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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF
EARLIEST EVENT REPORTED): NOVEMBER 14, 1997 (OCTOBER 31, 1997)
CHIREX INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0 - 27698 04-3296309
(State or other jurisdiction of Commission File number (I.R.S. Employer
incorporation or organization) Identification No.)
300 Atlantic Street
Suite 402
Stamford, Connecticut 06901
(Address of principle executive office) (Zip Code)
(203) 351-2300
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 31, 1997, ChiRex Inc. (the "Company" or "ChiRex") and Glaxo Wellcome
plc ("Glaxo Wellcome or Glaxo") announced that ChiRex completed its purchase of
Glaxo Wellcome's FDA cGMP pharmaceutical production facility at Annan, Scotland
("Annan"). Glaxo Wellcome has received approximately $66 million ((pounds)40
million) for the facility plus an additional payment for certain working capital
of approximately $1.6 million (approximately (pounds)1 million) and ChiRex will
initiate the manufacture of certain pharmaceutical intermediates and active
ingredients under a five-year contract with Glaxo valued at approximately $450
million. The transaction will be accounted for as a purchase.
On July 7, 1997, ChiRex announced the signing of a letter of intent with Glaxo
Wellcome plc to acquire Glaxo Wellcome's FDA cGMP pharmaceutical production
facility at Annan, Scotland. As part of the proposed agreement, Glaxo Wellcome
would award the Company a five-year contract to supply certain pharmaceutical
intermediates and active ingredients worth approximately $450 million. A
definitive Asset Purchase Agreement and Supply Agreement were signed by the
Company and Glaxo Welcome on September 23, 1997, on essentially the same terms
contained in the letter of intent with the closing occurring no later than
November 15, 1997.
Under the Asset Purchase Agreement, ChiRex purchased all of the buildings, land
and equipment at the 154-acre Annan, Scotland property, encompassing three main
production facilities plus certain working capital. Under the Supply Agreement,
ChiRex will continue to manufacture most of the products currently made at Annan
and plans to invest (pounds)20 million (approximately $31 million) over five
years to accommodate newly contracted products and to modify the facility for
general purpose pharmaceutical fine chemical manufacturing.
To finance the acquisition and provide for the general cash requirements of the
business, a subsidiary of the Company entered into a senior secured term-loan
and revolving credit agreement on October 29, 1997, with Bankers Trust Company
allowing it to borrow up to (pounds)62 million (approximately $100 million) for
a five-year period. The credit facility is comprised of a (pounds)40 million
(approximately $65 million) term loan and a (pounds)22 million (approximately
$35 million) revolving credit facility each bearing interest at LIBOR plus 1%.
The term-loan facility is repayable in nine equal semi-annual installments
beginning in late 1998 and also provides for annual mandatory pre-payments from
excess cashflow as defined in the credit agreement. Borrowings under the credit
facility are secured by the real and personal property of and guaranteed by the
Company and its subsidiaries. The credit agreement contains normal and customary
financial covenants and limitations on indebtedness, dividends, capital
expenditures and certain other transactions. The Company's existing bank
revolving credit facility was repaid and terminated upon signing of the new
credit facility.
ChiRex is a Contract Manufacturing Organization serving the outsourcing needs of
the pharmaceutical industry through its extensive pharmaceutical fine chemical
manufacturing, process development capabilities and proprietary chiral
technologies. The Company supports and supplements the in-house development and
manufacturing capabilities of its pharmaceutical and biotechnology customers
with a broad range of fully-integrated services, accelerating the time from drug
discovery to commercialization. ChiRex currently produces over 50 products in
its two world-class, FDA cGMP manufacturing facilities in Dudley,
Northumberland, England and in Annan, Scotland. ChiRex holds over 50 patents and
patent applications in the field of chiral chemistry.
Any statements contained in this Current Report on Form 8-K that relate to
future plans, events or performance, are forward-looking statements that involve
risks and uncertainties, including, but not limited to, product development and
market acceptance risks, product manufacturing risks, the impact of competitive
products and pricing, the results of current and future licensing and other
collaborative relationships, the results of financing efforts, developments
regarding intellectual property rights and litigation, risks of product
non-approval or delays or post-approval reviews by the FDA or foreign regulatory
authorities, and other risks identified in the ChiRex Inc.'s Securities and
Exchange Commission filings. Actual results, events or performance may differ
materially. Readers are cautioned not to place
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undo reliance on these forward-looking statements, which speak only as the date
hereof. ChiRex undertakes no obligation to publicly release the results of any
revisions to these forward-looking statements that may be made to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of the Business Acquired.
Audited financial statements for the Annan Manufacturing Site of Glaxo
Operations UK Limited for the years ended December 31, 1994, 1995 and 1996
required by Item 7(a) of this Current Report on Form 8-K will be filed with the
Securities and Exchange Commission as soon as possible, but in any event on or
prior to January 13, 1998.
(b) Pro Forma Financial Statements.
Unaudited pro forma combined balance sheets and statements of operations of the
Company and the Annan Manufacturing Site of Glaxo Operations UK Limited required
by Item 7(b) of this Current Report on Form 8-K will be filed with the
Securities and Exchange Commission as soon as possible, but in any event on or
prior to January 13, 1998.
(c) Exhibits.
The exhibits listed in the accompanying Exhibit Index are filed pursuant to Item
7(c) of this Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHIREX INC.
Date: November 14, 1997 By: /s/ Michael A. Griffith
--------------------------
Michael A. Griffith
Chief Financial Officer
and Secretary
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EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
2.1* Asset Purchase Agreement between ChiRex
Inc. and Glaxo Wellcome plc
4.1 Facilities Agreement between ChiRex
(Holdings) Limited. and Bankers Trust
Company
4.2 Pledge Agreement between ChiRex Inc. and
Bankers Trust Company
10.1* Supply Agreement between ChiRex Inc. and
Glaxo Wellcome plc
99.1 ChiRex Inc. press release dated October
31, 1997
- ----------
* Certain portions of this exhibit have been omitted and are subject to a
confidential treatment request. The omitted portions have been filed separately
with the Securities and Exchange Commission.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
September 23, 1997
(1) GLAXO GROUP LIMITED
and
(2) CHIREX (ANNAN) LIMITED
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AGREEMENT
for the sale and purchase of the
Business and Assets of Glaxo Group Limited
operated from its site at Annan,
Dumfries, Scotland
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INDEX
CLAUSE
1. DEFINITIONS AND INTERPRETATION.......................................... 1
2. SALE AND PURCHASE OF BUSINESS AND ASSETS................................ 12
3. PURCHASE PRICE.......................................................... 13
4. CONDITIONS.............................................................. 13
5. PERIOD BEFORE COMPLETION................................................ 16
6. COMPLETION.............................................................. 17
7. REIMBURSEMENT OF COSTS.................................................. 19
8. COMPLETION STATEMENT.................................................... 20
9. CONTRACTS............................................................... 21
10. CREDITORS AND LIABILITIES............................................... 22
11. EMPLOYEES............................................................... 26
12. PENSIONS................................................................ 28
13. APPORTIONMENT........................................................... 28
14. WARRANTIES.............................................................. 29
15. RIGHT TO RESCIND........................................................ 31
16. POST COMPLETION OBLIGATIONS............................................. 32
17. VALUE ADDED TAX......................................................... 34
18. CAPITAL GOODS SCHEME.................................................... 35
19. FURTHER ASSURANCE....................................................... 35
20. DISPUTE RESOLUTION...................................................... 36
21. SECONDMENT.............................................................. 37
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22. ANNOUNCEMENTS........................................................... 38
23. COSTS................................................................... 38
24. SUCCESSORS AND ASSIGNMENT............................................... 38
25. ENTIRE AGREEMENT........................................................ 38
26. TIME OF THE ESSENCE..................................................... 39
27. NOTICES................................................................. 39
28. AGREEMENT CONTINUES IN FORCE............................................ 39
29. SEVERABILITY............................................................ 39
30. WAIVER.................................................................. 40
31. VARIATIONS.............................................................. 40
32. COUNTERPARTS............................................................ 40
33. FUNDING................................................................. 40
34. GOVERNING LAW........................................................... 40
SCHEDULE 1................................................................... 42
Apportionment of Purchase Price......................................... 42
SCHEDULE 2................................................................... 44
The Property............................................................ 44
SCHEDULE 3................................................................... 48
Terms and Conditions of Sale of the Property............................ 48
SCHEDULE 4................................................................... 53
Pensions................................................................ 53
Definitions............................................................. 53
Calculation of the Transfer Requirement................................. 59
Payment of the Transfer Requirement and Provision of
Benefits................................................................ 60
Additional Voluntary Contributions...................................... 63
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 5................................................................... 67
Warranties.............................................................. 67
SCHEDULE 6...................................................................103
Limitations to Vendor's Liability.......................................103
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Agreed Form documents*
Annexures*
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
*These documents have been omitted from the filing because the Registrant does
not believe them material to an investment in its Common Stock. The documents
will be furnished supplementally to the Commission upon request.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
THIS AGREEMENT is made September 23, 1997
BETWEEN:
(1) GLAXO GROUP LIMITED (registered number 305979) whose registered office is
at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex UB6 0NN
(the "Vendor"),
(2) CHIREX (ANNAN) LIMITED (registered number 3417229) whose registered office
is at Dudley, Cramlington, Northumberland NE23 7QG (the "Purchaser")
WHEREAS
The Vendor carries on the Business and the Vendor has agreed to sell and the
Purchaser has agreed to purchase the Business and the Assets as a going concern
for the consideration and otherwise upon the terms and conditions set out in
this agreement.
IT IS HEREBY AGREED:
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement the following words and expressions shall (except
where the context otherwise requires) have the following meanings:
"Access Agreement" means the access agreement between Dumfries and
Galloway Regional Council and a company within the Vendor's Group
dated 8 June 1979 and 17 July 1979 and recorded in the Division of
the General Register of Sasines applicable to the County of Dumfries
on 21 September 1979;
"Accounts" means the audited financial statements of the Annan
manufacturing site of GWO for each of the three consecutive
accounting reference periods ended on 31 December 1994, 31 December
1995 and 31 December 1996 respectively and the audited financial
statements of the Annan manufacturing site of GWO for the period
from 31 December 1996 to
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Completion and the financial statements to be produced pursuant to
clause 16.2;
"Accounts Date" means the date as at which the Accounts were
respectively prepared;
"Assets" means, the Contracts, the Equipment, the Fixed Plant, the
Goodwill, the Intellectual Property, the Property, the Stock and the
Work in Progress;
"Body Corporate" means any body corporate other than a company
incorporated under the Companies Acts;
"Business" means the business of the manufacture and sale of
pharmaceutical intermediates carried on at the date hereof at the
Property by the Vendor;
"Business Day" means a day other than a Saturday or Sunday on which
banks are open for business in London;
"Cash" means the cash in hand and at bank of the Vendor in respect
of the Business at the Completion Date;
"Companies Acts" means the 1985 Act and the 1989 Act;
"Company" means (i) for the purposes of paragraph 1.3.1 of Schedule
3 a company incorporated under the Companies Acts and/or a Friendly
Society and/or an Industrial and Provident Society and/or a foreign
company and (ii) for the purposes of paragraphs 1.3.2 and 1.3.4 of
Schedule 3, a company incorporated under the Companies Acts;
"Completion" means completion of the sale and purchase of the Assets
in accordance with Clause 6;
"Completion Date" means 5 pm on the date on which Completion takes
place;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"Computer Systems" means the computer systems used by or for the
benefit of the Business and which are located on the Property or
computer processors associated and peripheral equipment computer
programs, technical and other documentation and data entered into or
created by the Vendor and used by or for the benefit of the Business
from time to time;
"Conditions" means the conditions contained or referred to in Clause
4;
"Confidential Information" means information concerning or relating
to property owned or used in connection with the Business in the
nature of know-how, trade secrets, technical processes, and any
other matters concerning the business, affairs or finances of the
Business (however stored) (details of which are not in the public
domain);
"Contracts"
(i) means those contracts entered into by or on behalf of the Vendor
in connection with the Business for the purchase of raw materials
and intermediates by the Vendor details of which are set out in the
list in agreed terms headed "Purchase Contracts";
(ii) means such other written contracts (but excluding the Lease
Contracts) entered into by or on behalf of the Vendor in connection
with the Business details of which are set out in the list in agreed
terms headed "Other Contracts";
and in each case which shall be subsisting but uncompleted (both
those part performed and those not yet commenced) on the Completion
Date;
"Deeds and Documents" means those deeds and documents relating to
the Property identified in the list in agreed terms headed "Deeds
and Documents";
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"Defective" means cannot be used for its intended purpose in its
current form or used to produce good quality material without undue
expense being incurred in relation to it;
"Disclosed Scheme(s)" means the retirement benefits schemes details
of which are set out in Schedule 4 Part 1;
"Disclosure Letter" means the letter of even date with this
agreement from the Vendor to the Purchaser in agreed terms relating
to the Warranties together with any documents annexed thereto;
"Disposition" means a Disposition of the Property with absolute
warrandice in the form annexed hereto (Annex 6) to be granted by GWO
to the Purchaser on Completion;
"Employees" means those employees of the Vendor whose employment is
to be transferred to the Purchaser and whose names and details of
employment are set out in the list in agreed terms headed
"Employees";
"Employment Letter" a letter from the Vendor to the Purchaser
relating to the Employees;
"Encumbrance" means a mortgage, equity, charge, lien, claim, third
party right standard security, floating charge or other encumbrance;
"Environment" means all or any of the following media namely: the
air (including without limitation the air within buildings and the
air within other natural or manmade structures above or below
ground), water and land and any living organisms or systems
supported by those media;
"Environmental Laws" means all European Community or Union
Regulations, directives and statutory decisions, all statutes and
subordinate legislation,
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
all regulations, orders and ordinances including but without
limitation the Environment Act 1995, the Radioactive Substances Act
1993, the Planning (Hazardous Substances) (Scotland) Act 1997, the
Control of Pollution Act 1974, and the Environment Act 1990 and the
Sewerage (Scotland) Act 1968 together with Part IIA Environmental
Protection Act 1990, Sections 161A - 161D Water Resources Act 1991
and Sections 46A-D of the Control of Pollution Act 1974 the Private
Water Supply (Scotland) Regulations and all subordinate legislation
or guidance having effect thereunder and all consents, permits,
authorizations and local laws and bye-laws, all judgments, decrees,
orders, instructions, demands or awards of any competent authority
in each of the foregoing cases which are directly applicable in the
United Kingdom or any parts thereof and which concern the protection
of the Environment;
"Equipment" means all the loose plant, equipment, engineering
supplies, machinery, tools, motor vehicles, furniture, trade
utensils and other chattels owned or used in connection with the
Business at the Completion Date located at the Property (or which
are leased or hired under the terms of any of the Lease Contracts)
including but without limitation those items set out in the list in
agreed terms headed "Equipment";
"Excluded Assets" means the items listed at Schedule 1 Part 2;
"Excluded Employees" means those employees of the Vendor (previously
employed within the Business) whose employment is not to be
transferred to the Purchaser hereunder details of whom are set out
in the list in agreed terms headed "Excluded Employees";
"External Costs" means the external costs including labour costs
incurred by the Vendor directly in connection with the design and
development works
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
which the Purchaser agrees or has agreed is necessary at the
Property to facilitate the production of ****;
"Finished Products" means any products manufactured by the Vendor or
any member of the Vendor's Group in connection with the Business;
"Fixed Plant" means the fixed plant owned or used in connection with
the Business and physically attached to the Property including,
without limitation, that identified in the list in agreed terms
headed "Fixed Plant";
"Foreign Company" means any legal person, other than a natural
person, incorporated elsewhere than in Great Britain;
"Glaxo Wellcome plc Letter" means a letter in agreed terms from
Glaxo Wellcome plc relating to the transfer of the Employees";
"Grazing Lease" means the grazing lease entered into between a
company within the Vendor's Group and Messrs J.M. & J. Goldie dated
3 March 1997;
"Goodwill" means the goodwill of the Business excluding any part
thereof which is an Excluded Asset;
"GWO" means Glaxo Operations UK Limited (registered number 711851)
which trades under the name Glaxo Wellcome Operations;
"Hoddam" means Hoddam Contracting Company Limited having its
registered office at Hoddam Road, Ecclefechan;
"Hoddam Agreement" means the agreement for the supply of water to
Hoddam constituted by letter dated 14 January 1997 from GWO to
Hoddam and
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Hoddam's endorsed acceptance thereof dated 4 February 1997;
"Information Technology Services Agreement" means the agreement in
agreed terms between GWO and the Purchaser relating to the provision
of information technology support by GWO to the Purchaser;
"Intellectual Property" means patents, inventions, know-how, trade
secrets and other confidential information, registered designs,
copyrights, design rights, rights affording equivalent protection to
copyright and design rights, topography rights, trade marks, service
marks, business names, trade names, moral rights, registration of an
application to register any of the aforesaid items, rights in the
nature of any of the aforesaid items in any country, rights in the
nature of unfair competition rights and rights to sue for
passing-off in all such cases relating exclusively to the Business
but excluding any of the foregoing which relates to any Excluded
Asset;
"IPC Authorization" means the Integrated Pollution Control
Authorizations issued in respect of the Business under Section 6 of
the Environmental Protection Act 1990 being authorization number
IPC/063/1994, IPC/011/1994, IPC/012/1994; and IPC/058/93;
"Keeper" means the Keeper of the Registers of Scotland;
"Land Register" means the Land Register of Scotland;
"Last Actuarial Valuation" means the last actuarial valuation or
funding review of the Disclosed Scheme received (whether in draft or
final form) prior to the date of this agreement;
"Lease Contracts" means the lease and hire purchase agreements
entered into by or on behalf of GWO in
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
connection with the Business and subsisting at the Completion Date
details of which are set out in the list in agreed terms headed
"Lease Contracts";
"Management Accounts" means the unaudited balance sheet and profit
and loss account of the Annan manufacturing site of GWO for the
monthly periods ending respectively 31 July 1997, 31 August 1997,
and 30 September 1997;
"Obsolete" means cannot be used for the purpose intended in
connection with the Business;
"Parties" means the parties to this agreement;
"Pensions Warranties" means the warranties contained in Schedule 4
Part 3;
"Pipeline" means the pipeline for the supply of water from the River
Annan to within the Property and all pumps, valves, manholes,
inspection chambers and associated plant and equipment and
apparatus, the right to part of which is governed by the Servitudes
and the weir in the River Annan immediately downstream from the
Pumphouse, the line of the Pipeline being shown on the plan annexed
to this agreement headed "Plan A" (Annex 1) including without
prejudice to the generality the Pumphouse and the Pumping Station;
"Property" means the heritable property and servitude rights
described in Schedule 2 and any parts thereof;
"Pumphouse" means the pumphouse, pump and intake pipe and other
plant and equipment constructed on the subjects described (In the
Third Place) (FIRST) in Schedule 2;
"Pumping Station" means the pumping station and pumps and other
equipment constructed on the
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
subjects described (In the Third Place) (SECOND) in Schedule 2;
"Purchase Price" means the aggregate amount payable by the Purchaser
for the Business and the Assets as set out in Clause 3;
"Purchaser's Accountants" means Arthur Andersen of Pearl Assurance
House, 7 New Bridge Street, Newcastle Upon Tyne NE1 8BQ;
"Purchaser's Group" means the Purchaser, any parent company of the
Purchaser and any company which, in relation to the Purchaser and/or
any parent company of the Purchaser, is a subsidiary undertaking
from time to time;
"Purchaser's Property Solicitors" means Brodies of 15 Atholl
Crescent, Edinburgh EH3 8HA;
"Purchaser's Solicitors" means Dibb Lupton Alsop of 117 The Headrow,
Leeds LS1 5JX;
"Records" means a list of all suppliers, books and records, whether
stored on hard copy or on computer and computer programmes, designs,
drawings, plans and specifications and other technical matter in
relation to the Business together with any plates, blocks, negatives
and other like material relating thereto other than the Retained
Records and other than any of the foregoing which relate to Excluded
Assets;
"Regulations" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981 as amended by the Collective
Redundancies and Transfer of Undertakings (Protection of Employment)
Amendment Regulations 1995;
"Relevant Claim" means any claim by the Purchaser relating to a
breach of the Warranties;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"Retained Records" means those records of or relating to the
Business details of which are set out in the list is agreed terms
headed "Retained Records";
"Secondment Letter" means the letter in agreed terms between GWO and
the Purchaser relating to the secondment of certain of the Employees
by the Purchaser to a Vendor Group Company;
"SEPA" means the Scottish Environmental Protection Agency;
"Secrecy Agreement" means the secrecy agreement between Glaxo
Wellcome plc and Chirex Limited dated 30 May 1997 entered into in
contemplation of the sale of the Business and Assets under this
agreement;
"Servitudes" shall have the meaning given in Schedule 2;
"SSAP" and "FRS"" means respectively a Statement of Standard
Accounting Practice or Financial Reporting Standard in force at this
date as made or adopted by the Accounting Standards Board Limited;
"Shelf-Life" means the period during which intermediates and raw
materials may properly be used;
"Stock" means the stock in trade of unfinished goods, intermediates,
raw materials, fuel, of the Vendor for the purposes of the Business
as at the Completion Date (including items which although supplied
to the Vendor under reservation of title by the suppliers are under
the control of the Vendor);
"Subjects" shall have the meaning given in Schedule 2;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"subscribed" means in relation to any document, that such document
is validly subscribed so that the document shall be presumed to have
been subscribed by the grantor of it for the purposes of Sections 3
and/or 7 of, and/or Schedule 2 to, the Requirements of Writing
(Scotland) Act 1995;
"Supply Agreement" means the agreement in agreed terms between GWO
and the Purchaser relating to the supply of products by the
Purchaser to GWO;
"Tax" means all forms of taxation, duty, levy, charges, and
withholdings, or social security contribution and any fine, penalty,
or interest in respect thereof;
"Taxes Act" means the Income and Corporation Taxes Act 1988;
"VAT" means Value Added Tax;
"Vendor's Accountants" means Coopers & Lybrand of Plumtree Court
London;
"Vendor's Group" means the Vendor, any parent company of the Vendor
and any company which, in relation to the Vendor and/or any parent
company of the Vendor is a subsidiary undertaking from time to time;
"Warranties" means the representations, warranties and undertakings
on the Vendor's part contained or referred to in Clause 14 and
Schedule 5 and including the Pensions Warranties;
"Water Abstraction Consents" means the consents to the abstraction
of water from the River Annan which are detailed in the assignation
thereof the form of which is annexed hereto (Annex 2);
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"Water Supply" means the taking of water from the River Annan by the
Pipeline;
"Work in Progress" means work in process of the Vendor for the
purposes of the Business as at the Completion Date ;
"1979 Act" means the Land Registration (Scotland) Act 1979;
"1985 Act" means the Companies Act 1985; and
"1989 Act" means the Companies Act 1989.
1.2 Any reference in this agreement to any provision of any Act of
Parliament shall include reference to any subordinate legislation
(as defined in the Interpretation Act 1978) made pursuant thereto
and shall be deemed (unless otherwise expressly provided) to be a
reference to such Act of Parliament or subordinate legislation as
amended, modified or re-enacted (whether before or after the date
hereof) and any reference to any provision of any such Act of
Parliament or subordinate legislation shall also include where
appropriate any provision of which it is a re-enactment (whether
with or without modification).
1.3 In this agreement words incorporating the masculine gender only
include the feminine and neuter genders and words incorporating the
singular number only include the plural and vice versa.
1.4 Unless otherwise stated references to Clauses, sub-clauses and
Schedules are references to Clauses and sub-clauses of and Schedules
to this agreement. The Schedules form part of this agreement.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
1.5 The Index and clause headings are for ease of reference only and do
not affect the construction or interpretation of this agreement.
1.6 References to persons shall include bodies corporate, unincorporated
associations and partnerships.
1.7 References to the parties hereto include their respective successors
in title, assigns and legal personal representatives.
1.8 A body corporate shall be deemed to be associated with another body
corporate if it is a holding company of, or a subsidiary of, or a
subsidiary of a holding company of, that other body corporate and a
person shall be deemed to be connected with another if that person
is so connected within the meaning of Section 839 of the Taxes Act.
1.9 Where a document is referred to in this agreement as being "in
agreed terms", it shall be in the form agreed by the parties to this
agreement and initialed by or on behalf of them for identification.
1.10 Where any statement is qualified by the expression "to the best of
the knowledge information and belief of the Vendor" or "so far as
the Vendor is aware" or any similar expression there shall be deemed
to be included after such statement the words "after careful
consideration and having made appropriate enquiry of relevant
persons currently in the employment of any company in the Vendor
Group and the following professional advisers; Sackers, the Vendor's
Accountants, Dundas & Wilson and the knowledge of the Vendor shall
be deemed to include the knowledge of each of the companies within
the Vendor's Group.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
2. SALE AND PURCHASE OF BUSINESS AND ASSETS
2.1 The Vendor shall sell with full title guarantee (save for the
Property)and the Purchaser shall purchase the Business as a going
concern and all of the Assets free from all Encumbrances as at the
Completion Date.
2.2 The Property shall be transferred in accordance with the terms and
subject to the conditions set out in Schedule 3.
2.3 There shall be excluded from the sale and purchase hereby agreed
upon the Excluded Assets and nothing herein contained shall operate
so as to impose upon the Purchaser any obligations or liabilities in
respect of any other assets or liabilities of the Vendor except as
specifically provided in this agreement.
3. PURCHASE PRICE
3.1 The Purchase Price payable by the Purchaser for the Business and the
Assets shall be the aggregate of:
3.1.1 the sum of (pounds)40,000,000 (forty million pounds) which sum
shall be paid on the Completion Date; and
3.1.2 the sum agreed or determined in accordance with Clause 8
provided always that in no circumstances shall this sum exceed
(pounds)1,000,000 (one million pounds) and which sum shall be
paid on the Completion Date or, if such sum has not been
agreed or determined on the Completion Date, within 7 days of
such agreement or determination.
3.2 The Purchase Price shall be apportioned (subject to adjustment in
accordance with Clause 8) among the Assets as set out in Schedule 1.
4. CONDITIONS
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
4.1 The sale and purchase of the Business and the Assets under this
agreement is in all respects conditional upon:-
4.1.1 the Purchaser being satisfied that there is a secure and
adequate supply of water to the Property for the purposes of
the Business including satisfactory results of a triangulation
survey (to be verified by the Purchaser's environmental
consultants) at the Property to establish the suitability of
ground water resource and the availability of at least 500,000
gallons of water a day which is not contaminated by salt and
is of an appropriate quality to be used in the Business and an
independent estimate of the cost and timing of sinking the
production well and a letter of intent from SEPA confirming
their consent to the construction of a pumping well on the
Property and the extraction from that well of up to 500,000
gallons of water per day for use in the Business and a letter
from the local planning authority confirming either that the
sinking of a production well would not require planning
permission, or (if it does) that planning consent would be
granted and a letter from the appropriate authority confirming
the availability of a public supply of water to the Property
and indicating the capacity of such supply and an estimate of
the cost, feasibility and timing of constructing a pipeline to
the Property and agreement between the Parties of the works to
be undertaken to secure such supplies, it being acknowledged
that the Vendor's liability to pay one half of the cost of
such works (set out in Clause 16.1) should be limited to an
amount to be agreed by the Parties;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
4.1.2 the board of directors of Chirex Inc voting in favor of making
the acquisition of the Business and the Assets;
4.1.3 the Purchaser and the Vendor agreeing proposals regarding the
arrangements with Hoddam relating to Hoddam's rights to
extract water from the Pipeline, including the possible
termination of the Hoddam Agreement, it being acknowledged by
the Vendor that it may be appropriate as part of such
proposals that the Vendor grant the Purchaser an indemnity in
respect of any liabilities, or loss of rights of the Property
to extract water which such proposals might give rise to;
4.1.4 the Purchaser being reasonably satisfied with the current
estimates of the Vendor in respect of any works, modification
or remedial action required in connection with the variation
of the existing IPC Authorizations or obtaining new IPC
Authorizations or expenditure otherwise required in respect of
the incinerator in excess of (pounds)650,000 it being
acknowledged that any increase in operating levels following
Completion would not be taken into account in assessing such
expenditure and that it may be appropriate for the Vendor to
give an indemnity in respect of such expenditure should the
existing estimates be insufficient;
4.1.5 the Purchaser receiving satisfactory confirmation from the
Vendor that a manufacturing licence pursuant to the Medicines
Act 1968 and the Medicines Act 1971 is not required for the
operation of the Business;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
4.1.6 approval of third parties to transfer of contracts/licences;
4.1.7 the Purchaser being satisfied with the results of any
outstanding due diligence enquiries which have been raised in
writing by or on behalf of the Purchaser prior to the date of
this agreement.
4.2 The Vendor shall save in respect of clause 4.1.1 use all reasonable
endeavours with the Purchaser's full assistance to procure that each
of the conditions set out in Clause 4.1 are satisfied as soon as
possible, (it being the intention that all such conditions are
satisfied by 15 October 1997.)
4.3 In the event of any of the conditions in Clause 4.1 not being
satisfied or waived in writing by the Purchaser by 15 November 1997
then the provisions of this agreement, (save for Clauses 21 and 22
which shall continue in full force and effect) shall (unless the
Parties otherwise agree in writing) be null and void and of no
further effect and the Parties shall be released from their
respective obligations under this agreement. For the avoidance of
doubt the Secrecy Agreement shall continue to apply between the
parties thereto.
5. PERIOD BEFORE COMPLETION
5.1 The Vendor undertakes that during the period from the date of this
agreement until the Completion Date it will procure that the
Business is carried on in substantially the same manner as
heretofore, so as to maintain the same as a going concern and
without prejudice to the generality of the foregoing (unless the
Purchaser shall previously have agreed otherwise in writing) the
Vendor will procure that it or (as appropriate) GWO will in relation
to the Business:-
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
5.1.1 not enter into any contract or commitment of an unusual nature
or which is other than in the ordinary course of business;
5.1.2 not institute changes in management policy of a significant
nature;
5.1.3 not purchase stock, raw materials, or intermediates of a kind
or in quantities other than as may be reasonably necessary for
the operation of the Business in the ordinary course and so as
to maintain quantities of stock, raw materials and
intermediates consistent with the previous operation of the
Business;
5.1.4 not terminate the employment of any of the Employees or alter
any existing term of their employment or engage more
employees;
5.1.5 not do or suffer to be done any act or thing which may
immediately or in the future adversely affect the Goodwill;
5.1.6 not enter into any agency, distribution, advertising,
maintenance or other similar contract;
5.1.7 consult the Purchaser prior to taking action in relation to
any matters of importance in connection with the Business;
5.1.8 allow the Purchaser and its representatives reasonable access
to the Property and to the books, documents, files and records
of the Business on prior notice and subject to the observance
by the Purchaser of the site procedures in operation at the
Property and subject to making good any damage caused by the
18
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Purchaser or its representatives to the Property;
5.1.9 use all reasonable endeavours to assist the Purchaser in
the assignment, transfer or grant to the Purchaser of all
statutory or regulatory licences necessary for the
Purchaser to carry on the Business;
5.1.10 maintain the supply of all utilities required in connection
with the Business on terms no less favorable than those
which exist at the date of this agreement; and
5.1.11 keep in force its existing insurance policies as disclosed
to the Purchaser in respect of the Business and the Assets.
6. COMPLETION
6.1 Completion of the sale and purchase of the Business and Assets
shall take place on 15 October 1997 or (if later) three Business
Days after the satisfaction or waiver of the last of the
conditions in Clause 4 to be satisfied or waived. Completion shall
take place at such location as is agreed by the Parties.
6.2 At Completion the Vendor shall:-
6.2.1 permit the Purchaser to assume the conduct of the Business
and possession of those of the Assets capable of passing by
delivery and the Purchaser will carry on the Business with
effect from the Completion Date;
6.2.2 complete the sale or procure the completion of the sale to
the Purchaser of the Property in accordance with the terms
contained in or referred to in Schedule 3;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
6.2.3 deliver to the Purchaser:-
6.2.3.1 the Disposition and any other items required
to be delivered at Completion in terms of
Schedule 3;
6.2.3.2 the Deeds and Documents;
6.2.3.3 the Information Technology Services
Agreement;
6.2.3.4 the Supply Agreement;
6.2.3.5 the Secondment Letter;
6.2.3.6 duly executed assignments in agreed terms
together with such other documents as the
Purchaser may reasonably require to perfect
its title to the Goodwill, the Intellectual
Property, the Contracts and the Lease
Contracts;
6.2.3.7 the Records;
6.2.3.8 all national insurance contributions and
PAYE records duly completed and up to date
in respect of the Employees;
6.2.3.9 all contracts of employment, statements of
terms and conditions and all personnel
records, files and details relating to the
Employees;
6.2.3.10 the value added tax records referred to in
Clause 17;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
6.2.3.11 a letter from the Vendor (or the appropriate
Vendor Group Company) transferring the IPC
Authorizations to the Purchaser;
6.2.3.12 the Disclosure Letter;
6.2.3.13 the Employment Letter; and
6.2.3.14 the Glaxo Wellcome plc Letter.
6.3 Upon fulfilment by the Vendor of its obligations under Clause 6.2
the Purchaser shall:
6.3.1 procure the payment by electronic funds transfer of the
sums due and payable under Clause 3 to National Westminster
Bank Plc sort code 50/00/OT account number 00462616 account
name Glaxo Group Limited; and
6.3.2 deliver to the Vendor duly executed counterparts of the
documents referred to in Clause 6.2 as are required to be
executed by the Purchaser.
6.4 The Purchaser shall not be obliged to complete the purchase of any
of the Assets unless the purchase of all the Assets is completed
in accordance with this agreement.
7. REIMBURSEMENT OF COSTS
7.1 The Purchaser undertakes that it will within 28 days of receipt by
it of any relevant suppliers invoice, reimburse the Vendor the
External Costs. The Purchaser shall have no liability under this
clause unless it shall have given its written approval to any
External Costs before any such costs are incurred by the Vendor.
Such approval may be given by the Purchaser in respect of each
specific item of cost or by approval of such costs within a
specific project.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
7.2 The Vendor shall reimburse the Purchaser for any VAT in respect of
such costs for which the Purchaser is liable and which is
irrecoverable by the Purchaser.
7.3 In the event that Completion has not taken place, for any reason
whatsoever, by 15 November 1997 the Vendor shall repay forthwith
to the Purchaser all sums paid by the Purchaser under Clause 7.1.
7.4 The Vendor shall reimburse any costs (not exceeding the GWO budget
and interest) incurred by the Purchaser in respect of the Business
in the period from the date of this agreement to 31 December 1997
insofar as such costs exceed the revenues of the Business to which
the Purchaser is entitled during that period. The Vendor shall be
entitled to require the Purchaser to provide such information as
it reasonably requires to monitor and challenge any costs
schedules produced by the Purchaser.
8. COMPLETION STATEMENT
8.1 On the Completion Date or as soon as practicable thereafter the
Vendor shall carry out a physical count and a valuation of the
Stock and Work in Progress as at the Completion Date. The
Purchaser and its representatives shall be entitled to attend such
count and valuation.
8.2 The Stock and Work in Progress will (subject to the further
provisions of this clause) be valued at the lower of cost and net
realizable value using the same methods and bases (as nearly as
may be practicable and insofar as they are consistent with good
accounting and valuation practice and with all applicable SSAP's
and FRS's) as those consistently adopted by the Vendor in the
valuations of similar items for the purposes of the Accounts. No
value will be attributed to any Stock or Work in Progress which is
Defective, Obsolete or outside of its Shelf-Life. Provided
22
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Always that if the value of the Stock and Work in Progress (when
valued in accordance with the provisions of this Clause 8.2)
would, but for this proviso, exceed(pounds)1,000,000 it shall be
certified as being and for all purposes relating to this agreement
shall be (pounds)1,000,000.
8.3 The Vendor will procure that a written certificate of the value of
the Stock and Work in Progress calculated on the basis set out or
referred to in Clause 8.2 ("the Completion Statement") is
delivered to the Purchaser as soon as practicable following the
Completion Date and in any event not later than 3 Business Days
following such date. The Purchaser may within the period of 3
Business Days following delivery of the Completion Statement by
notice in writing to the Vendor dispute the value set out in the
Completion Statement. If no such notice is received or if within
the said period of 3 Business Days the value of the Stock and Work
in Progress as set out in the Completion Statement or any amended
amount is agreed between the Vendor and the Purchaser then the
value as set out in the Completion Statement or (as the case may
be) any amended amount shall be conclusive and binding upon the
parties for the purposes hereof.
8.4 If the Purchaser shall give notice of any dispute under Clause 8.3
which is not resolved within the said period of 3 Business Days,
such dispute shall be referred for determination in accordance
with Clause 20.
9. CONTRACTS
9.1 With effect from the Completion Date the Purchaser shall take
over, perform and complete the Contracts.
9.2 Insofar as the benefit of any of the Contracts or Lease Contracts
cannot effectively be transferred
23
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
to the Purchaser (whether by assignment, novation or otherwise)
without the consent of a third party and such consent has not been
obtained at or prior to Completion:-
9.2.1 the Vendor shall use all reasonable endeavours to obtain
such consent as soon as practicable;
9.2.2 unless and until any such contract has been transferred to
the reasonable satisfaction of the Purchaser, the Purchaser
shall for its own benefit and to the extent that the
contract in question permits without constituting a breach
thereof, perform on behalf of the Vendor (but at the
Purchaser's expense) all the Vendor's obligations and the
Vendor will co-operate with the Purchaser (at the Vendor's
expense) in any reasonable arrangements designed to provide
for the Purchaser the benefits under any such contracts
including the enforcement of any and all rights of the
Vendor thereunder;
9.2.3 in the event that any such contract cannot be fully and
effectually transferred to the Purchaser, the Parties shall
use their respective reasonable endeavours to procure that
the contract in question is terminated without liability to
the Parties. If termination without liability to the
Parties cannot be achieved the Purchaser shall have no
further obligation to the Vendor relating to the contract
in question and the Vendor shall indemnify the Purchaser
against any costs, claims, damages, liabilities, or
expenses arising from claims by any third party in relation
to the contract in question and the termination, assignment
or attempted
24
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
assignment of such contract without consent;
9.2.4 if the Purchaser shall require, the Vendor shall enter into
novation agreements with the other parties to any of such
contracts to the intent that thenceforth the Purchaser
shall be in a direct contractual relationship with such
other parties.
10. CREDITORS AND LIABILITIES
10.1 The Vendor shall remain responsible for and shall promptly pay,
discharge or satisfy all debts payable by the Vendor and other
obligations and liabilities arising from or attributable to the
carrying on of the Business prior to the Completion Date (save for
any which are expressly assumed by the Purchaser under this
agreement) including without limitation:-
10.1.1 all liabilities to trade and other creditors including
banks and all liabilities in respect of Tax of the Vendor
or any company within the Vendor's Group;
10.1.2 all liabilities and obligations accrued or falling to be
performed under the Contracts and the Lease Contracts up to
the Completion Date; and
10.1.3 all claims made by third parties on or after the Completion
Date in respect of any goods or services supplied by the
Vendor or any company within the Vendor's Group or any act
or omission of the Vendor or any company within the
Vendor's Group prior to the Completion Date.
The Vendor shall if so requested by the Purchaser promptly supply
to the Purchaser written details
25
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
of all trade and other creditors of the Business subsisting at the
Completion Date.
10.2 The Vendor shall fully and effectively indemnify and keep
indemnified the Purchaser against any liability, loss, damage,
penalty, cost or expense (including reasonable legal and other
professional fees) incurred in defending or resolving any actions
or claims (civil or criminal) or in appealing against any
judgment, notice or award and also including the cost of remedial
work under or pursuant to or carried out to avoid the application
of any Environmental Laws, which are suffered or incurred by the
Purchaser and which arise out of the past use of the Property
(including any activity, trade, business or operation carried out
on the Property at anytime) whether arising before or after
Completion and including, but without limitation, any liability,
loss, damage, penalty, cost or expense arising directly or
indirectly from the oil spillage which occurred on the Property in
1992. Provided that the Vendor shall not be liable under this
clause 10.2 if and to the extent that the matter giving rise to
the claim would not have arisen but for the passing of or a change
in, after the date of Completion a law, or regulation not actually
prospectively in force at the date of this agreement. For the
purposes of this clause Part IIA of the Environment Protection Act
1990 as inserted by the Environment Act 1995 as it is brought into
force and the first complete set of guidance and regulations
adopted thereunder, and the amendment to Sections 161A to D of the
Water Resource Act 1991 as inserted by the Environment Act 1995
shall be deemed to be in force at the date of this agreement.
10.3 The maximum liability of the Vendor under Clause 10.2 shall be
****.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
10.4 The Vendor is not liable under Clause 10.2 unless the Purchaser
has given the Vendor written notice of the matter under Clause
10.2 on or before the date which is **** after the Completion
Date.
10.5 If the Vendor pays to the Purchaser an amount under Clause 10.2
and the Purchaser or any member of the Purchaser's Group
subsequently recovers from a third party an amount which is
directly referable to the matter giving rise to the claim under
Clause 10.2 then:
10.5.1 if the amount paid by the Vendor in respect of the claim
under Clause 10.2 is more than the sum recovered from the
third party, the Purchaser shall pay the Vendor the sum so
recovered; and
10.5.2 if the amount paid by the Vendor in respect of the claim
under Clause 10.2 is less than or equal to the sum
recovered from the third party, the Purchaser shall pay the
Vendor an amount equal to the amount paid by the Vendor;
For the purposes of this Clause 10.5 the "sum recovered" means an
amount equal to the amount recovered from the third party less all
reasonable costs and expenses incurred by the Purchaser or any
member of the Purchaser's Group in recovering the amount from the
third party.
10.6 The Purchaser shall as soon as reasonably practicable give written
notice to the Vendor of any matter which it becomes aware which is
likely to give rise to a claim under Clause 10.2 and shall consult
with the Vendor in respect to the matter and the Vendor shall be
entitled to make such reasonable investigation into the matter as
it thinks fit. If the Purchaser fails, for whatever reason, to
comply with the terms of this Clause any such failure shall not
affect the
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Purchaser's ability to make a claim under Clause 10.2.
10.7 If and to the extent that the matter giving rise to the claim
under Clause 10.2 concerns the reduction in value of the Property
as a consequence of the Purchaser using and operating the Property
for purposes other than pharmaceutical and intermediate
manufacturing (including without limitation the use of the
Property for residential uses or public recreation).
10.8 Unless otherwise expressly provided, nothing in this agreement
shall make the Purchaser liable in respect of anything done or
omitted to be done by the Vendor or any company within the
Vendor's Group prior to the Completion Date and the Vendor shall
indemnify the Purchaser in full for and against any claims, costs,
expenses or liabilities whatsoever and howsoever arising incurred
or suffered by the Purchaser in connection with any of the debts,
obligations and liabilities referred to in Clause 10.1 including
costs incurred by the Purchaser in settling any claim in respect
of such debts, obligations or liabilities. This indemnity shall
extend without limitation to all legal expenses and other
professional fees reasonably and properly incurred by the
Purchaser.
10.9 With effect from the Completion Date the Purchaser shall:-
10.9.1 observe and perform or procure to be observed and performed
all the obligations of GWO under the Contracts and the
Lease Contracts except insofar as such obligations should
have been performed at or before the Completion Date and
except insofar as such obligations have not been fully and
effectively transferred to the Purchaser whether by
assignment, novation
28
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
or otherwise and it is not possible for the Purchaser to
perform or procure the performance thereof without
constituting a breach of the contract concerned;
10.9.2 assume responsibility for payment for all goods delivered
or services received under the Contracts after the
Completion Date and which do not form part of the Stock or
Work in Progress whether the invoices for such goods or
services are received before or after the Completion Date;
10.9.3 keep the Vendor and GWO fully and effectively indemnified
against any liability howsoever arising from the Contracts
or the Lease Contracts as a result of any act or omission
of the Purchaser after Completion.
11. EMPLOYEES
11.1 The Parties acknowledge that pursuant to the Regulations at the
Completion Date the Purchaser it will become the employer of the
Employees (but not the Excluded Employees).
11.2 The Vendor shall indemnify the Purchaser in full for and against
all claims, costs, expenses or liabilities whatsoever and
howsoever arising incurred or suffered by the Purchaser including
without limitation all legal expenses and other professional fees
(together with any VAT thereon) arising out of or in respect of
the employment or the termination of the employment of any of the
Employees up to and including the Completion Date or arising out
of the employment or the termination of the employment of the
Excluded Employees or any other person in respect of the Business
at any time.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
11.3 The Purchaser shall indemnify the Vendor and/or GWO in full for
and against all claims, costs, expenses or liabilities whatsoever
and howsoever arising incurred or suffered by the Vendor and/or
GWO including without limitation any reasonable legal expenses and
other professional fees (together with any VAT thereon) arising
out of or in respect of the termination of the employment of the
Employees after the Completion Date.
11.4 The Vendor warrants that the Vendor and/or GWO (as applicable)
have complied with Regulation 10 of the Regulations and will
indemnify the Purchaser against any compensation for which the
Purchaser may become liable as a result of any breach thereof by
the Vendor. The Vendor shall have no liability to the Purchaser
under this clause to the extent that any failure on its or GWO's
part to comply with Regulation 10 is as a result of a failure on
the part of the Purchaser to provide the Vendor with such
information as the Vendor has requested regarding the Purchaser
and its plans for the Business following Completion.
11.5 All salaries and other emoluments including holiday pay, taxation
and national insurance contributions and contributions to
retirement benefit schemes relating to the Employees shall be
borne by the Vendor up to and including the Completion Date and by
the Purchaser with effect from the Completion Date and all
necessary apportionments shall be made.
12. PENSIONS
The provisions set out in Schedule 4 shall apply to the Employees and
govern their rights under the Disclosed Schemes.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
13. APPORTIONMENT
13.1 All rents, rates, gas, water, electricity, telephone charges and
other outgoings relating to or payable in respect of the Business
up to and including the Completion Date shall be borne and paid by
the Vendor and as from the Completion Date shall be borne and paid
by the Purchaser and shall be apportioned accordingly.
13.2 All rents, royalties and other periodical payments receivable in
respect of the Business up to the Completion Date shall belong and
be payable to the Vendor and as from that time shall belong to and
be payable to the Purchaser and shall be apportioned accordingly.
13.3 The benefit of any prepayments, deposits or payments in advance
made to the Vendor on or before the Completion Date in respect of
goods and services to be supplied by the Purchaser after the
Completion Date shall belong to the Purchaser and the benefit of
any prepayments, deposits and payments in advance made by the
Vendor in respect of goods ordered but not delivered and services
contracted for but not rendered to the Vendor in connection with
the Business on or before the Completion Date shall be reimbursed
by the Purchaser to the Vendor.
13.4 Any amount due from the Vendor or the Purchaser pursuant to
Clauses 13.1, 13.2 or 13.3 shall be paid within 14 days of written
request from the Purchaser or the Vendor (as the case may be) for
the amount thereof together with supporting vouchers. If any
dispute shall arise as to the amount of any apportionment
hereunder such dispute shall be referred for final determination
in accordance with Clause 20.
14. WARRANTIES
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
14.1 The Vendor warrants and represents to the Purchaser as at the date
of this agreement in the terms of the Warranties.
14.2 The Vendor shall further warrant and represent as at the
Completion Date to the Purchaser in the terms of the Warranties as
if they had been entered into afresh at Completion by reference to
the facts and circumstances then existing.
14.3 Each of the Warranties shall be construed as a separate and
independent warranty and (save where expressly provided to the
contrary) shall not be limited or restricted by reference to or
inference from any other terms of this agreement or any other
Warranty.
14.4 The rights and remedies of the Purchaser in respect of any breach
of any of the Warranties shall continue to subsist notwithstanding
Completion.
14.5 The Vendor hereby undertakes with the Purchaser that it will
forthwith disclose in writing to the Purchaser any event or
circumstance which may arise or become known to it after the date
hereof and prior to Completion which is materially inconsistent
with any of the Warranties or which has or is likely to have an
adverse effect on the financial position or business prospects of
the Business or which is otherwise material to be known by a
purchaser for value of the Business.
14.6 The Purchaser shall be given all such facilities as it (or its
authorized representatives) may reasonably require to enable the
Purchaser to be satisfied with regard to the accuracy of the
Warranties provided that the Warranties shall not be deemed in any
way modified or discharged by reason of any investigation made or
to be made by or on behalf of the Purchaser or by reason of any
information relating to the Business of which
32
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
the Purchaser has knowledge (actual implied or constructive)
except such information as is fully and fairly disclosed in the
Disclosure Letter.
14.7 In the event of any breach or non-fulfilment of any of the
Warranties resulting in:-
14.7.1 the value of the Goodwill and/or any of the other Assets
being or becoming less than it would have been had the
relevant circumstances been as so warranted; or
14.7.2 the Purchaser having incurred or incurring any liability
which it would not have incurred had the relevant
circumstances been as so warranted;
then without prejudice to any other rights or remedies available
to the Purchaser and without restricting its ability to claim
damages on any other basis the Vendor agrees to pay to the
Purchaser on demand an amount sufficient to make good the
diminution in the value of the Goodwill and/or other Assets or an
amount equal to the liability thereby incurred.
14.8 The Vendor hereby agrees to indemnify the Purchaser in full for
and against all costs (including reasonable legal costs) and
expenses (together with any VAT thereon) incurred by the Purchaser
either before or after the commencement of any action in
connection with:-
14.8.1 the settlement of any claim that any of the Warranties has
been breached or is untrue inaccurate or misleading;
14.8.2 any legal proceedings arising out of or in connection with
any claim or breach of any of the Warranties in which
judgment is given in favour of the Purchaser; or
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
14.8.3 the enforcement of any such settlement or judgment.
14.9 The rights of the Purchaser under Clauses 14.7 and 14.8 shall be
in addition and without prejudice to any other right or remedy
available to it under this agreement or otherwise.
14.10 Any amount paid by the Vendor to the Purchaser in respect of a
breach of Warranty shall be treated primarily as a reduction in
the Purchase Price.
14.11 The Warranties shall be qualified by matters fully and fairly
disclosed in the Disclosure Letter but shall otherwise be subject
to no qualification whatsoever.
14.12 The Purchaser acknowledges that no representations, or warranties
express or implied are given by the Vendor in relation to the
Business other than the Warranties themselves.
14.13 The provisions of Schedule 6 shall have effect in respect of the
matters to which this Clause 14 applies to limit the liability of
the Vendor in respect of the Warranties.
15. RIGHT TO RESCIND
15.1 If the Vendor shall disclose any event or circumstance pursuant to
sub-clause 14.5 or if there is a breach of any of the Warranties
or a breach or non-fulfilment of any other term of this agreement
by the Vendor, the Purchaser shall be entitled in addition and
without prejudice to any other right or remedy available to it to
rescind this agreement without any liability to any other party
whereupon the Vendor shall indemnify the Purchaser in full for and
against all claims, costs, expenses and liabilities incurred or
suffered by the Purchaser (including but not limited to all legal
and other professional fees
34
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
and expenses) in connection with the negotiation, preparation and
rescission of this agreement as are incurred after the date of
this agreement.
15.2 The Purchaser shall not be entitled to exercise its right of
rescission under Clause 15.1 unless the matter in question in the
reasonable opinion of the Purchaser (having first discussed the
matter with the Vendor) has had or is likely to result in a
reduction in the value of the Assets of(pounds)1,000,000 or more.
In arriving at its opinion as to whether such matter will have or
has had such an effect the Purchaser shall act reasonably and in
good faith and shall take into account the availability of
insurance receipts in respect of such matter.
16. POST COMPLETION OBLIGATIONS
16.1 The Vendor undertakes to indemnify and keep indemnified the
Purchaser against all liabilities, losses, obligations, costs,
claims, damages, demands and expenses arising directly or
indirectly out of the provision of a secure and adequate supply of
at least 500,000 gallons a day of non saltwater water to the
Property which is suitable for the purposes of the Business
provided that the Vendor's liability under clause 16.1 shall be
limited to 50% of such costs and the Vendor's liability shall be
limited to such amount as is agreed pursuant to Clause ?.
16.2 The Vendor undertakes to provide to the Purchaser in respect of
the manufacturing site at Annan:
16.2.1 within 10 Business Days of Completion audited financial
statements for the years ended 31 December 1994, 31
December 1995 and 31 December 1996;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
16.2.2 within 10 Business Days of Completion, copies of the
unaudited financial statements to Completion;
16.2.3 within 28 days of Completion, copies of the audited balance
sheet and profit and loss accounts for the period from 31
December 1996 to Completion;
16.2.4 by the later of 30 November 1997 and 28 days after
Completion unaudited quarterly accounts in respect of the
period from 1 January 1996 (being audited as at 31 December
1996) to Completion. In respect of any costs incurred by
the Vendor under this Clause 16.2.4 the Purchaser shall, if
required, pay the actual cost of any temporary assistance
up to a maximum of (pounds)5,000.
16.3 The Vendor undertakes to the Purchaser to maintain adequate
insurance in respect of Finished product at the Property both
before and after Completion.
16.4 The Vendor undertakes to obtain from the Vendor's Accountants
authority to use any financial information available or required
in respect of the Business (whether before or after Completion)
under the requirements of the Securities and Exchange Commission
and the Securities Act of 1933 and the Securities Exchange Act of
1934 of the United States and to procure the co-operation of the
Vendor's Accountants in respect of any public offering of Chirex
Inc., including providing any customer comfort letters required by
any underwriters of such offering and to procure access to any
underlying records of the Vendor's Accountants or the Vendor's
Group.
16.5 The Parties undertake to one another that all Records delivered to
the Purchaser at Completion shall be retained by the Purchaser and
all the
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Retained Records shall be retained by the Vendor and each Party
shall make available for inspection and reasonable use by the
other Party all such books, records and other documents retained
by it (or transferred to it as the case may be) relating to the
Business as the other Party may request in finalizing its affairs
in relation to the transfer of the Business and the Assets
pursuant to this agreement and to give effect to this agreement.
The rights and obligations contained in this clause shall expire
on the sixth anniversary of Completion, save in respect of
particular records (including but not limited to Control of
Substances Hazardous to Health records) in respect of which there
is a legal obligation to retain such Records for a longer period.
The Purchaser undertakes to maintain and, on request, provide to
the Vendor samples of Products (as are available on Completion)
manufactured by the Vendor at the Property.
16.6 The Purchaser shall procure at the Vendor's cost that for a period
of 12 months after Completion those of the Employees whose
assistance is reasonably required by the Vendor in connection with
matters arising from its carrying out the Business prior to the
Completion Date will be available at reasonable times to assist
the Vendor provided that such assistance does not unduly interfere
with their day-to-day function within the Business.
17. VALUE ADDED TAX
17.1 The purchase price of the Assets and the Business stated in this
agreement is exclusive of VAT.
17.2 The parties intend that the provisions of section 49 of the Value
Added Tax Act 1994 and Article 5 of the Value Added Tax (Special
Provisions) Order 1995 shall apply to the sale of the Business and
the Assets and, accordingly, no VAT shall be
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
charged by the Vendor on them. The Vendor and the Purchaser shall
each promptly following Completion inform their respective VAT
offices of the sale and purchase under this agreement, complete
all relevant forms for VAT purposes relating to such sale and
purchase and take all reasonable steps to ensure that the sale of
the Business and Assets is treated neither as a supply of goods
nor a supply of services for the purposes of VAT but as the
transfer of a going concern. In the event that it is at any time
determined by HM Customs and Excise or, on appeal, by the tribunal
or the court that section 49 of the Value Added Tax Act 1994 and
Article 5 of the Value Added Tax (Special Provisions) Order 1995
do not apply to the sale of the Business and Assets or any part of
them, the Purchaser shall pay to the Vendor the amount of the VAT
in question on the later of the business day before such amount is
due to be paid by the Vendor to Customs & Excise and the day on
which the Vendor delivers to the Purchaser a valid VAT invoice or
invoices in respect thereof. Subject to the Vendor having complied
with its obligations under this Clause 17 the Purchaser shall in
addition pay any penalty and interest imposed by Customs and
Excise in respect of late payment of such VAT.
17.3 For the purposes of the said Article 5, the Vendor warrants that
it carries on, and that it will immediately prior to Completion
carry on, the Business.
17.4 The Vendor shall, at Completion, deliver to the Purchaser all the
records of the Business for VAT purposes which are required to be
preserved by the Purchaser by section 49(1)(b) of the Value Added
Tax Act 1994, and the Purchaser shall, for a period of not less
than six years from the Completion Date, preserve the records so
delivered and, upon reasonable notice, during normal
38
<PAGE> 45
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
business hours make them available for inspection to the Vendor or
its agent.
17.5 The Purchaser confirms that it will be registered for VAT and will
carry on the Business as a going concern immediately after
Completion.
17.6 The Purchaser confirms that it shall not apply for a reallocation
of the Vendor's VAT registration number.
17.7 The Vendor agrees that it will not at any time before Completion
without the consent of the Purchaser exercise its right under VAT
1994 Schedule 10 paragraph 2 to elect to tax the Property.
18. CAPITAL GOODS SCHEME
The Vendor will provide the Purchaser with all records and other
information required by the Purchaser for the purposes of the Capital
Goods Scheme in Part XV Value Added Tax Regulations 1995 (SI1995/2518)
and any adjustments thereunder.
19. FURTHER ASSURANCE
19.1 Upon and at any time after Completion the Vendor shall at the
request of the Purchaser and at the Vendor's cost do and execute
or procure to be done and executed all such acts deeds documents
and things as may be reasonably necessary to vest the title to the
Business and Assets in the Purchaser and to give effect to this
agreement.
19.2 The Vendor will use all reasonable endeavours to ensure that all
relevant authorisations, permissions, consents, licences or
agreements are (where necessary) transferred to the Purchaser or,
as the case may be, renewed. In particular, but without
limitation, the Vendor shall assist the Purchaser in making
application to or providing information to any relevant authority
for the purpose of such transfer or renewal.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
19.3 Without prejudice to the terms of clause 19.1 the Vendor shall at
the request of the Purchaser and at the Vendor's cost, execute or
procure to be done and executed all such acts, documents and
things as may be necessary or desirable in connection with:
19.3.1 the loss of the original title deeds to the Property; and
19.3.2 the application by the Purchaser to register the title to
the Property.
19.4 The Vendor will at any time after Completion, at the Purchasers
cost and at the request of the Purchaser execute such documents
and give such assistance as is reasonable in ensuring that a
secure and adequate supply of water is available to the Property
for the purpose of the Business.
20. DISPUTE RESOLUTION
If there is a dispute between the Vendor and the Purchaser, pursuant to
Clause 8.4 and/or 13.4, which the Vendor's Accountants and the
Purchaser's Accountants cannot resolve, then the matter in dispute shall
be referred to an independent firm of Chartered Accountants nominated
jointly by them or if no such nomination is made within 14 days after the
expiry of one party requiring nomination, nominated at the request of
either of them by the President for the time being of the Institute of
Chartered Accountants in England and Wales. The Accountants so nominated
shall be entitled to ask for and inspect the working papers, records and
documents of both Parties as they may reasonably consider necessary. In
making their determination, the said Accountants shall act as experts and
not as arbitrators, their decision shall (in the absence of manifest
error) be final and binding on the Parties and their fees shall be borne
and paid by the Vendor and the Purchaser in such proportions as the
Accountants determine in the light of the
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
respective contentions of the Parties, and the Accountants'
determination.
21. SECONDMENT
21.1 The Vendor undertakes to use its best endeavours to procure that
at least 40 Employees are seconded during the period from
Completion to 31 December 1998 to a Vendor Group Company on the
terms set out in the Secondment Letter. The Vendor shall:
21.1.1 make available, within the Vendor's Group, 40 suitable
positions for secondees of the Business;
21.1.2 identify (after consultation with the Purchaser) 40
Employees suitable for secondment, and not required for the
Business during the period from Completion to 31 December
1998;
21.1.3 make proposals, as soon as practicable, to such Employees
for their secondment; and
21.1.4 use its reasonable endeavours to persuade such Employees to
accept its offer of secondment which may include increasing
relocation/secondment benefits.
21.2 The Purchaser shall, following Completion use its reasonable
endeavours to persuade such Employees to accept the offer of
secondment made to them.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
22. ANNOUNCEMENTS
No announcement, communication or circular in connection with the subject
matter of this agreement shall be made (prior to or after the Completion
Date) by or on behalf of the Vendor or the Purchaser without the prior
approval of the other (such approval not to be unreasonably withheld or
delayed) save for:-
22.1 announcements to Employees, customers, suppliers and agents of the
Purchaser and the Business in such form as may be agreed between
the Parties; and
22.2 such announcements, documents, and other information as may be
required by any recognized stock exchange or the Securities
Exchange Commission and/or as required under the Securities Act of
1933 and the Securities Exchange Act of 1934 or which would be
customary for the Purchaser to make to investors, stockholders,
analysts and within the Purchaser's Group.
23. COSTS
Subject to the provisions of Clause 15 each of the Parties shall bear and
pay its own legal, accountancy and other fees and expenses incidental to
the preparation and implementation of this agreement and all other
documents in the agreed form referred to herein.
24. SUCCESSORS AND ASSIGNMENT
No Party may assign or transfer, or purport to assign or transfer, any of
its rights or obligations under this agreement, save that the Purchaser
shall be entitled to assign the benefit of the Warranties to any company
in the Purchaser's Group.
25. ENTIRE AGREEMENT
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
25.1 This agreement (together with the documents referred to in it) and
the Secrecy Agreement constitute the entire agreement between the
parties in connection with its subject matter.
25.2 Neither Party has relied on any representation or warranty except
as expressly set out in this agreement.
26. TIME OF THE ESSENCE
As regards any time date or period mentioned in this agreement time shall
be of the essence.
27. NOTICES
Any notice to be given pursuant to the terms of this agreement must be
given in writing to the Party due to receive such notice at its
registered office from time to time or at its address set out in this
agreement or such other address as may have been notified for the purpose
to the other Parties in accordance with this clause. Notice shall be
delivered personally or sent by first class pre-paid recorded delivery or
registered post (air mail if overseas) or by facsimile transmission and
shall be deemed to be given in the case of personal delivery on delivery
and in the case of posting (in the absence of evidence of earlier
receipt) within 48 hours after posting (6 days if sent by air mail) and
in the case of facsimile transmission on completion of the transmission.
28. AGREEMENT CONTINUES IN FORCE
This agreement shall remain in full force and effect so far as concerns
any matter remaining to be performed at Completion and notwithstanding
that Completion shall have taken place and in respect of any indemnities
and undertakings on the part of the Vendor (including without prejudice
to the generality those contained in Clauses 16 and 19, the Vendor shall
at the Purchaser's request but at the Vendor's cost grant to the
Purchaser, at intervals of not less than four years,
43
<PAGE> 50
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
written confirmation (in such form as the Purchaser may require) that
this Clause remains fully binding on the Vendor notwithstanding the
passage of time.
29. SEVERABILITY
The invalidity, illegality or unenforceability of any provision of this
agreement shall not affect the continuation in force of the remainder of
this agreement.
30. WAIVER
No waiver by the Purchaser of any breach or non-fulfilment by the Vendor
of any provision of this agreement shall be deemed to be a waiver of any
subsequent or other breach of that or any other provision hereof and no
failure to exercise or delay in exercising any right or remedy under this
agreement shall constitute a waiver thereof. No single or partial
exercise of any right or remedy under this agreement shall preclude or
restrict the further exercise of any such right or remedy. The rights and
remedies of the Purchaser provided in this agreement are cumulative and
not exclusive of any rights and remedies provided by law.
31. VARIATIONS
No variation of this agreement or any of the documents in the agreed
terms shall be valid unless it is in writing and signed by or on behalf
of each of the Parties.
32. COUNTERPARTS
This agreement may be executed in any number of counterparts each of
which when executed by one or more of the Parties shall constitute an
original but all of which shall constitute one and the same instrument.
33. FUNDING
The Vendor shall give due consideration prior to Completion to any
comments made by funders of the
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Purchaser's Group in relation to the terms of this agreement.
34. GOVERNING LAW
34.1 Subject to the provisions of Clause 34.2 below, this agreement
shall be governed by and construed in accordance with English Law
and, subject to Clause 20, the Parties hereby submit for all
purposes in connection with this agreement to the exclusive
jurisdiction of the English Courts.
34.2 The provisions of Schedule 3 and the Property Warranties are to be
interpreted in accordance with Scots Law.
AS WITNESS the hands of the Parties or their duly authorized representatives the
day and year first above written
SIGNED by )
for and on behalf of GLAXO ) /s/ Dr. G. Joseph Blaker
GROUP LIMITED in the presence of:- )
Dr. G. Joseph Blaker
Witness
Name
Address
SIGNED by )
for and on behalf of ) /s/ Michael A. Griffith
CHIREX (ANNAN) LIMITED )
in the presence of:- ) Michael A. Griffith
Witness
Name
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Address
46
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 1
Part 1
Apportionment of Purchase Price
================================================
Asset Purchase Price
- ------------------------------------------------
Contracts (pounds)1
- ------------------------------------------------
Equipment (pounds)24,000,000
- ------------------------------------------------
Fixed Plant (Non (pounds)1,000,000
Qualifying)
- ------------------------------------------------
Fixed Plant (pounds)5,000,000
(Qualifying)
- ------------------------------------------------
Goodwill (pounds)7,000,000
- ------------------------------------------------
Intellectual (pounds)1
Property
- ------------------------------------------------
Property (pounds)2,999,998
- ------------------------------------------------
Stock/Work in as determined under
Progress Clause 8
================================================
Part 2
Excluded Assets
1. Cash;
2. All Finished Products;
3. The rights to use the name Glaxo, Wellcome, Glaxo Wellcome or their
respective logos;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
4. Any amounts recoverable by members of the Vendor's Group in respect of
Tax and VAT allowances and repayments attributable to matters or events
occurring on or before Completion;
5. The benefit of any insurance claims arising prior to Completion in
relation to the Business save where such claims relate to Assets to be
acquired by the Purchaser under this agreement; and
6. All Book Debts.
7. All intellectual property in respect of the products manufactured at any
time at the Property by any member of the Vendor's Group.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 2
The Property
(In the First Place) (Primo) ALL and WHOLE the Farm of Waterfoot, Annan, part of
the Estate of Newbie in the County of Dumfries extending to one hundred and
sixty two acres and one hundred and forty three decimal or one thousandth parts
of an acre or thereby being the subjects described in and disponed by and
delineated and shown within red lines on the plan annexed and executed as
relative to the Disposition by Newbie Estates (in voluntary liquidation) and
David Simpson Carson, the Liquidator thereof, in favor of Newbie Salmon
Fisheries Limited dated Seventh and recorded in the Division of the General
Register of Sasines for the County of Dumfries on Nineteenth both days of
January Nineteen hundred and Fifty five: Together with the foreshore of the
Solway Firth and of the River Annan ex adverso the said subjects: BUT EXCEPTING
ALWAYS from the said subjects the whole of the salmon and other fishing rights
ex adverso the same; (Secundo) ALL and WHOLE that lot or piece of ground
extending to one thousand one hundred and twenty five square yards or thereby
being the south-west corner of the field marked number 847 on the Ordnance
Survey map of the Parish of Annan in the County of Dumfries being the subjects
described in and disposed by and delineated and coloured red on the Plan annexed
and subscribed as relative to the Feu Charter by William Dalziel MacKenzie in
favor of himself and Patrick Alexander Pasley Dirom and another, as Trustees for
behoof of the District Board of the River Annan, dated Third and recorded in the
said Division of the General Register of Sasines on Seventeenth both days of
October Nineteen hundred and Ninety three; (Tertio) ALL and WHOLE that area of
ground in the County of Dumfries on which was erected the subjects known as
Newbie Villa being the subjects described in and disponed by and shown outlined
in red on the excerpt of the Ordnance Survey map annexed and executed as
relative to the Disposition by Newbie Salmon Fisheries (Property) Limited in
favor of Glaxo Properties Limited dated Twenty seventh September and recorded in
the said Division of the General Register of Sasines on Sixteenth December both
months in
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Nineteen hundred and Seventy six; and (Quarto) ALL and WHOLE that area of ground
in the County of Dumfries being the subjects described in and (in the Second
Place) disponed by and shown coloured blue between the points "E" and "F" on the
plan annexed and executed as relative to the Deed of Servitude (containing
Disposition and Assignation) by the Rt. Hon. John Frederick, Baron Gretton,
David Stewart Bowser and John Gerard Freeman, as Trustees therein mentioned, in
favor of Glaxo Properties Limited dated Third, Fourteenth and Nineteenth July
Nineteen hundred and Seventy eight and recorded in the said Division of the
General Register of Sasines on Eighth April Nineteen hundred and Eighty; (In the
Second Place) ALL and WHOLE that irregular shaped area or plot of ground in the
County of Dumfries extending to two hundred and twenty square metres or thereby
lying to the south-east of Three Trees Road, Newbie, Annan being the area or
plot of ground more particularly described in, disponed (In the First Place) by
and shown delineated in red on Plan A annexed and executed as relative to
Disposition by Northern Engineering Industries Limited in favor of Glaxo
Operations UK Limited dated Eighteenth April and recorded in the said Division
of the General Register of Sasines on Eleventh June both months in Nineteen
hundred and Eighty TOGETHER WITH (One) the whole buildings and other erections
thereon; (Two) the whole parts, privileges, rights and pertinents thereof or
otherwise offering thereto including without prejudice to the foregoing
generality the servitude and other rights granted in favor of the said subjects
or any part thereof in (a) Deed of Servitude granted by Joseph Robinson in favor
of Glaxo Properties Limited dated Seventh and recorded in the said Division of
the General Register of Sasines on Twenty eighth both days of March Nineteen
hundred and Seventy eight; (b) Deed of Servitude granted by Neil Graham in favor
of Glaxo Properties Limited dated Thirty first March and recorded in the said
Division of the General Register of Sasines on Seventh April both months in
Nineteen hundred and Seventy eight; (c) the said Deed of Servitude (containing
Disposition and Assignation) granted by the Rt. Hon. John Frederick, Baron
Gretton, David Stewart Bowser and John Gerard Freeman, as Trustees therein
mentioned, in favor of Glaxo Properties Limited; (d) Grant of Servitude granted
by the Secretary of State for Defence in favor of Glaxochem
50
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Limited dated Eighteenth September Nineteen hundred and Eighty four and recorded
in the said Division of the General Register of Sasines on Thirtieth January
Nineteen hundred and Eighty five; and (e) Minute of Agreement and Deed of
Excambion between Royal Ordnance plc, the Trustees of Edward William Brook and
Glaxochem Limited dated Twenty fifth and Thirtieth August and Twenty eighth
October both months in Nineteen hundred and Ninety three and Twenty first March
Nineteen hundred and Ninety four and recorded in the said Division of the
General Register of Sasines for publication and also as in the Books of the
Lords of Council and Session for preservation on Third June Nineteen hundred and
Ninety four; (In the Third Place) ALL and WHOLE (FIRST) that rectangular piece
of ground lying on the right bank of the River Annan and on the north-east side
of Milnby Quarry together with the access road leading thereto comprising part
of area number 0900 in the County of Dumfries on the 1:2500 inch Ordnance Survey
map NY1867 and being the subjects shown delineated black and coloured pink on
the plan annexed and executed as relative to the said Minute of Agreement and
Deed of Excambion among Royal Ordnance plc, the Trustees of Edward William Brook
and Glaxochem Limited dated Twenty fifth and Thirtieth August and Twenty eighth
October both months in Nineteen hundred and Twenty three and Twenty first March
nineteen hundred and ninety four and recorded in the said Division of the
General Register of Sasines on Third June Nineteen hundred and Ninety four and
(SECOND) that oblong area of ground comprising compartment 4404 in the said
County situated on the north-eastern corner of area number 0002 on the 1:2500
inch Ordnance Survey map NY1867 and being the subjects shown delineated black
and coloured pink on the said plan annexed and signed as relative to the said
Minute of Agreement and Deed of Excambion dated and recorded as aforesaid
TOGETHER WITH (One) the whole buildings and erections on the said subjects
including, without prejudice to the foregoing generality, the pump house erected
on the subjects (FIRST) described and the pumping station erected on the
subjects (SECOND) described; (Two) the whole parts, privileges, rights and
pertinents offering to the subjects including, without prejudice to the
foregoing generality, the heritable and irredeemable servitude and other rights
specified in the
51
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Disposition by Newbie Estates in favor of the Minister of Supply in trust as
therein mentioned dated Fifth May Nineteen hundred and Forty three and recorded
in the said Division of the General Register of Sasines on Twenty sixth December
Nineteen hundred and Forty four; (Three) entry to the subjects by existing roads
and ways used for that purpose.
Declaring that the various servitude rights constituted in favor of the subjects
above described (In the First Place) by the said five deeds, and any other
servitudes in favor of such subjects which may be constituted by possession,
shall in this agreement and the Schedules thereto be referred to as "the
Servitudes", and the whole heritable subjects above described, under exception
of the Servitudes, shall in the this agreement and the Schedules thereto be
referred to as "the Subjects", declaring that the Subjects shall be deemed to
comprise the whole of the Property under exception only of the Servitudes.
52
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 3
Terms and Conditions of Sale of the Property
1. EXHIBITION OF TITLE/DELIVERY OF DEEDS
1.1 The Vendor warrants that no application has been made for
registration of title to any part of the Property in the Land
Register.
1.2 On the Completion Date the Vendor shall deliver to the Purchaser a
subscribed Disposition in favor of the Purchaser or its nominees,
which shall if the Purchaser requires have attached to it a
taxative plan of the Property acceptable to the Purchaser and
complying with the specific plan requirements of the Keeper as
published from time to time and a subscribed Deed of Servitude in
favor of the Purchaser or its nominees in respect of the Water
Supply in terms of the draft annexed hereto (Annex 3) and shall
exhibit or deliver a valid and marketable title to the Property
(including without prejudice to the generality both the Subjects
and the Servitudes) together with:
1.2.1 clear Searches in the Register of Sasines for 40 years (or
if longer from the date of the prescriptive writ) and in
the Register of Inhibitions and Adjudications for the
prescriptive period; and
1.2.2 a Form P16 Report confirming that the Keeper can identify
the Property on the relevant Ordnance Survey Sheet, a Form
10 Report brought down to a date as near as practicable to
the Completion Date disclosing no entries adverse to the
Vendor's interest, and such documents or evidence,
including a plan or plans, as the Keeper may require to
enable the Keeper to issue a Land Certificate or Land
Certificates in name of the
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Purchaser or its nominees (as the case may be) as the
registered proprietor of the Property (including without
prejudice to the generality the Servitudes) and containing
no exclusion of indemnity in terms of Section 12(2) of the
1979 Act.
1.3 There will also be delivered by the Vendor to the Purchaser on the
Completion Date:
1.3.1 Searches/Reports in the Register of Charges/Mortgage
Register and Company File against any company (including
the Vendor) having an interest in the Property within the
period of 10 years prior to the Completion Date; such
Searches/Reports, continued to a date 22 days after the
date such company divested itself of its interest in the
Property, shall be clear of entries prejudicial to the
ability of the Vendor to grant a valid unencumbered title
to the Property in name of the Purchaser or its nominees;
1.3.2 in relation to the document in terms of which any company
referred to in paragraph 1.3.1 divested itself of its
interest in the Property, evidence that at the time of
signature any person bearing to sign that document as a
Director or Secretary of such company was such a Director
or Secretary, and that any person signing that document on
behalf of such company bearing to have been authorized to
do so was authorized to do so;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
1.3.3 in the case of any body corporate (including the granter of
said Disposition) having an interest in the Property within
the period of 10 years prior to the Completion Date,
evidence that, at the time of signature of any document in
terms of which such body corporate divested itself of its
interest in the Property, all persons signing that document
on behalf of such body corporate were authorized to do so
whether in their capacity as office holders of such body
corporate or otherwise, except where authority so to sign
is presumed under the Requirements of Writing (Scotland)
Act 1995;
1.3.4 a subscribed Assignation of the Water Extraction Consents
in the form annexed hereto (Annex 2) completed as
appropriate;
1.3.5 Dundas & Wilson's Letter of Obligation in the form annexed
hereto (Annex 4) completed as appropriate and duly
subscribed;
1.3.6 any other items required to be delivered on the Completion
Date in terms of any other provision of this Schedule 3.
2. VENDOR'S POST-SETTLEMENT OBLIGATIONS REGARDING TITLE
2.1 The Vendor shall procure that the Land Certificate(s) to be issued
to the Purchaser or its nominees (as the case may be) in respect
of the whole of the Property will disclose no entry, deed or
diligence prejudicial to the Purchaser's or its nominees' interest
other than such as are created by or against the Purchaser or its
nominees or have been disclosed to and accepted by the Purchaser
in terms of this agreement.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
2.2 The Vendor shall exhibit or deliver to the Purchaser within twenty
days of written demand such documentation, evidence and others
(including plans) as may be requisitioned by the Keeper in
connection with the registration of the interest of the Purchaser
or its nominees (as the case may be) in respect of the whole or
any part of the Property in the Land Register.
3. THE GRAZING LEASE
It shall be an essential condition of this agreement that within 21 days
of the execution thereof the Vendor shall deliver to the Purchaser a
subscribed statement and undertaking issued by Messrs J.M. & J. Goldie,
Newbie Mains, Annan as tenant under the Grazing Lease, and each of the
individual Partners thereof, confirming that their sole entitlement to
occupy the subjects of the Grazing Lease is in terms of the Grazing
Lease, and without prejudice to the generality no agricultural tenancy
has been created in respect of the subjects of the Grazing Lease, either
by the Grazing Lease or otherwise, and undertaking to remove from the
subjects of the Grazing Lease on or before 30 November 1997.
4. APPORTIONMENTS ETC
The sums due to the Vendor under the Grazing Lease and the Hoddam
Agreement shall be apportioned between the Vendor and the Purchaser as at
the Completion Date, and the apportionment in respect of the Hoddam
Agreement shall be calculated on the basis of a meter reading taken at
close of business on the day preceding the Completion Date. The Vendor
shall indemnify the Purchaser fully against any and all liability which
the Purchaser may incur in relation to any breach of the terms of the
Grazing Lease or the Hoddam Agreement by the Vendor prior to the
Completion Date.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
5. ASSIGNATION OF RIGHTS
On or prior to the Completion Date the Vendor shall deliver to the
Purchaser a subscribed assignation in favor of the Purchaser or its
nominees assigning to the Purchaser all rights which the Vendor shall
have in respect of the design, construction, manufacture, assembly or
installation of any buildings, structures, civil engineering or other
similar works, plant and equipment, machinery and fixtures and fittings
on or in the Property, along with certified true copies of all
documentation (or alternatively a warranted statement confirming the
whole terms and conditions of the contract) on the basis of which any
such buildings or others were constructed or otherwise as aforesaid,
together with evidence that any requisite consent to such assignation has
been granted, and that in the form annexed hereto (Annex 5) (completed as
appropriate).
6. THE ACCESS AGREEMENT
Following Completion the Vendor shall notify the relevant authority of
the disposal of its interest in the Property as required by Clause FIRST
of the Access Agreement.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 4
Pensions
Part 1: Disclosed Schemes
The Glaxo Wellcome Pension Scheme
The Glaxo Wellcome Contracted Out Money Purchase Scheme
Part 2: Transfer Provisions
1 Definitions
1.1 In this Part of this Schedule the following expressions shall have
the following meanings:
"Actuary" a Fellow of the Institute of
Actuaries or a Fellow of the
Faculty of Actuaries in
Scotland or a firm employing
such persons;
"Actuary's Letter" the letter from the Vendor's
Actuary to the Purchaser's
Actuary dated 10 September 1997
a copy of which is annexed to
this Schedule;
"Adjusted Transfer (a) in relation to transfers
Requirement" Requirement" from the Vendor's
Scheme in respect of FS
Benefits, the Pension
Liabilities multiplied by the
Timing Adjustment in respect of
the period from and including
the Completion Date to but
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
excluding the Due Date; and
(b) in relation to transfers from
the Vendor's Scheme in respect
of MP Benefits an amount
representing at the Due Date
the aggregate of the member's
accounts to which the
Consenting Members acquire a
right on ceasing to be in
pensionable service under the
Vendor's Scheme at the
Completion Date;
"Consenting Members" means those Transferring
Members who have submitted
Transfer Forms to the Vendor's
Scheme not later than 13 weeks
after the later of
(a) being advised by the trustees
of the Purchasers Scheme of the
benefits to be provided for
them in respect of any transfer
made in respect of them
pursuant to this Schedule; and
(b) the Completion Date
and who do not withdraw such
consent prior to payment of the
Transfer Amount;
"Approval" approval by the Board of Inland
Revenue as an
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
exempt approved scheme for the
purposes of Chapter I of Part
XIV of the Taxes Act;
"Due Date" the first working day one week
after the satisfaction of the
last to be satisfied of the
Transfer Conditions;
"FS Benefits" means the benefits to which a
Consenting Member is entitled
or prospectively and
contingently entitled and which
are determined on a final
salary basis under the Vendor's
Scheme;
"Independent Actuary" an Actuary who is nominated by
the Vendor and the Purchaser
jointly or, if they cannot
agree, by the President of the
Institute of Actuaries on
application by either the
Vendor or the Purchaser;
"MP Benefits" means the Benefits
(disregarding any additional
voluntary contributions and
benefits derived from them) to
which a Consenting Member is
entitled or prospectively and
contingently entitled and which
are determined on a money
purchase basis under the
Vendor's Scheme;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"Pensionable Salary" such remuneration of the
Relevant Employees as in each
case is pensionable in
accordance with the governing
documentation of the Vendor's
Scheme;
"Pension Liabilities" as defined in the Actuary's
Letter;
"Pensionable Service" such service of the Relevant
Employees as in each case is
used for the purpose of
calculating pension benefits
under the Vendor's Scheme;
"Purchaser's Actuary" the Actuary appointed by the
Purchaser from time to time for
the purposes of this Schedule;
"Purchaser's Scheme" the ChiRex Pension Scheme
established by an interim trust
deed dated 5 February 1996 (or
where the context so requires,
the trustees for the time being
of that scheme);
"Relevant Employees" those Employees who at
Completion are active members
of the Vendor's Scheme;
"Timing Adjustment" as defined in the Actuary's
Letter;
"Transfer Amount" the amount (if any) which the
Vendor's Scheme pays to the
Purchaser's Scheme
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
in respect of the Consenting
Members;
"Transfer Conditions" all of the following:
(1) the Board of Inland Revenue has
given its written approval to
the transfer of assets from the
Vendor's Scheme to the
Purchaser's Scheme in respect
of the Transferring Members and
that approval still subsists;
(2) the Vendor's Scheme has
received the Transfer Forms
from Consenting Members; and
(3) the amount of the Pension
Liabilities has become final
and binding whether by
agreement under paragraph 4 or
following determination of any
dispute under paragraph 7;
"Transfer Form" means the document (prepared in
such form as the Vendor and the
Purchaser shall agree: such
agreement not to be
unreasonably withheld or
delayed) which shall include a
discharge in favor of the
Vendor's Scheme which each
Consenting Member signs
confirming his request
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
for or consent to a payment or
transfer being made from the
Vendor's Scheme to the
Purchaser's Scheme for and in
respect of him and under which
he exercises his right in
relation to his cash equivalent
in accordance with the
provisions of Part IV of
Chapter IV of the 1993 Act so
as to acquire transfer credits
or other rights under the
Purchaser's Scheme;
"Transferring Members" those Relevant Employees who
become members of the
Purchaser's Scheme with effect
from Completion Date pursuant
to the offer of membership
referred to in paragraph 2
below and whose names shall be
provided to the Vendor by the
Purchaser within 28 days of the
Completion Date;
"Vendor's Actuary" the Actuary appointed by the
Vendor from time to time for
the purposes of this Schedule;
"Vendor's Scheme" the Glaxo Wellcome Pension
Scheme (or, where the context
so requires, the trustees of
that scheme);
"1993 Act" the Pension Schemes Act 1993;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"1995 Act" the Pensions Act 1995
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
2 The Purchaser's Scheme
The Purchaser undertakes to the Vendor that:-
2.1 the Purchaser shall procure that not later than 14 days after
Completion Date all Relevant Employees who have not reached their
retirement date or otherwise ceased to be active members under the
Vendor's Scheme shall be invited in writing to become members of
the Purchaser's Scheme with effect from the Completion Date. The
invitations must be consistent with this Schedule and in this
respect they shall be subject to the prior approval of the Vendor
(which shall not be unreasonably withheld or delayed). For the
avoidance of doubt any Relevant Employee who dies between the
Completion Date and the date on which the Relevant Employee either
becomes a member of the Purchaser's Scheme or is deemed under the
terms of the invitation to have rejected the invitation shall be
provided with lump sum death in service benefits and survivor's
benefits as if he or she had been a member of the Purchaser's
Scheme with effect from the Completion Date;
2.2 the Purchaser's Scheme shall at the Completion Date either have
received Approval or be capable of receiving Approval and be a
scheme to which the Vendor's Scheme can make a transfer payment
without prejudicing the Approval of the Vendor's Scheme;
2.3 the Purchaser undertakes that in respect of the Transferring
Members and their service with the Purchaser from the Completion
Date benefits will be provided (subject to the terms of the
Purchaser's Scheme relating to amendment and discontinuance) on
the same basis as they are provided for other employees of the
Purchaser under that scheme.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
3 Calculation of the Transfer Requirement
3.1 Within a period of 2 months following the Completion Date the
Vendor shall procure that the Vendor's Actuary receives all
material information under the Vendor's control which is necessary
to calculate the Pension Liabilities and the Purchaser shall
procure that the Vendor's Actuary receives all material
information under the Purchaser's control required to calculate
the Pension Liabilities;
3.2 Within a period of 2 months following the receipt by the Vendor's
Actuary of the complete, true and accurate information required to
calculate the Pension Liabilities, the Vendor shall procure that
the Vendor's Actuary calculates the Pension Liabilities and
submits his results in writing to the Purchaser's Actuary for
verification by the Purchaser's Actuary together with such
information as the Purchaser's Actuary may reasonably require for
the purpose of verifying the Vendor's Actuary's calculations;
3.3 At the date which is 2 months after the date of receipt by the
Purchaser's Actuary of details of the calculations described in
3.2 above the Purchaser's Actuary shall be deemed to have agreed
to those calculations and to the amount of the Pension Liabilities
so calculated unless he shall within that time have notified the
Vendor's Actuary in writing to the contrary;
3.4 If the Vendor's Actuary and the Purchaser's Actuary cannot agree
the amount of the Pensions Liabilities within a period of 3 months
after the date of receipt by the Purchaser's Actuary of details of
the calculations described in 3.3 above (or such earlier or later
date as the Vendor and the Purchaser may agree), then either the
Vendor or the Purchaser may require by notice in writing to the
other the amount of the Pension Liabilities
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
to be determined by an Independent Actuary in accordance with
paragraph 7 below.
4 Payment of the Transfer Requirement and Provision of Benefits
4.1 The Vendor shall use its reasonable endeavours to procure that the
Vendor's Scheme shall pay the Adjusted Transfer Requirement to the
Purchaser's Scheme on or before the Due Date.
4.2 The Adjusted Transfer Requirement shall be satisfied by the
transfer of such assets (which may include cash in whole or part)
as shall be agreed by the Vendor's Scheme and the Purchaser's
Scheme and in default of agreement shall be in cash.
4.3 Subject to receipt of the Adjusted Transfer Requirement on the Due
Date by the Purchaser's Scheme and/or of any payment which falls
due under paragraph 5 below, the Purchaser will procure that
benefits are provided for and in respect of the Consenting Members
under the Purchaser's Scheme in respect of their service prior to
the Completion Date:
4.3.1 in relation to the FS Benefits of each Consenting Member,
which are of equivalent value overall, in the reasonable
opinion of Purchaser's Actuary and on an actuarial basis
consistent with that set out in the Actuary's Letter, to
those which would have been provided for and in respect of
them under the Vendor's Scheme (as in force at the
Completion Date) on retirement, death or withdrawal if the
Consenting Member had continued in Pensionable Service
under the Vendor's Scheme calculated by reference to
Pensionable Salary at retirement, death
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
or withdrawal but related only to service prior to the
Completion Date; and
4.3.2 in relation to the MP Benefits of each Consenting Member,
which are of equivalent value, in the reasonable opinion of
Purchaser's Actuary, and on an actuarial basis consistent
with that set out in the Actuary's Letter, to the amount
transferred in respect of each of them (which Vendor's
Actuary shall identify to Purchaser's Actuary) pursuant to
para (b) of the definition of Adjusted Transfer
Requirement.
4.4 The Purchaser's Actuary shall certify to the Vendor's Actuary that
the benefits to be provided by the Purchaser's Scheme comply with
paragraph 4.3 above.
5 Adjustments to the Transfer Requirement
5.1 If at the Due Date the Transfer Amount is less than the Adjusted
Transfer Requirement the Vendor shall (subject to paragraph 5.2
below) pay, as an adjustment to the consideration, to the
Purchaser the amount equal to the difference between the Transfer
Amount and the Adjusted Transfer Requirement less the percentage
rate of Corporation Tax applying generally on the Due Date
multiplied by the Timing Adjustment in respect of the period from
the Due Date to the actual date of payment (such amount being
known as "the Shortfall") within a period of 5 working days after
the Due Date.
5.2 No payment shall be due from the Vendor pursuant to paragraph 5.1:
5.2.1 if the reason for the Transfer Amount (or part of it) not
having been
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
transferred to the Purchaser's Scheme at the Due Date is
the failure of the Purchaser's Scheme, for whatever reason,
to accept the whole, or any part of the Transfer Amount, or
if the reason is any other reason outside the control of
the Vendor's Scheme but, if no payment is due from the
Vendor because of any such other reason outside the control
of the Vendor's Scheme, payment will become due (in
accordance with paragraph 5.1) if, and when, such reason
ceases to exist;
5.2.2 unless the Purchaser undertakes in writing to the Vendor to
pay any amount received pursuant to 5.1 above forthwith to
the Purchaser's Scheme.
6 Additional Voluntary Contributions
6.1 Any additional voluntary contributions paid by Consenting Members
to Vendor's Scheme and all benefits derived therefrom on a money
purchase basis shall be disregarded for the purposes of this part
of this Schedule other than this paragraph 6. The Vendor shall use
its reasonable endeavours to procure that on the Due Date the
Vendor's Scheme transfers or procures the transfer to the
Purchaser's Scheme of the amount of any such additional voluntary
contributions paid by the Consenting Members to the Vendor's
Scheme together with accumulated interest or bonuses thereon in
such form (which may include cash in whole or part) as shall be
agreed by the Vendor's Scheme and the Purchaser's Scheme and in
default of agreement shall be in cash;
6.2 The Purchaser shall procure that the Purchaser's Scheme applies
the amount of such transfer as is described in 6.1 above in the
provision of additional benefits on a money purchase basis under
the Purchaser's Scheme for and in respect of
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
each relevant individual Consenting Member who has paid such
additional voluntary contributions.
7 Independent Actuary
Any dispute between Vendor and Purchaser or between Vendor's Actuary and
Purchaser's Actuary about any matters referred to in this Schedule shall,
in the absence of agreement, be referred to an Independent Actuary. The
Independent Actuary will act as an expert and not as an arbitrator. His
decision will (except in the case of manifest error) be final and
binding. His expenses will be borne equally by Vendor and Purchaser or as
he may otherwise direct.
8 Indemnity
The Purchaser shall indemnify and keep indemnified the Vendor on an
after-tax basis against all actions, proceedings, reasonable costs,
claims, damages and reasonable expenses arising from, or in connection
with, any claim brought against the Vendor by, or on behalf of, a
Transferring Member on grounds that the benefits provided under the
Purchaser's Scheme in respect of service after the Completion Date are
inferior to those provided under the Vendor's Scheme immediately prior to
the Completion Date.
Part 3: Warranties
1 Except under the Disclosed Schemes no agreement, arrangement, custom or
practice (whether ex-gratia or otherwise) exists whereby the Vendor is
under any obligation to provide or pay towards the provision of any
relevant benefits (as defined in Section 612(1) Taxes Act with the
omission of the exception to that definition) for any Employee or for any
dependent of any Employee.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
2 In relation to each Disclosed Scheme full details of the Disclosed Scheme
have been given to the Purchaser including:-
2.1 true and complete copies of the trust deeds rules and other
documents containing the provisions currently governing the
Disclosed Scheme;
2.2 copies of the booklet issued to employees who are or may become
members of the Disclosed Scheme and of all announcements or other
employee literature issued to such employees which detail changes
to the provisions of the Disclosed Scheme which are not
incorporated in the Disclosed Scheme's formal governing documents;
2.3 in relation to a Disclosed Scheme under which some or all of the
benefits are payable on a final salary basis a copy of the last
actuarial valuation;
2.4 a copy of the audited accounts of the Disclosed Scheme for the
last scheme year;
2.5 a list of the Disclosed Scheme's active members setting out all
information required to determine their respective entitlement to
benefits under the Disclosed Scheme;
2.6 full details of any exercise of any power or discretion under the
Disclosed Scheme in relation to the Relevant Employees (as defined
in Part 2 above) to augment benefits or to provide new or
additional benefits which would not otherwise be provided or to
admit to membership any person who would not otherwise be eligible
for membership;
3 In relation to each Disclosed Scheme under which the amount of the
benefits payable to or in respect of a member (other than any insured
lump sum death in service benefits) is based solely on the amount of the
accumulated contributions made to the Disclosed Scheme
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
by or in respect of the member together with investment return thereon:-
3.1 as far as the Vendor is aware no written undertaking or assurance
has been made or given to any member of the Disclosed Scheme that
any particular level or amount of benefit (other than insured lump
sum death in service benefit) will be provided for or in respect
of them under the Disclosed Scheme; and
3.2 no contributions due to the Disclosed Scheme have fallen due but
are unpaid.
4 Neither the Vendor nor any other employer participating in a Disclosed
Scheme has any liability to make any payment to the Disclosed Scheme
pursuant to section 75 Pensions Act 1995 (or otherwise) or any
undischarged liability pursuant to Regulation 3 the Occupational Pension
Schemes (Deficiency on Winding Up etc) Regulations 1996.
5 Every employee who has been admitted to membership or offered membership
of a Disclosed Scheme after 31st May 1989 has been admitted to or offered
admission on terms which comply with the requirements of Part 2 of
Schedule 6 to the Finance Act 1989 and the substance of such terms have
been communicated to each such employee in writing.
6 In respect of the Employees the records of each Disclosed Scheme have
been properly and accurately maintained, there has been no such breach of
the trusts of any Disclosed Scheme and there are not in respect of any
Disclosed Scheme any actions suits or claims (other than routine claims
for benefits) outstanding pending or threatened against the trustees or
administrator of the Disclosed Scheme or against the Vendor or any other
employer participating in the Disclosed Scheme and after making
reasonable enquiries the Vendor is not aware of any circumstances which
might give rise to any such claims.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
7 Each Disclosed Scheme is approved or capable of approval as an exempt
approved scheme (within the meaning of Chapter I of Part XIV Taxes Act)
and there is in force in respect of the employments to which the Glaxo
Wellcome Contracted Out Money Purchase Scheme relates an appropriate
contracting-out certificate under the Pension Schemes Act 1993.
8 In respect of the Employees each Disclosed Scheme has been administered
in accordance with all applicable laws being all relevant statutes and
subordinated legislation of the Parliament of the United Kingdom and all
relevant provisions of the law of the European Communities.
9 Other than as revealed in the documents disclosed to the Purchaser
pursuant to paragraph 2 no undertaking or assurance has been given to any
of the Employees as to the continuance or introduction of or increase or
improvement to any benefits under any Disclosed Scheme which the
Purchaser will be legally required to implement.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 5
Warranties
1 INFORMATION SUPPLIED
All information contained in this agreement (other than in relation to
the Purchaser), all matters contained in the Disclosure Letter, all other
information relating to the Business given by the Vendor or its
accountants or solicitors to the Purchaser or its accountants or the
Purchaser's Solicitors or the Purchaser's Property Solicitors and the
replies to the Purchaser's due diligence enquiries are true, accurate and
complete in every respect and there is no fact or matter relating to the
Business which is known to the Vendor which has not been disclosed in the
Disclosure Letter which renders any such matters or information untrue,
incomplete or misleading or the disclosure of which is material to be
known by a purchaser of the Business and the Assets.
2 CAPACITY
The Vendor has full power and authority to enter into and perform this
agreement which constitutes a binding and enforceable obligation on the
Vendor in accordance with its terms.
3 ACCOUNTS
3.1 The Accounts have been carved out from the historical books and
records of GWO as if the site was a stand alone entity and were
prepared in accordance with the historical cost convention and
present fairly in all material respects the assets and liabilities
of the Business as at the Accounts Date and its profits for the
accounting reference period ended on the Accounts Date and agree
with the Records of the Business. The Financial Statements do not
represent UK statutory financial statements as the site is part of
Glaxo Operations UK Limited.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
3.2 Without limiting the generality of paragraph ? above the Accounts
disclose all the Assets and either make full provision or reserve
for or, as appropriate, disclose all liabilities whether actual,
contingent, unquantified or disputed and all capital commitments
whether actual or contingent of the Vendor and/or GWO in relation
to the Business as at the Accounts Date.
3.3 Any Slow-Moving Stock included in the Accounts has been written
down appropriately and any Defective, redundant or Obsolete, Stock
or Stock outside of its Shelf-Life has been wholly written off and
the value attributed to the remaining Stock and Work in Progress
does not exceed the lower of cost or net realisable value at the
Accounts Date.
3.4 The audited balance sheets and profit and loss accounts of GWO in
relation to the Business for each of the accounting reference
periods ended on the Accounts Date complied with the requirements
of all relevant laws then in force and with all SSAP's and FRS's
and generally accepted accounting principles of the United Kingdom
then in force.
3.5 The rate of depreciation adopted in the audited balance sheets of
GWO in relation to the Business for each accounting reference
periods ended on the Accounts Date was sufficient for each of the
Fixed Assets of the Vendor in relation to the Business to be
written down to nil by the end of its useful life.
3.6 Except as stated in the audited balance sheets and profit and loss
accounts of GWO in relation to the Business for each of the
accounting reference periods ended on the Accounts Date no changes
in the policies of accounting have been made therein for any of
those periods and the method of valuing Stock and Work in Progress
and the basis of depreciation and amortization adopted has been
consistent during each of those periods.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
3.7 The profits shown by the audited profit and loss accounts of GWO
in relation to the Business for each of the accounting reference
periods ended on the Accounts Date have not (except as therein
disclosed) been affected by any extraordinary or exceptional item
or by any other factor rendering such profits for all or any of
such periods unusually high or low.
3.8 The Management Accounts have been prepared in accordance with
generally accepted accounting policies and accurately state the
assets and liabilities and turnover and profit before taxation of
the Business for the period from 31 December 1996 to the last date
to which management accounts are available prior to Completion.
4 POSITION SINCE 31 DECEMBER 1996
4.1 Since 31 December 1996:-
4.1.1 the Business has been carried on in the ordinary and usual
course as regards the nature, extent and manner of carrying
it on; and
4.1.2 there has been no deterioration either in the financial or
trading position or in the prospects of the Business; and
4.1.3 there has been no deterioration by reference to the
International Active suppliers Production Plan Model in the
expected demand for Product to be produced by the Business
over the period of 5 years after the Completion Date.
4.2 Without prejudice to the generality of paragraph 4.1 since 31
December 1996:-
4.2.1 neither the Vendor nor GWO has in relation to the Business
acquired or disposed of or agreed to acquire or
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
dispose of any business or any material asset or assumed or
acquired any material liability (including a contingent
liability) otherwise than in the ordinary course of
business;
4.2.2 GWO has paid the creditors of the Business in accordance
with their respective credit terms and there are no amounts
owing by the Vendor/GWO which have been due for more than 6
weeks beyond their normal credit terms;
4.2.3 no debtor relating to the Business has been released by the
Vendor on terms that he pays less than the book value of
his debt and no debt owing to the Vendor/GWO in relation to
the Business has been deferred, subordinated or written off
or has proved to any extent irrecoverable and all book
debts at the date hereof are good and will be recoverable
in full on their respective due dates in the ordinary
course;
4.2.4 neither the turnover nor the expenses (direct or indirect)
nor the trading position nor the margin of profitability of
the Business shows any material deterioration by comparison
with the turnover, expenses, trading position and margin of
profitability of the Business for the corresponding period
from 31 December 1995 to 31 December 1996;
4.2.5 no contract or commitment (whether in respect of capital
expenditure or otherwise) has been entered into by the
Vendor or GWO in relation to the Business which is of an
unusual or long term nature or which was entered into
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
otherwise than in the ordinary course of the Business;
4.2.6 save in relation to the design and development work which
the Purchaser has agreed is necessary at the Property to
facilitate the production of ****, neither the Vendor nor
GWO has incurred nor agreed to incur any capital
expenditure in relation to the Business;
4.2.7 neither the Vendor nor GWO has reduced or increased the
levels of stocks or raw materials and spares and
replacement parts in relation to the Business to a material
extent and such stocks are adequate for the current needs
of the Business.
5 TAXATION
5.1 Neither the Vendor nor GWO is involved in any dispute with the
Inland Revenue HM Customs & Excise or other fiscal authority
concerning any matter which could affect the Business or any of
the Assets in any way.
5.2 There is no unsatisfied liability to capital transfer tax or
inheritance tax attached or attributable to any of the Assets and
the Assets are not subject to an Inland Revenue charge as
mentioned in Section 237 Inheritance Tax Act 1984.
5.3 No person has a power of sale or mortgage or the right to charge
on any of the Assets in the circumstances mentioned in Section 212
Inheritance Tax Act 1984.
5.4 No security has been given over any of the Assets in favour of the
Commissioners for Customs and Excise under the provisions of
paragraph 4 of Schedule 11 Value Added Tax Act 1994.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
5.5 No election has been made and no election will be made on or
before Completion under paragraph 2 of Schedule 10 Value Added Tax
Act 1994 in relation to any of the Property.
5.6 Neither the Vendor nor GWO has received notice of an election
under paragraph 2 Schedule 10 Value Added Tax Act 1994 from the
holder of any interest immediately superior to that held by the
Vendor in respect of any of the Property.
5.7 None of the Assets is a capital item the input tax on which may be
subject to adjustment under Part VA Value Added Tax (General)
Regulations 1985.
5.8 All documents in the possession or under the control of the
Vendor/GWO or to the production of which the Vendor/GWO is
entitled which are necessary to establish the title of the Vendor
to any Asset and which attract stamp duty in the United Kingdom or
elsewhere have been properly stamped and no documents are outside
the United Kingdom which would attract duty if they were brought
into the United Kingdom.
6 BUSINESS NAME
The Vendor/GWO does not use any name for any purpose in connection with
the Business other than its full corporate name.
7 LICENCES AND CONSENTS
The Vendor and/or GWO has obtained all licences, permissions,
authorisations and consents required for the proper carrying on of the
Business (details of which are set out in the Disclosure Letter). All
such licences, permissions, authorisations and consents are in full force
and effect and neither the Vendor nor GWO is in breach of any of the
terms and conditions attached thereto and there are no circumstances
known to the Vendor which indicate that any of such licences,
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
permissions authorisations or consents may be revoked or not renewed in
whole or in part in the ordinary course of events nor are there any
circumstances known to the Vendor and/or GWO which indicate that
equivalent licences, permissions, authorisations, or consents on no less
favourable terms would not be granted to the Purchaser following its
acquisition of the Business.
8 THE PROPERTY AND ENVIRONMENTAL MATTERS
Title
8.1 The Property comprises all the land and premises and heritable
property and rights owned, occupied or otherwise used by the
Vendor/GWO in connection with the Business.
8.2 GWO is the heritable proprietor of the Property and (save to the
extent (if any) fully disclosed in the Disclosure Letter) no other
party has any right, title or interest in or to the Property, and
all plant and equipment and fixtures and fittings on, at, or in
the Property are the absolute property of GWO, free from any lien
or encumbrance.
8.3 GWO has a good and marketable title to the Property free from all
questions or doubts and (in particular) where GWO or its
predecessors in title has prior to the date hereof sold off land
adjoining or near to the Property there were excepted and reserved
to the Vendor all necessary and appropriate servitudes and other
rights for the benefit of the Property.
8.4 Any information contained in the Disclosure Letter as to the terms
of any leases or licences which have been granted over any part of
the Property is true and accurate in all material respects.
8.5 GWO's title has been recorded in the General Register of Sasines,
but no application has been
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
made in respect of the Property in the Land Register.
8.6 The Deeds and Documents comprise all deeds or documents or written
agreements which constitute, vary or otherwise affect GWO's title
to the Property.
Encumbrances
8.7 The Property is free from any standard security, floating charge
or other lien or charge or incumbrance securing the repayment of
monies or other obligation or liability, whether of the Vendor/GWO
or any other party.
8.8 The Property is not subject to any liability for the payment of
any outgoings other than non-domestic rates, water and sewerage
rates, and insurance premiums.
8.9 Save as may be disclosed in the Deeds and Documents the Property
is not subject to any leases, burdens, restrictions, stipulations,
servitudes, licences, grants, exceptions or reservations,
overriding interests or other such rights the benefit of which is
vested in third parties nor any agreement to create the same.
8.10 Where any such matters as are referred to in Paragraphs 8.7, 8.8
and 8.9 have been disclosed in the Disclosure Letter the
obligations and liabilities imposed and arising under them have
been fully observed and performed in all material respects and all
payments in respect of them due and payable have been duly paid.
8.11 The Property is not subject to any agreement or right to acquire
the same nor any option right of pre-emption or right of first
refusal and there are no outstanding actions, claims, disputes or
demands between the Vendor and/or GWO and any
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
other party affecting or in respect of the Property.
8.12 Save as disclosed in the Disclosure Letter there is no person who
is in occupation or who has or claims any rights or servitudes of
any kind in respect of the Property adverse to the interest, right
or title of the Vendor or GWO therein.
Planning Matters
8.13 For the purposes of sub-paragraphs 8.13 to 8.24 (inclusive) of
this paragraph 8:-
"the Planning Acts" means
The Town and Country Planning (Scotland) Act 1997
The Planning (Listed Buildings and Conservation Areas) (Scotland)
Act 1997
The Planning (Hazardous Substances) (Scotland) Act 1997
The Planning (Consequences Provisions) (Scotland) Act 1997
The Planning and Compensation Act 1991
as the same are from time to time varied or amended and any other
statute or subordinate legislation relating to planning matters.
8.14 Each and every use of the Property is the permitted or lawful use
for the purposes of the Planning Acts and no such use is subject
to planning conditions of an onerous or unusual nature (including
any of a personal or temporary nature).
8.15 Planning permission has been granted or is deemed to have been
granted for the purposes of the Planning Acts in respect of the
development of the Property and any subsequent alteration,
extension or other improvement of the same and no planning
permission is of a personal or temporary nature or
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
has been revoked, modified or suspended or is the subject of a
Court of Session challenge and no application for planning
permission is either awaiting decision or the subject of any
appeal.
8.16 Building warrants and certificates of completion and approvals
have been obtained in respect of the development of the Property
and any subsequent alteration extension or other improvement of
the same.
8.17 Compliance is being made and has at all times been made in all
respects with all planning permissions and building warrants for
the time being in force in relation to the Property and with all
orders directions and regulations made under the Planning Acts and
the Building (Scotland) Acts.
8.18 Save as referred to in the Disclosure Letter no agreements or
undertakings relating to the Property have been entered into under
the provisions of:-
8.18.1 Sections 3A, 8, 16 or 37 of the Sewerage (Scotland) Act
1968;
8.18.2 Sections 14 and 48 of the Roads (Scotland) Act 1968;
8.18.3 Section 50 of the Town and Country Planning (Scotland) Act
1972 or Section 75 of the Town and Country Planning
(Scotland) Act 1997;
or any similar legislation or earlier legislation of the same
nature ("Statutory Agreements").
8.19 Compliance is being and has at all times been made with all
Statutory Agreements relating to the Property.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
8.20 No part of the Property is listed as being of special historic or
architectural importance or located in a conservation area nor is
the Property affected by any tree preservation orders.
8.21 All development charges, monetary claims and liabilities under the
Planning Acts or any other such legislation have been discharged
and no such liability contingent or otherwise is outstanding in
respect of the Property.
8.22 No part of the Property is affected or likely to be adversely
affected by any proposals contained in any structure plan, local
plan or unitary development plan prepared or in the course of
preparation in respect of the areas in which the Property is
situated.
8.23 All statements made and all information supplied by or on behalf
of the Vendor or GWO in support of applications lodged for the
grant of certificates of lawful existing use or development and
certificates of lawful proposed use or development under the
Planning Acts in respect of the Property were and remain true and
accurate in all material respects.
8.24 No planning contravention notices, breach of condition notices,
enforcement notices or stop notices have been issued by any local
planning authority in respect of the Property nor has any other
enforcement action (including the exercise of any right of entry)
been taken by any such authority and the Vendor is not aware of
any circumstances which may lead to the same.
Statutory Obligations
8.25 Compliance is being made and has at all times been made with all
applicable statutory and byelaw requirements with respect to the
Property and in particular (but without limitation) with
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
requirements as to fire precautions and means of escape in case of
fire and with requirements under the Public Health Acts, the
Housing Acts, the Highways and Roads (Scotland) Acts, the Offices
Shops and Railway Premises Act 1963, the Health and Safety at Work
etc Act 1974 and the Factory Acts.
8.26 There is no outstanding and unobserved or unperformed obligation
with respect to the Property necessary to comply with the
requirements (whether formal or informal) of any competent
authority exercising statutory or delegated powers and neither the
Vendor nor GWO anticipates that the owner of the Property will be
obliged to incur the expenditure of any substantial sum of money
within the next two years for such purpose.
8.27 There are not in force or required to be in force any licences
whether under the Licensing (Scotland) Act 1976 or otherwise which
apply to the Property or relate to or regulate any activities
carried on therein.
Adverse Orders
8.28 There are no compulsory purchase notices orders or resolutions
affecting the Property nor is the Vendor nor GWO aware of any
circumstances likely to lead to any being made.
8.29 There are no closing demolition or clearance orders affecting the
Property nor is the Vendor nor GWO aware of any circumstances
likely to lead to any being made.
Condition of the Property
8.30 The buildings and other structures on the Property are in good and
substantial repair and fit for the purposes for which they are
presently used.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
8.31 The principal means of access to the Property are over roads which
have been taken over by the local or other highway or roads
authority and which are maintainable at the public expense and no
means of access to the Property is shared with any other party nor
subject to rights of determination by any other party and the
Vendor and/or GWO has obtained written confirmation from the roads
authority that all bridges on the normal route for lorry traffic
between the Property and the A75 Trunk Road (including without
prejudice to the generality the bridge over the railway line
leading to the B724 public road) are fit to carry vehicles of at
least 40 tonnes weight.
8.32 The Property enjoys the main services of water drainage
electricity and gas through media located entirely on in or under
the Property and the passage and provision of such services is
uninterrupted.
8.33 No part of the Property is located in an area or subject to
circumstances particularly susceptible to flooding.
8.34 No building or structure on the Property has at any time been
affected by structural damage or electrical defects or by timber
infestation rising damp or disease.
8.35 The Property is not affected by past or present mining activity.
8.36 None of the buildings or other structures on the Property contains
so far as the Vendor is aware in its fabric any:-
8.36.1 high alumina cement or concrete;
8.36.2 calcium chloride cement;
8.36.3 calcium silicate bricks or tiles;
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
8.36.4 blue asbestos or other asbestos products;
8.36.5 wood wool slabs in permanent shuttering form;
8.36.6 crocidolite;
8.36.7 untreated sea-dredged aggregates;
8.36.8 alkali re-active aggregates;
8.36.9 urea formaldehyde;
8.36.10 vermiculite plaster;
8.36.11 artificial slates;
8.36.12 lead based paints;
8.36.13 concrete curing accelerator;
or any deleterious substances or any substances not approved by
the British Standards and Codes of Practice for the time being.
Insurance
8.37 The Property is insured in its full reinstatement value and
against third party and public liability claims to an adequate
extent.
8.38 All premiums payable in respect of insurance policies relating to
the Property which have become due have been duly paid and no
circumstances have arisen which would vitiate or permit the
insurers to avoid such policies.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
The Grazing Lease
8.39 The Grazing Lease has been validly executed in self-proving form,
and the subjects thereof are as shown on the plan annexed to the
Disclosure Letter. The Grazing Lease has not been varied in any
respect. Neither the Tenant under the Grazing Lease nor any of the
partners thereof nor any connected person has had any title to
occupy any part of the Property prior to commencement of the
Grazing Lease on 15 March 1997. No party is entitled to claim an
agricultural tenancy in respect of the property or part thereof,
and the heritable proprietor for the time being of the Property is
entitled to vacant possession of the subjects of the Grazing Lease
on 30 November 1997 without requiring to give any notice.
8.40 Neither the Vendor nor GWO nor the tenant under the Grazing Lease
either is or has been in breach of the Grazing Lease in any
respect.
The Hoddam Agreement
8.41 The Hoddam Agreement has not been varied in any respect.
8.42 Neither Hoddam nor GWO are or have been in breach of the Hoddam
Agreement in any respect.
The Water Supply
8.43 At no time has there ever been complaint about or challenge as to
the entitlement to the Water Supply by any party at any time since
the Business commenced to make use of the Water Supply.
8.44 The Vendor has a valid and marketable title to make use of the
Water Supply without any restriction as to the quantity of water
(other than implied by common law) and to leave in place
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
and maintain repair, renew and replace as necessary the Pipeline.
8.45 At no time has the quantity of water actually available from the
Water Supply been inadequate for the requirements of the Business
or to meet the Vendor's obligations under the Hoddam Agreement.
8.46 Other than Hoddam in terms of Hoddam Agreement, no other party
makes use of the Water Supply or the Pipeline.
8.47 The Pipeline has been properly maintained by appropriate
specialist contractors and the Vendor is aware of no defects in
the Pipeline or repairs which might be required to the Pipeline.
8.48 So far as the Vendor or GWO is aware the Pipeline has not been
damaged by the action of any third party.
8.49 The Vendor or GWO has in its possession full records showing the
quantity of water consumed at the Property through the Water
Supply, and will deliver same to the Purchaser at Completion.
8.50 Neither the Vendor nor GWO has at anytime been unable to supply to
Hoddam 1,500,000 gallons of water per day as required by the
Hoddam Agreement.
8.51 Neither the Vendor nor GWO has had cause to complain about the
abstraction of water from the River Annan by any other party.
Damage to the Property
8.52 The Property has at no time suffered any damage or encroachment by
sea or tidal action or flooding by either salt or fresh water.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
8.53 Neither the Vendor nor GWO has on any occasion suffered any damage
to the Property or inconvenience to or interruption of the
Business pursuant to the exercise of any right of access over the
Property either pursuant to the Access Agreement or otherwise.
Miscellaneous
8.54 The Proprietor of the Boilerworks to the north east of the
Property has not exercised the right conferred in Disposition by
Northern Engineering Industries Limited in favor of Glaxo
Properties Limited recorded in said Division of the General
Register of Sasines on 11 June 1980 to make use of the access road
forming part of the Property for heavy vehicular traffic.
8.55 All the burdens and conditions contained in the Deeds and
Documents or other title deeds of the Property have been complied
with and, insofar as of a continuing nature, will be complied with
by the Vendor or GWO at its own expense until the Completion Date.
8.56 Other than in terms of the Grazing Lease, no part of the Property
is or has during the period of ownership of occupation by any
company in the Vendor's Group been leased to or occupied by any
party (whether lawfully or otherwise) other than the Vendor
itself.
8.57 No company in the Vendor's Group, nor so far as the Vendor is
aware any third party is or has been in dispute with any neighbour
or other person or authority whomsoever as to the extent or
boundaries of the Property or any neighbouring property or any
common liabilities or title conditions affecting, or servitude
exercisable by or against (including without prejudice to the
generality of the Servitudes), the Property or its proprietor, or
otherwise in respect of the
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Property except with regard to previous grazing leases which have
expired and whose tenants have removed and who have no further
rights in respect of the Property.
8.58 There are no notices, orders or proposals under the Planning Acts
or any other public or local statutes or regulations or orders
made thereunder or proposals or applications for statutory
consents in relation to development affecting the Property or
adjacent or nearby land or buildings, and no part of the Property
or adjacent land is a SSSI or the subject of any other
conservation, environmental or amenity designation.
8.59 All buildings, structures, civil engineering or similar works,
plant and equipment, machinery and fixtures and fittings on or
comprised in the Property have been designed, constructed,
manufactured and assembled or installed by suitably qualified and
experienced persons in implement of written contracts which are in
the possession of the Vendor (and which will be delivered by the
Vendor to the Purchaser on the Completion Date), and in accordance
with all appropriate statutory and other consents, British
Standards and Codes of Practice, the Purchaser has not had
occasion to make any claim against any such person, and the Vendor
and/or GWO (as appropriate) is entitled to assign to the Purchaser
all rights which the Vendor and/or GWO (as appropriate) shall have
against any such person, without requiring the consent of any such
person or other party, and the Vendor and/or GWO (as appropriate)
holds all appropriate consents, warranties and guarantees in
respect of any such buildings or others.
8.60 There are no matters known to the Vendor adverse to the Property
the disclosure of which is material to be known by a purchaser of
the Property.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Environmental Matters
8.61 Consents:
8.61.1 The Vendor and/or GWO (as appropriate) holds (in its name)
all authorizations, permissions, consents, licences and
agreements necessary to enable it to carry on the Business
lawfully and effectively as at the date of this agreement
in the places and in the manner in which the Business is
now carried on and in particular (but without limitation):
to make all relevant abstractions of water; to keep, store
or hold all relevant substances whether as raw materials,
products or wastes; to carry on all relevant processes; to
construct and maintain all relevant buildings, plant and
equipment; and to hold, treat, manage, consign and dispose
of all waste materials, substances, gases and effluents in
the relevant manner and knows of no circumstances which
would require additional authorizations, permissions,
consents, licences and agreements to be obtained following
Completion if the Business was carried on after Completion
in the same way and to the same extent as before
Completion.
8.61.2 All such authorizations, permissions, consents, licences
and agreements have been lawfully obtained and are in full
force and effect.
8.61.3 No further authorizations, permissions, consents, licences
and agreements are necessary to enable the Purchaser to
carry on the Business as now or since 31 December 1996
conducted.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
8.61.4 Without prejudice to paragraphs 8.61.1, 8.61.2 and 8.61.3
details of all authorizations, permissions, consents,
licences and agreements of the types referred to in
paragraph 8.61.1 are set out in the Disclosure Letter
(including details of the renewal dates).
8.61.5 The Vendor and each member of the Vendor's Group has in
relation to the Business complied at all times in all
respects with all conditions attaching to the
authorizations, permissions, consents, licences and
agreements referred to in paragraph 8.61.1 (whether such
conditions are imposed expressly or are implied by law) and
there are no circumstances known to the Vendor which would
render it impracticable for the Purchaser to comply with
those conditions in the future.
8.61.6 Neither the Vendor nor any member of the Vendor's Group has
in relation to the Business received written notice,
correspondence or communication in any other form in
respect of any of the authorizations, permissions,
consents, licences or agreements referred to above
revoking, suspending, modifying or varying any of them and
there are no circumstances known to the Vendor which might
give rise to such notice being received or of any intention
on the part of any relevant authority to give any such
notice.
Compliance with environmental protection laws
8.62 Neither the Vendor nor any member of the Vendor's Group nor any of
their officers, agents or employees have committed, in relation to
the
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Business or the Property and whether by act or omission, any
breach of Environmental Laws, and they have conformed at all times
with all relevant codes of practice, guidance notes, standards and
other advisory material issued by any competent authority.
8.63 Neither the Vendor nor any member of the Vendor's Group has in
relation to the Business or the Property received any notice,
order or other communication from any relevant authority in
respect of a failure to comply with any Environmental Laws and
there are no circumstances which might give rise to such notice,
order or other communication being received nor is the Vendor
aware of any intention on the part of any such authority to give
such notice.
8.64 Civil liability
8.64.1 There is no actual or potential liability on the part of
the Vendor or any member of the Vendor's Group arising from
any activities or operations of the Business or the state
or condition of any properties now or formerly owned or
occupied by the Vendor or any member of the Vendor's Group
in relation to the Business or facilities now or formerly
used by the Vendor or any member of the Vendor's Group in
relation to the Business and in particular (but without
limitation) any such liability in respect of: injury to
persons (including impairment of health or interference
with amenity); damage to land or personal property;
interference with riparian or other proprietary or
possessory rights; public or private nuisance; liability
for waste or other substances; and damage to or impairment
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
of the environment including living organisms.
8.64.2 Neither the Vendor nor any member of the Vendor's Group is
in relation to the Business engaged in any litigation,
arbitration or dispute resolution proceedings relating to
any actual or potential liability in respect of any matter
covered by paragraph 8.64.1 and the Vendor is not aware of
any such litigation or proceedings pending or being
threatened nor is the Vendor aware of any circumstances or
facts likely to give rise to such litigation, arbitration
or proceedings.
8.64.3 Neither the Vendor nor any member of the Vendor's Group is
subject to any injunction, interdict or similar remedy or
order by a court of competent jurisdiction, or to any
undertaking given to such court, in respect of matters
referred to in this paragraph 8.64.
8.64.4 No notification has been (or in accordance with the terms
of the relevant policies of insurance should have been)
made to the Vendor's or GWO's insurers of any matters
specified in this paragraph 8.64.
8.65 Condition of the Property
8.65.1 No notice or other communication has been received from any
relevant authority relating to the physical condition of
the Property nor so far as the Vendor is aware is there any
circumstance likely to give rise to the
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
service of any such notice or communication.
8.65.2 The Property has not been used for the deposit of waste
controlled by any legislation during the ownership or
occupation of the Vendor or any member of the Vendor's
Group and neither the Vendor nor any member of the Vendor's
Group is aware of any such use before its ownership or
occupation.
8.66 Internal policy assessments and plans
8.66.1 Details of all the Vendor's and GWO's statements of
corporate environmental policy and operating procedures are
set out in the Disclosure Letter.
8.66.2 The Vendor and any other relevant company in the Vendor's
Group have complied with all its statements of corporate
environmental policy and operating procedures.
8.66.3 The Vendor and each other relevant company in the Vendor's
has properly carried out and made all such assessments or
plans as are required by law in relation to the substances,
processes, operations and wastes (including without
limitations those relating to hazardous substances,
accident hazards, releases to the environment and noise) of
the Business; proper records have been kept of such
assessments and plans and the Vendor knows of no
circumstances which would render such appraisals or plans
incorrect or subject to revision.
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
8.67 Any replies given by or on behalf of the Vendor and/or GWO
to enquiries before contract raised by or on behalf of the
Purchaser relating in any way to the Property are true,
complete and accurate in all respects and contain all
information known or available to the Vendor's Group in
response to the enquiries.
9 ASSETS
9.1 The Vendor is the legal and beneficial owner having possession of
and with good and marketable title to all the Assets and all the
assets required to carry on the Business are included in the sale
hereunder and are in the possession or under the control of the
Vendor.
9.2 None of the Assets is the subject of any Encumbrance.
9.3 The Vendor has not created any Encumbrance on over or affecting
any part of the Assets and there is no agreement or commitment to
give or create any Encumbrance and no claim has been made by any
person to be entitled to any Encumbrance.
9.4 All the plant, machinery, equipment and vehicles of the Vendor
relating to the Business are in good repair and working order and
have been regularly and properly maintained and no substantial
repairs are in hand or are necessary and none of the plant,
machinery, equipment or vehicles is out of date, dangerous (by
reason of its state of repair), not fit for its purpose,
unsuitable or in need of renewal or replacement or fails to comply
with the applicable safety standards.
9.5 The List of Fixed Plant and the List of Equipment comprise a
complete and accurate record of all the plant and equipment (with
a value of(pounds)50,000 or more), machinery, equipment and
vehicles owned or possessed by the Vendor in relation to the
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Business and necessary for the continuation of the Business.
9.6 There are no Assets used in the Business which are not situate at
the Property.
10 STOCK
10.1 All the Stock can be used in the Business.
10.2 The Stock is sufficient for the normal requirements of the
Business.
10.3 The Stock is at its normal level having regard to current orders.
11 INSURANCE
11.1 Full details of all insurance policies effected in relation to the
Business have been disclosed to the Purchaser and all such details
are true and correct in all respects and all such insurance
policies are currently in full force and effect.
11.2 Neither the Vendor nor GWO has done or omitted to do or suffered
anything to be done or not to be done which has or might render
any policies of insurance taken out by it void or voidable or
which would or might result in an increase in the rate of premiums
on the said policies and there are no circumstances of which the
Vendor is aware which would or might give rise to any claim under
any of such policies of insurance.
11.3 There is now and has at all times been adequate insurance in
respect of the Business against fire, accident, damage, injury,
third party loss (including product liability) loss of profits and
other risks normally covered by insurance (including such risks as
companies carrying on the same type of business as the Business
commonly cover by insurance).
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
12 RECORDS
The records and books of account of the Vendor and GWO relating to the
Business are duly entered up and contain true, full and accurate records
of all matters to be dealt with therein and do not contain any material
inaccuracies or discrepancies. All books and all records and documents of
the Vendor and GWO relating thereto which are its property are in the
possession or under the control of a company within the Vendor's Group.
13 CONFIDENTIAL INFORMATION
13.1 Neither the Vendor nor GWO uses in the Business any processes and
is not engaged in the Business in any activities which involve the
misuse of any Confidential Information belonging to any third
party.
13.2 The Vendor is not aware of any actual or alleged misuse by any
person of any of its Confidential Information.
13.3 Neither the Vendor nor GWO has disclosed to any person any of its
Confidential Information except where such disclosure was properly
made in the normal course of the Business and was made subject to
an agreement under which the recipient was obliged to maintain the
confidentiality of such Confidential Information and was
restrained from further disclosing or using it other than for the
purposes for which it was disclosed by the Vendor or GWO.
13.4 Confidential Information used by the Vendor or GWO is kept
strictly confidential and the Vendor and GWO operate and fully
complies with procedures which maintain such confidentiality which
confidentiality has not been breached.
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
14 INTELLECTUAL PROPERTY
14.1 The Vendor is the sole unencumbered legal and beneficial owner and
where registered the sole registered proprietor of all the
Intellectual Property.
14.2 The material particulars as to ownership registration (and
applications therefor) of the Intellectual Property (if any) are
set out in the Disclosure Letter and such details are complete and
correct. Such Intellectual Property comprises all Intellectual
Property which the Purchaser will require in order fully to carry
on and exploit the Business and deal with the Assets sold and
purchased hereunder.
14.3 None of the Intellectual Property is currently being infringed by
any third party or has been so infringed in the 6 year period
preceding the Completion Date and no third party has threatened
any such infringement.
14.4 Save for those agreements listed in the Disclosure Letter the
carrying on of the Business as presently constituted does not
require any licences or consents from or the making of royalty or
similar payments to any third party and the Vendor is not engaged
in any activities which and none of the Vendor's processes or
products infringe any Intellectual Property belonging to any third
party. All such listed agreements (and each provision thereof) are
valid and subsisting and not restricted in any way and the Vendor
is not in breach of any of the provisions thereof.
14.5 There are no outstanding claims against the Vendor for
infringement of any Intellectual Property used (or which has been
used) by it in the Business and no such claims have been settled
by the giving of any undertakings which remain in force.
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
14.6 There is no Intellectual Property required for the carrying on of
the Business which is not exclusively used in respect of the
Business or which is being licensed to the Purchaser.
15 COMPUTER SYSTEMS
15.1 The Computer Systems have been satisfactorily maintained and have
the benefit of the maintenance agreements listed in the Disclosure
Letter or in the Information Technology Services Agreement.
15.2 Disaster recovery plans are in effect and in the opinion of the
Vendor's directors are adequate for its present needs to ensure
that the Computer Systems can be replaced or substituted without
material disruption to the Business.
15.3 In the event that any person providing maintenance or support
services for the Computer Systems ceases or is unable to do so,
the Vendor has all necessary rights to obtain the source code and
all related technical and other information to procure the
carrying out of such services by its own employees or by a third
party.
15.4 The Vendor has adequate procedures for its present needs to ensure
internal and external security of the Computer Systems, including
procedures for taking and storing, on-site and off-site, back-up
copies of computer programs and data.
15.5 None of the records, systems, controls, data or information
relating to the Business are recorded, stored, maintained,
operated or otherwise wholly or partly dependent upon or held by
any means (including any electronic, mechanical or photographic
processes whether computerized or not) which (including all means
of access thereto and therefrom) are not under the exclusive
ownership and direct control of the Vendor.
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
16 DATA PROTECTION
The Vendor and GWO (as applicable) has complied with all relevant
requirements of the Data Protection Act 1984, in relation to the Business
including:
16.1 the data protection principles established in that Act;
16.2 request from data subject for access to data held by it; and
16.3 the requirements relating to the registration of data users.
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
17 REPAYMENT LIABILITIES
Neither the Vendor nor GWO has received any notice to repay any monies or
liabilities which are repayable on demand and no default or event
entitling any person with or without giving any formal notice and whether
immediately or after expiry of any notice to demand or accelerate
repayment appoint a receiver or take any other action to protect his
security has occurred in relation to any agreement relating to any
borrowing or indebtedness or security given by the Vendor or GWO in
relation to the Business.
18 EMPLOYEES
18.1 None of the Employees has given or received notice terminating his
employment or will be entitled to give notice as a result of the
provisions of this agreement.
18.2 Full particulars of the terms and conditions of employment of all
the Employees (including without limitation all remuneration
incentives bonuses expenses and other payments and benefits
whatsoever payable) are set out in the Disclosure Letter.
18.3 There is not in existence any contract of employment with
directors or employees of the Vendor (or any contract for services
with any individual) relating to the Business which cannot be
terminated by 3 months' notice or less without giving rise to a
claim for damages or compensation (other than a statutory
redundancy payment or statutory compensation for unfair
dismissal).
18.4 In relation to each of the Employees (and so far as relevant to
each of its Excluded Employees and/or former employees) the Vendor
has:-
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
18.4.1 complied with all obligations imposed on it by Articles of
the Treaty of Rome European Commission Regulations and
Directives and all statutes regulations and codes of
conduct relevant to the relations between it and the
Employees or it and any recognized trade union;
18.4.2 maintained adequate and suitable records regarding the
service of each of the Employees;
18.4.3 complied with all collective agreements and customs and
practices for the time being dealing with such relations or
the conditions of service of the Employees; and
18.4.4 complied with all relevant orders and awards made under any
statute affecting the conditions of service of its
Employees.
18.5 The Vendor nor any other company in the Vendor's Group is involved
in any industrial or trade disputes and to the best of the
Vendor's knowledge information and belief there are no
circumstances which may result in any industrial dispute involving
any of the Employees and to the best of the Vendor's knowledge
information and belief none of the provisions of this agreement
including the identity of the Purchaser is likely to lead to any
industrial dispute.
18.6 There is not outstanding any agreement or arrangement to which the
Vendor nor any other company in the Vendor's Group is party in
relation to the Business for profit sharing or for payment to any
of its employees of bonuses or for incentive payments or other
similar matters.
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
18.7 Since 31 December 1996 no change has been made in the terms of
employment by the Vendor of any of the Employees.
18.8 Save as disclosed in the Disclosure Letter the Vendor nor any
other company in the Vendor's Group has not entered into any
recognition agreement with a trade union in respect of the
Employees nor has it done any act which may be construed as
recognition.
18.9 The Vendor and GWO have complied with all recommendations made by
the Advisory Conciliation and Arbitration Service and with all
awards and declarations made by the Central Arbitration Committee.
18.10 There is no agreement, arrangement, scheme or obligation (whether
legal or moral) for the payment of any pensions, allowances, lump
sums or other like benefits on retirement or on death or during
periods of sickness or disablement for the benefit of any of the
Employees or for the benefit of dependents of such persons save as
disclosed in the Disclosure Letter.
18.11 No amounts due to or in respect of any of the Employees (including
PAYE and national insurance and pension contributions) are in
arrear or unpaid.
18.12 No monies or benefits other than in respect of contractual
emoluments are payable to any of the Employees and there is not at
present a claim occurrence or state of affairs which may hereafter
give rise to a claim against the Vendor or GWO arising out of the
employment or termination of employment of any employee for
compensation for loss of office or employment or otherwise and
whether under the Employment Rights Act 1996 Equal
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Pay Act 1970, Sex Discrimination Act 1975, Sex Discrimination Act
1986, Disability Discrimination Act 1995 or any other act or
otherwise.
19 CONTRACTS
19.1 There is not outstanding in connection with the Business:-
19.1.1 any agreement or arrangement between the Vendor or GWO and
any third party which the signature or performance of this
agreement will contravene or under which the third party
will acquire a right of termination or any option as a
result of the signature or performance of this agreement;
19.1.2 any agency, distributorship, marketing, purchasing,
manufacturing or licensing agreement or arrangement or any
restrictive trading or other agreement or arrangement
pursuant to which any part of the Business has been carried
on;
19.1.3 any agreement or arrangement in relation to the Business
between the Vendor or GWO and any other company which is a
member of the Group;
19.1.4 any agreement or arrangement entered into by the Vendor or
GWO otherwise than by way of bargain at arm's length and in
the normal and ordinary course of the Business; or
19.1.5 any sale or purchase option or similar agreement or
arrangement affecting any of the Assets or by which the
Vendor or
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
GWO is bound in relation to the Business.
19.2 None of the Contracts contain are unprofitable (that is to say
known to have been likely to result in a loss to the Vendor on
completion of performance if the Vendor had not sold the Business)
or of a long term nature (that is to say incapable of performance
in accordance with its terms within 6 months after the date on
which it was entered into or undertaken).
19.3 No party with whom the Vendor or GWO has entered into any
agreement or arrangement in connection with the Business is in
default thereunder being a default which would have a material and
adverse effect on the financial or trading position or prospects
of the Business and so far as the Vendor is aware there are no
circumstances likely to give rise to such a default.
19.4 Neither the Vendor nor GWO has any knowledge of the invalidity of
or grounds for rescission, avoidance or repudiation of any of the
Contracts and has not received notice of intention to terminate
any of the Contracts.
19.5 Neither the Vendor nor GWO has any reason to believe that any
supplier of the Vendor or GWO or other person dealing with the
Vendor or GWO in connection with the Business will refuse to deal
with the Purchaser in connection with the Business or will deal
with it on a smaller scale than with the Vendor or GWO as a result
of the signature or performance of this agreement.
19.6 Details of all tenders which have been made by the Vendor or GWO
in connection with the Business and which have not yet been
accepted but are capable of acceptance are contained in the
Disclosure Letter.
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
20 BORROWINGS
Except as disclosed in the Accounts neither the Vendor nor GWO has
outstanding in connection with the Business:-
20.1 any borrowing or indebtedness in the nature of borrowing including
any bank overdrafts liabilities under acceptances (otherwise than
in respect of normal trade bills) and acceptance credits other
than borrowing or indebtedness arising in the ordinary course of
business;
20.2 any guarantee indemnity or undertaking (whether or not legally
binding) to procure the solvency of any person or any similar
obligation; or
20.3 any mortgage charge lien pledge or any obligation (including a
conditional obligation) to create a mortgage charge lien or
pledge.
21 LITIGATION OFFENCES AND COMPLIANCE WITH STATUTES
21.1 Neither the Vendor nor any other company in the Vendor's Group is
plaintiff, defendant (save where it has no knowledge any
proceedings to be served on it) pursuer or defender or otherwise a
party to any litigation, arbitration or administrative proceedings
in connection with the Business which are in progress or are
threatened or pending by or against or concerning the Vendor or
any of the Assets the Vendor is not being prosecuted for any
criminal offence in connection with the Business, no governmental
or official investigation or inquiry concerning the Business or
any of the Assets is in progress or pending and so far as the
Vendor is aware there are no circumstances which are likely to
give rise to any such proceedings, investigation or inquiry.
21.2 Neither the Vendor nor any other company in the Vendor's Group nor
any of its officers, employees
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
or, so far as the Vendor is aware, its agents (during the course
of their duties in relation to the Business) has committed or
omitted to do any act or thing the commission or omission of which
is or could be in contravention of any statutory obligation or any
other law of the United Kingdom or any part thereof or any other
country giving rise to any fine, penalty, default, proceedings or
other liability in relation to the Business or any of the Assets
or any judgment or decision which would materially affect the
financial or trading position or prospects of the Business.
21.3 Neither the Vendor nor any other company in the Vendor's Group has
done or agreed to do anything as a result of which either any
investment or other grant paid to the Vendor in relation to the
Business is or may be liable to be refunded in whole or in part or
any such grant for which application has been made by it will or
may not be paid or may be reduced.
21.4 There is not outstanding in relation to the Business any liability
for industrial training levy or for any other statutory or
governmental levy or charge.
22 RESTRICTIVE AGREEMENTS
22.1 There are no agreements in force to which the Vendor nor any other
company in the Vendor's Group is a party directly or indirectly
affecting the Business which would restrict the freedom of the
Purchaser to provide and take goods and services by such means and
from and to such persons as it may from time to time think fit.
22.2 Neither the Vendor nor any other company in the Vendor's Group is
nor has it been party to any agreement, arrangement, concerted
practice or course of conduct directly or indirectly affecting the
Business which:-
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
22.2.1 is or ought to be or ought to have been or requires to be
registered under the Restrictive Trade Practices Acts 1976
and 1977 or contravenes the provisions of the Resale Prices
Act 1976 or is or has been the subject of any inquiry,
investigation or proceeding under any of these Acts;
22.2.2 is or has been the subject of an inquiry, investigation,
reference or report under the Fair Trading Act 1973 (or any
previous legislation relating to monopolies or mergers) or
the Competition Act 1980; or
22.2.3 contravenes Article 85(1) or 86 of the Treaty of Rome or
which has been notified to the Commission of the European
Community for an exemption or in respect of which an
application has been made to the said Commission for a
negative clearance or infringes any regulation or other
enactment made under Article 87 of the said Treaty or is or
has been the subject of any inquiry, investigation or
proceeding in respect thereof;
22.2.4 has or is intended to have or is likely to have the effect
of restricting, distorting or preventing competition in
connection with the production, supply or acquisition of
goods in the United Kingdom or any part of it or the supply
or securing of services in the United Kingdom or any part
of it.
22.2.5 is by virtue of its terms or by virtue of any practice for
the time being carried on in connection therewith a
"Consumer Trade Practice" within the
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
meaning of section 13 of the Fair Trading Act 1973 and
susceptible to or under reference to the Consumer
Protection Advisory Committee or the subject matter of a
report to the Secretary of State or the subject matter of
an Order by the Secretary of State under the provisions of
Part II of that Act; or
22.2.6 infringes any other competition, anti- restrictive trade
practice, anti-trust or consumer protection law or
legislation applicable in the United Kingdom or elsewhere
and not specifically mentioned in this paragraph.
22.3 Neither the Vendor nor any other company in the Vendor's Group has
in connection with any matter directly or indirectly affecting the
Business given any assurance or undertaking to the Restrictive
Practices Court or the Director General of Fair Trading or the
Secretary of State for Trade and Industry or the Commission or the
Court of Justice of the European Communities or any other court,
person or body and is not subject to any act, decision, regulation
or other instrument made by any of them relating to any matter
referred to in this sub-paragraph 24.3.
22.4 Neither the Vendor nor any other company in the Vendor's Group is
in default or in contravention of any article, act, decision,
regulation or other instrument or of any undertaking relating to
any matter referred to in sub-paragraph 23.2 ("the Anti-Trust
Rules") and has received no complaint or threat to complain under
or referring to the Anti-Trust Rules from any person and has not
received any request for information, investigation or objection
relating to the Anti-Trust Rules or been party to any proceedings
to
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
which the Anti-Trust Rules (or any of them) were pleaded or relied
upon.
22.5 Neither the Vendor nor any other company in the Vendor's Group is
in relation to the Business in a dominant position in any market
in any substantial part of the EEC for the purposes of Article 86
of the Treaty of Rome.
23 EFFECTS OF THIS AGREEMENT
Neither this agreement nor completion thereof:-
23.1 conflicts with or will or may result in the breach of or
constitute a default under or give rise to any right of
termination or acceleration of payment or additional liability
under any agreement, instrument, order, judgment, award,
injunction, decree or regulation or any restriction of any kind to
which a member of the Vendor's Group is a party; nor
23.2 will or may relieve any other party to any of the Contracts of its
obligations thereunder or enable it to determine such obligations
or any of them to the Purchaser's detriment or to the detriment of
the Business.
24 DEFECTIVE PRODUCTS
Neither the Vendor nor any member of the Vendor's Group has in relation
to the Business sold or supplied prior to Completion any products which
are or were in any respect faulty or defective or which do not comply
with any warranties or representations expressly or implied made.
25 REORGANIZATION
Details of the transfer in 1995 of the Business and associated assets
from Glaxochem Limited to GWO and in
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
1997 from GWO to the Vendor are contained in the Disclosure Letter.
113
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 6
Limitations to Vendor's Liability
1 The provisions of this Schedule shall operate to limit the liability of
the Vendor under the warranties contained in Schedule 5 and references
to "liability" or "liabilities" shall be construed accordingly.
2 The Vendor shall not be liable for any claim in respect
of any Relevant Claim:
2.1 unless the aggregate amount of all Relevant Claims
for which the Vendor would otherwise be liable
exceeds (pounds)100,000;
2.2 to the extent that the total liability of the
Vendor in respect of all Relevant Claims would
exceed ****;
2.3 unless the Purchaser has given the Vendor written
notice of the Relevant Claim (stating in
reasonable detail the nature of the Relevant Claim
and, if practicable, the amount claimed) on or
before the date which is 30 days after the date of
receipt of the audited accounts of the Purchaser
for the financial period ended 31 December 1999.
If the aggregate amount of the Relevant Claims exceeds (pounds)100,000
the Vendor shall be liable for the full amount and not just the excess
above (pounds)100,000.
3 A Relevant Claim notified in accordance with paragraph 2.3 and not
satisfied, settled or withdrawn is unenforceable against the Vendor, on
the expiry of twelve (12) months starting on the day of notification of
the Relevant Claim unless proceedings in respect of the Relevant Claim
have been issued and served on the Vendor.
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confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
4 The Vendor shall not be liable in respect of a Relevant Claim:
4.1 if and to the extent that the matter giving rise to the Relevant
Claim would not have arisen but for the passing of, or a change
in, after the date of Completion a law, regulation or
administrative practice of a government, government department,
agency or regulatory body, in each case not actually or
prospectively in force at the date of this agreement;
4.2 if and to the extent that the matter giving rise to the Relevant
Claim is an amount for which the Purchaser's Group has recovered
from any person (other than the Vendor), whether under a provision
of applicable law, insurance policy or otherwise;
4.3 if and to the extent that the matter giving rise to the Relevant
Claim would not have arisen but for an act omission or transaction
of the Purchaser or an officer of the Purchaser which was outside
the ordinary course of the Business which it or he should
reasonably have known would give rise to such liability.
5 The Purchaser shall not be entitled to recover more than once in respect
of the same loss.
6 The Purchaser shall as soon as reasonably practicable give written notice
to the Vendor of any matter which it becomes aware which is likely to
give rise to a Relevant Claim and whether the Purchaser considers it may
have any remedy against any third party and shall consult with the Vendor
in respect to the matter. If the Purchaser fails, for whatever reason, to
comply with the terms of this clause any such failure shall not affect
the Purchaser's ability to make a Relevant Claim.
7 If the Purchaser becomes aware of a matter which might give rise to a
Relevant Claim and if such claim is as a
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<PAGE> 122
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
result of or in connection with a claim by or a liability to a third
party:
7.1 the Purchaser shall (subject to any obligations as to
confidentiality to third parties) provide to the Vendor and its
advisors reasonable access, by prior arrangement, to premises and
personnel and to relevant assets, documents and records within the
power or control of the Purchaser's Group for the purposes of
investigating the matter and enabling the Vendor to take the
action referred to in paragraph 7.4;
7.2 the Vendor (at its cost) may by prior arrangement take copies of
the documents and records and photograph the premises or assets
referred to in paragraph 7.2;
7.3 the Purchaser shall (save where any such action would be
prejudicial to the Business) take any action and institute any
proceedings and give any information and assistance, as the Vendor
may reasonably request to dispute, resist, appeal, compromise,
defend, remedy, settle or mitigate the matter or enforce against a
person, (other than a member of the Vendor's Group) the rights of
the Purchaser in relation to the matter in connection with
proceedings related to the matter (other than against a member of
the Vendor's Group) and the Vendor shall indemnify the Purchaser
for all reasonable costs incurred as a result of any such request
by the Vendor;
7.4 the Purchaser shall not, and shall ensure that no member of the
Purchaser's Group will, admit liability in respect of, compromise
or settle the matter without the prior written consent of the
Vendor (not to be unreasonably withheld or delayed).
8 If the Vendor pays to the Purchaser an amount in respect of a Relevant
Claim and the Purchaser or any
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
member of the Purchaser's Group subsequently recovers from a third party
an amount which is referable to the matter giving rise to the Relevant
Claim then:
8.1 if the amount paid by the Vendor in respect of the Relevant Claim
is more than the sum recovered from the third party, the Purchaser
shall as soon as practicable pay the Vendor the sum so recovered;
and
8.2 if the amount paid by the Vendor in respect of the Relevant Claim
is less than or equal to the sum recovered from the third party,
the Purchaser shall as soon as practicable pay the Vendor an
amount equal to the amount paid by the Vendor;
9 For the purposes of this paragraph the "sum recovered" means an amount
equal to the amount recovered from the third party less all reasonable
costs and expenses incurred by the Purchaser or any member of the
Purchaser's Group in recovering the amount from the third party.
10 Nothing in this part of this Schedule restricts or limits the Purchaser's
general obligations to mitigate any loss or damage which it may incur in
consequence of a matter giving rise to a Relevant Claim.
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<PAGE> 1
DATED 30th OCTOBER, 1997
CHIREX (HOLDINGS) LIMITED
as Borrower
CHIREX INC.
CHIREX (DUDLEY) LIMITED
CHIREX (ANNAN) LIMITED
as Guarantors
BANKERS TRUST INTERNATIONAL PLC
MIDLAND BANK PLC
as Joint Arrangers
BANKERS TRUST COMPANY
as Agent
BANKERS TRUST COMPANY
as Security Agent
and
THE LENDERS DESCRIBED HEREIN
----------------------------
FACILITIES AGREEMENT
GBP 62,000,000
----------------------------
O'MELVENY & MYERS LLP
10 Finsbury Square
London EC2A 1LA
Tel: +44 171 256 8451
Fax: +44 171 638 8205
<PAGE> 2
TABLE OF CONTENTS
1. INTERPRETATION............................................................3
2. THE FACILITIES...........................................................28
3. PARTICIPATION OF LENDERS.................................................29
4. CONDITIONS PRECEDENT.....................................................33
5. DRAWDOWN PROCEDURES......................................................36
6. REPAYMENT OF ADVANCES....................................................38
7. PREPAYMENT...............................................................39
8. INTEREST.................................................................42
9. PAYMENTS.................................................................45
10. CHANGE IN CIRCUMSTANCES..................................................48
11. FEES, EXPENSES AND STAMP DUTIES..........................................51
12. REPRESENTATIONS AND WARRANTIES...........................................53
13. UNDERTAKINGS.............................................................61
14. EVENTS OF DEFAULT........................................................78
15. GUARANTEE................................................................83
16. THE AGENT AND THE OTHER FINANCE PARTIES..................................86
17. EVIDENCE OF INDEBTEDNESS.................................................93
18. APPLICATION OF MONEYS....................................................93
19. PRO RATA PAYMENTS........................................................94
20. SET-OFF..................................................................95
21. NOTICES..................................................................95
22. NO IMPLIED WAIVERS.......................................................96
23. INVALIDITY OF ANY PROVISION..............................................96
24. CONFIDENTIALITY..........................................................96
25. CHANGES TO PARTIES.......................................................96
(i)
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26. LENDER DECISIONS.........................................................99
27. INDEMNITIES..............................................................99
28. CERTIFICATES CONCLUSIVE.................................................101
29. GOVERNING LAW...........................................................101
30. JURISDICTION............................................................101
31. COUNTERPARTS............................................................102
SCHEDULE 1
Commitments and Lending Offices......................................S1 - 1
SCHEDULE 2
Repayment Schedule...................................................S2 - 1
SCHEDULE 3
Form of Drawdown Request.............................................S3 - 1
SCHEDULE 4
Structure of ChiRex Group............................................S4 - 1
SCHEDULE 5
Calculation of the Mandatory Liquid Asset Costs
for any Sterling Advances........................................S5 - 1
SCHEDULE 6
Form of Deed of Accession............................................S6 - 1
SCHEDULE 7
Form of Transfer Certificate.........................................S7 - 1
First Schedule to the Transfer Certificate...........................S7 - 4
Second Schedule to the Transfer Certificate..........................S7 - 5
SCHEDULE 8
Continuing Indebtedness..............................................S8 - 1
(ii)
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THIS AGREEMENT ("Agreement") is made on 30th October, 1997
AMONG:-
(1) CHIREX (HOLDINGS) LIMITED, a limited company organised under the laws of
England with registered number 3080257 with its registered office at
Dudley, Cramlington, Northumberland NE23 7QG;
(2) CHIREX INC., a corporation organised under the laws of the State of
Delaware with its principal office at 300 Atlantic Street, Suite 402,
Stamford, CT 06901, U.S.A., CHIREX (DUDLEY) LIMITED., a limited company
organised under the laws of England with registered number 857670 with
its registered office at Dudley, Cramlington, Northumberland NE23 7QG,
and CHIREX (ANNAN) LIMITED., a limited company organised under the laws
of England with registered number 3417229 with its registered office at
Dudley, Cramlington, Northumberland NE23 7QG;
(3) BANKERS TRUST INTERNATIONAL PLC and MIDLAND BANK PLC, as Joint Arrangers;
(4) BANKERS TRUST COMPANY, as Agent;
(5) BANKERS TRUST COMPANY, as Security Agent; and
(6) THE LENDERS DESCRIBED HEREIN.
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 Definitions
In this Agreement, unless the context requires otherwise, the following
expressions shall have the following meanings:-
"Accountants' Report" means the reports prepared by Arthur Andersen
relating to analysis of costs of certain operations in the U.K. of the
ChiRex Group, together with the letter in respect thereof dated 16th
October, 1997, each addressed to and for the benefit of, inter alia, the
Finance Parties;
"Achievement Date" means the later of (i) 31st December, 1998 or (ii) the
first Accounting Quarter end following the date of this Agreement as at
which the Total
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Debt/EBITDA Ratio, calculated as provided in Clause 13.4, is 2:1 or
lower;
"Accounting Quarter" means, subject to Clause 13.3, each successive
fiscal period of the ChiRex Group consisting of three consecutive months;
"Accounting Reference Period" means each successive financial year of the
ChiRex Group ending on or about 31st December, as such ending date may be
altered in accordance with Clause 13.3;
"Advance" means the principal amount of the borrowing made or to be made
by the Borrower on a Drawdown Date under any of the Facilities (and
includes a WCP Advance) or, as the context requires, the principal amount
thereof for the time being outstanding;
"Advisory Capacity" has the meaning given to it in Clause 16.6.3;
"Affected Interest Period" has the meaning given to it in Clause 8.5.1;
"Affected Lender" has the meaning given to it in Clause 10.1.1;
"Agency Indemnitees" has the meaning given to it in Clause 16.8.1;
"Agent" means Bankers Trust Company acting in its capacity as agent for
the Lenders or such other agent for the Lenders as shall be appointed
pursuant to Clause 16.9;
"Annan Facility" means the manufacturing facility situated at Annan,
Dumfries, Scotland to be purchased pursuant to the Sale and Purchase
Agreement;
"Annan Note" means the note dated the date hereof to be issued by ChiRex
(Annan) Limited to the Borrower in respect of the proceeds of the Tranche
A Facility;
"Approved Accounting Principles" means (a) with regard to the Borrower,
ChiRex (Dudley) Limited, and ChiRex (Annan) Limited, accounting
principles and practices generally accepted in the U.K. consistently
applied and (b) with regard to ChiRex Inc. and ChiRex America Inc.,
accounting principles generally accepted in the U.S. consistently
applied;
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"Assets" has the meaning set forth in the Sale and Purchase Agreement;
"Auditors" means Arthur Andersen, or such other firm of accountants as
the Borrower may appoint in compliance with the provisions of Clause
13.3.3;
"Availability Period" means the period commencing on the Initial Drawdown
Date and ending on the earlier of (i) the fifth day thereafter and (ii)
the date on which the Commitments are terminated in full;
"Available Amount" means, at any time, the lesser of (i) 50% of the
cumulative Net Income of the ChiRex Group or (ii) 50% of the cumulative
Cashflow of the ChiRex Group, in each case calculated for each successive
Accounting Reference Period or part thereof beginning on the date of this
Agreement and ending on the last day of the Accounting Reference Period
ending immediately prior to such time, and in each case after making
appropriate deduction in respect of any Accounting Reference Period in
which Net Income or Cashflow, as the case may be, is negative;
"Available Currency" means (a) in respect of the Tranche A Facility, GBP
only and (b) in respect of the Tranche B Facility, DEM, FF, LIT, GBP,
CHF, Yen and USD and, subject to the provisions of Clause 5.1.7, any
other currency freely available to all the Lenders in which dealings
regularly occur in the London interbank market, provided that the Agent
has, prior to selection of such currency, confirmed such availability to
the Borrower;
"Borrower" means ChiRex (Holdings) Limited;
"Business" means the business of ChiRex Inc. and its subsidiaries as
described in ChiRex Inc.'s Form 10-K with respect to its fiscal year most
recently ended;
"Business Day" means, in respect of each Available Currency, a day (other
than a Saturday, Sunday or public holiday) which is a day on which banks
are open for dealings in such Available Currency in the London interbank
market and on which banks are open for business (and are not permitted by
law to remain closed) in the place where the main domestic market for
such Available Currency is situated;
"Business Plan" means a set of five year financial projections, together
with the assumptions forming the
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basis thereof, prepared in connection with the execution and delivery of
this Agreement by the management of ChiRex Inc. in respect of the
consolidated operations of ChiRex Inc. and its subsidiaries, which
Business Plan shall include the initial Operating Budget;
"Capital Expenditure" means in relation to a person or group of persons,
expenditure treated as expenditure in respect of tangible fixed assets in
accordance with the applicable Approved Accounting Principles and
determined for such person or, on a consolidated basis, for such persons
(as the case may be);
"Cashflow" means, in respect of the relevant testing period in relation
to a person or group of persons under the applicable Approved Accounting
Principles:
EBITDA, adjusted as follows, to the extent not already similarly treated
in calculating EBITDA,
PLUS: (a) decreases in Working Capital during the relevant period,
and losses on fixed asset disposals during the relevant
period;
(b) increases in provisions to the extent not previously
taken into account in Working Capital (other than
deferred tax provisions);
(c) cash proceeds from the issuance of shares of capital
stock in ChiRex Inc. and cash proceeds from any Equity
Sale;
(d) cash income constituting extraordinary or exceptional
items; and
(e) Net Cash Proceeds of disposals during the relevant
period, if positive;
MINUS: (f) increases in Working Capital during the relevant period
and gains on fixed asset disposals during the relevant
period;
(g) Capital Expenditure paid during the relevant period
which expenditure is (i) in accordance with the Business
Plan, or (ii) pursuant to the prior written consent of
the Agent;
(h) Tax paid during the relevant period;
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(i) Total Debt Service, to the extent paid in cash, in
respect of (i) Financial Indebtedness under the Finance
Documents, (ii) Continuing Indebtedness, and (iii)
Permitted Indebtedness falling within paragraph (iii) or
(x) of the definition thereof;
(j) the sum of prepayments pursuant to Clauses 7.1 (to the
extent applied pursuant to the provisions hereof to
Tranche A Term Advances only) and 7.3;
(k) cash expenses constituting extraordinary or exceptional
items;
(l) decreases in provisions to the extent not previously
taken into account in Working Capital (other than
deferred tax provisions); and
(m) Net Cash Proceeds of disposals during the relevant
period, if negative;
and determined in accordance with such Approved Accounting Principles for
such person or, on a consolidated basis, for such persons (as the case
may be);
"Change of Control" means (i) ChiRex Inc. shall cease to beneficially own
and control, directly or indirectly, 100% of the issued and outstanding
shares of ChiRex America Inc. or the Borrower, or the greater of (A) 75%
of the issued and outstanding shares of capital stock of any of its other
subsidiaries or (B) the percentage of ownership necessary for ChiRex Inc.
to maintain group tax benefits with respect to its other subsidiaries; or
(ii) any person or any two or more persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, of the equity securities of ChiRex
Inc. (or other securities convertible into such equity securities)
representing 50% or more of the combined voting power of all equity
securities of ChiRex Inc. entitled to vote in the election of director;
or (iii) any person or any two or more persons acting in concert shall
have acquired the ability to exercise management control over ChiRex
Inc.;
"CHF" means the lawful currency from time to time of Switzerland;
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"ChiRex (Annan) Limited" means ChiRex (Annan) Limited, a limited company
organised under the laws of England with registered number 3417229;
"ChiRex Group" means ChiRex Inc. and each direct and indirect subsidiary
thereof;
"ChiRex Inc." means ChiRex Inc., a corporation organised under the laws
of the state of Delaware;
"Code" means the United States Internal Revenue Code of 1986;
"Commitment" means, in relation to the participation of any Lender in a
Facility, the amount stated opposite its name in Schedule 1 in relation
to that Facility (or, in the case of a Transferee, the amount stated in
the Schedule to the relevant Transfer Certificate as being transferred to
that Transferee), in each case as the same may be transferred (in whole
or in part), cancelled, reduced, varied or terminated in accordance with
the terms of this Agreement;
"Continuing Indebtedness" means financial indebtedness of the ChiRex
Group identified on Schedule 8, and in each case all interest and other
amounts accrued thereon during or for the interest period current at any
date of determination, each such item of financial indebtedness being
evidenced by its related agreement, deed or other instrument in the form
in existence on the date of this Agreement, subject to such changes
therein and refinancings thereof as do not materially prejudice the
interests of the Finance Parties under or in connection with the Finance
Documents;
"Dangerous Substance" means any natural or artificial substance (whether
in a solid or liquid form or in the form of a gas or vapour and whether
alone or in combination with any other substance) (i) capable of causing
harm to man or any other living organism or of damaging the Environment
or causing danger to public health or welfare, including without
limitation any hazardous, toxic or dangerous waste, which is subject to
regulation by any Governmental Authority under any applicable
Environmental Law, or (ii) because of its quantity, concentration or
physical or chemical characteristics, exposure to which is limited by any
applicable Governmental Authority;
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"Deed of Accession" means one or more deeds to be executed by any obligor
who becomes an Obligor after the date of this Agreement, substantially in
the form of Schedule 6, subject to variation in accordance with the laws
of the jurisdiction of organisation of the relevant Obligor which relate
to the giving of guarantees and similar undertakings, and with such
amendments thereto as the Agent may reasonably require or permit;
"Default Interest Period" has the meaning given to it in Clause 8.4.1.;
"Default Rate" has the meaning given to it in Clause 8.4.1;
"DEM" means the lawful currency from time to time of the Republic of
Germany;
"Discharged Rights and Obligations" has the meaning given to it in Clause
25.3.2;
"Drawdown" means the making of the Advances hereunder;
"Drawdown Date" means the date for the making of an Advance as specified
by the Borrower in the relevant Drawdown Request;
"Drawdown Request" means a notice requesting an Advance in the form set
out in Schedule 3;
"Dudley Facility" means the manufacturing facility situated at Dudley,
Cramlington, Northumberland NE23 7QG, England, owned as of the date of
this Agreement by ChiRex (Dudley) Limited;
"Due Diligence Report (Legal)" means, collectively, (i) ChiRex Inc.'s
Form 10-K with respect to its fiscal year ended 31st December 1996, (ii)
the report(s) in agreed terms previously compiled by Dibb Lupton Alsop
regarding the Annan Facility, (iii) the report(s) in agreed terms
compiled by Brodies WS regarding the Annan Facility, (iv) the report(s)
in agreed terms compiled by British Geological Survey regarding the water
supply at the Annan Facility, and (v) the report(s) in agreed terms
compiled by MacFarlanes regarding the Dudley Facility;
"EBIT" means, in respect of the relevant testing period and in relation
to a person or group of persons under the applicable Approved Accounting
Principles, EBITDA less (i) depreciation on all fixed assets, (ii)
amortisation
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of goodwill, acquisition costs and other intangible assets and (iii)
write-downs, write-offs, minority interests and other non-cash charges in
determining earnings of such person or persons for that period,
determined in accordance with such Approved Accounting Principles for
such person or, on a consolidated basis, for such persons;
"EBITDA" means, in respect of the relevant testing period and in relation
to a person or group of persons under the applicable Approved Accounting
Principles, Net Income for that period, determined in accordance with
such Approved Accounting Principles for such person or, on a consolidated
basis, for such persons adding back (if previously deducted) or, as the
case may be, before any deduction (to the extent that such deduction is
made in the calculation of earnings) for or on account of:-
(a) Total Interest;
(b) Tax charged or credited during the relevant testing period;
(c) depreciation on fixed assets;
(d) amortisation of goodwill, acquisition costs and other intangible
assets; and
(e) write-downs, write-offs, minority interests and other non-cash
charges in determining earnings of such person or persons for that
period;
and excluding the effect, positive or negative, of items which would be
regarded as extraordinary or exceptional items;
"Employee Benefit Plan" means, at any time, any "employee benefit plan"
as defined in Section 3(3) of ERISA and any "multiemployer plan" as
defined in Section 3(37) of ERISA, to which any US Obligor or any of
their respective ERISA Affiliates is contributing, or ever has
contributed, or to which any US Obligor or any of their respective ERISA
Affiliates has, or ever has had, an obligation to contribute;
"Environment" consists of all, or any, of the following media: the air,
water as ground water, surface water, drinking water supplied, vapour and
ice, and land (both surface and subsurface); and the medium of the air
includes the air within buildings and air within other
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natural or manmade structures, above or below ground and "Environmental"
shall be construed accordingly;
"Environmental Claim" means (i) any threatened or instituted claim,
demand, accusation, allegation or notice of violation, in each case made
in writing, against any Obligor or any of their respective subsidiaries
(not being a purely vexatious, frivolous or specious claim) by any person
(x) in respect of any loss or liability suffered or incurred by that
person as a result or in connection with any violation of Environmental
Law or (y) giving rise to any remedy or penalty that may be enforced or
assessed by private or public legal action in connection with
Environmental Contamination or (ii) any remedial action or action to
comply that any Obligor or any of their respective subsidiaries is
obliged to undertake pursuant to Environmental Law in connection with
Environmental Contamination, or (iii) any application for any interim or
final judicial or administrative decree, injunction, cease and desist
order, abatement order, compliance order, consent order, consent decree,
settlement agreement, request for information, clean-up order or
enforcement notice, stop notice, improvement notice, prohibition notice
or revocation order against any Obligor or any of their respective
subsidiaries in respect of Environmental Contamination;
"Environmental Contamination" means the following and the consequences
resulting therefrom: any condition connected with any emission, release,
leakage, spillage, or presence, use, leaching or migration (in any case
whenever occurring), of Dangerous Substances at or from any site (or the
migration of a Dangerous Substance from surrounding property or
groundwater in, into or onto any site) owned or operated by any Obligor
or any of their respective subsidiaries, and any residual Dangerous
Substance on or under any site owned or operated by any Obligor or any of
their respective subsidiaries including (without limitation) the storage,
keeping, handling, labeling, transfer or disposal of Dangerous
Substances, to the extent any of the foregoing results in a breach of any
Environmental Law or has given or could reasonably be expected to give
rise to an Environmental Claim;
"Environmental Event" means any event (whenever occurring) which
constitutes a breach of any Environmental Law or which has given or could
reasonably be expected to give rise to an Environmental Claim;
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"Environmental Law" means all present and future laws, regulations,
ordinances, permits guidance documents or other requirements having legal
effect in any jurisdiction in which any Obligor carries on business or
owns assets, or in the European Union as a whole, concerning the
protection of the Environment, human health and safety or the control of
Dangerous Substances;
"Environmental License" means any permit, license, authorisation, plan,
consent order or consent decree of or from any Governmental Authority;
"Environmental Report" means such reports or other documents from the
Obligors and/or third parties in form and substance satisfactory to the
Agent to be provided to the Agent in connection with the execution and
delivery of the Agreement, compiling information relating to compliance
by the Obligors with, and liabilities of the Obligors under, applicable
Environmental Laws, including the following documents: (i) Environmental
Phase I Survey of Annan Facility, dated September 1997, prepared by Dames
& Moore, (ii) Environmental Phase I Survey of Dudley Facility, dated
August 1995, prepared by Peter Brett Associates, (iii) Environmental
Phase I Update of Dudley Facility, dated November 1995, prepared by
Environmental Resources Management, and (iv) management letter dated 30th
October, 1997, relating to environmental updates in respect of the Dudley
Facility;
"Equity Sale" means the sale or transfer of equity securities in any
direct or indirect subsidiary of ChiRex Inc., which sale or transfer
dilutes the aggregate percentage equity ownership (direct or indirect) of
ChiRex Inc. in such subsidiary;
"Equivalent Amount" means the amount of a currency other than GBP that
can be purchased with GBP calculated on the basis of the Agent's spot
rate of exchange for the purchase of such other currency with GBP on the
date such calculation is to be made (such calculation to be made, for the
purpose of determining the amount available to be drawn under the Tranche
B Multicurrency Revolving Facility, on the Rate Fixing Day applicable to
the relevant Drawdown Date);
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute;
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"ERISA Affiliate", as applied to any person, means any entity required to
be treated with any US Obligor as a single employer under Section 414 of
the Internal Revenue Code;
"Event of Default" means one of the events specified in Clause 14.1;
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute;
"Facilities" means the Tranche A Facility and the Tranche B Facility
(including the WCP Facilities) not in excess of the Total Commitments
granted to the Borrower hereunder (as the same may be reduced in
accordance with the terms of this Agreement);
"Facility Amount" means (i) in the case of the Tranche A Term Facility,
GBP 40,000,000, and (ii) in the case of the Tranche B Multicurrency
Revolving Facility, GBP 22,000,000, or the Equivalent Amount thereof, in
each case as the same may be reduced or cancelled pursuant to the terms
of this Agreement;
"Fees Letter" means the letters from ChiRex Inc. to Bankers Trust
International PLC in the agreed terms setting out details of the fees
payable pursuant to Clause 11.1.1(b);
"FF" means the lawful currency from time to time of the Republic of
France;
"Final Repayment Date" means the earlier of (a) 31st December, 2002 and
(b) the date on which the Commitments are terminated in full in
accordance with the terms of this Agreement;
"Finance Documents" means this Agreement, the Fees Letter, each WCP
Agreement, each Transfer Certificate, each Security Document, each Deed
of Accession and any other document expressed to be made supplemental to,
amending and/or modifying any of the foregoing or entered into pursuant
hereto or thereto, and "Finance Document" means any of them;
"Finance Indemnitees" has the meaning given to it in Clause 27.1;
"Finance Parties" means each Arranger, the Agent, the Security Agent,
each Lender and each WCP Provider, and
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"Finance Party" means any of them; "Financial Indebtedness" means,
without duplication, any indebtedness in respect of or arising under or
in connection with:-
(i) moneys borrowed including, without limitation, on a contractually
subordinated basis;
(ii) any debenture, bond, note or loan stock or other similar
instrument;
(iii) any acceptance or documentary credit (except, in the case of
documentary credits, those issued in support only of liabilities
to trade creditors incurred in the ordinary course of business and
having a term of not more than 90 days);
(iv) receivables sold or discounted in a transaction other than one in
respect of which (a) no recourse exists against any Obligor and no
Obligor has any obligation to repurchase, or make any payment in
respect of deficiencies in collection of, any receivables, and (b)
no Obligor has the right or obligation to sell, discount or
otherwise dispose of receivables in addition to those transferred
on the initial funding date of the transaction;
(v) the acquisition cost of any asset to the extent payable after the
time of acquisition or possession by the person liable as
principal obligor for the payment thereof where the deferred
payment is arranged primarily as a method of raising finance or
financing or refinancing the acquisition of the asset acquired
(which, for the avoidance of doubt, shall not include liabilities
to trade creditors incurred in the ordinary course of business and
having a term of not more than 90 days);
(vi) the sale price of any asset to the extent paid before the time of
sale or delivery by the person liable to effect such sale or
delivery where the advance payment is arranged primarily as a
method of raising finance or financing or refinancing the
manufacture, assembly, acquisition or holding of the asset to be
sold;
(vii) finance leases, credit sale or conditional sale agreements
(whether in respect of land, buildings, plant, machinery,
equipment or otherwise) entered into primarily as a method of
raising finance or financing or refinancing
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the acquisition of the relevant asset (but not including
liabilities under operating leases);
(viii) the amount payable under any put option or other arrangement
whereby the Borrower or any of its subsidiaries is liable to
purchase share capital or other securities issued;
(ix) any guarantee, indemnity or similar assurance against financial
loss of any person in respect of obligations of the type described
in the preceding paragraphs (i) to (viii);
(x) any guarantee, endorsement or other undertaking of responsibility
for any obligations of any other person, whether (a) directly or
indirectly by agreement to purchase the Financial Indebtedness of
any other person, or (b) through the purchase of goods or other
assets, supplies or services, or maintenance of working capital or
other balance sheet covenants or conditions, or by way of stock
purchase, capital contribution, advance or loan which, in any case
in this subclause (b), is entered into for the purpose of paying
or discharging any Financial Indebtedness of such other person or
assuring the holder of such Financial Indebtedness or obligation
against loss in respect thereof;
(xi) amounts raised under any other transaction having as a primary,
and not an incidental effect, the commercial effect of a
borrowing;
(xii) debts incurred in the ordinary course of business which remain
unpaid for more than 60 days after their due date for payment,
including for this purpose debts which upon their incurrence are
within the exceptions set forth in paragraph (iii) above (other
than debts which are being diligently contested in good faith
unless the Agent reasonably believes that there is no reasonable
prospect of success); or
(xiii) net amounts payable under any interest rate or currency swap,
collar or other similar agreement or any other hedging or
derivative instrument, the amount of Financial Indebtedness being
attributable thereto being 10% of the face or notional amount of
the relevant agreement, or in each case such lower
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percentage as shall be reasonably approved by the Agent;
"GBP" means the lawful currency from time to time of the United Kingdom;
"Glaxo Group Limited" means Glaxo Group Limited, a company organised
under the laws of England, whose registered office is at Glaxo Wellcome
House, Berkeley Avenue, Greenford, Middlesex UB6 0NN;
"Glaxo Operations UK Limited" means Glaxo Operations UK Limited, a
company organised under the laws of England, whose registered office is
at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex UB6 0NN;
"Governmental Authority" means any domestic or foreign court or
governmental body, department, agency, commission, authority or
instrumentality;
"Guarantees" means the guarantees by the Guarantors pursuant to Clause
15;
"Guarantor" means, together, ChiRex Inc., ChiRex (Dudley) Limited, ChiRex
(Annan) Limited, and/or other guarantors acceptable to the Lenders;
"Holdings Note" means the promissory note issued by the Borrower to
ChiRex Inc. on 30th October 1997 in the principal amount of USD
38,234,000;
"ICTA" means the Income and Corporation Taxes Act 1988, as the same may
be amended from time to time;
"Industry Report" means the report by Chem. Systems, together with the
letter in respect thereof, each addressed to and for the benefit of,
inter alia, the Finance Parties;
"Information Memorandum" means the document containing information
relating to the Business prepared in connection with this Agreement by
the Agent and the ChiRex Group and distributed by the Agent to the
Lenders and potential Lenders;
"Initial Drawdown" means the making of the first Advance hereunder, which
Advance must in any event be an amount sufficient to discharge all fees
due and payable on the Initial Drawdown Date pursuant to Clause 11.1.1;
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"Initial Drawdown Date" means the date of the Initial Drawdown, which
date shall occur on or after each of the conditions set forth in Clause
4.1 have been satisfied or waived by the Agent, and which date shall
occur on or before the tenth Business Day after the date of this
Agreement;
"Intellectual Property" means all patents and patent applications, trade
and/or service marks and trade and/or service mark applications (and all
goodwill associated with such applications), all brand and trade names,
all copyrights and rights in the nature of copyright, all design rights,
all registered designs and applications for registered designs, all trade
secrets, know-how and all other intellectual property rights now or in
the future owned by any Obligor throughout the world or the interest of
any Obligor in any of the foregoing now or in the future, together with
the benefit of all present and future agreements entered into or the
benefit of which is enjoyed by any Obligor relating to the use or
exploitation of any of the aforementioned rights;
"Interest Coverage Ratio" means, at any time, the ratio of (i)
consolidated EBITDA for the immediately preceding four Accounting
Quarters, to (ii) Total Interest for the immediately preceding four
Accounting Quarters, in each case in respect of the ChiRex Group.;
"Interest Payment Date" means, in relation to an Advance, the date
determined pursuant to Clause 8.2;
"Interest Period" means a period by reference to which interest is
calculated and payable on an Advance or an overdue sum, and includes a
Default Interest Period;
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter;
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, or, as the case may be,
an assignee or Transferee therefrom to whom rights and/or obligations are
assigned or transferred in accordance with Clause 25.2 or 25.3, and
includes a successor of any such person;
"Lending Office" means in relation to a Lender, the office or offices
through which it is acting for
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the purpose of this Agreement, which office or offices initially are set
out in Schedule 1;
"LIBOR" means, in relation to any Advance or any overdue sum:-
(a) the rate determined by the Agent to be the arithmetic mean
(rounded upwards, if necessary, to the nearest five decimal
places) of the offered quotations for deposits in the relevant
Available Currency for a period equal to the Interest Period
relating to that Advance (or overdue sum) which appear on the
Telerate Display Screen page number 3750 (or such other page(s) as
may replace such pages from time to time on that system) at or
about 11.00 a.m. (London time) on the relevant Rate Fixing Day; or
(b) if no such offered quotations appear on the relevant page as
aforesaid the arithmetic mean (rounded upwards, if necessary, to
the nearest five decimal places) of the respective rates, as
supplied to the Agent at its request, quoted (subject to Clause
8.1.3) by the Reference Lenders to prime lenders in the London
Interbank Market at or about 11.00 a.m. (London time) on the
relevant Rate Fixing Day for the offering of deposits in the
relevant Available Currency and in an amount comparable to the
amount of, and for a period equal to the Interest Period relating
to, that Advance (or overdue sum) for delivery on the first day of
that Interest Period;
"LIT" means the lawful currency from time to time of Italy;
"Loan" means the aggregate principal amount of all Advances for the time
being outstanding under this Agreement, and "Tranche A Term Loan" and
"Tranche B Multicurrency Revolving Loan" shall be construed accordingly;
"Majority Lenders" means one or more Lenders, the sum of whose Relevant
Amounts equals or exceeds 51 per cent. (51%) of the aggregate of the
Relevant Amounts of all the Lenders;
"Mandatory Liquid Asset Costs" means, in relation to each Lender, the
additional cost to such Lender of complying with (i) the relative reserve
asset ratio required by the Bank of England from time to time (if any),
expressed as
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a percentage per annum and calculated as set forth in Schedule 5, or (ii)
any analogous requirement of any central banking or financial regulatory
authority imposed at the date of this Agreement in respect of the funding
or maintenance of commitments or loans of the type contemplated hereby
and applicable to a specific currency;
"Margin" means 1.00% for the period commencing on the Initial Drawdown
Date and ending on the last day of the fourth full Accounting Quarter
following such date, and thereafter 0.75%, upon ChiRex Inc. (on a
consolidated basis) achieving a level of Total Debt/EBITDA Ratio equal to
1.5 : 1 (and only for such time as such level continues to be achieved),
tested as at the last day of the immediately preceding Accounting Quarter
and calculated as provided in Clause 13.4 provided that:-
(a) there shall be no decrease in the Margin if there has occurred an
Event of Default or a Potential Event of Default which is
continuing and the Margin shall remain at or increase to 1.00%
until such time as such Event of Default or Potential Event of
Default is no longer continuing, whereupon the Margin shall be
determined as aforesaid; and
(b) any reduction or increase in the Margin shall take effect as from
the date of receipt by the Agent of the relevant accounts in
accordance with Clause 13.3.4 (on the basis that in the case of a
reduction or increase taking effect during an Interest Period the
interest payable on the Interest Payment Date will reflect such
reduction or increase on a time apportioned basis);
"Margin Stock" means margin stock within the meaning of Regulations G, T,
U and X of the Board of Governors of the Federal Reserve System of the
U.S.;
"Material Adverse Effect" has the meaning given thereto in Clause 1.2.5;
"Material Agreement" means, at any time, any agreement or group of
related agreements (i) to which, individually or in the aggregate, is
attributable (on a reasonable estimation basis) 10% or more of either the
gross turnover or the EBITDA of the ChiRex Group for the Accounting
Reference Period then in effect, or, at any time before 31st December,
1997, for the Accounting Reference Period ending on 31st December, 1998,
or (ii)
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the termination or non-performance of which would constitute a Material
Adverse Effect;
"Material Subsidiary" means any direct or indirect subsidiary of ChiRex
Inc. other than a subsidiary that has been designated in writing by the
Agent as a Non-Material Subsidiary; provided that upon each such
designation, ChiRex Inc. shall deliver a certificate signed on behalf of
ChiRex Inc. by two of its officers, certifying that (i) the aggregate
gross turnover of the Non-Material Subsidiaries as at such date does not
exceed 10% of the gross turnover of ChiRex Inc. and its subsidiaries as
at such date, (ii) the aggregate gross assets of the Non-Material
Subsidiaries as at such date does not exceed 10% of the gross assets of
ChiRex Inc. and its subsidiaries as at such date, and (iii) the aggregate
EBITDA of the Non-Material Subsidiaries as at such date does not exceed
10% of the EBITDA of ChiRex Inc. and its subsidiaries as at such date.
For this purpose:-
(a) in the case of a person which itself has subsidiaries, the
calculation shall be made by using the consolidated gross turnover
or gross assets or EBITDA of it and its subsidiaries; and
(b) the calculation of consolidated gross turnover or gross assets or
EBITDA shall be made by reference to:-
(i) the accounts of the relevant subsidiary (or, as the case may be, a
consolidation of the accounts of it and its subsidiaries) used for the
purpose of the then latest unaudited quarterly or audited annual
consolidated accounts of ChiRex Inc. delivered to the Agent under Clause
4.1.1 or 13.3 (as the case may be) or, in the case of a newly acquired or
formed subsidiary, the most recent unaudited quarterly or audited annual
accounts of the relevant subsidiary (or, as the case may be, a
consolidation of the accounts of it and its subsidiaries), provided such
accounts report a period ending no earlier than six months from the date
of such calculation; and
(ii) the unaudited quarterly or audited annual consolidated accounts (as the
case may be) of ChiRex Inc. on a pro forma basis together with any
newly-acquired or formed subsidiary described in sub-clause (b)(i) of
this definition;
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"Multiborrower Revolving Note" means the note(s) dated the date hereof to
be issued by each member of the ChiRex Group (other than the Borrower) to
the Borrower in respect of the proceeds of the Tranche B Facility;
"Net Cash Proceeds" means the remainder of cash proceeds arising from the
disposal of any fixed asset or any part of the business of any Obligor,
or from any Equity Sale, after deducting (i) in the case of such a
disposal, required repayment of Financial Indebtedness secured by such
asset and/or Financial Indebtedness incurred to purchase such asset or
business (or any refinancings thereof), (ii) reasonable costs related to
such Equity Sale or disposal, and (iii) reasonable provision for Taxes
attributable to such Equity Sale or disposal;
"Net Income" means, in respect of any period and in relation to:
(a) the Borrower, the profit shown on the Borrower's profit and loss
account for such period, determined in accordance with Approved
Accounting Principles; or
(b) the ChiRex Group, the profit shown on the profit and loss account
on a consolidated basis for the ChiRex Group for such period,
determined in accordance with the applicable Approved Accounting
Principles, provided that there shall be excluded (i) the profit
of any person (other than any Obligor) in which any other person
(other than any Obligor or any of their respective subsidiaries)
has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to any Obligor or
any of their respective subsidiaries by such person during such
period and (ii) the profit of any person accrued prior to the date
it becomes a subsidiary of any Obligor or any of their respective
subsidiaries or is merged into or consolidated with any Obligor or
any of their respective subsidiaries or that person's assets are
acquired by any Obligor or any of their respective subsidiaries;
"Net Tranche B Multicurrency Revolving Commitment" means, in relation to
any Lender, its Tranche B Multicurrency Revolving Commitment less, to the
extent it is a WCP Provider under the Tranche B Facility, the amount of
its WCP Commitment under the Tranche B Facility pursuant to Clause 3.6.1
from time to time;
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"Non-Material Subsidiary" means a subsidiary of ChiRex Inc. that is not a
Material Subsidiary;
"Obligor" means the Borrower, each Guarantor and any other member of the
ChiRex Group which is or becomes a party to a Finance Document;
"Operating Budget" means a budget for the ChiRex Group in form and scope
reasonably satisfactory to the Agent and consistent with the financial
reporting of the ChiRex Group (including budgeted statement of income,
and sources and uses of cash and balance sheets);
"Participation" means, in relation to a Lender and a Facility, its right,
title, interest and obligations in relation to such Facility, namely:-
(a) its right to receive its Participation Proportion of principal and
interest in respect of outstanding Advances under the Facility
including its right to any consequential payment pursuant to
Clause 3.7.1; and
(b) its obligation to participate in its Participation Proportion in
future Advances up to the limit of that Facility;
"Participation Proportion" means, in relation to a Lender and a Facility,
the proportion in which that Lender has agreed to participate in that
Facility pursuant to Clause 3.1 (Basis of Participation) and subject to
Clause 3.6 (the WCP Facilities);
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
thereto);
"Permitted Indebtedness" means, in relation to the Obligors:-
(i) Financial Indebtedness outstanding under any of the Facilities;
(ii) the Continuing Indebtedness (and refinancings thereof), provided
that the principal amount thereof shall not be increased after the
date of this Agreement;
(iii) finance leases, hire purchase and conditional sale agreements in
relation to which the maximum aggregate liability on termination
of
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such leases or agreements would not exceed in aggregate GBP
1,000,000 (or its equivalent);
(iv) guarantees, indemnities or bonds given in the ordinary course of
trading activities;
(v) Financial Indebtedness arising from a loan or credit permitted by
Clause 13.2.12;
(vi) Financial Indebtedness (and any refinancings thereof) of any
person which, by way of acquisition after the date of this
Agreement, will be consolidated on the ChiRex Group's financial
statements, provided that: (i) such Financial Indebtedness was
subsisting prior to the date of the person's acquisition, (ii)
such Financial Indebtedness was not incurred in contemplation of
or in connection with the acquisition, (iii) the principal amount
of such Financial Indebtedness shall not have been and shall not
be increased after the date of such acquisition above the amount
outstanding on such date or, if greater, the maximum amount
available to be drawn under the documentation governing such
Financial Indebtedness as in effect on such date, and (iv) the
aggregate amount of such Financial Indebtedness outstanding at any
one time, when added to that outstanding and permitted pursuant to
item (x) of this definition, shall not exceed GBP 10,000,000 (or
its equivalent);
(vii) Financial Indebtedness in connection with the provision of customs
bonds required in the ordinary course of trading of the relevant
person;
(viii) Permitted Subordinated Debt;
(ix) guarantees, indemnities or similar assurances given by an Obligor
in respect of obligations of another member of the ChiRex Group
which is a Tier I Guarantor, the guaranteed obligations in each
case in this paragraph (ix) being themselves permitted under this
Agreement;
(x) Financial Indebtedness not falling within any other paragraph of
this definition in a principal amount which when added to
Financial Indebtedness outstanding and permitted pursuant to item
(vi) of this definition, does not exceed GBP 10,000,000 (or its
equivalent) at any one time outstanding; and
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(xi) any other Financial Indebtedness incurred with the consent of the
Agent (acting on the instructions of the Majority Lenders);
"Permitted Investment" means, in relation to the Obligors:-
(i) cash;
(ii) commercial paper maturing not more than nine months from the date
of issue and rated at least A-1 by Standard & Poor's Ratings Group
or P-1 by Moody's Investors Service, Inc.;
(iii) any deposit of not more than one year's maturity with, or
acceptance maturing not more than one year after issue accepted
by, a bank or credit institution which has a combined capital and
surplus and undistributable profits of not less than GBP
100,000,000 (or its equivalent) and whose short term unsecured,
unsubordinated debt rating is at least A-1 by Standard & Poor's
Ratings Group or P-1 by Moody's Investors Service, Inc.;
(iv) securities issued or directly and fully guaranteed or insured by
the governments of Great Britain or the United States of America
or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition;
(v) repurchase obligations with a term of not more than seven days
fully collateralised by underlying securities of the types
described in paragraphs (ii) and (iii) above entered into with any
bank meeting the qualifications specified in paragraph (iii)
above;
(vi) debt securities having not more than one year until final maturity
and listed on a recognised stock exchange and rated at least Aa by
Moody's Investors Service, Inc. or AA by Standard & Poor's Ratings
Group;
(vii) loans or credits permitted pursuant to Clause 13.2.12;
(viii) investments in the ordinary course of the trading business of the
relevant person; and
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(ix) investments in subsidiaries in the respective amounts in effect on
the date of this Agreement;
"Permitted Security Interest" means, in relation to the Obligors:-
(i) Security Interests granted with the consent of the Agent (acting
on the instructions of the Majority Lenders);
(ii) liens arising and subsisting by operation of law and in the
ordinary course of business activities;
(iii) rights of set-off existing in the ordinary course of trading
activities between such Obligor and its suppliers or customers,
and rights of set-off arising by operation of law by virtue of the
provision to such person of bank clearing facilities or overdraft
facilities permitted hereunder;
(iv) any retention of title to goods supplied to such Obligor where
such retention is permitted by the relevant person in the ordinary
course of its trading activities and on customary terms;
(v) Security Interests securing Financial Indebtedness referred to in
paragraph (vi) of the definition of "Permitted Indebtedness",
provided that: (i) such Security Interest was subsisting prior to
the date of the person's acquisition by such Obligor, (ii) such
Security Interest was not granted in contemplation of or in
connection with the acquisition, and (iii) the principal Financial
Indebtedness secured by any such Security Interest shall not be
increased after the date of such acquisition;
(vi) Security Interests securing the Continuing Indebtedness on the
date of this Agreement, provided that the principal Financial
Indebtedness secured by any such Security Interest shall not be
and shall not have been increased after such date;
(vii) Security Interests covering assets the subject of equipment and
finance leases, hire purchase, conditional sale or similar
arrangements entered into by such Obligor which are permitted by
this Agreement;
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(viii) Security Interests arising in respect of any escrow arrangements
put into place for the purpose of a disposal or acquisition by
such Obligor permitted by this Agreement; and
(ix) Security Interests of such Obligor not falling within any other
paragraph of this definition securing Financial Indebtedness
(including interest and fees relating thereto) which does not
exceed GBP 100,000 (or its equivalent) at any one time;
in each case, other than any of the aforementioned imposed pursuant to
Section 401(1)(29) or 412(n) of the Internal Revenue Code or by ERISA;
"Permitted Subordinated Debt" means unsecured Financial Indebtedness of
the Obligors provided that either (i) such Financial Indebtedness is
subordinated to the Financial Indebtedness outstanding under the Finance
Documents upon terms in all respects reasonably satisfactory to the Agent
taking into consideration the market in or into which it is issued, or
(ii) the terms of subordination of such Financial Indebtedness provide,
without limitation, that:
(a) such Financial Indebtedness shall not amortise prior to the final
date of maturity, which date shall be no earlier than 31st
December, 2003;
(b) no amount in respect of principal of such Financial Indebtedness
(by way of purchase, redemption or otherwise) shall be paid until
all amounts which may be or become payable under the Finance
Documents have been irrevocably paid in full and all Commitments
hereunder shall have terminated, except on terms and conditions
reasonably satisfactory to the Majority Lenders and the Agent;
(c) no amount in respect of interest on such Financial Indebtedness
may be paid until all amounts which may be or become payable under
the Finance Documents have been irrevocably paid in full and all
Commitments hereunder shall have terminated, except on terms and
conditions reasonably satisfactory to the Majority Lenders and the
Agent;
(d) no default in respect of such Financial Indebtedness shall arise
and the lender thereof shall waive any available remedies as a
result thereof until all amounts which may be or become payable
under the
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Finance Documents have been irrevocably paid in full and all
Commitments hereunder shall have terminated;
(e) each lender in respect of such Financial Indebtedness shall agree
that it will not accelerate any such Financial Indebtedness or
otherwise declare it prematurely payable, enforce any such
Financial Indebtedness (to the maximum extent permitted by law),
petition for or otherwise take any steps with a view to any
insolvency, liquidation, re-organization, administration or
dissolution proceedings or any voluntary arrangement or assignment
for the benefit of creditors or any similar proceedings, including
without limitation any event referred to in Clause 14.1.5 to
Clause 14.1.10 (inclusive) involving any member of the ChiRex
Group or otherwise exercise any rights or pursue any remedy for
the recovery of such Financial Indebtedness or in respect of any
breach of covenant, misrepresentation or non-observance of any
provision of such Financial Indebtedness, in each case, until all
amounts which may be or become payable under the Finance Documents
have been irrevocably paid in full and all Commitments hereunder
shall have been terminated; and
(f) each lender in respect of such Financial Indebtedness shall agree
to turn over to the Agent all payments and distributions received
in respect of any proceeding referred to in Clause 14.1.5 to
Clause 14.1.10 (inclusive) involving the Borrower, and any other
amount paid in a manner inconsistent with clauses (a) and (b) of
this definition, for application by the Agent to the satisfaction
of outstandings under this Agreement until all amounts which may
be or become payable under the Finance Documents have been
irrevocably paid in full and all Commitments hereunder shall have
been terminated;
"Potential Event of Default" means any event which, with the giving of
notice or the lapse of time or both or the making of any determination or
the fulfilment of any condition, will constitute an Event of Default,
provided that such notice, lapse of time, determination or condition is
in any case specified or referred to in the relevant Event of Default as
set forth in Clause 14.1;
"Qualifying Lender" means an institution which is (i) a bank resident in
the U.K. for the purpose of Section 349 of the Income and Corporation
Taxes Act 1988 (as in effect on the date of this Agreement) and is
beneficially
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entitled to its Participation Proportion of interest due on the Advances
or (ii) a bank lending through any other branch, affiliate or agency if
the bank or affiliate (as the case may be) is resident in a country with
which the United Kingdom has an appropriate double taxation treaty
pursuant to which that bank or affiliate (as the case may be) is entitled
to receive principal, interest and fees under this Agreement from the
Borrower without withholding of United Kingdom income Tax or is otherwise
entitled to receive principal, interest and fees without such
withholding;
"Rate Fixing Day" means, in relation to an Advance, the Business Day
being two Business Days prior to the Drawdown Date for that Advance and,
in relation to any Interest Period, the Business Day being two Business
Days prior to the first day of that Interest Period provided that, in
relation to an Advance denominated in GBP the Rate Fixing Day shall be
the Drawdown Date or, as the case may be, the first day of the relevant
Interest Period;
"Recovering Lender" has the meaning given to it in Clause 19.1;
"Recovery" has the meaning given to it in Clause 19.1;
"Reference Lenders" means, subject to Clause 25.5.2, Bankers Trust
Company and Midland Bank plc;
"Relevant Amounts" means, in relation to a Lender, the aggregate from
time to time of (a)(i) before the making of the initial Advances, its
Commitments or (ii) after the making of the initial Advances, all
Advances made by it then outstanding, or (b) if the Commitments have been
terminated, all Advances made by it then outstanding;
"Repayment Dates" means the semi-annual dates commencing on 31st
December, 1998, as detailed in Schedule 2;
"Repayment Schedule" means the repayment schedule for the Tranche A Term
Facility which is set out in Schedule 2;
"Reservations" means limitations on enforceability of legal documents
dictated by local law and used as qualifications in legal opinions
delivered to and accepted by the Agent in connection with the Initial
Drawdown or the accession of a Guarantor pursuant to a Deed of Accession;
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"Restricted Payment" means any of (i) the redemption, purchase,
retirement or acquisition by ChiRex Inc. of any shares, warrants or other
equity related securities issued by it, or the setting apart by it of any
sum for such purpose, or other reduction by it of its capital, (ii) the
declaration or payment by ChiRex Inc. or making of any other distribution
on any ordinary or other shares issued by it, and (iii) before the
Achievement Date only, the incurrence of any Capital Expenditure by the
ChiRex Group in excess of that set forth for the relevant Accounting
Reference Period in the Business Plan;
"Revolving Lenders" means any Lender participating in the Tranche B
Multicurrency Revolving Facility;
"Sale and Purchase Agreement" means the Agreement in the agreed terms
dated 23rd September 1997 between Glaxo Group Limited and ChiRex (Annan)
Limited for the Sale and Purchase of the Business and Assets of Glaxo
Group Limited operated from its site at Annan, Dumfries, Scotland;
"Same Day Funds" means funds settled for value on the same day throughout
a clearing system relevant for the currency concerned and such other
funds as the Agent shall specify as being customary at the time for such
settlement;
"Scheme" means the ChiRex Pension Plan as established by an interim trust
deed dated 5th February, 1996;
"SEC" means the United States Securities and Exchange Commission (or any
successor thereto);
"Security Agent" means Bankers Trust Company as agent for the Finance
Parties under the Security Documents or any other person as may from time
to time hold the whole or any part of the security created thereby
pursuant to Clause 16;
"Security Documents" means each of:-
(a) Pledge Agreement dated as of the date hereof between the Security
Agent, on behalf of the Lenders, and ChiRex Inc. relating to all
the issued and outstanding shares of capital stock of ChiRex
America Inc. and the Borrower, and the Holdings Note;
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(b) Debenture dated as of the date hereof between the Security Agent,
on behalf of the Lenders, and the Borrower relating to all the
issued and outstanding shares of ChiRex (Dudley) Limited and
ChiRex (Annan) Limited, the Annan Note and the Multiborrower
Revolving Notes;
(c) Debenture dated the date hereof by ChiRex (Dudley) Limited in
favour of the Security Agent, on behalf of the Lenders, relating
to the Dudley Facility and certain other assets of ChiRex (Dudley)
Limited;
(d) Debenture dated the date hereof by ChiRex (Annan) Limited in
favour of the Security Agent, on behalf of the Lenders, relating
to certain assets of ChiRex (Annan) Limited; and
(e) Standard Security in agreed terms dated the date hereof by ChiRex
(Annan) Limited in favour of the Security Agent, on behalf of the
Lenders, relating to the Annan Facility;
in each case as the same may be amended, from time to time, in accordance
with its terms;
"Security Interest" means any mortgage, charge (fixed or floating),
standard security, pledge, lien, right of set-off hypothecation, trust,
assignment by way of security, reservation of title, or any other
security interest whatsoever, howsoever created or arising or any other
agreement or arrangement (including, without limitation, a sale and
repurchase arrangement) having the practical effect of conferring
security, and any agreement to enter into, create or establish any of the
foregoing;
"Standard Security" means a standard security in terms of the
Conveyancing and Feudal Reform (Scotland) Act 1970;
"Syndication" has the meaning set forth in Clause 3.5;
"Taxes" means and includes all present and future income and other taxes,
levies, assessments, imposts, deductions, charges, duties, compulsory
loans and withholdings whatsoever and wheresoever imposed and any charges
in the nature of taxation together with interest thereon and penalties
and fines with respect thereto, if any, and any payments made on or in
respect thereof; and "Tax" and "Taxation" shall be construed accordingly;
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"Tier I Guarantor" means any Guarantor which (i) has guaranteed all
obligations of each Obligor hereunder and the amount of which guarantee
is not subject to any limitation hereunder or under any Deed of
Accession, if applicable, and (ii) for the purpose of securing such
guarantee, has entered into one or more Security Documents in favour of
the Security Agent creating in favour of the Security Agent a valid,
perfected, first priority Security Interest in all or substantially all
of such Guarantor's assets;
"Total Borrowings" means, at any time, the aggregate outstanding amount
of all Financial Indebtedness of all Obligors, calculated on a
consolidated basis;
"Total Commitments" means, together, the Lenders' Commitments.
"Total Debt" means, as at any date of determination, in respect of any
person or persons, the aggregate principal amount of Financial
Indebtedness of such person or, on a consolidated basis, persons (as
applicable), determined in accordance with the applicable Approved
Accounting Principles;
"Total Debt/EBITDA Ratio" means, at any time, the ratio of (i) Total Debt
as of the last day of the immediately preceding Accounting Quarter, to
(ii) consolidated EBITDA for the immediately preceding four Accounting
Quarters, in each case in respect of ChiRex Inc.;
"Total Debt Service" means, in respect of any period and any person or
persons, the aggregate of (a) Total Interest and (b) the aggregate
principal amount of Financial Indebtedness of such person or, on a
consolidated basis, persons (as applicable) scheduled to be repaid
(having regard to any reductions in respect thereof due to previous
prepayment of any such amount where such prepayment occurred in a
previous period) during such period under the terms and conditions
relating to such Financial Indebtedness;
"Total Interest" means, in respect of the relevant testing period, the
aggregate of all interest (including amounts in the nature of interest in
connection with any interest rate and/or currency swap, cap, floor,
collar or other similar arrangement), guarantee fees, commitment fees and
other costs and fees of a similar nature (not including, to the extent
otherwise included, costs of issuance of debt, equity or warrants or
amortisation of
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debt discount) due in respect of Total Borrowings (including, for
purposes of calculating "Total Borrowings" and notwithstanding sub-clause
(xiii) of the definition of "Financial Indebtedness", 100% of the face or
notional amount of each interest rate or currency swap, collar or other
similar agreement or other hedging or derivative instrument as the
Financial Indebtedness attributable thereto) and payable by the ChiRex
Group during such period (including interest, the interest finance charge
element of hire-purchase, credit sale and conditional sale agreements and
of lease rentals under finance leases), less the sum of all interest
(including amounts in the nature of interest in connection with any
interest rate and/or currency swap, cap, floor, collar or other similar
arrangement), guarantee fees, commitment fees and other costs and fees of
a similar nature payable to the ChiRex Group during such period;
"Tranche A Facility" or "Tranche A Term Facility" means the Tranche A
Term loan facility not in excess of the Tranche A Term Commitments
granted to the Borrower hereunder (as the same may be cancelled, reduced,
varied or terminated in accordance with the terms of this Agreement);
"Tranche A Term Commitment" means, in relation to the participation of
any Lender in the Tranche A Term Facility, the amount stated opposite its
name in Schedule 1 in relation to that Facility (or in the case of a
Transferee, the amount stated in the Schedule to the relevant Transfer
Certificate as being transferred to that Transferee), in each case as the
same may be transferred (in whole or in part), cancelled, reduced, varied
or terminated in accordance with the terms of this Agreement;
"Tranche B Facility" or "Tranche B Multicurrency Revolving Facility"
means the Tranche B multicurrency revolving loan facility not in excess
of the Tranche B Multicurrency Revolving Commitments granted to the
Borrower hereunder (as the same may be cancelled, reduced, varied or
terminated in accordance with the terms of this Agreement);
"Tranche B Multicurrency Revolving Commitment" means, in relation to the
participation of any Lender in the Tranche B Multicurrency Revolving
Facility, the amount (or the Equivalent Amount thereof) stated opposite
its name in Schedule 1 in relation to the Facility (or in the case of a
Transferee, the amount or Equivalent Amount of such amount stated in the
Schedule to the relevant
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Transfer Certificate as being transferred to that Transferee), in each
case as the same may be transferred (in whole or in part), cancelled,
reduced, varied or terminated in accordance with the terms of this
Agreement;
"Transfer" has the meaning given to it in Clause 25.2;
"Transfer Certificate" means a certificate substantially in the form set
out in Schedule 7;
"Transferee" means a bank, financial institution or other person to which
a Lender seeks to transfer or has transferred all or part of its rights
and obligations hereunder;
"United Kingdom" or "UK" means the United Kingdom of Great Britain and
Northern Ireland;
"United States" or "US" means the United States of America;
"USD" means the lawful currency from time to time of the United States;
"US Obligor" means any Obligor organised under the laws of any
jurisdiction within the the United States;
"VAT" means value added tax imposed in any relevant jurisdiction or any
other tax of a substantially similar nature substituted therefor from
time to time;
"WCP Advance" means an Advance under a WCP Facility;
"WCP Agreement" means an agreement between a WCP Provider and the
Borrower relating to a WCP Facility;
"WCP Commitment" means, in respect of any WCP Provider for a WCP
Facility, the amount designated by the WCP Provider pursuant to Clause
3.6.1, as such WCP Commitment may be reduced pursuant to the terms of
this Agreement;
"WCP Facility" means a revolving credit facility made available by a WCP
Provider to the Borrower pursuant to Clause 3.6 and "WCP Facilities"
means all such facilities;
"WCP Provider" means any Lender acting through a branch or affiliate in
respect of a WCP Commitment of that Lender;
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"Working Capital" means in relation to a person or group of persons under
any Approved Accounting Principles, trade and other debtors in respect of
operating items plus prepayments and inventory less trade and other
creditors in respect of operating items and less accrued expenses and
accrued costs, in each case determined in accordance with such Approved
Accounting Principles for such person or, on a consolidated basis, for
such persons (as the case may be); and
"Yen" means the lawful currency from time to time of Japan.
1.2 Construction of Other Terms
In this Agreement, unless the context otherwise requires, a reference
to:-
1.2.1 "affiliate" means in relation to any person (a) any person (other than a
subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with such person, or (b) any
person who is a director or officer (i) of such person, (ii) of any
subsidiary of such person or (iii) of any person described in clause (a)
above. For purposes of this definition, "control" of a person shall mean
the power, direct or indirect, (i) to vote 25% or more of the securities
having ordinary voting power for the election of directors of such
person, whether by way of ownership of securities, contract, proxy or
otherwise, or (ii) to direct or cause the direction of the management and
policies of such person, whether by ownership of securities, contract,
proxy or otherwise;
1.2.2 "assets" means business, undertaking, property, assets (tangible or
intangible), revenues, rights and uncalled capital, wherever situated,
present, future and contingent (including uncalled share capital), and
every kind of interest in an asset, except that the word "contingent"
shall not be deemed included in this definition where the definition is
used in provisions relating to financial accounting;
1.2.3 "indebtedness" includes any obligation (whether incurred as principal or
as surety) for the payment or repayment of money, whether present or
future, actual or contingent, except that the word "contingent" shall not
be deemed included in this definition where the definition is used in
provisions relating to financial accounting;
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1.2.4 a document or other writing being "in the agreed terms" means that the
relevant document or writing is in form and substance satisfactory to the
Agent and has been initialled by or on behalf of the Agent and the
Borrower (or their respective agents) on or before the date hereof;
1.2.5 an event or matter having a "Material Adverse Effect" is to be construed
as a reference to an event or matter (a) which has or is reasonably
likely to have a material adverse effect on the prospects, financial
condition, business, assets or revenues of the ChiRex Group taken as a
whole such that the Obligors, taken as a whole, will be, or are
reasonably likely to be, unable to perform in a timely and diligent
manner all or any of their material obligations (including, without
limitation, payment obligations) under each of the Finance Documents or
(b) resulting in any material term of the Finance Documents not being
legal, valid and binding on and enforceable against any Obligor party
thereto, subject only to the Reservations;
1.2.6 a "month" means (save where used in the expression "calendar month") a
period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month (or in a
subsequent calendar month in the case of the plural "months"), provided
that if:-
(a) any such period would otherwise end on a day which is not a
Business Day, it shall end on the next Business Day in the same
calendar month, or if none, on the preceding Business Day; and
(b) a period starts on the last Business Day in a calendar month or if
there is no numerically corresponding day in the month in which
that period ends, that period shall end on the last Business Day
in that later month;
(and references to "months" shall be construed accordingly);
1.2.7 "outstanding" under a Facility means the principal amount of all Advances
outstanding under such Facility;
1.2.8 a "person" includes any person, firm, company, corporation, government,
state or agency of a state or any undertaking (within the meaning of
Section 259(1) of the Companies Act 1985) or other entity or association
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(whether or not having separate legal personality), or any two or more of
the foregoing;
1.2.9 "repayment" includes "prepayment" and its grammatical variations and
cognate expressions shall be construed accordingly;
1.2.10 "subsidiary" means, with respect to any person, any corporation or other
person more than fifty percent (50%) of whose securities or other
ownership interests having ordinary voting power for the election of
directors or similar representatives (other than securities having such
power only by reason of the happening of a contingency) are, as of the
date of determination thereof, directly or indirectly owned by such
person or one or more of such person's subsidiaries; and
1.2.11 "winding-up" of any person includes its dissolution and/or termination
and/or any equivalent or analogous proceedings under the law of any
jurisdiction in which the person concerned is incorporated, registered,
established or carries on business or to which that person is subject.
1.3 Other Provisions
Except where a contrary intention appears, in this Agreement:-
1.3.1 a reference to an Obligor or a Finance Party is, where relevant, deemed
to be a reference to or to include, as appropriate, their respective
successors or assigns;
1.3.2 references to Clauses and Schedules are references to, respectively,
clauses of and schedules to this Agreement;
1.3.3 a reference to any agreement, deed or other instrument (including the
Finance Documents) is to be construed as a reference to that agreement,
deed or other instrument as it may have been or hereafter be, from time
to time, amended, varied, supplemented, restated or novated but excluding
for this purpose any amendment, variation, supplement or modification
which is contrary to any provision of any of the Finance Documents;
1.3.4 a reference to a statute, law, rule, regulation or statutory instrument
is to be construed as a reference to that statute as the same may have
been, or may from time to time hereafter be, amended or re-enacted;
1.3.5 a time of day is a reference to London, England time;
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1.3.6 the index to and the headings in this Agreement are inserted for
convenience only and are to be ignored in construing this Agreement;
1.3.7 references to the singular shall include the plural and vice versa, and
reference by way of masculine pronoun or adjective shall include
references by way of the feminine, and vice versa ; and
1.3.8 accounting terms are to be construed in accordance with the Approved
Accounting Principles.
2. THE FACILITIES
2.1 The Facilities
2.1.1 The Lenders grant to the Borrower, upon the terms and subject to the
conditions of this Agreement, the Facilities.
2.2 Purpose
2.2.1 Tranche A Term Facility: The proceeds of the Advance under the Tranche A
Term Facility shall be used by the Borrower to advance to ChiRex (Annan)
Limited the consideration for the purchase of the Assets from Glaxo Group
Limited pursuant to the Sale and Purchase Agreement.
2.2.2 Tranche B Multicurrency Revolving Facility: The proceeds of any Advance
under the Tranche B Multicurrency Revolving Facility (including WCP
Advances, except as otherwise restricted by Clause 3.6) shall be used by
the Borrower (a) up to the principal amount of GBP 1,000,000, for the
purpose for which proceeds under the Tranche A Facility may be used and
(b) otherwise, to advance to any member of the ChiRex Group for general
corporate purposes of such member of the ChiRex Group.
2.2.3 Financial Assistance: No amount drawn down hereunder shall be applied by
an Obligor in a manner which may be prohibited by any financial
assistance or other similar laws in any relevant jurisdiction.
3. PARTICIPATION OF LENDERS
3.1 Basis of Participation
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Subject to the provisions of this Agreement, each Lender will participate
in each Advance in the proportion which (i) in the case of an Advance
under the Tranche A Term Facility, its Commitment in relation to such
Facility as at the Drawdown Date bears to the undrawn portion of the
Total Commitments of the Lenders in relation to such Facility as at such
date, and (ii) in the case of an Advance under the Tranche B
Multicurrency Revolving Facility, its Net Tranche B Multicurrency
Revolving Commitment in relation to such Facility as at the Drawdown Date
bears to the undrawn portion of the Total Commitments of the Lenders in
relation to such Facility as at such date.
None of the Lenders is obliged to participate in an Advance to the extent
that to do so would result in the amount outstanding to it under the
relevant Facility exceeding its Commitment in respect of that Facility.
3.2 Lending Office
3.2.1 Each Lender will participate in each Advance as aforesaid through its
Lending Office.
3.2.2 If any Lender changes any Lending Office, that Lender agrees to notify
the Agent and the Borrower promptly of such change and, until it does so,
the Agent and the Borrower shall be entitled to assume that no such
change has taken place.
3.3 Rights and Obligations of Finance Parties
3.3.1 The rights and obligations of each of the Finance Parties under the
Finance Documents are several. Failure of any Finance Party to observe
and perform its obligations under any Finance Document shall neither:-
(a) result in any other Finance Party incurring any liability
whatsoever; nor
(b) relieve the Borrower or any other Finance Party from their
respective obligations under the Finance Documents.
3.3.2 Notwithstanding any other provision of any Finance Document, the
interests of each Finance Party are several and the total amounts
outstanding at any time under the Finance Documents and due to each
Finance Party constitute separate and independent debts.
3.4 Enforcement of Rights
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Each Finance Party has the right to protect and enforce its rights
arising out of the Finance Documents and it will not be necessary for any
other Finance Party to be joined as an additional party in any
proceedings brought for the purpose of protecting or enforcing such
rights.
3.5 Syndication
The Borrower acknowledges that, without limitation of the provisions of
Clause 25, the Lenders may assign or transfer their respective rights
under this Agreement ("Syndication") and the Borrower undertakes to
assist and co-operate with the Joint Arrangers in Syndication in such
manner and to such extent as the Joint Arrangers may from time to time
each reasonably request including, without limitation, by:-
(a) providing and causing the Borrower's advisers to provide the Joint
Arrangers with all reasonable information deemed necessary by the
Joint Arrangers to complete Syndication, including but not limited
to information and evaluations prepared by the Borrower and its
advisers;
(b) assisting in the preparation of an Information Memorandum;
(c) making available officers of the Borrower and ChiRex Inc. from
time to time and, as may reasonably be requested, causing such
officers to attend and make presentations regarding the business
and prospects of the Borrower and ChiRex Inc., as appropriate, at
a meeting or meetings of Lenders or prospective Lenders;
(d) arranging and conducting appropriate Borrower site visits for the
Joint Arrangers;
(e) selecting Interest Periods having a duration of not more than one
month in respect of all Advances made for the first six months
following the date of this Agreement or, if earlier, the date on
which the Agent notifies the Borrower that in the Agent's
determination Syndication is completed, which the Agent hereby
agrees to do promptly upon completion of Syndication; and
(f) refraining and causing its subsidiaries to refrain, from placing
any of their respective borrowings in the English, French, Spanish
or international
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financial or capital markets until the earlier of (i) six months
after the date of this Agreement, and (ii) completion of such
Syndication as notified to the Borrower by the Agent.
3.6 The WCP Facilities
3.6.1 (a) If a WCP Provider so agrees, at the request of the Borrower, a WCP
Provider may designate by notice to the Agent all or part of its
Tranche B Multicurrency Revolving Commitment as being utilised by
its provision of a WCP Commitment in the amount designated in
respect of a WCP Facility for the Borrower up to a maximum
aggregate amount of GBP 2,000,000 or the Equivalent Amount
thereof.
(b) Under no circumstance shall the aggregate of any WCP Provider's
WCP Commitments exceed such WCP Provider's Tranche B Multicurrency
Revolving Commitment.
(c) Subject to the terms of this Agreement,
(i) while and to the extent a WCP Facility is made available for drawing by
the Borrower, the Tranche B Multicurrency Revolving Commitment of the WCP
Provider for that WCP Facility shall be reduced by the amount of its WCP
Commitment in respect of that WCP Facility, as set forth in the
definition of Net Tranche B Multicurrency Revolving Commitment; and
(ii) the Borrower may cancel any undrawn element of a WCP Facility at any
time, and in any such event or upon the expiration of the WCP Commitment
for that WCP Facility, the Net Tranche B Multicurrency Revolving
Commitment of the WCP Provider for that WCP Facility shall automatically
be increased by the amount so cancelled or expired; provided that such
WCP Provider's Net Tranche B Multicurrency Revolving Commitment shall not
be increased in excess of its Tranche B Multicurrency Revolving
Commitment.
3.6.2 Each WCP Facility shall be made available to the Borrower upon the terms
of this Agreement, as follows:-
(a) WCP Advances may be in the form of cash Advances, letters of
credit or revolving credit guarantees as agreed between the
relevant WCP Provider in the applicable WCP Agreement.
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(b) WCP Advances under a WCP Facility shall, except as otherwise
provided, be made available to the Borrower on the same terms and
conditions (including without limitation the terms and conditions
relating to interest, payments, change in circumstances, defaults,
etc.) under which Advances under the Tranche B Multicurrency
Revolving Facility are made available to the Borrower under this
Agreement, provided that for purposes of Clauses 2, 3 and 5 to 11
(inclusive):
(i) the Lending Office(s) of a WCP Provider for purposes of its WCP Facility
may be different from the Lending Office(s) it designates for other
purposes under this Agreement;
(ii) except as set forth in Clause 3.6.1, all notices to be given by or to the
Agent in respect of a Tranche B Multicurrency Revolving Advance shall, in
respect of a WCP Advance, be given by or to (as applicable) the WCP
Provider for the relevant WCP Facility (and references to the Agent and
its address in the relevant provisions of such clauses shall be deemed
references to the relevant WCP Provider and its address for this
purpose);
(iii) all determinations to be made by the Agent in respect of a Tranche B
Multicurrency Revolving Advance shall, in respect of a WCP Advance, be
made by the relevant WCP Provider (and references to the Agent in the
relevant provisions of such clauses shall be deemed references to the
relevant WCP Provider for this purpose);
(iv) all payments which, in respect of a Tranche B Multicurrency Revolving
Advance are required to be made to the Agent hereunder shall, in respect
of a WCP Advance to the Borrower, be made to the WCP Provider in respect
of those WCP Advances (and references to the Agent and its address in the
relevant provisions of such clauses shall be deemed references to the
relevant WCP Provider and its address for this purpose); and
(v) each WCP Advance shall be in such minimum amount and integral multiples
as is agreed between the relevant WCP Provider and the Borrower in the
applicable WCP Agreement.
(c) The foregoing notwithstanding, the Borrower and WCP Provider in
relation to a WCP Facility may agree in a WCP Agreement between
them to vary the interest rate applicable to WCP Advances under
the WCP Facility, the number of WCP Advances that may be
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outstanding at any one time, or the form of or requirement for any
Drawdown Request or the notice required to make a drawing of a WCP
Advance under that WCP Facility, and payment and amount of fees;
provided that such WCP Agreement may not amend, supplement or vary
this Agreement in any other respect without the consent of the
Agent acting at the direction of the Majority Lenders, or, to the
extent required by the other provisions of this Agreement, the
Lenders.
(d) In addition to the foregoing, Clause 8.3.4 shall not apply in
respect of any WCP Advance.
3.7 Certain Adjustments Relating to WCP Facilities
3.7.1 Following the occurrence and during the continuance of an Event of
Default:-
(a) each WCP Provider shall promptly notify the Agent of any Recovery
made by it from the Borrower and/or any loss or expense suffered
by it in connection with the failure to repay in full, in each
case by reference to the WCP Facility or WCP Facilities to which
it is a party; and
(b) in the event of a shortfall as regards any or all of the Obligors
under the Finance Documents, the Agent shall calculate the
necessary adjustments between that WCP Provider and the other
Lenders so that, as closely as is practicable, each Lender shares
any loss suffered by all the Lenders (including the WCP Provider)
in the proportion which that Lender's Commitments under the
Facilities bears to the Total Commitments under the Facilities.
(c) The Lenders (including each WCP Provider) agree to accept as
conclusive (in the absence of manifest error) the calculations of
the Agent under paragraph (b) above and to make such consequential
payments as between themselves as may be necessary to achieve the
proportionate loss sharing contemplated by that paragraph (b) and
to give effect to Clause 19.
3.7.2 Any consequential payment made by a Lender under Clause 3.7.1 above is
without prejudice to the obligations under this Agreement of the Borrower
to pay all amounts due and payable under this Agreement.
4. CONDITIONS PRECEDENT
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4.1 Initial conditions precedent
4.1.1 The obligations of the Lenders to make any Advance available to the
Borrower under this Agreement are conditioned upon the Agent and its
legal advisers having received the following documents and evidence in
all respects (except where otherwise specified) in form and substance
satisfactory to the Agent and its legal advisers by 12:00 noon on the
first Business Day prior to the Initial Drawdown Date:-
(a) a copy, certified as of the Initial Drawdown Date as true and
complete by a duly authorised representative of the relevant
Obligor, of:
(i) the constitutional documents of each Obligor, including evidence of due
incorporation, together with satisfactory search results of any public
corporate registers of that Obligor;
(ii) board (or other appropriate governing body) resolutions of each Obligor
(A) approving the transactions and the matters contemplated by each of
the Finance Documents, and (B) authorising or granting a power of
attorney to a specified person or persons to (x) execute on its behalf
each of the Finance Documents to which it is a party, and (y) give all
notices, requests, instructions, certificates and other documents for
that Obligor in connection with each of the Finance Documents to which it
is a party;
(iii) all other corporate, trust or other applicable authorisations and actions
of it required (including without limitation any resolutions of
shareholders or approvals of beneficiaries) to enable it to enter into,
execute and perform those of the Finance Documents to which it is, or is
to be, a party;
(iv) specimen signatures of the signatories authorised by each Obligor in the
board (or other appropriate governing body) resolutions described in
Clause 4.1.1(a)(ii) to sign Financing Documents to which it is or is to
be a party; and
(v) all other resolutions, powers, declarations, approvals, consents and
licenses (corporate, official or otherwise) necessary or appropriate for
the entry into and performance by each Obligor of the Finance Documents
to which it is or is to be a party, and for the enforceability and
validity thereof;
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(b) duly and unconditionally executed counterparts (except where such
documents are expressly governed (in whole or in part) by Scottish
law, in which case such documents shall not be executed in
counterparts) of:-
(i) this Agreement; and
(ii) each of the Security Documents.
(c) legal opinions properly addressed to the Agent and Lenders from:-
(i) Cravath, Swaine & Moore, U.S. legal advisers to the ChiRex
Group;
(ii) Dibb Lupton Alsop, English legal advisers to the ChiRex
Group; and
(iii) O'Melveny & Myers LLP, legal advisers to the Agent;
(d) (i) in relation to the Annan Facility, evidence that:
(A) the consummation of the transactions contemplated in
the Sale and Purchase Agreement and entry into the Supply
Agreement will occur on terms and conditions acceptable to
the Agent substantially contemporaneously with the Initial
Drawdown; and
(B) an executed and completed letter of obligation from
Brodies WS, "Disposition" in favour of ChiRex (Annan)
Limited, a wire transfer in respect of (i) stamp duty on
the Disposition in the amount of GBP 240,000 and (ii)
registration dues on the Disposition and Standard Security
in the amount of GBP 7,522, and the prior writs and land
registration forms 1 and 4 in respect of the Disposition,
have each been delivered to Tods Murray, Scottish counsel
for the Agent; and
(ii) in relation to the Dudley Facility, evidence that the
Security Interest held by Midland Bank plc has been paid and
discharged in full substantially contemporaneously with the
Initial Drawdown.
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(e) delivery of share certificates and share transfer forms and/or
evidence of the relevant recording on the share registers with
respect to the shares of ChiRex America Inc., the Borrower, ChiRex
(Dudley) Limited and ChiRex (Annan) Limited, and the Holdings
Note, the Annan Note and the Multiborrower Revolving Note, all as
pledged pursuant to the Security Documents, and/or any other
evidence that the Security Interests created thereby are
appropriately perfected or will be perfected upon registration
under applicable law;
(f) Environmental Report;
(g) Due Diligence Report (Legal);
(h) Business Plan;
(i) Operating Budget;
(j) Accountants' Report and Industry Report;
(k) in each case, unless the relevant report itself is addressed to
the Agent and each of the Lenders, reliance letters addressed to
the Agent and each of the Lenders in form and substance
satisfactory to the Agent with respect to each of (i) the
Environmental Report, to the extent it relates to the Annan
Facility, (ii) the Due Diligence Report (Legal) as described in
item (ii), (iii) and (iv) of the definition thereof, (iii) the
Accountants' Report, and (iv) the Industry Report;
(l) analyses and evidence of insurance complying with Clause 13.2.6
(Insurances) in scope, form and substance reasonably satisfactory
to the Agent;
(m) audited consolidated financial statements for ChiRex Inc. for the
Accounting Reference Period ended 31st December, 1996 and
unaudited interim financial statement for the Accounting Quarter
ended 30th June, 1997;
(n) each of the financial statements and other materials required
pursuant to Clause 13.3.4 (Financial Statements and Operating
Budget);
(o) copies of each of the agreements, deeds or other instruments, in
each case containing covenants, events of default and matters
relating to requirements for repayment in advance of scheduled
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maturity in form and substance reasonably satisfactory to the
Agent, evidencing the Continuing Indebtedness, certified as of the
Initial Drawdown Date by a duly authorised representative of the
Borrower;
(p) evidence that the agents for service of process named in Clause
30.2 have accepted their respective appointments for the purposes
of this Agreement and the other Finance Documents; and
(q) evidence of the payment of the fees specified in Clause 11.1.1(b).
4.1.2 When the Agent is satisfied that such conditions have been fulfilled, the
Agent will give notice to that effect to the Borrower and each of the
Lenders.
4.2 Additional Conditions Precedent for All Advances
4.2.1 The obligations of the Lenders to make any Advance to the Borrower is
subject to the following further conditions precedent that on both the
date of the relevant Drawdown Request and the relevant Drawdown Date,
unless waived by the Agent acting in accordance with Clause 26:-
(a) no Event of Default or Potential Event of Default has occurred and
continues unremedied or will occur as a result of the making of
the Advance; and
(b) the representations and warranties required to be made in
accordance with Clause 12 are true and accurate in all material
respects in each case by reference to the facts and circumstances
then subsisting and will remain true and accurate immediately
after the Advance is made.
4.2.2 Each Drawdown must fall on a Business Day on or before the expiry of the
Availability Period for the relevant Facility. Any amounts not drawn on
or before the expiry of the Availability Period for the Facility shall be
cancelled.
5. DRAWDOWN PROCEDURES AND LENDERS' PARTICIPATIONS;
5.1 Drawdown of Advances
5.1.1 Whenever the Borrower wishes to borrow an Advance, the Borrower must
deliver to the Agent a duly completed Drawdown Request not later than
10.00 a.m. three Business
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Days prior to the proposed Drawdown Date (including with respect to the
Initial Drawdown Date).
5.1.2 A Drawdown Request for an Advance delivered to the Agent must be in the
form set out in Schedule 3 and must specify each of the following:-
(a) the proposed Drawdown Date for the Advance (which must be a
Business Day falling within the Availability Period);
(b) the amount of the Advance which amount must be a minimum of GBP
1,000,000 or the Equivalent Amount thereof and an integral
multiple of GBP 500,000 or the Equivalent Amount thereof, except
to the extent of variations from such amounts for rounding
purposes approved by the Agent;
(c) the duration of the first Interest Period applicable to the
Advance, which must comply with Clause 8.3;
(d) the account to which the proceeds of the Advance are to be paid;
and
(e) the purpose for which the Advance is requested.
5.1.3 In no event may the amount specified in a Drawdown Request be such that
the Loan would thereby exceed the then Total Commitments. If, however,
the amount specified in a Drawdown Request exceeds the then Total
Commitments, and the amount of that excess may reasonably be attributed
to exchange rate fluctuations on or after the date a Drawdown Request is
given, the Agent in its sole discretion may agree with the Borrower to
adjustments, complying with the terms and conditions of this Agreement,
in the amount of any Loan requested pursuant to such Drawdown Request so
that the amounts requested pursuant to such Drawdown Request comply with
this Clause 5.1.3. The Agent shall notify the Lenders promptly after any
such adjustment is made, and all expenses, losses, damages and liability
of the Lenders arising out of any such adjustments shall be for the
account of the Borrower pursuant to Clause 27.1 (General Indemnity and
Breakage Costs).
5.1.4 A Drawdown Request in relation to an Advance, once given, may not be
withdrawn or revoked.
5.1.5 Advances under the Tranche A Term Facility may only be requested for the
Initial Drawdown Date.
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5.1.6 Not more than fifteen separate Tranche B Multicurrency Revolving Advances
may be outstanding at any time.
5.1.7 (a) The Borrower may not request the drawdown of an Advance in a
currency other than DEM, FF, LIT, GBP, CHF, Yen or USD (unless the
Agent has confirmed in writing to the Borrower that such other
currency is freely available to all the Lenders and is one in
which dealings regularly occur in the London interbank market).
(b) Notwithstanding Clause 5.1.7(a), if before 9.15 a.m. (London time)
on the proposed Drawdown Date for a utilisation to be denominated
in a currency other than DEM, FF, LIT, GBP, CHF, Yen or USD:-
(i) the Agent receives notice from a Lender that it is impracticable for the
Lender to fund its participation for the relevant Interest Period in such
currency in the ordinary course of its business in the London interbank
market; or
(ii) the drawing of the proposed Advance in such currency could, in the
opinion of the Agent, be reasonably likely to contravene any applicable
law or regulation;
then:-
(A) the Agent shall promptly and in any event before 10.00 a.m.
on that Drawdown Date notify the Borrower;
(B) if the Agent receives notice from the Borrower by 11.00
a.m. on the relevant Drawdown Date, the drawdown shall not
be made;
(C) if the Agent does not receive any notice under
sub-paragraph (B) above, the drawdown will be denominated
instead in GBP and there shall be substituted in the
definition of "LIBOR" in Clause 1.1 the time "1.00 p.m."
for the time "11.00 a.m."; and
(D) the Borrower shall forthwith on demand indemnify each
Lender against any liability which that Lender incurs as a
consequence of the operation of this Clause 5.1.7(b).
5.2 Lenders' Participations
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5.2.1 Subject to the provisions of this Agreement, each Lender will make
available to the Agent its Participation Proportion of the relevant
Advance on the relevant Drawdown Date in accordance with Clause 9.1.1
(Payments).
5.2.2 If, prior to an Advance being made, a Lender's Commitment has been or
will be wholly cancelled or terminated pursuant to this Agreement, such
Lender will not participate in such Advance.
5.3 Notice to the Lenders of a Proposed Drawdown
Whenever the Agent receives a Drawdown Request which complies with the
requirements of Clause 5.1, the Agent will promptly give notice to each
of the Lenders of (a) the details of the requested Advance, and (b) the
amount of such Lender's participation (or deemed participation) in the
relevant Advance.
6. REPAYMENT OF ADVANCES
6.1 Repayment of Tranche A Term Loans
6.1.1 On each Repayment Date, the Borrower shall repay or cause the repayment
(as applicable) of the aggregate amount of the Tranche A Term Loan set
forth opposite such date in Schedule 2.
6.1.2 If any Repayment Date is not a Business Day it will be adjusted to fall
on the next succeeding Business Day unless the result of such adjustment
would be to carry that Repayment Date into another calendar month, in
which event such Repayment Date shall be the last preceding Business Day.
6.1.3 Any amount of the Tranche A Term Loan repaid under this Agreement may not
be redrawn and the relevant Tranche A Term Commitment shall be reduced by
an amount equal to the amount of such Loan so repaid.
6.2 Repayment of Tranche B Multicurrency Revolving Advances
6.2.1 Each Advance under the Tranche B Multicurrency Revolving Facility shall
be borrowed for a period equal to the Interest Period selected in
relation to such Advance. The Borrower shall accordingly repay each such
Advance on the last day of such Interest Period in the currency in which
such Advance was made to the Borrower.
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6.2.2 The Borrower shall ensure that the aggregate principal amount of all
Tranche B Multicurrency Revolving Advances from time to time outstanding
does not exceed the aggregate amount of the Tranche B Multicurrency
Revolving Facility from time to time (including Equivalent Amounts in
respect of Advances not denominated in GBP).
6.2.3 Subject to the provisions of this Agreement, Tranche B Multicurrency
Revolving Advances repaid in accordance with Clause 6.2.1 above shall be
capable of being redrawn by the Borrower.
6.2.4 Subject to the terms of this Agreement: (i) on 31st December, 2000, the
Borrower shall repay such portion of the outstanding Tranche B
Multicurrency Revolving Advances, if any, required to cause the total
outstanding Tranche B Multicurrency Revolving Advances to equal GBP
19,000,000 (or the Equivalent Amount thereof) or less (and the Tranche B
Multicurrency Revolving Commitments shall be decreased accordingly); (ii)
on 31st December, 2001, the Borrower shall repay such portion of the
outstanding Tranche B Multicurrency Revolving Advances, if any, required
to cause the total outstanding Tranche B Multicurrency Revolving Advances
to equal GBP 16,000,000 (or the Equivalent Amount thereof) or less (and
the Tranche B Multicurrency Revolving Commitments shall be decreased
accordingly); and (iii) on 31st December, 2002, the Borrower shall repay
all remaining outstanding Tranche B Multicurrency Revolving Advances.
6.2.5 Subject to the terms of this Agreement, if any Tranche B Multicurrency
Revolving Advance (the "New Revolving Advance") is to be made to the
Borrower on the day on which another Tranche B Multicurrency Revolving
Advance denominated in the same currency (the "Maturing Revolving
Advance") is due to be repaid (the "Revolving Maturity Date") by the
Borrower then (subject to there being no Event of Default or Potential
Event of Default), as between each Lender and the Borrower, the amount to
be repaid by the Borrower by way of Maturing Revolving Advance shall be
set off against the amount of the New Revolving Advance to be advanced by
each Lender (in respect of its participation) and the party to whom the
smaller amount is to be paid shall advance or repay (as appropriate) to
the party to whom the larger amount is to be paid the difference between
the two amounts on the Revolving Maturity Date.
7. PREPAYMENT AND CANCELLATION
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7.1 Voluntary Prepayments
7.1.1 Subject to the order of application set forth in Clause 7.3.1, the
Borrower may voluntarily prepay the whole or part of any Advance on the
last day of an Interest Period (or on any other Business Day subject to
payment of any breakage costs thereby incurred by any Lender in
accordance with Clause 27.1) relating thereto provided that the Agent has
received from the Borrower not less than ten Business Days' notice of the
proposed date and the amount of the prepayment.
7.1.2 If the Loans are to be prepaid voluntarily in part, the aggregate amount
of the partial prepayment must be a minimum of GBP 1,000,000 or the
Equivalent Amount thereof and an integral multiple of GBP 500,000 or the
Equivalent Amount thereof.
7.1.3 A prepayment made in accordance with the terms of this Clause 7 may be
made without premium or penalty.
7.2 Mandatory Prepayments
7.2.1 Asset Disposals
If the Borrower disposes of an asset (other than:-
(a) a disposal permitted by Clauses 13.2.8(a), (b) or (c), or
(b) disposals permitted by Clauses 13.2.8(d) and (e) up to an
aggregate amount of Net Cash Proceeds for all such disposals
described in this sub-clause (b) of GBP 2,500,000 (or its
equivalent) following the date of this Agreement),
the Net Cash Proceeds of such disposal shall be applied by the Borrower
as promptly as practicable in prepayment of the outstandings under this
Agreement in accordance with Clause 7.3.1 below.
7.2.2 Cashflow
Before the Achievement Date only, the Borrower will once per annum make a
prepayment to be applied against the outstandings under this Agreement in
accordance with Clause 7.3.1 below within 120 days of the expiry of each
Accounting Reference Period (beginning with the Accounting Reference
Period ended 31st December 1998) in the amount of 50% of the aggregate of
the unconsolidated
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Cashflow, without allowing for any duplication, of each Obligor
(determined in accordance with the respective applicable Approved
Accounting Principles) for the Accounting Reference Period then ended, if
a positive number.
7.2.3 Change of Control
Immediately upon a Change of Control:
(a) the Borrower will prepay all Advances, accrued interest thereon
and all other sums payable under this Agreement and the other
Finance Documents; and
(b) the unborrowed amount of all Facilities will be cancelled and the
Commitment of each Lender in respect of each Facility shall be
reduced to zero.
7.3 Prepayments; Order of Application
7.3.1 Partial prepayments made pursuant to Clauses 7.1 and 7.2 will be applied
by the Borrower first, to the permanent prepayment of the Tranche A Term
Loan (to be applied pro-rata against the scheduled remaining repayments
thereof); and second, to the permanent prepayment of the Tranche B
Multicurrency Revolving Advances.
7.3.2 Amounts applied in permanent repayment of the Tranche B Multicurrency
Revolving Advances may not be redrawn and, upon any such prepayment, each
Lender's Tranche B Multicurrency Revolving Commitment shall be reduced
proportionately.
7.4 Prepayments during Interest Periods
7.4.1 Prepayments pursuant to Clauses 7.1, 7.2 and 7.3 applied to the
obligations of the Borrower hereunder shall be subject to payment of any
breakage costs incurred by any Finance Party, calculated in accordance
with Clause 27.1 (General Indemnity and Breakage Costs). If requested by
the Borrower, the Agent shall deposit the proceeds of prepayment in an
interest-bearing account established on terms (including terms as to
security) in all respects satisfactory to the Agent until the end of the
Interest Period then current and apply such funds (together with any
interest accrued thereon) toward the required prepayment on the last day
of such Interest Period.
7.5 Cancellation
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7.5.1 The Borrower may cancel the whole or any part (but if in part, in a
minimum amount of GBP 1,000,000 or the Equivalent Amount thereof and in
integral multiples of GBP 500,000 or the Equivalent Amount thereof) of
the Tranche B Multicurrency Revolving Facility undrawn when the notice of
cancellation takes effect if it gives three Business Days' written notice
of cancellation to the Agent. Cancellation made in accordance with the
terms of this Clause 7 may be made without penalty.
7.5.2 Upon each cancellation of the Tranche B Multicurrency Revolving Facility,
the Borrower shall be required to make such repayments thereof as are
necessary so that the Tranche B Multicurrency Revolving Advances
outstanding at the time of the cancellation do not exceed the total
Tranche B Multicurrency Revolving Commitments after giving effect to such
cancellation. Upon any such cancellation taking effect the maximum amount
of the Tranche B Multicurrency Revolving Facility shall be accordingly
reduced and the amount of each Lender's Tranche B Multicurrency Revolving
Commitment (if any) shall be reduced proportionately.
7.6 General
7.6.1 No prepayment may be made except at the times and in the manner expressly
provided by this Agreement.
7.6.2 No amount prepaid in respect of the Tranche A Term Facility may be
subsequently re-drawn.
7.6.3 All prepayments shall be made together with interest accrued thereon up
to the date of prepayment and any other amounts then due and payable
under any Finance Document.
7.6.4 The Agent shall notify the Lenders promptly upon receipt by it of a
notice of prepayment.
7.6.5 All notices of prepayment and all notices of cancellation given by the
Borrower are irrevocable.
8. INTEREST
8.1 Interest Rate
8.1.1 Each Advance will bear interest during each Interest Period applicable to
that Advance at the rate per annum determined by the Agent to be the sum
of (a) the applicable Margin, (b) LIBOR for such Interest Period,
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and (c) in the case of Advances denominated in GBP or another currency
subject to Mandatory Liquid Asset Costs, Mandatory Liquid Asset Costs.
8.1.2 Interest will be calculated on the basis of actual days elapsed and a
360-day year (other than interest in respect of Advances denominated in
GBP, which will be calculated on the basis of a year of 365 days), and
will accrue from day to day from, and including, the first day of each
Interest Period.
8.1.3 If requested to do so, each Reference Lender shall use its reasonable
endeavours to supply a quotation to the Agent for the purposes of
determining LIBOR for a particular Interest Period. If any Reference
Lender does not do so, the relevant arithmetic mean shall be determined
on the basis of the quotations supplied by the remaining Reference
Lenders. At such time as there are three Reference Lenders, if no, or
only one, Reference Lender supplies a quotation, Clause 8.5 shall apply;
provided that if there are only two Reference Lenders and one supplies a
quotation, Clause 8.5 shall not apply in such case.
8.2 Payment of Interest
The Borrower will pay interest accrued on each Advance to the Agent for
the account of the Lenders in arrears on the last day of each Interest
Period applicable to that Advance, provided that where such Interest
Period is of a duration of longer than three months, accrued interest in
respect of the relevant Advance shall be paid every three months during
such Interest Period and on the last day of such Interest Period.
8.3 Selection of Interest Periods
8.3.1 Subject to Clause 3.5.(e), the duration of each Interest Period will be a
period of one, two, three or six months (or such other period as may be
agreed between the Borrower and all of the Lenders) as notified by the
Borrower to the Agent not later than 10.00 a.m. three Business Days prior
to the commencement of such Interest Period, provided that:-
(a) the first Interest Period in relation to an Advance will commence
on the Drawdown Date relating thereto and each subsequent Interest
Period relating to such Advance (or part thereof) will commence on
the expiry of the preceding Interest Period relating thereto;
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(b) if the Borrower fails to select an Interest Period, then, subject
as provided in this Clause 8.3, the Borrower will be deemed to
have selected an Interest Period of three months; and
(c) if all or part of a Tranche A Term Advance is required to be
repaid on a Repayment Date to ensure that the Borrower complies
with its obligations under Clause 6.1.1 and if an Interest Period
relative to that Advance would, but for the operation of this
sub-clause (c), extend beyond such Repayment Date, then if
necessary such Advance shall be split into two separate Advances
(such additional Advance not to be counted for the purposes of
sub- clause (d) below), one of which shall be in an amount equal
to the amount required to be repaid and having an Interest Period
commencing upon the expiry of the immediately preceding Interest
Period and expiring on the relevant Repayment Date, the other
Advance being for the balance of the amount of the original
Advance; and
(d) the Borrower will not be entitled to select more than three
concurrent Interest Periods in relation to the Advances.
8.3.2 If any Interest Period would, but for this Clause 8.3.2, end on a day
which is not a Business Day, that Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the last preceding Business
Day.
8.3.3 No Interest Period for any Advance shall expire after the Final Repayment
Date.
8.3.4 The Agent will notify:-
(a) the Lenders of each Interest Period applicable to each Advance
promptly upon the same being determined; and
(b) the Lenders and the Borrower of the rate of interest applicable to
such Interest Period as soon as it is determined under this
Agreement.
8.4 Interest on Unpaid Sums
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8.4.1 If the Borrower fails to pay any sum due from it under this Agreement or
any other Finance Document on its due date (an "unpaid sum"), the
Borrower will pay default interest on such unpaid sum from its due date
to the date of actual payment (after as well as before judgement or
decree) at a rate (the "Default Rate") determined by the Agent to be 2
per cent per annum above:-
(a) if the unpaid sum is principal which has fallen due prior to the
expiry of the relevant Interest Period, the rate applicable to
such principal immediately prior to the date it so fell due (but
only for the period from such due date to the end of the relevant
Interest Period); or
(b) in any other case (including principal falling within (a) above
once the relevant Interest Period has expired), the rate which
would be payable if the unpaid sum was an Advance made for a
period equal to the period of non-payment divided into successive
Interest Periods of such duration as shall be selected by the
Agent (a "Default Interest Period").
8.4.2 Default interest will be payable by the Borrower on demand by the Agent
and will be compounded at the end of each Default Interest Period.
8.4.3 The Agent will promptly notify the Borrower and the Lenders of each
determination of the Default Rate and each selection of a Default
Interest Period.
8.5 Market Disruption
8.5.1 If prior to the commencement of an Interest Period (an "Affected Interest
Period"):-
(a) the Agent, after consultation with the Lenders, determines that,
by reason of circumstances affecting the London interbank market
or the financial markets generally, adequate and fair means do not
or will not exist for ascertaining the interest rate applicable to
the Affected Interest Period; or
(b) Lenders whose Relevant Amounts exceed 51% of Relevant Amounts of
all Lenders notify the Agent that LIBOR would not accurately
reflect the cost to such Lenders of making or maintaining their
respective Participations in the relevant Advance during the
Affected Interest Period; or
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(c) the appropriate page of the Telerate Display Screen does not list
any appropriate quotations and (i) at such time as there are three
Reference Lenders none or only one of the Reference Lenders has
notified a rate to the Agent for the purposes of determining LIBOR
for the Affected Interest Period, or (ii) at such time as there
are two Reference Lenders none of the Reference Lenders has
notified a rate to the Agent for the purposes of determining LIBOR
for the Affected Interest Period;
the Agent shall give notice of such event to the Borrower and the Lenders
(a "Suspension Notice"). If such Suspension Notice shall be given prior
to the receipt by the Agent of a Drawdown Request, the Borrower's right
to borrow and issue a Drawdown Request in respect of Advances hereunder
shall be suspended during the continuance of such circumstances.
8.5.2 If at the time of the Suspension Notice a Drawdown Request has been given
pursuant to Clause 5.1.1, such Drawdown Request shall, unless the
Borrower and the Agent (after consultation with the Lenders) otherwise
agree, be deemed to have been cancelled and the Advance concerned shall
not be made.
8.5.3 Subject to Clause 8.5.4, during the 21 days following the giving of the
Suspension Notice, the Agent, the Borrower and the Lenders shall
negotiate in good faith in order to arrive at a mutually acceptable
substitute basis for calculating the alternative interest rate or (as the
case may be) an alternative basis for the relevant Lender to fund or
continue to fund the affected Advance during the Affected Interest Period
on the basis that the net return to the Lenders or the relevant Lender
shall be no less than had the event described in Clause 8.5.1 not
occurred. If within such 21 day period such parties shall agree in
writing upon a substitute basis, such substitute basis shall apply in
accordance with its terms. If such parties fail to agree on a substitute
basis within such 21 day period, the Agent (after consultation with the
Lenders or, as the case may be, the relevant Lender) shall certify to the
Borrower (such certificate to be conclusive in the absence of manifest
error, and binding on all concerned) the basis upon which interest in
relation to the Affected Interest Period is to be fixed or (as the case
may be) the basis upon which the relevant Lender will fund or continue to
fund its participation in the Advance during the Affected Interest
Period. Such basis (in relation to the said rate of interest) may include
the substitution of the cost of
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funds to such Lenders from other sources and for different funding
periods, plus the Margin (plus, in the case of Advances in GBP or another
currency subject to Mandatory Liquid Asset Costs, Mandatory Liquid Asset
Costs), and may be retroactive to the beginning of the Affected Interest
Period. Such interest shall be calculated at the rate specified in the
Agent's certificate.
8.5.4 Notwithstanding the foregoing, the Borrower may, at any time after the
Agent shall have set a substitute funding procedure or interest rate or
rates pursuant to Clause 8.5.3 and for so long as such funding procedure
or interest rate or rates continue(s) to be applicable, give to the Agent
not less than five Business Days' notice (which shall be irrevocable) of
its intention to prepay the whole (but not part only) of the Advance
affected, in which event the Borrower shall pay:-
(a) on the date specified in such notice to the Agent for the account
of the Lenders the principal amount of the Advance affected
together with interest accrued thereon at the applicable rate to
the date of actual prepayment; and
(b) to each Lender on demand such amount (if any) as such Lender may
certify should be paid to it pursuant to Clause 26.1 (General
Indemnity and Breakage Costs).
9. PAYMENTS
9.1 Place and Time
9.1.1 All payments to be made by any Obligor or any Lender under the Finance
Documents are to be made in full, without any deduction or withholding
for or on account of any Taxes, to the Agent not later than 11.00 a.m. on
the due date therefor to such account as the Agent specifies by written
notice for this purpose, in immediately available and freely transferable
Same Day Funds in the relevant currency.
9.1.2 Subject to Clause 9.1.3, each payment received by the Agent pursuant to
Clause 9.1.1 for the account of another person will be made available by
the Agent to that person for value on the same day by transfer to such
bank account as that person has previously notified to the Agent by not
less than three Business Days' prior notice.
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9.1.3 Where a sum is to be paid under the Finance Documents for the account of
another person, the Agent will not be obliged to make any such sum
available to that person until it has been able to establish to its
satisfaction that it has actually received such sum, but shall be free to
do so and if it does so and it proves to be the case that it has not
actually received the sum it paid out, then such person will on request
ensure that the amount so made available is refunded to the Agent and
such person shall be liable (1) to pay to the Agent interest on the
amount in question at the rate determined by the Agent to be equal to the
cost to the Agent of funding such amount for the period from payment out
by the Agent until refund to the Agent thereof and (2) to indemnify the
Agent against any additional cost or loss it may have suffered or
incurred by reason of it having paid out such sum prior to it having
received the same.
9.2 No Deductions
All payments made by any Obligor under the Finance Documents (whether of
principal, interest, acceptance commission, fees or otherwise) shall be
paid in full without set-off or counterclaim and not subject to any
condition.
9.3 Taxes
9.3.1 All payments by the Obligors under the Finance Documents are to be made
in full without any deduction or withholding for or on account of any
Taxes unless the deduction or withholding is required by law in which
event the relevant Obligor Borrower will:-
(a) ensure that the deduction or withholding does not exceed the
minimum amount legally required;
(b) pay to the relevant Taxation or other authorities within the
period for payment permitted by the applicable law such amount as
is required to be paid in consequence of the deduction (including,
but without prejudice to the generality of the foregoing, the full
amount of any deduction from any additional amount paid pursuant
to Clause 9.3.2); and
(c) deliver to the relevant Finance Parties within 30 days from the
date on which the payment of such withholding tax or deduction was
due, the documents evidencing the payment of such aforementioned
withholding tax or deductions; and
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(d) indemnify each of the Finance Parties against any losses or costs
incurred by it by reason of (i) any failure on the part of such
Obligor to make any deduction or withholding or (ii) any such
additional amount not being paid on the due date for payment
thereof.
9.3.2 Subject to Clause 9.3.3, if any deduction or withholding for or on
account of Taxes or any other deduction from any payments made or to be
made by the relevant Obligor, or by the Agent to any other Finance Party,
under any of the Finance Documents is required by law, then the Obligor
shall pay to the Finance Party concerned an additional amount being the
amount required to procure that the aggregate net amount received by that
Finance Party will equal the full amount which would have been received
by it had no such deduction or withholding or other deduction been made.
9.3.3 No additional amount will be payable to a Lender under Clause 9.3.2 in
respect of Taxes to the extent that such additional amount becomes
payable as a result only of (i) a Lender not having been a Qualifying
Lender at the time it became a Lender, or (ii) a Lender having ceased to
be a Qualifying Lender by any action on its part, or (iii) a change in
the Lending Office of the relevant Lender, unless (A) such change is
requested by the Borrower, or (B) under the relevant Tax laws,
regulations, treaties or rules in effect at the time of the change in
Lending Office, such additional amount would not have been payable.
9.3.4 If the Borrower is obliged to pay an amount under Clause 9.3.1, the
Borrower may prepay in whole (but not in part) and without penalty
(subject to Clause 27) all Advances made available to it by the affected
Lender, upon the Borrower giving not less than three Business Days' prior
written notice to the Agent and the affected Lender, provided that such
notice is given within 30 days of the Borrower becoming aware that it
would be obliged to pay such amount. The liability of such Lender to make
any further Advances or other extensions of credit available to the
Borrower (and such lender's Commitments) shall automatically be cancelled
on the giving of such notice.
9.3.5 If any of the Lenders determines, in its absolute discretion, that it has
received, realised, utilised and retained a Tax benefit by reason of any
deduction or withholding in respect of which an Obligor has made an
increased payment or paid any indemnifying amount or
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compensating sum under this Clause 9.3, such Lender shall, provided that
the Agent and each Lender has received all amounts which are then due and
payable by an Obligor under any of the Finance Documents, promptly pay to
the Borrower (to the extent that such Lender can do so without
prejudicing the amount of such benefit or repayment and the right of such
Lender to obtain any other benefit, relief or allowance which may be
available to it) such amount, if any, as such Lender, in its absolute
discretion shall determine will leave such Lender in no worse position
than it would have been in if the deduction or withholding had not been
required, provided that:-
(a) each Lender shall have an absolute discretion as to the time at
which and the order and manner in which it realises or utilises
any Tax benefit and shall not be obliged to arrange its business
or its Tax affairs in any particular way in order to be eligible
for any credit or refund or similar benefit;
(b) no Lender shall be obliged to disclose any information regarding
its business, Tax affairs or Tax computations;
(c) if a Lender has made a payment to the Borrower pursuant to this
Clause 9.3.5 on account of any Tax benefit and it subsequently
transpires that such Lender did not receive that Tax benefit, or
received a lesser Tax benefit, the Borrower shall, on demand, pay
to such Lender such sum as the relevant Lender may determine as
being necessary to restore its after-Tax position to that which it
would have been had no adjustment under this Clause 9.3.5 been
necessary; and
(d) no Lender shall be obliged to make any payment under this Clause
9.3.5 if, by doing so, it would contravene the terms of any
applicable law or any notice, direction or requirement of any
governmental or regulatory authority (whether or not having the
force of law).
9.4 Payments on Business Days
Subject to Clauses 6.2 and 8.3.2, if any sum would otherwise become due
for payment pursuant to any of the Finance Documents on a day which is
not a Business Day, such sum shall become due on the next succeeding
Business Day unless that day falls in the next calendar month, in
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which case the sum shall become due on the preceding Business Day and all
sums payable under any of the Finance Documents calculated by reference
to any period of time shall be recalculated on the basis of such
extension in time (or reduction thereof).
9.5 Accounts
9.5.1 Each Lender shall maintain an account or accounts recording the amounts
from time to time lent by, owing to and paid to such Lender pursuant to
the Finance Documents, which shall, as between such Lender and the
relevant Obligor, be prima facie evidence of such amounts.
9.5.2 The Agent will maintain a memorandum account showing the principal amount
of all Advances for the time being outstanding hereunder and all payments
with respect thereto made by the Obligors from time to time pursuant to
this Agreement.
9.6 Currency
9.6.1 A repayment or prepayment of an Advance or any part of an Advance is
payable in the currency in which the Advance was denominated on the date
it was made.
9.6.2 Interest and fees in respect of an Advance are payable in the currency in
which the relevant amount of the relevant Advance in respect of which it
is payable is denominated. Fees in respect of Commitments hereunder shall
be payable in GBP.
9.6.3 Amounts payable in respect of costs, expenses and Taxes and the like are
payable in the currency in which they are incurred.
9.6.4 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in GBP.
10. CHANGE IN CIRCUMSTANCES
10.1 Increased Costs
10.1.1 If the effect of any implementation of, change in or introduction or
making after the date of this Agreement of, any law, regulation, treaty
or official directive or official request or guidance applicable to any
Lender or any affiliate, including without limitation, a holding company,
(an "Affected Lender") (whether or not having
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the force of law) or any change in the interpretation or application
thereof or compliance by such Affected Lender, with the same (including
without limitation those relating to Taxation, reserve asset, special
deposit, cash ratio, liquidity or capital adequacy requirements or any
other form of banking or monetary controls) is to:-
(a) impose an additional cost on the Affected Lender as a result of it
having entered into any of the Finance Documents or making or
maintaining its participation in any Advance or of it performing
its obligations under the Finance Documents; or
(b) reduce any amount received or receivable by the Affected Lender
under the Finance Documents or reduce the effective return on its
capital or any class thereof; or
(c) result in the Affected Lender making any payment or foregoing any
interest or other return on or calculated by reference to any
amount received or receivable by the Affected Lender from any
other party under any of the Finance Documents,
each such increased cost, reduction, payment, foregone interest or other
return being hereafter referred to in this Clause 10.1 as an "increased
cost"), then:-
(1) the Affected Lender will notify the Borrower and the Agent of such event
promptly upon its becoming aware of the same; and
(2) upon demand from time to time by the Affected Lender, the Borrower will
pay to the Affected Lender such amount as the Affected Lender shall
determine to be necessary to compensate the Affected Lender on an
after-tax basis for such increased cost (or the portion of such increased
cost as is in the reasonable opinion of the Affected Lender attributable
to its entering into the Finance Documents or of making or maintaining
its participation in any Advance or of maintaining its Commitment).
10.1.2 The certificate of an Affected Lender specifying the amount of
compensation payable under Clause 10.1.1 and containing reasonable detail
as to how such amount was calculated will, in the absence of manifest
error, be conclusive.
10.1.3 The Borrower will not be obliged to compensate any Affected Lender
pursuant to Clause 10.1.1 in respect of any increased cost:-
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(a) attributable to a change in the rate of Tax on the overall net income of
the Affected Lender; or
(b) compensated for by the operation of Clause 9.3 (Taxes); or
(c) incurred in consequence of the implementation in whole or in part of the
International Convergence of Capital Measurements and Capital Standards
dated July 1988 published by the Basle Committee on Banking Regulations
and Supervisory Practices (the "Guidance"), except to the extent that a
higher level of capital adequacy is imposed than that stipulated in the
Guidance as at the date of this Agreement;
(d) including within the definition of Mandatory Liquid Asset Costs; or
(e) until the calculation of such cost set forth in the certificate referred
to in Clause 10.1.2 has been received by the Borrower.
10.2 Illegality
If the effect of any implementation of, change in, or introduction or
making after the date of this Agreement of, any law, regulation, treaty
or official directive or official request or guidance applicable to any
Lender or any affiliate, including without limitation, a holding company,
(a "Restricted Lender") (whether or not having the force of law) in any
jurisdiction applicable to such Restricted Lender is to prohibit such
Restricted Lender, or make it illegal for such Restricted Lender, to make
available or to maintain its participation in any Advance or maintain its
Commitment, then such Restricted Lender will give written notice to that
effect to the Agent and the Borrower, specifying in reasonable detail the
obligations the performance of which is prohibited and the relevant law,
regulation, treaty, directive, request or guideline, whereupon:-
(a) to the extent of such prohibition or illegality, the Borrower
shall forthwith prepay the Restricted Lender's participation in
all Advances then outstanding together with all interest accrued
thereon and all other amounts due to the Restricted Lender under
this Agreement (including pursuant to Clause 26 (Indemnities));
and/or
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(b) to the extent of such prohibition or illegality, the Restricted
Lender's undrawn Commitment (if any) shall be cancelled forthwith.
10.3 Mitigation
If circumstances arise in relation to a particular Lender which would, or
may, result in:-
(a) an obligation to pay an additional amount under Clause 9.3.2
(Gross-Up); or
(b) a demand for compensation pursuant to Clause 10.1 (Increased
Costs); or
(c) an obligation to repay or the cancellation of an undrawn
Commitment under Clause 10.2 (Illegality);
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrower under any of the Clauses referred to above,
such Lender will promptly after becoming aware thereof notify the Agent
and the Borrower thereof and, except as set out in the provisos in
paragraphs (y) and (z) below, in consultation with the Agent and the
Borrower, take such steps as may be reasonably open to it to mitigate the
effects of such circumstances including (but without limitation):-
(i) changing its Lending Office for the purposes of this Agreement; or
(ii) transferring its rights and obligations hereunder pursuant to Clause 25.2
or 25.3 to a bank or financial institution acceptable to the Borrower and
the Agent which is willing to participate in the Facilities in its place;
provided that (y) the Lender concerned will not be obliged to take any
action under sub-paragraph (i) above if to do so would or might (in its
opinion) have an adverse effect upon its business, operations or
financial condition or cause it to incur liabilities (including any
material costs and expenses) or obligations (including Taxation) which
(in its opinion) are material or would reduce its return in relation to
its participation in the Facilities and (z) such Lender will not be
obliged to take the action referred to in sub-paragraph (ii) above unless
the Borrower indemnifies it by means of an indemnity in form and content
satisfactory to such Lender against any liabilities or obligations
reasonably incurred as a result of taking such action.
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11. FEES, EXPENSES AND STAMP DUTIES
11.1 Fees
11.1.1 The Borrower will pay to the Agent the following fees:-
(a) for the account of each Lender a commitment fee during the Availability
Period for each respective Facility which will:-
(i) be computed at a rate per annum equal at all times to one-half of the
Margin and on the daily aggregate undrawn, uncancelled amount of the
Total Commitments;
(ii) accrue from day to day and be calculated on the basis of a 365 day year
and the actual number of days elapsed;
(iii) be payable quarterly in arrears on the last day of each successive
calendar quarter, on each drawing under the Tranche A Term Facility and
on the termination or lapse of the Availability Period to the extent no
drawing under the Tranche A Term Facility is made concurrent with such
termination or lapse; and
(b) for its own account or as otherwise specified in the Fees Letter, such
arrangement, agency and other fees at the times and otherwise in
accordance with the terms of the Fees Letter.
11.1.2 All fees payable under the Finance Documents are exclusive of any VAT or
other similar tax chargeable upon or in connection with such fees. If any
VAT or other similar Tax is or becomes so chargeable, such Tax will be
paid by the Borrower at the same time as the relevant fee itself is paid.
11.1.3 The Borrower authorises the Agent to discharge the fees due upon Initial
Drawdown under Clauses 11.1.1 (a) and (b) from the proceeds of Advances
made upon Initial Drawdown under any Facility.
11.2 Expenses
11.2.1 The Borrower will (subject to the limitations set forth in the Fees
Letter) on demand pay and reimburse to the Agent and the Security Agent,
on the basis of a full indemnity, all reasonable costs and expenses
(including legal fees, due diligence expenses, recordation fees and other
out-of-pocket expenses and any VAT or other similar Tax thereon) incurred
by the Agent or the Security Agent
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in connection with the negotiation, preparation, recordation, execution
and completion of each of the Finance Documents, and all documents,
matters and things referred to in the Finance Documents or incidental to
any of the Finance Documents.
11.2.2 The Borrower will on demand pay and reimburse to the Agent and the
Security Agent, on the basis of a full indemnity, all reasonable costs
and expenses (including reasonable legal fees, recordation fees and other
out-of-pocket expenses and any VAT or other similar Tax thereon) incurred
by the Agent or the Security Agent in connection with:-
(a) any variation, recordation, amendment, supplement, restatement, waiver,
consent or suspension of rights (or any proposal for any of the same)
relating to any of the Finance Documents (and documents, matters or
things referred to therein); and
(b) the investigation of any Event of Default or Potential Event of Default,
provided that the relevant Finance Party had reasonable grounds to
believe that such Event of Default or Potential Event of Default had
occurred.
11.2.3 The Borrower will on demand pay and reimburse to each Finance Party, on
the basis of a full indemnity, all costs and expenses (including
reasonable legal fees, recordation fees and other out-of-pocket expenses
and any VAT or other similar Tax thereon) incurred by such Finance Party
in connection with the preservation, enforcement or the attempted
preservation or enforcement of any Finance Document or of such Finance
Party's rights under any of the Finance Documents (and documents referred
to therein).
11.3 Stamp Duties, etc.
The Borrower will:-
(a) pay, and on demand indemnify each Finance Party from and against
any liability for, any stamp duty, documentary, registration and
other duties and Taxes (if any) which are or may hereafter become
payable in connection with the entry into, performance,
recordation, execution or enforcement of any of the Finance
Documents or to which any of the Finance Documents may otherwise
be or become subject or give rise; and
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(b) on demand indemnify each of the Finance Parties from and against
any losses or liabilities which they may incur as a result of any
delay or omission by the Borrower to pay any such duties or Taxes.
12. REPRESENTATIONS AND WARRANTIES
12.1 Reliance and Effective Time
12.1.1 Each Obligor acknowledges that each Finance Party has or will have
entered into this Agreement and the other Finance Documents to which it
is a party and participated in the Advances in full reliance on
representations in the terms set out in the following provisions of this
Clause 12. Subject to Clause 12.1.2, each Obligor represents and warrants
to each Finance Party in the terms set forth in Clauses 12.2 to 12.23
inclusive with reference to itself and, where appropriate, its
subsidiaries.
12.1.2 The representations and warranties in this Clause 12 will be deemed
initially made on the date of this Agreement and repeated on the date of
delivery of each Drawdown Request, on each Drawdown Date and on each
Interest Payment Date thereafter by reference to the facts and
circumstances existing on each such day, except that:
(a) each reference to financial statements in Clause 12 shall be construed as
a reference to the then latest available financial statements of the
relevant Obligor; and
(b) those representations and warranties which are expressly stated to relate
to an earlier date or time shall be deemed repeated only by reference to
the facts and circumstances existing at that earlier date or time.
12.2 Incorporation
It is duly incorporated or organised and validly existing with limited
liability under the laws of the country or other jurisdiction of its
incorporation or organisation, and has the power to own its assets and
carry on its business as it is being conducted or is proposed to be
conducted.
12.3 Power and Authority
It has all necessary power and authority to enter into and perform all
its obligations under the Finance Documents to which it is expressed to
be a party, has
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taken all necessary action to authorise the execution (if appropriate,
under seal or as a deed), delivery and performance by it of each Finance
Document and other document referred to therein to which it is expressed
to be a party or signatory, and (in the case of the Borrower only) has
taken all necessary action to authorise the borrowings by it under this
Agreement.
12.4 No Contravention
12.4.1 The execution, delivery and performance of the Finance Documents to which
it is a party is not now and will not:-
(a) violate, conflict with, or cause a breach or default under, its
organisational documents, any provision of any existing law,
regulation, statute, judgement, decree, order, license, permit or
consent applicable to it or its assets or of any agreement,
mortgage, contract, instrument or other undertaking to which it is
party, which is binding upon it or under which it or any of its
assets may be bound or affected; or
(b) will not oblige it to create any Security Interest over all or any
of its assets other than any Security Interest under the Security
Documents.
12.4.2 Borrowings by the Borrower under this Agreement up to and including the
maximum amount available hereunder will not cause any limit on borrowings
(whether imposed by statue, regulation, agreement or otherwise), or on
the powers of its board of directors, to be exceeded.
12.5 Authorisations and Consents
All consents, licenses, approvals, authorisations and notifications
(whether corporate, official or otherwise) required to be obtained or
made by it in connection with the entry into, validity, performance and
enforceability of each of the Finance Documents to which it is a party
have been unconditionally obtained and are in full force and effect.
12.6 Enforceability; Ranking
Its obligations under the Finance Documents to which it is a party
constitute its legal, valid, binding and enforceable obligations and are
in full force and effect, except (in the case of enforceability) as
limited by the Reservations, and such obligations, to the extent not
secured by any Security Interest, ranks and will continue
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to rank at all times at least pari passu with all its unsecured and
unsubordinated obligations (subject to the preference of certain
obligations in the liquidation, bankruptcy or other analogous proceedings
in respect of it by mandatory operation of applicable law).
12.7 Litigation
It is not involved in any pending or, to the best of its knowledge,
threatened litigation, arbitration or administrative proceeding, nor is
there subsisting any unsatisfied judgement or award given against it by
any court, board of arbitration or other body, which is reasonably likely
to result in liability to any Obligor which has or is reasonably likely
to have a Material Adverse Effect.
12.8 Accounts
12.8.1 The consolidated or unconsolidated financial statements of each Obligor
most recently delivered to the Agent pursuant to Clause 4.1.1 or 13.3, as
the case may be, including any notes thereto:-
(a) have been prepared in accordance with the respective relevant Approved
Accounting Principles consistently applied, except to the extent
specified therein; and
(b) give a true and fair view of the consolidated or unconsolidated (as the
case may be) financial condition of the relevant persons as at the
respective dates to which they were drawn up;
and in each case set forth all material actual or contingent liabilities
then existing required to be set forth therein in accordance with the
relevant Approved Accounting Principles consistently applied subject in
the case of any unaudited interim financial statements, to changes
resulting from normal year-end audit and other adjustments.
12.9 No Material Adverse Effect
No event or matter having or likely to have a Material Adverse Effect has
occurred since 31st December, 1996.
12.10 Security Interests
Except as permitted by Clause 13.2.10, no Security Interest exists on the
date of this Agreement on the
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undertaking, property or assets, present or future, of the Borrower or
any of its subsidiaries.
12.11 No Defaults
Unless notified to the Agent under Clause 13.3.1, no Event of Default or
Potential Event of Default has occurred and is continuing and no event
has occurred (which has not been remedied or waived) which constitutes a
default under or in respect of any agreement, instrument, deed or
document to which it is a party or by which it or any of its assets may
be bound or affected being a default which has or is reasonably likely to
have a Material Adverse Effect, and no event has occurred (which has not
been remedied or waived) which, with the giving of notice which may
validly be given and/or the lapse of any grace period and/or giving of
any certificate or statement which may validly be given and/or making of
any determination which may validly be made and/or fulfilment of any
other condition (which notice, grace period, certificate, statement,
determination or condition is in any case specified or referred to in the
relevant agreement, instrument, deed or document), will constitute any
such default which is reasonably likely to have a Material Adverse
Effect.
12.12 Compliance with Laws
It is in compliance with all laws, regulations, statutes, judgements,
orders, licenses, permits or consents applicable to it or its assets,
except any non-compliance which does not have and is not reasonably
likely to have a Material Adverse Effect.
12.13 Ownership of Assets, Licenses and Agreements for Business Operations;
Intellectual Property
12.13.1 It has good (and in the case of Scottish property, valid and
marketable) title to, or valid leasehold or other valid right to use,
all its material assets (including without limitation those relating to
the Annan Facility and the Dudley Facility) to the extent required to
conduct the Business or the part thereof which it conducts.
12.13.2 All licenses, consents and authorisations (including without
limitation, all such licenses, consents and authorisations required to
be obtained from the United States Food and Drug Administration, the
Medicines Control Agency and any other regulatory body having
jurisdiction over the manufacture and/or
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sale of pharmaceutical products in the United States or the United
Kingdom) have been obtained which are necessary for the carrying on of
its Business or the part thereof which it conducts, and all such
licenses, consents and authorisations are in full force and effect, and
there are no circumstances known to it which indicate that any of such
licenses, consents and authorisations is reasonably likely to be
revoked or varied or amended in whole or in part, except to the extent
that the absence, non-effectiveness, revocation, variation or amendment
of any such license, consent or authorisation would not have and would
not be reasonably likely to have a Material Adverse Effect.
12.13.3 The Obligors own or have licensed to them all Intellectual Property
rights required to conduct the Business, and the Intellectual
Property:-
(a) is beneficially owned by or validly licensed to an Obligor,
is, to the best knowledge of the Obligors, free from any
licenses to third parties and Security Interests, and will not
be adversely affected by the transactions contemplated by this
Agreement;
(b) has not lapsed or been cancelled and all steps have been taken
to protect and maintain the Intellectual Property including
paying renewal fees where appropriate; and
(c) does not, to the best knowledge of any Obligor, infringe any
intellectual property rights of any nature of any third party.
12.13.4 ChiRex (Annan) Limited has made appropriate provision for an
operationally and economically viable source of water supply for the
needs of the Business currently conducted, or anticipated, at the Annan
Facility.
12.14 Tax Liabilities
No claims are being or are reasonably likely to be asserted against it
with respect to Taxes which would be reasonably likely to have a
Material Adverse Effect.
12.15 Solvency
12.15.1 As at the Initial Drawdown Date, immediately prior to each Drawdown, it
will be solvent within the
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definition of any law applicable to it which requires as a condition to
the validity (and/or non-avoidability) of financial obligations
undertaking by it that it be solvent.
12.15.2 It has not taken any action nor (so far as it is aware having made all
due enquiry) have any steps been taken or legal proceedings been
started against it for winding-up, dissolution or re-organisation, the
enforcement of any Security Interest over its assets or for the
appointment of a receiver, administrative receiver, or administrator,
trustee, judicial factor, manager for credits, or similar officer of it
or of any or all of its assets or any other procedure under which it
obtains protection from any of its creditors, or any analogous
proceedings in any relevant jurisdiction.
12.16 Group Structure
The structure of the ChiRex Group as at the Initial Drawdown Date is as
set out in Schedule 4.
12.17 Indebtedness
The Obligors have no Financial Indebtedness as of the date of this
Agreement other than as set forth in subclause (iii) of the definition
of Permitted Indebtedness.
12.18 Margin Stock
Neither it, nor any of its subsidiaries, is engaged principally, or as
one of its important activities, in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock and none of
the proceeds of the facilities made available hereunder will be used,
directly or indirectly, to purchase or convey any Margin Stock or to
extend credit to others for the purchasing or conveying of any Margin
Stock.
12.18.1 Accountants' Report; Industry Report; Business Plan; Operating Budget
In relation to the Accountants' Report:-
(a) all factual information contained in the Accountants' Report
was, at the date of the report, true and accurate in all
material respects; and
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(b) all assumptions and presumptions contained in the Accountants'
Report (on the consolidated basis contemplated in the
Accountants' Report) attributable to the ChiRex Group were
reasonable at the time they were made and in relation to the
period in respect of which they were made.
In relation to the Industry Report:-
(c) all factual information contained in the Industry Report was,
at the date of the report, true and accurate in all material
respects; and
(d) all assumptions and presumptions contained in the Industry
Report (on the consolidated basis contemplated in the Industry
Report) attributable to the ChiRex Group were reasonable at
the time they were made and in relation to the period in
respect of which they were made.
In relation to the Business Plan and the Operating Budget:
(e) all factual information contained in or utilised for the
purpose thereof was, at the date thereof, true and accurate in
all material respects and nothing has occurred since the date
thereof which renders any factual statement contained therein
or so utilised misleading in any material respect;
(f) all assumptions and presumptions made for the purpose thereof
were fair and reasonable at the time they were made and in
relation to the period in respect of which they were made and
so far as the ChiRex Group is aware (after having made all due
enquiry) nothing has occurred since the date thereof which
makes it necessary to change the consolidated forecasts,
projections and estimates set out therein in any material
respect; and
(g) all forecasts, projections and estimates taken on a
consolidated basis contained or referred to in the Operating
Budget and all assumptions and presumptions upon the basis of
which the same were made, at the time they were made were, to
its best knowledge, fair and reasonable and, so far as the
ChiRex Group is aware (after having made all due enquiry),
nothing has occurred since the date thereof which makes it
necessary to change any of those forecasts, projections and
estimates in any material respect.
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12.19 Environmental Report
In relation to the Environmental Report, (a) to the best knowledge of
the Borrower after due inquiry all factual information contained in the
Environmental Report was, at the date of such report, true and accurate
in all material respects and nothing has occurred since the date of
such report which renders any factual statement therein misleading in
any material respect, and (b) all forecasts, projections and estimates
contained or referred to in the Environmental Report and all
assumptions and presumptions upon the basis of which the same were
made, at the time they were made were fair and reasonable and, so far
as the Borrower is aware (after having made all due enquiry), nothing
has occurred since the date thereof which makes it necessary to change
any of those forecasts, projections and estimates in any material
respect.
12.20 Environmental Warranties
12.20.1 To the best knowledge of each Obligor, no Environmental Event has
occurred at any time in relation to any site now or previously owned,
operated or occupied by the Borrower, any Guarantor or any of their
respective subsidiaries (or with respect to which any of them could be
subject to an Environmental Claim) which individually or in the
aggregate could reasonably be expected to have a Material Adverse
Effect.
12.20.2 It has obtained and is, and has at all times been, in substantial
compliance with all Environmental Licenses necessary in connection with
the ownership and operation of its facilities and business as currently
owned and operated or if there is or has been any failure to so obtain
or any non-compliance with such Environmental Licenses such failure or
non-compliance, individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.
12.20.3 No circumstances exist which could reasonably be expected to prevent or
interfere with any Obligor or any of their respective subsidiaries
obtaining or being in substantial compliance with any Environmental
Licenses in the future so as to give rise to a Material Adverse Effect.
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12.20.4 On the basis of its ongoing reviews which identify and evaluate
liabilities and costs relating to Environmental Law, it has reasonably
concluded that the application of any Environmental Law to it or any of
its subsidiaries could not reasonably be expected to have a Material
Adverse Effect.
12.20.5 Its operations, and the operations of its subsidiaries, are, and at all
times have been, in full compliance with all Environmental Law or if
there is any non-compliance with Environmental Laws, such
non-compliance could not reasonably be expected to have a Material
Adverse Effect. No circumstances exist which currently are known or
ought reasonably to be known by it which may reasonably be expected to
prevent or interfere with any Obligor or any of their respective
subsidiaries being in full compliance with any Environmental Laws in
the future so as to give rise to a Material Adverse Effect.
12.21 Labour Law and Employee Benefit Plans
It has complied with all applicable labour and social security laws and
instituted all employee benefit plans legally necessary; these plans in
place are in full force and effect and each such plan is fully funded
to meet its expected obligations as they come due except for such
failure to fund, the liability as to which is not reasonably likely to
have a Material Adverse Effect.
12.22 U.S. Employee Benefit Plans.
(a) As at the date of this Agreement no US Obligor has a
"multiemployer plan" (as defined in the definition of Employee
Benefit Plan) and no Employee Benefit Plan of any US Obligor
is subject to Title IV of ERISA.
(b) Each Employee Benefit Plan is in compliance in form and
operation and in all other material respects with the
applicable provisions of ERISA, the Code and any other
applicable Federal or U.S. state law, and no event or
condition has occurred or exists concerning such Employee
Benefit Plan which any US Obligor or any ERISA Affiliate
thereof would be under an obligation to report to the Agent in
accordance with Clause 13.3.8(e).
12.23 U.K. Employee Benefit Plans.
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(a) No agreement or arrangement (other than the Scheme) exists for
the provision by any Obligor of any relevant benefits (as
defined in Section 612 of the ICTA) for any person or (without
limitation to the foregoing) superannuation benefits for
employees.
(b) The last actuarial valuation of the Scheme disclosed that the
aggregate value of the assets of the Scheme at the date of the
valuation was equal to or greater than the aggregate value of
the liabilities of the Scheme on an on-going basis calculated
in accordance with the actuarial methods and assumptions used
in the valuation. So far as the Obligors are aware, no event
has occurred since the valuation that would have materially
adversely affected the funding position of the Scheme.
(c) Except that no action has been taken under the Scheme to
eliminate discriminatory treatment as between men and women
which is attributable to the provision of guaranteed minimum
pensions (within the meaning of the Pension Schemes Act 1993),
the applicable Obligors have complied in all material respects
with their respective obligations under the Scheme in relation
to past and present employees and officers of such Obligors
and all material amounts due to be paid to the Scheme from
such Obligors have been paid.
(d) No undertaking or assurance has been given to any member of
the Scheme as to continuance, introduction, increase or
improvement of any benefits under the Scheme.
(e) To the best knowledge of the Obligors, there are not in
respect of the Scheme any claims or actions pending or
threatened involving any Obligor or the trustees of the Scheme
(other than routine claims for benefits).
(f) No Obligor is providing, or, upon the consummation of the Sale
and Purchase Agreement, will be obligated to provide, material
ex gratia pension or other similar payments for any former
employee.
(g) No company other than the applicable Obligor participates or
has participated in the Scheme.
12.24 Governmental Regulation
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It is not subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce
Act or the Investment Company Act of 1940 or under any other federal
or state statute or regulation which may limit its ability to incur
Financial Indebtedness or which may otherwise render all or any
portion of the obligations under the Finance Documents unenforceable.
13. UNDERTAKINGS
13.1 Duration
Each Obligor undertakes to each of the Finance Parties in the terms of
the provisions of Clauses 13.2 to 13.4 (inclusive), and ChiRex Inc.
undertakes to each of the Finance Parties in terms of the provisions
of Clause 13.5, all such undertakings to continue until the
liabilities and obligations under each of the Finance Documents have
been finally discharged and no Finance Party has any obligation to
lend hereunder, unless in any case the Agent (acting on the
instructions of the Majority Lenders) agrees otherwise. All
undertakings set forth in this Clause 13 are cumulative such that, if
more than one set of such undertakings are given by an Obligor, such
Obligor shall be bound by the aggregate of all restrictions set forth
in the undertakings given by it.
13.2 General Undertakings
13.2.1 Use of Proceeds
It will procure that the proceeds of Advances be used only for the
purposes specified in Clause 2.2.
3.2.2 Authorisations and Consents
It will, and will procure that each of its subsidiaries will, obtain
and promptly renew from time to time and maintain in full force and
effect all such authorisations, approvals, consents, licenses and
exemptions, and promptly make and renew from time to time all such
filings and registrations, as may be required under any applicable law
or regulation (i) to enable it to perform its obligations under each
of the Finance Documents and (ii) for the validity and enforceability
thereof, subject to the Reservations.
13.2.3 Change of Business
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It will not, and will procure that each of its subsidiaries will not,
engage in any material business other than the Business or any
business reasonably incidental thereto.
13.2.4 Maintenance of Status and Authorisations, Title to Assets
It will, and will procure that each of its subsidiaries will:-
(a) do all such things as are necessary to maintain their
respective legal existences, except that any two or more
subsidiaries of an Obligor may consolidate or merge with one
another, in each case in accordance with Clause 13.2.9;
(b) ensure that it and each of them has the right and is duly
qualified to conduct their respective businesses as
conducted in all applicable jurisdictions, and obtain and
maintain all licenses, consents, authorisations, franchises,
Intellectual Property and other rights necessary for the
preservation and operation of such businesses in all
material respects, except to the extent that the absence of
any such right or qualification, or the non-existence or
non-maintenance of such licenses, consents, authorisations,
franchises, property or rights would not be reasonably
likely to have a Material Adverse Effect; and
(c) comply in all material respects with all laws, regulations,
judgements, decrees, orders, licenses, permits or consents
binding upon it, except where non-compliance would not be
reasonably likely to have a Material Adverse Effect.
13.2.5 Arm's Length Transactions
It will not enter into, and will procure that each of its subsidiaries
does not enter into, any arrangement or transaction other than (i) on
an arm's length basis and for at least market value, or (ii) on terms
that in every respect are equal to or more advantageous to such
Obligor.
13.2.6 Insurances
It will:-
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(a) maintain and will procure that each of its subsidiaries
maintains in full force and effect adequate insurance
(including, without limitation, employer's and public
liability insurance and business interruption/loss of
profits insurance) in relation to its and their respective
assets and businesses against all such risks as are normally
insured against by other companies (whose practice is not to
self-insure except in connection with reasonable excesses)
owning or possessing similar assets or carrying on similar
businesses in an amount, to the extent reasonably possible,
equal to the full replacement cost of such assets (after
allowing for any decrease in value of such assets as a
result of normal wear and tear in the case of plant and
machinery and related assets), in respect of its or their
respective businesses, except where its failure to do so
would not be reasonably likely to have a Material Adverse
Effect;
(b) procure that the interest of the Security Agent is noted on
all policies of such insurance (or at the option of the
Security Agent, acting reasonably, and where the relevant
insurer agrees, that such policies are issued in the joint
names of the Security Agent and the relevant Obligor); and
(c) if so requested by the Agent, supply copies of all such
policies, and receipts for all premiums and other payments
necessary for effecting and keeping such policies.
13.2.7 Taxes
It will pay within any permitted period, and will procure that each of
its subsidiaries pays within any permitted period, all material Taxes
imposed upon it or any of them or any of its or their assets, income
or profits or any transactions undertaken or entered into by it or any
of them (other than such Taxes as are being contested in good faith by
appropriate proceedings, pending determination of which payment may
lawfully be withheld without penalty, in respect of which Taxes there
shall be set aside adequate reserves in accordance with the applicable
Approved Accounting Principles).
13.2.8 Disposals
It will not, and will procure that its subsidiaries will not (whether
by a single transaction or a number of related or unrelated
transactions and whether at the same
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time or over a period of time) sell, transfer or otherwise dispose of
any of its assets (including shares of the capital stock of any other
person, or if such person is not an incorporated entity, other
ownership interests therein, and the coverage of this undertaking is
to be deemed to include any transaction the effect of which would be
to reduce the percentage of any class of shares or interests in any
person held directly or indirectly by such Obligor) or all or any part
of its undertakings, assets or revenues or any interest therein, other
than:-
(a) disposals of assets on an arm's length basis in the ordinary
course of trading;
(b) payment of cash in respect of a transaction not otherwise
prohibited by this Agreement, and exchange of cash
equivalents for cash;
(c) the exchange, or replacement within three months, of assets
for or with other assets required for its trading activities
of similar or greater value than the assets disposed of or
replaced, on arm's length commercial terms;
(d) disposals of assets which are no longer required for the
purposes of its business at a price not significantly less
than the market value of those assets less, if the assets
would otherwise be liquidated, the costs of the liquidation;
or
(e) disposals, other than disposals of shares or ownership
interests in ChiRex America Inc. or the Borrower, not
falling within any other paragraph of this Clause 13.2.8
whose consideration does not exceed GBP 5,000,000 (or its
equivalent) in any one Accounting Reference Period and GBP
15,000,000 (or its equivalent) when aggregated with all
other such disposals made by the Obligors and each of their
respective subsidiaries following the date of this
Agreement.
13.2.9 Merger, Consolidation, Etc.
It will not, and will procure that its subsidiaries do not, merge or
consolidate with any other person (whether by winding-up, dissolution
or other means) except that:-
(a) two or more Tier I Guarantors may consolidate or merge with
one another or an Obligor which is not a
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Tier I Guarantor may merge into an Obligor which is a Tier I
Obligor, and
(b) any subsidiary of an Obligor may merge into such Obligor,
provided in that the Agent shall have received legal opinions in
respect of the relevant merger or consolidation in form and substance
reasonably satisfactory to the Agent, which legal opinions shall, in
any event, confirm that none of the material rights of any Finance
Party or the material obligations and liabilities to any Finance Party
of any Obligor will, after such merger or consolidation, cease to be
in full force and effect and that the person surviving or resulting
from such merger or consolidation is bound under the Finance Documents
after giving effect to such merger or consolidation to the same extent
as the other person or persons party to such transaction were bound
immediately prior thereto.
13.2.10 Negative Pledge; Absence of Other Negative Pledges
(a) It will not, and will procure that its subsidiaries will
not, create or have outstanding any Security Interest on or
over its respective assets, other than Permitted Security
Interests.
(b) It will not, and will procure that none of its subsidiaries
will, covenant for the benefit of any person other than the
Lenders pursuant to the Finance Documents, to refrain from
granting for the purpose of securing Financial Indebtedness,
Security Interests on all or any portion of its or their
assets or properties, except (i) in respect of assets
subject to Permitted Security Interests in favour solely of
the holder of the relevant Security Interest and (ii) any
such covenants in existence on the date hereof pursuant to
any of the Continuing Indebtedness provided that the
principal amount of such Continuing Indebtedness shall not
be increased after the date hereof.
13.2.11 Indebtedness
It will not, and will procure that its subsidiaries will not, incur or
permit to exist any Financial Indebtedness other than Permitted
Indebtedness.
13.2.12 Loans, Etc.
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It will not, and will procure that its subsidiaries will not, make or
permit to be outstanding any loans or grant any credit to any person
or make any other similar arrangement other than:-
(i) loans to directors or employees which, together with all such loans
made by the Borrower and its subsidiaries, do not exceed a maximum
aggregate amount of GBP 1,000,000 (or its equivalent) outstanding at
any time;
(ii) trade credit granted in the ordinary course of its trading business,
(iii) loans to all material terms of which the Agent (acting upon the
instructions of the Majority Lenders) has consented; and
(iv) loans or credits granted by one of the Borrower's subsidiaries to the
Borrower or another of the Borrower's subsidiaries.
13.2.13 Acquisitions of Subsidiaries or Businesses
It will not, and will procure that its subsidiaries will not (i)
acquire any subsidiary which is not its subsidiary as at the date of
this Agreement, (ii) acquire any business, or (iii) enter into any
agreement under which it may be or become bound to acquire any such
subsidiary or business other than:-
(a) subsidiaries or businesses acquired exclusively with the
proceeds of one or more sales of equity securities or rights
in relation thereto, where (i) the subsidiary or business to
be acquired is such that it would not result in the untruth
or inaccuracy of any representation or warranty set forth
herein, the violation of any covenant set forth herein, or
the occurrence of any Potential Event of Default or Event of
Default, as demonstrated in each case to the reasonable
satisfaction of the Agent, (ii) if on a pro forma basis (as
demonstrated to the reasonable satisfaction of the Agent),
the proposed acquisition would result in there being a
Material Subsidiary which is not an Obligor, the acquiror
shall simultaneously with the acquisition cause compliance
by the acquired business or acquired subsidiary with Clause
13.2.22, and (iii) if the business or subsidiary proposed to
be acquired has any interest in real property which may
subject such business or subsidiary or any other member of
the ChiRex Group
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to liability under any Environmental Law, the acquiror shall
provide to the Agent a report of the type described in
Clause 13.2.18(g) in all respects satisfactory to the Agent
no fewer than 20 days prior to the date of the proposed
acquisition; and
(b) subsidiaries or businesses acquired in whole or in part with
the proceeds of Financial Indebtedness (including any direct
or indirect usage of the Tranche B Facility), where (i) the
acquisition satisfies the requirements of the preceding
Clause 13.2.13(a), and (ii) the Agent has received evidence
to its reasonable satisfaction that the proposed acquisition
will not result in the ChiRex Group having available to it
at any time insufficient cash or liquid assets to enable it
to meet all of the payment obligations under this Agreement
as well as all other material liabilities as they are then
anticipated to fall due.
13.2.14 Restriction on Redemption and Acquisition of Own Shares
It will not, and will procure that none of its subsidiaries will,
directly or indirectly redeem, purchase, retire or otherwise acquire
for consideration any shares, warrants or other equity or equity
related securities issued by it or set apart any sum for any such
purpose or otherwise reduce its capital without the consent of the
Agent (acting on the instructions of the Majority Lenders), except to
the extent that any sums paid or set apart by ChiRex Inc. in respect
of the redemption, purchase, retirement or acquisition of its shares,
when added to any other Restricted Payments, do not exceed in
aggregate the Available Amount.
13.2.15 Blockage of Payments, Etc.
It is not, and will procure that none of its subsidiaries is, a party
to any contractual or similar arrangement pursuant to which any such
subsidiary is prohibited from making any loan, payment of dividends,
distributions of income or other amounts, or transferring any
properties or assets, to it, or any condition or requirement is
imposed on any such payment or transfer except, in the case of
prohibitions on transfers of properties or assets, customary
provisions restricting subletting or assignment of any lease governing
a leasehold interest of it or one of its subsidiaries.
13.2.16 Restriction on Payment of Dividends, Etc.
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It will not declare or pay, directly or indirectly, any dividends or
make any other distribution, or other amounts whether in cash or
otherwise, on any of its ordinary or other shares except to the extent
that dividends paid by ChiRex Inc., when added to any other Restricted
Payments, do not exceed in aggregate the Available Amount.
13.2.17 Material Agreements
The relevant Obligor will at its own cost and expense take all
reasonable steps to preserve and enforce available rights and remedies
in respect of the Material Agreements or any breach thereof, maintain
in full force and effect (subject to rights of termination exercisable
by the other party or parties thereto not arising from the relevant
Obligor's actions or omissions) and during their term comply with the
terms of the Material Agreements in all material respects, and not
agree to any waiver of any material term of or to any material
amendment or variation of the terms of the Material Agreements, except
to the extent that the failure to perform or observe any of the
undertakings set forth in this Clause 13.2.17 is not reasonably likely
to have a Material Adverse Effect.
13.2.18 Environmental Obligations
(a) It will, and will procure that each of its subsidiaries
will, (i) comply with the terms of all Environmental
Licenses and Environmental Laws applicable to it or any of
its subsidiaries, (ii) promptly pay or cause to be paid all
costs and expenses incurred in such compliance and (iii)
keep or cause to be kept all real property now or hereafter
owned or operated by it or any of its subsidiaries free and
clear of any Security Interests imposed pursuant to such
Environmental Laws for such period as such real property is
owned or operated by it or any of its subsidiaries, except
for such non-compliances, failures to pay or Security
Interests which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
(b) It shall promptly take, and shall cause each of its
subsidiaries promptly to take, any and all investigation,
study, sampling, testing, abatement, clean up, removal,
remediation, or other appropriate response action necessary
to remove, remediate,
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clean up, or abate any Environmental Contamination that is
in violation of any Environmental Laws or that presents a
material risk of giving rise to an Environmental Claim where
the failure to do is reasonably likely to have a Material
Adverse Effect. In the event it or any of its subsidiaries
undertakes any such action with respect to any Dangerous
Substances on, under or about any real property owned or
operated by any of them, it or such subsidiary shall conduct
and complete such action in compliance with all applicable
Environmental Laws, and in accordance with the policies,
orders and directives of all Governmental Authorities except
when, and only to the extent that, its or such subsidiary's
liability for such presence, storage, use, disposal,
transportation or discharge of any Dangerous Substances is
being contested in good faith by it or such subsidiary.
(c) It shall promptly take, and shall cause each of its
subsidiaries promptly to take, any and all action necessary
to cure any violation of applicable Environmental Laws by
such Obligor or its Subsidiaries that could reasonably be
expected to have, individually or in the aggregate, a
Material Adverse Effect.
(d) It will not, and will procure that each of its subsidiaries
will not, generate, use, treat, store, release or dispose
of, or permit the generation, use, treatment, storage,
release or disposal of Dangerous Substances on any real
property now or hereafter owned or operated by it or any of
its subsidiaries, or transport or permit the transportation
of Dangerous Substances to or from any such real property
except for Dangerous Substances used or stored at, or
transported from, any such real properties in compliance
with all applicable Environmental Laws and used in
connection with the operation, use and maintenance of any
such real property, except such non-compliances as could not
reasonably be expected to have a Material Adverse Effect.
(e) If: (i) an Event of Default has occurred and is continuing;
(ii) the Lenders receive notice under Clauses 13.2.18(f) or
13.2.18(g) for any event for which notice is required to be
delivered for any such real property; or (iii) the Agent or
the Majority Lenders reasonably believe that there was a
breach of any representation, warranty or covenant
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contained in Clause 12.20, 13.2.18(a) or 13.2.18(d); then,
at the written request of the Agent or the Majority Lenders,
which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, it will
provide, at the Borrower's sole cost and expense, an
environmental site assessment report and compliance audit
concerning any real property in form and substance
satisfactory to the Agent, prepared by an environmental
consulting firm approved by the Agent addressing the matters
in sub-clause (i), (ii) or (iii) above of this Clause
13.2.18(e) which gives rise to such request and estimating
the range of the potential costs of any removal, remedial or
other corrective action in connection with any such matter.
If the Borrower fails to provide the same within 90 days
after such request was made, the Agent may order the same,
and the Obligors shall grant and hereby grant to each of the
Agent and the Lenders and their agents access to such real
property and specifically grant the Agent and the Lenders an
irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment all at the expense
of the Borrower (including, without limitation, taking
samples of soil, groundwater and suspected asbestos
containing materials). Any such investigation of any real
property shall be conducted, unless otherwise agreed to by
Borrower and Agent, during normal business hours and, to the
extent reasonably practicable, shall be conducted so as not
to interfere with the ongoing operations at any such real
property or to cause any damage or loss to any property at
such real property. Borrower and Agent hereby acknowledge
and agree that any report of any investigation conducted at
the request of Agent pursuant to this Clause 13.2.19(e) will
be obtained and shall be used by Agent and Lenders for the
purposes of Lenders' internal credit decisions, to monitor
and police the Facilities and to protect Lenders' security
interests, if any, created by the Finance Documents. Agent
agrees to deliver a copy of any such report to Borrower with
the understanding that Borrower acknowledges and agrees that
(i) it will indemnify and hold harmless Agent and each
Lender from any costs, losses or liabilities relating to
Borrower's use of or reliance on such report, (ii) neither
Agent nor any Lender makes any representation or warranty
with respect to such report, and (iii) by delivering such
report to Borrower neither Agent nor any Lender is
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requiring or recommending the implementation of any
suggestions or recommendations contained in such report.
(f) Promptly upon, and in any event within five Business Days
after, an officer or director of any Obligor obtaining
knowledge thereof, written notice of any of the following
matters (including all reasonably related claims or
liabilities) which could reasonably be expected to result in
costs to any Obligor in excess of GBP 2,500,000 shall be
delivered to the Lenders:-
(i) any pending or threatened Environmental Claim against any Obligor
(including any such claim arising out of the ownership or operation by
an Obligor, or any predecessor-in-interest thereto, of any real
property then no longer owned by such Obligor) or any real property
then owned or operated by an Obligor and any pending or threatened
suspension, revocation or material modification of any Environmental
License applicable to such Obligor (including any threatened closure
or shutdown of all or any part of a facility owned or operated by such
Obligor);
(ii) any condition or occurrence on or arising from any real property owned
or operated by any Obligor (or with respect to which any Obligor has
liability) that (x) results in material noncompliance by an Obligor
with any applicable Environmental Law or (y) could reasonably be
expected to form the basis of an Environmental Claim against an
Obligor, or any predecessor-in-interest thereto, (including any such
claim arising out of the ownership or operation by an Obligor of any
real property then no longer owned by such Obligor) or any real
property then owned by an Obligor;
(iii) any condition or occurrence on any real property owned or operated by
any Obligor that could reasonably be expected to cause such real
property to be subject to any restrictions on the ownership,
occupancy, use or transferability by such Obligor of such real
property under any Environmental Law;
(iv) the taking of any removal or remedial action in response to the actual
or alleged presence of any Dangerous Substances on any real property
owned or operated by an Obligor, or any predecessor-in-interest
thereto, as required by any Environmental Law or any Governmental
Authority; and
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(v) any change or addition to any applicable Environmental Law the effect
of which change or addition is reasonably likely to have a Material
Adverse Effect.
All such notices shall describe in reasonable detail the
nature of the claim, investigation, condition, occurrence or
removal or remedial action and the relevant Obligor's
response thereto. In addition, the relevant Obligor will
provide the Lenders with copies of such detailed reports of
any Environmental Claim as may reasonably be requested by
the Majority Lenders. In addition, promptly upon receiving
written notice of the entry of any real property (or any
property with respect to which it or any of its subsidiaries
has liability or potential liability) on any register or
database maintained by any Governmental Authority or like
authority for those properties deemed contaminated with
Dangerous Substances including, without limitation, a "black
spots" list, inform the Agent of the entry where the entry
has or could reasonably be expected to have a Material
Adverse Effect.
(g) It will, and will procure that each of its subsidiaries
will, undertake a suitable site assessment of the
Environmental status of any material real property (or any
material interest therein) or any company in which it
intends or they intend to acquire a majority interest (which
assessments shall include, but not be limited to, a written
environmental site assessment prepared by a reputable
environmental consultant for real property or interests
therein acquired or held by any company to be acquired),
provided it is so permitted by the then owner of such real
property, and will notify the Agent of the results of such
assessment.
13.2.19 Intellectual Property
It will:-
(a) make such registrations and pay such fees, registration
Taxes and similar amounts as are necessary to keep all
Intellectual Property rights which are material to the
business of any member of the ChiRex Group in force and to
record its interest in those Intellectual Property rights;
and
(b) take such steps as are necessary and commercially reasonable
(including, without limitation, the institution of
appropriate legal proceedings) to
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prevent third parties from infringing those Intellectual
Property rights referred to in paragraph (a) above and
(without prejudice to paragraph (a) above) take such other
steps as are reasonably practicable to maintain and preserve
its interest in those rights.
13.2.20 Investments
It will not, and will procure that its subsidiaries will not, own any
interest in any share, equity related investment or investment
security other than Permitted Investments.
13.2.21 Financial Indebtedness within the ChiRex Group
It will not, and will procure that its subsidiaries will not, permit
any Financial Indebtedness or other obligation owed by it to another
Obligor or to it by another Obligor, to be either (i) contractually
subordinated to any other obligations, or (ii) evidenced by a note or
other similar instrument, unless that note or instrument is pledged to
the Security Agent on behalf of the Lenders in a manner satisfactory
in all respects to the Security Agent.
13.2.22 Additional Guarantors
Each Obligor will procure that each of its subsidiaries which either
after the date of this Agreement becomes a Material Subsidiary (an
"Existing Material Subsidiary") or is a person to be acquired pursuant
to Clause 13.2.13 which would be a Material Subsidiary after giving
effect to such acquisition (an "Acquired Material Subsidiary")
executes and delivers, except to the extent that (i) such execution
and delivery is prohibited by law or (ii) it would, in the reasonable
opinion of the Agent, create an unreasonable risk of liability for the
directors of such Material Subsidiary after taking into account the
costs of the contingent liability to the Material Subsidiary
attributable to the guaranteeing of obligations under the Finance
Documents versus the benefits to be derived therefrom by such Material
Subsidiary, in the case of an Existing Material Subsidiary, within 90
days of availability to the Borrower of information demonstrating that
such subsidiary has become a Material Subsidiary and, in the case of
an Acquired Material Subsidiary, substantially contemporaneously with
the consummation of its acquisition (and in any event within 30 days
thereafter), to the Agent a Deed of Accession and the
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documents described in the following sub-clauses (i), (ii) and (iii)
relevant to it:
(i) a copy, certified as of the date of the Deed of Accession as true and
complete by a duly authorised representative of such Material
Subsidiary of:
(A) the constitutional documents of such Material
Subsidiary, including evidence of due
incorporation;
(B) board (or other appropriate governing body)
resolutions of such Material Subsidiary (A)
approving the transactions and the matters
contemplated by each of the Finance Documents, and
(B) authorising a specified person or persons to
(x) execute on its behalf each of the Finance
Documents to which it is a party, and (y) give all
notices, requests, instructions, certificates and
other documents for that Material Subsidiary in
connection with each of the Finance Documents to
which it is a party;
(C) all other corporate, trust or other applicable
authorisations and actions required of it
(including without limitation any resolutions of
shareholders or approvals of beneficiaries) to
enable it to enter into, execute and perform those
of the Finance Documents to which it is, or is to
be, a party;
(D) specimen signatures of the signatories authorised
by such Material Subsidiary in the board (or other
appropriate governing body) resolutions described
in Clause 13.2.22(i)(B) to sign Financing
Documents to which it is or is to be a party; and
(E) all other resolutions, powers, declarations,
approvals, consents and licenses (corporate,
official or otherwise) necessary or appropriate
for the entry into and performance by such
Material Subsidiary of the Finance Documents to
which it is or is to be a party, and for the
enforceability and validity thereof;
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(ii) a legal opinion properly addressed to the Agent and Lenders from
reputable counsel acceptable to the Agent in the jurisdiction in which
such Material Subsidiary is organised or incorporated, who may be
counsel to ChiRex Inc.; and
(iii) such other documents as the Agent may reasonably request.
13.2.23 No Payment of Management Fees
No Obligor will pay to any member of the ChiRex Group which is not an
Obligor management fees, royalty fees or otherwise except in respect
of services actually provided on commercially reasonable terms.
13.3 Information and Accounting Undertakings
13.3.1 Events of Default
ChiRex Inc. will notify the Agent of the occurrence of any Event of
Default or Potential Event of Default immediately upon becoming aware
of it and will from time to time on request deliver to the Agent a
certificate confirming that no Event of Default or Potential Event of
Default has occurred or setting out details of any Event of Default or
Potential Event of Default and the action taken or proposed to be
taken to remedy it.
13.3.2 Books of Account
Each Obligor will, and will procure that each of its respective
subsidiaries will, keep proper books of account and will prepare
management accounts in the usual form and will permit the Agent or any
authorised representative of the Agent upon reasonable notice to visit
them and inspect the same at the place where they are maintained and
to interview such officers and employees of the Borrower as the Agent
may reasonably require, provided that such visits and interviews may
not occur more frequently than once a year unless an Event of Default
has occurred.
13.3.3 Appointment of Auditors
No Obligor will at any time appoint or continue to employ any auditors
other than the Auditors or other auditors of international repute
approved by the Agent, provided that nothing in this Clause 13.3.3
shall limit or otherwise affect the appointment of statutory auditors.
13.3.4 Financial Statements and Operating Budget
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The Obligors will deliver, or cause to be delivered, to the Agent in
form and substance acceptable to the Agent for distribution to the
Lenders sufficient copies for each of the Lenders of the following:-
(a) as soon as available and in any event within the period
required to be delivered to the SEC, the Form 10-K of ChiRex
Inc. which incorporates the consolidated financial
statements of ChiRex Inc. and its subsidiaries, audited by
the Auditors as at the end of and for that financial year;
(b) as soon as available and in any event within the period
required to be delivered to the SEC, the Form 10-Q of ChiRex
Inc. which incorporates the unaudited consolidated financial
statements of ChiRex Inc. and its subsidiaries and the
relevant consolidating adjustments as at the end of, and
for, the relevant Accounting Quarter;
(c) as soon as available and in any event within 30 days after
the end of each fiscal month for the first eleven months of
each Accounting Reference Period, consolidated monthly
management accounts for each of (i) the ChiRex Group, and
(ii) the Borrower (setting forth separately income and
expenses of ChiRex (Annan) Limited and ChiRex (Dudley)
Limited) each as at the end of such month including, without
limitation, a consolidation adjustment column;
(d) not more than 30 days after the beginning of each successive
Accounting Reference Period, the Operating Budget applicable
to such Accounting Reference Period; and
(e) within 120 days after the end of each Accounting Reference
Period, a report of ChiRex Inc. describing in reasonable
detail each of the respective elements of the unconsolidated
Cashflow of each Obligor demonstrating the calculations made
in order to determine the Cashflow in each such case and, to
the extent practicable, reconciling the figures set forth
therein to the relevant audited figures;
provided, that the financial statements provided pursuant to
Sub-clauses 13.3.4(a), (b) and (c) shall include, without limitation,
in respect of each Accounting Quarter or Accounting Reference Period,
as the case may be, a statement of consolidated profit and loss, a
consolidated balance sheet, a consolidated cash flow statement,
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together with a comparison of all such information with the
information, if any such consolidated information is available, for
the corresponding period in the preceding financial year (or part
thereof following the date hereof), and the financial statements
provided pursuant to Sub-clauses 13.3.4(c) to include a comparison
with the relevant projections, estimates or forecasts in the relevant
Operating Budget.
13.3.5 Financial Covenant and Other Compliance Certificates
Each of the financial statements delivered under Subclauses 13.3.4(a),
(b) and (c) shall be accompanied by a certificate signed by the chief
financial officer of ChiRex Inc. and (in the case of financial
statements delivered pursuant to Sub-clause 13.3.4(a) approved by a
the Board of Directors of ChiRex Inc., certifying whether or not the
Obligors are in compliance with each of the covenants contained in
Clause 13.4 (such certificate to contain detailed calculations
reasonably acceptable to the Agent demonstrating such determination),
confirming that at the date of such financial statement, no Event of
Default or Potential Event of Default has occurred, or if one has
occurred, a description thereof and the action taken or proposed to be
taken to remedy it and, in the case of the annual financial
statements, (i) listing each Material Subsidiary as at the date of
such annual financial statements, and (ii) accompanied by a
certificate from the Auditors (in such form and with such content as
the Agent may reasonably require) demonstrating whether or not the
Obligors are in compliance with the covenants contained in Clause
13.4.
13.3.6 Accounting Reference Period/Accounting Quarter
No alteration may be made to its Accounting Reference Period or
Accounting Quarters without the prior written consent of the Agent
(which consent shall not be unreasonably withheld). The Agent may
require such changes in the financial covenants contained in this
Agreement as will fairly reflect any such change.
3.3.7 Auditors' Investigations
[*** Clause Reserved ***]
13.3.8 Other Information
Each Obligor (or each US Obligor, as applicable) will promptly deliver
to the Agent for distribution to the Lenders:-
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(a) details of any litigation, arbitration or administrative
proceedings relating to such Obligor which is reasonably
likely to give rise to a Material Adverse Effect;
(b) at the same time as sent to any of its financial creditors,
any other material document or information sent to such
creditors;
(c) such other information relating to its financial condition
or operations (including sales and details in relation to
its debtors), or those of any other Obligor as the Agent (or
any other Lender through the Agent) may from time to time
reasonably request;
(d) details of any occurrence or circumstance which will
materially adversely affect the ability of any Obligor to
perform any of its payment obligations under any of the
Finance Documents;
(e) promptly upon becoming aware of any event or circumstance
pertaining to an Employee Benefit Plan which is reasonably
likely to give rise to a Material Adverse Effect, a written
notice specifying the nature thereof, what action the
relevant US Obligor or any of its ERISA Affiliates has
taken, is taking or proposes to take with respect thereto
and, when known, any action taken or threatened by the
United States Internal Revenue Service, the United States
Department of Labor or the PBGC with respect thereto; and
(f) a copy of any notice or other writing received or issued by
any Obligor in connection with the possible termination,
revocation or modification of the terms of any license,
consent or authorisation necessary for the carrying on of
the Business, or the termination, waiver, amendment or
variance of any Material Agreement.
13.3.9 Other Investigations
It will, and will procure that its subsidiaries will, at any time
during the occurrence of a Potential Event of Default or an Event of
Default, permit the Agent and such person or persons as the Agent
shall nominate at all reasonable times during normal business hours
and on not less than 24 hours' written notice to enter into and upon
the principal premises from which the relevant Obligor's or
subsidiary's business is being conducted to view the state and
condition of such premises.
13.3.10 Approved Accounting Principles
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All audited financial statements or accounts of the Obligors delivered
or to be delivered to the Agent under this Agreement shall be prepared
in accordance with the relevant Approved Accounting Principles. If,
(i) as a result of a change in law or other change in Approved
Accounting Principles such statements or accounts are required to be
prepared on a different basis, or (ii) any change in Approved
Accounting Principles would result in any material change in the
manner in which any item relevant to the covenants in Clause 13.4
(Financial Covenants) is accounted for or reported by any Obligor, or
(iii) any Obligor shall propose to change its Approved Accounting
Principles from those specified in the definitions herein:-
(a) the relevant Obligor shall promptly so advise the Agent, and
shall deliver to the Agent (with sufficient copies for the
Lenders) the Operating Budget for the then current
Accounting Reference Period and the financial statements
required to be delivered under Clauses 13.3.4(a) and (b)
during the prior twelve month period, in each case, giving
effect to the relevant changes;
(b) on request of the Agent (which request shall be deemed made
in the case of a proposal to change any of the Approved
Accounting Principles from those specified in the
definitions herein), the Obligors and the Agent (on behalf
of the Lenders) shall negotiate in good faith with a view to
agreeing such amendments to Clauses 13.4 and/or the
definitions of any or all of the terms used therein as are
necessary as a result of such change in law or in generally
accepted accounting principles (or other change) to give the
Lenders comparable protection to that contemplated at the
date of this Agreement;
(c) if amendments satisfactory to the Lenders are agreed by the
Obligors and the Agent in writing within 30 days of such
notifications to the Agent, those amendments shall take
effect in accordance with the terms of that agreement; and
(d) if such amendments are not so agreed within 30 days, within
15 days after the end of that 30 day period, the relevant
Obligor shall either:-
(i) deliver to the Agent, in reasonable detail and in a form satisfactory
to the Agent, details of all such adjustments as need to be made to
the relevant financial statements in order to bring them into line
with Approved
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Accounting Principles or, as the case may be, to eliminate the effect
of the relevant change; or
(ii) ensure that the relevant financial statements are prepared in
accordance with the relevant Approved Accounting Principles subject,
as the case may be, to eliminating the effect of the relevant change.
13.3.11 Annual Meeting with Banks
At the request of the Agent, the Obligors shall within 120 days after
the close of each Accounting Reference Period, hold a meeting at a
time and place selected by the Obligors and reasonably acceptable to
the Agent, with all of the Lenders at which meeting shall be reviewed
the financial results of the previous fiscal year, the financial
condition of the Obligors and the Operating Budget for the then
current fiscal year of the Obligors.
13.4 Financial Covenants
13.4.1 (a) Maximum Total Debt / EBITDA Ratio
ChiRex Inc. shall maintain, as of the end of each Accounting
Quarter to occur during the periods shown below, a Total
Debt/EBITDA Ratio of not more than the maximum Total
Debt/EBITDA Ratio shown below:
================================================================
Maximum Total
Debt/EBITDA
Period Ratio
----------------------------------------------------------------
1st April, 1998 to 30th June, 1998 3.25 : 1
----------------------------------------------------------------
1st July, 1998 to 30th September, 3.0 : 1
1998
----------------------------------------------------------------
Thereafter 2.5 : 1
================================================================
(b) Minimum Interest Coverage Ratio
ChiRex Inc. shall maintain, as of the end of each Accounting
Quarter to occur during the periods shown below, an Interest
Coverage Ratio of not less than the minimum Interest
Coverage Ratio shown below:
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==========================================================
Minimum
Interest
Period Coverage Ratio
----------------------------------------------------------
1st April, 1998 to 30th September, 3.0 : 1
1998
----------------------------------------------------------
Thereafter 3.5 : 1
==========================================================
(c) Calculation
(i) The covenants contained in this Clause 13.4.1 will be tested on a
rolling aggregate basis for the immediately preceding four quarterly
periods ending on the last day of the relevant Accounting Quarter
(except that Total Debt will be tested as of the last day of the
Accounting Quarter most recently ended), in each case by reference to
the quarterly management accounts in respect of the first three
Accounting Quarters of each Accounting Reference Period, delivered to
the Agent pursuant to Clauses 13.3.4(b), for the relevant period, and
by reference to the audited accounts required to be delivered to the
Agent pursuant to Clause 13.3.4(a) in respect of the fourth Accounting
Quarter of each Accounting Reference Period; provided that if when the
audited accounts become available they either demonstrate that the
figures in any relevant quarterly management accounts utilised for any
such calculation cannot have been substantially accurate or indicate a
material discrepancy which is prejudicial to the Finance Parties
between the aggregate figures for the management accounts for the four
relevant Accounting Quarters and the aggregate audited figures, then
the Agent shall require such adjustment to the calculations made or to
be made as it reasonably considers appropriate to rectify such
inaccuracy or discrepancy, and compliance with the covenants in this
Clause 13.4.1 will be determined by reference to such adjusted
figures.
(ii) In the case of any component calculated by reference to management
accounts the relevant Approved Accounting Principles will be applied
within the reasonable parameters which may be expected of management
accounts not the subject of audit procedures.
13.4.2 Capital Expenditure
(a) Before the Achievement Date only, ChiRex Inc. shall procure
that the Capital Expenditures (determined in
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accordance with Approved Accounting Principles) of the
ChiRex Group in each Accounting Reference Period ending
after the date of this Agreement do not exceed the sum of
(i) the amount set forth in respect thereof in the Business
Plan and (ii) an amount which, when added to any other
Restricted Payments, does not exceed in aggregate the
Available Amount; provided that for any Accounting Reference
Period of less than twelve months, the permitted amount of
Capital Expenditures shall be pro-rated accordingly.
(b) Without prejudice to the other terms of this Agreement, upon
each disposal of a business or company (or a material part
of either), the amount specified in Clause 13.4.2(a), if
applicable, shall be automatically reduced by the amount (if
any) reasonably determined by the Agent to be attributable
to that business, company or part thereof.
(c) Notwithstanding the foregoing, to the extent that the actual
Capital Expenditures (as so calculated) during any
Accounting Reference Period are less than the amount
permitted by Clause 13.4.2(a) for such Accounting Reference
Period, 100% of such unused amount shall be added to the
amount of permitted Capital Expenditures in any succeeding
year subject to no Event of Default having occurred and
being continuing at the time of a proposed usage of all or
any part of such unused amount in such succeeding year.
13.5 Additional Undertakings of ChiRex Inc.
ChiRex Inc. undertakes that:
(a) Business
It will not engage in any business or activity other than
the ownership of the shares of capital stock of its
subsidiaries, and activities necessarily related thereto.
(b) Ownership
It will at all times own beneficially and of record 100% of
the outstanding shares of capital stock of ChiRex America
Inc. and the Borrower.
(c) Financial Indebtedness, Etc.
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It will procure that (i) none of ChiRex America Inc., ChiRex (Annan) Limited,
nor the Borrower has any Financial Indebtedness, except (A) in the case of the
Borrower only, its obligations in respect of the Finance Documents and the
Holdings Note, and (B) in the case of ChiRex (Annan) Limited only, its
obligations under the Finance Documents, the Annan Note and the Multiborrower
Revolving Note, (ii) the Borrower has no material assets, other than the shares
of capital stock of its subsidiaries and such assets as arise in connection with
the use of proceeds of the Advances, and (iii) ChiRex America Inc. has expenses
not exceeding GBP 2,500,000 in any Accounting Reference Period.
14. EVENTS OF DEFAULT
14.1 List of Events
Each of the events set out in this Clause 14.1 constitutes an
Event of Default whether or not the occurrence of the event
concerned is outside the control of the Obligors or any other
person.
14.1.1 Payment Default
Any Obligor fails to pay on the due date any amount payable by it
under any of the Finance Documents at the place at which, and in
the currency in which, it is expressed to be payable but, without
prejudice to Clause 27.1, such non-payment shall not constitute an
Event of Default if (i) it is a non-payment in respect of interest
or fees and the relevant payment is received by the Agent within
three Business Days of the due date for payment thereof, or (ii)
such non-payment is caused by a technical fault in transmission of
funds and such funds are subsequently successfully transmitted
within one Business Day of the due date for payment thereof.
14.1.2 Breach of Other Obligations
(a) a breach of any provision of Clause 13.4 (Financial
Covenants) occurs;
(b) any Obligor fails to comply with any of its obligations in
Clause 13 (other than Clause 13.4) and, in any such case,
if such failure is, in the reasonable opinion of the
Agent, capable of remedy,
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(c) it is not remedied within twenty Business Days
after such Obligor becomes aware of such failure; or
(d) any Obligor fails to comply with or perform any of its
other material obligations or undertakings under any of
the Finance Documents and, if such failure is, in the
reasonable opinion of the Agent, capable of remedy, it is
not remedied within twenty Business Days after such
Obligor becomes aware of such failure.
14.1.3 Misrepresentation
Any representation, warranty or statement which is made by any Obligor
in any of the Finance Documents or is contained in any certificate,
statement or notice provided under or pursuant to any of the Finance
Documents proves to be incorrect in any material respect when made (or
deemed to be repeated) unless the circumstances giving rise to that
default are, in the reasonable opinion of the Agent, remediable, and
are remedied within twenty Business Days after such Obligor becoming
aware of the same.
14.1.4 Invalidity, Unlawfulness, Etc.
(a) Any provision of any Finance Document is, or becomes,
materially invalid or unenforceable for any reason (except
by reason of the unavailability of specific performance or
other equitable remedy) or shall be repudiated or the
validity or enforceability of any provision of any Finance
Document shall at any time be contested by any Obligor party
thereto, or any Obligor shall deny the existence of any
liability or obligation on its part thereunder.
(b) At any time it is or becomes unlawful under the laws of any
applicable jurisdiction for any Obligor (other than a
Non-Material Subsidiary) to perform any of its material
obligations under any Finance Document.
(c) At any time any act, condition or thing required to be done,
fulfilled or performed in order (i) to enable any Obligor
lawfully to enter into, exercise its rights under and
perform the material obligations expressed to be assumed by
it in any of the Finance Documents or (ii) to ensure that
the material obligations expressed to be assumed by any
Obligor in any Finance Document are legal, valid and
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binding, is not done, fulfilled or performed, and if the
relevant matter is, in the reasonable opinion of the Agent,
capable of remedy, it is not remedied within fourteen
Business Days after the first of such Obligor becomes aware
of such matter.
14.1.5 Insolvency
Subject to Clause 14.2, any Obligor is declared insolvent or is
unable, or admits in writing its inability, to pay its debts as they
fall due or stops or threatens to stop payment of its debts generally
or becomes insolvent within the terms of any applicable law.
14.1.6 Receivership and Administration
Subject to Clause 14.2,
(a) an application is made for the appointment of an
administrator (as such term is used in the Insolvency Act
1986) or similar official in relation to any Obligor or a
resolution is passed by the directors or shareholders of
ChiRex Inc. or any such Obligor for such an application to
be made;
(b) a liquidator, trustee, administrative or other receiver,
manager (being a person acting on behalf of all or any
creditors), judicial factor, manager for credits, or similar
officer is appointed in respect of (or takes possession of)
any Obligor or in respect of (or takes possession of) all or
any part of its assets; or
(c) any distress, execution, attachment (other than an
attachment or arrest to found jurisdiction) or other process
affects any asset of any Obligor, except where such Obligor
is, in good faith, reasonably contesting such distress,
execution, attachment or other process by proceedings
diligently pursued and such distress, execution, attachment
or other process is discharged or stayed within 30 days.
14.1.7 Compositions and Arrangements
Subject to Clause 14.2, a moratorium or suspension of payments in
respect of all or any classes of debts of any Obligor or a composition
or an arrangement with creditors generally of any Obligor or any other
arrangement whereby its affairs are submitted to the control of its
creditors is applied for, ordered or declared.
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14.1.8 Winding-up or Similar Event
Subject to Clause 14.2, any order is made or resolution passed or any
legal proceedings are consented to by any Obligor or otherwise
commenced (by way of petition or otherwise) for the suspension of
payments generally or dissolution, termination of existence,
liquidation, winding-up or bankruptcy of any Obligor.
14.1.9 Protection from Creditors
Subject to Clause 14.2, any order is made, decree is passed or
resolution is passed or other action is taken by or with respect to
any obligor for protection from creditors of such Obligor.
14.1.10 Similar Events Elsewhere
Subject to Clause 14.2, there occurs in relation to any Obligor or any
of their respective assets, in any country or territory in which such
Obligor is organised or carries on business or to the jurisdiction of
whose courts it or any of its assets are subject, any event which
corresponds in that country or territory with any of those mentioned
in Clauses 14.1.5 to 14.1.9 (inclusive) (including, without
limitation, the filing of any petition or the commencement of any
proceedings under any U.S. federal or state bankruptcy, insolvency,
reorganisation or other similar law), or any Obligor or its assets
otherwise become subject, in any such country or territory, to any law
relating to insolvency, bankruptcy or liquidation.
14.1.11 Cessation of Business
Subject to Clause 14.2, any Obligor ceases, or threatens to cease, to
carry on all or a substantial part of its business, other than in
connection with a transfer by such Obligor of all or substantially all
of its assets in accordance with Clause 13.2.8(g).
14.1.12 Compulsory Acquisition
All or any part of the property or assets of any Obligor is
compulsorily acquired by, or by the order of, any central or local
governmental authority and such acquisition results in a Material
Adverse Effect.
14.1.13 Security Interests
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Any Security Interest securing obligations or liabilities in excess of
GBP 2,500,000 (or its equivalent), affecting the business, undertaking
or any of the assets of any Obligor becomes enforceable (other than by
the exercise of a lien arising solely by operation of law in the
ordinary course of trading where the indebtedness in respect of which
that lien is being exercised (i) has been due for less than twenty
days or (ii) is being contested in good faith by appropriate means)
whether or not steps are taken to enforce the same.
14.1.14 Cross Default
(a) Any other Financial Indebtedness in excess of GBP 2,500,000
(or its equivalent) of any Obligor:-
(i) is not paid when due or within any applicable grace period in any
agreement relating to that Financial Indebtedness; or
(ii) becomes due and payable (or presently capable of being declared due
and payable) before its normal maturity or is placed upon demand
before it is due (or any commitment for any such indebtedness is
cancelled or suspended) by reason of a default or event of default,
however described, or by reason of any other contractual provision
requiring prepayment; or
(b) Any amount due under a WCP Facility becomes due and payable
(or presently capable of being declared due and payable)
before its normal maturity or is placed on demand before its
time (or any WCP Commitment for any WCP Facility is
cancelled or suspended) by reason of a default, however
described, relating thereto.
14.1.15 Auditors' Qualification
The Auditors qualify their report on the audited consolidated
financial statements of any Obligor in any way whatsoever.
14.1.16 Material Adverse Effect
An event or circumstance occurs or exists which has, or is reasonably
likely to have, a Material Adverse Effect.
14.1.17 Litigation
Any litigation, arbitration or administrative proceedings are current
or pending at the date of this Agreement or
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are commenced after such date against any Obligor, which proceedings
are reasonably likely to have a Material Adverse Effect.
14.1.18 Environmental Defaults
(a) any Obligor fails to comply with any Environmental Law or
Environmental License or becomes subject to any liability or
potential liability in respect of Dangerous Substances and
that non-compliance or liability or potential liability
could reasonably be expected to have a Material Adverse
Effect;
(b) if any entry on any register maintained by any government or
like authority for those properties deemed contaminated with
Dangerous Substances, including, without limitation, a
"black spots" list, is made in respect of any property owned
by any Obligor (or with respect to which property any
Obligor has any liability or potential liability) and as a
result of such registration there is a fall in the value of
the property in question which could reasonably be expected
to have a Material Adverse Effect;
(c) any change in applicable Environmental Law results in the
imposition of any liability on any Finance Party in relation
to any Environmental Event which liability is reasonably
likely to have a Material Adverse Effect; or
(d) any change in applicable law causes the rights of any person
in relation to any Environmental Claim against any Obligor
to rank ahead of the rights of any Finance Party against it
in a manner which could reasonably be expected to have a
Material Adverse Effect.
14.1.19 Judgement Default
Any final judgement, decree or order (not covered by insurance) for
the payment of money in excess of GBP 2,500,000 against all such
persons (treating any deductibles, self-insurance or retention as not
so covered) shall be rendered against any Obligor and shall not be
discharged, and there shall be any period of 30 consecutive days
following entry of such final judgement, decree or order during which
a stay of enforcement of such final judgement, decree or order, by
reason of a pending appeal or otherwise, shall not be in effect.
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14.1.20 Employee Benefit Plans
An event or condition occurs or exists with respect to any Employee
Benefit Plan and as a result of such event or condition, together with
all other such events or conditions, a US Obligor or any ERISA
Affiliate thereof has incurred or is reasonably likely to incur a
liability to a Employee Benefit Plan, the PBGC or a trustee appointed
pursuant to Section 4042 of ERISA (or any combination of the
foregoing) which is reasonably likely to have a Material Adverse
Effect.
14.1.21 Licenses, Authorisations, Material Agreements
Any license, consent or authorisation necessary for the carrying on of
the Business shall be terminated or revoked or the terms thereof shall
be modified, or any Material Agreement shall cease to be in full force
and effect, or the party thereto not a member of the ChiRex Group (or
its successor) shall give notice to terminate prior to its scheduled
termination date such Material Agreement in accordance with its terms,
or any term of such Material Agreement shall be waived, amended or
varied, in any case where the relevant event (taking into account any
replacement or other compensating agreement or order secured by any
member of the ChiRex Group) is reasonably likely to have a Material
Adverse Effect.
14.2 Bankruptcy and Insolvency Types of Events of Default
Notwithstanding the terms of Clauses 14.1.5 through 14.1.11
(inclusive), the occurrence of any event described under such Clauses
with respect to any subsidiary of the Borrower shall not constitute an
Event of Default if the Borrower shall have, not less than twenty days
prior to the occurrence of such event, provided evidence satisfactory
to the Agent that, the occurrence of such event is not reasonably
likely either to (i) have a Material Adverse Effect or (ii) to result
in the incurrence by the Lenders of any material liabilities or
claims.
14.3 Cancellation and Repayment
At any time after the occurrence and during the continuance of an
Event of Default the Agent may and, if so instructed by the Majority
Lenders, will by notice to the Borrower:-
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(a) cancel any unborrowed amount of the Facilities (whereupon
the commitment of each Lender in respect to each Facility
shall be reduced to zero); and/or
(b) declare all Advances, accrued interest thereon and any other
sum accrued under this Agreement and any of the other
Finance Documents to be immediately due and payable,
whereupon they shall become so due and payable.
15. GUARANTEE
15.1 Guarantee
Subject to any limitations specified for the relevant Guarantor in its
Deed of Accession and subject to Clause 15.2 below, each Guarantor
irrevocably and unconditionally:-
(a) as principal obligor, waiving any benefit under applicable
law, guarantees to each Finance Party, prompt performance by
each Obligor (any reference in this Guarantee to one or more
Obligors shall not be construed to include a reference by a
Guarantor to itself in its capacity as a Guarantor), of all
its respective obligations under the Finance Documents (the
"Guarantee Obligation");
(b) undertakes with each Finance Party that whenever an Obligor
does not pay any amount when due under or in connection with
any Finance Document, such Guarantor shall forthwith on
demand by the Agent pay that amount (the "Payment
Obligation") as if such Guarantor instead of the relevant
Obligor were expressed to be the principal obligor; and
(c) indemnifies each Finance Party on demand against any loss or
liability suffered by it under the Finance Documents as a
result of any obligation guaranteed by such Guarantor being
or becoming unenforceable, invalid or illegal.
15.2 Limitation on Guarantee Obligations
Anything contained in this Clause 15 to the contrary notwithstanding,
if any Fraudulent Transfer Law (as hereinafter defined) is determined
by any United States court of competent jurisdiction to be applicable
to the obligations of any US Obligor under the Guarantee set forth in
this Clause 15, such obligations of such US Obligor hereunder shall be
limited to a maximum aggregate amount equal to the largest
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amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of
Title 11 of the United States Code or any applicable provisions of
comparable state law, to the extent applicable to any respective
guarantee of any US Obligor (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all other liabilities of
such US Obligor, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any
liabilities of such US Obligor in respect of intercompany indebtedness
to any other member of the ChiRex Group to the extent that such
indebtedness would be discharged in an amount equal to the amount paid
by such US Obligor hereunder) and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such US Obligor pursuant to
applicable law or pursuant to the terms of any agreement.
15.3 Joint and Several Liability
Subject to any limitations specified for the relevant Obligor in its
Deed of Accession, if applicable, each obligation expressed under this
Agreement to be an obligation of the Obligors shall be the joint and
several obligation of each Obligor.
15.4 Continuing Guarantee
This guarantee is a continuing guarantee and will extend to the
ultimate balance of all sums payable by the Obligors under the Finance
Documents, regardless of any intermediate payment or discharge in
whole or in part.
15.5 Reinstatement
(a) Where any discharge (whether in respect of the obligations
of any Obligor or any security for those obligations or
otherwise) is made in whole or in part or any arrangement is
made on the faith of any payment, security or other
disposition which is avoided or must be restored on
insolvency, liquidation or otherwise without limitation, the
liability of each Guarantor under this Clause 15 shall
continue as if the discharge or arrangement had not
occurred.
(b) Each Finance Party may concede or compromise any claim that
any payment, security or other disposition is liable to
avoidance or restoration.
15.6 Waiver of Defences
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The obligations of each Guarantor under this Clause 15 will not be
affected by, and each Guarantor waives its rights (to the fullest
extent permitted by law) in connection with, any act, omission, matter
or thing which, but for this provision, would reduce, release or
prejudice any of its obligations under this Clause 15 or prejudice or
diminish those obligations in whole or in part, including (whether or
not known to it or any Finance Party):-
(a) any time or waiver granted to, or composition with, any
Obligor or any other person;
(b) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets
(including any balance of any deposit or account or credit
on the books of any Finance Party or other person in favour
of any Obligor or any other person) of, any Obligor or other
person or any non-presentation or non-observance of any
formality or other requirement in respect of any instrument
or any failure to realise the full value of any security;
(c) any incapacity or lack of powers, authority or legal
personality of or dissolution or change in the members or
status of any Obligor or any other person;
(d) any variation (however fundamental) or replacement of a
Finance Document or any other document or security so that
references to that Finance Document in this Clause 15 shall
include each variation or replacement;
(e) any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document or any
other document or security, to the intent that such
Guarantor's obligations under this Clause 15 shall remain in
full force and its guarantee be construed accordingly, as if
there were no unenforceability, illegality or invalidity; or
(f) any postponement, discharge, reduction, non-provability or
other similar circumstance affecting any obligation of any
Obligor under a Finance Document resulting from any
insolvency, liquidation or dissolution proceedings or from
any law, regulation or order so that each such obligation
shall for the purposes of each Guarantor's
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obligations under this Clause 15 be construed as if there
were no such circumstance.
15.7 Immediate recourse
Each Guarantor waives any right it may have of first requiring any
Finance Party (or any trustee or agent on its behalf) to (i) proceed
against or enforce any other rights or security or claim payment from
any person, or (ii) pursue any other remedy in the power of any
Finance Party whatsoever, before enforcing its rights against such
Guarantor under this Clause 15.
15.8 Appropriations
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full, each Finance Party (or any trustee or agent on its behalf)
may:-
(a) refrain from applying or enforcing any other moneys,
security or rights held or received by that Finance Party
(or any trustee or agent on its behalf) in respect of those
amounts, or apply and enforce the same in such manner and
order as it sees fit (whether against those amounts or
otherwise) and no Guarantor shall be entitled to the benefit
of the same; and
(b) hold in a market rate interest-bearing suspense account any
moneys received from each Guarantor or on account of such
Guarantor's liability under this Clause 15, with interest
accruing thereon for the account of such Guarantor at a rate
determined by such Finance Party, acting reasonably, to be
appropriate in the circumstances.
15.9 Non-competition
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full, each Guarantor shall not, after a claim has been made or by
virtue of any payment or performance by it under this Clause 15:-
(a) be subrogated to any rights, security or moneys held,
received or receivable by any Finance Party (or any trustee
or agent on its behalf) or be entitled to any right of
contribution or indemnity
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in respect of any payment made or moneys received on account
of such Guarantor's liability under this Clause 15;
(b) without the consent of the Agent, claim, rank, prove or vote
as a creditor of any Obligor or its estate in competition
with any Finance Party (or any trustee or agent on its
behalf); or
(c) receive, claim or have the benefit of any payment,
distribution or security from or on account of any Obligor,
or exercise any right of set-off as against any Obligor.
Each Guarantor shall hold in trust for and forthwith pay or transfer
to the Agent for the Finance Parties any payment or distribution or
benefit of security received by it contrary to this Clause 15.9.
15.10 Additional Security, Relation to Other Obligations of Guarantors
This guarantee is in addition to and shall not in any way be
prejudiced by any other security now or hereafter held by any Finance
Party.
16. THE AGENT AND THE OTHER FINANCE PARTIES
16.1 Appointment and duties of the Agent, Security Agent and Joint
Arrangers
16.1.1 Each Lender hereby appoints (i) Bankers Trust Company as Agent, to act
as its agent in connection with the Finance Documents, (ii) Bankers
Trust Company as Security Agent, to act as security agent for purposes
of the Security Documents, and (iii) Bankers Trust International PLC
and Midland Bank plc to act as Joint Arrangers, under and in
connection with the Finance Documents, and irrevocably authorises
Bankers Trust Company for and on its behalf to exercise such rights,
powers and discretions as are specifically delegated to it by the
terms of the Finance Documents, together with all such rights, powers
and discretions as are incidental thereto, and to give a good
discharge for any moneys payable under the Finance Documents. The
Lenders empower the Agent or the Security Agent, as the case may be,
on the broadest terms to take such actions and to exercise any and all
rights derived from this Agreement, including, but not limited to (i)
the enforcement of the Finance Documents, and (ii) the
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sending or receiving of whatever notices or communications the Agent
may deem necessary or advisable.
16.1.2 The Agent will act solely as agent for the Lenders in carrying out its
functions as agent under the Finance Documents and will exercise the
same care as it would in dealing with a credit for its own account.
16.1.3 The relationship between the Lenders and the Agent is that of
principal and agent only. The Agent shall not have, nor be deemed to
have assumed, any obligations to, or trust or fiduciary relationship
with, the other Finance Parties or ChiRex Inc. or any member of the
ChiRex Group other than those for which specific provision is made by
the Finance Documents.
16.1.4 References in this Clause 16 to "Agent" shall be deemed also to be
references to the Agent in its capacities as Security Agent and Joint
Arranger (save where specific reference is made to the contrary),
notwithstanding the use of the expression "the Agent and the Security
Agent" in certain provisions of the Finance Documents.
16.2 Agent's Duties
The Agent shall:-
16.2.1 promptly send to each Lender details of each communication received by
it from ChiRex Inc., the Borrower or the members of the ChiRex Group
under the Finance Documents, except that details of any communication
relating to a particular Lender shall be sent to that Lender only;
16.2.2 promptly send to each Lender a copy of any legal opinion delivered
under this Agreement or any of the other Finance Documents and of any
document or information received by it pursuant to Clause 13.3
(Information and Accounting Undertakings) or (if requested) pursuant
to Clause 4.1;
16.2.3 subject to those provisions of this Agreement which require the
consent of all the Lenders, act in accordance with any instructions
from the Majority Lenders or, if so instructed by the Majority
Lenders, refrain from exercising a right, power or discretion vested
in it under this Agreement or any of the Finance Documents;
16.2.4 have only those duties, obligations and responsibilities expressly
specified in the Finance Documents; and
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16.2.5 without prejudice to any other clause hereof (including without
limitation Clauses 16.3.5, 16.4(c) and 16.6.3), promptly notify each
Lender of the occurrence of any Event of Default or Potential Event of
Default of which an officer of the Agent responsible for the
administration of this Agreement becomes aware.
16.3 Agent's and Security Agent's Rights
The Agent and the Security Agent, as the case may be, may:-
16.3.1 perform any of its duties, obligations and responsibilities under the
Finance Documents by or through its personnel, delegates or agents (on
the basis that the Agent and/or Security Agent may extend the benefit
of any indemnity received by it hereunder to its personnel, delegates
or agents);
16.3.2 refrain from exercising any right, power or discretion vested in it
under the Finance Documents until it has received instructions from
the Majority Lenders, or where relevant, all the Lenders;
16.3.3 unless it has received notice in writing to the contrary treat (a) the
Lender which makes available any portion of an Advance as the person
entitled to repayment of that portion and (b) the office set under a
Lender's name in Schedule 1 (or, in the case of a Transferee, at the
end of the Transfer Certificate to which it is a party as Transferee)
as its Lending Office;
16.3.4 refrain from doing anything which would or might in its opinion be
contrary to any law, regulation, directive, judgement or decree of any
court of any jurisdiction or otherwise render it liable to any person
and may do anything which is in its opinion necessary to comply with
any such law, regulation, judgement, decree or directive;
16.3.5 assume that no Event of Default or Potential Event of Default has
occurred unless an officer of the Agent while active on the account of
the Borrower acquires actual knowledge to the contrary;
16.3.6 refrain from taking any step (or further step) to protect or enforce
the rights of any Lender under this Agreement or any of the other
Finance Documents until it has been indemnified and/or secured to its
satisfaction against any and all costs, losses, expenses or
liabilities (including legal fees) which it would or might sustain or
incur as a result;
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16.3.7 rely on any communication or document believed by it to be genuine and
correct and to have been communicated or signed by the person to whom
it purports to be communicated and signed;
16.3.8 rely as to any matter of fact which might reasonably be expected to be
within the knowledge of the Borrower on a statement by or on behalf of
the Borrower;
16.3.9 obtain and pay for such legal or other expert advice or services as
may seem necessary to it or desirable and rely on any such advice.
16.3.10 accept without enquiry such title as the Obligors may have to any
asset or assets intended to be the subject of the security created by
the Security Documents; and
16.3.11 hold or deposit any title deeds, the Security Documents or any other
documents in connection with any of the assets charged by the Security
Documents with any banker or banking company or any company whose
business includes undertaking the safe custody of deeds or documents
or with any lawyer or firm of lawyers and it shall not be responsible
for or be required to insure against any loss incurred in connection
with any such holding or deposit and it may pay all sums required to
be paid on account or in respect of any such deposit.
16.4 Exoneration of Agent, Security Agent and Joint Arrangers
Neither the Agent nor the Security Agent nor the Joint Arrangers nor
any of their respective personnel or agents:-
(a) shall be responsible for the adequacy, accuracy or
completeness of any representation, warranty, statement or
information in the Information Memorandum, any of the
Finance Documents or any notice or other document delivered
under the Finance Documents;
(b) shall be responsible for the execution, delivery, validity,
legality, adequacy, enforceability or admissibility in
evidence of any of the Finance Documents;
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(c) shall be obliged to enquire as to the occurrence or
continuation of an Event of Default or a Potential Event of
Default;
(d) shall be responsible for any failure of any member of the
ChiRex Group or any of the Lenders duly and punctually to
observe and perform their respective obligations under the
Finance Documents;
(e) shall be responsible for the consequences of relying on the
advice of any professional advisers selected by any of them
in connection with the Finance Documents;
(f) shall be liable for acting (or refraining from acting) in
what it believes to be in the best interests of the Lenders
in circumstances where it has been unable, or it is not
practicable, to obtain the instructions of the Lenders or
the Majority Lenders (as the case may be); or
(g) shall be liable for anything done or not done by it under or
in connection with the Finance Documents save in the case of
its own negligence or wilful misconduct.
16.5 The Agent, the Security Agent and the Joint Arrangers Individually
16.5.1 If it is a Lender, each of the Agent, the Security Agent and each
Joint Arranger shall have the same rights and powers under the Finance
Documents as any other Lender and may exercise those rights and powers
as if it were not also acting as Agent, Security Agent or Joint
Arranger.
16.5.2 Each of the Agent, the Security Agent and each Joint Arranger may:-
(a) retain for its own benefit (and without liability to
account) any fee or other sum receivable by it for its own
account; and
(b) accept deposits from, lend money to, provide any advisory,
trust or other services to or engage in any kind of banking
or other business with any party to this Agreement, or any
subsidiary or affiliate of any party (and, in each case, may
do so without liability to account).
16.6 Communications and Information
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16.6.1 All communications to any member of the ChiRex Group are to be made by
or through the Agent. Each Finance Party will notify the Agent of, and
provide the Agent with a copy of, any communication between such
Finance Party and the relevant member of the ChiRex Group or any other
of the Finance Parties on any matter concerning the Facilities or the
Finance Documents.
16.6.2 The Agent will not be obliged to transmit to the other Finance Parties
any information in any way relating to any of the parties to the
Finance Documents which the Agent may have acquired otherwise than in
connection with the Facilities or the Finance Documents.
16.6.3 In acting as Agent for the Lenders, the Agent's banking division shall
be treated as a separate entity from any other of its divisions (or
similar unit of the Agent in any subsequent re-organisation),
subsidiaries or affiliates (the "Other Divisions") and, in the event
that the Agent should act for any member of the ChiRex Group in a
corporate finance or other advisory capacity ("Advisory Capacity"),
any information given by any of them to one of the Other Divisions is
to be treated as confidential and will not be available to the Finance
Parties without the consent of the person for whom the Agent is acting
in an Advisory Capacity, provided that:-
(a) the consent of that person shall not be required in relation
to any information which the Agent in its discretion
determines relates to an Event of Default or a Potential
Event of Default or in respect of which the Lenders have
given a confidentiality undertaking in a form satisfactory
to the Agent and the Borrower or that person; and
(b) if representatives or employees of the Agent receive
information in relation to an Event of Default or a
Potential Event of Default while acting in an Advisory
Capacity they will not be obliged to disclose such
information to representatives or employees of the Agent in
their capacity as agent bank, security agent or joint
arranger hereunder or to any of the Lenders if to do so
would breach any rule or regulation or fiduciary duty
imposed upon such persons.
16.7 Non-Reliance on Agent, Security Agent or Joint Arrangers
Each Lender confirms in favour of the Agent, Security Agent and Joint
Arrangers that it is (and will at all
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times continue to be) solely responsible for making its own
independent investigation and appraisal of the business, operations,
financial condition, creditworthiness, status and affairs of the
ChiRex Group and has not relied, and will not at any time rely on the
Agent or the Security Agent or the Joint Arrangers:-
16.7.1 to provide it with any information relating to the business,
operations, financial condition, creditworthiness, status and affairs
of the ChiRex Group, whether coming into its possession before or
after the making of any Advance, except as otherwise specifically
provided herein; or
16.7.2 to check or enquire into the adequacy, accuracy or completeness of any
information provided by the ChiRex Group under or in connection with
this Agreement or any other Finance Document (whether or not such
information has been or is at any time circulated to it by the Agent),
including, without limitation, that contained in the Information
Memorandum; or
16.7.3 to assess or keep under review the business, operations, financial
condition, creditworthiness, status or affairs of the ChiRex Group.
16.8 Indemnity to Agent, Security Agent and Joint Arrangers
16.8.1 Each Lender shall on demand fully indemnify the Agent, the Security
Agent and the Joint Arrangers and their respective officers, employees
and affiliates (collectively the "Agency Indemnitees") in the
proportion which its Relevant Amount bears to the Relevant Amounts of
all the Lenders at the relevant time against any cost, expense or
liability sustained or incurred by any of the Agency Indemnitees in
their respective capacities as Agent, Security Agent and Joint
Arrangers as a consequence of or in connection with complying with any
instructions from the Lenders or the Majority Lenders (as the case may
be) or otherwise sustained or incurred in their respective capacities
as Agent, Security Agent and Joint Arrangers in connection with the
Finance Documents or its respective duties, obligations and
responsibilities under the Finance Documents, except to the extent
that they are sustained or incurred principally as a result of the
negligence or wilful misconduct of such Agency Indemnitee as finally
determined by a court having jurisdiction (the determination not being
subject to appeal).
16.8.2 The provisions of Clause 16.8.1 are without prejudice to the
obligations of the Borrower to indemnify the Agency
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Indemnitees pursuant to Clause 27 and the Borrower will reimburse each
Lender on demand for any payment made by that Lender pursuant to
Clause 16.8.1.
16.9 Termination and Resignation of Agency: Appointment of Successor
16.9.1 The Agent may resign its appointment at any time by giving not less
than 30 days' notice to the Lenders and the Borrower.
16.9.2 A successor Agent shall be selected:-
(a) by the retiring Agent (following consultation with the
Borrower) nominating one of its subsidiaries or affiliates
as successor Agent in its notice of resignation; or
(b) if the retiring Agent makes no such nomination, by the
Majority Lenders nominating one of the Lenders as successor
Agent (following consultation with the Borrower); or
(c) if the Majority Lenders have failed to nominate a successor
Agent within 30 days of the date of the retiring Agent's
notice of resignation, by the retiring Agent nominating a
financial institution of good standing to be the successor
Agent.
16.9.3 The resignation of the retiring Agent and the appointment of the
successor Agent will only become effective upon the successor Agent
accepting its appointment as Agent in writing at which time:-
(a) the successor Agent will become bound by all the obligations
of the Agent and become entitled to all the rights,
privileges, powers, authorities and discretions of the Agent
hereunder;
(b) the agency of the retiring Agent will terminate but without
prejudice to any liabilities which the retiring Agent may
have incurred or the indemnities to which the retiring Agent
may be entitled prior to the termination of its agency; and
(c) the retiring Agent will be discharged from any further
liability or obligation under or in connection with the
Finance Documents (save that the outgoing Agent shall pay to
the successor a pro rata proportion of the agency fee paid
under Clause 11.1.1(c)).
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16.9.4 The retiring Agent will co-operate with the successor Agent in order
to ensure that its functions are transferred to the successor Agent
without disruption to the service provided to the ChiRex Group and the
Lenders and will promptly make available to the successor Agent such
documents and records as have been maintained in connection with this
Agreement in order that the successor Agent is able to discharge its
functions.
16.9.5 The provisions of this Agreement will continue in effect for the
benefit of any retiring Agent in respect of any actions taken or
omitted to be taken by it or any event occurring before the
termination of its agency.
16.10 Resignation of Security Agent
The Security Agent may resign its appointment in exactly the same
manner as set out in relation to the Agent in Clause 16.9 above except
that the Security Agent's resignation shall not take effect until all
necessary deeds and documents have been entered into in order to
substitute its successor as holder of the security comprised in the
Security Documents.
16.11 Payments to Finance Parties
16.11.1 The Agent will account to the other Finance Parties for their due
proportion of all sums received by the Agent for such Finance Parties,
whether by way of repayment of principal or payment of interest,
commitment commission, fees or otherwise.
16.11.2 Save as otherwise specifically agreed between the Agent and the other
Finance Parties in the case of any arrangement fee, the Agent may
retain for its own use and benefit, and shall not be liable to account
to the other Finance Parties for all or any part of, any sums received
by it by way of agency fee or any other fee or by way of reimbursement
of expenses incurred by it.
16.12 Change of Office of Agent, Security Agent or Joint Arrangers
The Agent, the Security Agent and either Joint Arranger may at any
time and from time to time in their respective sole discretion by
written notice to the Borrower and each of the other Finance Parties
designate a different office from which their respective duties as
Agent,
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Security Agent or Joint Arranger will thereafter be performed.
17. EVIDENCE OF INDEBTEDNESS
In any proceedings relating to this Agreement, a statement as to any
amount due to any Finance Party under this Agreement which is
certified as being correct by an officer of the Agent and a statement
as to any amount due to a Finance Party under this Agreement which is
certified as being correct by an officer of that Finance Party shall
in the absence of manifest error, unless otherwise provided in this
Agreement, be prima facie evidence of the amount so due and that such
amount is in fact due and payable.
18. APPLICATION OF MONEYS
If any sum paid or recovered in respect of the liabilities of the
Obligors under any of the Finance Documents is less than the amount
then due, the Agent shall apply that sum in the following order:-
(a) first to any unpaid fees and reimbursement of unpaid
expenses of the Agent and the Security Agent;
(b) secondly to any unpaid fees and reimbursement of unpaid
expenses of the Lenders;
(c) thirdly to unpaid interest;
(d) fourthly to unpaid principal; and
(e) fifthly to other amounts due under the Finance Documents;
in each case pro rata to the outstanding amounts owing to the Finance
Parties under the Finance Documents taking into account any
applications under this Clause 18.
19. PRO RATA PAYMENTS
19.1 If any amount owing by any Obligor under any Finance Document to a
Lender (the "Recovering Lender") is discharged by payment, set-off,
use of cash collateral or any other manner other than through the
Agent in accordance with Clause 9.1.1 (such amount being referred to
in this Clause 19.1 as the "Recovery"), then:-
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(a) within two Business Days of receipt of the Recovery, the
Recovering Lender shall pay to the Agent an amount equal (or
equivalent) to such Recovery;
(b) the Agent shall treat such payment as if it were part of the
payment to be made by the Borrower to the Lenders rateably
in accordance with their respective Commitments; and
(c) save for any receipt by the Recovering Lender as a result of
the operation of paragraph (b) above, as between the members
of the ChiRex Group and the Recovering Lender the Recovery
shall be treated and deemed as not having been paid.
19.2 Each Lender shall notify the Agent promptly of any such Recovery by
that Lender other than by payment through the Agent. If any Recovery
subsequently has to be wholly or partly refunded by the Recovering
Lender which paid an amount equal thereto to the Agent under Clause
19.1(a), each Lender to which any part of that amount was distributed
shall, on request from the Recovering Lender, repay to the Recovering
Lender such Lender's pro rata share of the amount which has to be
refunded by the Recovering Lender.
19.3 Each Lender shall on request supply to the Agent such information as
the Agent may from time to time request for the purpose of this Clause
19. Notwithstanding the foregoing provisions of this Clause 19, no
Recovering Lender shall be obliged to share with another person any
Recovery which it receives pursuant to legal proceedings taken by it
to recover any sums owing to it under the Finance Documents where such
other person has a legal right to, but does not, either join in such
proceedings or commence and diligently pursue separate proceedings to
enforce its rights in the same or another court (unless the
proceedings instituted by the Recovering Lender are instituted by it
without prior notice having been given to such other person through
the Agent).
19.4 Failure by any Recovering Lender to comply with any of the provisions
of this Clause 19 shall not release any other Recovering Lender from
any of its obligations or liabilities under this Clause 19.
19.5 Each party to this Agreement agrees to take all steps required of it
pursuant to Clause 19.1, and to use its reasonable endeavours to
obtain any consents or authorisations which may at any relevant time
be
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required, for any payment by it pursuant to this Clause 19.
19.6 The provisions of this Clause 19 shall not, and shall not be construed
so as to, constitute a charge by a Lender over all or any part of a
sum received or recovered by it in the circumstances mentioned in this
Clause 19.
20. SET-OFF
Any Finance Party may without notice to any members of the ChiRex
Group, following the giving of notice by the Agent pursuant to Clause
14.3, combine, consolidate or merge all or any of the accounts of any
member of the ChiRex Group with, and liabilities to, that Finance
Party and may set off or otherwise retain or transfer any sum standing
to the credit of any such accounts in or towards the satisfaction of
any of the liabilities of such member of the ChiRex Group to that
Finance Party under the Finance Documents (whether or not such
liabilities are then due for payment), and may do so notwithstanding
that the balances on such accounts and the liabilities may not be
expressed in the same currency, and each Finance Party is hereby
authorised to effect any necessary conversions at the Agent's spot
rate of exchange then prevailing.
21. NOTICES
21.1 Save as specifically otherwise provided in this Agreement or agreed
with the Agent any notice, demand or other communication to be served
under this Agreement may be served upon any party hereto only by
posting by first class (or air mail) post or by delivering the same in
person or by courier or sending the same by facsimile transmission to
the party to be served at its address or facsimile number given in the
relevant Finance Document or at such other address or number as it may
from time to time notify in writing to the other parties hereto. As
regards the initial parties to this Agreement, their respective
addresses and numbers are set out under their respective names in
Schedule 1 or in the signature pages of this Agreement.
21.2 A notice or demand served by first class (or air mail) post shall be
deemed duly served upon receipt, a notice or demand served in person
or by courier shall be deemed duly served when delivered and a notice
or demand sent by facsimile transmission shall be deemed to have been
served at the time of transmission unless served on a
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non-Business Day or after 5.00 p.m. at the place in which the
recipient is located in which case it will be deemed served at 9.00
a.m. at the place in which the recipient is located on the following
Business Day.
21.3 In proving service of any notice or demand it will be sufficient to
prove, in the case of a letter, that such letter was properly stamped
or franked first class (or with appropriate air mail postage),
addressed and placed in the post, in the case of a notice or demand
served by courier that it was delivered by the courier company and, in
the case of a facsimile transmission, that such facsimile was duly
transmitted to a current facsimile number of the addressee at the
address referred to above and the transmission report indicates that
it was correctly sent and received.
22. NO IMPLIED WAIVERS
22.1 No failure or delay by the Agent, the Security Agent or the Joint
Arrangers or any other Finance Party in exercising any right, power or
privilege under any of the Finance Documents shall operate as a waiver
thereof nor shall any single or partial exercise of any right, power
or privilege preclude any further exercise thereof or the exercise of
any other right, power or privilege.
22.2 The rights and remedies provided in the Finance Documents are
cumulative and not exclusive of any rights and remedies provided by
law and all such rights and remedies howsoever arising will, save
where expressly provided to the contrary therein, be available to the
Finance Parties severally and any Finance Party shall be entitled to
commence proceedings in connection therewith in its own name.
23. INVALIDITY OF ANY PROVISION
If any of the provisions of this Agreement become invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
24. CONFIDENTIALITY
24.1 Each of the Finance Parties agrees with the Borrower to hold
confidential all information which they acquire
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under or in connection with the Finance Documents save to the extent
they are required by law or regulation, or are requested by any
regulator with jurisdiction over, or over any business of, the
relevant Finance Party or any of its subsidiaries or affiliates, or
where necessary in connection with litigation, to disclose the same or
the same comes into the public domain (otherwise than as a result of a
breach of this Clause 24).
24.2 Nothing in Clause 24.1 shall restrict any Finance Party from
disclosing information in accordance with Clause 25.4 (Disclosure of
Information).
24.3 Except to the extent required by law, all public announcements in
relation to this Agreement shall be made through the Agent. The Agent
will not make any written public announcement in relation to this
Agreement without first having the text of the announcement approved
by ChiRex Inc. (such approval not to be unreasonably withheld or
delayed).
25. CHANGES TO PARTIES
25.1 No Assignment by the ChiRex Group
None of the members of the ChiRex Group may assign or transfer all or
part of their rights or obligations under this Agreement or any of the
other Finance Documents.
25.2 Lenders
25.2.1 A Lender (a "Transferor") may at any time, following consultation with
the Borrower, assign or otherwise transfer (together, "Transfer") all
or any part of its rights or obligations under the Finance Documents
to any person which is then a Qualifying Lender (a "Transferee"),
subject to the other terms of this Clause 25, provided that unless the
Borrower and the Agent otherwise agree, any Transfer by a Transferor
(i) in relation to all Facilities other than a WCP Facility, must, to
the extent it has rights and/or obligations in respect of one or more
Facility, be in relation to all Facilities and any Transfer shall be
for the same proportion of the Transferor's rights and obligations in
each Facility, and (ii) in relation to a WCP Facility must be in
respect of that entire WCP Facility and that Transferor's entire WCP
Commitment thereunder.
25.2.2 A Transfer of obligations of the Lenders shall only be effective if
made in accordance with Clause 25.3
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(Substitution Provisions) or if the Transferee has, prior to the
Transfer taking effect, confirmed in writing to the Agent (acting on
behalf of all the other Lenders) and to the Borrower that it
undertakes to be bound by the terms of each of the Finance Documents
binding upon it as a Lender in form and substance satisfactory to the
Agent. On any such Transfer being made, the Transferor shall be
relieved of its obligations to the extent that they are transferred to
the Transferee.
25.3 Substitution Provisions
25.3.1 A Transferor may transfer, upon notice being given by the Agent to the
other parties hereto as provided below, all or any of its rights and
obligations under the Finance Documents to a Transferee by means of a
novation effected by the Agent executing a Transfer Certificate which
has been duly completed and signed on behalf of both the Transferee
and the Transferor. For the avoidance of doubt, the Agent shall not be
obliged to execute a Transfer Certificate unless the identity of the
Transferee named therein is satisfactory to the Agent, and nothing in
this Clause 25.3.1 shall be deemed to authorise the Agent to sign a
Transfer Certificate which has not been signed on behalf of a
Transferee and Transferor.
25.3.2 On the later of (i) the date specified in the Transfer Certificate as
being the date on or as from which the substitution under this Clause
25.3 is to take effect and (ii) the date on which the Agent executes
the Transfer Certificate, the following shall occur:-
(a) to the extent that in the Transfer Certificate the
Transferor seeks to transfer its rights and obligations
under the Finance Documents, the members of the ChiRex Group
and the Transferor shall each be released from further
obligations to each other under the Finance Documents (and
the appropriate reduction shall be made to the Commitment of
the Transferor) and their respective rights against each
other shall be cancelled (such rights and obligations beings
referred to in this Clause 25.3.2 as "Discharged Rights and
Obligations");
(b) the members of the ChiRex Group and the Transferee shall
each assume obligations towards each other and acquire
rights against each other which differ from the Discharged
Rights and Obligations only in so far as the members of the
ChiRex Group and such Transferee have assumed and acquired
the same in
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place of the members of the ChiRex Group and the Transferor;
(c) the Agent, the Security Agent, the Joint Arrangers, the
Transferee and the other Lenders shall acquire the same
rights and assume the same obligations between themselves as
they would have acquired and assumed had the Transferee been
an original party hereto as a Lender with the rights and
obligations acquired or assumed by it as a result of the
novation; and
(d) on the date upon which such transfer takes effect, the
Transferee shall pay to the Agent for its own account a
transfer fee of GBP 500, except that no fee shall be payable
in respect of a transfer which occurs not later than six
months after the Initial Drawdown Date.
25.3.3 Nothing in this Agreement or any other Finance Document shall oblige a
Transferor or cause a Transferor to be liable:-
(a) to accept a re-assignment or re-transfer from a Transferee
of any of the rights or obligations assigned, transferred or
novated pursuant to this Clause 25; or
(b) to support any losses incurred by a Transferee by reason of
the non-performance by any member of the ChiRex Group of
their obligations under any of the Finance Documents.
25.3.4 Each of the parties hereto (other than the Transferor and the
Transferee) authorises the Agent to execute on its behalf any Transfer
Certificate which has been duly completed in accordance with this
Clause 25.3 and executed on behalf of each of the Transferor and the
Transferee.
25.3.5 The Agent shall promptly notify the other parties hereto of the
receipt and execution by it on their behalf of any Transfer
Certificate and shall supply a copy of the Transfer Certificate to the
Borrower.
25.4 Disclosure of Information
Each Lender may disclose to a proposed assignee or transferee or any
sub-participant, risk participant or other participant proposing to
enter or having entered into a contract with such Lender regarding the
Finance Documents any information in the possession of such
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Lender relating to the ChiRex Group (and any member of it) as it sees
fit subject to such person agreeing in writing to be bound by the
confidentiality provisions set out in Clause 24.
25.5 The Agent and the Reference Lenders
25.5.1 Changes to the Agent and the office through which the Agent acts may
be effected pursuant to Clauses 16.9 and 16.12 respectively.
25.5.2 If a Reference Lender ceases to be one of the Lenders or, if a
Reference Lender is not itself a Lender but an affiliate of a Lender
and such Lender ceases to be one of the Lenders, then:-
(a) the Lender or, as the case may be, affiliate of the Lender
concerned shall cease to be a Reference Lender; and
(b) the Agent shall in consultation with the Borrower appoint
another Lender or an affiliate of another Lender to be a
Reference Lender.
26. LENDER DECISIONS
26.1 Subject to Clauses 26.2 and 26.3, any provision of this Agreement or
any of the other Finance Documents may be amended, waived, varied or
modified with the agreement of the Majority Lenders.
26.2 The following matters shall require the unanimous agreement of all of
the Lenders:-
26.2.1 any increase in any Commitment of any Lender;
26.2.2 any extension of any scheduled date for payment of any sum due, owing
or payable to any Lender;
26.2.3 any reduction in the amount, or change in currency, of any payment of
principal, interest, fees or commissions or other amounts payable
hereunder by any party;
26.2.4 any amendment, variation or modification of this Clause 26, Clause 19
(Pro Rata Payments), Clause 20 (Set-off), Clause 25.1 (Assignment by
the Borrower, Etc.) or to the definition of Majority Lenders;
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26.2.5 any matter which, by the terms of this Agreement as at the date
hereof, is stated to be subject to the consent of all Lenders;
26.3 Any amendment, waiver, variation or modification of Clause 16 (The
Agent and the other Finance Parties) may not be effected without the
agreement of the Agent (giving effect to Clause 16.1.4).
26.4 Subject to any provision of the Finance Documents entitling or
obliging the Agent or the Security Agent to grant releases or permit
any disposal to take place, any question which relates to the release
or material variation of any security held by the Security Agent shall
require the agreement of the Majority Lenders, failing which no such
release or variation may be effected.
27. INDEMNITIES
27.1 General Indemnity and Breakage Costs
The Borrower will fully indemnify each of the Finance Parties, and
their respective officers, employees, subsidiaries and affiliates
(collectively the "Finance Indemnitees") from and against any expense,
loss, damage or liability (including without limitation any arising
from any actual or alleged breach of any Environmental Laws) which any
of the Finance Indemnitees may incur as a consequence of or in
connection with (i) the provision and/or Syndication of the Facilities
or the use of proceeds thereof (including the distribution of the
Information Memorandum), or (ii) the execution, delivery or
performance of any of the Finance Documents, other than, in the case
of a Finance Indemnitee, any such expense, loss, damage or liability
which is finally determined by a court having jurisdiction (the
determination not being subject to appeal) to have resulted
principally from the negligence or wilful misconduct of such Finance
Indemnitee or which is otherwise reimbursed by a member of the ChiRex
Group under the Finance Documents. The Borrower will further fully
indemnify each of the Finance Parties from and against any expense,
loss, damage or liability which they may incur as a consequence of any
failure to pay any sum due pursuant to the Finance Documents when due,
or any failure to borrow when obliged to do so in accordance with this
Agreement (including without limitation failure to satisfy any
conditions precedent to such borrowing) or repaying an Advance
otherwise than on the last day of an
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Interest Period or otherwise in connection with a breach by ChiRex
Inc. or any member of the ChiRex Group of this Agreement or of any
Finance Document, except where it is otherwise reimbursed by a member
of the ChiRex Group under the Finance Documents. Without prejudice to
its generality, the indemnity in the preceding sentence extends to any
interest, fees or other sums whatsoever paid or payable on account of
any funds borrowed in order to carry any amount which a member of the
ChiRex Group fails to pay in breach of this Agreement and to any loss
(including loss of profit), premium, penalty or expenses which may be
incurred in liquidating or employing deposits from third parties
acquired to make, maintain or fund outstanding Advances or any other
amount due or to become due under this Agreement.
27.2 Currency Indemnity
Without prejudice to Clause 27.1, if:-
27.2.1 any amount payable by any Obligor under or in connection with any
Finance Document is received by any Finance Party in a currency (the
"Payment Currency") other than that agreed in the relevant Finance
Document (the "Agreed Currency"), whether as a result of any
judgement, decree or order or the enforcement thereof, the liquidation
of that member or otherwise; and
27.2.2 the amount produced by converting the Payment Currency so received
into the Agreed Currency is less than the relevant amount of the
Agreed Currency;
then the relevant Obligor shall, as an independent obligation,
indemnify the relevant Finance Party for the deficiency and any loss
sustained as a result. Such conversion shall be made at such
prevailing rate of exchange, on such date and in such market as is
determined by the relevant Finance Party as being most appropriate for
the conversion. The relevant Obligor shall in addition pay the costs
of the conversion as an independent and joint and several obligation.
27.3 Waiver
Each Obligor waives any right it may have in any jurisdiction to pay
any amount under any Finance Document in a currency other than that in
which it is expressed to be payable in the relevant Finance Document.
28. CERTIFICATES CONCLUSIVE
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A certificate, determination, notification or opinion of a Finance
Party, the Majority Lenders or any Lender provided for in any Finance
Document shall be conclusive save in the case of manifest error.
29. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of England.
30. JURISDICTION
30.1 Submission
For the benefit of each Finance Party, each Obligor agrees that the
courts of England shall have jurisdiction to settle any disputes in
connection with any Finance Documents and accordingly submits to the
jurisdiction of the English courts.
30.2 Service of Process
Without prejudice to any other mode of service, each Obligor:-
(a) irrevocably appoints the Borrower as its agent for service
of process relating to any proceedings before the English
courts in connection with any Finance Document;
(b) agrees that failure by a process agent to notify it of the
process will not invalidate the proceedings concerned; and
(c) (without prejudice to other forms of service permitted by
law) consents to the service of process relating to any such
proceedings by prepaid posting of a copy of the process to
its address for notices to it from time to time under Clause
21 (Notices).
(d) The Borrower irrevocably accepts its appointment as agent
for service of process under the Finance Documents as set
forth in sub-clause (a).
30.3 Forum Convenience and Enforcement Abroad
Each Obligor:-
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(a) waives objection to the English courts on grounds of
inconvenient forum or otherwise as regards proceedings in
connection with a Finance Document; and
(b) agrees that a judgement, decree or order of an English court
or other court in connection with a Finance Document is
(subject to rights of appeal before the English courts or
such other courts) conclusive and binding on it and may be
enforced against it in the courts of any other jurisdiction.
30.4 Non-Exclusivity
Nothing in this Clause 30 limits the right of a Finance Party to bring
proceedings against any Obligor in connection with any Finance
Document:-
(a) in any other court of competent jurisdiction; or
(b) concurrently in more than one jurisdiction.
31. COUNTERPARTS
This Agreement may be executed in any number of counterparts and all
of such counterparts taken together shall be deemed to constitute one
and the same instrument.
[Remainder of page intentionally left blank]
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CHIREX (HOLDINGS) LIMITED, in its capacity as the Borrower
By: /s/ Michael A. Griffith
-----------------------------------
Print Name: Michael A. Griffith
---------------------------
Title: Chief Financial Officer
--------------------------------
CHIREX INC., in its capacity as a Guarantor
By: /s/ Michael A. Griffith
-----------------------------------
Print Name: Michael A. Griffith
---------------------------
Title: Chief Financial Officer
--------------------------------
CHIREX (DUDLEY) LIMITED, in its capacity as a Guarantor
By: /s/ Michael A. Griffith
-----------------------------------
Print Name: Michael A. Griffith
---------------------------
Title: Chief Financial Officer
--------------------------------
CHIREX (ANNAN) LIMITED, in its capacity as a Guarantor
By: /s/ Michael A. Griffith
-----------------------------------
Print Name: Michael A. Griffith
---------------------------
Title: Chief Financial Officer
--------------------------------
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BANKERS TRUST INTERNATIONAL PLC, in its capacity as a Joint
Arranger
By: /s/ Elene A. Harkavy
-----------------------------------
Print Name: Elene A. Harkavy
---------------------------
Title: Vice President
--------------------------------
MIDLAND BANK PLC, in its capacity as a Joint Arranger and a
Lender
By: /s/ Keith Taylor
-----------------------------------
Print Name: Keith Taylor
---------------------------
Title: Senior Business Banking Manager
--------------------------------
BANKERS TRUST COMPANY, in its capacities as a Lender, Agent and
Security Agent
By: /s/ Elene A. Harkavy
-----------------------------------
Print Name: Elene A. Harkavy
---------------------------
Title: Vice President
--------------------------------
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SCHEDULE 1
Commitments and Lending Offices
-------------------------------
Names and Addresses of
Initial Lenders Commitment
------------------------------------------------------------------
GBP
BANKERS TRUST COMPANY 31,000,000
1 Appold Street
London EC2A 1HE
Attn. Barry Jefferies
Tel: +44 171 982 2500
Fax: +44 171 982 2271
MIDLAND BANK PLC 31,000,000
50 Grey Street
Newcastle upon Tyne
NE99 1SA
Attn. Keith Taylor
Tel: +44 191 220 6127
Fax: +44 191 220 6197
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SCHEDULE 2
Repayment Schedule
------------------
Scheduled Repayment
Repayment Date of Term Loans
---------------------- --------------------------------------------
GBP
31st December, 1998 4,444,444.44
30th June, 1999 4,444,444.44
31st December, 1999 4,444,444.44
30th June, 2000 4,444,444.44
31st December, 2000 4,444,444.44
30th June, 2001 4,444,444.44
31st December, 2001 4,444,444.44
30th June, 2002 4,444,444.44
31st December, 2002 4,444,444.48
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SCHEDULE 3
Form of Drawdown Request
To: [Insert details of Agent's administrations department]
Attn:
[ ]
GBP 62,000,000 facilities agreement dated [
], 1997
We refer to the above agreement between, inter alia, ourselves, the Arrangers,
the Lenders described therein and yourselves as Agent (as heretofore amended,
the "Facilities Agreement", which expression includes any amendments or
supplements thereto or restatements thereof). Terms defined in the Facilities
Agreement have the same meaning in this notice.
Pursuant to Clause 5.1 of the Facilities Agreement, we hereby give you notice of
the following proposed drawing of an Advance under the [Tranche A Term Facility]
[Tranche B Multicurrency Revolving Facility]:
(a) Proposed Drawdown Date (a Business Day):
(b) Currency [GBP only if Tranche A Facility; USD, DEM, FF LIT, CHF, Yen
and GBP if Tranche B Facility]:
(c) Amount:
(d) Duration of first Interest Period:
(e) Payment instructions:
(f) Purpose:
We confirm that no Event of Default or Potential Event of Default has occurred
and is continuing unremedied or unwaived or will occur as a result of making
this Advance and that each of the representations and warranties required to be
made in accordance with Clause 12 of the Facilities Agreement is true and
accurate on the date hereof.
Dated: _____________
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[BORROWER]
By:
---------------------------
Its:
--------------------------
Notes
(1) No more than fifteen separate Tranche B Revolving Advances may be
outstanding at any one time.
(2) Currencies other than USD, DEM, FF, LIT, CHF, Yen and GBP may not be
requested unless the Agent has confirmed in writing to the Borrower
that such other currency is freely available to all the Lenders and is
one in which dealings regularly occur in the London interbank market.
(3) These notes are included for convenience only and are to be ignored in
construing the Facilities Agreement.
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SCHEDULE 4
Structure of ChiRex Group
[GRAPHIC OMITTED]
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SCHEDULE 5
Calculation of the Mandatory Liquid Asset Costs
for any Sterling Advances
(a) The Mandatory Liquid Asset Costs for an Advance if denominated in GBP
for each Interest Period for that Advance is calculated in accordance
with the following formula:
BY + L(Y-X) + S(Y-Z)
-------------------
% PER ANNUM
100 - (B+S)
where on the day of the application of the formula:
B is the percentage of the Agent's eligible liabilities which
the Bank of England then requires the Agent to hold on a
non-interest-bearing deposit account in accordance with its
cash ratio requirements;
Y is the rate at which GBP deposits are offered by the Agent
to leading banks in the London interbank market at or about
11.00 a.m. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a result
of the requirements of the Bank of England) the Agent
maintains as secured money with members of the London
Discount Market Association or in certain marketable or
callable securities approved by the Bank of England, which
percentage shall (in the absence of evidence that any other
figure is appropriate) be conclusively presumed to be 5 per
cent.;
X is the rate at which secured GBP deposits may be placed by
the Agent with members of the London Discount Market
Association at or about 11.00 a.m. on that day for
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the relevant period or, if greater, the rate at which GBP
bills of exchange (of a tenor equal to the duration of the
relevant period) eligible for rediscounting at the Bank of
England can be discounted in the London Discount Market at
or about 11.00 a.m. on that day;
S is the percentage for the Agent's eligible liabilities which
the Bank of England requires the Agent to place as a special
deposit; and
Z is the interest rate per annum allowed by the Bank of
England on special deposits.
(b) For the purposes of this Schedule:
(i) "eligible liabilities" and "special deposits" have the
meanings given to them at the time of application of the
formula by the Bank of England; and
(ii) "relevant period" in relation to each Interest Period means:
(A) if it is 3 months or less, that Interest Period or
(B) if it is more than 3 months, 3 months.
(c) In the application of the formula, B, Y, L, X, S and Z are included in
the formula as figures and not as percentages, e.g. if B=0.5% and Y =
15%, BY would be calculated as 0.5 x 15.
(d) The formula is applied on the first day of each relevant period. Each
amount is rounded up to the nearest one- sixteenth of one per cent.
(e) If the Agent determines that a change in circumstances has rendered,
or will render, the formula inappropriate, the Agent (after
consultation with the Lenders) shall notify the Borrower of the manner
in which the Mandatory Liquid Asset Costs for such
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Advances will subsequently be calculated. The manner of calculation so
notified by the Agent shall, in the absence of manifest error, be
binding on all the Obligors.
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SCHEDULE 6
Form of Deed of Accession
THIS DEED is made this [ ] day of __________, by [ ], as Guarantor, IN FAVOUR
OF:
(1) CHIREX (HOLDINGS) LIMITED (the "Borrower")
(2) BANKERS TRUST INTERNATIONAL PLC AND MIDLAND BANK PLC as Joint
Arrangers;
(3) BANKERS TRUST COMPANY, as Agent (the "Agent");
(4) BANKERS TRUST COMPANY, as Security Agent;
(5) THE LENDERS PARTY TO THE FACILITIES AGREEMENT DESCRIBED BELOW; and
(6) THE OBLIGORS PARTY TO THE FACILITIES AGREEMENT DESCRIBED BELOW.
WHEREAS:
(A) This Deed is supplemental to a facilities agreement (the "Facilities
Agreement", which expression includes any amendments or supplements
thereto or restatements thereof) dated __ October, 1997 made among the
parties referred to in paragraphs (1) to (6) above.
(B) [insert name of party] wishes to accede to the Facilities Agreement as
a Guarantor.
NOW THIS DEED WITNESSETH AS FOLLOWS:
(1) Words and expressions defined in the Facilities Agreement shall have
the same meanings when used herein.
(2) [insert name of Guarantor] hereby:
(a) agrees to be bound by all the terms and conditions of the
Facilities Agreement insofar as they relate to a Guarantor
(including without limitation Clause 15 (Guarantee) and
Clause 30 (Jurisdiction) of the
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Facilities Agreement) as if it were a party to the
Facilities Agreement in such capacity; and
(b) represents and warrants to the Agent and the other Finance
Parties in the terms of the Facilities Agreement
(3) The undersigned Guarantor agrees to be bound by all the terms and
conditions of the Facilities Agreement insofar as they relate to an
Obligor as if it were a party to the Facilities Agreement in such
capacity.
(4) [The foregoing notwithstanding, the obligations of the undersigned
Guarantors under the foregoing shall be limited as follows:
[limitations to guarantees, if not already in Facilities Agreement, to
the extent required by applicable law]
(5) The undersigned Guarantor confirms that its address for the purposes
of Clause 21 (Notices) of the Facilities Agreement is set out under
its name as follows:
[Name]
[Address]
Attention: [
]
Facsimile: [
]
(6) Each of the undersigned hereby agrees that [insert name of Guarantor]
shall, from the date of the later of (i) the execution by Agent of
this Deed and (ii) the execution by Borrower of this Deed, accede to
the Facilities Agreement as if it were a Guarantor and an Obligor
named therein and a party thereto.
(7) This Deed may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and
the same instrument.
(8) This Deed shall be governed by and construed in accordance with the
laws of England.
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IN WITNESS WHEREOF the undersigned have caused this Deed to be duly executed and
delivered the day and year first above written.
EXECUTED and DELIVERED )
as a deed )
for and on behalf of )
[ ] )
by )
in the presence of )
EXECUTED and DELIVERED )
as a deed )
for and on behalf of )
[ ] )
as Borrower )
by [ ] )
in the presence of: )
SIGNED by
for and on behalf of
BANKERS TRUST COMPANY,
as Agent
.............................................
Date:
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SCHEDULE 7
Form of Transfer Certificate
[Note: the Transferor and Transferee should ensure that all regulatory
requirements (in particular compliance with the Financial Services Act of 1986
and any regulations made thereunder) are satisfied in connection with their
entry into of their Transfer Certificate.]
TRANSFER CERTIFICATE
To: [name of Agent]
for and on behalf of the Borrower, the other Obligors, the
Lenders and the other Finance Parties (each as defined in the
Facility Agreement referred to below).
From: [insert name of Transferor] (the "Transferor")
[insert name of Transferee] (the "Transferee")
This transfer certificate (this "Certificate") relates to a Facilities Agreement
dated [ ] 1997, and made among Bankers Trust Company, as Agent and the Lenders
and Arrangers, described therein (the "Facilities Agreement", which expression
includes any amendments or supplements thereto or restatements thereof). Terms
defined in the Facilities Agreement shall, unless otherwise defined in this
Certificate, have the same meanings when used in this Certificate.
(1) The Transferor by its execution of this Certificate:-
(a) confirms that the details which appear in column II of the
First Schedule of this Certificate accurately state,
respectively, the amount of the Transferor's Commitment and
the Transferor's participation in Advances as at the date of
this Certificate;
(b) requests the Transferee to accept and procure, in accordance
with Clause [24.3] of the Facilities Agreement, transfer to
the Transferee of the portion of the Transferor's
participation in the Facility specified in column III of the
First Schedule of this Certificate by counter-signing
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this Certificate and delivering it to the Agent at its
address for the giving of notices under the Facility
Agreement so as to take effect on the date specified in the
Second Schedule of this Certificate (the "Transfer Date").
(2) The Transferee by its execution of this Certificate requests the
Obligors, the Lenders, the Agent and the other Finance Parties to
accept this Certificate as being delivered under and for the purposes
of Clause [25.3] of the Facilities Agreement so as to take effect in
accordance with the terms of that Clause on the Transfer Date.
(3) The Transferee undertakes to pay to the Agent for the Agent's own
account a transfer fee of [USD ________] as provided in Clause
[25.3.2(d)] of the Facility Agreement.
(4) The Transferee hereby:
(a) confirms that it has received from the Transferor a copy of
the Facilities Agreement together with such other documents
and information as it has requested in connection with this
transaction;
(b) confirms that it has not relied, and will not hereafter
rely, on the Transferor or any other Finance Party to the
Facilities Agreement or any of the other Finance Documents
to check or enquire on its behalf into the legality,
validity, effectiveness, adequacy, accuracy or completeness
of any such documents or information;
(c) agrees that it has not relied, and will not hereafter rely,
on the Transferor or any other Finance Party to the
Facilities Agreement or any of the other Finance Documents
to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or
nature of the Borrower, the other Obligors or any other
party to the Facilities Agreement or the other Finance
Documents; and
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(d) represents and warrants to the Transferor and all other
parties to the Facilities Agreement that it (i) has power to
become a party to the Facilities Agreement as a "Lender" on
the terms herein and therein set out, and (ii) has taken all
necessary steps to authorise execution and delivery of this
Certificate.
(5) Neither the Transferor nor any other Finance Party to the Facilities
Agreement makes any representation or warranty nor assumes any
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Finance Documents and assumes no
responsibility for the financial condition of the Borrower, the other
Obligors or any other party to the Finance Documents or for the
performance and observance by the Borrower or any other Obligor of any
of its obligations under the Finance Documents and any and all such
representations and warranties and responsibility, whether express or
implied by law or otherwise, are hereby excluded.
(6) On execution of this Certificate by the Agent for itself and on behalf
of the Obligors, the Lenders (other than the Transferor) and the other
Finance Parties, each of them accepts the Transferee on and with
effect from the Transfer Date as a party in substitution for the
Transferor with respect to all those rights and obligations which by
the terms of the Facilities Agreement, the other Finance Documents and
this Certificate are assumed by the Transferor.
(7) By its execution hereof, the Transferee confirms the appointment of
[insert name of Agent] to act as its agent under and in connection
with the Finance Documents and irrevocably authorises the Agent and
for and on its behalf to exercise such rights, powers and discretions
as are delegated to it by the terms of the Finance Documents, together
with all such rights, powers and discretions as are incidental
thereto, and to give a good discharge for any moneys payable under the
Finance Documents.
(8) This Certificate and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with English law.
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<PAGE> 149
AS WITNESS the hands of authorised signatories for and on behalf of the
Transferor, the Transferee and the Agent on the respective dates appearing
below.
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Executed Copy
<PAGE> 150
First Schedule to the Transfer Certificate
I II III
Facility Details Transferor Position Position to be
to Transferee Prior to Transfer Transferred
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
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Second Schedule to the Transfer Certificate
Particulars relating to the Transferee
Transfer Date :
Lending Office :
Contact Name :
Account for Payments
:
Telephone :
Facsimile :
[Transferor] [Transferee]
By:..............................
By:..............................
Date: [ ] Date: [ ]
[Agent]
By:..............................
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SCHEDULE 8
Continuing Indebtedness
NONE
Executed Copy
<PAGE> 1
This PLEDGE AGREEMENT (this "Agreement") is dated as of __________
1997 and entered into by and between ChiRex Inc., (the "Pledgor"), and Bankers
Trust Company, as security agent for and representative of (in such capacity
herein called "Secured Party") the financial institutions ("Lenders") party to
the Facilities Agreement (as defined below).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the shares
of stock (the "Pledged Shares") described in Part A of Schedule I annexed hereto
and issued by the corporations named therein and (ii) the indebtedness (the
"Pledged Debt") described in Part B of said Schedule I and issued by the
obligors named therein.
B. Pledgor, Secured Party, Bankers Trust International PLC and
Midland Bank plc as joint arrangers, Bankers Trust Company as Agent, the Lenders
party thereto and certain other parties have entered into a Facilities Agreement
dated as of __________, 1997 (as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Facilities Agreement",
capitalised terms used herein and not otherwise defined shall have the meanings
set forth in the Facilities Agreement) with, among others, the Borrower and the
Pledgor pursuant to which Lenders have made certain commitments, subject to the
terms and conditions set forth in the Facilities Agreement, to extend certain
credit facilities to the Borrower.
C. The Pledgor has guarantied the prompt payment and
performance when due of all obligations of all Obligors under the Facilities
Agreement.
D. It is a condition precedent to the initial extensions of
credit by Lenders under the Facilities Agreement that the Pledgor shall have
granted the security interests and undertaken the obligations contemplated by
this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make the Advances and other extensions of credit under the
Facilities Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. Pledge of Security. Pledgor hereby pledges and assigns to
Secured Party, and hereby grants to
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Secured Party a security interest in, all of Pledgor's right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Pledgor now has or hereafter acquires an interest and wherever the same
may be located (the "Pledged Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares and any interest of Pledgor in the entries on the books of any financial
intermediary pertaining to the Pledged Shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distrib uted in respect of or in exchange for
any or all of the Pledged Shares;
(b) all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire, stock
of any issuer of the Pledged Shares from time to time acquired by Pledgor in any
manner (which shares shall be deemed to be part of the Pledged Shares), the
certificates or other instruments representing such additional shares,
securities, warrants, options or other rights and any interest of Pledgor in the
entries on the books of any financial intermediary pertaining to such additional
shares, and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such additional
shares, securities, warrants, options or other rights;
(c) all shares of, and all securities convertible into and warrants,
options and other rights to purchase or otherwise acquire, stock of any person
that, after the date of this Agreement, becomes, as a result of any occurrence,
a direct subsidiary of Pledgor (which shares shall be deemed to be part of the
Pledged Shares), the certificates or other instruments representing such shares,
securities, warrants, options or other rights and any interest of Pledgor in the
entries on the books of any financial intermediary pertaining to such shares,
and all dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares, securities, warrants,
options or other rights;
(d) the Pledged Debt and the instruments evidenc ing the Pledged
Debt, and all interest, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
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(e) all additional indebtedness from time to time owed to Pledgor by
any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such indebted ness;
(f) all indebtedness from time to time owed to Pledgor by any person
that, after the date of this Agreement, becomes, as a result of any occurrence,
a direct or indirect Subsidiary of Pledgor, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness; and
(g) to the extent not covered by Clauses (a) - (f) above, all
proceeds of any and all of the foregoing Pledged Collateral. For purposes of
this Agreement, the term "proceeds" includes whatever is receivable or received
when Pledged Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes,
without limitation, proceeds of any indemnity or guaranty payable to Pledgor or
Secured Party from time to time with respect to any of the Pledged Collateral.
SECTION 2. Security for Obligations. This Agreement secures, and the
Pledged Collateral is collateral security for, the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and
liabilities of every nature of Pledgor now or hereafter existing under or
arising out of or in connection with the Facilities Agreement and any other
Finance Document (and all extensions or renewals thereof), whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Pledgor or any other Obligor,
would accrue on such obligations), fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being the
"Underlying Debt"), and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement (all such obligations of Pledgor,
together with the Underlying Debt, being the "Secured Obligations").
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SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by Pledgor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably
satisfactory to Secured Party. During the occurrence and continuation of an
Event of Default, Secured Party shall have the right, at any time in its
discretion, to transfer to or to register in the name of Secured Party or any of
its nominees any or all of the Pledged Collateral, subject only to the revocable
rights specified in Section 7(a). Secured Party shall notify the Pledgor in
writing as soon as practicable following the exercise of such right. In
addition, Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties. The representations and
warranties in respect of the Pledgor set forth in Clauses 12.2 - 12.6 in the
Facilities Ageement are incorporated herein by reference. In addition, Pledgor
represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of the
Pledged Shares have been duly authorized and validly issued and are fully paid
and non-assessable. The instrument(s) evidencing the Pledged Debt has been duly
authorized authenticated or issued, and delivered and is the legal valid and
binding obligation of the issuer thereof, and the issuer thereof is not in
default thereunder.
(b) Description of Pledged Shares. The Pledged Shares constitute 100
percent of the issued and outstanding shares of stock of each of the direct
subsidiaries of Pledgor, and there are no outstanding warrants, options or other
rights to purchase, or other agreements outstanding with respect to, or property
that is now or hereafter convertible into, or that requires the issuance or sale
of, any Pledged Shares. The Pledged Debt constitutes all of the issued and
outstanding intercompany indebtedness owing to Pledgor evidenced by a promissory
note issued by any direct or indirect subsidiary of Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the legal, record
and beneficial owner of the Pledged Collateral free and clear of any Security
Interest except for the security interest created by this Agreement.
(d) Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement and the grant by Pledgor of the security
interest granted hereby, (ii) the execution, delivery or performance of this
Agreement by Pledgor, or (iii) the exercise by Secured Party of the voting or
other rights, or the remedies in respect of the Pledged Collateral, provided for
in this Agreement (except as may be required in connection with a disposition of
Pledged Collateral by laws
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affecting the offering and sale of securities generally), the failure to so
obtain or undertake would be likely to result in a Material Adverse Effect.
(e) Perfection. The pledge of the Pledged Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest in
the Pledged Collateral, securing the payment of the Secured Obligations.
(f) Margin Regulations. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System.
(g) Other Information. All material written information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Pledged Collateral is accurate and complete in all respects.
SECTION 5. Transfers and Other Security Interests; Additional
Pledged Collateral Covenants; etc. Pledgor shall:
(a) not, (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral, (ii) create or suffer to exist any Security Interest upon or with
respect to any of the Pledged Collateral, except for the Security Interest under
this Agreement, or (iii) permit any issuer of Pledged Shares to merge or
consolidate unless all the outstanding capital stock of the surviving or
resulting corporation is, upon such merger or consolidation, pledged hereunder
and no cash, securities or other property is distributed in respect of the
outstanding shares of any other constituent corporation;
(b) (i) cause each issuer of Pledged Shares not to issue any stock
or other securities in addition to or in substitution for the Pledged Shares
issued by such issuer, except to Pledgor, (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
shares of stock or other securities of each issuer of Pledged Shares, and (iii)
pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all shares of stock of any person that, after the date of this
Agreement, becomes, as a result of any occurrence, a direct subsidiary of
Pledgor;
(c) (i) pledge hereunder, immediately upon their issuance, any and
all instruments or other evidences of additional indebtedness from time to time
owed to Pledgor by any obligor on the Pledged Debt, and (ii) pledge hereunder,
immediately upon their issuance, any and all instruments or other evidences of
indebtedness from time to time owed to Pledgor by any person that after the date
of this Agreement becomes, as a result of any occurrence, a direct or indirect
subsidiary of Pledgor;
(d) promptly notify Secured Party of any event of which Pledgor
becomes aware causing material loss or depreciation in the value of the Pledged
Collateral;
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(e) promptly deliver to Secured Party all written notices received
by it with respect to the Pledged Collateral; and
(f) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged Collateral,
except to the extent the validity thereof is being contested in good faith;
provided that Pledgor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed sale
under any judgement, writ or warrant of attachment entered or filed against
Pledgor or any of the Pledged Collateral as a result of the failure to make such
payment.
SECTION 6. Further Assurances; Pledge Amendments.
(a) Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be reasonably necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any and all Pledged Collateral. Without limiting the generality
of the foregoing, Pledgor will: (i) if applicable, execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may reasonably request, in order to perfect and preserve the Security Interests
granted or purported to be granted hereby and (ii) at Secured Party's request,
appear in and defend any action or proceeding that may affect Pledgor's title to
or Secured Party's Security Interest in all or any part of the Pledged
Collateral.
(b) Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder
as provided in Section 5(b) and/or Section 5(c), promptly (and in any event
within twenty Business Days) deliver to Secured Party a Pledge Amendment, duly
executed by Pledgor, in substantially the form of Schedule II annexed hereto (a
"Pledge Amendment"), in respect of the additional Pledged Shares and/or Pledged
Debt to be pledged pursuant to this Agreement. Pledgor hereby authorizes Secured
Party to attach each Pledge Amendment to this Agreement and agrees that all
Pledged Shares and/or Pledged Debt listed on any Pledge Amendment delivered to
Secured Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of Pledgor to execute a Pledge Amendment with respect
to any additional Pledged Shares and/or Pledged Debt pledged pursuant to this
Agreement shall not impair the Security Interest of Secured Party therein or
otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
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SECTION 7. Voting Rights and Dividends in respect of Pledged Shares;
Etc.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or the Facilities Agreement; provided, however, that Pledgor
shall not exercise or refrain from exercising any such right if Secured
Party shall have notified Pledgor that, in Secured Party's judgment, such
action would have a material adverse effect on the value of the Pledged
Collateral or any part thereof; and provided, further, that Pledgor shall
give Secured Party at least five Business Days' prior written notice of
the manner in which it intends to exercise, or the reasons for refraining
from exercising, any such right. It is understood, however, that neither
(A) the voting by Pledgor of any Pledged Shares for, or Pledgor's consent
to, the election of directors at a regularly scheduled annual or other
meeting of stockholders or with respect to incidental matters at any such
meeting, nor (B) Pledgor's consent to or approval of any action otherwise
permitted under this Agreement and the Facilities Agreement shall be
deemed inconsistent with the terms of this Agreement or the Facilities
Agreement within the meaning of this Section 7(a)(i), and no notice of any
such voting or consent need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Security Interest under this Agreement, any
and all dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
A. dividends and interest paid or payable other than in
cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral,
B. dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
C. cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for any Pledged
Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by Pledgor, be received in trust
for the benefit of Secured Party, be segregated from the other property or
funds of Pledgor and
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be forthwith delivered to Secured Party as Pledged Collateral in the same
form as so received (with all necessary endorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies, dividend
payment orders and other instruments as Pledgor may from time to time
reasonably request for the purpose of enabling Pledgor to exercise the
voting and other consensual rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends, principal or
interest payments which it is authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an Event of
Default:
(i) upon written notice from Secured Party to Pledgor, all
rights of Pledgor to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 7(a)(i)
shall cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to exercise such voting and
other consensual rights;
(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends and
interest payments; and
(iii) all dividends, principal and interest payments which are
received by Pledgor contrary to the provisions of paragraph (ii) of this
Section 7(b) shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of Pledgor and shall forthwith be
paid over to Secured Party as Pledged Collateral in the same form as so
received (with any necessary indorsements).
(c) In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to Section
7(b)(i) and to receive all dividends and other distributions which it may be
entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (i) Pledgor
shall promptly execute and deliver (or cause to be executed and delivered) to
Secured Party all such proxies, dividend payment orders and other instruments as
Secured Party may from time to time reasonably request and (ii) without limiting
the effect of the immediately preceding clause (i), Pledgor hereby grants to
Secured Party during the occurrence and continuation of an Event of Default an
irrevocable proxy to vote the Pledged Shares and to exercise all other rights,
powers, privileges and remedies to which a holder of the Pledged Shares would be
entitled (including, without limitation, giving or withholding written consents
of shareholders, calling special meetings of shareholders and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action
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(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence and continuation of an Event of
Default and which proxy shall only terminate upon the payment in full of the
Secured Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including without
limitation:
(a) if applicable, to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Pledge
Collateral without the signature of Pledgor;
(b) to ask for, demand, collect, sue for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;
(c) to receive, endorse and collect any drafts or other instruments
made payable to Pledgor representing any dividend, principal or interest payment
or other distribution in respect of the Pledged Collateral or any part thereof
and to give full discharge for the same;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Pledged Collateral; and
(e) upon the occurrence and during the continuation of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Pledged Collateral as fully and completely as
though Secured Party were the absolute owner thereof for all purposes, and to
do, at Secured Party's option and Pledgor's expense, at any time or from time to
time, all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Pledged Collateral and Secured Party's Security
Interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Pledgor might do.
SECTION 9. Secured Party May Perform. If any Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party incurred
in connection therewith shall be payable by Pledgor under Section 13(b).
SECTION 10. Standard of Care. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of
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reasonable care in the custody of any Pledged Collateral in its possession and
the accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Pledged Collateral, it being understood that Secured
Party shall have no responsibility for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, (b) taking any necessary steps (other
than steps taken in accordance with the standard of care set forth above to
maintain possession of the Pledged Collateral) to preserve rights against any
parties with respect to any Pledged Collateral, (c) taking any necessary steps
to collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value. Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property consisting of negotiable securities.
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and be continuing
and, in any case other than the failure to pay amounts due upon final maturity,
the Agent has served notice on the Borrower pursuant to Clause 14.3
(Cancellation and Repayment) under the Facilities Agreement, Secured Party may
exercise in respect of the Pledged Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "Code") (whether or not the Code
applies to the affected Pledged Collateral), and Secured Party may also in its
sole discretion, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Pledged Collateral. Secured Party or any Lender may be the
purchaser of any or all of the Pledged Collateral at any such sale and Secured
Party, as agent for and representative of Lenders (but not any Lender or Lenders
in its or their respective individual capacities unless Majority Lenders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any Pledged
Collateral payable by Secured Party at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of Pledgor, and Pledgor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to Pledgor of the time and
place of any public sale or the time after which
10
<PAGE> 11
any private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Pledged Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Pledged
Collateral are insufficient to pay all the Secured Obligations, Pledgor shall be
liable for the deficiency and the fees of any attorneys employed by Secured
Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the Pledged Collateral
conducted without prior registration or qualification of such Pledged Collateral
under the Securities Act and/or such state securities laws, to limit purchasers
to those who will agree, among other things, to acquire the Pledged Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances, Pledgor agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner and that
Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any or
all of the Pledged Collateral, upon written request, Pledgor shall and shall
cause each issuer of any Pledged Debt to be sold hereunder from time to time to
furnish to Secured Party all such information as Secured Party may request in
order to determine the number of instruments included in the Pledged Collateral
which may be sold by Secured Party in exempt transactions under the Securities
Act and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
SECTION 12. Application of Proceeds. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Pledged Collateral may, in the discretion of Secured Party, be held by
Secured Party as Pledged Collateral for, and/or then, or at any time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
11
<PAGE> 12
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder
for the account of Pledgor, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 13;
SECOND: To the payment of all other Secured Obligations in the order
described in Clause 18 of the Facilities Agreement; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 13. Indemnity and Expenses.
(a) Pledgor agrees to indemnify Secured Party and each Lender from
and against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the amount of any
and all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Secured Party incurs in connection
with (i) the administration of this Agreement, (ii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
Secured Party hereunder, or (iv) the failure by Pledgor to perform or observe
any of the provisions hereof.
SECTION 14. Continuing Security Interest; Transfer of Loans. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect until the payment in full of all
Secured Obligations and the cancellation or termination of the Commitment, (b)
be binding upon Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its succes sors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of Clause
25 of the Facilities Agreement, any Lender may assign or otherwise transfer any
Loans held by it to any other person, and such other person shall thereupon
become vested with all the benefits in respect thereof granted to Lenders herein
or otherwise. Upon the payment in full of all Secured Obligations and the
cancellation or termination of the Commitment and the security interest granted
12
<PAGE> 13
hereby shall terminate and all rights to the Pledged Collateral shall revert to
Pledgor. Upon any such termination Secured Party will, at Pledgor's expense,
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence such termination and Pledgor shall be entitled to the
return, upon its request and at its expense, against receipt and without
recourse to Secured Party, of such of the Pledged Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof.
SECTION 15. Amendments; Etc. No amendment, modification, termination
or waiver of any provision of this Agreement, and no consent to any departure by
Pledgor therefrom, shall in any event be effective unless the same shall be in
writing and signed by Secured Party and, in the case of any such amendment or
modification, by Pledgor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
SECTION 16. Notices. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages hereof or, as to either
party, such other address as shall be designated by such party in a written
notice delivered to the other party hereto.
SECTION 17. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 18. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 19. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 20. Governing Law; Terms. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
13
<PAGE> 14
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Facilities Agreement, terms used in Articles 8 and 9 of
the Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 21. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Pledgor hereby
agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to Pledgor at
its address provided in Section 16, such service being hereby acknowledged by
Pledgor to be sufficient for personal jurisdiction in any action against Pledgor
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Secured Party to bring
proceedings against Pledgor in the courts of any other jurisdiction.
SECTION 22. Waiver of Jury Trial. PLEDGOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Pledgor and Secured Party each
acknowledge that this waiver is a material inducement for Pledgor and Secured
Party to enter into a business relationship, that Pledgor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Pledgor and
Secured Party further warrant and represent that each has reviewed this waiver
with its legal counsel, and that each knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
14
<PAGE> 15
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this
Agree ment may be filed as a written consent to a trial by the court.
SECTION 23. Counterparts. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
15
<PAGE> 16
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective duly authorized
representatives as of the date first written above.
CHIREX INC., as Pledgor
By: /s/ Michael A. Griffith
----------------------------------
Print Name: Michael A. Griffith
Title: Chief Financial Officer
BANKERS TRUST COMPANY, as
Secured Party
By: /s/ Elene A. Harkavy
----------------------------------
Print Name: Elene A. Harkavy
Title: Vice President
Acknowledged and Agreed to by
CHIREX (HOLDINGS) LIMITED
By: /s/ Michael A. Griffith
---------------------------
Print Name: Michael A. Griffith
Title: Chief Financial Officer
Borrower, by countersigning this Agreement and as a contractual undertaking
acknowledges the terms of this Agreement and irrevocably accepts to pay any
amounts owed by it in respect of the Secured Obligations to the person(s)
entitled to receive such payments in accordance with the terms of this
Agreement, without right of set-off counterclaim or otherwise, notwithstanding
that the validity, scope, methods of enforcement or any other matters relating
to the Pledged Collateral or to this Agreement may in certain jurisdictions, in
particular vis-a-vis third parties, be subject to mandatory provisions of local
laws other than those of the State of New York.
S-1
<PAGE> 17
SCHEDULE I
Attached to and forming a part of the Pledge Agreement dated as of
_____________, 1997 between ChiRex Inc., as Pledgor, and Bankers Trust Company,
as Secured Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
- ------------ ----- ----------- ----- ------
ChiRex (Holdings) Limited
ChiRex America, Inc.
Part B
Debt Issuer Amount of Indebtedness
- ----------- ----------------------
ChiRex (Holdings) Limited GBP 25,192,000
SI - 1
<PAGE> 18
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated _________________, is delivered pursuant to Section
6(b) of the Pledge Agreement referred to below. The undersigned hereby agrees
that this Pledge Amendment may be attached to the Pledge Agreement dated
_________ 1997, between the undersigned and Bankers Trust Company, as Secured
Party (the "Pledge Agreement," capitalized terms defined therein being used
herein as therein defined), and that the [Pledged Shares] [Pledged Debt] listed
on this Pledge Amendment shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Pledged Collateral and shall secure
all Secured Obligations.
ChiRex Inc., as Pledgor
By: _________________________________
Print Name:
Title:
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
- ------------ ----- ----------- ----- ------
Debt Issuer Amount of Indebtedness
- ----------- ----------------------
SII - 1
<PAGE> 1
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
September 23, 1997
GLAXO OPERATIONS UK LIMITED (1)
and
CHIREX (ANNAN) LIMITED (2)
and
CHIREX (HOLDINGS) LIMITED (3)
----------------
SUPPLY AGREEMENT
----------------
<PAGE> 2
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
TABLE OF CONTENTS
CLAUSE PAGE NO
1. DEFINITIONS AND INTERPRETATION................................... 1
2. SUPPLY OF PRODUCTS............................................... 4
3. PRICE/PAYMENT.................................................... 7
4. SUPPLY OF RAW MATERIALS.......................................... 9
5. FORECASTS; ORDERS; DELIVERY..................................... 10
6. TITLE/RISK OF LOSS.............................................. 10
7. PREMISES/PLANT.................................................. 10
8. COVENANTS AS TO QUALITY AND QUANTITY............................ 11
9. SAMPLES; INSPECTIONS............................................ 12
10. TECHNICAL ASSISTANCE........................................... 13
11. HAZARDS........................................................ 13
12. INTELLECTUAL PROPERTY; IMPROVEMENTS............................ 13
13. CONFIDENTIALITY................................................ 15
14. CONSENTS....................................................... 16
15. ASSIGNMENT..................................................... 16
16. DURATION....................................................... 17
17. DENIAL OF RIGHTS............................................... 20
<PAGE> 3
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
18. PRODUCT COMPLAINTS; ADVERSE EVENT REPORTS...................... 20
19. INDEMNITIES.................................................... 20
20. INSURANCE...................................................... 21
21. FORCE MAJEURE.................................................. 22
22. NOTICES........................................................ 22
23. DISPUTE RESOLUTION............................................. 23
24. PUBLICITY...................................................... 23
25. CONTRACT ADMINISTRATION........................................ 23
26. LIABILITY...................................................... 24
27. WAIVER......................................................... 24
28. CONSENT TO JURISDICTION........................................ 24
29. ENTIRETY....................................................... 24
30. LAW............................................................ 24
31. SUCCESSORS AND ASSIGNS......................................... 24
32. PARTIES........................................................ 24
SCHEDULE 1 - THE PRODUCTS.......................................... 26
SCHEDULE 2 - KEY MATERIALS......................................... 27
SCHEDULE 3 - NOTIONAL CAPACITY REQUIREMENTS........................ 28
SCHEDULE 4 - FORMULA FOR PROFIT SHARE.............................. 30
<PAGE> 4
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SUPPLY AGREEMENT
THIS AGREEMENT is dated September 23, 1997
BETWEEN:
(1) GLAXO OPERATIONS UK LIMITED registered number 711851 whose registered
office is at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex
UB6 0NN ('Glaxo Operations')
(2) CHIREX (ANNAN) LIMITED registered number 3417229 whose registered office
is at Dudley, Cramlington, Northumberland NE23 7QG ("Chirex Annan")
(3) CHIREX (HOLDINGS) LIMITED whose registered office is at Dudley,
Cramlington, Northumberland NE23 7QG ("Chirex Holdings")
WHEREAS:
The Parties have agreed that Chirex Annan or another company within the Chirex
Group would manufacture and supply and Glaxo Operations would purchase certain
active ingredients and intermediates for use in pharmaceutical products under
the terms of this agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1. In this agreement the following expressions shall have the following
meanings unless the context otherwise requires:
"Added Value" means, in relation to a Product the price payable (or
which would have been payable for the Product by Glaxo Operations
had Glaxo Operations ordered it) under the terms of this agreement
less (a) Chirex Annan's cost of raw materials employed (or which
would have been employed had Glaxo Operations ordered the Product)
in Manufacturing that Product (b) any variable costs directly
incurred in respect of the Manufacture of that Product], and the
packaging costs and the cost of disposal of effluent in respect of
the Manufacture of that Product;
"Approved Supplier" means a person designated in the Manufacturing
Instructions which has been approved by Glaxo Operations in writing
for the supply of Raw Materials;
1
<PAGE> 5
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"Chirex Group" means Chirex (Holdings) Limited , any parent company
of Chirex Holdings Limited and any company which, in relation to
Chirex (Holdings) Limited and/or any parent company of Chirex
(Holdings) Limited is a subsidiary undertaking from time to time;
"Chirex Holdings" means Chirex (Holdings) Limited, whose registered
office is at Dudley, Cramlington, Northumberland NE23 7QG;
"Contract Year" means, in the case of the first Contract Year, the
period from the date of this agreement to 31 December 1997 and in
the case of subsequent Contract Years the respective periods
commencing on 1 January and ending on 31 December of the same year;
"Current Good Manufacturing Practices" or "CGMP's" means all
applicable standards relating to manufacturing practices for fine
chemicals, intermediates, or bulk pharmaceutical products (i)
promulgated by any Governmental Body having jurisdiction over the
manufacture of the Products in the form of laws or regulations, (ii)
promulgated by any Governmental Body having jurisdiction over the
Manufacture of the Products, in the form of guidance documents
(including but not limited to advisory opinions, compliance policy
guides and guidelines) which guidance documents have been
implemented within the pharmaceutical manufacturing industry for
such products in each case as in effect at the date of this
agreement and as amended, promulgated or accepted from time to time
during the term of this agreement;
"Facility" means the manufacturing facility of Chirex (Annan)
Limited located at Annan and/or the manufacturing facility of Chirex
(Dudley) Limited located at Dudley;
"Firm Commitments" means in respect of any Product the quantities of
such Product so identified in Schedule 1;
2
<PAGE> 6
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"Force Majeure" means any decree, restraint, order, rule, regulation
or other interference by any government or local authority, war,
strike, lockout, trade dispute, riot, epidemic disease, act of God,
inevitable accident, breakdown of plant or machinery, fire, flood or
any other circumstances whatsoever whether similar to the above
causes or not over which Glaxo Operations or Chirex Annan, as the
case may be, shall have no control;
"Governmental Body" means any government department or agency,
regulatory authority or any entity with legal authority to exercise
executive, legislative, judicial, regulatory or administrative
functions;
"GW Group" means Glaxo Operations, any parent company of Glaxo
Operations and any company which, in relation to Glaxo Operations
and/or any parent company of Glaxo Operations, is a subsidiary
undertaking from time to time;
"Intended Quantities" means the quantities of **** and **** so
identified in Schedule 1;
"Key Materials" means those Raw Materials to be used in the
Manufacture of the Products set out in Column 1 of Schedule 2;
"Manufacture" means all operations in the production and/or
packaging of Products and 'Manufactured' shall be construed
accordingly;
"Manufacturing Instructions" means full descriptions and
instructions concerning Raw Materials usage, operating conditions,
process and quality standards to be employed by Chirex Annan in the
Manufacture of Products, including Product specifications, packaging
instructions and quality control procedures, details of which have
been communicated by Glaxo Operations and agreed by Chirex Annan;
****
3
<PAGE> 7
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
"Other Materials" means all Raw Materials other than the Key
Materials;
"Parties" means the parties in this agreement;
"Products" means the compounds listed in Column 1 of Schedule 1;
"Quarter" means a period of three months beginning on 1 January, 1
April, 1 July, or 1 October respectively;
"Raw Materials" means all raw and packaging materials used in the
Manufacture of the Products; and
"Replacement Products" means the products identified as such in
Schedule 1 and such other products agreed by the Parties from time
to time.
1.2. The headings in this agreement are for ease of reference only and do
not form part of this agreement for the purposes of interpretation.
1.3 References to persons in this agreement shall mean any individual or
corporation, company, partnership, trust, incorporated or
unincorporated association, joint venture or other entity of any
kind.
2. SUPPLY OF PRODUCTS
2.1 Chirex Annan hereby agrees to Manufacture and sell to Glaxo
Operations in each Contract Year the volumes of Products set out in
Schedule 1 during the term of this agreement at the prices set forth
in Schedule 1, or as adjusted in accordance with the terms of this
agreement, and Glaxo Operations agrees to purchase such Products at
such prices. Schedule 1 sets out Firm Commitments and Intended
Quantities. It is acknowledged by the Parties that Glaxo Operations
is unable, at the date of this agreement, to confirm that it will
purchase the volumes of **** and **** designated as Intended
Quantities in Schedule 1, due to regulatory and market
uncertainties.
4
<PAGE> 8
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
2.2 While Glaxo Operations is committed to honouring its commitments and
obligations under clause 2.1, the Parties recognise and agree that
the purchase of the Intended Quantities of some volumes of **** in
2000 and thereafter and in all the volumes of **** may be inhibited
due to regulatory and market uncertainties in relation to these
Products or the products manufactured from the Products. In the
event that Glaxo Operations is unable, due to lack of regulatory
approval and/or marketing uncertainties to purchase the Intended
Quantities of **** in 2000 and thereafter or of **** at any time
then the Parties will in good faith negotiate and Glaxo Operations
shall use its best endeavours to purchase Replacement Products to
compensate Chirex Annan in full for any such shortfall. The
principle of such compensation shall be to make up volumes of
Intended Quantities with volumes of Replacement Products which will
result in equivalent Added Value to Chirex Annan and/or any other
company in the Chirex Group. The terms of purchase of such
Replacement Product shall be the same, mutatis mutandis, as under
this agreement.
2.3 The Parties recognise that it may be desirable, particularly at the
beginning or end of any Contract Year for a Product scheduled to be
Manufactured and/or purchased in one Contract Year to be
Manufactured and/or purchased in the following or immediately
preceding Contract Year. The Party proposing any such rescheduling
shall give as much advance notice of its proposals as is reasonably
practicable. Any such rescheduling shall be subject to the agreement
of the Parties.
2.4 In respect of the Product ****, the Firm Commitments shall include
the requirement of **** and its affiliates. If and to the extent
that quantities of such product are purchased by **** and its
affiliates direct from Chirex Annan and/or any other company in the
Chirex Group, such quantities shall be deemed to have been purchased
by Glaxo Operations for the purpose of fulfilling Glaxo Operations'
obligations under this clause 2.
2.5 If Glaxo Operations is unable for any reason (other than due to the
default of Chirex Annan) to purchase any Firm Commitments of any
Product Glaxo Operations shall in that event compensate Chirex Annan
in full in accordance with the terms of this
5
<PAGE> 9
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
clause but not further or otherwise. Notwithstanding this Chirex
Annan will use its reasonable endeavours to evaluate in good faith
the possibility of the Manufacture of other products including the
Replacement Products or increased volumes of Products for Glaxo
Operations to purchase on the same terms as this agreement.
If, in respect of any Contract Year, Glaxo Operations orders less
Product than the amount set out in Schedule 1 with reference to that
Contract Year as a Firm Commitment, Glaxo Operations shall, on or
before 14 January in the immediately following Contract Year, pay to
Chirex Annan a sum in pounds sterling equal to the Added Value which
would have been generated had Glaxo Operations submitted orders for
such quantity of the Product as represents the difference between
the amount of Product actually ordered by Glaxo Operations in
respect of the Contract Year in question and the Firm Commitment
amount which it undertook to order under the terms of clause 2.
2.6 Without prejudice to Chirex Annan's obligations under clause 2.1 and
5, Chirex Annan undertakes to have sufficient capacity available at
the Facilities to Manufacture not less than 10% in excess of orders
placed by Glaxo Operations under the terms of this agreement in
accordance with the following procedure:
2.6.1 Glaxo Operations shall advise its proposed Firm Commitment
volumes for the next Contract Year by 30 August of the
previous year;
2.6.2 Chirex Annan will by October of the previous year advise Glaxo
Operations of the production schedule for the following
Contract Year including (a) timing of available capacity to
make up to 10% in excess of the Firm Commitment and (b) any
opportunity to Manufacture in excess of 10% more than the Firm
Commitment;
2.6.3 Glaxo Operations will by November of the previous year advise
Chirex Annan of its wish to reserve available capacity for in
excess of 10% of the Firm Commitment in respect of the
following Contract Year. Chirex Annan
6
<PAGE> 10
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
shall advise Glaxo Operations whether it is able to reserve
any further capacity but shall be under no obligation to do
so. If such additional capacity is available the Parties will
then negotiate a reservation fee as it is recognised that
Chirex Annan will be holding an under utilised capacity for
Glaxo Operations. Schedule 3 sets out Chirex Annan's current
estimate of the capacity which it expects to be available at
the Facilities in respect of the Products in the periods set
out.
2.7 It is acknowledged that it is the intention of Glaxo Operations and
Chirex Annan to achieve volumes of Products (not Replacement
Products) in excess of the total number specified in Schedule 1.
2.8 In the event that Chirex Annan is unable to perform its obligations
under this agreement in respect of confirmed orders placed by Glaxo
Operations and accepted by Chirex Annan in accordance with the terms
of this agreement Firm Commitments quantities specified in Schedule
1 shall be reduced to the extent of such shortfall, without
prejudice to any other rights Glaxo Operations may have under this
agreement. For the avoidance of doubt there shall be no obligation
on Glaxo Operations to make up any such shortfall in later Contract
Years.
2.9 This clause shall apply if Glaxo Operations places a confirmed order
under this agreement and Glaxo Operations subsequently gives Chirex
Annan written notice that it is unable to comply with such order. In
this event any savings of fixed costs of Chirex Annan or other
member of the Chirex Group which Chirex Annan can make by using the
capacity which had been reserved for the manufacture of such Product
and which is actually used in the Manufacture, in the same period,
of product for a third party, shall be deducted from any payments
due by Glaxo Operations in respect of such order.
2.10 The **** of **** to be ordered in accordance with Schedule 1 in
respect of 1997 will be reduced, if this agreement is entered into
after 10 October 1997. The reduction will be calculated according to
a formula being the number of days from 1 October
7
<PAGE> 11
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
1997 to the date this agreement is entered into divided by 92 days
and multiplied by ****.
2.11 Glaxo Operations shall have met its obligations with regard to Firm
Commitments and Intended Quantities if it purchases products from
Chirex Annan irrespective of individual product volumes that will
result in equivalent Added Value to Chirex Annan in respect of any
Contract Year had the quantities specified in Schedule 1 been
ordered in that Contract Year.
3. PRICE/PAYMENT
3.1 3.1. Glaxo Operations shall pay Chirex Annan in accordance with the
sums set out in Schedule 1 for all Products purchased under this
agreement. Chirex Annan shall bear the cost of delivery within the
United Kingdom. Glaxo Operations shall in addition pay to Chirex
Annan any delivery costs and any taxes, or import or export duties
in respect of deliveries outside of the UK.
3.2 Glaxo Operations shall make payment to Chirex Annan not later than
30 days from the date of invoice. In respect of **** and **** and in
respect of such other products as the Parties may agree which are
Manufactured in a campaign Chirex Annan shall be entitled to invoice
monthly during the term of such campaign, the volume actually
available for despatch. Chirex Annan shall invoice Glaxo Operations
upon notifying Glaxo Operations in writing that the Product has been
Manufactured and is available for delivery to Glaxo Operations and
whether or not Glaxo Operations shall have ordered such delivery.
3.3 The prices payable for the Products shall be adjusted annually
before the end of the year immediately preceding the Contract Year
in respect of which such adjusted price is to apply. The adjusted
price shall reflect any material costs variations (upwards or
downwards) since the last adjustment (or, in the case of the first
adjustment since the date of this agreement) in Chirex Annan's unit
raw materials costs plus direct costs
8
<PAGE> 12
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
base (including labour and overheads) and usage yields and, in
respect of the Contract Years 2001, and 2002 shall take into account
the ****. The adjusted price in respect of the future supply of any
particular Product shall also reflect any cost savings achieved
through process improvements (achieved in respect of that Product
only) provided that any such adjustments shall only be made if the
Added Value derived from the total volume of Products ordered by
Glaxo Operations for that Contract Year exceeds the Added Value that
would have been derived if Glaxo Operations had ordered the
aggregate volumes of Firm Commitments and Intended Quantities set
out in Schedule 1.
3.4 During August of each Contract Year, or at any other time which the
Parties agree (save for the first Contract Year) in which case the
relevant month shall be November) in the year immediately preceding
the year in relation to which such adjusted price is to apply Chirex
Annan shall deliver to Glaxo Operations a statement showing in
relation to each Product the variations in costs detailing raw
material (usage and conversion)and direct costs.
Within 30 days following delivery of such statement the Parties
shall discuss the statement and endeavour to agree the amount of the
variations and the amount by which the price in respect of each
Product shall be adjusted. Glaxo Operations shall be entitled, as
part of its review, to require Chirex Annan to provide it with such
underlying financial information as is relevant in relation to the
statement produced by Chirex Annan.
If the Parties agree the amount of the variation within the 30 day
period (or such longer period as they may agree) they shall agree,
by exchange of correspondence, the price adjustment to the Product.
If the Parties fail to so agree, either of them may refer the matter
for determination in accordance with the terms of clause 23.
3.5 Any price adjustment agreed or determined under clause 3.4 shall
have effect as from 1 January in each year (or such other date as
the parties may agree), regardless of the date of agreement or
determination.
9
<PAGE> 13
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
3.6 The Parties acknowledge that it is their intention that orders in
excess of the volumes set out in Schedule 1 both in respect of Firm
Commitments and Intended Quantities identified in Schedule 1 (not
Replacement Products) are placed under this agreement. In this event
any Added Value to which Chirex Annan would be entitled in respect
of such additional orders shall be applied between the Parties in
accordance with the terms of Schedule 4. Any applications under this
clause shall be made at six monthly intervals, or at such other
times as the Parties may agree. The Parties shall review in November
of each year the procedure for such allocation which may, at the
request of Glaxo Operations, be made in respect of the prices to be
paid for ****. The Parties shall agree when to make such
applications.
3.7 All prices are stated exclusive of applicable taxes and VAT and,
where appropriate, taxes and VAT will be added to all invoices at
the rate applicable on the tax point date which shall be the date of
that invoice.
4. SUPPLY OF RAW MATERIALS
4.1. Subject to clauses 4.2 and 4.3 Chirex Annan shall procure at its own
expense all Raw Materials for the Manufacture of the Products.
4.2. Where the Manufacturing Instructions name one or more Approved
Suppliers for Other Materials, Chirex Annan shall obtain that Other
Material only from an Approved Supplier thereof.
4.3 Subject to clause 4.4 in respect of Key Materials Glaxo Operations
shall select each supplier for the Key Materials and shall have the
right to designate to Chirex Annan the quantity, consistent with
contracted volumes, of each Key Material to be purchased from such
designated supplier. The designated supplier may be Glaxo Operations
itself or a member of the GW Group. The initial designated suppliers
for Key Materials are listed in column 2 of Schedule 2.
10
<PAGE> 14
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
4.4 Chirex Annan shall not utilise any Key Materials purchased under
this agreement for any purposes other than the Manufacture of the
relevant Products in accordance with the terms of this agreement and
to the extent that Glaxo Operations is in breach of its obligations
to order the relevant Product under the terms of this agreement
Glaxo Operations shall reimburse Chirex for the Key Materials
therefor.
4.5 It is acknowledged that Chirex Annan shall be entitled to
Manufacture **** and utilise **** Manufactured by Chirex Annan in
the production of **** under the terms of this agreement. Chirex
Annan understands that Glaxo Operations or another member of the GW
Group may have contractual commitments with third parties to supply
**** to Glaxo Operations or other member of the GW Group and shall
discuss with Glaxo Operations ways in which the production of ****
by Chirex Annan may be reduced to a level consistent with such other
commitments. In this respect Chirex Annan agrees that it will not
without Glaxo Operations' prior written consent Manufacture more
than **** of **** in 1998 nor more than **** of **** in 1999.
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and
have been filed separately with the Commission.
5. FORECASTS; ORDERS; DELIVERY
5.1. For budget purposes Glaxo Operations and Chirex Annan shall meet
prior to 30 August of each year to discuss forecast volumes for the
next full Contract Year.
5.2 Glaxo Operations shall communicate to Chirex Annan by 30 August of
each year a draft order forecast for the next full Contract Year.
The budgeted volume shall be broken down month by month (in respect
of the first six months of any Contract Year) and by Quarter (in
respect of the second six months of any Contract Year) and in
respect of each delivery point. The Parties shall discuss at which
Facility it is appropriate to Manufacture the Product.
5.3 Glaxo Operations shall place with Chirex Annan a firm written
confirmatory order specifying the required quantity of Product, the
date upon which it expects such
11
<PAGE> 15
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Product to be available for delivery and the appropriate packaging
and labelling instructions. Such confirmatory order shall be placed
at least 30 days prior to the next following Quarter in respect of
all Product to be Manufactured in that Quarter.
5.4 Chirex Annan shall have 10 days from the date of receipt of the
Order to suggest modifications in respect of quantities or delivery
date, based on order forecasts previously communicated to Chirex
Annan.
5.5 Chirex Annan shall deliver or arrange for delivery of Products
Manufactured hereunder to Glaxo Operation's facility (or such other
UK site as Glaxo Operations shall indicate not less than 7 days
before the date of delivery) in accordance with clause 5.3.
6. TITLE/RISK OF LOSS
Chirex Annan shall be responsible for loss of Products until delivery to
Glaxo Operations. Title to Products and risk of loss shall be with Chirex
Annan until delivery to Glaxo Operations or (in the case of deliveries
outside the U.K.) to the delivery agent.
7. PREMISES/PLANT
7.1 Chirex Annan undertakes to Manufacture Products at either Facility.
Manufacture of any Product at either Facility shall be subject to
prior clearance (not to be unreasonably withheld or delayed) by
Glaxo Operations that the Facility, Manufacturing environment
therein, plant and services in which and by which the Portions of
this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and
have been filed separately with the Commission. Products will be
Manufactured meet Glaxo Operations' manufacturing and quality
assurance requirements.
7.2 Subject to the provisions of clause 7.1 Glaxo Operations shall not
be required to approve which Facility Manufactures particular
Products at any one time provided that Glaxo Operations is notified
in advance where particular Products are to be Manufactured. However
if Glaxo Operations reasonably believes that security of
12
<PAGE> 16
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
supply of particular Products is or could be prejudiced by the
quantities of Products being Manufactured at one or other of the
Facilities it shall be entitled to notify Chirex Annan of such
belief. Glaxo Operations shall be entitled, if it is required to do
so by any regulations, to require Chirex Annan to move production
between the Facilities.
8. COVENANTS AS TO QUALITY AND QUANTITY
8.1 Chirex Annan undertakes that the Manufacture of the Products
hereunder shall be carried out in accordance with the Manufacturing
Instructions and that the Products delivered to Glaxo Operations
shall be in compliance with the relevant specifications set out in
the Manufacturing Instructions and (if applicable) approved
reference samples of such Products. Chirex Annan shall not vary the
method of Manufacture of any Product without the prior written
consent of Glaxo Operations. Chirex Annan shall carry out the
Manufacture of the Products in accordance with CGMP.
8.2 Glaxo Operations shall notify any non-compliance with specifications
and/or approved references samples within 30 days of receipt of
Product. Glaxo Operations undertakes not to process the Product
unless and until such Product (or, where appropriate, samples
thereof) have been subject to Glaxo Operations' quality control
tests and approved as meeting the Manufacturing Instructions. Chirex
Annan shall have no liability under the provisions of clause 8.1 if
and to the extent that Glaxo Operations fails to carry out such test
and such tests would have shown that Chirex Annan was not in
compliance with its obligations under this agreement including the
obligation to Manufacture the Products in accordance with the
Manufacturing Instructions. Glaxo Operations shall notify Chirex
Annan of any apparent or chemical defect in the Product of which it
becomes aware whether as a result of its testing requirements for
pharmaceutical ingredients or otherwise within 30 days of receipt of
the Product by Glaxo Operations. If Glaxo Operations has given
notice of any defect in the Product in accordance with this clause
it shall immediately send a sample of such Product to Chirex Annan
for cross-checking.
13
<PAGE> 17
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
8.3 In the event that any batch of any Product Manufactured by Chirex
Annan and delivered to Glaxo Operations shall not comply with the
relevant specification set out in the Manufacturing Instructions
and/or approved reference samples of such Product Chirex Annan shall
make no charge hereunder in respect of that batch provided that
Chirex Annan shall have the right at its option to re-work or
re-process the batch at its own expense in accordance with a
procedure validated by Glaxo Operations if satisfactory recovery or
utilisation of the Product shall thereby be technically feasible.
Chirex Annan shall have the right to have the original non-complying
Product returned to such site as it shall nominate or destroyed.
Chirex Annan shall reimburse Glaxo Operations for all reasonable
expenses incurred by Glaxo Operations in returning the defective
batch to Chirex Annan. Any payment(s) made by Glaxo Operations
pursuant to clause 3 for such Products shall not prejudice Glaxo
Operations' rights under this clause.
8.4 If Glaxo Operations and Chirex Annan do not agree on whether Chirex
has Manufactured any Product in accordance with clause 8 samples of
the Product in question will be submitted for testing to an
independent testing laboratory acceptable to both Parties. The
determination of such independent laboratory will be binding on both
Parties. The cost of the testing by the independent laboratory shall
be borne by the Party whose results differ from those of the
independent laboratory as to whether the Product in question has not
been Manufactured in accordance with this clause 8.
8.5 Glaxo Operations assumes liability for and shall indemnify Chirex
Annan against any loss, liability or expense which Chirex Annan
suffers or incurs to the extent that such loss or liability results
from the Manufacturing Instructions, specifications or other
requirements of Glaxo Operations under this agreement. Provided that
this indemnity shall not extend to physical damage suffered by
Chirex Annan or personal injury to or death of its employees.
9. SAMPLES; INSPECTIONS
9.1. At the request of Glaxo Operations, Chirex Annan shall submit to
Glaxo Operations
14
<PAGE> 18
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
samples of such production batches of Products as Glaxo Operations
shall reasonably request from time to time.
9.2. Glaxo Operations shall have the right at Glaxo Operations' cost
during normal business hours by prior appointment to have an
appropriately qualified observer reasonably approved by Chirex Annan
enter either Facility for the purpose of inspecting the Manufacture
of Products, the storage of Raw Materials and Products in the course
of Manufacture and, insofar as is necessary to determine if the
Product is being Manufactured in accordance with Chirex Annan's
obligations under this agreement, all records and reports relating
to the Manufacture of the Products. Chirex Annan shall insofar as it
is able procure such rights of entry and inspection in respect of
any suppliers of Raw Materials.
9.3. Glaxo Operations shall have the right to request Chirex Annan to
provide samples of Raw Materials and Products in the course of
Manufacture.
9.4. Chirex Annan shall notify Glaxo Operations of the results of,
observations of, and outcome of all inspections and/or audits of the
Facilities and/or operations conducted by any Governmental Body
which is relevant to the Manufacture of the Products.
10. TECHNICAL ASSISTANCE.
Glaxo Operations shall provide Chirex Annan upon request by Chirex Annan
with such technical assistance and instructions as is reasonably necessary
to enable Chirex Annan to Manufacture Products.
11. HAZARDS
Glaxo Operations will provide Chirex Annan with all information in Glaxo
Operations' possession or which it is obliged to provide by law or under
regulation relating to known hazards relating to the Manufacture and
handling of the Products and the handling of the Raw Materials. The
Parties recognise that Glaxo Operations selected Chirex Annan for the
15
<PAGE> 19
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Manufacture of Products, inter alia, for Chirex Annan's expertise in
handling chemicals required in the Manufacture of Products. Chirex Annan
shall be solely responsible for compliance with all health, safety and
environmental regulations and guidelines during the Manufacture of
Products and the storage of Raw Materials and Products prior to delivery
to Glaxo Operations.
12. INTELLECTUAL PROPERTY; IMPROVEMENTS
12.1 All intellectual property rights (which shall include patents,
patent applications, know-how, designs, copyright and technical
information) in the Manufacturing Instructions and other information
relating to the Products disclosed by Glaxo Operations in
contemplation of or in accordance with this agreement are and shall
remain the property of Glaxo Operations.
12.2 Glaxo Operations warrants that it or a member of the GW Group is the
owner of all intellectual property rights required for the
Manufacture of the Products under this agreement and that it has the
right to grant a licence of such rights in accordance with the terms
of clause 12.3.
12.3 Under the terms and subject to the conditions of this agreement
Glaxo Operations grants Chirex Annan a non-exclusive, royalty free,
non-transferrable, non-sub-licensable right during the term of this
agreement of all intellectual property rights referred to in clause
12.1. to make, manufacture and supply Products solely to Glaxo
Operations and solely to perform Chirex Annan's obligations under
this agreement. Chirex Annan will have no right or licence to make,
manufacture, supply, distribute or sell Products, using the
intellectual property rights licensed to it under this clause for
any other purpose or for or to any other person nor to make,
manufacture, supply, distribute or sell any products other than the
Products. To the extent that Chirex Annan and/or any other company
in the Chirex Group enters into a direct Contract with **** or one
of its affiliates in respect of the manufacture and supply of the
Product **** (see clause 2.4) Chirex Annan shall have the right and
licence under all intellectual property rights referred to in clause
12.1 to make, manufacture and supply
16
<PAGE> 20
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
such Product to **** or one of its affiliates.
12.4 Each Party shall notify the other of any process improvements that
it discovers or of which it learns (and in each case, which it is
free to disclose) relating to the Manufacture of the Products unless
the party discovering or learning of the improvement has bona fide
commercial reasons for not wishing to disclose such improvements
save as is envisaged under clause 3.3. All intellectual property
rights in such improvements shall (whether or not disclosed) belong
to Glaxo Operations but:
12.4.1 if disclosed shall be licensed to Chirex Annan on the terms
of clause 12.2; and
12.4.2 if discovered, or learned of, by Chirex Annan and not being
specific to the Products Chirex Annan shall have the right to
use such improvements in relation to all products other than
the Products.
13. CONFIDENTIALITY
13.1. Chirex Annan undertakes for itself and any of its employees having
access to any of the Manufacturing Instructions relating to the
Products to use the Manufacturing Instructions only for the purpose
of Manufacturing Products on behalf of Glaxo Operations and to hold
the same in confidence and not to disclose the Manufacturing
Instructions to any other person (other than its affiliates and
their professional advisers, all of whom shall be instructed to keep
such information confidential) during the term of this agreement or
thereafter without the written consent of Glaxo Operations. Chirex
Annan hereby agrees that the Manufacturing Instructions are and
shall at all times remain the property of Glaxo Operations and
Chirex Annan undertakes on the termination of this agreement, unless
otherwise agreed:
13.1.1. to cease using the Manufacturing Instructions; and
17
<PAGE> 21
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
13.1.2. not to manufacture the Products using intellectual property
rights granted to Chirex Annan under this agreement on
behalf of any third party; and
13.1.3. to return to Glaxo Operations all documents relating thereto
and all copies or reproductions thereof (other than one copy
as proof of receipt).
13.2. Glaxo Operations undertakes for itself and its employees to keep
confidential all information regarding Chirex Annan's quality
control procedures, documentation, processes, manufacturing
practices and all other information acquired by Glaxo Operations in
connection with this agreement relating to Chirex Annan's plant or
operations, whether or not relating to Products, not to make any use
of such information except in connection with its purchase of
Products hereunder, and not to disclose any such information to any
other person (other than its affiliates and their professional
advisers, all of whom shall be instructed to keep such information
confidential) during the term of this agreement or thereafter
without the prior written consent of Chirex Annan.
13.3. Clauses 13.1 and 13.2 shall not apply to any information:
13.3.1. that is and can be shown to be already known to any member
of the GW Group or Glaxo, Operations any member of the
Chirex Group, as the case may be, at the time of disclosure
to such Party under the provisions of this agreement; or
13.3.2. that is or has been disclosed to Chirex Annan or Glaxo
Operations as the case may be, without restriction by any
other person entitled to disclose the said information; or
13.3.3. that is in the public domain or is subsequently disclosed to
the public other than by a breach of this agreement; or
18
<PAGE> 22
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
13.3.4 that is required to be disclosed by any court of competent
jurisdiction or any governmental or regulatory authority.
14. CONSENTS
It is hereby agreed by the Parties that this agreement is made conditional
upon Chirex Annan obtaining all necessary authorisations and consents and
completing such formalities as may be required by any governmental or
ministerial body in order for Chirex Annan to Manufacture and supply the
Products in accordance with the terms of this agreement. The Parties
recognise that Glaxo Operations has selected Chirex Annan to carry out the
Manufacture of Products because inter alia Chirex Annan's premises, plant
and operations are to a standard that is acceptable to the US Food and
Drug Administration. Without prejudice to the generality of the foregoing,
Chirex Annan undertakes to maintain all necessary FDA approvals.
15. ASSIGNMENT
15.1 The obligations of Chirex Annan under this agreement may be
performed by any company within the Chirex Group. Subject to clause
15.2 Chirex Annan may not at any time delegate, transfer or assign
all or any part of this agreement or the benefits thereof to any
person without the prior written consent of Glaxo Operations, and
Chirex Annan hereby acknowledges that the rights and obligations
contained herein are solely personal to Chirex Annan.
15.2 Chirex Annan may assign this agreement to any company within the
Chirex Group and, upon prior notice to Glaxo Operations to any
funder of Chirex Annan.
15.3 Glaxo Operations may not at any time delegate transfer or assign all
or any part of this agreement or the benefits hereof to any person
without the prior written consent of Chirex Annan and Glaxo
Operations hereby acknowledges that the rights and obligations
contained herein are solely personal to Glaxo Operations. Glaxo
19
<PAGE> 23
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Operations may with the prior written consent of Chirex Annan (such
consent not to be unreasonably withheld or delayed) assign this
agreement to any company within the GW Group.
16. DURATION
16.1 Subject to the provisions of clauses 16.2 and 16.3 this agreement
shall commence on the date first above written and shall continue in
force until 31 December 2002. This agreement shall be automatically
renewed by successive periods of 12 months unless terminated by
either Party at the end of its initial term or at the end of any
renewal period (in either such case) by 24 months prior written
notice given to the other Party to that effect and the minimum level
of orders for any such extended period shall be as agreed between
the Parties.
16.2 In addition to any rights to terminate this agreement herein
elsewhere provided:
16.2.1 either Party shall have the right to terminate this agreement
forthwith by giving written notice to the other Party if the
other Party becomes insolvent or goes into liquidation (other
than a voluntary liquidation for the purpose of amalgamation
or reconstruction) or shall have any form of receiver
appointed over the whole or any part of its assets or shall
enter into any arrangement or composition with creditors or
shall cease business;
16.2.2 if either Party shall commit or allow to be committed (other
than by reason of Force Majeure) a material breach of any of
the provisions on its part to be observed and, after written
notice from the other Party indicating if there is another
material breach it intends to terminate this agreement and
such a further material breach arises the other Party shall
have the right to terminate this agreement by giving written
notice to the defaulting Party provided that in the case of a
breach capable of being made good if the defaulting Party
shall make good the said breach within 30 days after the said
notice shall have been given the said notice shall not be
effective;
20
<PAGE> 24
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
16.2.3 if either Party shall commit or allow to be committed (other
than by reason of Force Majeure) a material breach of any of
the provisions on its part to be observed and, after written
notice from the other Party indicating if there is another
material breach it intends to terminate this agreement and a
further material breach arises in relation to a Product the
other Party shall have the right to terminate this agreement
in relation to that Product only by giving written notice to
the defaulting party provided that in the case of a breach
capable of being made good if the defaulting Party shall make
good the said breach within 30 days after the said notice
shall have been given the said notice shall not be effective.
16.3 16.3.1 Glaxo Operations may terminate this agreement upon 60 days
notice to Chirex Annan upon the occurrence prior to December
31, 2002 of a Change in Control of Chirex Annan.
16.3.2 A "Change in Control of Chirex Annan" shall mean that a party
(other than a Permitted Owner and other than Chirex Inc. or
any entity controlled by Chirex Inc.) shall have acquired,
directly or indirectly, more than 50%, on a fully diluted
basis, of the voting securities of Chirex Annan or (as the
case may be) Chirex Inc.
16.3.3 A Permitted Owner means any entity (other than an entity
which is itself or through one or more of its affiliates one
of the 30 largest pharmaceutical companies, as determined by
reference to the most current annual revenues as published by
I.M.S.) that
16.3.3.1 is experienced in or has senior and operating
management, including personnel retained at the
Facility (or other facilities permitted to
Manufacture and supply Products hereunder), who are
experienced in pharmaceutical manufacturing under
CGMPs, including fine chemicals, intermediates and
bulk
21
<PAGE> 25
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
activities; and
16.3.3.2 has sufficient financial resources and liquidity to
satisfy the requirements for working capital
necessary to operate such facilities as aforesaid
in the manner required to Manufacture and supply
Products and perform all the obligations of Chirex
Annan under this agreement; and
16.3.3.3 is in good standing with the FDA and has for five
years prior to the Change in Control of Chirex had a
satisfactory record of regulatory compliance with
the FDA and the other applicable Governmental
Bodies exercising similar functions except to the
extent any non compliance would not reasonably be
expected to have a material adverse effect on the
ability of such entity to operate facilities of the
type described in clause 16.3.3.1; and
16.3.3.4 is not (and has no affiliate that is) at the time
of the Change of Control of Chirex Annan, or the
five year period prior thereto engaged in any
litigation or arbitration involving a member of the
GW Group or the manufacture of products for the GW
Group, in either case only if such litigation or
arbitration involves significant amounts to the GW
Group.
16.4. On termination of this agreement Glaxo Operations shall in
accordance with the terms of this agreement purchase any and all
stocks of Products which are not defective in the possession of
Chirex Annan (for which Chirex Annan shall invoice Glaxo Operations
in accordance with clause 3) and any Raw Materials and intermediates
purchased by Chirex Annan for the purposes of this agreement and
which is not excessive to meet Chirex Annan's requirements for stock
to fulfil its expected obligations under this agreement where such
excessive stock has not been purchased in good faith by Chirex Annan
(for which Chirex Annan shall invoice
22
<PAGE> 26
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
Glaxo Operations the price paid by Chirex Annan for them) Provided
that Chirex Annan shall be entitled to complete the Manufacture of
any Product which is in process.
16.5. The termination of this agreement shall be without prejudice:
16.5.1. to the obligations of the Parties to remit in full all
payments accrued due and payable at the effective date
of such termination;
16.5.2. to the provisions of Clauses 12, 13, 18 and 19;
16.5.3 to any other right or remedy available to either Party at
such termination.
17. DENIAL OF RIGHTS
Nothing herein contained shall be interpreted as granting or be deemed to
grant Chirex Annan or any member of the Chirex Group any right, title or
interest of any kind whatsoever in or under any patent claiming any of the
Products.
18. PRODUCT COMPLAINTS; ADVERSE EVENT REPORTS
18.1. Chirex Annan acknowledges that Glaxo Operations shall be solely
responsible for receiving, recording and responding to all customer
enquiries and complaints and all reports of alleged adverse events
relating to the final products which are produced from the Products.
In so responding Glaxo Operations shall have due regard to the
reputation and commercial interests of Chirex Annan. Glaxo
Operations shall be solely responsible for reporting all such
matters to Governmental Bodies in accordance with applicable laws.
Chirex Annan shall provide Glaxo Operations with any technical
information relating to investigations, and Manufacture of the
Products reasonably necessary to enable Glaxo Operations to perform
such obligations.
23
<PAGE> 27
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
18.2 The provisions of clause 18.1 shall survive expiration or
termination of this agreement.
19. INDEMNITIES
19.1. Chirex Annan shall be liable for and shall indemnify Glaxo
Operations against any loss, claim, damage, expense, or liability
arising out of;
19.1.1. any breach of the terms of the agreement by Chirex Annan,
including without limitation any failure to Manufacture the
Products in accordance with this agreement;
19.1.2. any negligence, storage or handling of the Products by
Chirex Annan prior to delivery to Glaxo Operations; and
19.1.3. any wilful act or omission of Chirex Annan or its employees,
agents or other contractors with respect to the Products.
19.2. Glaxo Operations shall be liable for and shall indemnify Chirex
Annan against any loss, claim, damage, expense or liability arising
out of:
19.2.1 any infringement of any third party intellectual property
arising from Chirex Annan's Manufacture of the Products in
accordance with the provisions of this agreement;
19.2.2 the marketing and the sale of the Products (or products into
which the Products are incorporated) provided that Glaxo
Operations shall not be required to indemnify Chirex Annan in
accordance with the foregoing to the extent that Chirex Annan
is obliged to indemnify Glaxo Operations pursuant to the
provisions of clause 19.1
19.2.3 the handling or use of the Product following delivery by
Chirex Annan.
24
<PAGE> 28
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
19.3. Where one Party ("the Indemnifier") is required to indemnify the
other ("the Indemnified") in accordance with clause 8.5 or this
clause 19 it shall be a condition of such Indemnity that:
19.3.1. the Indemnified promptly notifies the Indemnifier in writing
of the claim or the threat of a claim;
19.3.2 the Indemnified accepts and acts upon the reasonable requests
of the Indemnifier as to the manner in which and the means by
which the claim or threat is dealt with; and
19.3.3 the Indemnified shall not have compromised the position by
unnecessary admissions or statements or conduct in a way
which could prejudice the defence of any such claim or
threat.
20. INSURANCE
20.1. Unless otherwise agreed in writing, Chirex Annan shall, at its own
expense, carry and maintain during the term of this agreement the
following insurance's under policies and with companies satisfactory
to Glaxo Operations and in amounts per event no less than that
specified for each type:-
20.1.1. Public Liability Insurance for a sum assured of not less
than (pounds)1,000,000 (one million pounds); and
20.1.2. Product Liability Insurance for sum assured of not less than
(pounds)5,000,000 (five million pounds).
20.2 On request Chirex Annan shall have its insurance carrier or carriers
furnish to Glaxo Operations certificates that all insurance required
under this agreement is in force, such certificates to indicate any
deductible and/or self-insured retention and stipulate
25
<PAGE> 29
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
that the insurance will not be cancelled while this agreement is in
effect without (prior written notice to Glaxo Operations. Chirex
Annan shall on request permit Glaxo Operations to examine original
insurance or other protective policies issued in compliance with the
requirements hereof. Should Chirex Annan at any time neglect or
refuse to provide or cause not to be provided the insurance required
herein, or should such insurance be cancelled, Glaxo Operations
shall have the right to procure the same and the cost thereof shall
be deducted from monies then due or thereafter to become due to
Chirex Annan.
21. FORCE MAJEURE
Any failure or delay in performance hereunder shall be excused if and to
the extent such failure or delay is due to Force Majeure; provided that
the Party seeking to excuse its performance shall (a) promptly notify the
other Party of the cause therefor and (b) use its best efforts to remedy
or remove the cause therefor. Neither Party shall have the right or action
against the other for any failure or delay. If the performance of any
material obligation under this agreement is delayed or prevented owing to
Force Majeure for any continuous period of more than 6 months, the Party
not affected by such Force Majeure shall have the right to terminate this
agreement by serving written notice to that effect on the other party.
22. NOTICES
Any notice or consent required to be given by either Party shall be
addressed in writing to the company secretary of the Party for whom it is
intended at the address listed on the first page hereof (or such other
address as a party may from time to time designate by written notice) and
shall be deemed to have been duly served at the time that it would have
been received in the ordinary course of post. Any notice served on Chirex
Annan shall be copied to the Managing Director and Finance Director at
Chirex Dudley Limited, Dudley, Cramlington, Northumberland NE23 7QG.
26
<PAGE> 30
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
23. DISPUTE RESOLUTION
The Parties shall endeavour to settle amicably any dispute between them of
a financial nature arising in connection with this agreement. If no
amicable settlement can be arrived at within a reasonable time period then
either Party may refer such matter to an independent firm of Chartered
Accountants nominated jointly by them or if no such nomination is made
within 14 days after the expiry of one Party requiring nomination,
nominated at the request of either of them by the President for the time
being of the Institute of Chartered Accountants in England and Wales. The
Accountants so nominated shall be entitled to ask for and inspect the
working papers, records and documents of both Parties as they may
reasonably consider necessary. In making their determination, the said
Accountants shall act as experts and not as arbitrators, their decision
shall (in the absence of manifest error) be final and binding on the
Parties and their fees shall be borne and paid by the Parties in such
proportions as the Accountants determine in the light of the respective
contentions of the Parties, and the Accountants' determination.
24. PUBLICITY
Neither Party shall issue any press release or other publicity materials
or make any representation with respect to the existence of this agreement
or the subject matter thereof without the prior written consent of the
other Party. However, this restriction shall not apply to announcements
required by law or regulation or the regulations of any recognised stock
exchange or under the requirements of the U.S. Securities Act 1933 and the
Securities Exchange Act 1934 except that in such event the Parties shall
co-ordinate to the extent possible with respect to the wording of any such
announcement.
25. CONTRACT ADMINISTRATION
25.1 The Parties shall establish points of contact for, respectively,
matters of a commercial nature and a technical/quality nature
relating to the performance of this agreement to whom matters will
be referred in the first instance. Such points of contact may be
27
<PAGE> 31
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
changed at any time by either Party on notification of such change
to the other Party.
25.2 Through their nominated representatives the Parties shall meet on
such basis as shall be agreed from time to time (but no less than
quarterly) to discuss Glaxo Operations' forecast for the Products
and production matters relating to delivery of Products requested by
Glaxo Operations.
26. LIABILITY
In no event shall the aggregate liability of Chirex Annan or any other
member of the Chirex Group under this agreement exceed (pounds)10,000,000
(ten million pounds) in any period of 12 months.
27. WAIVER
The failure on the part of either Party to exercise or enforce any right
conferred upon it shall not be deemed to be a waiver of any such right or
operate to bar the exercise or enforcement thereof at any time or times
thereafter.
28. CONSENT TO JURISDICTION
With respect to any suit, action or proceeding relating to this agreement,
each Party irrevocably submits to the jurisdiction of the English courts
and waives any objection which it may have any time to laying of venue of
any proceedings brought in any such court. Each party irrevocably consents
to service of process given in the manner for notices in clause 22.
29. ENTIRETY
This agreement constitutes the entire agreement between the Parties
relating to Manufacture of the Products, and this agreement shall not be
considered cancelled or amended in any respect unless done so in writing
signed on behalf of the Parties.
28
<PAGE> 32
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
30. LAW
This agreement shall be construed and have effect in all respects in
accordance with English law.
31. SUCCESSORS AND ASSIGNS
This agreement shall be binding upon and enure for the benefit of both
Parties and their successors and permitted assigns as the case may be.
32. PARTIES
Chirex Holdings is a party to this agreement only to receive the benefit
of clause 15.
As WITNESS the hands of the duly authorised signatories on behalf of the Parties
the day and year first above written.
29
<PAGE> 33
SCHEDULE 1
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1998 2000
---- ---- ----
Products tns (pounds)/kg (pounds)m tns (pounds)/kg (pounds)m tns (pounds)/kg (pounds)m tns
- -------- --- ----------- --------- --- ----------- --------- --- ----------- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
****
<CAPTION>
2001 2001 2002
---- ---- ----
Products (pounds)/kg (pounds)m tns (pounds)/kg (pounds)m tns (pounds)/kg (pounds)m
- -------- ----------- --------- --- ----------- --------- --- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
****
) )
) )
) )
) )
</TABLE>
30
<PAGE> 34
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 2
Key Materials
Material Initial designated supplier
-------- ---------------------------
**** ****
31
<PAGE> 35
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 3
Notional Capacity Requirements (see clause 2.6.3)
Product Contract Year Notional capacity at
- ------- ------------- Commencement of Contract
Year (tpa)
------------------------
Annan Dudley
----- ------
**** 1998 **** ****
1999
2000
2001
2002
1998
1999
2000
2001
2002
1998
1999
2000
2001
2002
32
<PAGE> 36
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
1998
1999
2000
2001
2002
1998
1999
2000
2001
2002
1998
1999
2000
2001
2002
1998
1999
2000
2001
2002
33
<PAGE> 37
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SCHEDULE 4
Formula for Profit Share
In the event of additional volume to that set out in Schedule 1. (Both in
respect of Firm Commitment and Intended Quantities.)
Profit share will be based on:- **** of
Additional turnover less direct cost and engineering and development costs.
Existing Products New Products
----------------- ------------
Direct cost defined as:-
****% Raw Materials ****% Raw Materials
****% Labour ****% Labour
****% Utilities and ****% Utilities and
Consumables Consumables
****% Depreciation
SIGNED by David Pulman )
on behalf of ) /s/ D. Pulman
GLAXO OPERATIONS UK )
LIMITED in the presence of: )
/s/ P.R. Jones
P.R. Jones
Solicitor
SIGNED by Alan R. Clark )
on behalf of ) /s/ A.R. Clark
CHIREX (ANNAN) LIMITED )
in the presence of: )
34
<PAGE> 38
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions are marked **** and have been filed
separately with the Commission.
SIGNED by Alan R. Clark )
on behalf of ) /s/ A.R. Clark
CHIREX (HOLDINGS) )
LIMITED )
in the presence of: )
35
<PAGE> 1
[ChiRex Letterhead]
CONTACTS FOR CHIREX: CONTACT FOR GLAXO
WELLCOME MEDIA ENQUIRIES:
IN THE U.S.
Michael A. Griffith Nancy Pekarek
Chief Financial Officer Communications Manager
ChiRex Inc. London
(203) 351-2300 011-44-171-493-4060
Douglas MacDougall
Feinstein Kean Partners Inc.
(617) 577-8110
IN THE U.K.
Alan R. Clark
Chairman and CEO
ChiRex Inc.
011-44-191-250-0471
FOR IMMEDIATE RELEASE
CHIREX COMPLETES PURCHASE OF GLAXO WELLCOME
MANUFACTURING FACILITY AT ANNAN, SCOTLAND
- ChiRex to Initiate Manufacturing Under Five Year Supply Contract
Valued at Approximately $450 million -
Stamford, Connecticut and Dudley, Northumberland, England, October 31, 1997 --
ChiRex Inc. (Nasdaq: CHRX), a leading pharmaceutical Contract Manufacturing
Organization, and Glaxo Wellcome plc announced today that ChiRex has completed
its purchase of Glaxo Wellcome's FDA cGMP pharmaceutical production facility at
Annan, Scotland. Glaxo Wellcome has received $66 million (Pound Sterling 40
million) for the facility and ChiRex will initiate the manufacture of certain
Glaxo pharmaceutical intermediates and active ingredients under a five year
contract valued at approximately $450 million.
"We have begun a period of collaboration with ChiRex, building on our
association over the last 15 years," said David Pulman, Ph.D., Director of
International Actives Supply, Glaxo Wellcome. "Through this relationship, Glaxo
Wellcome has access to the ChiRex organization and its combination of
manufacturing expertise and innovative technologies." Dr. Pulman noted that
Glaxo Wellcome has been working with ChiRex management to achieve a smooth
transition at the Annan site, and all staff members have been transferred to
ChiRex as of today.
"The completion of this Glaxo Wellcome agreement supports ChiRex's plans in
several ways," said Alan R. Clark, Chairman and CEO of ChiRex. "Financially,
the manufacturing contract ensures a major revenue stream beginning in this
fiscal year and continuing into the next decade. Operationally, the facility
significantly expands our capacity. Strategically, it positions us solidly in
the next generation of higher-value-added pharmaceuticals, and enables us to
accelerate the use of ChiRex's proprietary technologies by the world's major
pharmaceutical companies."
-more-
<PAGE> 2
ChiRex Inc. Announces the Completion of the Annan Facility Purchase
Page2
Mr. Clark added that ChiRex already has appointed managers for key positions
and commenced the integration of the Annan employees, as well as meeting with
regulatory agencies and beginning the reconfiguration of the facilities.
ChiRex has purchased all of the buildings, land and equipment at the 154-acre
Annan, Scotland, property, encompassing three main production buildings, for
pound sterling 40 million (approximately $66 million), plus certain working
capital. Under the agreement, ChiRex will continue to manufacture most of the
products currently made at Annan and plans to invest pound sterling 30 million
(approximately $48 million) over five years to accommodate newly contracted
products and to modify the facility for general purpose manufacturing.
ChiRex is a Contract Manufacturing Organization serving the outsourcing needs
of the pharmaceutical industry through its extensive pharmaceutical fine
chemical manufacturing, process development capabilities and proprietary chiral
technologies. The Company supports and supplements the in-house development
and manufacturing capabilities of its pharmaceutical and biotechnology
customers with a broad range of fully-integrated services, accelerating the
time from drug discovery to commercialization. ChiRex currently produces over
50 products in its two world-class, FDA cGMP manufacturing facilities in
Dudley, Northumberland, England and in Annan, Scotland. ChiRex holds 54 patents
and patent applications in the field of chiral chemistry.
Glaxo Wellcome is a research-based company committed to fighting disease by
bring innovative medicines and services to patients throughout the world and to
the healthcare providers who serve them.
Any statements contained in this release that relate to future plans, events
or performance, are forward-looking statements that involve risks and
uncertainties, including, but not limited to, product development and market
acceptance risks, product manufacturing risks, the impact of competitive
products and pricing, the results of current and future licensing and other
collaborative relationships, the results of financing efforts, developments
regarding intellectual property rights and litigation, risks of product
non-approval or delays or post-approval reviews by the FDA or foreign regulatory
authorities, and other risks identified in the ChiRex Inc.'s Securities and
Exchange Commission filings. Actual results, events or performance may differ
materially. Readers are cautioned not to place undo reliance on these
forward-looking statements, which speak only as the date hereof. ChiRex
undertakes no obligation to publicly release the results of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
# # #
