil Quimca Yes
parte Santo Andre Brazil Ltda
- -----------------------------------------------------------------------------------------------------
Unused RDC premises Singapore Leasehold ICI Polyurethanes No
(Asia Pacific) Pte
Ltd
- -----------------------------------------------------------------------------------------------------
452 Wenjing Road Minhang Economic & Leasehold ICI Polyurethanes No
Technical Development Zone (China) Ltd
Shanghai China
- -----------------------------------------------------------------------------------------------------
G/F Zhong Sui An Tai Building Bao Leasehold ICI Polyurethanes No
Shi Road Guanzhou Economic & (China) Ltd
Development District Guanzhou
51030 China
- -----------------------------------------------------------------------------------------------------
Man Po offices, Shanghai, China Leasehold ICI Polyurethanes No
(Asia Pacific) Ltd
- -----------------------------------------------------------------------------------------------------
303 moo 3 Bangpoo Industrial Estate Leasehold ICI 1996 Thailand No
Sukhumvit Road Sumutprakam 10280 Limited
Thailand
- -----------------------------------------------------------------------------------------------------
No. 19 Industrial 3rd Road Kuan Yin Paid up ICI Taiwan Ltd Yes
County Taoyuan 328 Taiwan lease/licence
with option to
call for
freehold
transfer,
subject to
local law
requirements
- -----------------------------------------------------------------------------------------------------
Avda. de la Granvia 179, 08908 Leasehold ICI Espana Yes
L'Hospitalet Barcelona Spain
- -----------------------------------------------------------------------------------------------------
RELEVANT
PETROCHEMICALS BUSINESS
- -----------------------------------------------------------------------------------------------------
Paraxylene V Plant at Wilton Works Freehold ICI C&P Limited Yes
- -----------------------------------------------------------------------------------------------------
Page 394
- -----------------------------------------------------------------------------------------------------
Property Address Interest Legal Owner of Transferred
relevant Interest Property
Yes/No
- -----------------------------------------------------------------------------------------------------
Wilton Redcar and Cleveland
England (shown on Agreed Plan 2)
- -----------------------------------------------------------------------------------------------------
Aromatics Plant at North Tees Works Leasehold ICI C&P Limited Yes (grant of pie
Stockton-on Tees England (shown on crust lease)
Agreed Plan 3)
- -----------------------------------------------------------------------------------------------------
Saltholme Brine Reservoirs at Freehold ICI C&P Limited Yes
Saltholme Stockton-on-Tees England
(shown on Agreed Plan 4)
- -----------------------------------------------------------------------------------------------------
No. 4 and No. 6 Brinefields at Seal Freehold ICI C&P Limited Yes
Sands Stockton-on-Tees England
(shown on Agreed Plan 5)
- -----------------------------------------------------------------------------------------------------
Parts of the Salt Mines at Leasehold ICI C&P Limited Yes
Billingham England
- -----------------------------------------------------------------------------------------------------
North Tees Works Stockton-on-Tees Leasehold ICI C&P Limited Yes (grant of pie
England (shown on Agreed Plan 6) crust lease)
- -----------------------------------------------------------------------------------------------------
Boat Jetty and Jetties Nos. 1, 2 & Leasehold ICI C&P Limited Yes
3 North Tees Works
Stockton-on-Tees England
- -----------------------------------------------------------------------------------------------------
OLEFINS MANUFACTURING BUSINESS
- -----------------------------------------------------------------------------------------------------
1. Olefins 6 Plant at Wilton Freehold Lion C&P Limited Yes
Works, Wilton, Redcar and
Cleveland, England
- -----------------------------------------------------------------------------------------------------
2. Butadiene Storage, Ethylene Freehold Lion C&P Limited Yes
Control and Olefins 5 Plant at
Wilton Works, Wilton, Redcar and
Cleveland, England
- -----------------------------------------------------------------------------------------------------
3. Central Control Area, Wilton Freehold Lion C&P Limited Yes
Works, Wilton, Redcar and
Cleveland, England
- -----------------------------------------------------------------------------------------------------
4. Brine Reservoirs to the south Freehold Lion C&P Limited Yes
of Wilton Works, Wilton, Redcar
and Cleveland, England
- -----------------------------------------------------------------------------------------------------
5 Lima Compound 8 Freehold Lion C&P Limited Yes
- -----------------------------------------------------------------------------------------------------
Note: Properties 1-5 are comprised in a transfer in agreed form
- -----------------------------------------------------------------------------------------------------
Part of Teesport Works, Redcar and Leasehold Lion C&P Limited Yes (grant of
Cleveland, England (shown edged underlease of
and cross-hatched red on agreed part)
plan OM1)
- -----------------------------------------------------------------------------------------------------
Part of North Tees Works, Stockton Leasehold Lion C&P Limited Yes (grant of
on Tees, England (shown edged and piecrust lease)
- -----------------------------------------------------------------------------------------------------
Page 395
- -----------------------------------------------------------------------------------------------------
Property Address Interest Legal Owner of Transferred
relevant Interest Property
Yes/No
- -----------------------------------------------------------------------------------------------------
shown cross-hatched red on agreed
plan OM2)
- -----------------------------------------------------------------------------------------------------
Jetty A, North Tees Works, Stockton Leasehold Lion C&P Limited Yes
on Tees, England
- -----------------------------------------------------------------------------------------------------
Easement rights in relation to Freehold/ Lion C&P Limited Yes
Trans Pennine Ethylene Pipeline Leasehold
(excludes Hill House Spur)
- -----------------------------------------------------------------------------------------------------
Easement rights in relation to Freehold/ Lion C&P Limited Yes
Wilton - Grangemouth Ethylene Leasehold
Pipeline
- -----------------------------------------------------------------------------------------------------
Ethylene Conditioning Compound, Freehold [ICI C&P Limited] Yes
Lostock, Cheshire (shown on agreed
plan OM3)
- -----------------------------------------------------------------------------------------------------
Compound 38, Wilton Works, Wilton Freehold ICI C&P Limited Yes
- -----------------------------------------------------------------------------------------------------
No. 2 Process Office, Wilton Works Leasehold ICI C&P Limited Yes (underlease
of part)
- -----------------------------------------------------------------------------------------------------
Ethylene Pipeline Garage, Wilton Leasehold ICI C&P Limited Yes
- -----------------------------------------------------------------------------------------------------
Offices and Store at Leasehold ICI C&P Limited New lease
Castner-Kelner, Cheshire
- -----------------------------------------------------------------------------------------------------
Wilton Centre Offices Licence ICI C&P Limited Assignment or
sub-licence
- -----------------------------------------------------------------------------------------------------
Easement rights in relation to Freehold/ ICI C&P Limited Yes
Trans Pennine Ethylene Pipeline Leasehold
(Runcorn to Holford Spur and Shell
Interchange)
- -----------------------------------------------------------------------------------------------------
TIOXIDE BUSINESS
- -----------------------------------------------------------------------------------------------------
Factory at Tees Road Greatham Freehold Tioxide Europe No
England Limited
- -----------------------------------------------------------------------------------------------------
East and West Sites Billingham Freehold Tioxide Europe No
England Limited
- -----------------------------------------------------------------------------------------------------
Factory at Pyewipe Road Grimsby Freehold Tioxide Europe No
England Limited
- -----------------------------------------------------------------------------------------------------
Healing Cress Beds Grimsby England Freehold Tioxide Europe No
Limited
- -----------------------------------------------------------------------------------------------------
Nettleton Bottom Quarry Caistor Freehold Tioxide Europe No
England Limited
- -----------------------------------------------------------------------------------------------------
Land at North Killingholme England Freehold Tioxide Europe No
Limited
- -----------------------------------------------------------------------------------------------------
Page 396
- -----------------------------------------------------------------------------------------------------
Property Address Interest Legal Owner of Transferred
relevant Interest Property
Yes/No
- -----------------------------------------------------------------------------------------------------
Strip of land on banks of the River Leasehold Tioxide Europe No
Humber England Limited
- -----------------------------------------------------------------------------------------------------
Gypsum Store at Ownby England Leasehold Tioxide Europe No
Limited
- -----------------------------------------------------------------------------------------------------
Lincoln House 137-143 Hammersmith Leasehold Tioxide Group No
Road London England Limited
- -----------------------------------------------------------------------------------------------------
No 3 & 4 of first floor 748/754 Leasehold Tioxide Europe No
Wilmslow Road Didsbury England Limited
- -----------------------------------------------------------------------------------------------------
Land at Yarm Back Lane Carlton Freehold Tioxide Europe No
England Limited
- -----------------------------------------------------------------------------------------------------
49 Bargate Grimsby England Freehold Tioxide Europe No
Limited
- -----------------------------------------------------------------------------------------------------
Factory at 1 Rue des Garennes 62102 Freehold Tioxide Europe SA No
Calais France
- -----------------------------------------------------------------------------------------------------
Land in the North East of Calais Freehold Tioxide Europe SA No
France
- -----------------------------------------------------------------------------------------------------
Depot in Calais France Leasehold Tioxide Europe SA No
- -----------------------------------------------------------------------------------------------------
Office at C van Kerckhovenstraat Leasehold TESA/ NV No
110 BUS 203 2880 Bornem Belgium
- -----------------------------------------------------------------------------------------------------
Office at s-402 23 Gothenburg Sweden Leasehold TEAB No
- -----------------------------------------------------------------------------------------------------
Factory at Kawasan Industri Teluk State concession Tioxide Malaysia No
Kalong 24000 Chukai Kemaman lease
Terengganu Malaysia
- -----------------------------------------------------------------------------------------------------
5th floor Wisma Avon 13A Jalan 219 Leasehold Tioxide Malaysia No
46100 Selangor Darul Ehsan
Petaling Jaya Malaysia
- -----------------------------------------------------------------------------------------------------
Office at Kultur Sitesi Camlik Yolu Leasehold TET No
Sokak E1 Daire 2 Etiler 80600
Istanbul Turkey
- -----------------------------------------------------------------------------------------------------
Factory at Loc Casome Scarlino Part Freehold/ TESRL No
Grosseto Italy Part State
concession
- -----------------------------------------------------------------------------------------------------
Sales office in Milan Italy Leasehold TESRL No
- -----------------------------------------------------------------------------------------------------
Factory at Sub L of 33 Umlazi Freehold TSA No
Native Location No 4676
- -----------------------------------------------------------------------------------------------------
Page 397
- -----------------------------------------------------------------------------------------------------
Property Address Interest Legal Owner of Transferred
relevant Interest Property
Yes/No
- -----------------------------------------------------------------------------------------------------
Umbogintwini South Africa
- -----------------------------------------------------------------------------------------------------
69 Plots of vacant land in Leasehold TSA No
Kwamakhuta Township South Africa
- -----------------------------------------------------------------------------------------------------
Office at Am Brull 17 D-40878 Leasehold TEG No
Ratingen Germany
- -----------------------------------------------------------------------------------------------------
Factory at Poligano Industrial Freehold TES No
Nuevo Porto Palos de la Frontera
Huelva Spain
- -----------------------------------------------------------------------------------------------------
Part of factory at Poligano Leasehold OL No
Industrial Nuevo Porto Palos de la
Frontera Huelva Spain
- -----------------------------------------------------------------------------------------------------
Warehouse at Docks Levante Carni Leasehold TES No
Real de Madrid Km234 46469
Beniparrel Valencia Spain
- -----------------------------------------------------------------------------------------------------
Warehouse at Transportes Francisco Leasehold TES No
Bermejo C/Plomo No.3 28045 Madrid
Spain
- -----------------------------------------------------------------------------------------------------
Warehouse at Credito & Docks Leasehold TES No
Poligano Industrial Manso Mateu
08820 El Prat do Llobregat
Barcelona Spain
- -----------------------------------------------------------------------------------------------------
Warehouse at Doman Barrio Juncal Leasehold TES No
S/N Aparcavisa 48510 Valle de
Trapaga Bilbao Spain
- -----------------------------------------------------------------------------------------------------
Sales office at Renta Inmobiliaria Leasehold TES No
SA c/Orense 34-7a 28020 Madrid
Spain
- -----------------------------------------------------------------------------------------------------
Warehouse at Palos de la Frontera Leasehold OL No
Spain
- -----------------------------------------------------------------------------------------------------
Factory 1690 & 1694 Marie-Victorin Freehold Tioxide Canada No
Boulevard Tracy Quebec Canada Inc
- -----------------------------------------------------------------------------------------------------
Land at Lot 708-102 of the official Freehold Tioxide Canada No
cadastre of the Parish of Inc
Notre-Dame-de-la-Nativite-de
Becancour and Lot 879-10 of the
Official Cadastre of the Parish of
Saint-Edouard-de-Gentilly Canada
- -----------------------------------------------------------------------------------------------------
9999 Cavendish Boulevard Ville St. Leasehold Tioxide Canada No
Laurent Canada Inc
- -----------------------------------------------------------------------------------------------------
Page 398
- -----------------------------------------------------------------------------------------------------
Property Address Interest Legal Owner of Transferred
relevant Interest Property
Yes/No
- -----------------------------------------------------------------------------------------------------
350 Burnhamthorpe Road West Suite Leasehold Tioxide Canada No
210 Mississagua Canada Inc
- -----------------------------------------------------------------------------------------------------
2001 Butterfield Road Suite 601 Leasehold Tioxide Americas No
Downers Grove Illinois 1660515 USA Inc
- -----------------------------------------------------------------------------------------------------
Plant Site (known as Farquhar Heirs Freehold Louisiana Pigment No
Property) Northwest quarter of the Corporation
Northeast Quarter of Section 17,
Township 10 South, Range 9 West,
Calcasleu Parish Louisiana USA
- -----------------------------------------------------------------------------------------------------
Landfill Site (known as Relly-Pujo Freehold Louisiana Pigment No
"Rose-Bluff" property) Tract of Corporation
land in Section 17, Township 10
South, Range 9 West, Calcasleu
Parish Louisiana USA
- -----------------------------------------------------------------------------------------------------
Administrative Building and parking Freehold Louisiana Pigment No
lot site (known as Pelly-Pujo 20 Corporation
acres) East 20 Acres of the
Northwest quarter of the Northeast
Quarter of Section 17, Township 10
South, Range 9 West, Calcasleu
Parish Louisiana USA
- -----------------------------------------------------------------------------------------------------
Mitigation property site (known as Freehold Louisiana Pigment No
Heinen Property) the East half of Corporation
the Northeast Quarter of Section
25, Township 9 South, Range 13
West, lying south of the Sabine
River Diversion Canal less a tract
containing approximately 3 acres
Louisiana USA
- -----------------------------------------------------------------------------------------------------
Landfill/Parking lot (City of Leasehold Louisiana Pigment No
Sulphur Lease USA Corporation
- -----------------------------------------------------------------------------------------------------
Ore Storage facility (Lake Charles Leasehold Louisiana Pigment No
Harbour Lease) USA Corporation
- -----------------------------------------------------------------------------------------------------
Brimstone Rentals Lease USA Leasehold Louisiana Pigment No
Corporation
- -----------------------------------------------------------------------------------------------------
PO/MTBE BUSINESS
- -----------------------------------------------------------------------------------------------------
PO/TBA Pilot Plant Facility Travis Leasehold HSCC Yes
Texas USA
- -----------------------------------------------------------------------------------------------------
Page 399
- ------------------------------------------------------------------------------------------------------------------------------------
Property Address Interest Legal Owner of Transferred
relevant Interest Property
Yes/No
- ------------------------------------------------------------------------------------------------------------------------------------
PO/MTBE Plant Port Neches Freehold/cotenancies in cogeneration HSCC Yes
Jefferson County Texas USA wastewater treatment plants and SK
substation
- ------------------------------------------------------------------------------------------------------------------------------------
Part II
Excluded Properties
- ------------------------------------------------------------------------------------------------------------------------------------
Property Address Tenure Legal Owner
- ------------------------------------------------------------------------------------------------------------------------------------
POLYURETHANES BUSINESS
- ------------------------------------------------------------------------------------------------------------------------------------
Disused plant and site at Hillhouse England Not available ICI PLC
- ------------------------------------------------------------------------------------------------------------------------------------
Wilton Centre Wilton England Not available ICI C&P Limited
- ------------------------------------------------------------------------------------------------------------------------------------
Sales office Bogata Columbia Freehold ICI Colombia SA
- ------------------------------------------------------------------------------------------------------------------------------------
Office rented by ICI Colombia SA in Venezuela Not available ICI Colombia SA
- ------------------------------------------------------------------------------------------------------------------------------------
Sales office Sao Paulo Brazil Leasehold ICI Brasil Quimica Ltda
- ------------------------------------------------------------------------------------------------------------------------------------
San Lorenzo blending facility Argentina Not available ICI Argentina Saic/Du Real
- ------------------------------------------------------------------------------------------------------------------------------------
ICI plant at Moterrey Mexico Leasehold ICI Mex SA de CV
- ------------------------------------------------------------------------------------------------------------------------------------
Wakaguri 1372-1 Ami-machi Inashiki-gun Ibaraki Oref Not available ICI Japan Ltd
300-0333 Tokyo Japan
- ------------------------------------------------------------------------------------------------------------------------------------
Land at Vilvoorde, Belgium Not available Not available
- ------------------------------------------------------------------------------------------------------------------------------------
RELEVANT PETROCHEMICALS BUSINESS
- ------------------------------------------------------------------------------------------------------------------------------------
Wilton Centre Wilton England Not available ICI C&P Limited
- ------------------------------------------------------------------------------------------------------------------------------------
Reversionary interest in Pie Crust Leases Freehold ICI C&P Limited
- ------------------------------------------------------------------------------------------------------------------------------------
Olefins Land Wilton England Freehold ICI C&P Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
TIOXIDE BUSINESS
- ------------------------------------------------------------------------------------------------------------------------------------
Former EA West Site Derby England Freehold Tioxide Europe Limited
- ------------------------------------------------------------------------------------------------------------------------------------
West Field Grimsby (shown for identification edged Freehold Tioxide Europe Limited
black on agreed plan 7) England
- ------------------------------------------------------------------------------------------------------------------------------------
Page 400
- ------------------------------------------------------------------------------------------------------------------------------------
Property Address Tenure Legal Owner
- ------------------------------------------------------------------------------------------------------------------------------------
GENERALLY
- ------------------------------------------------------------------------------------------------------------------------------------
The Sales Offices Various Various
- ------------------------------------------------------------------------------------------------------------------------------------
Part III
The Sales Offices
Such of the national selling offices as are used by the following companies in
the following jurisdictions as agent, support or other service provider for the
Polyurethanes, Relevant Petrochemicals and (as the case may be) Tioxide
Businesses:
---------------------------------------------------------------------------
ICI International Limited Russia (Moscow/St. Petersburg)
Ukraine (Kiev)
Rumania (Bucharest)
Bulgaria (Sofia)
Yugoslavia (Belgrade)
Slovenia (Ljubnia)
Croatia (Zargreb)
---------------------------------------------------------------------------
ICI Polska Sp.Z00 Poland
---------------------------------------------------------------------------
ICI Czechoslovakia Sro Czech Republic
---------------------------------------------------------------------------
ICI Slovakia Sro Slovakia
---------------------------------------------------------------------------
ICI Hungary Kft Hungary
---------------------------------------------------------------------------
ICI Korea Ltd Korea
---------------------------------------------------------------------------
ICI Singapore Private Ltd Singapore
---------------------------------------------------------------------------
ICI Japan Ltd Japan
---------------------------------------------------------------------------
ICI (Malaysia) Holdings Sdn Bhd Malaysia
---------------------------------------------------------------------------
ICI China Ltd Hong Kong
---------------------------------------------------------------------------
ICI France SA France
---------------------------------------------------------------------------
ICI Norden Sweden
Finland
---------------------------------------------------------------------------
Norway
---------------------------------------------------------------------------
ICI Switzerland AG Switzerland
---------------------------------------------------------------------------
ICI Israel Israel
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Page 401
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ICI National Starch Thailand
---------------------------------------------------------------------------
ICI Vietnam Vietnam
---------------------------------------------------------------------------
Part IV
Provisions for the transfer of Transferred Properties
Definitions
1.1 In this Schedule the following expressions shall bear the following
meanings:
agreed plan means any one plan forming part of the agreed volume of plans.
agreed volume of plans means the bundle of plans initialled for identification
purposes by the parties hereto.
Excluded Properties means the interests and/or estates of the relevant Companies
or Business Vendors in the properties referred to in Part II of this Schedule
and Excluded Property shall be construed accordingly.
Material US Properties means the ICI Americas Inc. owned Properties at Geismar
Louisiana and West Deptford New Jersey, the HSCC leased Property at Travis Texas
and the HSCC owned Property at Port Neches Jefferson County Texas.
Retained Business means the Business of the Retained Group.
Sales Offices means the properties referred to in Part III of this Schedule.
Transferred Property Approval means, in relation to any Transferred Property,
the consent, waiver, approval or acquiescence of any landlord or other third
party required for the underlease of the Transferred Property to the Designated
Purchaser;
Transferred Property Consent means, in relation to any Transferred Property, the
consent, waiver, approval or acquiescence of any landlord or other third party
required for the transfer of the whole or any part of the Transferred Property
to the Designated Purchaser;
1.2 In Part VII of this Schedule a reference to the property shall be a
reference to the Property to which the relevant paragraph refers.
Page 402
Matters to which the sale is subject
2. The Transferred Properties are sold subject to and (where appropriate) with
the benefit of the following matters (other than liens and encumbrances securing
financial charges):
(A) all local land charges and all matters capable of registration as local
land charges;
(B) all notices served and orders, demands, proposals or requirements made by
any local or other competent authority;
(C) all exceptions and reservations, all rights of way, water, light, air or
other rights, easements, quasi-easements, servitudes, wayleaves and other
encumbrances (whether constituted in the title deeds or otherwise) and
third party rights of possession or occupation;
(D) in the case of a Transferred Property which is leasehold, the covenants,
obligations and conditions on the part of the lessee contained in the
lease;
(E) in the case of a Transferred Property which is affected by any lettings in
favour of third parties (Transferred Property Lettings), the covenants,
obligations and conditions on the part of the relevant Business Vendor in
the Transferred Property Lettings and the other terms and conditions
therein;
(F) the liens encumbrances and other matters described in the Disclosure
Letter; and
(G) the Permitted Encumbrances.
Vacant possession
3. Each Transferred Property is sold subject to the Transferred Property
Lettings and the other matters set out in paragraph 2 above but otherwise with
vacant possession of the whole at Closing.
Title
4.1 Subject to obtaining Transferred Property Consents or Transferred Property
Approvals the relevant Business Vendor shall transfer the Transferred Properties
to the relevant Designated Purchaser in accordance with clause 2 and the
remaining terms of this Schedule on the Closing Date.
Page 403
4.2 Each Designated Purchaser shall accept the title of the Business Vendor to
each of the relevant Transferred Properties at Closing and shall raise no
objection or requisition thereto.
Property consents
5.1 This paragraph and paragraph 6 applies to those Transferred Properties in
relation to which a Transferred Property Consent is required for the sale,
transfer or (as the case may be) assignment to the Designated Purchaser and if
such Transferred Property Consent remains to be obtained as at Closing this
paragraph shall continue to apply until the relevant Transferred Property
Consent shall have been obtained or until this Agreement shall cease to apply to
such Transferred Properties in accordance with the terms of this Agreement.
5.2 The relevant Business Vendor shall use all reasonable endeavours at its own
expense to obtain the Transferred Property Consents. The Designated Purchaser
shall provide to any landlord or other third party lawfully requiring the same a
direct covenant by the Designated Purchaser with the landlord or other third
party to observe and perform the terms of the relevant lease or other applicable
agreement, together with (if lawfully required by the relevant landlord or third
party) a guarantee or other surety provided by the Designated Purchaser.
5.3 The relevant Business Vendor shall pay the professional and other fees of
any landlord incurred in connection with all applications for the Transferred
Property Consents.
5.4 The Designated Purchaser shall supply all references and other evidence and
information reasonably required by any landlord or any other third party in
order to obtain the Property Consents.
5.5 If any Transferred Property Consent shall not have been obtained by 18
months following the Closing the relevant Business Vendor shall (or shall
procure) in relation to each Transferred Property so affected:
(A) at the parties' joint expense make and pursue an application to a Court for
a declaration that the Transferred Property Consent is being withheld
unreasonably (where the relevant landlord is not entitled to withhold
consent in such a manner) unless either the Business Vendor and the
Purchaser agree that such an application has no reasonable prospect of
success or the Business Vendor obtains advice from leading counsel to the
same effect; and
Page 404
(B) if paragraph 7 of this Part IV applies at its own expense apply to the
relevant landlord for a Transferred Property Approval to an underlease to
the Designated Purchaser for a term equal to the residue of the term of the
relevant lease (less 3 days) and otherwise on the same terms of such lease.
Delayed legal completion
6.1 If a Transferred Property Consent has not been obtained by the Closing Date
in relation to a Transferred Property then the date for legal completion of the
transfer or assignment (as the case may be) of the relevant Transferred Property
shall be postponed to the day 10 Business Days after the earlier of:
(A) the date on which the Transferred Property Consent is obtained;
(B) the expiration of the period for the lodging of an appeal against a
decision of a court of competent jurisdiction that the Transferred Property
Consent is being unreasonably withheld without such appeal being lodged;
and
(C) the Designated Purchaser (if it so elects) giving notice that it wishes to
complete the transfer or assignment (as the case may be) of the Transferred
Property notwithstanding the non-issue of the Transferred Property Consent
in which case the transfer or assignment to the Designated Purchaser shall
contain an indemnity in favour of the relevant Business Vendor in respect
of any Costs arising as the result of the transfer or assignment (as the
case may be) taking place without consent.
6.2 Pending legal completion and with effect from the Closing Date the relevant
Business Vendor will or will procure that in relation to any relevant Business
Property:
(A) the Transferred Property is held on trust for the Designated Purchaser;
(B) the Designated Purchaser shall (with all persons authorised by it) have the
use and occupation of either the whole of the Transferred Property or such
parts of the Transferred Property as are not subject to any Transferred
Property Lettings or other third party rights;
(C) the relevant Business Vendor does not enter into any arrangement, contract
or other dealing (other than as contemplated by this Agreement), effect or
accept any variation or surrender or other termination of any leases nor
serve any notices upon a landlord or
Page 405
tenant thereunder nor (in respect of any lease where the rent is now or
prior to assignment becomes subject to review) agree to take any steps in
relation to any review of the rent without the prior written consent of the
Designated Purchaser (such consent not to be unreasonably withheld or
delayed). Each relevant Business Vendor shall with all due expedition take
such action as the Designated Purchaser (at the expense of the Designated
Purchaser) may reasonably require in connection with any such rent review;
(D) if the relevant Transferred Property is leasehold and subject to being put
in funds by the Designated Purchaser, the rents, service charges and other
sums reserved by the relevant lease are paid; and
(E) the Designated Purchaser is accounted to forthwith for any income received
from the Transferred Property.
6.3 Pending legal completion and with effect from the Closing Date in relation
to any relevant Transferred Property, the Designated Purchaser will:
(A) pay on demand to the relevant Business Vendor a licence fee equivalent to
all rents, service charges and other outgoings properly paid by the
relevant Business Vendor in respect of the Transferred Property;
(B) by way of indemnity only observe and perform the covenants and conditions
contained in the title deeds and documentation relating to the relevant
Transferred Property including without limitation those on the part of the
lessee in the relevant lease (other than payment of rents);
(C) indemnify the relevant Business Vendor against the acts or omissions of the
employees, servants, agents, licensees and invitees of the Designated
Purchaser in or about the relevant Transferred Property.
6.4 The Designated Purchaser acknowledges that:
(A) as against any person from whom a Transferred Property Consent is to be
obtained in accordance with this Agreement it has no right to possession or
occupation of the relevant Transferred Property;
(B) in the event of legal proceedings in respect of inter alia a breach caused
by the occupation of such Designated Purchaser being issued by any such person
it will vacate the relevant Transferred Property on demand.
Page 406
6.5 If paragraph 6.4(B) of this Part IV of this Schedule applies and the
Designated Purchaser vacates the Transferred Property in accordance therewith
then the Designated Purchaser may by written notice at any time thereafter
unless and until a relevant Transferred Property Consent or Transferred Property
Approval is in fact obtained elect by written notice or notices to treat any
such Transferred Property so affected as withdrawn from the sale and purchase
set out in this agreement so that the parties' obligations in respect of the
relevant Transferred Property shall end immediately after the relevant notice is
served without limiting any accrued rights of action. If the value (as referred
to in paragraph 11 (Value)) of the relevant Transferred Property is other than a
nil amount the relevant Business Vendor will forthwith pay the Designated
Purchaser an amount equivalent to that value and the Designated Purchaser shall
surrender its interest in such Transferred Property to the relevant Business
Vendor.
Underlease
7.1 This clause shall apply to any Transferred Property (an Unconsented
Property) in relation to which a Transferred Property Consent is required where:
(A) the parties agree that the Transferred Property Consent has been reasonably
withheld; or
(B) the Transferred Property Consent has been refused and the landlord has no
obligation to act reasonably in deciding whether or not to grant a
Transferred Property Consent; or
(C) the relevant Business Vendor having complied with its obligations under
sub-paragraph 5.5(A) the Court has refused to grant a declaration; or
(D) the Transferred Property Consent has not been issued by the date 18 months
after the date of this Agreement unless an application has been made to the
Court for a declaration that the Transferred Property Consent has been
unreasonably withheld and such application has not been determined.
7.2 The relevant Business Vendor and the Designated Purchaser will at the
election of either such party enter into an agreement for grant and the taking
up of, an underlease of each Unconsented Property.
7.3 The provisions of paragraphs 5.2, 5.3, 5.4 and 5.5 (except sub-paragraph
5.5 (B)) shall apply to Transferred Property Approvals (mutatis mutandis).
Page 407
7.4 Such agreement for underlease shall specify that the underlease shall be
completed on the tenth Business Day after the earlier of:
(A) the Transferred Property Approval being obtained; and
(B) the expiry of the period for the lodging of an appeal against a decision
made by a Court of competent jurisdiction that the Transferred Property
Approval has been unreasonably withheld without such appeal being lodged.
7.5 Such agreement for underlease should specify that the underlease of each
Unconsented Property will be for a term equal to the unexpired term of the lease
of the relevant Transferred Property less three days and will be otherwise on
the same terms as, and otherwise in compliance with, the relevant lease with
provisions for the rent to be the same as the rent agreed or determined from
time to time under the lease, a covenant by the underlessee to observe and
perform the terms of the lease other than those relating to the payment of rent
and a covenant by the underlessor to pay the rent reserved by the lease.
7.6 Where the Transferred Property Consent is obtained or a declaration is
obtained that such Transferred Property Consent has been unreasonably withheld
after completion of such underlease this Agreement shall continue to take effect
for the purpose of assigning or transferring the lease of the relevant
Transferred Property to the Designated Purchaser subject to and with the benefit
of the underlease.
Deposits
8. Insofar as it is able to do so, on legal completion the relevant Business
Vendor will transfer to the Designated Purchaser the benefit of all Transferred
Property Lettings or any documents entered into pursuant to them.
The Property Transfer
9.1 On legal completion the relevant Business Vendor will deliver a duly
executed transfer or (as the case may be) assignment of the Transferred
Properties to the Designated Purchaser.
9.2 The relevant Business Vendor will not by reason of the covenants implied by
law or statute or otherwise expressed in any transfer/assignment of a
Transferred Property which is leasehold be deemed to covenant expressly or
impliedly that the obligations contained in any lease of the Transferred
Page 408
Property relating to its state and condition have been complied with and the
transfer/assignment shall contain a declaration to that effect.
9.3 The Designated Purchaser shall (where appropriate) covenant (by way of
indemnity only) to observe and perform all covenants, conditions and obligations
on the part of the owner of the relevant Transferred Property and to indemnify
and keep indemnified the owner of the relevant Transferred Property against any
future failure to observe and perform the same.
9.4 The transfer/assignment shall (where appropriate) contain such rights and
reservations as may be necessary or otherwise required pursuant to the
provisions of Part VII of this Schedule.
General
10.1 The Business Vendors and the Designated Purchaser will co-operate in any
reasonable arrangements proposed by either of them designed to provide for the
Designated Purchaser to receive the benefits and assume the burdens of the
Transferred Properties with effect from Closing, including (without limitation):
(A) enforcement (at the cost and for the account of the Designated Purchaser)
of all rights of the relevant Business Vendors against any third party;
(B) taking or, as the case may be, joining in such action as the Designated
Purchaser may reasonably request (in either case at the expense of the
Designated Purchaser) in relation to the Transferred Properties; and
(C) noting the Designated Purchaser's interest in the Transferred Properties on
any insurance.
10.2 To the extent that there shall be disagreement in respect of any matters
to be agreed or settled between the parties pursuant to this Part IV of this
Schedule, the provisions of paragraph 2.6 of Part VII of this Schedule shall
apply (mutatis mutandis).
Value
11. Subject to the remaining provisions of this Agreement in respect of such
matters, as soon as practicable following the date of this Agreement the
relevant Business Vendor and the relevant Designated Purchaser will discuss in
good faith and use all reasonable endeavours to agree a realistic value having
regard to any other agreement relating to apportionment to be
Page 409
attributed to any of the Transferred Properties where a value is required to be
attributed for the purposes of payment of stamp duty or any equivalent duty.
HM Land Registry
12. On Closing ICI will provide to the Relevant Purchaser of the Land at
Wilton, Saltholme and North Tees a certified copy of a letter dated 22 February
1988 from HM Land Registry together with the written confirmation referred to
therein.
Non-Merger
13. The provisions of this Schedule 17 shall remain in full force and effect
notwithstanding Closing insofar as they remain to be implemented after Closing.
Section 2 Law of Property (Miscellaneous Provisions) Act 1989
14. The parties hereby declare that this Agreement and any other agreement to
be entered into pursuant hereto contain all material terms and conditions of the
agreement between the parties and (to the extent required for the purpose of
section 2 of the Law of Property (Miscellaneous Provisions) Act 1989) the
provisions of such other agreements are incorporated in this Agreement.
Evidence of Title of Material US Properties
15.1 Title Commitment: Within 20 days after the date hereof, each Business
Vendor:
(i) shall obtain a commitment (a Title Commitment) at such Business Vendor's
sole cost and expense for the Title Commitment from a title insurance
company of national recognition to issue a title insurance policy (a Title
Policy) insuring fee title to the owned Material US Properties and
leasehold title to the leased Material US Properties in the name of the
Designated Purchaser in an amount to be reasonably determined by the
Designated Purchaser therefor at the sole cost and expense of the
Designated Purchaser for the Title Policy; and
(ii) shall deliver copies of the Title Commitments to each of ICI and HSCC for
their review.
15.2 Review: Each of ICI and HSCC shall have 20 days following the date of its
receipt of the Title Commitment and the documents referred to therein, but in no
event later than 20 days prior to Closing (the Title Review Period)
Page 410
during which to review the Title Commitments. The Designated Purchaser shall
accept title to the Material US Properties subject to:
(i) the Permitted Encumbrances and other matters described in paragraph 2 of
this Part IV of this Schedule; and
(ii) any other matters disclosed in the Title Commitment to which:
(a) HSCC does not object in the case of the ICI Material US
Properties; and
(b) ICI does not object in the case of the HSCC Material US
Properties
in each case prior to the expiration of the Title Review Period (items (i) and
(ii) above being herein the Permitted Title Encumbrances). If prior to the
expiration of the Title Review Period:
(i) HSCC discovers an exception to the title to any ICI US Material Property
which is not a Permitted Encumbrance, another matter described in
paragraph 2 of this Part IV of this Schedule or is not otherwise
acceptable to HSCC; or
(ii) ICI discovers an exception to the title to any HSCC Material US Property
which is not a Permitted Encumbrance, another matter described in
paragraph 2 of this Part IV of this Schedule or is not otherwise
acceptable to ICI
(in each case a Disapproved Title Exception), the party identifying such
Disapproved Title Exception shall give written notice of its objection thereto
to the relevant Business Vendor. If such Business Vendor fails to cause such
Disapproved Title Exception to be removed from, or insured over by, the Title
Policy, ICI, HSCC, the relevant Business Vendor and the Designated Purchaser
shall nevertheless proceed to Closing, but if such Disapproved Title Exception
constitutes a breach by ICI or HSCC, as the case may be, of a Warranty given by
it under paragraph 16.2(A) of Schedule 9 to this Agreement, then ICI and HSCC
shall have such rights and obligations with respect to such breach as are
provided in clauses 10, 11, 12 and 13 of this Agreement.
15.3 Owner's Policy: At the time of the transfer of the Material US Properties
to the Designated Purchaser, the Designated Purchaser shall purchase a Title
Policy with respect to each Material US Property in the name of the Designated
Purchaser, in an amount to be reasonably determined by the Designated Purchaser
at the sole cost and expense of the Designated
Page 411
Purchaser for the Title Policy, insuring the Designated Purchaser upon
recordation of the deed with respect to each owned Material US Property and the
assignment of the lease for the leased Material US Property, title to such owned
Material US Property or the leasehold estate in such leased Material US Property
shall be vested in the Designated Purchaser, subject only to the Permitted
Encumbrances.
15.4 Condemnation: If before Closing, all or any part of any Property located
in the United States of America is taken by eminent domain (or is the subject of
a pending or contemplated taking by eminent domain known to the relevant
Business Vendor which has not been consummated), the applicable Business Vendor
shall promptly notify ICI and HSCC of such taking and, in the event, ICI, HSCC,
the relevant Business Vendor and the Designated Purchaser shall proceed to the
Closing in accordance with this Agreement, without modification of the terms of
this Agreement, except that:
(i) such Property will not include the part thereof so taken; and
(ii) the applicable Business Vendor will assign and turn over to the Designated
Purchaser, all awards for such taking, less:
(a) any amounts that the Business Vendor has incurred to collect such
awards;
(b) any amounts that the Business Vendor has incurred to protect or
restore such Property; and
(c) any awards that are compensation for interruption of the Business
Vendor's business prior to Closing.
16. The transfer or other disposition of property to be made pursuant to
Schedule 18 shall be made pursuant to the terms of this Schedule 17 which shall
apply mutatis mutandis.
Part V
Excluded Properties
Excluded Properties
1. ICI will procure that the Excluded Properties at Derby, West Field Grimsby
and Vilvoorde Belgium are transferred from the current legal owner(s) of such
Excluded Properties to a member of the ICI Retained Group or some other third
party.
2. Without prejudice to paragraph 1 of this Part V, the provisions of Part IV
of this Schedule shall apply to the Excluded Properties (mutatis
Page 412
mutandis) where appropriate so that the Excluded Properties shall be transferred
to a member of the ICI Retained Group.
Part VI
Existing Intra-Group Provisions
Release
1. In relation to the Property at Haverton Hill Road, Billingham, ICI will
prior to the Closing Date procure the release of the benefit of the registered
option right of pre-emption in favour of members of the ICI Retained Group.
2. In relation to the Polyurethanes plant at Wilton, ICI will procure that
before Closing ICI C&P Limited shall agree to sell its interest therein to ICI.
Part VII
Site Separation
Steps to be taken
1. At Closing or as soon as practicable thereafter ICI and HSCC will or will
procure that the following steps are taken and appropriate documentation entered
into:
A. Polyurethanes business
1. PU Plant, Wilton, Redcar and Cleveland:
(a) deeds of grant of easements for access to and to maintain existing pipes
and cables in a form consistent with the existing regime for the grant of
easements at Wilton over the transferred land and the adjoining ICI
retained land;
(b) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at Teesport;
(c) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at North Tees and Bran Sands;
Page 413
(d) the grant of a licence permitting the occupation of such part of the Wilton
Centre, Wilton as is used at the date of this agreement by relevant
employees of the Polyurethanes Business, on prevailing terms for occupation
of the Wilton Centre
2. Everberg, Belgium
The grant of lease(s) to relevant members of the ICI Retained Group of such
part(s) of the property as is at the date of this Agreement occupied by
such Retained Business as currently occupy the property.
3. Rozenburg, Holland
(a) The grant of lease(s) to relevant members of the ICI Retained Group of such
parts of the property as are at the date of this Agreement occupied by the
Retained Business for a term of years equal to the residue of the term of
the headlease at a rent equal to a fair and reasonable proportion of the
rent payable under the headlease and a fair and reasonable proportion of
the outgoings payable in respect of the property. The entry into an
infrastructure agreement by members of the ICI Retained Group, ICI Holland
BV and the landlord;
(b) Either:
(i) the acceptance by the communal port authorities of Rotterdam (the Port) of
a surrender by the relevant Company of its current lease of the part of the
Rosenberg site shown edged red on Agreed Plan 8 (the Acroleine Site) and
the contemporaneous grant by the Port of a lease of the Acroleine Site to
such member of the ICI Retained Group as ICI may direct for the purpose of
ICI's Quest business on the same terms (including as to rent) as those
which apply under the relevant Company's current lease (with such
amendments as ICI reasonably requires) or
(ii) the grant by the relevant Company of a sublease of the Acroleine Site to
such member of the ICI Retained Group as ICI may direct for the purpose of
ICI's Quest business on the terms required by the Port, but, subject
thereto, on the same terms (including as to rent) as those which apply
under the relevant Company's current lease (with such amendments as ICI or
HSCC reasonably requires) and subject to the payment of a fair and
reasonable proportion of the outgoings payable in respect of the Rosenberg
site
both ICI and HSCC acknowledging that:
Page 414
(A) the current rent paid by the Company in relation to the Acroleine Site is
3.23 Dutch guilders per square metre (exclusive of VAT)
(B) the Acroleine Site measures approximately 70 metres by 286 metres and that,
whilst its position on the southern boundary of the Rosenberg site may be
moved along such boundary by agreement, the position of the Acroleine Site
must remain adjacent to the railway so that access to and from the railway
is protected
(C) the Acroleine Site is required by the Quest Business for the purpose of
development of an acroleine processing plant. Accordingly, the following
provisions of this Schedule which relate to the continued use of a part of
a Property or Excluded Property shall be read (in relation to the Acroleine
Site) as if they referred to the intended use and development by the Quest
business
(D) any lease or sublease of the Acroleine Site should be for a term equivalent
to the residue of the term of the relevant Company's current lease and that
any sublease shall contain an obligation on the landlord to consult with
the tenant before terminating, renewing or extending its headlease with a
view to enabling the tenant to continue to use the Acroleine Site
(E) these provisions override any existing agreements or arrangements
(contractual or otherwise) between any members of ICI's Group in relation
to the Acroleine Site
4. Auburn Hills Michigan USA
Clause 18.2 shall apply to all liabilities of a tenant assigning a lease,
guarantees, indemnities, counter- indemnities, assurances, commitments and
letters of comfort of any nature whatsoever in connection with the
development of the Property at Auburn Hills, as if such matters were Inter
Group Guarantees and if appropriate release(s) are not obtained by Closing
then, at ICI's election, the Business Vendor shall instead grant an
underlease (in accordance with paragraph 7.5 of Part IV of this Schedule)
to the relevant Designated Purchaser provided that in the event of any
future full and complete release of such obligations, HSCC shall be
entitled to require a transfer of the lease to the Designated Purchaser.
5. Pacheco Argentina
Peel, Canada
Tialanpantia Whs Mexico
Page 415
The grant of short term lease(s) of such part(s) of the properties
occupied by the Retained Business at the date of this Agreement to relevant
members of the Retained Group.
5A. Tenarte Italy
The grant of a comodato in respect of occupation of employee(s) of ICI
Italia Srl of the part of the property occupied by the ICI Retained
Business at 15 April.
6. Sales Offices
(a) To the extent that a Sales Office will be owned at Closing by a Company if
no steps are taken in relation to it, the relevant Company shall at Closing
assign/transfer such Sales Office to a member of the ICI Retained Group in
accordance with the provisions of Part IV of this Schedule (mutatis
mutandis).
(b) At the expiry of any agreement to be implemented pursuant to Schedule 5 in
relation to sales agency, if the option to be contained therein is validly
exercised, ICI shall at that time procure the grant of a tenancy/licence
agreement (on terms determined in accordance with this Schedule) relating
to that part(s) of such Sales Office as the employees so transferred, then
occupy provided that the relevant member of the ICI Retained Group shall be
under no obligation to HSCC or any Designated Purchaser to renew any lease
under which it holds a Sale Office.
7. Sales Office Sao Paulo Brazil
ICI Representative Office Jakarta Indonesia
The grant of short term lease(s) of such parts of such properties occupied
by the Polyurethanes Business at the date of this Agreement to relevant
members of the Polyurethanes Business.
8. Bangpoo Industrial Estate, Sumutprakam, Thailand
The surrender by ICI 1996 (Thailand) Limited of its lease of the property
and the grant by the landlord of a new lease of the property to the
Designated Purchaser.
9. Monterrey Mexico
The surrender of any right, title and interest held by ICI Mex SA de CV in
the property and the grant of a new lease to the ICI Retained Group by the
landlord.
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10. Vilvoorde Belgium
ICI shall indemnify ICI Europe Limited in respect of all claims, demands,
liabilities and costs incurred by ICI Europe Limited arising from any
breach of the terms of the lease under which the Property at Vilvoorde (the
Vilvoorde Property) is held or otherwise in relation to the Vilvoorde
Property save for all rent or other outgoings payable in respect of the
Vilvoorde Property proportionate to the extent of the occupation or use of
the Vilvoorde Property by or on behalf of any member of the Purchaser's
Group and/or where such claim demand liability of cost arises out of a
breach of the provisions of such lease or other action or inaction by any
member of the Purchaser's Group, its servants agents or employees after the
date hereof. ICI shall be given full conduct of all actions, negotiations,
discussions, proceedings and settlements in respect of the Vilvoorde
Property and the Purchaser shall and shall procure that all relevant
members of its Group shall, take all reasonable steps to mitigate its or
their respective losses. This indemnity shall not apply if ICI Europe or
any member of the Purchaser's Group shall withdraw or purport to withdraw
the notice of termination served on the landlord prior to the date hereof,
or if such lease is renewed or extended by ICI Europe Limited or any member
of the Purchaser's Group.
To the extent that the lease of the Vilvoorde Property as not terminated on
31.12.1999 the Purchaser shall procure that the Vilvoorde Property is
transferred to any ICI Retained Group company in accordance with the
provisions of Part IV of this schedule.
B. Relevant Petrochemicals business
1. Paraxylene Plant, Wilton, Redcar and Cleveland England:
(a) deeds of grant of easements for access to and to maintain existing pipes
and cables in a form consistent with the existing regime for the grant of
easements at Wilton over the transferred land and the adjoining ICI
retained land;
(b) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at Teesport;
(c) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing
Page 417
regime for the grant of easements in the relevant service corridors
relating to the service corridors at North Tees and Bran Sands;
(d) The grant (at the option of HSCC) of an underlease or licence to retain
assets in respect of the 3 storage tanks at Teesport and at the date of
this Agreement by the Relevant Petrochemicals Business.
2. Aromatics Plant and North Tees Logistics Plant, North Tees Works, Stockton-
on-Tees England
(a) deeds of grant of easements for access to and to maintain existing pipes
and cables in a form consistent with the existing regime for the grant of
easements at Wilton over the transferred land and the adjoining ICI
retained land;
(b) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at Teesport;
(c) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at North Tees and Bran Sands;
3. Cavity Storage No.4 (Part) and No.6 Brinefields, Stockton-on-Tees England.
Note: the areas shown hatched red on agreed plan 7 are excluded.
(a) deeds of grant of easements for access to and to maintain existing pipes
and cables in a form consistent with the existing regime for the grant of
easements at Wilton over the transferred land and the adjoining ICI
retained land;
(b) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at Teesport;
(c) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at North Tees and Bran Sands;
Page 418
(d) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the deeds referred to
at sub-paragraphs (b) and (c) above for the benefit of the retained areas
hatched red on agreed plan 7;
4. Brine Reservoirs Stockton-on-Tees England
(a) deeds of grant of easements for access to and to maintain existing pipes
and cables in a form consistent with the existing regime for the grant of
easements at Wilton over the transferred land and the adjoining ICI
retained land;
(b) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at Teesport;
(c) a deed of grant of easements for access to and to lay and maintain new and
existing service conduits in a form consistent with the existing regime for
the grant of easements in the relevant service corridors relating to the
service corridors at North Tees and Bran Sands;
(d) the grant of a deed of grant in favour of the relevant Business Vendor and
BP in respect of that part of the Wilton-Grangemouth Ethylene pipeline
which crosses part of the property, such grant to be in a form consistent
with that usually used by the relevant Business Vendor in connection with
the formal grant of existing easements granted in relation to such
pipeline.
5. Cavities - Part No. 4 Brinefield Stockton-on-Tees England
The assignment of part of the relevant Business Vendor's lease of the
premises to contain provisions for a fair and reasonable apportionment of
the rent and other outgoings payable and other liabilities under the
headlease. Cavities owned and operated by ICI's retained Chlor-Chems
business to be excluded.
6. No.2 Jetty Wilton Redcar and Cleveland England
Terra Nitrogon UK Limited (TNUK) has required ICI Chemicals & Polymers
Ltd to grant to TNUK rights in respect of apparatus on No 2 Jetty and
rights to use the Jetty. The rights of user will apply only when the owner
from time to time of No 2 Jetty fails to provide to TNUK or its successors
in title jetty services as provided at the date of this Agreement on
reasonable commercial terms. HSCC will permit
Page 419
such grant by ICI Chemicals & Polymers prior to Closing in the form
approved prior to the date of this Agreement (subject to such further
amendments as may be approved by HSCC acting reasonably or as may be
lawfully required) or, if such grant has not been completed prior to
Closing, HSCC will procure that such right is granted by the Relevant
Purchaser within one year following closing. The Grant will be by way of
sub-licence and will provide for TNUK to comply with all reasonable
regulations and to pay a fair contribution to the cost of maintaining the
Jetty when the rights of user are exercised (as aforesaid).
7. Wilton Centre Wilton Redcar and Cleveland England
The grant of a licence permitting the occupation of such part of the Wilton
Centre, Wilton (used at the date of this agreement by relevant employees of
the Relevant Petrochemicals Business, on terms prevailing for the
occupation of the Wilton Centre.
8. Olefins Plant at Wilton
(a) Deeds of Grant of Easement for access to and to maintain existing
pipes and cables in a form consistent with the existing regime for the
grant of easements at Wilton over the transferred land and the
adjoining Lion retained land.
(b) A Deed of Grant of Easement for access to and to lay and maintain new
and existing service conduits in a form consistent with the existing
regime for the grant of easements in the relevant service corridors
relating to the service corridors at Teesport and North Tees.
(c) Deed of Grant of Easement for access to and to lay and maintain new
and existing service conduits in a form consistent with the existing
regime for the grant of easements in the relevant service corridors
relating to the service corridors at Bran Sands.
9. Olefins Plants at North Tees and Teesport
(a) Deeds of Grant of Easement for access to and to maintain existing
pipes and cables in a form consistent with the existing regime for the
grant of easements at Wilton over the transferred land and the
adjoining Lion retained land.
Page 420
(b) A Deed of Grant of Easement for access to and to lay and maintain new
and existing service conduits in a form consistent with the existing
regime for the grant of easements in the relevant service corridors
relating to the service corridors at Teesport and North Tees.
(c) A Deed of Grant of Easement for access to and to lay and maintain new
and existing service conduits in a form consistent with the existing
regime for the grant of easements in the relevant service corridors
relating to the service corridors at Bran Sands.
(d) A Deed of Grant of Easement in a form consistent with the existing
regime relating to the Wilton to Grangemouth Ethylene Pipeline over
ICI's retained land.
(e) A Deed of Grant of Easement in a form consistent with the existing
regime relating to the Trans Pennine Ethylene Pipeline at ICI's
retained land.
10. Compound 38, Saltholme, Stockton on Tees
(a) Deeds of Grant of Easement for access to and to maintain existing
pipes and cables in a form consistent with the existing regime for the
grant of easements at Wilton over the transferred land and the
adjoining Lion retained land.
(b) A Deed of Grant of Easement for access to and to lay and maintain new
and existing service conduits in a form consistent with the existing
regime for the grant of easements in the relevant service corridors
relating to the service corridors at Teesport and North Tees.
(c) A Deed of Grant of Easement for access to and to lay and maintain new
and existing service conduits in a form consistent with the existing
regime for the grant of easements in the relevant service corridors
relating to the service corridors at Bran Sands.
11. Wilton Centre, Wilton
Grant or assignment of a Licence to Occupy space at Wilton Centre in a form
consistent with the existing licences for the Wilton Centre.
12. Castner-Kelner, Runcorn
Page 421
The grant of a lease of first floor offices and store plus 5 parking spaces
at Castner-Kelner for a term of 5 years at an annual rent of (Pounds)14,874
per annum (inclusive of outgoings) with a tenant's right to break on 6
months' notice.
13. No. 2 Process Office, Wilton
The grant of an underlease of the part of the property occupied by the
Olefins Manufacturing Business.
C. Tioxide Business
1. East Billingham England
A lease to ACMA Limited in respect of the part of the office building at
East Billingham occupied by ACMA Limited at the date of this agreement, for
a term of 2 years (subject to a tenant's break right on 3 months notice).
2. Nettleton Bottom Quarry Caistor England
Land at North Killingholme England
The current owners (Broadcount Properties Limited and WT Scales Limited
respectively) shall transfer the properties to Tioxide Europe Limited in
accordance with the provisions of Part IV of this Schedule (mutatis mutandis).
2.1 Following the date of this Agreement, the parties will agree the form of
appropriate deeds, memoranda, transfers, leases or other agreements (Separation
Documents) to reflect the arrangements described in this Part VII of this
Schedule. Each Separation Document is to be in a form appropriate to the
jurisdiction in which the relevant property is situate and will comply with all
formalities and other requirements in the relevant jurisdiction. Nothing in
this Part VII of this Schedule 17 shall give either party the right to require
that any lease to be granted pursuant hereto shall be a pie crust lease save
where provision to that effect is specifically made.
2.2 The Separation Documents which are underleases will follow the form of the
relevant headlease (other than in respect of the amount of rent and the length
of term) insofar as is reasonably appropriate.
2.3 Each Separation Document will grant and reserve rights to continue to use
all roads, accesses and conduits used and enjoyed by the relevant parts of the
properties at the date of this Agreement on terms reflecting as closely as
possible their use at the date of this Agreement.
Page 422
2.4 Without prejudice to the principles (as to the preservation of arrangements
existing at the date hereof) set out in the remainder of this paragraph, all
Separation Documents are to be negotiated between the parties in good faith and
on an arms length basis and on reasonable commercial terms. The Separation
Documents will enable the Designated Purchaser and/or (as the case may be) the
relevant member of the ICI Retained Group to continue to use the relevant
Properties and/or Excluded Properties in the same manner (including as to terms
and costs) as they are used at the date of this Agreement and will incorporate
such other provisions as are fair and reasonable in all the circumstances.
2.5 The provisions of Part IV of this Schedule will apply to this Part VII
(mutatis mutandis) save that paragraph 5 thereof shall not apply to any
arrangement with a term of 1 year or less. In the case of any inconsistency
between the terms of this Part VII and Part IV, the terms of this Part VII will
prevail.
2.6 In the event of disagreement, the matter may be referred by either party to
nominated senior management of ICI and HSCC and (in the event of continuing
disagreement) for determination by an independent lawyer in the relevant
jurisdiction with not less than ten years experience in dealing with commercial
property transactions. Such independent lawyer is to be appointed in the absence
of agreement by the President of the Law Society or other body responsible for
regulation of the legal profession in the relevant jurisdiction on the
application of either party. The independent lawyer will act as an expert and
not as an arbitrator and may obtain any additional professional advice in
relation thereto as he may deem necessary or desirable. The cost of the
determination must be met by the parties in equal shares.
Preservation of Rights/Listed Apparatus
3.1 All facilities (meaning access rights, services, utilities and conducting
media) which are currently enjoyed by the relevant Business Vendor and (as the
case may be) the relevant Designated Purchaser will be maintained in respect of
each Transferred Property and any part of a Property where such Property is the
subject of a Separation Document pursuant to this Schedule and where appropriate
either general or specific rights will be granted within the transfer or
otherwise where the relevant Transferred Property adjoins or is adjacent to land
to be retained by a business of the Retained Group which either provides or
shares such facilities.
3.2 If following Closing the Designated Purchaser or the relevant Business
Vendor shall be of the view that transfer or lease of a Transferred Property,
Excluded Property or part of a Property which is the subject of a Separation
Page 423
Document omits the grant or reservation of any rights (whether of access or with
regard to any item of apparatus or equipment) which is required for the purposes
of the business carried out at the Transferred Properties or the property of the
Retained Group (Omitted Rights or Easements) it shall give the notice referred
to in paragraph 3.3 of this part of this Schedule and the parties (acting
reasonably and in the utmost good faith) will meet and attempt to reach
agreement with regard thereto and to any amendments needed to the transfer or
lease of the relevant Transferred Property or Excluded Property or (as the case
may be) the relevant Separation Document to remedy the deficiency.
3.3 If any party identifies any Omitted Rights or Easements that party shall
give written notice thereof to the other party as soon as reasonably practicable
and in any event within two years of the Closing Date (time to be of the
essence).
3.4 As soon as reasonably practicable following the date of this Agreement the
parties shall procure that their representatives shall meet in order to agree
and sign by way of identification for future record lists of the items of
apparatus belonging to each party at each of the Transferred Properties at
Teesside England (Listed Apparatus). Such representatives will act reasonably
and in good faith.
3.5 Any dispute or difference as to Omitted Rights or Easements or any
amendments required to the transfer of the Transferred Property or Listed
Apparatus shall be resolved by means of a reference to an independent person
(Independent Person) appointed in accordance with this clause.
3.6 The Independent Person will be appointed by agreement between ICI and HSCC
or if within 5 working days they are unable to agree then on the application of
any of the parties by the President for the time being of the Royal Institution
of Chartered Surveyors or its equivalent in the jurisdiction in which the
Transferred Property is situated.
3.7 The Independent Person will act as an expert and not an arbitrator and his
decision shall be final and binding upon the parties. The Independent Person
shall consider any representations made by or on behalf of ICI or HSCC but shall
not be bound thereby and the parties shall use all reasonable endeavours to
procure that the Independent Person shall give his decision as speedily as
possible. The cost of appointing the Independent Person shall be shared between
the parties in such proportions as the Independent Person shall determine.
Page 424
3.8 As soon as practicable following agreement or determination as to any
Omitted Rights or Easements or Listed Apparatus and in any case within 2 months
of such agreement or determination ICI and HSCC will procure to be executed any
deeds or other documents requisite for the purpose.
Part VIII
General
The parties acknowledge and undertake to each other that:
(A) notwithstanding that certain of the arrangements provided for or envisaged
by this Schedule (including without limitation the form of property
transfer required by paragraph 9 of Part IV of this Schedule) may not be
capable of being directly or appropriately applied in jurisdictions other
than England and Wales (Other Jurisdictions) under the laws, established
law practices and procedures of those jurisdictions (Foreign Laws), the
commercial principles underlying the provisions and intentions of this
Schedule shall be applied as closely as possible in the Other Jurisdictions
to produce as nearly as possible the same commercial results;
(B) to the extent that the arrangements provided for or envisaged by this
Schedule including without limitation the form of the property transfer
cannot readily or appropriately and with reasonable practicality be wholly
applied in Other Jurisdictions under Foreign Law, they will apply subject
to such alteration and amendment as may be necessary or desirable in order
to achieve in reasonably practical terms the same commercial results (or as
nearly as possible the same commercial results, taking into account the
relevant Foreign Law) as would be achieved in England and Wales on the
application of those arrangements;
(C) to the extent necessary in order to achieve in Other Jurisdictions the
commercial results intended by this Schedule, clause 18.3 (further
assurance) will apply.
(D) to the extent required to give effect to these provisions each party agrees
to ensure that any relevant local registration, filing or other requirement
is complied with as soon as possible hereafter.
Page 425
SCHEDULE 18
PRE-CLOSING STEPS
The parties to this Agreement agree that this Schedule 18 reflects the intention
of the parties as at the date of this Agreement. It is expressly agreed that
the parties may agree amendments to the provisions of this Schedule 18 and any
consequential amendments required to any other provision of this Agreement.
Where, pursuant to paragraph 1 of this Schedule, one company (the Forming
Company) is required to form another company (the Formed Company), the Formed
Company may be incorporated under another company or companies in the relevant
group and then transferred to the Forming Company.
Words or expressions defined in Schedule 4 shall have the same meaning in this
Schedule.
The parties agree that the following provisions of this Agreement shall apply
with any necessary modifications to the transactions referred to in paragraphs
1(h), 2(c), 3(n), 4, 5 and 6 of this Schedule: clauses 2, 3.5, 3.7, 3.8, 3.10 to
3.15 (inclusive), 4.2, 4.3, 5.1, the first two sentences of 6.1, 6.2, 6.3(b),
6.10 to 6.19 (inclusive), 7.1 (to the extent provided), 9.2, 16, 18.3 and 18.9
and Schedules 4, 12, 15, 16, 17 and 19. Such provisions shall apply as if:
(i) the shares referred to in this Schedule 18 as being transferred (other
than shares being transferred to a member of ICI's Retained Group) were
Sale Shares;
(ii) the assets referred to in this Schedule 18 as being transferred (other
than assets being transferred to a member of ICI's Retained Group) were
Business Assets of a Local Business;
(iii) the transferor of shares referred to in this Schedule 18 (other than
where the shares are being transferred to a member of ICI's Retained
Group) were a Share Selling Company;
(iv) the transferor of assets referred to in this Schedule 18 (other than
where the assets are being transferred to a member of ICI's Retained
Group) were a Business Vendor;
(v) the transferee of shares or assets referred to in this Schedule 18 (other
than where the transferee is a member of ICI's Retained Group) were a
Designated Purchaser;
Page 426
(vi) the time of transfer of shares or assets under this Schedule 18 were
immediately prior to Closing.
Formation of holding companies and other entities
1. As soon as reasonably practicable after the date of this Agreement:
(a) ICI shall effect a conversion of the share capital (the Conversion) of
TGL. The share capital shall be converted into:
(i) 280,999,000 fixed rate preference shares (Preference Shares). The
Preference Shares will have a nominal value of (Pounds)1 per share
and carry the right to a cumulative dividend of 7% (when declared);
(ii) 900 Class A ordinary shares (Class A Shares) which will not have
any voting rights and which will have liquidation rights limited to
the par value of the shares - the Class A Shares will rank pari
passu in dividend and liquidation rights to the ordinary shares,
but junior in right to the Preference Shares. The Class A Shares
will have a nominal value of (Pounds)1 per share; and
(iii) 100 ordinary shares which will have dividend rights, on a per share
basis, of nine hundred (900) times the dividend rights on the Class
A Shares. The ordinary shares will have a nominal value of
(Pounds)1 per share.
(b) TGL will form a wholly-owned Subsidiary in England and Wales registered as
an unlimited liability company, Huntsman ICI (Holdings) UK (UK Holdings).
TGL (and, in respect of one share only, a nominee of TGL) will subscribe
for 2 classes of ordinary shares in UK Holdings, being 1,950 UK Holdings
Class 1 ordinary shares having a nominal value of (Pounds)100 per share
and for an aggregate subscription price of (Pounds)195,000 and 1,050 UK
Holdings Class 2 ordinary shares having a nominal value of (Pounds)100 per
share and for an aggregate subscription price of (Pounds)105,000. The UK
Holdings Class 1 ordinary shares will have, as a class, 65% of the total
voting rights of UK Holdings and the UK Holdings Class 2 ordinary shares
will have no right to vote. Otherwise the two classes of ordinary share
shall rank pari passu. Huntsman International Investments Corporation
shall subscribe for 50 UK Holdings fixed rate preferred shares (which have
a nominal value of (Pounds)100 per share) for an aggregate subscription
price of (Pounds)5,000. The UK Holdings fixed rate preferred shares will
have, as a class, 35% of the total voting rights of UK Holdings and will
be
Page 427
limited and preferred as to dividends and liquidation. The UK Holdings
fixed rate preferred shares will be entitled to a cumulative 7% dividend
when declared, and will have liquidation rights limited to their initial
subscription price.
(c) UK Holdings will form:
(i) a wholly-owned limited liability Subsidiary registered in England
and Wales, Huntsman ICI Polyurethanes (UK) Limited and subscribe
for 2 ordinary shares of Huntsman ICI Polyurethanes (UK) Limited at
(Pounds)1 each. Huntsman ICI Polyurethanes (UK) Limited will be
authorised to issue 1,000 ordinary shares;
(ii) a wholly-owned limited liability Subsidiary registered in England
and Wales, Huntsman ICI Petrochemicals (UK) Limited and subscribe
for 2 ordinary shares of Huntsman ICI Petrochemicals (UK) Limited
at (Pounds)1 each. Huntsman ICI Petrochemicals (UK) Limited will be
authorised to issue 1,000 ordinary shares; and
(iii) a wholly-owned limited liability Subsidiary registered in England
and Wales, Huntsman ICI (UK) Limited and subscribe for 26,438
ordinary shares for an aggregate consideration of (Pounds)26,438.
Huntsman ICI (UK) Limited will be authorised to issue 26,438
ordinary shares.
(d) Huntsman ICI (UK) Limited will form a wholly-owned Subsidiary registered in
the Netherlands, Huntsman ICI Investments (Netherlands) BV (Dutch Mixer),
and subscribe for all of the outstanding shares of Dutch Mixer for an
aggregate subscription price of EUR 40,000. Dutch Mixer will be authorised
to issue an appropriate further number of shares;
(e) Huntsman ICI Polyurethanes (UK) Limited will form a wholly-owned limited
liability Subsidiary registered in England and Wales, Huntsman ICI
Polyurethanes Sales Limited and subscribe for 2 ordinary shares at
(Pounds)1 each. Huntsman ICI Polyurethanes Sales Limited will be
authorised to issue 1,000 ordinary shares.
(ee) Dutch Mixer will form, as wholly-owned Subsidiaries and for the minimum
subscription required by law, the following entities in the following
jurisdictions:
Page 428
Jurisdiction Type of Company Name
Netherlands BV Huntsman ICI
(Netherlands) BV
(Dutch Holdco)
Netherlands BV Huntsman ICI
(Canadian Investments) BV
(f) Dutch Mixer will (or, in the case of Huntsman ICI (Canada) Corporation,
Huntsman ICI (Canadian Investments) BV will) form entities as wholly-owned
Subsidiaries (collectively referred to as the Other Polyurethanes Opcos) of
the following types in the following jurisdictions and transfer the
following subscription amounts (each such entity to be referred to in the
remainder of this Schedule 18 and in Schedule 4 by the name indicated
against the relevant jurisdiction below):
Jurisdiction Type of Company Subscription Name
(if known) price
Argentina Limitada minimum Huntsman ICI
required by (Argentina)
law SRL
Belgium SPRL minimum Huntsman ICI
required by (Belgium)
law SRL
Brazil Limitada minimum Huntsman ICI
required by (Brazil)
law Limitada
Canada Corporation minimum Huntsman ICI
(unlimited liability) required by (Canada)
law Corporation
Colombia Limitada minimum Huntsman ICI
required by Colombia
law Limitada
Germany GmbH minimum Huntsman ICI
required by (Germany)
law GmbH
Italy S.r.l. minimum Huntsman ICI
Page 429
required by (Italy) S.r.l
law
Spain Sociedad Limitada minimum Huntsman ICI
required by Espana
law Limitada
Taiwan Limited company minimum Huntsman ICI
required by (Taiwan)
law Limited
Thailand private limited company minimum Huntsman ICI
required by (Thailand)
law Limited
(g) ICI Italia SpA will form a wholly-owned limited liability subsidiary in
Italy, Huntsman ICI (Italian Operations) Srl with an appropriate authorised
share capital.
All the companies established pursuant to this paragraph 1 shall be Companies
for the purposes of this Agreement.
Reorganisation of ICI Subsidiaries
2. Before Closing:
(a) TAI will distribute a $40,000,000 intercompany note to IAHI;
(b) ICI will cause IAHI and TAI to take all steps necessary or desirable under
Section 390 of the General Corporation Law of the State of Delaware
(Section 390) to effectuate the transfer of TAI to the Cayman Islands, or
such other jurisdiction as ICI and HSCC reasonably agree (the New
Jurisdiction) including without limitation, obtaining all requisite
approvals of the board of directors and stockholders of TAI and filing with
the Delaware Secretary of State the certificate of transfer to the New
Jurisdiction in accordance with Section 390. ICI will also cause TAI to
take all steps necessary or desirable to cause such transfer to be
effective in the New Jurisdiction, including the compliance with provisions
to continue TAI under the laws of the New Jurisdiction. Within 75 days
after the date on which TAI becomes a New Jurisdiction company, ICI will
cause TAI to elect to be treated as a disregarded entity within the meaning
of Treasury Regulations Section 301.7701-3(c), as of the date of the
transfer;
Page 430
(c) TGL will issue a $3,071,344 intercompany note to IAHI in exchange for
IAHI's entire shareholding in TAI (the TGL/IAHI Temporary Note);
(d) The TGL Class A Shares will be transferred to GI Services Limited in
exchange for cash in the amount of (Pounds)3,000;
(e) ICI shall apply to the Registrar of Companies to reregister TGL as an
unlimited company pursuant to the provisions of section 49 Companies Act
1985, save that ICI may first transfer to a nominee(s) the legal title to
the shares in TGL held by ICI in which case ICI shall procure that such
nominee(s) make such application; and
(f) ICI will cause TGL to elect to be treated as a disregarded entity within
the meaning of Treasury Regulations Section 301. 7701-3(c).
Removal/Insertion of Assets
3. Before Closing:
(a) ICI Holland BV will transfer all of its assets other than assets of the
Polyurethanes Business conducted by ICI Holland BV to a member of ICI's
Retained Group;
(b) TGL will transfer all of its interest in Australian Titanium Products
Proprietary Ltd. to a member of ICI's Retained Group;
(c) TGL will transfer all of its interest in BTP Tioxide Ltd. to a member of
ICI's Retained Group;
(d) TGL will transfer all of its interest in TIL Ltd. to a member of ICI's
Retained Group;
(e) TGL will transfer all of its interest in Technical and Analytical Services
Ltd to a member of ICI's Retained Group;
(f) TGL will transfer all of its interest in Tioxide Investment Holdings Ltd.
to a member of ICI's Retained Group;
(g) TGL and Tioxide Group Services Ltd. will each transfer all of their
interest in Tioxide Overseas Investments Ltd. to a member of ICI's Retained
Group;
(h) ICI Europe Ltd will transfer all of its assets other than assets of the
Polyurethanes Business conducted by ICI Europe Ltd to ICI Belgium NV or to
another member of ICI's Retained Group;
Page 431
(i) ICI Mex SA DE CV will transfer all of its assets other than assets of the
Polyurethanes Business conducted by ICI Mex SA DE CV to a member of ICI's
Retained Group;
(j) ICI shall procure the transfer by Broadcount Properties Limited to Tioxide
Europe Ltd of the freehold land situated at Nettleton Bottom Quarry
Caistor, England and North Killingholme, England as referred to in Schedule
17;
(k) Tioxide Canada, Inc. will redeem its entire issued preference share
capital;
(l) Tioxide Europe Limited shall transfer land at Derby to a member of ICI's
Retained Group;
(m) Tioxide Europe Limited shall transfer land at West Fields, Grimsby to a
member of ICI's Retained Group;
(n) The other property which it has been agreed will not be acquired will be
transferred out; and
(o) ICI Italia SpA will transfer its Polyurethanes Business to Huntsman ICI
(Italian Operations) Srl in exchange for shares in that company.
Transfers to Huntsman ICI Holdings' Subsidiaries
4. Before Closing:
(a) Dutch Mixer will issue a $188,306,272 intercompany note to Omicron (the
Dutch Mixer/Omicron Temporary Note) in exchange for all of the outstanding
shares of ICI Holland BV;
(b) Huntsman ICI Espana Limitada will issue an intercompany note to ICI Espana
SA for the amount in euros which equates to $114,964,993 (on the basis of
the Euro/Dollar Rate) (the Huntsman ICI Espana Limitada/ICI Spain Temporary
Note) in exchange for all of the outstanding shares of Tioxide Europe SA
(Spain);
(c) Dutch Mixer will issue a $5,000,000 intercompany note to Deutsche ICI GmbH
in exchange for all of the outstanding shares of Tioxide Europe GmbH
(Tioxide Germany);
(d) Dutch Mixer will issue a $65,000,000 intercompany note to Omicron (the
Dutch Mixer/Omicron Malaysian Temporary Note)in exchange for 23,050,000
preferred shares of Tioxide (Malaysia) Sdn Bhd (or such other number of
preferred shares of Tioxide (Malaysia) Sdn Bhd
Page 432
as shall be held by Omicron following any pre-Closing redemption of
preferred shares by Tioxide (Malaysia) Sdn Bhd);
(e) Dutch Mixer will issue a $700,000 intercompany note to Theta in exchange
for all of the outstanding shares of ICI Polyurethanes (Asia Pacific) Pte.
Ltd.;
(f) Dutch Mixer will issue a $10,000,000 intercompany note to Theta in exchange
for all of the outstanding shares of ICI PU (China) Holdings BV;
(g) Dutch Mixer will issue a $31,000,000 intercompany note to ICI in exchange
for ICI's entire shareholding (750,000 ordinary shares) in Nippon
Polyurethane Industry Co. Ltd.;
(h) Dutch Mixer will issue a $3,000,000 intercompany note to ICI in exchange
for ICI's entire shareholding (12,800 ordinary shares) in Arabian Polyol
Company Limited, save that ICI may transfer such entire shareholding in
Arabian Polyol Company Limited to a wholly owned subsidiary of ICI
(proposed to be called Huntsman ICI (Arabian Investments) BV) formed for
the purpose in which case the $3,000,000 intercompany note shall be issued
by Dutch Mixer to ICI in exchange for ICI's entire shareholding in such
wholly owned subsidiary of ICI;
(i) Dutch Mixer will issue a $200,000 intercompany note to Omicron (the Dutch
Mixer/Omicron Chemical Blending Temporary Note) in exchange for all of the
outstanding shares of Chemical Blending Holland BV;
(j) Dutch Mixer will issue a $25,998,957 intercompany note to Grupo ICI Mexico
SA DE CV in exchange for 24,924 shares of ICI Mex SA DE CV;
(k) Dutch Holdco will issue a $1,043 intercompany note to Atlas DE Mexico SA DE
CV in exchange for 1 share of ICI Mex SA DE CV; and
(l) Huntsman ICI (Italy) Srl will issue an intercompany note to ICI Italia SpA
for the amount in euros which equates to $14,500,000 (on the basis of the
Euro/Dollar Rate) in exchange for the outstanding shares of Huntsman ICI
(Italian Operations) Srl.
5. Before Closing, the following Other Polyurethanes Opcos shall acquire the
assets relating to the Polyurethanes Business in each of the following
jurisdictions from the Company identified in respect of the relevant
Page 433
jurisdiction, in consideration of the issue by the company making the
acquisition of intercompany notes (the Other Polyurethanes Temporary Notes) in
an aggregate amount of $40,300,000.
Jurisdiction Purchaser Seller Value of
intercompany
note issued as
consideration ($)
Argentina Huntsman ICI ICI Argentina 7,000,000
(Argentina) S.R.L. S.a.i.c.
Belgium Huntsman ICI ICI Belgium NV/SA 500,000
(Belgium) SPRL
Brazil Huntsman ICI ICI Brasil Quimica 3,200,000
(Brazil) Limitada Ltda
Canada Huntsman ICI ICI Canada Inc. 3,600,000
(Canada)
Corporation
Colombia Huntsman ICI ICI Colombia SA 7,000,000
Colombia Limitada
Germany Huntsman ICI Deutsche ICI GmbH 5,500,000
(Germany) GmbH
Spain Huntsman ICI Espana ICI Espana SA 500,000
Limitada
Taiwan Huntsman ICI ICI Taiwan Limited 8,000,000
(Taiwan) Limited
Thailand Huntsman ICI ICI 1996 (Thailand) 5,000,000
(Thailand) Limited Ltd.
6. Huntsman ICI Polyurethanes Sales Limited (HIPS), a company having temporary
approval for a representative office in Indonesia, will issue a $200,000
intercompany note to PT ICI Indonesia in exchange for its Polyurethanes Business
assets.
7. ICI will use its reasonable endeavours to identify the steps necessary to
elect to treat certain of its subsidiaries as a disregarded entity within the
meaning of Treasury Regulations Section 301. 7701-3(c) and shall consult
Page 434
with HSCC with respect to the same, including, without limitation, the timing of
any elections.
Local Currency Transfers
8. Notwithstanding paragraph 5 of this Schedule, ICI may at its sole
discretion elect, provided it makes that election no later than 4 Business Days
before Closing, to do any or all of the following at any time prior to Closing:
(a) procure that ICI Finance plc transfers to Dutch Mixer the sum of $3,200,000
in exchange for an intercompany note in that amount (the Dutch Mixer/ICI
Finance Brazilian Temporary Note), and then procure that Dutch Mixer
transfers to Huntsman ICI (Brazil) Limitada the sum of $3,200,000
(converted into Brazilian Reals) in exchange for shares in Huntsman ICI
(Brazil) Limitada, in which case the consideration for the acquisition of
the assets relating to the Polyurethanes Business in respect of Brazil
pursuant to paragraph 5 of this Schedule shall be the payment of the sum of
$3,200,000 (as converted into Brazilian Reals) and not the issue of an
intercompany note in that amount; and/or
(b) procure that ICI Finance plc transfers to Dutch Mixer the sum of $7,000,000
in exchange for an intercompany note in that amount (the Dutch Mixer/ICI
Finance Colombian Temporary Note), and then procure that Dutch Mixer
transfers to Huntsman ICI Colombia Limitada the sum of $7,000,000
(converted into Colombian Pesos) in exchange for shares in Huntsman ICI
Colombia Limitada, in which case the consideration for the acquisition of
the assets relating to the Polyurethanes Business in respect of Colombia
pursuant to paragraph 5 of this Schedule shall be the payment of the sum of
$7,000,000 (as converted into Colombian Pesos) and not the issue of an
intercompany note in that amount; and/or
(c) procure that ICI Finance plc transfers to Dutch Mixer the sum of $8,000,000
in exchange for an intercompany note in that amount (the Dutch Mixer/ICI
Finance Taiwanese Temporary Note), and then procure that Dutch Mixer
transfers to Huntsman ICI (Taiwan) Limited the sum of $8,000,000 (converted
into Taiwanese Dollars) in exchange for shares in Huntsman ICI (Taiwan)
Limited, in which case the consideration for the acquisition of the assets
relating to the Polyurethanes Business in respect of Taiwan pursuant to
paragraph 5 of this Schedule shall be the payment of the sum of $8,000,000
(as converted into Taiwanese Dollars) and not the issue of an intercompany
note in that amount.
Page 435
The parties agree that the costs involved in converting the amounts being paid
for shares in Huntsman ICI (Brazil) Limitada, Huntsman ICI Colombia Limitada and
Huntsman ICI (Taiwan) Limited into local currency pursuant to this paragraph 8
or in connection with paragraph 48 of Part 1 of Schedule 4 (as the case may be),
together with the costs of converting such local currency back into dollars
immediately prior to or shortly following Closing, shall be borne equally by
HSCC and ICI.
Notarised Share Issues
9. Notwithstanding paragraph 5 of this Schedule, ICI may at its sole
discretion elect, provided it makes that election no later than 4 Business Days
before Closing, to do any or all of the following at any time prior to Closing:
(a) procure that ICI Finance plc transfers to Dutch Mixer the sum in euros
which equates to $500,000 (on the basis of the Euro/Dollar Rate) in
exchange for an intercompany note in that amount (the Dutch Mixer/ICI
Finance Belgium Temporary Note), and then procure that Dutch Mixer
transfers to Huntsman ICI (Belgium) SPRL the said sum in euros in exchange
for shares in Huntsman ICI (Belgium) SPRL, in which event the consideration
for the acquisition of the assets relating to the Polyurethanes Business in
respect of Belgium pursuant to paragraph 5 of this Schedule shall be the
payment of the sum in euros which equates to $500,000 (on the basis of the
Euro/Dollar Rate) and not the issue of an intercompany note; and/or
(b) procure that ICI Finance plc transfers to Dutch Mixer the sum in euros
which equates to $500,000 (on the basis of the Euro/Dollar Rate) in
exchange for an intercompany note in that amount (the Dutch Mixer/ICI
Finance Spanish First Temporary Note), and then procure that Dutch Mixer
transfers to Huntsman ICI Espana Limitada the said sum in euros in exchange
for shares in Huntsman ICI Espana Limitada, in which event the
consideration for the acquisition of the assets relating to the
Polyurethanes Business in respect of Spain pursuant to paragraph 5 of this
Schedule shall be the payment of the sum in euros which equates to $500,000
(on the basis of the Euro/Dollar Rate) and not the issue of an intercompany
note.
10. Notwithstanding paragraph 4(b) of this Schedule, ICI may at its sole
discretion elect, provided it makes that election no later than 4 Business
Days before Closing, to do any or all of the following at any time prior to
Closing:
Page 436
(a) ICI Finance plc transfers to Dutch Mixer the sum in euros which
equates to $33,000,000 (on the basis of the Euro/Dollar Rate) in
exchange for an intercompany note in that amount (the Dutch
Mixer/ICI Finance Spanish Second Temporary Note) and then that Dutch
Mixer transfers to Huntsman ICI Espana Limitada such sum in euros in
exchange for shares in Huntsman ICI Espana Limitada;
(b) ICI Finance plc transfers to UK Holdings the sum in euros which
equates (on the basis of the Euro/Dollar Rate) to $81,964,993 (as
adjusted to reflect any adjustment made pursuant to clause 3.4) in
exchange for an intercompany note in that amount (the UK
Holdings/ICI Finance Spanish Temporary Note) and then that UK
Holdings transfers to Huntsman ICI Espana Limitada the said sum in
euros in exchange for a note in that amount secured by all of the
assets of Huntsman ICI Espana Limitada (the Huntsman ICI Espana
Limitada/UK Holdings Intercompany Note);
in which event:
(i) the consideration for the acquisition by Huntsman ICI Espana
Limitada of all of the outstanding shares of Tioxide Europe SA
(Spain) pursuant to paragraph 4(b) of this Schedule shall be the
payment of the sum in euros which equates to $114,964,993 (on the
basis of the Euro/Dollar Rate) and not the issue of an intercompany
note;
(ii) in accordance with paragraph 37 of Part 1 of Schedule 4, Dutch Mixer
shall, instead of being required to subscribe for additional shares
in Huntsman ICI Espana Limitada, be required instead to pay to ICI
Finance plc the sum in euros which equates to $33,000,000 (on the
basis of the Euro/Dollar Rate) in satisfaction of the Dutch
Mixer/ICI Finance Spanish Second Temporary Note;
(iii) in accordance with paragraph 38 of Part 1 of Schedule 4, UK Holdings
shall, instead of being required to transfer $81,964,993 (as
adjusted to reflect any adjustment made pursuant to clause 3.4), be
required instead to pay to ICI Finance plc the sum in euros which
equates to $81,964,993 (on the basis of the Euro/Dollar Rate) in
satisfaction of the UK Holdings/ICI Finance Spanish Second Temporary
Note; and
Page 437
(iv) Huntsman ICI Espana Limitada shall not be required to transfer
$114,964,993 to ICI Espana SA in accordance with paragraph 39 of Part
1 of Schedule 4.
11. Notwithstanding paragraph 4(l) of this Schedule, ICI may at its sole
discretion elect, provided it makes that election no later than 4 Business
Days before Closing, to do any or all of the following at any time prior to
Closing:
(a) ICI Finance plc transfers to Dutch Mixer the sum in euros which
equates to $4,500,000 (on the basis of the Euro/Dollar Rate) in
exchange for an intercompany note in that amount (the Dutch Mixer/ICI
Finance Italian Temporary Note) and then that Dutch Mixer transfers
to Huntsman ICI (Italy) Srl such sum in euros in exchange for shares
in Huntsman ICI (Italy) Srl;
(b) ICI Finance plc transfers to UK Holdings the sum in euros which
equates to $10,000,000 (on the basis of the Euro/Dollar Rate) in
exchange for an intercompany note in that amount (the UK Holdings/ICI
Finance Italian Temporary Note) and then that UK Holdings transfers
to Huntsman ICI (Italy) Srl the said sum in euros in exchange for a
note in that amount (the Huntsman ICI (Italy) Srl/UK Holdings
Intercompany Note)
in which event:
(i) the consideration for the acquisition by Huntsman ICI (Italy) Srl of
all of the outstanding shares of Huntsman ICI (Italian Operations)
pursuant to paragraph 4(l) of this Schedule shall be payment of the
sum in euros which equates to $14,500,000 (on the basis of the
Euro/Dollar Rate) and not the issue of an intercompany note;
(ii) in accordance with paragraph 45 of Part 1 of Schedule 4, Dutch Mixer
shall, instead of being required to subscribe for additional shares
in Huntsman ICI (Italy) Srl, be required instead to pay to ICI
Finance plc the sum in euros which equates to $4,500,000 (on the
basis of the Euro/Dollar Rate) in satisfaction of the Dutch Mixer/ICI
Finance Italian Temporary Note;
(iii) in accordance with paragraph 46 of Part 1 of Schedule 4, UK Holdings
shall, instead of being required to transfer $10,000,000, be required
instead to pay to ICI Finance plc the sum in euros which equates to
$10,000,000 (on the basis of the
Page 438
Euro/Dollar Rate) in satisfaction of the UK Holdings/ICI Finance
Italian Temporary Note; and
(iv) Huntsman ICI (Italy) Srl shall not be required to transfer $14,500,000
to ICI Italia SpA in accordance with paragraph 47 of Part 1 of
Schedule 4.
12. Notwithstanding paragraphs 32 and 33 of Schedule 4, ICI may at its sole
discretion elect, provided that it makes the election no later than 4
Business Days before Closing, to procure that ICI Finance plc transfers to
UK Holdings a sum in dollars and euros which equates to $407,006,272 (on
the basis of the Euro/Dollar Rate) in exchange for an intercompany note in
that amount (the UK Holdings/ICI Finance $407,006,272 Temporary Note), and
then procure that UK Holdings transfers to Huntsman ICI (UK) Limited the
sum in dollars and euros which equates to $407,006,272 (on the basis of the
Euro/Dollar Rate) in exchange for shares in Huntsman ICI (UK) Limited, and
then procure that Huntsman ICI (UK) Limited transfers to Dutch Mixer the
sum in dollars and euros which equates to $407,006,272 (on the basis of the
Euro/Dollar Rate) in exchange for shares in and/or as a capital
contribution to Dutch Mixer, in which event:
(a) in accordance with paragraph 32 of Part 1 of Schedule 4, UK Holdings
shall, instead of being required to transfer [$407,006,272] to
Huntsman ICI (UK) Limited in exchange for shares in Huntsman ICI (UK)
Limited, be required instead either (i) to pay to ICI Finance plc the
sum of [$407,006,272] in satisfaction of the UK Holdings/ICI Finance
$407,006,272 Temporary Note or (ii) to pay to Dutch Mixer the sum of
[$407,006,272] (UK Holdings will enter into a Set-Off Agreement with
ICI Finance plc and Dutch Mixer in this regard);
(b) Huntsman ICI (UK) Limited shall not be required to transfer
$407,006,272 to Dutch Mixer in exchange for shares in Dutch Mixer
and/or as a capital contribution in accordance with paragraph 33 of
Part 1 of Schedule 4;
(c) ICI may elect to procure that part of the funds made available to
Dutch Mixer pursuant to this paragraph 12 are used by Dutch Mixer for
the purposes of funding prior to Closing any or all of the share
subscriptions referred to in paragraph 8, 9, 10(a) and/or 11(a) of
this Schedule 18 which ICI elects to fund prior to Closing, in which
case the amounts due to be loaned by ICI
Page 439
Finance plc to Dutch Mixer in accordance with the said paragraph(s) of
this Schedule 18 and the amounts to be repaid to ICI Finance plc
pursuant to paragraphs 37 and/or 45 and/or 48(iii) of Part 1 of
Schedule 4 (as the case may be) shall be reduced accordingly;
Formation of Newco
13. Before Closing, a Delaware corporation (US Newco) will be incorporated by
IAI.
Page 440
SCHEDULE 19
ADDITIONAL/EXCLUDED EMPLOYEES
Unless otherwise agreed to the contrary between the Vendor and the Purchaser,
the Employees named at (1) below shall be Additional Employees and the Employees
named at (2) below shall be Excluded Employees.
1. The Additional Employees
The Relevant Petrochemicals Business will need the following 28 employees who
have responsibility for commercial and other "overarching" functional and
management resources, including members of the management team, either to run a
commercial Olefins operation or to manage the Aromatics and North Tees Logistics
businesses. The parties agree that Schedule 9 (Warranties) will only apply in
relation to the Additional Employees at Closing (and not at the date of this
Agreement). The Purchaser acknowledges that disclosures against Schedule 9 in
relation to such employees may be made at any time prior to Closing.
Page 441
- ------------------------------------------------------------------------------------------------------------------------------------
Prefix Surname Initials Dept Nm 3 Dept Nm 4 Dept Nm 5 Local Job Grade
- ------------------------------------------------------------------------------------------------------------------------------------
Ms Gotledge A Petroc & Ferts Busns Systems Development Acc U
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Hoey MD Petroc & Ferts Busns Accounts It Industrial Trainee U
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs May CA Petroc & Ferts Busns Accounts Business Admin Accts Receiv Admin (Role 2) U
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Styles S Petroc & Ferts Busns Accounts It Industrial Trainee U
- ------------------------------------------------------------------------------------------------------------------------------------
Vacancy Petroc & Ferts Busns Accounts It Industrial Trainee U
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Emerson D Petroc & Ferts Busns Pip Pip Limited Finance Mgr 39
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Galbraith JW Petroc & Ferts Busns Management Teesside Sites She Mgr 39
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Hughes DL Petroc & Ferts Busns Accounts It Hydrocarbons IT Manager 37
- ------------------------------------------------------------------------------------------------------------------------------------
Dr Scott WJ P&F North Tees Pip Refinery Pip Operations Mgr 37
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Tonge M Petroc & Ferts Busns Accounts Business Admin Fin Control 37
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Leach SJ Information Systems It Services Teesside Site IT
Infrastr Mgr 36
- ------------------------------------------------------------------------------------------------------------------------------------
Dr Taylor JA Petroc & Ferts Busns Planning & Quality Pchems Models Grp Leader 36
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Wright BL Petroc & Ferts Busns Industrial Products Project Diamond Bus Pro Des Pro Diamond 35
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Mitchell J Petroc & Ferts Busns Accounts It Business Analyst 34
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Short S Petroc & Ferts Busns Accounts It Business Analyst 34
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Lofthouse M Petroc & Ferts Busns Accounts It Systems Analyst 33
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Allday M Petroc & Ferts Busns Accounts It Man applic Developer 32
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Brown TK Petroc & Ferts Busns Industrial Products Project Diamond Business Proc Mgr Reporting 32
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Jones JS Petroc & Ferts Busns Industrial Products Project Diamond Asst Prod Mgr 32
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Read P Petroc & Ferts Busns Accounts It Man applic Developer 32
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Smith A Petroc & Ferts Busns Industrial Products Project Diamond Business Process Mgr SD/MM 32
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Neate Petroc & Ferts Busns Secretarial Personal Assistant 31
- ------------------------------------------------------------------------------------------------------------------------------------
Mr Johnstone T Petroc & Ferts Busns Accounts Business Admin C&P Fincl Acctg Assist 31
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Raine SL Petroc & Ferts Busns Industrial Products Project Diamond Proj Spprt Admin P Diano 30
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Bergdahl PF Tops Safety Management Audit Administrator 29
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Riordan S Petroc & Ferts Busns Accounts Business Admin Accts Receiv Admin (Role 1) 29
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Smith BE Petroc & Ferts Busns Accounts Business Admin Banking & Paying Administration 29
- ------------------------------------------------------------------------------------------------------------------------------------
Mrs Smith L Petroc & Ferts Busns Olefins Cfst Senior Secretary/Supervisor 29
- ------------------------------------------------------------------------------------------------------------------------------------
Page 422
- ----------------------------------------------------------------------------------------------------------------------
Prefix Surname Initials Dept Nm 3 Dept Nm 4 Dept Nm 5 Local Job Grade
- ----------------------------------------------------------------------------------------------------------------------
Mr Upton CW Petroc & Ferts Busns Accounts It Small Sys Control 29
- ----------------------------------------------------------------------------------------------------------------------
29
- ----------------------------------------------------------------------------------------------------------------------
Page 443
2. The Excluded Employees
(a) Employees largely engaged in Sales Office activities.
POLYURETHANES:
EMPLOYEES OF NATIONAL SELLING COMPANIES
*Please note that numbers given below are approximate
France - ICI France SA - 7 employees
Hong Kong - ICI China Ltd. - 5 employees in Hong Kong.
Czech Republic - ICI Cz sro )
ICI International Limited - a number of branches in East Europe )
Slovakia - ICI Slovakia sro )12 employees
Poland - ICI Polska Sp.zo.o )
Hungary - ICI Hungary Kft )
Japan - ICI Japan Ltd. - 3 employees
Korea - ICI Korea Ltd - 4 employees
Malaysia - ICI (Malaysia) Holdings Sdn Bhd - 2 employees
Scandinavia - ICI Norden - 7 employees
Singapore - ICI (Singapore) Private Ltd. - 3 employees
Page 444
TIOXIDE:
Employees of National Selling Companies
- -------------------------------------------------------------------------------------------------------------------------------
COUNTRY PRESENTATION NOTES
===============================================================================================================================
ASIA
- -------------------------------------------------------------------------------------------------------------------------------
Japan ICI Japan (100% ICI owned) 2 X individuals wholly employed on matters Tioxide formally
Tioxide Japan employees before that company was folded into ICI
Japan Tioxide pick-up all costs. No contract.
- -------------------------------------------------------------------------------------------------------------------------------
South Korea ICI Korea - Exclusive for 1 X individual 20% of his time. No contract.
Fibres grades
- -------------------------------------------------------------------------------------------------------------------------------
Taiwan ICI Dulux (100% ICI owned) 1 X individual wholly employed on matters Tioxide. Tioxide
pick up all costs.
- -------------------------------------------------------------------------------------------------------------------------------
Hong Kong ICI China (100% ICI owned) 2 X individuals wholly employed on matters Tioxide. Tioxide
picks up all costs.
- -------------------------------------------------------------------------------------------------------------------------------
Thailand National Starch (100% ICI 3 X individuals wholly employed on matters Tioxide. Tioxide
owned) pick up all costs.
2 year termination. No existing contract but the parties
continue to act on the basis of the contract with ICI 1996
(Thailand) Ltd.
- -------------------------------------------------------------------------------------------------------------------------------
Page 445
- -------------------------------------------------------------------------------------------------------------------------------
COUNTRY PRESENTATION NOTES
===============================================================================================================================
Vietnam ICI Vietnam (100% ICI owned) No contract.
- -------------------------------------------------------------------------------------------------------------------------------
India IC India (51% ICI owned) 3 individuals wholly employed on matters Tioxide individuals
wholly employed on matters Tioxide. Unsigned 10 year contract
which, nonetheless, may have legitimacy under Indian law. Sole
and exclusive. 41% overriding commission. Termination with 12
months notice from 4/2002 at the earliest.
- -------------------------------------------------------------------------------------------------------------------------------
Pakistan ICI Pakistan (61% ICI owned) No contract.
- -------------------------------------------------------------------------------------------------------------------------------
Sri Lanka ICI Sri Lanka (40% ICI owned) No contract.
- -------------------------------------------------------------------------------------------------------------------------------
MIDDLE EAST
- -------------------------------------------------------------------------------------------------------------------------------
Saudia Arabia ICI Saudi Arabia (40% ICI One year termination. Contract not available.
owned)
- -------------------------------------------------------------------------------------------------------------------------------
Israel ICI Israel (100% ICI owned) Individual 50% employee on matters Tioxide. 3 months
termination. Contract not available.
- -------------------------------------------------------------------------------------------------------------------------------
Page 446
- -------------------------------------------------------------------------------------------------------------------------------
COUNTRY PRESENTATION NOTES
===============================================================================================================================
EASTERN EUROPE
CIS ICI (100% ICI owned) 1 X individual wholly employed and 1 x individual partly
employed on matters Tioxide. 1 year termination. Managed
through ICI Polyurethanes.
- -------------------------------------------------------------------------------------------------------------------------------
Czech Republic ICI (100% ICI owned) 1 X individual wholly employed on matters Tioxide. 1 year
termination. Managed through ICI Polyurethanes..
- -------------------------------------------------------------------------------------------------------------------------------
Hungary ICI (100% ICI owned) 2 X individuals partly employed on matters Tioxide. 1 year
termination. Managed through ICI Polyurethanes..
Poland ICI (100% ICI owned) 2 X individuals partly employed on matters Tioxide. 1 year
termination. Managed through ICI Polyurethanes..
- -------------------------------------------------------------------------------------------------------------------------------
Bulgaria ICI (100% ICI owned) 2 X individuals partly employed on matters Tioxide. 1 year
termination. Managed through ICI Polyurethanes
- -------------------------------------------------------------------------------------------------------------------------------
EUROPE
- -------------------------------------------------------------------------------------------------------------------------------
Switzerland ICI (Switzerland) AG (99.2% Individual less than 50% employed on matters Tioxide. Contract
ICI owned) due to end 6/99. Tioxide is considering extending for 3 months
until it puts in place a German distributor.
- -------------------------------------------------------------------------------------------------------------------------------
Page 447
(b) Relevant Petrochemicals Business Excluded Employees
- ------------------------------------------------------------------------------------------------------------------
Cont.
ID Prefix Surname Initials Local Job Grade Type Term Date
- ------------------------------------------------------------------------------------------------------------------
001187828 Mr Baker RA Planner/modeller 34 M&P
- ------------------------------------------------------------------------------------------------------------------
001176776 Mr Bell I ICI Petrochemicals HR Dev Mngr 37 SNR
- ------------------------------------------------------------------------------------------------------------------
001177497 Mr Blackhall NW Business Engineering Mngr 38 SNR
- ------------------------------------------------------------------------------------------------------------------
001186948 Mr Booth P Olefines Production Mgr 40 SNR Note: to be
seconded to
Huntsman ICI
Petrochemicals
(UK) Limited
for 18 months
- ------------------------------------------------------------------------------------------------------------------
001241035 Mrs Brettle EH Personal Assit/Snr Secretary 29 BAS
- ------------------------------------------------------------------------------------------------------------------
001250153 Mr Buenting H Aromatics Marketing Manager 36 OSC
- ------------------------------------------------------------------------------------------------------------------
001177169 Mr Butler RM Materials Manager 35 M&P 2000-03-31
- ------------------------------------------------------------------------------------------------------------------
000247714 Mr Clayton HD Aromatics Outside Op 6 SA 1999-07-31
- ------------------------------------------------------------------------------------------------------------------
001187363 Dr Comes PL Olefines Business Director 42 SNR
- ------------------------------------------------------------------------------------------------------------------
001176615 Mrs Cotterill MT Cashier Supervisor 30 BAS
- ------------------------------------------------------------------------------------------------------------------
001250513 Mr Cusworth PM Industrial Trainee U SSU
- ------------------------------------------------------------------------------------------------------------------
001252020 Miss De Jong N Industrial Trainee U SSU 1999-06-30
- ------------------------------------------------------------------------------------------------------------------
Page 448
- ------------------------------------------------------------------------------------------------------------------
Cont.
ID Prefix Surname Initials Local Job Grade Type Term Date
- ------------------------------------------------------------------------------------------------------------------
001228441 Mrs Denye M Mktg Prod Mgr 36 M&P
- ------------------------------------------------------------------------------------------------------------------
000045574 Mr Donaghue CP JVO6 Cold End Princ Tech 7 SA
- ------------------------------------------------------------------------------------------------------------------
001119627 Mr Gale DT P&f Business Process Mgr 37 SNR 1999-11-30
- ------------------------------------------------------------------------------------------------------------------
001210176 Miss Gardner DC Busn Excellence Co-ordinator 30 BAS
- ------------------------------------------------------------------------------------------------------------------
001156355 Mr Gardner M CEO Petrochemicals C8 EXEC
- ------------------------------------------------------------------------------------------------------------------
000043548 Mr Goodchild RE C/rm Senr Outside Op 6 SA 1999-07-31
- ------------------------------------------------------------------------------------------------------------------
001227083 Mr Harrison SJ Accountant 36 M&P
- ------------------------------------------------------------------------------------------------------------------
001140696 Mrs Jones EV Sales & Mktg Mgr Tsl 34 M&P 2000-03-31
- ------------------------------------------------------------------------------------------------------------------
001119464 Dr Lake IJS Senior Research Chemist 34 M&P
- ------------------------------------------------------------------------------------------------------------------
001128398 Mr Lawes PJ P&f Busn Technology Mngr 41 SNR 1999-09-30
- ------------------------------------------------------------------------------------------------------------------
001217011 MS Leonard K Financial Services Account 33 M&P
- ------------------------------------------------------------------------------------------------------------------
001235790 Mrs Maxfield G Personal Assistant 29 BAS
- ------------------------------------------------------------------------------------------------------------------
001223061 Mrs McMahon S Training Manager 33 M&P
- ------------------------------------------------------------------------------------------------------------------
001096286 Dr Moore CA Commercial Manager 38 SNR
- ------------------------------------------------------------------------------------------------------------------
001156642 Mr Otterbum EW P&f Tech Planning Mgr 35 M&P 2000-03-31
- ------------------------------------------------------------------------------------------------------------------
001220003 Mr Paton NA Diamond Project Manager 37 SNR
- ------------------------------------------------------------------------------------------------------------------
Page 449
- ------------------------------------------------------------------------------------------------------------------------
Cont.
ID Prefix Surname Initials Local Job Grade Type Term Date
- ------------------------------------------------------------------------------------------------------------------------
000255711 Mr Paul R Area Contracts Coord 31 BAS 1999-07-09
- ------------------------------------------------------------------------------------------------------------------------
001187764 Mrs Pearson-Pratt AM Secretary 28 BAS
- ------------------------------------------------------------------------------------------------------------------------
001160341 Mr Reynolds JK Busn Mngr Indust Chems 41 SNR 1999-07-31
- ------------------------------------------------------------------------------------------------------------------------
001228636 Mr Richardson CA JVO6 Allocation Sprt Mgr 31 BAS
- ------------------------------------------------------------------------------------------------------------------------
001144780 Mr Shovlin TA Petrochems CFO 42 SNR
- ------------------------------------------------------------------------------------------------------------------------
001239234 Mrs Smith L Senior Secretary/Supervisor 29 BAS
- ------------------------------------------------------------------------------------------------------------------------
000257467 Mr Smith J Pipe Cover/lag 5 SA 1999-07-11
- ------------------------------------------------------------------------------------------------------------------------
001218426 Mr Smith DN Olefines Area Task Mgr 35 M&P
- ------------------------------------------------------------------------------------------------------------------------
001239522 Mr Steinbach GPW Comm Mgr - Aromatics 39 OSC Note: to be
seconded to
Huntsman ICI
Petrochemicals
(UK) Limited
for 6 months
- ------------------------------------------------------------------------------------------------------------------------
001125678 Mr Stoney JR Methanol Business Director 41 SNR
- ------------------------------------------------------------------------------------------------------------------------
001157146 Mr Taylor GR Joint Venture/develt Mgr 38 SNR
- ------------------------------------------------------------------------------------------------------------------------
001160902 Mr Trotter PM HR Mgr Petroc&ferts Busn 39 SNR
- ------------------------------------------------------------------------------------------------------------------------
001160317 Miss Watson A Financial Accountant 34 M&P
- ------------------------------------------------------------------------------------------------------------------------
001177172 Mr Westlake RP Op Srvs Snr Prod Mgr 39 SNR
- ------------------------------------------------------------------------------------------------------------------------
Page 450
- ------------------------------------------------------------------------------------------------------------------
Cont.
ID Prefix Surnames Initials Local Job Grade Type Term Date
- ------------------------------------------------------------------------------------------------------------------
001179109 Mr White JM HR Director Petrochems 41 SNR
- ------------------------------------------------------------------------------------------------------------------
001228219 Miss Wigmore AS Accounting Support 29 BAS
- ------------------------------------------------------------------------------------------------------------------
001157159 Mr Williams G Measurement Tech 29 BAS 1999-07-31
- ------------------------------------------------------------------------------------------------------------------
001250514 Mr Wood EC Industrial Trainee U SSU
- ------------------------------------------------------------------------------------------------------------------
Total Employees 46
- ------------------------------------------------------------------------------------------------------------------
Page 451
SCHEDULE 20
I.T. SCHEDULE
1. INTERPRETATION
1.1 In this Schedule, and subject to paragraph 1.2 below, defined terms shall
have the same meaning as those terms in clause 1 of this Agreement.
1.2 The following terms shall have the following meanings:
Business Owned Software means all software owned by ICI or its Retained Group
and which is used exclusively or predominantly in the ICI Business in the 12
months prior to Closing including without limitation the Diamond Software
(subject to paragraph 3.5 of this Schedule 20) but excluding:
(a) the Excluded Software;
(b) the Retained Software;
(c) the Functional Services Software; and
(d) for the avoidance of doubt, the Lotus Notes Database Rights;
Copied/Cloned System means any I.T. systems used by the ICI Business or any
member of ICI's Retained Group which the parties agree require copying/cloning
under paragraph 9.1.2 and Copy/Clone and Copying/Cloning shall be construed
accordingly;
Diamond Software means so much of the Intellectual Property Rights as are owned
by ICI or its Retained Group in the software comprised in the Petrochemicals
SAP/R3 System known as Diamond;
Excluded Services means the I.T. transition services which the Purchaser agrees
shall not be made available by ICI as set out in attachment 4;
Excluded Software means all software owned by ICI or its Retained Group as
referred to in attachment 1 to this Schedule;
Functional Services Software means software owned by ICI or its Retained Group
used by ICI staff to provide functional services to the ICI Business or software
accessed by staff of the ICI Business to receive functional services to the ICI
Business;
Licensed Back Software means Business Owned Software which is:
Page 452
(a) used by ICI or its Retained Group during the 12 months prior to Closing;
and
(b) reasonably required for the ongoing conduct of ICI or its Retained Group in
substantially the manner operated during the 12 months prior to Closing;
ICI Network means the wide area and local area networks (including the ICI Lotus
Notes Backbone service and the Shiva and Compuserve dial in services) of ICI and
ICI's Retained Group;
Licensed ICI Owned Software means the Permanently Licensed ICI Owned Software
together with the Temporarily Licensed ICI Owned Software;
ICI Retained Software means Licensed ICI Owned Software; the Excluded Software;
the Retained Software; the Functional Services Software, the Lotus Notes
Database Rights and the Diamond Software;
Lotus Notes Database Rights means all Intellectual Property Rights (if any) in
the Lotus Notes Databases which are owned by ICI or members of ICI's Retained
Group and which include data relating to the ICI Business but which are not used
exclusively or predominantly by the ICI Business;
Permanently Licensed ICI Owned Software means the software owned by ICI or
members of ICI's Retained Group which is used by the ICI Business in the 12
months prior to Closing and reasonably required for the ongoing conduct of the
ICI Business in substantially the manner operated in the 12 months prior to
Closing
but excluding:
(i) the Excluded Software;
(ii) the Retained Software;
(iii) the Functional Services Software;
Relevant Term Sheet means the term sheets which the parties shall agree shall
apply to the provision of a Transitional Service in accordance with the
provisions of paragraph 13;
Relevant Transitional Period means the duration for which each Transitional
Service is provided in accordance with paragraph 15;
Retained Software means the following software owned by ICI or its Retained
Group:
Page 453
(a) Process Engineering Library;
(b) Engineering standards; and
(c) SHE standards;
(which, for the avoidance of doubt, may be licensed to the Purchaser by ICI on
an arms' length commercial basis separate from and not the subject of this
Schedule);
Temporarily Licensed ICI Owned Software means the software owned by ICI or
members of ICI's Retained Group which is licensed to the Purchaser under the
terms of paragraph 4.2 below;
Transitional Services means the I.T. transition services agreed to be made
available by ICI to the Purchaser under paragraph 13.1 as set out in attachment
3 as may be amended by the parties pursuant to paragraph 13.3, or such
Transitional Services as may be agreed to be made available by the Purchaser
under paragraph 20;
TSA means the transitional I.T. services agreement to be agreed by the parties
in accordance with paragraph 13 of this Schedule;
Zeneca means Zeneca Limited or any of its successors or assigns.
1.3 Except as expressly provided, all references to paragraphs and attachments
in this Schedule shall refer to the paragraphs of and attachments to this
Schedule.
1.4 In the event of any conflict in relation to the subject matter of this
Schedule and other terms appearing in the remainder of this Agreement and the
Ancillary Agreements, the terms of this Schedule shall prevail.
2. INTRODUCTION
2.1 This document defines:
2.1.1 the general principles both parties will adhere to in relation to
separation and transition arrangements;
2.1.2 the principles agreed by the parties concerning the transfer of
Intellectual Property Rights in Business Owned Software and the
license to the ICI Business of Intellectual Property Rights in
certain Licensed ICI Owned Software; and
Page 454
2.1.3 the general conditions which will be incorporated into the TSA to be
agreed by the parties by the date of Closing.
2.2 In defining and carrying out their obligations under paragraphs 3 to 20 of
this Schedule, the objectives of the parties are:
2.2.1 to achieve a satisfactory and prompt separation of I.T. systems and
services used by the ICI Business from the I.T. systems and services
used by ICI and its Retained Group;
2.2.2 to ensure the continuity of the I.T. services supplied to the ICI
Business during a limited period; and
2.2.3 to ensure that there is no adverse impact on the I.T. operations of
ICI and its Retained Group due to separation.
3. Assignment of Rights in Business Owned Software
3.1 Subject always to Zeneca's consents where necessary, the Intellectual
Property Rights in all Business Owned Software shall be assigned from ICI to the
Purchaser in accordance with this Agreement.
3.2 In the event that it is discovered at any time after Closing that ICI or
any member of its Retained Group owns any Business Owned Software which was
owned by such member as at Closing and which is exclusively or predominantly
used in the ICI Business, ICI hereby undertakes to assign or procure the
assignment of such software as soon as reasonably practicable to the Purchaser
or its nominee.
3.3 In the event that it is discovered at any time after Closing that any
member of the Purchaser's Group owns any Intellectual Property Rights in ICI
Retained Software which are owned by such member immediately after Closing and
which were assigned to it pursuant to this Agreement and which either:
(a) were not exclusively or predominantly used by the ICI Business; or
(b) are not licensed to the Purchaser pursuant to this Schedule,
the Purchaser hereby undertakes to assign or procure the assignment of such
rights as soon as reasonably practicable to ICI or its nominee.
3.4 For the purposes of this clause 3 the determination of whether Business
Owned Software or Intellectual Property Rights in ICI Retained Software are
exclusively or predominantly used in the ICI Business is to be made in
Page 455
accordance with the state of the ICI Business in the 12 months prior to Closing.
3.5 In the event that the Olefins Manufacturing Business is a Delayed Business,
the Diamond Software shall be deemed to constitute Permanently Licensed ICI
Owned Software and shall be excluded from the definition of Business Owned
Software, but only until the Delayed Closing of the Olefins Manufacturing
Business whereupon the Diamond Software will become part of the Business Owned
Software and shall be assigned from ICI to the Purchaser in accordance with this
Agreement.
4. LICENCES OF LION OWNED SOFTWARE
4.1 Subject always to Zeneca's consents where necessary, ICI hereby grants, and
shall procure that such relevant member of its Retained Group shall grant, to
the Purchaser and the Purchaser's Group a perpetual, royalty free, worldwide,
non-exclusive licence to use the Permanently Licensed ICI Owned Software in the
business of the Purchaser and the Purchaser's Group.
4.2 In relation to the Temporarily Licensed ICI Owned Software where
Transitional Services are agreed to be supplied under paragraphs 13 to 19 below,
then, subject always to Zeneca's consents where necessary, ICI shall grant and
shall procure that each relevant member of its Retained Group shall grant, to
the Purchaser a licence of such software as shall be owned by ICI or its
Retained Group which is necessary for the Purchaser to receive the benefit of a
Transitional Service for the duration of that Transitional Service.
5. LICENSED BACK SOFTWARE
5.1 The Purchaser hereby grants to ICI and its Retained Group a perpetual,
royalty free, worldwide, non-exclusive licence of the Licensed Back Software for
use in the business of ICI and ICI's Retained Group.
6. LOTUS NOTES DATABASE RIGHTS
6.1 ICI hereby grants and shall procure that each relevant member of its
Retained Group shall grant, so far as they are able, a perpetual, royalty free,
world-wide, non-exclusive licence to use the Lotus Notes Database Rights in the
ICI Business.
6.2 ICI reserves the right to delete or remove any data held on such databases
which it considers sensitive and does not relate to the ICI Business.
Page 456
7. LION EXCLUDED SOFTWARE
7.1 The parties agree that, save for any Temporarily Licensed ICI Owned
Software licensed to the Purchaser under paragraph 4.2 above, nothing in this
Agreement or any of the Ancillary Agreements shall require ICI or any member of
its Retained Group to assign, license or otherwise transfer to the Purchaser any
rights in the Excluded Software.
8. LICENCE OF PURCHASER SOFTWARE
8.1 Where Transitional Services are agreed to be supplied by the Purchaser
under paragraph 20 below, the Purchaser shall grant, and shall procure the grant
by each relevant member of its Group, to the service recipient of a licence of
such software as shall be owned by the Purchaser or any member of the
Purchaser's Group which is necessary for the service recipient to receive the
benefit of each such Transitional Service for the duration of that Transitional
Service.
9. SEPARATION PROJECT MANAGEMENT
9.1 Immediately on signing this Agreement the parties shall work together to
establish an appropriate separation project team and process to achieve timely
separation of I.T. systems, networks and services. In particular the parties
shall immediately effect:
9.1.1 a joint investigation of the network infrastructure presently used by the
ICI Business and any possible alternatives; and
9.1.2 a joint investigation of the I.T. systems used by the ICI Business and/or
members of ICI's Retained Group which may require Copying/Cloning;
9.1.3 in conducting the above investigation, close liaison will be maintained
with the other teams working on separation issues, in particular, but
without limitation, those working on national selling companies, HR and
payroll services, financial management and research and technology to
ensure that any I.T. separation issues arising from the separation
decisions made in other functional areas are addressed; and
9.1.4 the parties shall in accordance with paragraphs 10.1 and 10.2 and in good
faith mutually agree (such agreement not to be unreasonably withheld or
delayed) and implement a separation plan and timetable for the migration
off of the ICI Networks and the shared local I.T. systems and equipment.
Page 457
9.2 During the separation the parties shall liaise in relation to Year 2000
testing and remediation work and share Year 2000 status reports in so far as
they relate to the ICI Business.
10. SEPARATION FROM LION NETWORKS
10.1 The Purchaser will use its reasonable endeavours to migrate off the ICI
Networks by 60 days after Closing.
10.2 If the parties agree that the Purchaser shall remain on the ICI Networks
beyond the date referred to in paragraph 10.1 then both parties will use their
reasonable endeavours to achieve separation as quickly as practicable and, in
any event, within 3 months of Closing save where this would require separation
to occur during a period determined by ICI as being millennium sensitive in
which such case the parties agree that such separation shall to await the end of
such period.
10.3 ICI shall ensure all transferring Lotus Notes accounts are moved to
dedicated servers where such accounts do not reside on servers which are
transferring to the Purchaser.
10.4 During any period in which the Purchaser remains connected to the ICI
Networks:
10.4.1 current network services shall continue to be made available;
10.4.2 ICI, HSCC and the Purchaser shall work together to establish mutually
beneficial and secure communication links as appropriate to their
evolving business relationships;
10.4.3 the Purchaser shall not establish any connection to any other company
except via a ICI approved firewall; and
10.4.4 the Purchaser shall comply with ICI I.T. Security standards (see
attachment 2 to this Schedule).
10.5 Once network separation is completed, ICI shall ensure provision of
necessary firewalls and gateways to enable temporary access to any ICI systems
provided under the TSA. The Purchaser shall pay the associated costs as a
Transitional Service charge.
11. SHARED LOCAL EQUIPMENT
11.1 Subject to necessary consents, Copied/Cloned Systems shall be provided
by ICI to the Purchaser on Closing.
Page 458
11.2 If a Copied/Cloned System cannot be made available to the Purchaser by
Closing then ICI shall use its reasonable endeavours to ensure a Copied/Cloned
System is made available to the Purchaser as quickly as possible after Closing.
11.3 If within 3 months after Closing the Purchaser can demonstrate to the
reasonable satisfaction of ICI that a Copied/Cloned System was used during the 3
months before Closing and is required by the Purchaser to continue the
operations of the Business as operated by ICI immediately prior to Closing then
ICI will, subject to obtaining necessary consents, use its reasonable endeavours
to provide such Copied/Cloned System.
11.4 The Purchaser shall be responsible for the use of, the support and the
ongoing development of any Copied/Cloned System.
12. SEPARATION COSTS
12.1 ICI shall pay all of the following costs associated with the separation:
12.1.1 making ready/suitable for transfer any I.T. systems/services which are
not so and for which it is agreed this is a practical solution e.g.
Copying/Cloning; and
12.1.2 achieving separation tasks e.g. separation from ICI's Network, managing
exit from non-transferring I.T. systems, and managing impact on ICI's
Retained Group.
12.2 The Purchaser shall pay all of the following costs associated with the
separation:
12.2.1 taking and modifying I.T. systems/services transferred from ICI so that
they meet the Purchaser's requirements;
12.2.2 changing the Purchaser's I.T. systems/services to assimilate new
business, or creating any new I.T. systems/services needed e.g. network
services;
12.2.3 where the ICI Business is continuing to benefit from and is currently
paying or has agreed to pay an agreed share of millennium project costs
associated with a transferred system, costs on the same basis until the
millennium project is completed; and
12.2.4 the charges for using ICI's Networks between Closing and separation at
the same charging rates as charged to other members of ICI's Retained
Group.
Page 459
12.3 The parties shall bear their own costs of discharging their respective
obligations under paragraphs 9 and 10 above.
13. TRANSITIONAL SERVICES
13.1 So far as ICI is able and subject to any third party consents which may
be required, ICI shall make available to Purchaser the Transitional Services and
to that end the parties shall use their reasonable endeavours to agree (such
agreement not to be unreasonably withheld or delayed) before Closing a TSA and
Relevant Term Sheets to be attached to the TSA on the basis set out below.
13.2 Unless provided under paragraph 13.5 below, the Excluded Services shall
not be made available to the Purchaser.
13.3 If the Purchaser can demonstrate that the ICI Business requires:
13.3.1 an I.T. service not currently included as a Transitional Service which
was provided by ICI or a member of ICI's Retained Group to the ICI
Business immediately before Closing; and
13.3.2 that service is reasonably required by the Purchaser to continue the
operation of the Business as operated by ICI prior to Closing; then
the parties shall in good faith use their reasonable endeavours to agree term
sheets for the provision of such service (such agreement not to be unreasonably
withheld or delayed) in which case such service will be deemed to be a
Transitional Service. For the avoidance of doubt this paragraph 13.3 shall not
apply to Excluded Services.
13.4 ICI shall provide and the Purchaser shall purchase the agreed
Transitional Services for the Relevant Transitional Period.
13.5 If at Closing, the Purchaser, despite having used its reasonable
endeavours to do so, is unable to put in place alternatives to the Excluded
Services and such Excluded Services are required to avoid substantial disruption
to the ICI Business then ICI will use its reasonable endeavours to continue to
provide such Excluded Services to the Purchaser for a maximum of 3 months after
Closing.
13.6 The parties have agreed that the Polyurethanes Business should not
continue with its previous planned implementation of the standard support
environment service from IBM negotiated under Project Quantum pending further
discussions between the parties after signing and before Closing. It has also
been agreed that the Polyurethanes Business should continue its
Page 460
planned implementation of its standard operating environment under Project
Quantum. Subject to agreeing a Relevant Term Sheet for the provision of such a
Transitional Service, ICI is prepared to provide the standard support
environment service to the Purchaser on a transitional basis.
14. CHARGES AND PAYMENT FOR TRANSITIONAL SERVICES
14.1 The charge made by ICI for each Transitional Service will be set out in
the Relevant Term Sheet and shall be calculated in accordance with the following
principles:
14.1.1 on the same basis as those made by ICI or a member of ICI's Retained
Group to the ICI Business for that service; or, where explicit charges
are not being made at the time of Closing, the actual cost to ICI of
providing the service (or procuring a third party to provide all or part
of that service) together with a reasonable and proportionate amount of
its overheads in so doing; plus
14.1.2 where the ICI Business is currently paying or has agreed to pay an
agreed share of millennium project costs associated with that service,
those costs on the same basis until the millennium project is completed;
and
14.1.3 termination costs incurred by ICI for early exit as set out in the
relevant term sheets.
14.2 Charges shall be subject to increase or decrease as the case may be if:
14.2.1 associated costs change (including third party supplier costs); or
14.2.2 for any quarter, the volume usage of a Transitional Service by the ICI
Business increases or decreases by 10% or more over the volume usage of
that Transitional Service by the ICI Business in the previous quarter.
15. DURATION OF TRANSITIONAL SERVICES
15.1 The Relevant Transitional Period will be set out in the Relevant Term
Sheet. The parties agree that:
15.1.1 subject always to paragraph 15.1.2 below, no Relevant Term Sheet shall
have a duration in excess of 18 months beyond Closing unless and to the
extent that a Transitional Service is necessary to deliver to the
Purchaser a service for a greater period and that Transitional Service
is a service which the Purchaser cannot reasonably be expected to obtain
from another source; and
Page 461
15.1.2 no term sheet shall require ICI to supply any Transitional Services
which are dependent upon a third party supplier contract or third party
licences beyond the expiry date of such third party supplier contract or
third party licences; and
15.1.3 the parties will use reasonable endeavours to minimise the agreed
duration of Transitional Services.
15.2 Three months written notice of early termination is required unless
stated otherwise in Relevant Term Sheets.
15.3 Upon the expiry of a Transitional Service, ICI will provide reasonable
assistance to the Purchaser in liaising with current third party suppliers with
a view to establishing an ongoing direct service, but otherwise shall have no
obligation to provide or broker such on-going I.T. services.
15.4 In agreeing a Relevant Term Sheet, ICI may include an indication of
whether or not ICI would (so far as it is then able and subject to any third
party consents which may be required) be prepared to either renew the Relevant
Term Sheet for that Transitional Service or grant to the Purchaser a licence of
the I.T. systems used to deliver that Transitional Service, in both cases on
terms to be agreed by the parties before the expiry of the Relevant Term Sheet.
16. LIMITATIONS TO TRANSITIONAL SERVICES
16.1 Information/I.T. security is paramount and must not be compromised by or
for either party. Where security of ICI data cannot be adequately protected if
the Purchaser has direct access to a given I.T. system, then that I.T. system
will only be used indirectly through ICI staff or in accordance with other
arrangements agreed by ICI.
16.2 ICI will not be required to (a) modify or (b) extend the system life of
existing I.T. shared systems to meet the Purchaser's needs, other than in
circumstances in which Purchaser's business is at risk. The Purchaser would
bear the full cost for such modified/extended service.
16.3 To the extent that the Purchaser receives ICI site-based I.T. services,
it will comply with I.T. site infrastructure 'rules', and appoint a contact
responsible for compliance with these rules.
17. THIRD PARTY CONSENTS
17.1 ICI shall be responsible for obtaining any third party consents
necessary for the provision of the Transitional Services which it may agree to
Page 462
provide to the Purchaser in accordance with the provisions of the TSA. The
reasonable costs associated with obtaining such consents shall be deemed
included in the charges made by ICI to the Purchaser for the Transitional
Services.
17.2 ICI shall use its reasonable endeavours to obtain any consents necessary
from Zeneca to give effect to the provisions of this Schedule.
18. CHANGE CONTROL
Unless mutually agreed, no modifications will be made to ICI I.T. systems or
services on behalf of the Purchaser during the Relevant Transition Period. ICI
reserves the right to modify the systems for its own purposes during this time,
provided always that such modifications shall not adversely affect the
Transitional Services provided.
19. END OF TRANSITIONAL SERVICES
19.1. Subject to any exit charges specified in the Relevant Term Sheet, if,
during the Relevant Transition Period, the Purchaser (at its discretion)
contracts directly for a Transitional Service with any sub-contractor ICI uses
to supply that service, the Transitional Service shall cease on written notice
of such circumstances.
19.2. Where requested by the Purchaser, and subject to agreement by ICI (not
to be unreasonably withheld or delayed), ICI will provide assistance to the
Purchaser with its migration away from ICI systems and services at the end of
the Relevant Transition Period. The Purchaser shall be responsible for project
managing such work. This work will be covered by a migration support service
term sheet and will be charged on a time and materials basis.
20. TRANSITIONAL SERVICES FROM THE PURCHASER
20.1 Paragraphs 13 to 19 above relate to Transitional Services to be provided
by ICI to the Purchaser for a transitional period after Closing. The parties
agree that transitional I.T. services required from the Purchaser to ICI will be
provided on the same basis.
21. WARRANTY AND THE YEAR 2000
21.1 ICI will warrant in the TSA to be agreed that it will provide the
Transitional Services with reasonable skill and care, to the same standard as it
provides comparable services to other members of the ICI group from time to
time, using suitably qualified staff.
Page 463
21.2 ICI does not and will not warrant that the Transitional Services will be
accurate, uninterrupted, operable, or not adversely affected by any date
occurring before, after or during the Year 2000.
21.3 Subject to paragraph 21.1 above, ICI shall have no liability for any
inaccuracies, interruptions, inoperation or other affect caused by any date
occurring before, during or after the year 2000.
21.4 The Purchaser shall acknowledge when entering into the TSA that it has
not relied on any warranty, representation or undertaking given by ICI other
than those expressly set out in the TSA and in this Agreement.
22. FURTHER TERMS FOR TRANSITIONAL SERVICES
22. The parties agree that the terms of the TSA shall expressly include
terms substantially in the same form mutatis mutandis, as the clauses included
in attachment 5 to this Schedule save where:
(a) those terms cannot rationally be applied in the context of an agreement
for the provision of service; and
(b) additional terms or amended terms would be normal in the context of the
supply of such Transitional Services; or
(c) the parties expressly agree otherwise.
23. DISPUTES
23.1 In agreeing and implementing the terms of the TSA and any Relevant Term
Sheet the parties shall, and shall procure that the members of their respective
Retained Groups shall, act in such a way so that the recipient of any
Transitional Service shall be treated fairly and equitably in comparison with
any other members of the providers own Group who may receive the same service.
23.2 If, having used their reasonable endeavours and in good faith the
parties fail to agree:
23.2.1 the separation plan and timetable referred to in paragraph 9.1.4;
23.2.2 the terms of the TSA in accordance with paragraph 13.1;
23.2.3 the terms of any Relevant Term Sheet in accordance with paragraphs 13,
14, 15 and 16; or
Page 464
23.2.4 whether under paragraph 13.3 a service is required to be provided as a
Transitional Service
then the parties agree that such dispute shall constitute a Disputed Matter for
the purposes of clauses 15.9 to 15.12 of this Agreement and such dispute shall
be resolved having regard to the principles set out in this Schedule.
Page 465
PROJECT ALTA
I.T. SCHEDULE 20
ATTACHMENT I
EXCLUDED SOFTWARE
Page 466
EXCLUDED SOFTWARE
1. CAS/AU - Financial Management and Accounting Systems
2. Creditors Analysis - Creditor Analysis System
3. C&P Accounts - C&P Accounts System
4. Tax Reporting - Tax Reporting System
5. Merlin - Engineering Maintenance
6. NEWPS - Engineering Purchasing
7. PCMS - Project Cost Monitoring
8. Premium - Trip/Alarm Test Scheduling
9. IDSS (aka IQF) - Management Reporting from mainframe systems
10. CABS - Cash and Bank System
11. ICARUS - IT Supplier Charging System
12. SAP - Rozenburg - Rozenburg Engineering Purchasing System
13. Checkov - Annual Assurance System
Page 467
PROJECT ALTA
I.T. SCHEDULE 20
ATTACHMENT 2
LION'S I.T. SECURITY STANDARDS
Page 468
PROJECT ALTA
I.T. SCHEDULE 20
ATTACHMENT 3
TRANSITIONAL SERVICES
Page 469
TRANSITIONAL SERVICES
Part A : Services from ICI to the Purchaser
- -------------------------------------------
Polyurethanes
Quantum - IBM Global Desktop Service
Ibiza - IBM Local Infrastructure Services
Merlin - Engineering Maintenance System
NEWPS - Engineering Purchasing System
SAP/R2 - Rozenburg - Rozenburg Engineering Purchasing System
Relevant Petrochemicals
IDSS (aka as IQF) - Management Reporting System
Merlin - Engineering Maintenance System
NEWPS - Engineering Purchasing System
PCMS - Project Cost Monitoring
Premium - Trip/Alarm Test Scheduling System
RSS - Remote VAX System Support Service
Peoplesoft - HR System
Ibiza - IBM Local Infrastructure Services
Tioxide
None
Together with all such other I.T. Transitional Services which the parties shall
agree are to be supplied as Transitional Services from time to time under
paragraph 13.3
Part B :Services from the Purchaser to ICI
- ------------------------------------------
To be agreed.
Page 470
PROJECT ALTA
I.T. SCHEDULE 20
ATTACHMENT 4
EXCLUDED SERVICES
Page 471
EXCLUDED SERVICES
CAS/AU - Financial Management and Accounting Systems *
C&P Accounts - C&P Accounts System
Tax Reporting - Tax reporting System
CABS - Cash and Bank System
ICARUS - IT Supplier Charging System
Networks - ICI's WANs and LANs
OMNI - ICI's Lotus Notes Backbone service
Compuserve - Dial-in service
Shiva - Dial-in service
Checkov - Annual Assurance System
European VAT Reporting - European VAT Reporting System
VAT registrations - Creation and management of VAT registrations
Bank Interfaces - Creation and management of bank interfaces
ICI Business Systems - Transitional services will not be offered in
respect of IT systems transferred to the
Purchaser because such systems are used
exclusively or predominantly by a ICI Business
*These systems are not available to be accessed and used by ICI Business staff
as a Transitional Service. They will however be used to route data between SAP
R/3 and Merlin, NEWPS or PeopleSoft for as long as these latter three systems
are being provided as a Transitional Service to the Relevant Petrochemicals
Business by ICI.
Page 472
PROJECT ALTA
I.T. SCHEDULE 20
ATTACHMENT 5
Page 473
1. SUB-CONTRACTING
(1) For the avoidance of doubt, the Supplier may appoint sub-contractors to
supply the Services provided that:
(a) the Services shall be supplied in accordance with the provisions of this
agreement (including the relevant attachments hereto);
(b) the Supplier shall remain primarily liable for the provision of such
Services (to the extent that it is so liable under the terms and conditions
of this agreement); and
(c) no new sub-contractors who are required to work on or use assets belonging
to Service Recipient shall be appointed by the Supplier without the prior
written consent of Service Recipient (not to be unreasonably withheld or
delayed).
2. TERMINATION
(1) If either party shall have a receiver or administrator appointed, or shall
pass a resolution for winding-up (other than a winding-up for the purpose of, or
in connection with, any solvent amalgamation or reconstruction) or a court shall
make an order to that effect, or if a party shall enter into any composition or
arrangement with its creditors (other than relating to a solvent restructuring)
or shall cease to carry on business, then the other party may, without prejudice
to its other rights, terminate this agreement forthwith by written notice unless
it is reasonably satisfied that the party affected is able to continue and will
continue to perform its obligations under this agreement in full.
(2) If either party (the Breaching Party) is in wilful breach of this
agreement, the other party (the Non-Breaching Party) shall be entitled to serve
written notice on the Breaching Party notifying the Breaching Party that it
intends to terminate this agreement. If the Breaching Party remains in the
wilful breach of this agreement 30 days or more after the service of that
notice, then the Non-Breaching Party may serve a further notice immediately
terminating this agreement.
(3) Any waiver by either party of a breach of any provision of this agreement
shall not be considered to be a waiver of any subsequent breach of the same or
any other provision hereof.
(4) The right to terminate this agreement contained in this clause 2 shall not
prejudice any other right or remedy of either party in respect of any breaches
of this agreement.
Page 474
3. VAT AND SALES TAXES
(1) Unless otherwise provided, the price of each Service as set forth in the
relevant Schedule, shall not include any Value Added Tax (VAT) or other
applicable sales tax or duty, which (if applicable) shall be added to such price
in question (or any adjustment to that price) and shall be paid by Service
Recipient to the Supplier and in the case of VAT the Supplier shall issue to the
Service Recipient a proper VAT invoice in respect thereof.
4. LIABILITY
(1) Nothing in this agreement shall exclude or limit the liability of the
Supplier or Service Recipient or their affiliates or representatives for:
(a) death or personal injury resulting from the negligence as defined in the
Unfair Contract Terms Act 1977; or
(b) fraud or any other matter if and to the extent that, under English law,
liability for it cannot be excluded, restricted or limited as against
Service Recipient or the Supplier or their affiliates or representatives in
the context of this agreement.
(2) Except in the case of wilful breach of this agreement, in no event shall a
party be liable for loss of profits, loss of margin, loss of use, loss of
contract, loss of goodwill or any indirect or consequential losses of any nature
whatsoever, whether or not caused by or resulting from the negligence of such
party or a breach of its statutory duties or a breach of its obligations
howsoever caused.
(3) Except in the case of wilful breach of this agreement, the aggregate amount
of any claims of any kind, whether as to a Service provided or for the non-
provision of any Service, and whether or not based on negligence or other
tortious act or omission for a Relevant Transitional Period shall not be greater
in amount than the price of the relevant Service for that Relevant Transitional
Period (or 12 months if shorter) and failure to give notice of claim within 90
days from the date on which the Service was provided, or should have been
provided shall constitute a waiver by the Service Recipient of all claims in
respect of such Services.
(4) Service Recipient and Supplier (as the case may be) shall use all
reasonable endeavours to mitigate the loss and damage (if any) incurred by it as
a result of any breach by the other party of that other party's obligations
under this Agreement.
Page 475
(5) Neither party shall owe or incur any liability whatsoever to the other
party under this agreement (howsoever arising, whether in contract or in tort,
including negligence or otherwise), except in respect of breach of any
obligation, warranty or covenant contained in this agreement, subject to the
limitations expressly provided for in this agreement.
(6) Service Recipient acknowledges that this clause is fair and reasonable and
is reflected in the price for each Service. Service Recipient shall insure
and/or accept risk accordingly.
(7) Each of the restrictions in each paragraph or subclause above shall be
enforceable independently of each of the others and its validity shall not be
affected if any of the others is invalid. If any of those restrictions is void
but would be valid if some part of the restrictions were deleted, the
restriction in question shall apply with such modification as may be necessary
to make it valid.
5. FORCE MAJEURE
(1) The party affected shall be excused performance of its obligations under or
pursuant to this agreement if, and to the extent that, performance of such
obligations is delayed, hindered or prevented by Force Majeure.
(2) In the event of Force Majeure affecting the ability of the Supplier to
provide a Service hereunder, for the period of such Force Majeure the Supplier
shall be relieved of its obligations to provide such Service and Service
Recipient shall be relieved of its obligations to purchase such Service and
Service Recipient shall accordingly be reimbursed (where payment has already
been made) for the period during which the Service was not provided. To the
extent permitted by its legal obligations, Service Recipient shall, upon prior
written notice to the Supplier of such intention, have the right to purchase the
Service elsewhere at its own risk and cost, as may be necessary to cover its
requirements during the Force Majeure. The Supplier shall co-operate with
Service Recipient's efforts to obtain such substitute third party supply of
Services, including allowing a responsible third party reasonable access to that
Supplier's facilities for provision of such Service.
(3) If a party is prevented in whole or in part from performing its obligations
by reason of Force Majeure or is aware of the likelihood of being so prevented,
it shall notify the other party in writing immediately of the cause and extent
of such non-performance or likely non-performance, the date or likely date of
commencement thereof and the means proposed to be adopted to remedy or abate the
Force Majeure; and the parties shall without prejudice to the other provisions
of this clause 5 consult with a view to taking
Page 476
such steps as may be appropriate to mitigate the effects of such Force Majeure
on both parties.
(4) The party prevented from performing its obligations under this agreement by
reason of Force Majeure shall:
(a) use all reasonable endeavours to remedy or abate the Force Majeure as
expeditiously as possible; however, for the avoidance of doubt, nothing in
this clause 5 shall require the Supplier to purchase any Service from third
parties for resale to Service Recipient or shall require either party to
make good any shortfall in supply of Services due to the period of Force
Majeure after the end of the Force Majeure period or shall require either
party to settle or compromise any strike or labour dispute;
(b) keep the other party regularly informed during the period of Force Majeure
as to when resumption of performance shall, or is likely to, occur;
(c) notify the other party when the Force Majeure has ceased or the
circumstances have changed to an extent which permits resumption of
performance to occur; and
(d) resume performance as expeditiously as possible after the end of the period
of Force Majeure or the circumstances have changed to an extent which
permits resumption of such performance.
(5) Subject to any practical, logistical or physical limitation and without
prejudice to Service Recipient's rights under this agreement, if for any reason,
the resources available to the Supplier to provide any Service shall be
insufficient to satisfy the Supplier's requirements and those of its affiliates
and the Supplier's arrangements for the provision of that Service to third
parties (including Service Recipient) existing prior to the cause of the
insufficiency, then for so long as such insufficiency shall continue, the
Supplier shall apportion a fair and equitable manner the actual resources
available for the provision of the Service.
Page 477
SCHEDULE 21
DEFINITION OF POLYURETHANES BUSINESS
In this Agreement, Polyurethanes Business means:
(A) Development, manufacture (including for the avoidance of doubt manufacture
through toll manufacturing arrangements), distribution, marketing and sale
of (and the provision of related technical support services in respect of):
(i) nitrobenzene
(ii) aniline and its derivatives cyclohexylamine and dicyclohexylamine
(iii) nitric acid, dinitrotoluene and toluene diamine
(iv) diphenyl methane diisocyanate (MDI), its oligomers and isomers
(v) prepolymers of MDI and of its oligomers and isomers
(vi) toluenediisocyanate (TDI), its isomers and prepolymers
(vii) mixtures of any combination of (iv) to (vi) above
(viii) thermoplastic polyurethanes
(ix) Polyurethanes Polyols as defined below
(x) co-products and by-products in so far as they are made in the
course of manufacturing the above
and
(B) Blending of systems comprising any combination of (A)(iv) to (ix) and,
optionally, together with other ingredients such as polyols (other than
Polyurethanes Polyols) and additives as carried out at the following sites:
Shepton Mallet, Rozenburg, Deggendorf, Ternate, Everberg, Sumuttrakarn
Bangpu, Yin County Taoyuan, Shanghai Minhang, Guanzhou, West Deptford,
Sterling Heights, Geismar, Peel Mississauga and Cartagena, and such other
of the Properties as are described in Schedule 17 under the heading
Polyurethanes Business at which such blending of systems may be carried
out, but not at any other of ICI's operating sites. For the avoidance of
doubt, blending activities carried out by or on behalf of ICI's retained
Paints or
Page 478
Uniqema businesses at Everberg, Sumuttrakarn Bangpu and Guanzhou are not
included in this definition
and
(C) Development, distribution, marketing and sale of (and the provision of
related technical support services in respect of) such blended systems
referred to in (B) above
and
(D) Licensing of technology associated with the manufacture of (A)(i) to (x)
above and the blending referred to in (B) above
and
(E) Rendering of brokerage and intermediary trading and purchase for resale of
the products listed in A(i) to (x) above
all in each case as presently conducted by the Companies and Business Vendors.
Polyurethanes Polyols means:
(i) flexible polyether polyols which are hydroxyl-terminated polyethers made by
the addition of propylene oxide or propylene oxide and ethylene oxide on
one or more initiators selected from glycerol, trimethylolpropane,
diethylene glycol, dipropylene glycol and poly propylene glycols having
equivalent molecular weights in excess of 2000
(ii) rigid polyether polyols which are hydroxyl-terminated polyethers made by
the addition of propylene oxide or propylene oxide and ethylene oxide on
one or more initiators selected from water, maleic anhydride, bisphenol A,
ethylene glycol, diethylene glycol, glycerol, trimethylolpropane,
pentaerythritol, sorbitol, sucrose, triethanolamine, toluene diamine,
ethylene diamine, diaminodiphenylmethane and diethylene triamine
(iii)polyester polyols which are saturated polyesters with terminal hydroxyl
groups selected from poly (ethylene tetramethylene adipate) and polyesters
formed by the condensation reaction between one or more glycols selected
from glycerol, diethylene glycol, butane diol, trimethylolpropane,
caprolactone monomer, castor oil and monoethylene glycol and one or more
carboxylic acids selected from
Page 479
adipic acid, glutaric acid, succinic acid, dimethyl terephthalate and
phthalic acid.
Polyurethanes Polyols presently sold or under development includes
DALTOCEL AH 00500 DALTOLAC 80 DALTOREZ 1220
DALTOCEL B 110 DALTOLAC C 4 DALTOREZ 1320
DALTOCEL F 1606 DALTOLAC C 5 DALTOREZ 1520
DALTOCEL F 416 DALTOLAC D 40 DALTOREZ 1620
DALTOCEL F 417 DALTOLAC D 90 DALTOREZ 2360 A
DALTOCEL F 422 DALTOLAC DP531 DALTOREZ EA-20
DALTOCEL F 426 DALTOLAC P 120 DALTOREZ P 708
DALTOCEL F 428 DALTOLAC P 130 DALTOREZ P 716
DALTOCEL F 430 DALTOLAC P 140 DALTOREZ P 720
DALTOCEL F 432 DALTOLAC P 160 DALTOREZ P 723
DALTOCEL F 435 DALTOLAC P 170 DALTOREZ P 725
DALTOCEL F 436 DALTOLAC P 180 DALTOREZ P 726
DALTOCEL F 438 DALTOLAC P 190 DALTOREZ P 727
DALTOCEL F 442 DALTOLAC P 200 DALTOREZ P 732
DALTOCEL F 443 DALTOLAC P 210 DALTOREZ P 751
DALTOCEL F 448 DALTOLAC P 220 DALTOREZ P 765
DALTOCEL F 452 DALTOLAC P 230 DALTOREZ P 774
DALTOCEL F 455 DALTOLAC P 240 DALTOREZ P 775
DALTOCEL F 456 DALTOLAC P 260 DALTOREZ P 776
DALTOCEL F 457 DALTOLAC R 005 DALTOREZ P 778
DALTOCEL F 459 DALTOLAC R 018 DALTOREZ P 779
DALTOCEL F 460 DALTOLAC R 040 DALTOREZ P 875
DALTOCEL F 463 DALTOLAC R 090 DALTOREZ SF
DALTOCEL F 4801 DALTOLAC R 104 DALTOREZ TA-20
DALTOCEL F 481 DALTOLAC R 105 DALTOREZ TF
DALTOCEL F 488 DALTOLAC R 124 PBA 5075 A
DALTOCEL F 489 DALTOLAC R 130 PBA 5127
DALTOCEL F 516 DALTOLAC R 140 PBA 5408
DALTOCEL F 517 DALTOLAC R 144 SORANE P 125
DALTOCEL F 525 DALTOLAC R 145 SORANE P 132
DALTOCEL F 526 DALTOLAC R 151 SORANE P 176
DALTOCEL F 532 DALTOLAC R 159 SORANE P 179 S
DALTOCEL F 540 DALTOLAC R 160 SORANE PD 65
DALTOCEL F 548 DALTOLAC R 170 DALTOLAC P 710
DALTOCEL F 634 DALTOLAC R 180 DALTOLAC P 744
DALTOCEL F 660 DALTOLAC R 190 DALTOLAC P 767
DALTOCEL F 681 DALTOLAC R 200 H 76798
DALTOCEL T 112 DALTOLAC R 210 PBA 5044A
DALTOCEL T 160 DALTOLAC R 230 PBA 5513
DALTOCEL T 48 35 DALTOLAC R 240 DALTOLAC P 510
DALTOCEL T 56 DALTOLAC R 260 RUBINOL R 744
PBA 7516 DALTOLAC R 304 RUBINOL R 805
PBA 7517 DALTOLAC R 352
DALTOCEL F 2805 DALTOLAC SW
DALTOCEL F 3001 H 88025
DALTOCEL T 32/75 PBA 3040
Page 480
DALTOCEL F 3507 PBA 5051-1
DALTOCEL F 3601 PBA 5059
DALTOCEL PA 38 PBA 5059-1
DALTOCEL F 4803 PBA 5144
DALTOCEL F 5204 PBA 5786
DALTOCEL F 5502 UROPOL G 1652
DALTOCEL B 56 UROPOL G 790
PBA 1657 UROPOL TG 542
PBA 5159 RUBINOL R 015
PBA 5160 RUBINOL R 128
PBA 5181 RUBINOL R 140
PBA 5160 RUBINOL R 146
DALTOCEL T 32/75S RUBINOL R 162
PBA 5151 RUBINOL R 180
LUBROL FSA RUBINOL R 241
PBA 5130 RUBINOL R 242
RUBINOL F 428 RUBINOL R 243
RUBINOL F 436 RUBINOL R 244
RUBINOL F 443 RUBINOL R 245
RUBINOL F 455 RUBINOL R 246
RUBINOL F 456 RUBINOL R 247
RUBINOL F 460 RUBINOL R 260
RUBINOL F 517 RUBINOL XR 005
RUBINOL F 995 RUBINOL XR 102
RUBINOL XF 417 RUBINOL XR 118
RUBINOL XF 999 RUBINOL XR 119
RUBINOL XR 124
RUBINOL XR 135
and such other polyols as are manufactured at the Properties listed in Schedule
17 under the heading Polyurethanes Business but excluding any other polyols
manufactured by ICI at any other of ICI's operating sites.
Page 481
SCHEDULE 22
National Selling Companies
1. In this Schedule, and in relation to NSC Companies in Schedule 12, the
following expressions shall have the following meanings:
NSC Companies means the companies listed in this schedule (and any other
companies agreed between the parties) and which provide agency, support and
other services to the Companies and/or Business Vendors or any of them.
NSC Employees means those employees (and secondees) who are employed by (or who
are seconded to) the NSC Companies and who, on average, spend 50% or more of
their time providing services to the ICI Business.
2.1 Each NSC Company will continue to provide services to Tioxide,
Polyurethanes and Relevant Petrochemicals (the NSC Services) on the same basis
that those NSC Services are provided immediately prior to the date of this
Agreement for a maximum period of two years after Closing (the Transitional
Period).
2.2 The Purchaser will pay or procure the payment of all costs and charges
(including, without limitation, employee costs and contributions to business
accommodation costs) arising in connection with the provision of the NSC
Services during the Transitional Period on the same basis as such costs and
charges are payable immediately prior to the date of this Agreement.
2.3 If the Purchaser wishes to terminate the provision of any of the NSC
Services before the end of the Transitional Period it may do so by giving ICI
not less than 12 months written notice of termination of such NSC Services, such
notice to be served not later than 12 months from the date of Closing.
Notwithstanding the foregoing, where there is a written agreement evidencing the
basis on which an NSC Service is provided and which specifies a notice period of
shorter than 12 months, that shorter notice period shall prevail.
2.4 With effect from termination of the provision of an NSC Service (the
Termination Date), the Purchaser will offer employment to any NSC Employee
engaged in the provision of that NSC Service and who is required by the
Purchaser or a relevant member of the Purchaser's Group. Any such offer (and
where relevant the transfer of any employment contract by operation of law)
shall be subject to applicable legislation or other laws.
2.5 Each such NSC Employee shall be treated as if he were a Business Employee
and the provisions of clauses 6.10, 8.1(a), 9, 10(3)(e) and the provisions of
Schedules 9 and 11 of the Agreement, shall apply in relation to
Page 482
such NSC Employee mutatis mutandis, and subject in particular to the following:
(i) the indemnity in clause 8.1(a) shall apply from Closing;
(ii) in clause 9.1, the Applicable Period shall commence at Closing, but
the Purchaser shall only be obliged to procure the employment of
the NSC Employee from the Termination Date and on terms and
conditions no less favourable as a whole than those applicable to
him at the Termination Date;
(iii) in clauses 6.10, 9.2 and 9.6, reference to the Termination Date
shall be substituted for reference to Closing; and
(iv) in Schedule 11, Part 1 A, paragraph 2.1, reference to the
Termination Date shall be substituted for reference to Closing in
sub paragraph (a), and Part 1 C shall not apply.
So far as possible the assets used and/or owned by the NSC Company for the
purpose of providing the NSC Service will be transferred to the Purchaser at
cost or net book value. All liabilities relating to moveable property
(including, but not limited to, vehicles, office and computer equipment) used by
such NSC Employees in providing the NSC Service will be assumed by the Purchaser
at the end of the Transitional Period unless the parties agree otherwise.
2.6 The Purchaser will further indemnify ICI and each member of the ICI
Retained Group against all Costs which relate to or arise out of the termination
of the employment of any NSC Employee who is offered employment by the Purchaser
or a member of the Purchaser's Group in accordance with clause 2.4 above and of
any NSC Employee who is not offered employment by the Purchaser and whose
contract of employment terminates or is terminated by ICI or a member of the ICI
Retained Group. For the avoidance of doubt, this indemnity will apply where an
NSC Employee refuses to transfer, notwithstanding an offer of employment by the
Purchaser.
2.7 The parties shall co-operate in good faith to minimise any costs associated
with the termination of each NSC Service.
2.8 The parties acknowledge that it may, subject to agreement between the
parties, be appropriate to transfer the shares of particular NSC Companies to
the Purchaser after Closing (becoming a Transferred NSC Company) but before the
end of the Transitional Period. Any such transfer will be subject to the terms
provided mutatis mutandis in the Agreement. Where a
Page 483
Transferred NSC Company provides a sales agency service to ICI or any member of
the Retained ICI's Group (the Excluded Service) immediately prior to such
transfer, such Excluded Service will continue to be provided mutatis mutandis on
the terms specified in clauses 2.1 (but only for the period from the date of
such transfer to the end of the Transitional Period) - 2.4 and the provisions of
clauses 2.6 and 2.7 shall apply in relation to the employees of the Transferred
NSC Company engaged in the provision of the Excluded Service on termination of
the provision of that Excluded Service.
NSC COMPANIES
POLYURETHANES
*Please note that the list below may not be exhaustive
France - ICI France SA
Hong Kong - ICI China Ltd.
Czech Republic - ICI Cz sro
ICI International Limited - a number of branches in East Europe
Slovakia - ICI Slovakia sro
Poland - ICI Polska Sp.zo.o
Hungary - ICI Hungary Kft
Japan - ICI Japan Ltd.
Korea - ICI Korea Ltd
Malaysia - ICI (Malaysia) Holdings Sdn Bhd
Scandanavia - ICI Norden
Singapore - ICI (Singapore) Private Ltd.
Page 484
TIOXIDE
- ------------------------------------------------------------------------------
COUNTRY COMPANY
==============================================================================
ASIA
- ------------------------------------------------------------------------------
Japan ICI Japan (100% ICI owned)
- ------------------------------------------------------------------------------
South Korea ICI Korea - Exclusive for Fibres grades
- ------------------------------------------------------------------------------
Taiwan ICI Dulux (100% ICI owned)
- ------------------------------------------------------------------------------
Hong Kong ICI China (100% ICI owned)
- ------------------------------------------------------------------------------
Thailand National Starch (100% ICI owned)
- ------------------------------------------------------------------------------
Vietnam ICI Vietnam (100% ICI owned)
- ------------------------------------------------------------------------------
India IC India (51% ICI owned)
- ------------------------------------------------------------------------------
Pakistan ICI Pakistan (61% ICI owned)
- ------------------------------------------------------------------------------
Sri Lanka ICI Sri Lanka (40% ICI owned)
- ------------------------------------------------------------------------------
MIDDLE EAST
- ------------------------------------------------------------------------------
Saudia Arabia ICI Saudi Arabia (40% ICI owned)
- ------------------------------------------------------------------------------
Israel ICI Israel (100% ICI owned)
- ------------------------------------------------------------------------------
EASTERN EUROPE
- ------------------------------------------------------------------------------
CIS ICI (100% ICI owned)
- ------------------------------------------------------------------------------
Czech Republic ICI (100% ICI owned)
- ------------------------------------------------------------------------------
Hungary ICI (100% ICI owned)
Poland ICI (100% ICI owned)
- ------------------------------------------------------------------------------
Bulgaria ICI (100% ICI owned)
- ------------------------------------------------------------------------------
EUROPE
- ------------------------------------------------------------------------------
Switzerland ICI (Switzerland) AG (99.2% ICI owned)
- ------------------------------------------------------------------------------
Page 485
SCHEDULE 23
INDEMNITY
Wilton aniline pipe indemnity
1 In this Schedule the following terms shall have the following meanings:
Aniline Pipe means the pipeline (in part running through the No. 2 Tees Tunnel
and known as System 98) existing at the date of this Agreement which is used by
the Polyurethanes Business for the transfer of aniline from the Wilton Plant to
the Tees Storage Tanks;
BP means BP International Limited and its successors in title
Tees Storage Tanks means the storage tanks used at the date of this Agreement by
the Polyurethanes Business at Seal Sands Teesside England;
Wilton Plant means the Polyurethanes Plant at Wilton, England.
2. If:
(a) at any time during the period of ten years following Closing, BP serve
notice in consequence of which the Designated Purchaser's right to use the
Aniline Pipe will be lost or
(b) ICI so elects (at its discretion) or
(c) the period of ten years following Closing expires without either of the
events mentioned in (a) or (b) above having occurred
the provisions of the following paragraphs of this Schedule shall apply.
3. ICI shall provide or procure the provision to the Designated Purchaser at
the cost of ICI of such facilities as shall be reasonably required to enable the
Purchaser to continue to convey aniline produced by the Polyurethanes Business
(in quantities no greater than those capable of being conveyed by the Aniline
Pipe at the date the right is lost or (as the case may be) the relevant event
mentioned in paragraph 2 occurs) to the Tees Storage Tanks or to some other
reasonably convenient location for export via the River Tees (the Export
Alternative).
4. The nature of the Export Alternative shall be subject to the prior written
approval of the Purchaser which shall not be unreasonably withheld or delayed in
the case of an Export Alternative which is reasonably
convenient practicable and commercially sensible commensurate with the
requirements of both parties to use all reasonable endeavours to ensure that:
(a) any costs associated with operating the Export Alternative are not
materially greater than the then current costs of operating the Aniline
Pipe (as increased by RPI and any reasonable operating requirements);
(b) the operational risks associated with implementation of the Export
Alternative are not materially greater than the operational risks of
operating the Aniline Pipe; and
(c) any costs associated with providing and implementing the Export Alternative
are minimised in so far as reasonably practicable.
5. Without prejudice to the generality of the foregoing ICI and the Purchaser
agree that acceptable Export Alternatives under paragraph 4 above would include
any, or any combination, of the following:
(a) the construction of a new Aniline Pipe (or of a new part or parts thereof)
to a functional specification reasonably equivalent in all material
respects to that of the Aniline Pipe;
(b) the provision by ICI to the Designated Purchaser of the whole or some part
or parts of an existing pipeline or pipelines in substitution of the
Aniline Pipe or parts of it to a functional specification reasonably
equivalent in all material respects to that of the Aniline Pipe;
(c) procuring that BP relinquishes any right or entitlement to use (and any use
of) the Affected Pipe (whether by providing to BP a pipeline for use by BP
in replacement for the Affected Pipe or otherwise);
(d) the provision of new storage tanks and ancillary apparatus adjoining the
River Tees with access to and use of loading and berthing facilities at
least equivalent in all material respects to those enjoyed at the date of
this Agreement such that cargo sizes need to be no smaller and access to
berthing facilities no less frequent than at the date of this Agreement
(whether or not in conjunction with any or all of terms (a) (b) and/or(c)
above);
but not so as to limit in any way the generality of paragraph 4 above.
6. ICI will bear and be responsible for any costs which may be incurred in:
(a) obtaining from third parties; and/or
Page 487
(b) providing over ICI's retained land
any easement wayleaves or other rights which may be needed for the routing
and/or location of any pipes cables tankage or other apparatus needed to render
viable and implementable the Export Alternative (Export Apparatus) Provided That
the Purchaser will afford to ICI (at ICI's reasonable cost) any assistance which
may be reasonably required in negotiating with third parties in regard to the
acquisition of any rights required.
7. ICI will bear and be responsible for the cost of constructing any Export
Apparatus (or where the Export Apparatus includes any pipes or other apparatus
made available by ICI for the cost of any refurbishment reasonably required by
the Designated Purchaser to implement the Export Alternative).
8. The provisions of clauses 12.2, 12.8 - 12.11 (inclusive), 12.15 and 13.1 of
the Agreement shall apply (mutatis mutandis) to the matters set out in this
Appendix as if a claim made by the Purchaser pursuant to this Schedule were a
Claim.
9. ICI will bear any difference between the increased cost of operating the
Export Alternative and the cost that would have been incurred in operating the
Aniline Pipe for a period of ten years from Closing. In the event of any
dispute as to such difference in costs the provisions of paragraph 2.6 of Part
VII of Schedule 17 shall apply.
10. If ICI has not procured that the Export Alternative is made available for
use prior to the date on which the use by the Designated Purchaser of the
Aniline Pipe is terminated, ICI will arrange at its cost to the reasonable
satisfaction of the Designated Purchaser transport for the transfer of aniline
from the Wilton Plant to the Tees Storage Tanks until the Export Alternative is
made available for use (subject to the quantities of aniline being no greater
than those capable of being conveyed by the Aniline Pipe at the date its use by
the Designated Purchaser is terminated).
11. Once ICI has made the Export Alternative available for use in accordance
with this Schedule 23 ICI's obligations under this Schedule shall cease and
determine.
Page 488
SCHEDULE 24
Assets Included In the Relevant Petrochemicals Business
1. WILTON SITE
1.1 No. 6 Cracker and ancillary plants
- --------------------------------------------------------------------------------------------------------------------
Plot/Assets Comments Asset Ownership
- --------------------------------------------------------------------------------------------------------------------
JV06 + land "footprint" See map/plot ICI 80% BPCL 20%
- --------------------------------------------------------------------------------------------------------------------
incl. JVB3 Wilton. 1.1 ICI 80% BPCL 20%
- --------------------------------------------------------------------------------------------------------------------
incl. GTU ICI 80% BPCL 20%
- --------------------------------------------------------------------------------------------------------------------
1.2 Olefins Storages including cavities, Butadiene storage, Olefins 5 and
Ethylene Control
- --------------------------------------------------------------------------------------------------------------------
Plot/Assets Comments Asset Ownership
- --------------------------------------------------------------------------------------------------------------------
Wilton Ethylene Control (compressors, Within Cracker No.5 area ICI
driers, lines, gas distribution etc.)
- --------------------------------------------------------------------------------------------------------------------
Wilton Ethylene cavities (2, 3, 6, 7, 8 & 5 Total Capacity as ethylene is 51,750 mt ICI
decomm'd)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
All other associated Ethylene System Equip. ICI
- --------------------------------------------------------------------------------------------------------------------
Naphtha storage F 1962 A/B ICI
- --------------------------------------------------------------------------------------------------------------------
All other associated Naphtha System Equip. Includes link line to North Tees ICI
- --------------------------------------------------------------------------------------------------------------------
Refined Butadiene Storage (F1940 A/B & Capacity is 10 kt ICI
F1946)
- --------------------------------------------------------------------------------------------------------------------
Raffinate - 1 storage NF 1364/1365 2 spheres each 2000 mt ICI
- --------------------------------------------------------------------------------------------------------------------
Mixed C4's cavity (W4) Capacity approx. 12 kt. ICI
- --------------------------------------------------------------------------------------------------------------------
All other associated Gasoline System Equip. ICI
South of River Tees outside Teesport
- --------------------------------------------------------------------------------------------------------------------
Certain associated olefin equipment (e.g. ICI/4/
flare, WEC, etc)
- --------------------------------------------------------------------------------------------------------------------
Olefins South offices ICI
- --------------------------------------------------------------------------------------------------------------------
Workshops/No. 4 depot ICI
- --------------------------------------------------------------------------------------------------------------------
Raw pygas storage F1961 ICI
- --------------------------------------------------------------------------------------------------------------------
________________________________________________________________________________
/4/ The ownership of land at this site shall be included in the transfer but the
Olefins 5 Site (and Butadiene 2) shall be excluded. See Schedule 12.
Page 490
WILTON SITE
1.3 Central Control Area
- -----------------------------------------------------------------------------------------------------------------------------
Plot/Assets Comments Asset Ownership
- -----------------------------------------------------------------------------------------------------------------------------
Central Control Area including propylene Propylene system, Propane system, B'd & ICI
system (NF 38 a/b) and pumps Raff-1 system, pygas & C5 systems,
naphtha system all run by Central Control.
- -----------------------------------------------------------------------------------------------------------------------------
Road loading terminal -
Propylene
Butadiene
Propane
- -----------------------------------------------------------------------------------------------------------------------------
But also CHX, Benzene, where an
operating agreement for various third party
(incl. UCI) needs would be required.
Includes flare stack on adjacent plot.
- -----------------------------------------------------------------------------------------------------------------------------
Page 491
WILTON SITE
1.4 Brine reservoirs
- -----------------------------------------------------------------------------------------------------------------------------
Plot/Assets Comments Asset Ownership
- -----------------------------------------------------------------------------------------------------------------------------
Brine Reservoirs (4) Reservoirs 1, 2, 3, 4 ICI
- -----------------------------------------------------------------------------------------------------------------------------
2. NORTH TEES WORKS
2.1 Ethylene liquefaction and Export Terminal, Propylene Export Terminal - (To
be operated by NTL)
- -----------------------------------------------------------------------------------------------------------------------------
Assets Comments Asset Ownership
- -----------------------------------------------------------------------------------------------------------------------------
NTL area and equipment Essentially the Riverside area, tank storage ICI
areas, and the cavity storage areas
- -----------------------------------------------------------------------------------------------------------------------------
Ethylene Liquefaction Units & associated Includes storage tanks (2) Units 2A, 2B, 3. ICI
equipment
- -----------------------------------------------------------------------------------------------------------------------------
Ethylene export/import equipment (loading ICI
arms, etc.)
- -----------------------------------------------------------------------------------------------------------------------------
Propylene export/import sphere N 920F ICI
- -----------------------------------------------------------------------------------------------------------------------------
Page 492
- -----------------------------------------------------------------------------------------------------------------------------
Associated Propylene equipment & export kit ICI
- -----------------------------------------------------------------------------------------------------------------------------
Tanks N900F, N901F, N902F, N903F Formerly used for gasoline components ICI
- -----------------------------------------------------------------------------------------------------------------------------
NORTH TEES WORKS
2.2 Naphtha Import/Export Terminal
- -----------------------------------------------------------------------------------------------------------------------------
Assets Comments Asset Ownership
- -----------------------------------------------------------------------------------------------------------------------------
Naphtha Storage Includes import/export system at NTL and ICI
N904/905/906F System 30 to Wilton
- -----------------------------------------------------------------------------------------------------------------------------
Page 493
NORTH TEES WORKS
2.3 Others
- -----------------------------------------------------------------------------------------------------------------------------
Assets Comments Asset Ownership
- -----------------------------------------------------------------------------------------------------------------------------
Certain Other North Tees Cavities and Brine ICI
Winning system
- -----------------------------------------------------------------------------------------------------------------------------
Link lines - systems 28 and 29 - Wilton to Not used for several years and re-used by ICI
North Tees ICI (Polyurethanes Business)
- -----------------------------------------------------------------------------------------------------------------------------
System 31 (part) Capacity up to 800 tpd ICI
Propylene to BASF
- -----------------------------------------------------------------------------------------------------------------------------
Propane and butane link lines from Phillips System 35 and that part of System 34 from ICI
UK at Seal Sands to JV06 at Wilton via Phillips Petroleum to Wilton
No. 2 tunnel
- -----------------------------------------------------------------------------------------------------------------------------
North Tees Jetties including Jetty 1A ICI
- -----------------------------------------------------------------------------------------------------------------------------
NTL/CDC Riverfront footprint/associated ICI
assets not mentioned above
- -----------------------------------------------------------------------------------------------------------------------------
Page 494
3. TEESPORT
- -----------------------------------------------------------------------------------------------------------------------------
Assets Comments Asset Ownership
- -----------------------------------------------------------------------------------------------------------------------------
Teesport equipment to be allocated ICI (leased)
- -----------------------------------------------------------------------------------------------------------------------------
Pygas/C5's Storage and associated pumps for ICI
loading/export/import
- -----------------------------------------------------------------------------------------------------------------------------
Arthur Taylor Jetty - One loading arm Used for butadiene, mixed C4s or ICI (leased jetty)
Raffinate-1
- -----------------------------------------------------------------------------------------------------------------------------
West Byng, Jetty - loading arms 1 x C4's butadiene, raffinate - 1 arm ICI (leased jetty)
1 x C4/pygas arm
- -----------------------------------------------------------------------------------------------------------------------------
Flare stack Used for C4s ICI
- -----------------------------------------------------------------------------------------------------------------------------
QE2 Jetty Not in use currently ICI (leased jetty)
- -----------------------------------------------------------------------------------------------------------------------------
4. OLEFINS OFFSITES
4.1 Easements to retain existing off-plot pipelines, apparatus, equipment
infrastructure (if any) dedicated to Olefins Operations.
Page 495
5. WILTON GRANGEMOUTH ETHYLENE PIPELINE
- -----------------------------------------------------------------------------------------------------------------------------
Assets Comments Asset Ownership
- -----------------------------------------------------------------------------------------------------------------------------
ICI share of WGEP ICI 50%, BPCL 50%
- -----------------------------------------------------------------------------------------------------------------------------
Assignment of Deed of Grant of Easement Shown in red on Plan
- -----------------------------------------------------------------------------------------------------------------------------
Deed of Grant of Easements for sections on
ICI retained land, no. 2 tunnel, etc,
- -----------------------------------------------------------------------------------------------------------------------------
6. TRANS-PENNINE ETHYLENE PIPELINE
- -----------------------------------------------------------------------------------------------------------------------------
Assets Comments Asset Ownership
- -----------------------------------------------------------------------------------------------------------------------------
TPEP including LDS/metering at Runcorn ICI
- -----------------------------------------------------------------------------------------------------------------------------
Associated Ethylene compress/conditioning ICI
plant at Lostock
- -----------------------------------------------------------------------------------------------------------------------------
Assignment of deed of Grant of Easement Shown in red on Plan
of TPEP
- -----------------------------------------------------------------------------------------------------------------------------
Deed of Grant of Easement for TPEP sections
on ICI retained land at Wilton.
- -----------------------------------------------------------------------------------------------------------------------------
Page 496
Schedule 24 (CONTINUED)
ASSET LISTING FOR NORTH TEES
Assets at North Tees included in Relevant Petrochemicals Business
The assets included are generally those within the "Aromatics" and "Logistics"
boundaries on the maps of the North Tees site and the Saltholme brinefields and
include assets forming part of the Olefines Manufacturing Business.
- --------------------------------------------------------------------------------
INCLUDED
- --------------------------------------------------------------------------------
DESCRIPTION REFERENCE DUTY OUT OF
INFORMATION SERVICE?
- --------------------------------------------------------------------------------
Plants: Aromatics I
- --------------------------------------------------------------------------------
Aromatics II
- --------------------------------------------------------------------------------
Cumene
- --------------------------------------------------------------------------------
Ethylene Liquifaction Plants 2A, 2B, 3
plants
- --------------------------------------------------------------------------------
Effluent treatment
- --------------------------------------------------------------------------------
Jetties 1, 1A, 2, 3, Jetty 1 Berth only available y
including loading
facilities:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Jetty 1A with Ethylene Some loading facilities
propylene loading only on jetty 1A.
- --------------------------------------------------------------------------------
Jetty 2 Loading facilities for
multiple products.
- --------------------------------------------------------------------------------
Jetty 3 Loading facilities for
multiple products.
- --------------------------------------------------------------------------------
Some loading facilities
only on jetty 4.
- --------------------------------------------------------------------------------
Tanks (including F8/001 Reformer Naphtha
- --------------------------------------------------------------------------------
associated lines and F8/002 Reformer Naphtha
- --------------------------------------------------------------------------------
pump systems): F8/003 Reformer Naphtha/BPN
- --------------------------------------------------------------------------------
N-3018F Reformer Naphtha
- --------------------------------------------------------------------------------
N-3000F Reformer Naphtha
- --------------------------------------------------------------------------------
N-5003F Ethyle Benzene.
(ship)
- --------------------------------------------------------------------------------
Page 499
- --------------------------------------------------------------------------------
N-5004F Ethyle Benzene.
(ship)
- --------------------------------------------------------------------------------
N-5005F Ethyle Benzene. (Run
Down)
- --------------------------------------------------------------------------------
N-5006F Ethyle Benzene. (Run
Down)
- --------------------------------------------------------------------------------
N-5007F Ethyle Benzene. (Run
Down)
- --------------------------------------------------------------------------------
N-3019F Cyclohexane
- --------------------------------------------------------------------------------
N-3020F Cyclohexane
- --------------------------------------------------------------------------------
N-3021F Cyclohexane
- --------------------------------------------------------------------------------
N-5000F Cyclohexane
- --------------------------------------------------------------------------------
N-5001F Cyclohexane
- --------------------------------------------------------------------------------
N-5002F Cyclohexane. (Off
spec.)
- --------------------------------------------------------------------------------
N-5014F C9's
- --------------------------------------------------------------------------------
N-5015F C9's
- --------------------------------------------------------------------------------
N-3007F C9's
- --------------------------------------------------------------------------------
N-3008F C9's Column
Bottoms(petrinex T9)
- --------------------------------------------------------------------------------
N-3009F Cumene Col Bottoms
(aromasol 12)
- --------------------------------------------------------------------------------
N-3010F Benzene
- --------------------------------------------------------------------------------
N-3011F Benzene
- --------------------------------------------------------------------------------
N-904F Cracking Naphtha
(BPN)
- --------------------------------------------------------------------------------
N-5008F Benzene
- --------------------------------------------------------------------------------
N-5009F Benzene
- --------------------------------------------------------------------------------
N-2800F Cumene
- --------------------------------------------------------------------------------
N-2801F Cumene
- --------------------------------------------------------------------------------
N-2802F Cumene (off spec.)
- --------------------------------------------------------------------------------
2401F Oil rundown tank
PIP's (redundant)
- --------------------------------------------------------------------------------
N-2750F De-Ballast. (floating
roof)
- --------------------------------------------------------------------------------
N-2402FA De-Ballast. (open
tank)
- --------------------------------------------------------------------------------
Page 500
- --------------------------------------------------------------------------------
N-2402FB De-Ballast. (open
tank)
- --------------------------------------------------------------------------------
N-2402FC De-Ballast. (fixed
roof )
- --------------------------------------------------------------------------------
N-3002F Toluene
- --------------------------------------------------------------------------------
N-5010F Toluene
- --------------------------------------------------------------------------------
N-5011F Toluene
- --------------------------------------------------------------------------------
P-902F Propylene Sphere.
- --------------------------------------------------------------------------------
675F Ethylene
- --------------------------------------------------------------------------------
602F Ethylene
- --------------------------------------------------------------------------------
P-900F C6? empty
- --------------------------------------------------------------------------------
P-901F C8's
- --------------------------------------------------------------------------------
P-902F Toluene
- --------------------------------------------------------------------------------
P-903F C7's/ Toluene
- --------------------------------------------------------------------------------
N-905F Cracking Naphtha.
(BPN)
- --------------------------------------------------------------------------------
N-906F Cracking Naphtha.
(BPN)
- --------------------------------------------------------------------------------
F8/004 Toluene
- --------------------------------------------------------------------------------
N-5012F Xylene
- --------------------------------------------------------------------------------
N-5013F Xylene
- --------------------------------------------------------------------------------
N-5026F Xylene
- --------------------------------------------------------------------------------
N-5018F Pentane
- --------------------------------------------------------------------------------
N-5019F Iso Raffinate y
- --------------------------------------------------------------------------------
N-3029F HSFO
- --------------------------------------------------------------------------------
N-5017F Gasoil - Washoil Aro
II
- --------------------------------------------------------------------------------
N-3027F Redundant Methanol
- --------------------------------------------------------------------------------
N-3006F Crude Aromatics (Aro I)
- --------------------------------------------------------------------------------
N-3001F Platfinate. (Aro I)
- --------------------------------------------------------------------------------
N-1009F Crude Aromatics (Aro
II)
- --------------------------------------------------------------------------------
N-1008F Reformate. (Aro II)
- --------------------------------------------------------------------------------
N-2780F Premium Motor Spirit.
(PMS)
- --------------------------------------------------------------------------------
Page 501
- --------------------------------------------------------------------------------
N-2781F Unleaded Motor
Spirt. (PUMS)
- --------------------------------------------------------------------------------
N-2782F Premium Motor
Spirit. (PMS) y
- --------------------------------------------------------------------------------
N-2783F Unleaded Motor
Spirt. (PUMS) y
- --------------------------------------------------------------------------------
N-2205F Firewater
- --------------------------------------------------------------------------------
2206F Water Tank
- --------------------------------------------------------------------------------
N-3701F Methanol Tank
(Propane Ship Exp)
- --------------------------------------------------------------------------------
cavities (incl 47 Crude oil
wellhead and
associated equipment):
- --------------------------------------------------------------------------------
48 Crude oil
- --------------------------------------------------------------------------------
49 Crude oil
- --------------------------------------------------------------------------------
51 Light rejects
- --------------------------------------------------------------------------------
52 Gas oil y
- --------------------------------------------------------------------------------
54 Gas oil y
- --------------------------------------------------------------------------------
56 Crude oil y
- --------------------------------------------------------------------------------
57 LPG
- --------------------------------------------------------------------------------
64 CO y
- --------------------------------------------------------------------------------
68 Naphtha
- --------------------------------------------------------------------------------
69 Naphtha
- --------------------------------------------------------------------------------
72 Nitrogen
- --------------------------------------------------------------------------------
73 Nitrogen
- --------------------------------------------------------------------------------
74 Propylene
- --------------------------------------------------------------------------------
75 hydrogen
- --------------------------------------------------------------------------------
76 hydrogen
- --------------------------------------------------------------------------------
77 hydrogen
- --------------------------------------------------------------------------------
85 BASF propylene
- --------------------------------------------------------------------------------
82 propane
- --------------------------------------------------------------------------------
97 propane
- --------------------------------------------------------------------------------
98 propane
- --------------------------------------------------------------------------------
99 propane
- --------------------------------------------------------------------------------
Page 502
- -------------------------------------------------------------------------------------------------
43 ex-brine winning y
cavities in the
bounded area.
- -------------------------------------------------------------------------------------------------
4 ex-storage cavities, y
no longer usable.
- -------------------------------------------------------------------------------------------------
4 new cavities part
developed on No.6
field.
- -------------------------------------------------------------------------------------------------
Brine reservoirs, Nos. 1 & 2 That part of the brine
incl. associated reservoirs owned by
equipment ICI.
- -------------------------------------------------------------------------------------------------
No. 3 Brine reservoir.
- -------------------------------------------------------------------------------------------------
Road tanker gantries: 1 C9's
- -------------------------------------------------------------------------------------------------
pentane
- -------------------------------------------------------------------------------------------------
toluene y
- -------------------------------------------------------------------------------------------------
benzene y
- -------------------------------------------------------------------------------------------------
2 toluene y
- -------------------------------------------------------------------------------------------------
aromosal 12
- -------------------------------------------------------------------------------------------------
cumene
- -------------------------------------------------------------------------------------------------
EB's
- -------------------------------------------------------------------------------------------------
Link and vein lines All pipelines listed
(incl. service on the attached table
distribution lines): except for system 36
- -------------------------------------------------------------------------------------------------
Land: as per land maps in
A1, A2, A3, A4
- -------------------------------------------------------------------------------------------------
Others: Site drains.
- -------------------------------------------------------------------------------------------------
Other site
infrastructure e.g.
roads, lights.
- -------------------------------------------------------------------------------------------------
All buildings within
the Aromatics and
Logistics
- -------------------------------------------------------------------------------------------------
boundaries on the
North Tees main site.
- -------------------------------------------------------------------------------------------------
Page 503
INCLUDED LINKLINES
System Conveyed Product Owning Plant/Area - Site - Plant/Area - Site - GEP SRP
No. Business Start of System Start of End of System End of Operating
System System Mgr
- ----------------------------------------------------------------------------------------------------------------------------
8 Paraxylene Aromatics Central Control Wilton Storage Tanks Teesport Ogden T Ogden T
AF3, AF3A, AF12
- ----------------------------------------------------------------------------------------------------------------------------
16 Mixed Xylenes Aromatics Xylenes Storage North Tees Paraxylene V Wilton Farrar R G Maddren C
(Xylole) Tanks
- ----------------------------------------------------------------------------------------------------------------------------
18 Paraxylene Aromatics Paraxylene V Wilton Aromatics North Tees Ogden T Ogden T
Light Ends
(Aramasol L)
- ----------------------------------------------------------------------------------------------------------------------------
22 Cyclohexane Aromatics Teesport Nylon Solvents Wilton Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
45 Cyclohexane Aromatics Aromatics North Tees Teesport Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
52 Spare Aromatics Aromatics North Tees Oil Works Billingham Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
55 Spare (was MTBE) Aromatics Tees Storage North Tees MTBE Metering TSC Farrar R G -
Seal Sands Skid
- ----------------------------------------------------------------------------------------------------------------------------
62 HP Nitrogen Aromatics Compound 38 Link Cavities 72 and Cavities Chatha C S Chatha C S
corridor 73
- ----------------------------------------------------------------------------------------------------------------------------
68 Brine Aromatics Brine Reservoirs Brinefields No4 Site Weak Cavities Chatha C S Chatha C S
Brine Tank
- ----------------------------------------------------------------------------------------------------------------------------
78 Compressed Air Aromatics North Tees Road/Rail Road/Rail Farrar R G Maddren C
Filling
- ----------------------------------------------------------------------------------------------------------------------------
System Budget RME RME's
No. Owner nominee
- ----------------------------------------------
8 Tyrie J C Tyrie J C Crowther P
- ----------------------------------------------
16 Tyrie J C Tyrie J C Crowther P
- ----------------------------------------------
18 Tyrie J C Tyrie J C Crowther P
- ----------------------------------------------
22 Tyrie J C Tyrie J C Crowther P
- ----------------------------------------------
45 Tyrie J C Tyrie J C Cruickshank I D
- ----------------------------------------------
52 Tyrie J C Tyrie J C Cruickshank I D
- ----------------------------------------------
55 Tyrie J C Tyrie J C Cruickshank I D
- ----------------------------------------------
62 Tyrie J C Tyrie J C Cruickshank I D
- ----------------------------------------------
68 Tyrie J C Tyrie J C Cruickshank I D
- ----------------------------------------------
78 Tyrie J C Tyrie J C Cruickshank I D
- ----------------------------------------------
Page 504
- -------------------------------------------------------------------------------------------------------------------------
System Conveyed Product Owning Plant/Area - Site - Plant/Area - Site - GEP SRP
No. Business Start of System Start of End of System End of Operating
System System Mgr
- -------------------------------------------------------------------------------------------------------------------------
80 Light Aromatics Aromatics II North Tees Cavity 51, North Tees Farrar R G Maddren C
Reject/Naphtha Brinefields
- -------------------------------------------------------------------------------------------------------------------------
81 Light Rejects Aromatics Aromatics II North Tees Central Control Wilton Farrar R G Maddren C
- -------------------------------------------------------------------------------------------------------------------------
86 Naphtha Aromatics Storage Compound North Tees Cavity 69, Cavities Farrar R G Maddren C
Brinefields
- -------------------------------------------------------------------------------------------------------------------------
90 LPG Aromatics Cavity 57, Cavities Aromatics North Tees Farrar R G Maddren C
Brinefields
- -------------------------------------------------------------------------------------------------------------------------
97 Benzene Aromatics Benzene Metering North Tees Nitrobenzene Wilton Farrar R G Maddren C
Bay Plant
- -------------------------------------------------------------------------------------------------------------------------
5 Hydrogen Hydrogen Production Billingham Site Main Wilton Farrar R G Brown C H
Services
- -------------------------------------------------------------------------------------------------------------------------
2 Spare (was C4's Olefines Central Control Wilton BASF Cage North Tees Harrison M Harrison
Butane) A M A
- -------------------------------------------------------------------------------------------------------------------------
3 Depentanised Olefines Central Control Wilton Aromatics North Tees Harrison M Harrison
Hydrotreated A M A
Gasoline
- -------------------------------------------------------------------------------------------------------------------------
6 Butenes Olefines Central Control Wilton Teesport Harrison M Harrison
A M A
- -------------------------------------------------------------------------------------------------------------------------
10 Mono Ethylene Olefines EO2 Wilton Teesport Harrison M Harrison
Glycol A M A
- -------------------------------------------------------------------------------------------------------------------------
11 LPG Olefines Aromatics/Crude North Tees Olefines 6 Wilton Farrar R G Maddren C
Oil Unit
- -------------------------------------------------------------------------------------------------------------------------
12 Butane/Mixed Olefines Teesport Central Control Wilton Harrison M Harrison
C4's A M A
- -------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System
No. Budget RME RME's
Owner nominee
- ---------------------------------------------------
80 Tyrie J C Tyrie J C Cruickshank I D
- ---------------------------------------------------
81 Tyrie J C Tyrie J C Cruickshank I D
- ---------------------------------------------------
86 Tyrie J C Tyrie J C Cruickshank I D
- ---------------------------------------------------
90 Tyrie J C Tyrie J C Cruickshank I D
- ---------------------------------------------------
97 Tyrie J C Tyrie J C Crowther P
- ---------------------------------------------------
5 Brown C H Tyrie J C Cruickshank I D
- ---------------------------------------------------
2 Harrison Tyrie J C Crowther P
M A
- ---------------------------------------------------
3 Harrison Tyrie J C Crowther P
M A
- ---------------------------------------------------
6 Harrison McQuillan Walker AP
M A K W
- ---------------------------------------------------
10 Harrison McQuillan Walker AP
M A K W
- ---------------------------------------------------
11 Harrison Tyrie J C Crowther P
M A
- ---------------------------------------------------
12 Harrison McQuillan Walker AP
M A K W
- ---------------------------------------------------
Page 505
- -------------------------------------------------------------------------------------------------------------------------
System Conveyed Product Owning Plant/Area - Site - Plant/Area - Site - GEP SRP
No. Business Start of System Start of End of System End of Operating
System System Mgr
- -------------------------------------------------------------------------------------------------------------------------
13 Gasoline Olefines Central Control Wilton Teesport Harrison M Harrison
A M A
- -------------------------------------------------------------------------------------------------------------------------
14 C5 Liquid Olefines Central Control Wilton Compound 38 Teesport Harrison M Harrison
(cut back to TP) A M A
- -------------------------------------------------------------------------------------------------------------------------
15 Methane Olefines JV06 Wilton North Tees Harrison M Harrison
A M A
- -------------------------------------------------------------------------------------------------------------------------
24 Butadiene Olefines Ethylene Control Wilton Teesport Harrison M Harrison
A M A
- -------------------------------------------------------------------------------------------------------------------------
29 Spare Olefines JV06 Wilton P Compound P Compound Harrison M Harrison
A M A
- -------------------------------------------------------------------------------------------------------------------------
30 Naphtha Olefines North Tees JV06 Wilton Farrar R G Maddren C
- -------------------------------------------------------------------------------------------------------------------------
31 Propylene Olefines Central Control Wilton Cavity 74, North Tees Harrison M Harrison
Brinefields A M A
- -------------------------------------------------------------------------------------------------------------------------
32 Ethylene Olefines Ethylene Control Wilton Compound 38 North Tees Harrison M Harrison
A M A
- -------------------------------------------------------------------------------------------------------------------------
34 Propane Olefines Cavities 82, 97, Cavities JV06 Wilton Harrison M Harrison
98 and 99 via A M A
North Tees and
also from
Phillips
Petroleum
- -------------------------------------------------------------------------------------------------------------------------
35 Butane Olefines Phillips PIP JV06 Wilton Harrison M Harrison
Petroleum Seal A M A
Sands
- -------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------
System
No. Budget RME RME's
Owner nominee
- ----------------------------------------------
13 Harrison McQuillan Walker A P
M A K W
- ----------------------------------------------
14 Harrison McQuillan Walker A P
M A K W
- ----------------------------------------------
15 Harrison Tyrie J C Crowther P
M A
- ----------------------------------------------
24 Harrison McQuillan Walker A P
M A K W
- ----------------------------------------------
29 Harrison Tyrie J C Crowther P
M A
- ----------------------------------------------
30 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
31 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
32 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
34 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
35 Harrison Tyrie J C Crowther P
M A
- ----------------------------------------------
Page 506
- -------------------------------------------------------------------------------------------------------------------------
System Conveyed Product Owning Plant/Area - Site - Plant/Area - Site - GEP SRP
No. Business Start of System Start of End of System End of Operating
System System Mgr
- -------------------------------------------------------------------------------------------------------------------------
53 Propylene Olefines ICI/BASF Cav 85 Cavity 85, BASF Chatha C S Chatha C
Easement Area Brinefields
- -------------------------------------------------------------------------------------------------------------------------
54 Spare Olefines Simon Storage Simon Cumene Plant North Tees Farrar R G Maddren C
Storage
- -------------------------------------------------------------------------------------------------------------------------
69 Brine Olefines Brine Reservoir Brinefields Cavities H2 Cav Chatha C S Chatha C
Pumps De-Gassing Pots
- -------------------------------------------------------------------------------------------------------------------------
79 Brine Olefines Brine Reservoir Brinefields Cavities Cavities Chatha C S Chatha C
Saltholme
- -------------------------------------------------------------------------------------------------------------------------
85 Propane Olefines Cavities 82, 97, Cavities Propane Billingham Chatha C S Maddren C
98, 99 Vaporiser 701C
- -------------------------------------------------------------------------------------------------------------------------
88 Spare (was Olefines Petrol Blending North Tees Simon Storage Simon Farrar R G
Petrol PMS) & Storage Co, Seal Sands Storage
- -------------------------------------------------------------------------------------------------------------------------
89 Spare (was Olefines Petrol Blending North Tees Simon Storage Simon Farrar R G
Petrol ULMS) & Storage Co. Seal Sands Storage
- -------------------------------------------------------------------------------------------------------------------------
91 Brine Olefines No3 Brine Brinefields Brine Heater North Tees Chatha C S Chatha C
Reservoir Compound
Saltholme
- -------------------------------------------------------------------------------------------------------------------------
94 Pentanes Plus Olefines Amoco/Cats Amoco North Tees Farrar R G Maddren C
Terminal
- -------------------------------------------------------------------------------------------------------------------------
100 Spare (was C5's) Olefines Central Control Wilton Bravo Teesport Harrison M Harrison
A M A
- -------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------
System Budget RME RME's
No. Owner nominee
- ----------------------------------------------
53 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
54 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
69 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
79 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
85 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
88 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
89 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
91 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
94 Harrison Tyrie J C Cruickshank I D
M A
- ----------------------------------------------
100 Harrison McQuillan Walker A P
M A K W
- ----------------------------------------------
The following system is not part of the Petrochemicals business but is operated
by NTL on the owners' behalf, under a SLA:
Page 507
- ----------------------------------------------------------------------------------------------------------------------
System Conveyed Product Owning Plant/Area - Site - Plant/Area - Site - GEP SRP
No. Business Start of System Start of End of System End of Operating
System System Mgr
- ----------------------------------------------------------------------------------------------------------------------
36 Brine Chlor Brine reservoirs North Tees Bain Works Wilton Chatha C S Chatha C S
Chem
- ----------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------
System Budget RME RME's
No. Owner nominee
- ------------------------------------------------
36 Chatha C S Tyrie J C Cruickshank I D
- ------------------------------------------------
Page 508
INCLUDED WILTON VEINLINES
- ------------------------------------------------------------------------------------------------------------------------
System Conveyed Product Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
No. Business Start of System End of System Operating
Mgr
- ------------------------------------------------------------------------------------------------------------------------
V15 Light Rejects Aromatics Central Control JV06 SW/8917 Farrar RG Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V39 Paraxylene Aromatics Para 5 TA-T7 SW/8941 Ogden T Ogden T
- ------------------------------------------------------------------------------------------------------------------------
V40 Paraxylene Aromatics Para 4 TA-T8 SW/8942/1,2 Ogden T Ogden T
- ------------------------------------------------------------------------------------------------------------------------
V41 Paraxylene Aromatics Para5 Para4/Central SW/8943 Ogden T Ogden T
Control
- ------------------------------------------------------------------------------------------------------------------------
V42 Paraxylene Aromatics Para5 Para4/Central SW/8944 Ogden T Ogden T
Control
- ------------------------------------------------------------------------------------------------------------------------
V48 Aromasol Aromatics Para4/5 Central Control SW/8949/1,2 Ogden T Ogden T
- ------------------------------------------------------------------------------------------------------------------------
V55 Xylene Aromatics Para Storage Para 5 SW/12600 Ogden T Ogden T
- ------------------------------------------------------------------------------------------------------------------------
V56 Xylene Aromatics Para 5 Para Storage SW/12599 Ogden T Ogden T
- ------------------------------------------------------------------------------------------------------------------------
V02 Hydrogen Hydrogen Various Various SW/8904 Farrar R G Brown C H
(Distribution) (Distribution)
- ------------------------------------------------------------------------------------------------------------------------
V04 HP Steam Olefines JV06 T7/T8 SW/8906/1,2 Bence H W Jones S
- ------------------------------------------------------------------------------------------------------------------------
V06 Ethylene Olefines WEC Ethox SW/8908 Harrison M Harrison MA
2/Poly5/Para5/EO2 A
- ------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------
System Budget RME RME's
No. Owner nominee
- --------------------------------------------------
V15 Tyrie J C Tyrie J C Crowther P
- --------------------------------------------------
V39 Ogden T Tyrie J C Crowther P
- --------------------------------------------------
V40 Ogden T Tyrie J C Crowther P
- --------------------------------------------------
V41 Ogden T Tyrie J C Crowther P
- --------------------------------------------------
V42 Ogden T Tyrie J C Crowther P
- --------------------------------------------------
V48 Ogden T Tyrie J C Crowther P
- --------------------------------------------------
V55 Ogden T Tyrie J C Crowther P
- --------------------------------------------------
V56 Ogden T Tyrie J C Crowther P
- --------------------------------------------------
V02 Brown C H Tyrie J C Crowther P
- --------------------------------------------------
V04 Harrison M McQuillan Sanderson K J
A K W
- --------------------------------------------------
V06 Harrison M McQuillan Walker A P
A K W
- --------------------------------------------------
Page 509
- ------------------------------------------------------------------------------------------------------------------------
System Conveyed Product Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
No. Business Start of System End of System Operating
Mgr
- ------------------------------------------------------------------------------------------------------------------------
V07 Polypurge Olefines Poly 5/6 JV06 SW/8909/1,2 Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V08 Redundant (was Olefines LPG Storage North & South SW/8910 Harrison M Harrison M A
LPG) Tank Nf31 Vaporisers A
- -------------------------------------------------------------------------------------------------------------------------
V09 Methane Olefines JV06 Central SW/8911/1,2 Harrison M Williams M
control(LinkLine A
15)
- -------------------------------------------------------------------------------------------------------------------------
V10 Raw Gasoline Olefines B7 Central Control SW/8910/1,2 Bence H W Jones S
- -------------------------------------------------------------------------------------------------------------------------
V11 Propylene Olefines JV06 Central Control SW/8911/1,2,3 Harrison M Harrison M A
SW/8913 A
- -------------------------------------------------------------------------------------------------------------------------
V12 Off Spec Olefines JV06/WEC Central Control SW/8914 Harrison M Harrison M A
Propylene A
- -------------------------------------------------------------------------------------------------------------------------
V13 Butenes Olefines JV06/WEC Central Control SW/8915 Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V14 Flare Share Olefines JV06/WEC Central Control SW/8916 Bence H W Williams M
- -------------------------------------------------------------------------------------------------------------------------
V16 Ethylene Olefines Ethylene Ethylene Driers SW/8918 Harrison M Harrison M A
Storage Cavities A
- -------------------------------------------------------------------------------------------------------------------------
V17 Ethylene Olefines WEC TPEP SW/8919 Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V18 Ethylene Olefines WEC Central Control SW/8920 Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------
System Budget RME RME's
No. Owner nominee
- ---------------------------------------------------
V07 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V08 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V09 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V10 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V11 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V12 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V13 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V14 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V16 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V17 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V18 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
Page 510
- -------------------------------------------------------------------------------------------------------------------------
System Conveyed Product Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
No. Business Start of System End of System Operating
Mgr
- -------------------------------------------------------------------------------------------------------------------------
V19 Butadiene Olefines Butadiene2 Central Control SW/8921/1 Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V20 Mixed C4's Olefines JV06 Butadiene3/Well SW/8922/1,2,3 Harrison M Harrison M A
4/Ole5/Central A
Control
- -------------------------------------------------------------------------------------------------------------------------
V21 C5 Redundant Olefines Central Control MPS Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V22 Raw Gasoline Olefines JV06 B7/Central SW/8924/1,2 Bence H W Williams M
Control
- -------------------------------------------------------------------------------------------------------------------------
V23 C5s Olefines JV06 Central Control SW/8925 Harrison M Williams M
A
- -------------------------------------------------------------------------------------------------------------------------
V24 Butane Olefines Central Control EDC SW/8926 Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V25 Ethylene Olefines JV06 WEC/EDCVCM/EO2 SW/8927/1,2 Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V26 Ethylene Olefines Ethylene WEC SW/8928 Harrison M Harrison M A
Storage Cavities A
- -------------------------------------------------------------------------------------------------------------------------
V27 Ethylene Olefines JV06 EO2 SW/8929 Bence H W Williams M
- -------------------------------------------------------------------------------------------------------------------------
V28 Raw Butene (C4 Olefines WEC/CC/LinkLine JV06 SW/8930/1,2 Harrison M Williams M
Raffinate) 6 A
- -------------------------------------------------------------------------------------------------------------------------
V29 Butadiene Olefines Butadiene 3 WEC SW/8931 Harrison Williams M
M A
- -------------------------------------------------------------------------------------------------------------------------
V44 Ethylene Olefines JV06 BASF SW/8946 Bence H W Williams M
REDUNDANT
- -------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------
System Budget RME RME's
No. Owner nominee
- ---------------------------------------------------
V19 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V20 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V21 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V22 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V23 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V24 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V25 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V26 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V27 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V28 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V29 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V44 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
Page 511
- -------------------------------------------------------------------------------------------------------------------------
System Conveyed Product Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
No. Business Start of System End of System Operating
Mgr
- -------------------------------------------------------------------------------------------------------------------------
V45 Mixed C4's OUT Olefines WEC Well4 SW/8947 Harrison M Harrison M A
OF USE A
- -------------------------------------------------------------------------------------------------------------------------
V50 H2 REDUNDANT Olefines Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V51 ATG REDUNDANT Olefines Harrison M Harrison M A
A
- -------------------------------------------------------------------------------------------------------------------------
V52 H.P.Ethylene Olefines JV06 R&T Semi Tech SW/10740 Bence H W Williams M
- -------------------------------------------------------------------------------------------------------------------------
V54 Butane Olefines Linkline 35 JV06 SW/11145/1,2 Bence H W Harrison M A
(Lima 8)
- -------------------------------------------------------------------------------------------------------------------------
V57 Boiler Feed Water Olefines TA-T8 JV06 SW/13349 Bence H W Jones S
- -------------------------------------------------------------------------------------------------------------------------
V58 Naphtha Olefines B7 JV06 SW/12563 Bence H W Jones S
- -------------------------------------------------------------------------------------------------------------------------
V59 Recovered Oil Olefines B7 JV06 SW/12564 Bence H W Jones S
- -------------------------------------------------------------------------------------------------------------------------
V60 Wet Flare Olefines JV06 EBL JV06 NE corner SW/12565 Bence H W Williams M
REDUNDANT
- -------------------------------------------------------------------------------------------------------------------------
V62 ATG Spare Olefines New First Avenue Central Control Bence H W Jones S
- -------------------------------------------------------------------------------------------------------------------------
V63 Naphtha Olefines LinkLine System WEC SW/13353 Farrar R G Maddren C
30
- -------------------------------------------------------------------------------------------------------------------------
V66 Naphtha Olefines B7 JV06 SW/14484 Bence H W Jones S
- -------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------
System Budget RME RME's
No. Owner nominee
- ---------------------------------------------------
V45 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V50 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V51 Harrison M McQuillan Walker A P
A K W
- ---------------------------------------------------
V52 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V54 Harrison M McQuillan Sanderson K J
A K W GONE ???
- ---------------------------------------------------
V57 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V58 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V59 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V60 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V62 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
V63 Harrison M Tyrie J C Crowther P
A
- ---------------------------------------------------
V66 Harrison M McQuillan Sanderson K J
A K W
- ---------------------------------------------------
Page 512
- ------------------------------------------------------------------------------------------------------------------------
System Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
No. Product Business Start of System End of System Operating
Mgr
- ------------------------------------------------------------------------------------------------------------------------
V67 Ethylene Olefines MV/O-19500 E02 Harrison MA Harrison MA
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------
System Budget RME RME's
No. Owner nominee
- -----------------------------------------------
V67 Harrison M McQuillan Walker A P
A K W
- -----------------------------------------------
Page 513
INCLUDED NORTH TEES VEINLINES
- ------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ------------------------------------------------------------------------------------------------------------------------
V800 Benzene Aromatics 19 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V801 Benzene Aromatics 00153,154, Farrar R G Maddren C
155, 156,180
- ------------------------------------------------------------------------------------------------------------------------
V802 Benzene Aromatics 132 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V803 Benzene Aromatics 131 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V804 Benzene Aromatics 00185,186,187 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V805 Benzene Aromatics 182 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V806 Benzene Aromatics 00188,189 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V807 Benzene Aromatics 00201,202 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V808 Ethyl Benzene Aromatics 20 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V809 Ethyl Benzene Aromatics 21 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V811 Ethyl Benzene Aromatics 00037,38,39 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
-----------------------------------------------------
V800 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V801 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V802 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V803 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V804 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V805 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V806 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V807 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V808 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V809 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V811 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
Page 514
- ------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ------------------------------------------------------------------------------------------------------------------------
V812 Ethyl Benzene Aromatics 30 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V813 Ethyl Benzene Aromatics 31 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V814 Cumene Aromatics 00026,27 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V815 Cumene Aromatics 00028,29 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V816 Cumene Aromatics 196 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V817 Cumene Aromatics 00024,25 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V818 Cumene Aromatics 23 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V819 Cumene Aromatics 22 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V820 Xylenes Aromatics 14 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V821 Xylenes Aromatics 17 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V822 Xylenes Aromatics 18 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V823 Xylenes Aromatics 00091,92,93 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V824 Xylenes Aromatics 00094, 00148 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
- -----------------------------------------------------
V812 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V813 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V814 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V815 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V816 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V817 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V818 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V819 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V820 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V821 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V822 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V823 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V824 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
Page 515
- ------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ------------------------------------------------------------------------------------------------------------------------
V825 Toluene Aromatics 00067,68 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V826 Toluene Aromatics 69 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V827 Toluene Aromatics 70 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V828 Toluene Aromatics 00071,72 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V829 Toluene Aromatics 73 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V830 Toluene Aromatics 74 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V831 Toluene Aromatics 75 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V832 Toluene Aromatics 00076,77 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V833 Toluene Aromatics 78 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V834 Toluene Aromatics 79 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V835 Aromasol Aromatics 99 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V836 Cyclohexane Aromatics 63 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V838 Cyclohexane Aromatics 66 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
- -----------------------------------------------------
V825 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V826 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V827 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V828 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V829 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V830 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V831 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V832 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V833 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V834 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V835 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V836 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V838 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
Page 516
- ------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ------------------------------------------------------------------------------------------------------------------------
V839 Cyclohexane Aromatics 00134,135 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V840 Cyclohexane Aromatics 136 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V841 Cyclohexane Aromatics 137 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V842 Crude Arom Aromatics 32 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V843 Crude Arom Aromatics 33 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V844 Crude Arom Aromatics 34.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V845 Reformate Aromatics 95.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V846 Reformate Aromatics 80.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V847 Reformate Aromatics 81.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V848 Reformate Aromatics 113.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V849 Raffinate Aromatics 100.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V850 Raffinate Aromatics 112.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V851 Raffinate Aromatics 110.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
- -----------------------------------------------------
V839 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V840 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V841 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V842 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V843 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V844 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V845 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V846 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V847 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V848 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V849 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V850 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V851 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
Page 517
- ------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ------------------------------------------------------------------------------------------------------------------------
V853 C9 Aromatics 35.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V855 C9 Aromatics 62.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V856 C9 Aromatics 36.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V857 C9 Aromatics 00040,43 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V858 C9 Aromatics 61.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V859 Light Rejects Aromatics 00127,128 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V871 Pentane Aromatics 115.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V891 Naphtha Aromatics 00042,43,44 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V893 Naphtha Aromatics 00048,49,50 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V894 Naphtha Aromatics 00051,52,53,54 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V896 Naphtha Aromatics 56.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V905 Fuel Oil Aromatics 167.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V906 Fuel Oil Aromatics 00168,169 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
- -----------------------------------------------------
V853 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V855 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V856 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V857 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V858 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V859 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V871 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V891 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V893 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V894 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V896 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V905 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V906 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
Page 518
- ------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ------------------------------------------------------------------------------------------------------------------------
V909 Fuel Oil Aromatics 00170,171,172 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V921 Xylenes Aromatics 133.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V922 Benzene Aromatics 210.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V927 Benzene Aromatics 221.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V862 Hydrogen Hydrogen 00096,97,98 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V877 Deballast NTL 00015,16 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V884 Rec Oil NTL 00005,6 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V885 Rec Oil NTL 00007,8 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V886 Rec Oil NTL 9.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V887 Effluent Water NTL 10.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V888 Effluent Water NTL 11.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V889 Effluent Water NTL 12.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V890 Effluent Water NTL 13.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
- -----------------------------------------------------
V909 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V921 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V922 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V927 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V862 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V877 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V884 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V885 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V886 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V887 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V888 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V889 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V890 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
Page 519
- ------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ------------------------------------------------------------------------------------------------------------------------
V863 Methane Olefines 00145,146 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V864 Ethylene Olefines 00190,191 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V865 Ethylene Olefines 192.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V867 Propylene Olefines 143.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V868 Propylene Olefines 149.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V869 Propylene Olefines 00216,217,218, Farrar R G Maddren C
219,220
- ------------------------------------------------------------------------------------------------------------------------
V870 Propane Olefines 00138,139,140 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V892 Naphtha Olefines 00045,46,47 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V895 Naphtha Olefines 55.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V915 Propylene Olefines 204.00 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V916 Petrol Olefines 00088,89,90 Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
V917 Petrol Olefines 00101,102,103, Farrar R G Maddren C
104,105
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
- -----------------------------------------------------
V863 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V864 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V865 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V867 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V868 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V869 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V870 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V892 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V895 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V915 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V916 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V917 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
Page 520
- ----------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ----------------------------------------------------------------------------------------------------------------------------
V918 Petrol Olefines 00117,118,119 Farrar R G Maddren C
- -------------------------------------------------------------------------------------------- -----------------------------
V919 Petrol Olefines 00120,121,122 Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
V924 Propylene Olefines 211.00 Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
SD950 60 psig Steam Aromatics Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
SD951 120 psig Steam Aromatics Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
SD953 235 psig Steam Aromatics Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
SD954 600 psig Steam Aromatics Roe P M Owen-Hughes J
- ----------------------------------------------------------------------------------------------------------------------------
SD955 Potable (TV) Aromatics Farrar R G Maddren C
Water
- ----------------------------------------------------------------------------------------------------------------------------
SD956 Treated Water Aromatics Wilson M Eales R D
- ----------------------------------------------------------------------------------------------------------------------------
SD957 Gately Water Aromatics Farrar R G Maddren C
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
SD960 De-min Water Aromatics Roe P M Owen-Hughes J
- ----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
- -----------------------------------------------------
V918 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V919 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
V924 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
- -----------------------------------------------------
SD950 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
SD951 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
- -----------------------------------------------------
SD953 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
SD954 Roe P M Tyrie J C Stewart N
- -----------------------------------------------------
SD955 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
SD956 Wasson A Tyrie J C Stewart N
- -----------------------------------------------------
SD957 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
- -----------------------------------------------------
SD960 Roe P M Tyrie J C Stewart N
- -----------------------------------------------------
Page 521
- ------------------------------------------------------------------------------------------------------------------------
System No. Conveyed Owning Plant/Area - Plant/Area - Ref Dwgs GEP SRP
Product Business Start of End of System Operating
System Mgr
- ------------------------------------------------------------------------------------------------------------------------
SD962 Fire foam/ Aromatics Farrar R G Maddren C
Fire Water
- ------------------------------------------------------------------------------------------------------------------------
SD963 LP Nitrogen Aromatics Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
SD964 HP Nitrogen Aromatics Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
SD965 Plant Air Aromatics Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
SD966 Spare Aromatics Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
SD967 Instrument Air Aromatics Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
SD968 150 psig Fuel Aromatics Farrar R G Maddren C
Gas
- ------------------------------------------------------------------------------------------------------------------------
SD969 LP Fuel Gas Aromatics Farrar R G Maddren C
(pilot)
- ------------------------------------------------------------------------------------------------------------------------
SD970 50psig Steam Aromatics Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
SD971 140 psig Steam Aromatics Farrar R G Maddren C
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------
System No. Budget RME RME's
Owner nominee
- -----------------------------------------------------
SD962 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
SD963 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
SD964 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
SD965 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
SD966 Heath S H Tyrie J C Cruickshank I D
- -----------------------------------------------------
SD967 Heath S H Tyrie J C Cruickshank I D
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SD968 Heath S H Tyrie J C Cruickshank I D
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SD969 Heath S H Tyrie J C Cruickshank I D
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SD970 Heath S H Tyrie J C Cruickshank I D
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SD971 Heath S H Tyrie J C Cruickshank I D
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SIGNED by )
for and on behalf of )
IMPERIAL CHEMICAL )
INDUSTRIES PLC )
SIGNED by )
for and on behalf of )
HUNTSMAN SPECIALTY )
CHEMICALS CORPORATION )
SIGNED by )
for and on behalf of )
HUNTSMAN ICI HOLDINGS, LLC )
SIGNED by )
for and on behalf of )
HUNTSMAN ICI CHEMICALS, LLC )
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