EXHIBIT 10.5
CONFORMED COPY
Dated 30th June 1999
BP CHEMICALS LIMITED
-and-
HUNTSMAN ICI CHEMICALS LLC
============================================
Asset Sale Agreement
============================================
Slaughter and May
35 Basinghall Street
London EC2V 5DB
(JCXT/REL)
2
CONTENTS
1. DEFINITIONS AND INTERPRETATION....................................... 4
2. SALE OF BPCL INTEREST AND THE OTHER ASSETS........................... 9
3. CONSIDERATION........................................................ 9
4. CONDITIONS........................................................... 10
5. CONDUCT BEFORE CLOSING............................................... 11
6. CLOSING.............................................................. 12
7. FURTHER ASSURANCE.................................................... 14
8. EMPLOYEES............................................................ 15
9. WARRANTIES........................................................... 15
10. OTHER PROVISIONS RELATING TO THE WARRANTIES AND INDEMNITIES.......... 16
11. LIMITATIONS ON CLAIMS................................................ 18
12. FURTHER LIMITATIONS ON CLAIMS........................................ 20
13. UNDERTAKINGS......................................................... 23
14. COSTS................................................................ 24
15. PERFORMANCE BY GROUP MEMBERS; CAPACITY OF PARTIES.................... 24
16. ANNOUNCEMENTS........................................................ 25
17. ENTIRE AGREEMENT..................................................... 25
18. VARIATION............................................................ 26
19. ASSIGNMENT........................................................... 26
20. SEVERABILITY......................................................... 28
21. COUNTERPARTS......................................................... 28
22. NOTICES.............................................................. 28
23. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS................... 29
24. EXERCISE OF RIGHTS AND REMEDIES...................................... 29
3
25. CONFIDENTIALITY...................................................... 30
SCHEDULE 1 CLOSING....................................................... 31
SCHEDULE 2 WARRANTIES.................................................... 33
SCHEDULE 3 SITE.......................................................... 38
4
THIS ASSET SALE AGREEMENT is made the 30th day of June 1999
BETWEEN:
(1) BP CHEMICALS LIMITED a company incorporated in England and Wales with
registered number 194971 whose registered office is at Britannic House,
1 Finsbury Circus, London EC2M 7BA (the Vendor) as agent for BP
International Limited; and
(2) 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 (the Purchaser) as agent for Huntsman
ICI Petrochemicals (UK) Limited.
WHEREAS:
(A) The Vendor (as agent for BP International Limited) owns an undivided 20
per cent. share in the Plants (as defined below).
(B) The Vendor wishes to sell and the Purchaser (as agent for Huntsman ICI
Petrochemicals (UK) Limited) wishes to purchase the Vendor's 20 per
cent. ownership interest in the Plants (including certain related
rights and assets) on the terms and conditions set out in this
Agreement.
IT IS AGREED as follows:
1. Definitions And Interpretation
1.1 In this Agreement, except so far as the context otherwise requires, the
following terms shall have the following meanings:
Ancillary Agreements means the following documents in the agreed form:
(a) Product Supply Agreement (ethylene, propylene and butadiene);
(b) Ethylene Infrastructure Agreement;
(c) Ownership, Operating, Use and Maintenance Agreement (Wilton-
Grangemouth pipeline); and
(d) Operating and Maintenance Agreement (Liquefaction 4);
Assets has the meaning given in clause 2;
BPCL Interest means (a) the Vendor's 20 per cent. undivided ownership
interest in the Plants and (b) to the extent that the same are not
extinguished upon the termination at Closing of the BP/ICI Joint
Venture Agreements, all the Vendor's right, title and interest in and
to the Related Assets;
BP/ICI Joint Venture Agreements has the meaning given in the Tripartite
Agreement;
Business Day means a day (excluding Saturdays) on which banks generally
are open in London, Salt Lake City and New York City for the
transaction of normal banking business;
Claim means any Warranty Claim;
Closing means the completion of the sale and purchase of the BPCL
Interest and the other Assets and related matters in accordance with
clause 6;
5
Closing Date means the date on which Huntsman/ICI Closing occurs
pursuant to the Contribution Agreement, or such other date as the
parties may agree in writing;
Computer Systems means IT systems (hardware, software and networks
infrastructure) and all embedded information technology contained in
material plant, machinery and equipment;
Conditions has the meaning given in the Tripartite Agreement;
Confidentiality Agreements has the meaning given in the Tripartite
Agreement;
Consideration has the meaning given in clause 3.1;
Contracts means:
(a) the "ECR Supply Agreement - 1999" between the Vendor and Cabot
Europa, which was extended for the period from 1st January 1999
to 31st December 1999 pursuant to a letter dated 28th September
1998 from the Vendor to Cabot Europa;
(b) the Erskine Condensate Sales Agreement dated 30th January 1998
between Britoil Public Limited Company and BP Chemicals Limited;
(c) (to the extent still in effect) the Licence Agreement dated 10th
May 1978 between BP Trading Limited, the Vendor and ICI Limited;
(d) (to the extent still in effect) the Licence Agreement dated 9th
May 1977 between Bayer AG, ICI Limited and the Vendor; and
(e) (to the extent still in effect), those of the BP/ICI JV
Agreements to which BPCL is a party and which are indicated with
an asterisk in Schedule 1 to the Tripartite Agreement;
Contribution Agreement means the contribution agreement dated as of
15th April 1999 between (1) Imperial Chemical Industries PLC, (2)
Huntsman Specialty Chemicals Corporation, (3) Huntsman ICI Holdings,
LLC and (4) the Purchaser (as amended), a copy of which will be
provided to the Vendor within 5 Business Days of the date of this
Agreement (with any commercially sensitive information blanked out);
Costs means liabilities, losses, damages, costs (including reasonable
legal costs), charges, penalties and expenses (including Tax);
Cracker Stocks means all the stocks of fuels, spare parts and loose
tools and fittings beneficially owned by any member of the Vendor's
Group, or under the control of any member of the Vendor's Group
(subject to reservation of title by the relevant supplier), exclusively
or primarily for the purposes of the Plants (including where held by a
consignee), but excluding the Excluded Stocks;
Disclosed Matters means any fact, matter, event or circumstance which
is fairly disclosed in the Disclosure Letter and/or which is deemed to
be disclosed in the Disclosure Letter in accordance with its terms or
for which the Vendor is stated not to be liable in the Disclosure
Letter;
Disclosure Letter means the disclosure letter in the agreed form from
the Vendor to the Purchaser delivered immediately before the signing of
this Agreement;
6
dollar or $ means the lawful currency of the United States of America;
Excluded Stocks means feedstocks, stocks-in-process and finished stocks
beneficially owned by any member of the Vendor's Group or under the
control of any member of the Vendor's Group (subject to reservation of
title by the relevant supplier);
Group means, in relation to the Vendor or the Purchaser, that party and
its Subsidiaries for the time being and any undertaking which controls,
is controlled by or is under common control with that party for the
time being;
Huntsman/ICI Closing means Closing or, if applicable, Delayed Closing
of the transfer of the Olefins Manufacturing Business pursuant to the
Contribution Agreement (and in this definition "Closing", "Delayed
Closing" and "Olefins Manufacturing Business" have the meanings given
to them in the Contribution Agreement);
HSCC's Group has the meaning given in the Contribution Agreement;
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;
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;
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;
Plants means the plants at Wilton known as JVO6, JVB3 and GTU and (save
in the Recitals and in the definitions of BPCL Interest and Related
Assets) includes the Related Assets;
Related Assets means the plant and infrastructure relating to the
Plants and used for (a) the storage and distribution of products and
feedstock and/or (b) the production of products, but excluding
Liquefaction 4 (as defined in the Operating and Maintenance Agreement
(Liquefaction 4) in the agreed form);
7
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;
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,
4.4, 4.5, 4.6, 4.7, 5.3 and 8.1 of Schedule 2;
Senior Employee means any employee of any member of the Purchaser's
Group employed at ICI Job Grade 40 and above (or at or above the
equivalent grade within the Purchaser's Group);
Site means the property listed in Schedule 3;
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;
Tax means all 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;
Tripartite Agreement means the agreement dated the same date as this
Agreement entered into between (1) the Vendor, (2) Imperial Chemical
Industries PLC, (3) ICI Chemicals & Polymers Limited, (4) Huntsman
Specialty Chemicals Corporation, (5) Huntsman ICI Holdings, LLC and (6)
the Purchaser;
Transaction Agreements means this Agreement, the Ancillary Agreements,
the Disclosure Letter 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;
VAT means value added tax or any similar sales or turnover tax;
Vendor's Bank Account means account number 89842 with Citibank, London
Branch, Sort Code 18-50-08 (account name BP International Limited);
8
Warranties means the warranties set out in Schedule 2 (and shall
include, for the avoidance of doubt, the Repeated Warranties);
Warranty Claim means any claim in respect of any breach of a Warranty.
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;
(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 the
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 the 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
9
references to the corresponding persons, officers, documents or
organs (as the case may be) appropriate to undertakings of that
description.
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 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.
2. Sale Of BPCL Interest and the other Assets
On and subject to the terms set out in this Agreement, the Vendor
agrees with the Purchaser that the Vendor shall sell or procure the
sale by each relevant member of the Vendor's Group of, and that the
Purchaser shall purchase or procure the purchase of, the Assets listed
below and the Purchaser (as agent for Huntsman ICI Petrochemicals (UK)
Limited) undertakes to purchase or to procure the purchase of the
Assets listed below, in each case as at and with effect from Closing
but free from all liens, charges and encumbrances (other than, in the
case only of the Assets in (b) and (e) below, Permitted Encumbrances)
and all other rights exercisable by third parties (subject to the
rights of the counterparties to the Contracts and as otherwise
indicated in this Agreement, including without limitation in clause
6.6):
(a) the BPCL Interest;
(b) the Cracker Stocks;
(c) the benefit (subject to the burden) of the Contracts;
(d) books and records of the Vendor's Group to the extent relating
to the Contracts but excluding (i) materials relating to a
Contract but dated before the date of the Contract and (ii)
internal notes, memoranda and analyses relating to the
Contracts;
(e) all other property rights and all other assets of whatsoever
nature to which any member of the Vendor's Group is entitled and
which are used exclusively or primarily in the operation of the
Plants, but always excluding the Excluded Stocks,
(together, the Assets).
3. Consideration
3.1 The consideration (Consideration) for the Assets shall be the payment
in cash by Huntsman ICI Petrochemicals (UK) Limited to the Vendor of
the sum of (pound)73,333,333 (payment of which shall be procured by the
Purchaser). The Consideration shall be apportioned as follows:
10
(a) the plant and equipment comprised (pound)73,333,330
within the BPCL Interest (less the net book
value of the
Cracker Stocks)
(b) the Cracker Stocks the net book
value thereof
(c) the benefit (subject to the burden) (pound)1
of the Contracts
(d) books and records (pound)1
(e) other property rights and assets (pound)1.
3.2 The apportionment of the Consideration as described in clause 3.1 shall
be adopted by the Vendor (on behalf of itself and each of the relevant
members of the Vendor's Group) and the Purchaser for all purposes
(including Tax) except as otherwise required by law.
3.3 The Consideration shall be paid free from any set-off, deduction or
withholding whatsoever.
3.4 If any payment is made by the Vendor to the Purchaser pursuant to a
claim under 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 Consideration payable with respect to the appropriate
Assets.
3.5 Any sum payable by the Purchaser for itself to the Vendor for itself or
(on the basis described in clause 10.1) as agent for the relevant
members of the Vendor's Group under this Agreement is exclusive of any
amounts in respect of applicable VAT.
3.6 The Purchaser shall procure the payment to the Vendor in addition to
the Consideration an amount equal to the VAT chargeable in respect of
the Assets against delivery by the Vendor of an appropriate VAT
invoice.
4. Conditions
4.1 The obligations of the parties under clause 2 are conditional upon the
Conditions being fulfilled (or waived). Each party 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 31st October 1999 (the Termination Date).
4.2 If the Conditions are not satisfied or waived on or before the
Termination Date, this Agreement shall automatically terminate.
4.3 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 14, 15, 16, 17, 18, 19, 21, 22,
23, 24 and 25) shall automatically terminate, provided that the rights
and liabilities of the parties which have accrued prior to termination
shall subsist.
4.4 Subject to the provisions of the Tripartite Agreement, no Condition may
be waived except by written agreement of the parties.
11
4.5 Each party shall notify the other parties as soon as reasonably
practicable after it becomes aware that any Condition has been
satisfied.
4.6 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 parties 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
either party shall be entitled to treat this Agreement as terminated by
written notice to the other party, provided that neither party shall be
entitled to treat this Agreement as terminated where that party is in
breach of its obligations under clauses 4.1 to 4.5 where such breach
has contributed materially to the non-satisfaction of the Condition.
5. Conduct before Closing
5.1 The Vendor will ensure that, until Closing:
(a) it and each other applicable members of the Vendor's Group will
exercise its rights and perform or comply with its obligations
under the BP/ICI Joint Venture Agreements and the Contracts in
the ordinary and normal course and without any alteration in
nature or manner (save for routine and unimportant matters) and
on sound commercial principles consistent with those applied by
it during the financial period ended on the 31st December 1998
and, to the extent relevant, so as to protect and maintain the
Plants;
(b) all reasonable measures are taken by it and other applicable
members of the Vendor's Group, consistent with past practice, to
protect and maintain the Assets (other than the Plants).
5.2 Without prejudice to the generality of clause 5.1, until Closing the
Vendor will ensure, in respect of the Assets and the operation of the
Plants, that without the prior written consent of the Purchaser:
(a) no member of the Vendor's Group will dispose of, or agree to
dispose of or grant or agree to grant any option or other right
over or licence of, any Asset (except in the ordinary course of
business on normal arm's length terms);
(b) no member of the Vendor's Group will embark on a programme,
submit any bid or tender or make any contract or commitment in
relation to the Plants which is likely to involve more than
(pound)50,000 (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,
12
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 Plants or (bb) to involve any abnormal or
unusual commitment in relation to the Plants;
(c) no member of the Vendor's Group will make any material change in
the extent of the insurance cover relating to the Plants and the
Assets as taken out by any member of the Vendor's Group (if
any); and
(d) no member of the Vendor's Group will amend, terminate, transfer,
assign or grant any waiver in relation to the Contracts.
The Purchaser will consider and provide a response to any request for
such consent as promptly as reasonably practicable.
5.3 To the extent that any matter referred to in clause 5.2 is within the
control of ICI Chemicals & Polymers Limited as owner and operator of
the Plants, the Vendor's obligation under clause 5.2 shall be construed
as an obligation to exercise its rights and discretions under the
BP/ICI Joint Venture Agreements in a manner consistent with the
requirements of clause 5.2.
6. Closing
6.1 Subject to clause 6.6, beneficial ownership and risk in respect of each
of the Assets shall pass to Huntsman ICI Petrochemicals (UK) Limited on
Closing. Closing shall take place at such place or places outside the
United Kingdom as are agreed between the Vendor and the Purchaser.
Closing shall take place on the Closing Date.
6.2 (a) The Vendor agrees with the Purchaser that the Vendor and each
relevant member of the Vendor's Group shall at Closing transfer
the Assets and shall do, or procure the doing of, all those
things listed in relation to them in Schedule 1; and
(b) the Purchaser agrees with the Vendor that the Purchaser shall at
Closing do, or procure the doing of, all those things listed in
relation to it in Schedule 1.
6.3 The cash sum to be paid by Huntsman ICI Petrochemicals (UK) Limited to
the Vendor at Closing shall be paid by Huntsman ICI Petrochemicals (UK)
Limited (and the Purchaser shall procure such payment) to the Vendor's
Bank Account in immediately available funds and the Vendor shall
receive such payment on its own account and as agent for each relevant
member of its Group.
6.4 At Closing, the Vendor and the Purchaser shall procure that the members
of its Group expressed to be parties thereto shall enter into the
Ancillary Agreements.
6.5 Each party (first party) agrees with the other party (on behalf of
itself and the members of its Group) to indemnify and keep indemnified
on an after Tax basis the other party and each member of its Group
against any Cost which it may incur or suffer as a result of any
document delivered by the first party (or any member of its Group)
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 by the first party (or any member of its
Group) pursuant to clause 6.2 and Schedule 1 not being so delivered,
save that for the avoidance of doubt nothing in this clause 6.5 shall
13
operate to transfer to the Vendor or any member of its Group any
responsibility for any stamp duty or other transfer or similar taxes
which may arise pursuant to this Agreement.
6.6 Insofar as the benefit and burden of the Contracts cannot effectively
be or are not permitted to be assigned or transferred by the relevant
member of the Vendor's Group to Huntsman ICI Petrochemicals (UK)
Limited except by agreements of novation or without obtaining a
consent, approval or waiver from a third party (a Consent) then the
following provisions shall apply:
(a) this Agreement shall not constitute an assignment or an
attempted assignment of the relevant Contract if, or to the
extent that, such an assignment or attempted assignment would
constitute a breach of such Contract;
(b) the Vendor (on behalf of itself and each relevant member of the
Vendor's Group) and the Purchaser shall each use reasonable
endeavours to procure that such Contracts are novated or that
the necessary Consents are obtained and this Agreement shall
constitute an assignment of such Contract with effect from the
time when all Consents required in respect of such assignment
have been obtained;
(c) unless or until each such Contract is so novated or assigned or
any necessary Consent is obtained, the relevant member of the
Vendor's Group shall hold any such Contract and any moneys,
goods or other benefits received thereunder as agent of the
Purchaser and shall accordingly, promptly on receipt of the
same, account for and pay or deliver to the Purchaser (as agent
for Huntsman ICI Petrochemicals (UK) Limited) such moneys, goods
and other benefits less any reasonable direct out-of-pocket
costs and expenses of performance of that Contract incurred by
that member of the Vendor's Group (to the extent clause 6.6(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 Contract or the
performance thereof; and
(d) the Purchaser shall assist the relevant member of the Vendor's
Group to perform all its obligations (or, at the Vendor's
request, procure the performance of all of the obligations of
the relevant member of the Vendor's Group) under any such
Contract as sub-contractor of the relevant Vendor provided that
sub-contracting is permissible under the terms of the relevant
Contract and where sub-contracting is not permissible, the
Purchaser shall, provided that this is permissible under the
terms of the relevant Contract, procure the performance by
Huntsman ICI Petrochemicals (UK) Limited of any such Contract as
agent for the relevant member of the Vendor's Group, and the
Purchaser shall procure that Huntsman ICI Petrochemicals (UK)
Limited in the performance of such agency or sub-contracting
role shall indemnify the relevant member of the Vendor's Group
(save to the extent that the Costs are caused by the relevant
member's failure to comply with its obligations under this
clause or to take reasonable care in performing any obligations
under the relevant 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
14
basis against all Costs suffered or reasonably incurred in
connection with any such Contracts provided that the Purchaser
shall not be obliged to indemnify the relevant member of the
Vendor's Group in respect of its internal administrative costs
(including costs of the time of its employees) in respect of the
sub-contracting or agency or arrangements described in this sub-
paragraph and provided further 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 Contract by the
Vendor or the relevant member of the Vendor's Group prior to the
Closing Date;
(e) no effect shall however be given to sub-paragraphs (c) or (d)
above if any other party under the relevant Contract repudiates
the contract, refuses to deal with the relevant member of the
Vendor's Group or Huntsman ICI Petrochemicals (UK) Limited 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 Contract in
which case the Vendor, the relevant member of the Vendor's Group
and the 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 Contract to Huntsman
ICI Petrochemicals (UK) Limited or if such arrangements cannot
be made in respect of such Contract, the relevant member of the
Vendor's Group and the Purchaser shall use their respective
reasonable endeavours to procure that such Contract is
terminated without liability to either of them (in such a manner
that the Purchaser (as agent for Huntsman ICI Petrochemicals
(UK) Limited) may, if it so requires, negotiate a new contract
on its own behalf) and neither the Vendor, nor the relevant
member of the Vendor's Group or the Purchaser shall have any
further obligation to the other relating to the Contract after
such termination.
7. Further Assurance
7.1 Save for the Excluded Stocks, the Vendor undertakes that neither it nor
any member of the Vendor's Group shall assert any right of ownership
over the Site or any part thereof or over any assets which at Closing
are located on the Site. To the extent such assets are legally owned by
a member of the Vendor's Group, the Vendor shall procure that legal
title to such assets is transferred to the Purchaser or a member of the
Purchaser's Group nominated by the Purchaser as soon as practicable
after Closing without further consideration and at the Vendor's cost.
7.2 The Vendor hereby grants to the Purchaser, or agrees to procure the
grant to the Purchaser (in each case, for itself and for the benefit of
each member of its Group) of, a non-exclusive, perpetual, irrevocable,
freely transferable, royalty-free licence to use in the operation of
the Plants (a) any Intellectual Property Rights owned by any member of
the Vendor's Group and (b) any confidential Information the rights in
which are owned by any member of the Vendor's Group which in each case
has been used, within the period of 24 months preceding the date of
this Agreement, at or in the operation of the Plants (or any of them).
15
7.3 The Purchaser shall allow the Vendor's supplies of feedstocks comprised
within the Excluded Stocks and situated on the Wilton site at Closing
to be processed at the Plants on the Vendor's behalf into ethylene and
other co-products on the same terms as applied under the BP/ICI Joint
Venture Agreements before Closing and the Vendor shall reimburse the
Purchaser for all amounts that would have been payable under the BP/ICI
Joint Venture Agreements in respect of such processing.
7.4 With effect from Closing, the Purchaser shall:
(a) subject and without prejudice to clause 6.6 (which shall take
precedence over this clause 7.4 in circumstances where it
applies), observe and perform or procure to be observed or
performed all the obligations of the Vendor (or any member of
the Vendor's Group as the case may be) under the Contracts
except insofar as such obligations should have been performed
before Closing; and
(b) keep the Vendor and other members of the Vendor's Group fully
and effectively indemnified on an after Tax basis against any
liability howsoever arising from the failure of the Purchaser to
perform its obligations under subclause 7.4(a), 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 Contract by the Vendor or the relevant member of the
Vendor's Group prior to Closing.
8. Employees
If the contract of employment of any employee of any member of the
Vendor's Group is found or alleged to have effect after Closing as if
originally made with the Purchaser or any member of the Purchaser's
Group, the Vendor shall indemnify and keep indemnified on an after Tax
basis the Purchaser (for itself and as agent of each applicable member
of its Group) from and against any Costs arising from the employment of
such employee by the relevant member of the Purchaser's Group.
9. Warranties
9.1 Subject to clauses 10, 11 and 12, the Vendor warrants to the Purchaser
(on the basis set out in clause 10) that 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.
9.2 The Purchaser warrants to the Vendor that each of the following
warranties is true and accurate as at the date of this Agreement and
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:
(a) the Purchaser and any other party to any Transaction Agreement
who is a 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;
16
(b) those of the Transaction Agreements to which they are party
constitute valid and binding obligations of the Purchaser and
any other party to any Transaction Agreement who is a member of
the Purchaser's Group;
(c) the execution, delivery and compliance with the terms of those
of the Transaction Agreements to which they are party by the
Purchaser and any other party to any Transaction Agreement who
is a member of the Purchaser's Group will:
(i) not constitute a breach of any Contract or entitle any
person to terminate or avoid any Contract;
(ii) be in compliance with the memorandum and articles of
association, bye-laws or other equivalent constitutional
documents of the Purchaser and such other member of its
Group;
(iii) not contravene any order, judgement, decree, law or
regulation by which the Purchaser or such other member of
its Group is bound;
(d) no administrator, receiver or administrative receiver or any
other equivalent officer has been appointed in respect of the
Purchaser or, to the extent relevant to performance of
obligations under this Agreement, any member of the Purchaser's
Group or in respect of any part of the assets or undertakings of
any such company;
(e) no petition has been presented, no order has been made, no
resolution has been passed and no meeting has been convened for
the winding-up of the Purchaser or, to the extent relevant to
performance of obligations under this Agreement, any member of
the Purchaser's Group or for an administration order or the
equivalent in the relevant jurisdiction of incorporation to be
made in relation to any such company;
(f) neither the Purchaser nor, to the extent relevant to performance
of obligations under this Agreement, any member of the
Purchaser's Group is unable to pay its debts as they fall due;
and
(g) 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 Purchaser is
aware, applied for in respect of the whole or any material part
of the property, assets and/or undertaking of the Purchaser or,
to the extent relevant to performance of obligations under this
Agreement, any member of the Purchaser's Group and remains
outstanding.
9.3 The warranties given by the Purchaser pursuant to clause 9.2 are given
subject to the limitations in clauses 10, 11 and 12, which clauses will
apply, mutatis mutandis, to the warranties given by the Purchaser.
10. Other provisions relating to the Warranties and Indemnities
10.1 The Warranties and the indemnities given by the Vendor are given by the
Vendor as principal to the Purchaser, provided that, as between the
Vendor and any member of its Group, but without prejudice to the
Vendor's liability as principal to the Purchaser, the
17
Warranties and the indemnities given by the Vendor under this Agreement
are given by the Vendor for itself and as agent for each other relevant
member of the Vendor's Group. The Vendor's liability to the Purchaser
in respect of any breach of the Warranties or under the indemnities
given by the Vendor under this Agreement shall be no greater, and no
less, than such liability would have been if such agency relationship
between the Vendor and any member of its Group had not existed. The
Warranties and the indemnities given by the Vendor shall only be
enforceable by the Purchaser against the Vendor.
10.2 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.
10.3 Without prejudice to the other provisions of this clause 10 and the
provisions of clauses 11 and 12 the Vendor 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.
10.4 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.
10.5 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 following persons:
Des Gillen, Peter Skelley, Paul Bowdler, George Smith, Pat
Dixon, Bill Brandt, Colin Saunders and Rob Nevin,
but such phrases 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.
10.6 The Vendor shall not have any liability in respect of any claim under
clause 9 in respect of the Repeated Warranties to the extent that such
claim arises (i) as a result of any action taken by the Vendor prior to
Closing in accordance with a written request made by the Purchaser or
(ii) as a result of any action omitted to be taken by the Vendor prior
to Closing due to the Purchaser withholding its consent to any such
action being taken pursuant to the Purchaser's rights under clause 5.2
if the Purchaser either knew
18
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.
11. Limitations on Claims
11.1 The provisions of this clause 11 (except for clause 11.11 which shall
apply generally in its terms) shall operate to define and limit the
liability of the Vendor in respect of any Claims and to establish the
circumstances within which Claims may be made.
11.2 The maximum aggregate liability of the Vendor in respect of:
(a) all Claims shall not exceed the amount of the Consideration;
(b) (subject to the overall limit in paragraph (a)) all Claims
pursuant to paragraph 11 of the Warranties shall not exceed
15,000,000; and
(c) (subject to the overall limit in paragraph (a)) all Claims other
than those made pursuant to paragraphs 1, 2.1, 2.2 or 11 of the
Warranties shall not exceed (pounds)10,000,000.
11.3 The Vendor shall not have any liability in respect of any individual
Warranty Claim (other than a Claim pursuant to paragraphs 1, 2.1 or 2.2
of the Warranties) unless its liability in respect of such Claim
exceeds (pounds)50,000.
Where a series of Claims 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 amounts for which the Vendor has no
liability, or by which its liability is reduced, as a consequence of
the operation of this clause 11 or clause 12 shall not be taken into
account in determining whether the amount of such Claim exceeds the
threshold specified in this clause 11.3.
11.4 (a) The Vendor shall not have any liability in respect of any
Warranty Claim (other than a Claim pursuant to paragraphs 1, 2.1
or 2.2 of the Warranties) unless the aggregate amount of its
liability in respect of all Claims under the Warranties exceeds
(pound)1,000,000 in which case it shall only be liable for the
excess.
(b) For the avoidance of doubt, amounts for which the Vendor has no
liability, or by which the Vendor's liability is reduced, as a
consequence of the operation of this clause 11 and/or clauses 10
or 12 shall not be capable of being aggregated as a Claim or
part thereof with other Claims for the purposes of this clause
11.4.
11.5 The Vendor shall not be liable for any Claim 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, on or before
the date falling one (1) year after the Closing Date.
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 Vendor shall not be liable to the Purchaser in
19
respect of such Claim to the extent that the amount of it is increased,
or is not reduced, as a result of such failure.
11.6 Any Claim 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 Vendor.
11.7 The liability of the Vendor for any Claim in respect of any fact,
matter, event or circumstance shall be reduced or extinguished:
(a) 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;
(b) 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) carried out after the Closing Date by the
Purchaser 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;
(c) to the extent that the amount of such Claim is recovered under
any policy of insurance;
(d) if the Purchaser failed to comply or procure compliance with the
terms of any provision of this Agreement, to the extent that the
Vendor could have avoided or mitigated the loss arising from the
subject matter of the Claim if the Purchaser had complied with
such provision; or
(e) to the extent that the Claim or breach would not have arisen but
for an act, omission, transaction or arrangement carried out by
the Vendor or any member of the 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
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.
11.8 If any Claim shall arise by reason of some liability which at the time
that the Claim is notified to the Vendor is contingent only, the 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 11.6 shall be amended in relation to
such Claim so that the Claim shall not be deemed to be withdrawn unless
20
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.
11.9 The Purchaser's Group 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 and/or indemnities provided by members of the Vendor's Group
under, or in connection with, this Agreement or the Ancillary
Agreements. The Vendor and the Purchaser 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.
11.10 Before making a Claim in respect of any breach of the Warranties which
is capable of remedy, the Purchaser shall allow the 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 11.5
in order to allow the Vendor to remedy the breach unless to do so would
prejudice the Purchaser to any significant extent.
11.11 Each of the Vendor and the Purchaser hereby waives and relinquishes any
right of set off or counterclaim, deduction or retention which it might
otherwise have in respect of any Claim or out of any payments which it
may be obliged to make (or procure to be made) to the other of them
pursuant to this Agreement.
11.12 The limitations on liability set out in this clause 11 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 Vendor or any of its Related Persons.
11.13 The sole remedy against the Vendor for any breach by it of any of the
Warranties shall be an action for damages. The Purchaser shall not be
entitled to rescind this Agreement before or after Closing in any
circumstances.
11.14 Nothing in this clause 11 or clauses 10 and 12 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 the Vendor of the terms of this Agreement or any fact,
matter, event or circumstance giving rise to a Warranty Claim.
12. Further Limitations on Claims
12.1 Where the Purchaser or any other member of the Purchaser's Group is
entitled (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
to obtain any relief, saving or benefit which is in respect of any
matter (in each case whether before or after the 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 Vendor and provide
such information as the Vendor may reasonably require relating
to such potential recovery from that third party or to obtaining
such relief, saving or benefit and
21
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
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 Vendor (subject to the Purchaser being
fully indemnified to its reasonable satisfaction by the 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 Vendor may reasonably require to enforce
such recovery or obtain such relief, saving or benefit and
comply with the 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 against the Vendor shall be limited (in addition to
the limitations on its liability referred to in clauses 10 and
11 and this clause 12) 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
(ii) if the Vendor has paid to the Purchaser an amount in discharge
of a 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 repay to the Vendor:
(A) an amount equal to the sum recovered from the third party
(net of tax paid by the 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 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.
12.2 Any payment required to be made by the Purchaser, pursuant to clause
12.1 shall be made:
22
(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.
12.3 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 being made, the
Purchaser shall (subject to being fully indemnified by the Vendor
against all 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 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 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 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 Vendor, that the 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 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 Vendor does not elect to take control of the conduct of
proceedings under clause 12.3(e), the Purchaser shall ensure
that the 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
23
12.3, the Vendor shall not be liable in respect of any such Claim to
the extent that the 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.
12.4 Upon any Claim being made, or notification from the Purchaser to the
relevant Vendor of any third party claim which might lead to such a
Claim 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 Vendor such access to relevant personnel and
properties and to any relevant records and information as the
Vendor may reasonably request in connection with such Claim 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 or third party claim,
subject to the 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 12 shall not apply to the extent that recovery has been
obtained pursuant any other provision of this Agreement.
13. Undertakings
13.1 After Closing, the Vendor shall and shall procure that each relevant
member of its 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 Assets 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.
24
13.2 The Purchaser shall, and it shall procure that each member of its Group
shall, provide the Vendor at the Vendor'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 the Vendor's reporting
requirements and timetable and all other assistance as the Vendor shall
reasonably require for those purposes.
13.3 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 the
Vendor and its accountants reasonable access at all reasonable times,
and provide copies of, all books and records delivered to the Purchaser
on or after Closing as are reasonably required for the purposes of
drawing up the accounts of the Vendor 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 Vendor.
13.4 Notwithstanding any other provision of this Agreement, the Vendor and
other members of the Vendor's Group shall be entitled to retain
originals or copies of all files, books, personnel, and records
relating to litigation existing at Closing, whether or not currently in
their possession.
13.5 The 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 the Vendor's 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.
14. Costs
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, completion and
implementation of the transactions contemplated by this Agreement and
each of the agreements referred to herein.
15. Performance by Group Members; Capacity of parties
15.1 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
25
(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 15 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 15.
15.2 Notwithstanding the disclosure of any agency arrangement in this
Agreement, whether a party is acting as agent or principal shall not
affect its liability (or the liability of the other party) under this
Agreement.
16. Announcements
16.1 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 16.2) 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).
16.2 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).
16.3 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 as is required by
applicable law and regulations containing the minimum amount of
information necessary to comply with the relevant requirements. Each
party shall give the other every reasonable opportunity to comment on
its announcement referred to above (provided that this could not have
the effect of preventing such party from complying with its obligations
under applicable law and regulations).
17. Entire Agreement
17.1 This Agreement, the Tripartite Agreement, the Ancillary Agreements, the
Confidentiality Agreements (to which both parties to this Agreement (or
any member of their respective Groups) are a party), the Disclosure
Letter and all other contracts, agreements and arrangements to be
entered into pursuant to the terms of this Agreement or
contemporaneously herewith (to which both parties to this Agreement (or
any member of their respective Groups) are a party)(together the
Relevant Agreements) together constitute the whole and only agreement
between the parties relating to the sale and purchase of the Assets and
any prior drafts, agreements,
26
undertakings, representations, warranties and arrangements of any
nature whatsoever, whether or not in writing, relating thereto are
superseded and extinguished.
17.2 Each party (first party) acknowledges and agrees (for itself and on
behalf of each other member of its Group) with the 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 by any assurance,
representation or warranty (express or implied) made or given by
or on behalf of the other party or any member of the other
party's Group or any of their respective Related Persons other
than those expressly set out in this Agreement or in such other
Relevant Agreement 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) the other party and the members of the other party's Group, and
any of their respective Related Persons, do not owe any duty of
care to any member of the first 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 Assets in such
jurisdiction shall be excluded or, if incapable of exclusion,
irrevocably waived and it agrees to indemnify each member of the
other party's Group 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 the first
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).
17.3 The Purchaser agrees with the Vendor that, save as expressly provided
for in this Agreement and without prejudice to the Warranties, neither
the Vendor nor any member of its Group shall have any liability to the
Purchaser or any member of its Group under or in connection with the
BP/ICI Joint Venture Agreements.
17.4 This clause shall not exclude any liability for, or remedy in respect
of, fraudulent misrepresentation by a party or a member of its Group or
any of their respective Related Persons or where it is otherwise
unlawful to do so.
18. Variation
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.
19. Assignment
19.1 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:
27
(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 Vendor) 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 Plants (or any part thereof) at
the direction of the providers of finance or their
representatives pursuant to the Financing Agreements (as defined
in the Contribution Agreement) 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 (as defined in the Contribution Agreement) and any
such providers of Finance (as defined in the Contribution
Agreement) 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
Vendor 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.
19.2 If any assignment is made pursuant to clause 19.1 above, the liability
of the Vendor under this Agreement shall be no greater, and no less,
than such liabilities would have been had such assignment not occurred.
28
20. Severability
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.
21. Counterparts
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.
22. Notices
22.1 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 22.2, or delivering
it by hand to the address set out in clause 22.2 and in each case
marked for the attention of the relevant party set out in clause 22.2
(or as otherwise notified from time to time in accordance with the
provisions of this clause 22). 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.
22.2 The addresses and fax numbers of the parties for the purpose of clause
22.1 are as follows:
Vendor
------
Address: Britannic House,
1 Finsbury Circus,
London EC2M 7BA
Fax: 0171 496 4896
For the attention of: The Company Secretary
With a copy to: General Counsel (fax: 0171 496 4896)
Purchaser
---------
Address: 500 Huntsman Way
Salt Lake City
Utah 84108
USA
29
Fax: 001 801 584 5781
For the attention of: President
With a copy to: General Counsel (fax: 001 801 584 5782)
22.3 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 22, 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.
23. Governing law, Jurisdiction and Service of Process
23.1 This Agreement and the relationship between the parties shall be
governed by, and interpreted in accordance with, English law.
23.2 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.
23.3 The Purchaser shall at all times maintain an agent for service of
process and any other documents in proceedings in England. The agent
for 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 the Purchaser if delivered to its agent
at its address for the time being. If, for any reason the agent the
Purchaser ceases to act as such, the Purchaser shall promptly appoint
another such agent with an address in England and so advise the Vendor.
Failing such appointment and notification, the Vendor shall be entitled
to appoint an agent on behalf of the Purchaser at the expense of the
Purchaser. A copy of any document served on the agent of the Purchaser
shall also be sent to the Purchaser in accordance with the provisions
of clause 22.
24. Exercise of Rights and Remedies
24.1 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.
24.2 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.
30
25. Confidentiality
25.1 Subject to sub-clause (b) and clause 16, each party and each member of
its Group shall treat as strictly confidential all information received
or obtained as a result of entering into or performing this Agreement
which relates to:
(a) the other party or the other party's Group;
(b) the provisions or the subject matter of this Agreement or any
document referred to herein; or
(c) the negotiations relating to this Agreement or any document
referred to herein.
25.2 Either party may disclose information which would otherwise be
confidential if and to the extent:
(a) require by the law of any relevant jurisdiction or for the
purpose of any judicial proceedings.
(b) required by any securities exchange or regulatory or governmental
body to which that party is subject or submits, wherever
situated, whether or not the requirement for information has the
force of law;
(c) the information is disclosed on a strictly confidential basis to
the professional advisers, auditors and bankers of such party
provided that such party shall be liable for any failure by its
professional advisers, auditors and bankers to keep such
information strictly confidential;
(d) the other party has given its prior written consent to the
disclosure;
(e) it does so to a member of its Group which accepts restrictions in
the terms of this clause; or
(f) required to enable that party to enforce its rights under this
Agreement,
provided that any such information disclosed pursuant to paragraph (a)
or (b) shall be disclosed (if practicable in the circumstances) only
after notice to the other party.
25.3 The restrictions contained in this clause shall continue to apply after
the termination of this Agreement without limit in time.
25.4 Upon Closing, each of the Confidentiality Agreements shall be
terminated save to the extent that it relates to any business retained
by the Vendor.
31
Schedule 1
CLOSING
At Closing:
1. The Vendor shall:
(a) deliver to the Purchaser a copy of minutes of a duly held meeting
of the directors of the Vendor (or a duly constituted committee
thereof) authorising the execution by the Vendor of this
Agreement, the Ancillary Agreements in the agreed form and any
other agreement which pursuant to the terms of this Agreement is
to be entered into on or before Closing to which the 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 the Vendor's
Group (or a duly constituted committee thereof) authorising the
execution by the relevant member of the Vendor's Group of the
Ancillary Agreements in the agreed form 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
Vendor'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 Vendor'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 Vendor's Group);
(c) deliver (or procure the delivery of) to the Purchaser, executed
counterparts of the Ancillary Agreements in the agreed form and
any other agreement which pursuant to the terms of this Agreement
is to be entered into on or before Closing duly executed by the
Vendor and/or the relevant members of the Vendor's Group;
(d) deliver or shall procure that the relevant member of the Vendor's
Group shall deliver to the Purchaser (as agent for Huntsman ICI
Petrochemicals (UK) Limited)or its nominee all the Assets which
are capable of transfer by delivery with the intent that title in
such assets shall pass by and upon such delivery.
2. The Purchaser shall:
(a) deliver to the Vendor:
(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
32
execution by the Purchaser of this Agreement, the Ancillary
Agreements in the agreed form 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 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 Ancillary Agreements in the agreed
form 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 Vendor pursuant to this Schedule 1;
(iv) deliver (or procure the delivery of) to the Vendor of
executed counterparts of the Ancillary Agreements in the
agreed form and any other agreement which pursuant to the
terms of this Agreement is to be entered into on or before
Closing; and
(b) procure the payment by Huntsman ICI Petrochemicals (UK) Limited
of the Consideration to the Vendor in respect of the Assets in
accordance with the provisions of clause 3.
Each of the Vendor and the Purchaser shall, and shall procure that the members
of their respective Group shall, comply with the provisions of this Schedule 1
and at all times from Closing, do all things as may be required to give effect
to the provisions of this Schedule 1, 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.
33
Schedule 2
WARRANTIES
Capacity and conduct of business
1.1 The Vendor and any other party to any Transaction Agreement who is a
member of the Vendor'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 any other party to any
Transaction Agreement who is a member of the Vendor'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 and any
other party to any Transaction Agreement who is a member of the
Vendor's Group will:
(a) not constitute a breach of any Contract or entitle any person to
terminate or avoid any Contract;
(b) be in compliance with the memorandum and articles of association,
bye-laws or other equivalent constitutional documents of the
Vendor and such other member of its Group;
(c) not contravene any order, judgement, decree, law or regulation by
which the Vendor or such other member of its Group is bound.
Assets and Insurance
2.1 The Vendor (or another member of the Vendor's Group) has full legal and
beneficial title to the Assets and either has in its possession, or is
entitled (subject to any Permitted Encumbrance) to take possession of,
each of the Assets capable of possession.
2.2 None of the Assets 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.
2.3 No member of the Vendor's Group has any ownership interest in or
possession of or right of possession over:
(a) books or records containing information which Relates to the
Assets, with the exception of records containing such information
which the Vendor has received in the normal course of the
relationship between the Vendor and ICI Chemicals & Polymers
Limited (as operator) and for internal reports, memoranda and
analyses prepared by the Vendor therefrom or relating thereto; or
34
(b) plant, machinery or other equipment used exclusively or primarily
at or in the operation of the Plants.
Compliance with law
3. Neither the Vendor nor any member of the Vendor's Group is, in relation
to the Assets, 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
Assets. This Warranty does not apply to the BPCL Interest.
Litigation, insolvency and product liability
4.1 Neither the Vendor nor any member of the Vendor's Group is party to any
litigation, arbitration, administrative or criminal proceedings likely
to involve the Vendor or any member of the Vendor's Group paying any
sum in excess of (pound)50,000 which will, individually or
collectively, cause a material adverse effect on the Assets or the
operation of the Plants or which otherwise will, individually or
collectively, cause a material adverse effect on the Assets or the
operation of the Plants and, so far as the Vendor is aware, there are
no such proceedings pending or threatened in writing.
4.2 There are no orders, decrees, judgments or agreements with any Court or
governmental authority or agency to which the Vendor or any member of
the Vendor's Group is a party or by which the Vendor or any member of
the Vendor's Group is bound which will, individually or collectively,
cause a material adverse effect on the Assets or the operation of the
Plants.
4.3 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 member
of the Vendor's Group to perform its obligations under this Agreement
or any Ancillary Agreement and, so far as the Vendor is aware, no such
legal or arbitration proceedings have been threatened in writing.
4.4 No administrator, receiver or administrative receiver or any other
equivalent officer has been appointed in respect of the Vendor or, to
the extent relevant to performance of obligations under this Agreement,
any member of the Vendor's Group or in respect of any part of the
assets or undertakings of any such company.
4.5 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
the Vendor or, to the extent relevant to performance of obligations
under this Agreement, any member of the Vendor's Group or for an
administration order or the equivalent in the relevant jurisdiction of
incorporation to be made in relation to any such company.
4.6 Neither the Vendor nor, to the extent relevant to performance of
obligations under this Agreement, any member of the Vendor's Group is
unable to pay its debts as they fall due.
4.7 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
35
aware, applied for in respect of the whole or any material part of the
property, assets and/or undertaking of the Vendor or, to the extent
relevant to performance of obligations under this Agreement, any member
of the Vendor's Group and remains outstanding.
Contracts
5.1 No member of the Vendor's Group has received written notice of any
breach of, or default under, any Contract and, so far as the Vendor is
aware, no other party to a Contract is in breach of, or in default
under, any Contract.
5.2 The Vendor has provided to the Purchaser a complete and up to date copy
of each Contract incorporating all of its terms and conditions.
5.3 Each Contract is valid and enforceable in accordance with its terms,
save that:
(a) the nature and availability of the remedies provided by the
English courts would depend on the circumstances. These remedies,
including an order by the court requiring the payment of damages
or the payment of a sum due, would be available subject to
principles of law, equity and procedure of general application.
Some remedies, including an order by the court requiring specific
performance of an obligation or the issue of an injunction, would
be entirely within the discretion of the court. The possibility
of obtaining any remedy would be lost if proceedings were not to
be commenced within certain time limits. The English courts have
power to stay proceedings and may decline jurisdiction, notably
if concurrent proceedings are being brought elsewhere.
Accordingly, enforcement of the obligations of the counterparties
under the Contracts would not be certain in every circumstance;
(b) laws relating to liquidation or administration or other laws or
procedures affecting generally the enforcement of creditors'
rights may affect the obligations of the counterparties under the
Contracts and the remedies available;
(c) English law may have to have regard to the law of the place of
performance of any obligation under the Contracts which is to be
performed outside England and Wales. It may refer to that law in
relation to the manner of performance and the steps to be taken
in the event of defective performance;
(d) there could be circumstances in which a certificate,
determination or the like given or made, or discretion exercised,
pursuant to a Contract would not be treated as final; and
(e) any obligation which is in the nature of a penalty for the
failure to perform another obligation would not be valid, binding
or enforceable.
Licences and consents
6.1 The Vendor and other members of the Vendor's Group together have all
governmental authorisations, licences, consents, permissions, approvals
and qualifications (being qualifications which the Vendor or another
member of the Vendor's Group is required
36
to have for such purpose by applicable law) necessary to use the Assets
in all material respects in the manner in which Assets are now used 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 Assets. This Warranty does not apply to
the BPCL Interest.
6.2 All the authorisations, licences and consents referred to in paragraph
6.1 are valid and subsisting and have been complied with in all
material respects.
Recent Events
7. Since 31st December 1998 and except for the purpose of giving effect to
the transactions contemplated by this Agreement the activities of the
Vendor and each other applicable member of the Vendor's Group in
relation to the Assets have in all material respects been in the
ordinary course consistent with its past practices.
Intellectual Property & Information Technology
8.1 Save for Information the rights in which the Purchaser will acquire
pursuant to the Contracts, no Intellectual Property Rights or
Information of any member of the Vendor's Group and no Computer Systems
of any member of the Vendor's Group have been used in the operation of
the Plants within the 24 months preceding the date of this Agreement.
8.2 No material agreements have been entered into by any member of the
Vendor's Group 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 Assets or the operation of the Plants.
Employees
9. No employees of any member of the Vendor's Group are employed at or in
the operation of the Plants.
Environmental Matters
10. For the purposes of the warranties in this paragraph 10, where
applicable the definitions in Schedule 14 of the Contribution Agreement
shall apply.
10.1 So far as the Vendor is aware, during the period of three years
expiring on the date of this Agreement, each member of the Vendor's
Group has complied with all material Environmental Permits and
Environmental Laws except where failure to comply would not have a
material adverse effect on the Assets. This Warranty does not apply to
the BPCL Interest.
10.2 All material Environmental Permits required by any member of the
Vendor's Group in connection with the Assets 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
37
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 Assets. This Warranty does not apply
to the BPCL Interest.
10.3 No member of the Vendor's Group is party to 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 Assets or the operation of the Plants.
The Plants
11.1 Neither BPCL nor any member of its Group:
(a) operates or maintains the Plants (or any part thereof);
(b) requires any governmental authorisation, licence, consent,
permission, approval or qualification by reason of or in
connection with the BPCL Interest; or
(c) is the sole owner of any part of the Plants.
38
Schedule 3
SITE
The Site comprises the following properties:
1. Olefins 6 Plant at Wilton Works, Wilton, Redcar and Cleveland,
England (shown on plan OM1 in the agreed form);
2. Butadiene Storage, Ethylene Control and Olefins 5 Plant and Lima
compound 8 at Wilton Works, Wilton, Redcar and Cleveland, England
(shown on plan OM2 in the agreed form);
3. Central Control Area, Wilton Works, Wilton, Redcar and Cleveland,
England (shown on plan OM3 in the agreed form);
4. Brine Reservoirs to the south of Wilton Works, Wilton, Redcar and
Cleveland, England (shown edged red on plan 4 in the agreed form);
5. Part of Teesport Works, Redcar and Cleveland, England (shown on
plan OM5 in the agreed form);
6. Part of North Tees Works, Stockton on Tees, England (shown on plan
OM6 in the agreed form);
7. Jetty A, North Tees Works, Stockton on Tees, England;
8. Compound 38, Saltholme (shown on plan OM7 in the agreed form);
9. Ethylene Pipeline Garage, Wilton, Redcar and Cleveland, England;
10. No. 2 Process Office, Wilton, Redcar and Cleveland, England;
11. Wilton Centre, Wilton, Redcar and Cleveland, England.
[Note: the last 3 are short leasehold offices to be assigned. Plans are
not needed.]
References in this Schedule to agreed form plans are to agreed form plans
for the purposes of the Contribution Agreement.
39
SIGNED )
for and on behalf of )
BP CHEMICALS LIMITED )
by LAURENCE MALLETT as its ) L. Mallett
duly authorised attorney )
SIGNED )
for and on behalf of )
HUNTSMAN ICI CHEMICALS LLC )
by MARTIN MICHIELS as its ) Martin Michiels
duly authorised attorney )