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FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended October 31, 1997, or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___________________ to _______________________
Commission file number 0-14550
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AEP INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware 22-1916107
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
125 Phillips Avenue
South Hackensack, New Jersey 07606-1546
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (201) 641-6600
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- -------------------------
None ---------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
-----------------------------
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirement for
the past 90 days. Yes X No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
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Signature
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: January 30, 1998 AEP Industries Inc.
(Registrant)
S/A Lawrence R. Noll
Vice President, Controller & Secretary
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Exhibit 10(p)
Dated 18 July 1997
Agreement for Sale of Business
ICI AUSTRALIA LIMITED
(ACN 004 145 868)
("ICI")
ICI AUSTRALIA OPERATIONS PTY LTD
(ACN 004117 828)
("Vendor")
AEP INDUSTRIES (AUSTRALIA) PTY LTD
(ACN 075 939 614)
("Purchaser")
Mallesons Stephen Jaques
Solicitors
Level 28, Rialto North
525 Collins Street
Melbourne Vic 3000
Ref: RHB:JMH
MELCORP/0093694
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AGREEMENT FOR SALE OF BUSINESS
TABLE OF CONTENTS
Page
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1. Interpretation........................................................ -1-
2. Sale and purchase of Assets........................................... -8-
3. Purchase Price........................................................ -8-
4. Completion............................................................ -9-
5. Stocktake............................................................. -10-
6. Payment of the Purchase Price......................................... -11-
7. Apportionment......................................................... -12-
8. Conduct of Business Pending Completion................................ -12-
9. Risk and insurance.................................................... -12-
10. Equipment Leases...................................................... -12-
11. Employees............................................................. -13-
12. Superannuation........................................................ -15-
13. Contracts and Intellectual Property Licenses.......................... -15-
14. Liabilities........................................................... -16-
15. Debtors............................................................... -16-
16. Customers............................................................. -16-
17. Warranties, Representations and Indemnities........................... -17-
19. Removal of Equipment of Ammonia Filling Facility...................... -20-
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20. Environmental......................................................... -22-
Acknowledgment........................................................ -22-
Development........................................................... -22-
Planning Committee.................................................... -22-
Safety Management..................................................... -24-
Independent Expert.................................................... -25-
Notification to EPA................................................... -27-
License............................................................... -27-
Definitions........................................................... -27-
Non Merger............................................................ -29-
21. Costs and Stamp Duty.................................................. -29-
22. Non-Competition....................................................... -29-
23. Notices............................................................... -30-
24. Access to the Business................................................ -31-
25. Assignment............................................................ -31-
26. Miscellaneous......................................................... -31-
Exercise of Rights.................................................... -31-
Waiver and Variation.................................................. -31-
Approvals and consent................................................. -32-
Remedies cumulative................................................... -32-
No merger............................................................. -32-
Survival of indemnities............................................... -32-
Enforcement of indemnities............................................ -32-
Further assurances.................................................... -32-
Publicity............................................................. -32-
Entire agreement...................................................... -33-
Severability.......................................................... -33-
Time of the essence................................................... -33-
27. Governing law, jurisdiction and service of process.................... -33-
Appendix Warranties, Representations and Indemnities...................... -34-
Schedule 1 Business Premises........................................... -41-
Schedule 2 List of Key Plant and Equipment
Schedule 3 Statutory Licences
Schedule 4 Particulars of Registered and Unregistered Intellectual Property
Schedule 5 Employees
Schedule 6 Particulars of Key Contracts
Schedule 7 Particulars of Equipment Leases
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Schedule 8 Particulars of Mortgages etc
Schedule 9 Liabilities
Schedule 10 Actuary's Leffer
Schedule 11 Terms of Purchaser's Offer to Employees
Schedule 12 ICI Roundel
Schedule 13 Escluded Assets
Annexure A Accounts
Annexure B Developed Areas (clause 20.2)
Annexure C The Devdopment (clause 20.2)
Annexure D Disclosure Letter
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Agreement for Sale of Business
Date: 18 July 1997
Parties: ICI AUSTRALIA LIMITED (ACN 004 145 868) having its registered office
at 1 Nicholson Street, Melbourne, Victoria ("ICI") ICI AUSTRALIA
OPERATIONS PTY LTD (ACN 004 117 828) having its registered office at 1
Nicholson Street, Melbourne, Victoria ("Vendor")
AEP INDUSTRIES (AUSTRALIA) PTY LTD (ACN 075 939 614) having its
registered office at 162 Garnet Road, Kirrawee, New South Wales
("Purchaser")
Recitals: A. The Vendor carries on the business of the manufacture and sale of
VisQueen polyethylene blown film.
B. The Vendor has agreed to sell or procure the sale and the
Purchaser has agreed to purchase the assets of the business on
the following terms.
Operative provisions:
1. Interpretation
1.1 The following words have these meanings in this agreement unless
the contrary intention appears.
Accounts means the unaudited management accounts of the Business
prepared for internal information purposes for the years ending
30 September 1995 and 1996 and for the seven months ending 30
April 1997, a copy of each of which is attached at annexure A.
Actuary's Letter means the letter dated 17 July 1997 from the
Vendor's Actuary, a copy of which is attached at Schedule 10.
Ammonia Business means the business of the manufacture and sale
of ammonia carried on by the Vendor from the Business Site any
time prior to the Completion Date.
Ammonia Filling Facility means the ammonia filling facility
currently located on the Business Site.
Assets means the following assets:
(a) Goodwill;
(b) Plant and Equipment;
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(c) Stock;
(d) Intellectual Property Rights;
(e) Equipment Leases;
(f) Statutory Licenses;
(g) Contracts;
(h) Records; and
(i) all other property and assets of the Vendor connected with
the Business except the Excluded Assets.
Book Debts means trade debts and other receivables owed to the
Vendor in respect of the Business on the Completion Date and
notes and securities for them then held by the Vendor.
Business means the business of the manufacture and sale of
VisQueen polyethylene blown film presently carried on by the
Vendor from the Business Premises.
Business Day means a day on which trading banks are open for
general banking business in Melbourne, Victoria.
Business Names means the registered and unregistered business
names specified in schedule 4 and all associated goodwill.
Business Premises means the property described in schedule 1
together with all buildings, fixtures and other improvements.
Business Site means the land upon which the Business is conducted
at Chester Hill, New South Wales.
Completion means settlement of the sale and purchase of the
Assets in accordance with clause 5 and Complete has a
corresponding meaning.
Completion Date means 31 July 1997 or any other date agreed by
the Vendor and the Purchaser.
Completion Time means 12.00 am midnight on the Completion Date.
Confidential Information means all trade secrets and all
financial, marketing and technical information, ideas, concepts,
knowhow,
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technology, processes and knowledge which is confidential or of a
sensitive nature, but excludes that which is in the public domain
(except arising on breach of an obligation of confidence by the
Vendor after the Completion Time).
Contracts means the contracts and commitments entered into by the
Vendor in the ordinary course of conducting the Business:
(a) before the date of this agreement (including those described
in schedule 6 ); and
(b) between the date of this agreement and the Completion Date,
which are not fully performed as at the Completion Date.
Disclosure Letter means the letter provided by the Vendor to the
Purchaser before the date of this Agreement, a copy of which is
attached at annexure D.
Dollars and $ means the lawful currency of Australia.
Due Diligence Material means all the written material provided by
the Vendor to the Purchaser in connection with the acquisition of
the Assets, including written material provided to the Purchaser
as part of its due diligence enquiries.
Employees means the employees of the Vendor in relation to the
Business as at the Completion Date but excluding the Excluded
Employees.
Environmental Review means the report prepared by Woodward Clyde
in relation to the Business Site, a copy of which has been
provided to the Purchaser.
Equipment Leases means those leases of, and agreements to hire,
equipment (including 5 motor vehicles) used in connection with
the Business held by the Vendor as described in schedule 7.
Excluded Assets means:
(a) land and buildings connected with the Business (including
the Business Premises);
(b) cash at bank, on deposit or on hand;
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(c) insurance policies owned by the Vendor and the benefit of
any claims under them;
(d) money owed by trade debtors, and other receivables;
(e) the assets owned by the Vendor and used in the Business or
located on the Business Site and specified in schedule 13;
and
(f) any intellectual property rights in connector with the
letters ICI and the ICI Roundel.
Excluded Employees means the employees of the merchanted films
business presently working on the Business Premises.
Goodwill means the goodwill of the Business including, but not
limited to the exclusive right of the Purchaser to represent
itself as carrying on the Business as the successor to the
Vendor, but excluding the goodwill comprised in the Business
Names and Trade Marks.
ICI Roundel means the ICI Roundel, a representation of which
appears at schedule 12.
Independent Valuer means the person appointed as valuer jointly
by the Vendor and the Purchaser or if they do not agree on the
person to be appointed within seven days of one party requesting
appointment, the accountant appointed by the President of the
Australian Institute of Chartered Accountants Victorian Branch at
the request of either the Vendor or the Purchaser.
Intellectual Property Licenses means all agreements under which
the Vendor obtains the right to us, but not ownership of, any of
the business Names or Trade Marks or any Confidential
Information, patents, patent applications, discoveries,
inventions, registered or unregistered designs, copyright or
similar rights used in connection with the Business.
Intellectual Property Rights means:
(a) the Business Names;
(b) all Trade Marks owned by the Vendor or a Related Body
Corporate in connection with the Business;
(c) all Confidential Information owned by the Vendor in
connection with the Business;
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(d) all patents, patent applications, discoveries, inventions,
registered and unregistered designs, copyright and similar
rights owned by the Vendor in connection with the Business;
and
(e) the Intellectual Property Licenses,
but shall, for the avoidance of doubt, exclude any intellectual
property rights in connection with the letters ICI and the ICI
Roundel.
Leased Plant and Equipment means the subject matter of the
Equipment Leases.
Liabilities means liabilities of the Vendor connected with the
Business described in schedule 9.
Member Employees means the Transferring Employees who are members
of the Vendor's Fund on the Completion Date.
Plant and Equipment means all plant, equipment, motor vehicles'
machinery, furniture fixtures and fittings owned and used by the
Vendor in carrying on the Business on hand on the Completion Date
(including those items specified in schedule 2) and any plant or
equipment under construction and all consumables, spare parts
(other than engineering spares), tools and other maintenance
items, and office supplies.
Property Agreement means the agreement for the sale and the
purchase of the Business Premises dated the same date as this
agreement.
Purchase Price means the consideration for the Assets calculated
in accordance with clause 3.
Purchaser's Actuary means an actuary (or a company or firm making
available the advice of an actuary) appointed by the Purchaser
for the purposes of clause 12.
Purchaser's Fund means the Borden Superannuation Fund referred to
on page 14 of schedule 11.
Records means originals or copies, in machine readable or printed
form, of books, files, reports, records, correspondence'
documents and other material relating to or used in connection
with the Business or the Assets which is:
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(a) sales literature, market research reports, brochures and
other promotional material (including printing blocks,
negatives, sound tracks and associated material);
(b) all sales and purchasing records;
(c) lists of all regular suppliers and customers; and
(d) trading and financial records.
Related Body Corporate of a body corporate means another body
corporate which is related to the first within the meaning of
section 50 of the Corporations Law.
Statutory Licenses means all licenses, consents, rights, permits
and certificates relating to any aspect of the Business issued by
any governmental authority (whether Commonwealth, state or
local), including the items described in schedule 3, in so far as
they may be transferred to the Purchaser.
Stock means all engineering spares and stock in trade (including
raw materials' packaging and containers' work in progress and
finished goods) in use or intended for use in connection with the
Business as at the Completion Time' including items owned by the
Vendor which are in transit to the Vendor or on consignment with
any customer of the Business.
Supply Agreement means the agreement between the Vendor and the
Purchaser dated the same date as this agreement for the supply
of:
(a) polyethylene polymer; and
(b) rewind bags for packaging polyethylene polymer and printed
roll stock.
Trade Marks means all logos' symbols, get up, trademarks,
tradenames, service marks, brand names and similar rights,
whether registered or unregistered, and all associated goodwill,
including those items specified in schedule 4.
Transferring Employees means those Employees who accept the
Purchaser's offer of employment made under clause 11.1.
Transferring Members means the Member Employees who agree to the
transfer of their entitlements from the Vendor's Fund to the
Purchaser's
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Fund before the Member Transfer Date' except that any such person
who dies or ceases to be employed by the Purchaser before the
Member Transfer Date will cease to be a Transferring Member from
the date of the relevant event.
Transfer Payment Date means the date that is 7 days after the
date on which the Transfer Value is calculated under clause 12.2.
Transfer Value is the total amount to be paid by the trustees of
the Vendor's Fund to the trustees of the Purchaser's Fund
calculated in accordance with clause 12.
Vendor's Actuary means the actuary (or company or firm making
available the advice of an actuary) appointed in accordance with
the provisions of the Vendor's Fund.
Vendor's Fund means the ICI Australia Limited and Associated
Companies Superannuation Fund established by trust deed dated 23
November 1934.
Warranties means the warranties' representations and indemnities
contained in this agreement, including clause 17.
1.2 In this agreement unless the contrary intention appears:
(a) a reference to a clause, schedule, annexure or appendix is a
reference to a clause of or schedule, annexure or appendix
to this agreement and references to this agreement include
any recital, schedule, annexure or appendix;
(b) a reference to this agreement or another instrument includes
any variation or replacement of either of them;
(c) a reference to a statute, ordinance, code or other law
includes regulations and other instruments under it and
consolidations, amendments, re-enactrnents or replacements
of any of them;
(d) the singular includes the plural and vice versa;
(e) the word person includes a firm, a body corporate, an
unincorporated association or an authority;
(f) a reference to a person includes a reference to the person's
executors, administrators' successors' substitutes
(including, but not limited to, persons taking by novation)
and assigns;
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(g) an agreement, representation or warranty in favour of two or
more persons is for the benefit of them jointly and
severally;
(h) an agreement, representation or warranty on the part of two
or more persons binds them jointly and severally;
(i) if a period of time is specified and dates from a given day
or the day of an act or event' it is to be calculated
exclusive of that day; and
(j) a reference to a day is to be interpreted as the period of
time commencing at midnight and ending 24 hours later.
1.3 Headings are inserted for convenience and do not affect the
interpretation of this agreement.
2. Sale and purchase of Assets
2.1 The Vendor agrees to sell or procure the sale of and the
Purchaser agrees to purchase the Assets for the Purchase Price
and on the terms and conditions of this agreement with effect
from the Completion Time.
2.2 The Assets must be transferred to the Purchaser free from any
mortgage, charge, lien, pledge or other encumbrance.
2.3 This agreement is interdependent with the Supply Agreement and
the Property Agreement Neither the Vendor nor the Purchaser is
obliged to Complete under this agreement unless the other is
ready, willing and able to complete under those other agreements
on the Completion Date.
3. Purchase Price
3.1 The Purchase Price for the Assets is the aggregate of:
(a) for Goodwill, $1
(b) for the Plant and Equipment, $5,699,997;
(c) for the Stock, a sum determined in accordance with clause 6,
valuing Stock at the lowest of:
(i) its cost (excluding indirect overhead costs) to the
Vendor determined in accordance with the Accounting
Standards;
(ii) its net realisable value; and
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(iii) its replacement cost;
Provided that the Purchaser and the Vendor shall negotiate
an agreed value for finished goods Stock:
(A) which is damaged, redundant or obsolete which shall be
determined where the cost of the relevant item of
finished goods Stock is greater than its net realisable
value; and
(B) for which there has been no sales or which has been
held by the Vendor for more than 12 months;
(d) for the Intellectual Property Rights, $1; and
(e) for all other property and assets of the Vendor connected
with the Business except the Excluded Assets, $1.00.
3.2 The Purchase Price does not include sales tax and the Purchaser
must provide to the Vendor prior to the Completion Date its sales
tax number.
4. Completion
4.1 Completion of the sale and purchase of the Assets is to take
place at 12 noon on the Completion Date at ICI House, 1 Nicholson
Street, Melbourne, Victoria or any other time and place agreed by
the Vendor and the Purchaser.
4.2 The Vendor agrees to do the following on Completion:
(a) deliver to the Purchaser or its solicitors:
(i) executed instruments of transfer or assignment
(together with all relevant documents) that are
required to vest the Assets in the Purchaser;
(ii) all deeds and documents of title (if any) relating to
the Assets;
(iii) assignments of each of the Intellectual Property
Rights and all forms necessary to record the
change of their ownership;
(iv) the Equipment Leases, executed assignments of them to
the Purchaser and evidence of the written consent of
the lessors under the Equipment Leases to the
assignments;
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(v) the Contracts, and if reasonably required by the
Purchaser, an executed assignment of any of the
Contracts with appropriate consent by the other party
or an executed novation of any of the Contracts; and
(vi) completed transfer of ownership forms for each of the
motor vehicles which form part of the Plant and
Equipment;
(b) deliver to the Purchaser all Records, except that if the
Vendor is required by law to retain any of the documents the
Vendor may deliver copies of those documents to the
Purchaser if the original Record is not delivered to the
Purchaser;
(e) deliver to the Purchaser those Assets capable of transfer by
delivery and permit the Purchaser to take possession of the
Assets' the Leased Plant and Equipment and the Business
Premises from the Completion Time; and
(d) assist the Purchaser with the necessary forms and consents
to enable the utility services provided to the Business,
including those telephone or facsimile and other
communication services (with the benefit of the same
numbers) requested by the Purchaser to be transferred to the
Purchaser with effect from the Completion Time without
interruption of those services.
4.3 The Purchaser agrees to make payment on Completion in accordance
with clause 6.1 if the Vendor complies with clause 4.2.
5. Stocktake
5.1 The Vendor and the Purchaser and their respective representatives
agree within 10 Business Days of the Completion Date to jointly
undertake a physical stocktake of the Stock as at the Completion
Time and to determine the purchase price for the Stock.
5.2 If the Vendor and the Purchaser cannot agree on the valuation of
any item of Stock within 21 days of the Completion Date then
either the Vendor or the Purchaser may refer the disagreement to
the Independent Valuer with the request that the Independent
Valuer make a decision on the disagreement as soon as practicable
after receiving the reference and any submissions from the Vendor
and the Purchaser. The decision of the Independent Valuer is to
be conclusive and binding on the parties in the absence of
manifest error. The Vendor and the Purchaser agree to pay the
Independent Valuer's costs and expenses in the proportions
determined by
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the Independent Valuer in connection with the reference. The
Independent Valuer will be appointed as an expert and not as an
arbitrator. The procedures for determination are to be decided
by the Independent Valuer in its absolute discretion. The
Independent Valuer must use the criteria set out in clause 3.1(c)
for valuing any item of Stock.
5.3 The Purchaser acknowledges and agrees that part of the Stock to
be acquired pursuant to this agreement, including without
limiting the generality of the foregoing packaged finished goods,
will bear the name "ICI" or the ICI Roundel and further
acknowledges and agrees that it will not become entitled to any
rights in respect of such names and shall either obliterate or
overstamp the name ICI or the ICI Roundel wherever practicable on
the external surfaces of the finished goods so as to clearly
identify that the finished goods are sold by the Purchaser and
not the Vendor.
5.4 All goods including finished goods and packaged finished goods,
manufactured by the Purchaser after the Completion Time must not
bear the name ICI or the ICI Roundel and the Purchaser
indemnifies the Vendor for all liability or loss from a breach of
this clause by the Purchaser.
6. Payment of the Purchase Price
6.1 The Purchaser agrees to pay to the Vendor at Completion the sum
of $9,660,000, being an estimate of:
(a) the Purchase Price for the Assets (including Stock);
LESS
(b) the reduction in cash payable in accordance with clauses
11.6 and 1 1.7.
6.2 The Purchaser agrees to pay to the Vendor the balance of the
Purchase Price for the Assets within 5 Business Days of the final
determination of the Purchase Price' subject to the reduction in
the cash payable in accordance with clauses 11.6 and 11.7. The
Vendor agrees to refund to the Purchaser within that period any
excess of the amount pa d under clause 6.1 over the cash
component of the Purchase Price.
6.3 Each payment referred to in clauses 6.1 and 6.2 must be made by
bank cheque or by telegraphic transfer to a nominated account or
otherwise in cleared funds.
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7. Apportionment
7.1 All expenses and outgoings normally apportioned on the purchase
of a business similar to the Business will be apportioned as at
the close of business on the Completion Date and the parties must
make the appropriate payments within 14 days of final
determination. Either the Vendor or Purchaser may refer any
disagreement on apportionment to the Independent Valuer and the
provisions of clause 5.2 then apply with the necessary changes.
7.2 The parties acknowledge that the Vendor is entitled to income
derived from conducting the Business before and including the
Completion Time and the Purchaser is entitled to all the rights
and benefits of the Business (including the income derived in
connection untie the Business) from the Completion Time.
8. Conduct of Business Pending Completion
Until Completion the Vendor must carry on the Business in the normal
manner unless the Purchaser otherwise agrees.
9. Risk and insurance
9.1 The Vendor until the Completion Time remains the owner of and
bears all risks in connection with the Business and the Assets.
On and from the Completion Time property in and the risk of the
Business and the Assets passes to the Purchaser.
9.2 The Vendor agrees to take out and maintain until the Completion
Time insurance of the Assets covering such risks and for such
amounts as would be maintained in accordance with its ordinary
practice for the Business.
10. Equipment Leases
10.1 The Vendor warrants that the Vendor is not currently in material
breach of any of the Equipment Leases.
10.2 The Vendor must use its reasonable endeavours:
(a) to ensure that the Purchaser obtains the full benefit of the
Equipment Leases with effect from the Completion Time; and
(b) to obtain the consent of the other parties to any Equipment
Leases reasonably specified by the Purchaser to the
assignment of those
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Equipment Leases to the Purchaser or to the novation of those
Equipment Leases.
The Purchaser must assist the Vendor to obtain a novation of any
of the Equipment Leases specified by the Vendor.
10.3 From the Completion Time the Purchaser accepts responsibility for
the performance of the Equipment Leases as from the Completion
Time. The Vendor must hold the benefit of any Equipment Leases
not assigned or novated on the Completion Date for the Purchaser
and the Purchaser must properly perform the obligations of the
Vendor under the Equipment Leases on its behalf.
10.4 The Purchaser indemnifies the Vendor against any liability or
loss arising under any of the Equipment Leases as a result of any
act or omission of the Purchaser after the Completion Time. The
Vendor indemnifies the Purchaser against any liability or loss
arising under any of the Equipment Leases as a result of any act
or omission of the Vendor before the Completion Time.
11. Employees
11.1 In the days before the Completion Date, the Purchaser must make
an offer of employment, conditional on Completion and effective
from the Completion Time, consistent with the terms set out in
schedule 11 and in a form agreed to by the Vendor, to each of the
Employees.
11.2 On or before the close of business on the Completion Date the
Vendor must pay to each of the Transferring Employees all
amounts, if any, to which that Employee is entitled by law or
under any award, agreement or arrangement, on termination of
employment in connection with:
(a) wages, salary or allowances, bonuses, commission, loadings
or statutory compensation;
(b) untaken or pro rata annual leave or sick leave; and
(c) untaken or pro rata long service leave,
accrued or arising at Completion.
11.3 The Purchaser agrees that' subject to any relevant statute or
award, for the purpose of calculating any benefit arising under
any statute or award or contract of employment between the
Purchaser and the Transferring Employee, the period of service
(including any period of service deemed
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by law or contract) which a Transferring Employee has had with
the Vendor immediately before and continuous with the
commencement of employment with the Purchaser ("Prior Service")
is to be deemed service with the Purchaser and the continuity of
the period of service of the Transferring Employee is to be
deemed not broken because the Transferring Employee ceases to be
an employee of the Vendor and becomes an employee of the
Purchaser. If the Vendor has made a payment to a Transferring
Employee under clause 11.2, based on Prior Service' the
Purchaser's obligation to that Employee for the future benefits
to which that payment relates will only be in respect of actual
service with the Purchaser from the Completion Date.
11.4 The Vendor agrees to use all reasonable endeavours to induce the
Employees to accept any offer of employment made to them by the
Purchaser.
11.5 On Completion, an amount is to be determined ("Long Service Leave
Amount") by adding all the sums calculated as "$ LSL" in
accordance with the following formula in respect of each
Transferring Employee whose Prior Service with the Vendor is more
than 5 years:
AS
$ LSL = 260 x LSL Balance (days)
where:
$ LSL is the Transferring Employee's long service leave
amount;
LSL Balance (days) is the number of working days of long
service leave which have accrued to the Transferring
Employee as at the Completion Date;
AS is the Transferring Employee's effective annual salary or
wage entitlement on the Completion Date.
11.6 In consideration of the Purchaser assuming liability for future
long service leave entitlements to Transferring Employees in
accordance with clause 11.3 the cash payable in accordance with
clause 6.2 is to be reduced by an amount equal to 64% of the Long
Service Leave Amount after multiplying the Long Service Leave
Amount by 1.17.
11.7 In consideration of the Purchaser assuming liability for future
annual leave entitlements to Transferring Employees in accordance
with clause 11.3 the cash payable in accordance with clause 6.2
is to be reduced by an amount equal to 64% of the amount to which
the Transferring Employees to whom
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no payment is made for untaken or pro rata annual, leave at
Completion would be entitled by law or under any award, agreement
or arrangement in connection with untaken or pro rata annual
leave after multiplying the amount by 1.17.
12. Superannuation
12.1 With effect from the Completion Date' the Purchaser must cause
the Transferring Members to be admitted to the Purchaser's Fund.
12.2 As soon as practicable but in no event more than 5 Business Days
after the Completion Date the Vendor must cause the Vendor's
Actuary to make a calculation as at that date of the Transfer
Value in accordance with the Actuary's Letter.
12.3 The Vendor must use its best endeavours to cause the trustees of
the Vendor's Fund to pay the Transfer Value to the trustees of
the Purchaser's Fund on the Transfer Payment Date.
13. Contracts and Intellectual Property Licenses
13.1 The Vendor must use its reasonable endeavours:
(a) to ensure that the Purchaser obtains the full benefit of the
Contracts and Intellectual Property Licenses with effect
from the Completion Time; and
(b) to obtain the consent of the other parties to any Contracts
and Intellectual Property Licenses reasonably specified by
the Purchaser to the assignment of those Contracts and
Intellectual Property Licenses to the Purchaser or to the
novation of those Contracts and Intellectual Property
Licenses.
The Purchaser must assist the Vendor to obtain a novation of any
of the Contracts and Intellectual Property Licenses specified by
the Vendor.
13.2 From the Completion Time the Purchaser accepts responsibility for
the performance of the Contracts and Intellectual Property
Licenses as from the Completion Time. The Vendor must hold the
benefit of any Contracts and Intellectual Property Licenses not
assigned or novated on the Completion Date for the Purchaser and
the Purchaser must properly perform the obligations of the Vendor
under the Contracts and Intellectual Property Licenses on its
behalf.
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13.3 The Purchaser indemnifies the Vendor against any liability or
loss arising under any of he Contracts and Intellectual Property
Licenses as a result of any act or omission of the Purchaser
after the Completion Time. The Vendor indemnifies the Purchaser
against any liability or loss arising under any of the Contracts
and Intellectual Property Licenses as a result of any act or
omission of the Vendor before the Completion Time.
14. Liabilities
14.1 Subject to Completion and the terms of this agreement' and except
for any liabilities of whatever nature relating to the
environmental condition of the Business Site, which the Vendor
and the Purchaser acknowledge are to be conclusively dealt with
in clause 20, all liabilities of whatever nature in relation to
the Business incurred or payable in, or otherwise referable to,
the period:
(a) up to and including the Completion Time are the
responsibility of the Vendor and the Vendor indemnifies the
Purchaser from and against those liabilities; and
(b) after the Completion Time are the responsibility of the
Purchaser and the Purchaser indemnifies the Vendor from and
against all of those liabilities.
15. Debtors
15.1 All Book Debts shall remain the property of the Vendor and shall
be collected by the Vendor' including taking any legal
proceedings.
15.2 The Purchaser shall forthwith pay to the Vendor (without
deduction) all amounts representing Book Debts which are paid to
the Purchaser after the Completion Date.
15.3 The Vendor must provide the Purchaser within 5 Business Days of
the Completion Date with an itemized schedule of the Book Debts,
showing details of each debtor's name and address.
16. Customers
16.1 On or about the Completion Date the Purchaser and the Vendor
jointly must, at the Purchaser's expense, send to each of the
customers and suppliers of the Vendor in the Business a circular
or notice announcing the sale of the Business in a form agreed
with the Vendor.
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16.2 The Purchaser must not contract or engage or release or waive or
do any other act for, on behalf of or in the name of the Vendor
without the prior written consent of the Vendor.
16.3 The Purchaser must not use the name of the Vendor in any
advertisement or circular or stationery without the prior written
copses" of the Vendor. The Purchaser must display its name on
all stationery used by it in connection with the Business after
the Completion Date.
17. Warranties, Representations and Indemnities
17.1 The Vendor represents and warrants to the Purchaser that each of
the statements set out in the appendix to this agreement is
accurate. Each of the statements is to be treated as a separate
representation and warranty and the interpretation of any
statement made may not be restricted by reference to or inference
from any other statement.
17.2 The Vendor represents' warrants and undertakes to the Purchaser
that each of the Warranties is true and correct on the date of
execution of this agreement and will be true at the Completion
Date as if made on and as at each of those dates, except where
otherwise stated.
17.3 Subject to any law to the contrary and except as provided in the
Warranties and elsewhere in this Agreement, all terms,
conditions, warranties and statements, whether express, implied,
written, oral, collateral, statutory or otherwise, are excluded
and the Vendor disclaims all liability in relation to these to
the maximum extent permitted by law.
17.4 Subject to the qualifications contained in the Trade Practices
Act 1974 and all corresponding state and territory legislation,
the Vendor's liability for breach of a condition or warranty
implied by that legislation in relation to the Assets is limited
to one or more of the following, as determined by the Vendor:
(a) the replacement of the Asset or supply of an equivalent;
(b) the repair of the Asset;
(c) the payment of the cost of replacing the Asset or of
acquiring an equivalent; or
(d) the payment of the cost of having the Asset repaired.
17.5 The Purchaser acknowledges that, in entering into this agreement
and in proceeding to Completion, the Purchaser does not rely on
any statement,
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representation, warranty, condition or other conduct which may
have been made by the Vendor, or any person purporting to act on
behalf of the Vendor, except the Warranties.
17.6 The Warranties are extinguished to the extent that a matter is
disclosed in the Disclosure Letter, the Environmental Review or
is disclosed in the terms, conditions, schedules or annexures of
this agreement.
17.7 If a claim is made by a person against the Purchaser which if
satisfied by the Purchaser would result in a claim under the
Warranties:
(a) the Purchaser must immediately give notice of the claim to
Vendor; and
(b) at the expense and direction of the Vendor' the Purchaser
must take such action (including legal proceedings) as the
Vendor may reasonably require to avoid, dispute, defend,
appeal or compromise the claim and any adjudication of it.
17.8 If payment is made for a breach of any Warranty that relates to
one or more of the Assets, the payment is to be treated as a
reduction in the purchase price attributed to each relevant Asset
in clause 3.1. If a Warranty does not relate to specific Asses
any payment made is to be treated as a reduction in the purchase
price attributed to all of the Assets. The reduction in purchase
price is to be apportioned between relevant Assets in the same
ratio as the Purchase Price attributed to each relevant Asset
bears to the total Purchase Price attributed to all relevant
Assets.
17.9 The Purchaser may not claim for any breach of the Warranties
unless full details of the claim have been given to the Vendor
within 18 months from the Completion Date.
17.10 The Purchaser may not claim for any breach of the Warranties
unless the claims for breach of the Warranties are in
aggregate greater than $60,000 and each individual claim is
greater than $10,000.
17.11 The aggregate liability of the Vendor in respect of all
breaches of the Warranties, breaches of this Agreement and
claims under any indemnity in this Agreement and any costs
incurred under clause 20 shall not exceed the Purchase
Price.
18. Transitional Arrangements and Shared Services
18.1 The Vendor will permit the Purchaser and its representatives to
access and use, at the Purchaser's risk and at the cost of supply
to the Purchaser:
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(a) the Vendor's order entry and production scheduling software
(PSS), VISCALL and VISPLT from the VAX System, Dial-Net
access for Lotus Notes via the Noble Park server and the
Router and Wide Area Network access for VAX/IBM until 31
December 1998; and
(b) read only access until 30 September 1997 to the following
programs on the Vendor's IBM mainframe:
(i) TSO - QMF/DB2 tables;
(ii) Business systems:
- FAMIS (Purchasing, Inventory)
- CHEMCALL (Sales)
- SHEM
- MSDS
- Browse;
(iii) Millennium:
- GL:M (General Ledger)
- CP:M (Capital Projects)
- FA:M (Fixed Assets).
18.2 The Purchaser acknowledges that the VAX System is obsolete
technology and that the Vendor is intending to replace this
technology and shall be entitled, without any liability to the
Vendor, to give the Purchaser 3 months notice that provision of
all transitional services through the VAX System shall terminate.
18.3 In the 3 month period following Completion ("Transitional
Period"), the Vendor and the Purchaser agree to review the
services shared by the Business and other businesses not located
on the Business Premises and agree a plan ("Separation Plan") for
the orderly separation or maintenance of those services.
18.4 The Vendor and the Purchaser agree to act reasonably and in good
faith in the preparation of the Separation Plan based on the
principles that:
(a) separation of services should only be required if the
separate use of the shared services is reasonably necessary
to the ongoing conduct of the relevant business;
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(b) the costs of separation of services are not excessive in
relation to the value of services provided; and
(c) the costs of separation are to be borne equally by the users
of the shared services.
18.5 If it is decided to maintain shared services following the
Transitional Period' then the costs of any subsequent separation
are to be borne by the party requesting the separation.
19. Removal of Equipment of Ammonia Filling Facility
19.1 The Vendor, at its cost and to the satisfaction of the Purchaser,
must remove from the Business Premises all plant and equipment
related to the Ammonia Business by 31 December 1997 and the WDS
canopy within a reasonable period of time including without
limitation breaking up and disposing of any concrete bunding or
slabs, levelling the area, conducting any environmental
assessments and any required soil disposal and remediation of the
site of the Ammonia Business to a standard consistent with the
ongoing industrial use of the Business Site.
19.2 The Purchaser acknowledges that the Vendor requires the use of
the Ammonia Filling Facility until 30 September 1997 as a storage
facility for ammonia.
19.3 The Purchaser grants a license to the Vendor and its
representatives, agents and contractors to enter and exit the
Business Premises during normal business hours or as otherwise
agreed with the Purchaser to enable the Vendor to use the Ammonia
Filling Facility and provide any facilities or services
reasonably required by the Vendor to:
(a) load, unload and store ammonia in the storage tanks which
form part of the Ammonia Filling Facility; and
(b) store, deposit and retrieve ammonia in transportable storage
bullets.
19.4 The Purchaser must:
(a) allow the Vendor and its representatives' agents or
contractors full and free access to the Ammonia Filling
Facility with all vehicles and equipment that they require
at all reasonable times; and
(b) provide any information, assistance or facilities that the
Vendor and its representatives, agents or contractors
reasonably require,
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to enable the Vendor to perform its obligations under clause
19.1.
19.5 The Vendor and the Purchaser agree to co-operate and act in good
faith to ensure that the removal of the plant and equipment
related to the Ammonia Filling Facility may be conducted with
minimum interference and disruption to the Business.
19.6 The Purchaser has no liability whatever to the Vendor under this
clause 19 other than for any negligent act, matter or thing done
or omitted to be done by the Purchaser or any of its employees,
agents or contractors.
19.7 The Vendor indemnifies the Purchaser from and against all costs,
liabilities' expenses, losses, damages and claims incurred by or
brought against the Purchaser in respect of the Vendor's use of
the Ammonia Filling Facility.
19.8 If a dispute arises between the parties in relation to the
removal of the plant and equipment of the Ammonia Business, the
parties must use all reasonable endeavours acting in good faith
to settle the dispute as soon as practicable.
19.9 If a party considers that a dispute is not capable of resolution
between the parties then it may give notice to the other party
requiring the arbitration of the dispute ("Arbitration Notice").
The Arbitration Notice must specify in reasonable detail the
nature of the dispute.
19.10 If a dispute is referred for arbitration under this clause,
the parties must, by agreement, appoint an arbitrator who
they consider appropriate to deal with the dispute within 5
Business Days of the giving of the Arbitration Notice.
19.11 If the parties do not appoint an arbitrator within 5
Business Days of the giving of the Arbitration Notice,
either party may request the President or Acting President
of the Institute of Arbitrators to appoint an arbitrator
within 5 Business Days after the request is made.
19.12 The arbitration is to be conducted in accordance with and
subject to the Commercial Arbitration Act 1984 (NSW). The
parties agree to request, the arbitrator to make his
determination within 20 Business Days after the dispute was
submitted for arbitration. A party may be represented by a
duly qualified legal practitioner or other representative.
The parties agree to give any necessary consent to an appeal
to the Supreme Court of New South Wales on any question of
law arising in the course of the arbitration or arising out
of an award.
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19.13 A party may not commence court proceedings in relation to a
dispute arising in connection with this clause 19, until it
has exhausted the procedures in this clause 19' unless the
party seeks urgent interlocutory relief.
20. Environmental
Acknowledgment
20.1 The Purchaser acknowledges that:
(a) it has received, considered and understands the contents of
the Environmental Review;
(b) the Purchaser understands that the Environmental Review is
intended to provide information concerning the potential
presence of Contaminants on the Business Site and does not
constitute a comprehensive environmental audit as to the
nature and extent of Contaminants on or potentially
migrating from or onto the Business Site; and
(c) the Purchaser has had the opportunity to obtain independent
advice from appropriately qualified consultants in respect
of the Environmental Review and the potential presence of
Contaminants on or potentially migrating from or onto the
Business Site and has, independently, reached its own
conclusion and accepts the Contaminants potentially on, in,
under or migrating from or onto the Business Site.
Development
20.2 The parties agree that the areas of the Business Site to be
developed are as shown in Annexure B or such alternative areas of
the same or substantially the same size, but such that the total
area of the Business Site to be developed does not materially
exceed the area shown in Annexure B ("Developed Areas') and that
the development proposed in the Developed Areas is as set out in
Annexure C ("the Development').
Planning Committee
20.3
(a) Following Completion, the Purchaser agrees to establish a
committee ("Planning Committee") to deal with all aspects of
the Development from the conceptual stage through to the
completion
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of the Development. The Purchaser and the Vendor agree that
the Planning Committee must implement the Development so as
to minimize the cost to the Vendor of complying with its
obligations under this clause 20 ("Principle") including:
(i) using the most cost effective clean up methods;
(ii) only remediating or disposing off-site soil in which
Contaminants are inconsistent with the on-going
industrial use of the Business Site or which are in
contravention of any Environmental Law ("Cleanup
Objective");
(iii) using technology proven as capable of achieving
the planned Cleanup Objective; and
(iv) competitive tendering for consultants and contractors.
(b) The composition of the Planning Committee shall be at the
discretion of the Purchaser provided that the Vendor's
nominated representatives shall be a member of the Planning
Committee and be entitled to attend all meetings of the
Planning Committee.
(c) The Planning Committee shall meet as often as necessary.
The Vendor's nominated representatives must be given
reasonable notice of all meetings of the Planning Committee.
(d) Prior to the commencement of any development in a Developed
Area, the Planning Committee must agree a plan for the
sampling of the Developed Areas ("Sampling Plan") to be
conducted to determine the nature and extent of
Contamination in the relevant Developed Area The Purchaser
acknowledges that any sampling proposed by the Planning
Committee is to be undertaken by the Vendor and the results
of tests conducted on the samples ("Results") shall be
disclosed to the Planning Committee.
(e) On the basis of the Results the Planning Committee shall
prepare a plan for the implementation of the Development
("Implementation Plan") which must, as a minimum, outline:
(i) the extent and quantity of surface soils in the
Developed Areas, if any, which shall be excavated or
disturbed as part of the Development ("Excavated
Soil");
(ii) all works in the Developed Areas relating to the
excavation and the Excavated Soils including, without
limitation, the
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method of excavation and the storage, handling,
remediation, transport and disposal of the Excavated
Soil; and
(iii) the budgeted cost of the implementation of the
Development,
and, once the Implementation Plan has been agreed, the
Purchaser must adhere to it.
(f) Any transportation and disposal of any Excavated Soil, which
requires off-site disposal or remediation, shall be at the
Vendor's cost and shall be completed in accordance with EPA
requirements.
Safety Management
20.4
(a) The Planning Committee shall, based on the Results, develop
a Safety Management Plan ("SMP"), prior to the commencement
of any works to remove the Excavated Soils from the
Developed Areas. The SMP must specify appropriate handling
and excavation procedures to ensure the safety of all
persons exposed to or involved with the Excavated Soil.
(b) The Purchaser shall use its best endeavours to ensure that
its employees, agents and contractors involved in any works
in the Developed Areas or with the Excavated Soil are made
aware of the SMP and comply with its conditions at all
times.
(c) If the SMP is not being complied with either the Purchaser
or the Vendor will request the cessation of all works in the
Developed Areas at which time the Purchaser must ensure
that:
(i) all works cease immediately;
(ii) it takes appropriate steps to ensure on-going
compliance with the SMP; and
(iii) that the works do not recommence until compliance
with the SMP is assured.
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Independent Expert
20.5 If the Vendor's nominated representatives and the Purchaser's
representatives on the Planning Committee can not agree on a
Sampling Plan, Implementation Plan or SMP, then the parties will
jointly appoint an independent expert following the service of a
notice of dispute by a party on the other party ("Dispute
Notice"). The Dispute Notice must specify in reasonable detail
the nature of the dispute. The independent expert must be an
accredited environmental auditor under the Environment Protection
Act 1970 (Victoria).
20.6 If the parties can not agree on an independent expert within 5
Business Days of a party receiving a Dispute Notice, then either
party may request the President or Acting President of the
Environmental Management Industry Association of Australia to
appoint an independent expert.
20.7 The independent expert will be asked to determine the dispute the
subject of the Dispute Notice on the basis of the Principle and
the Cleanup Objective.
20.8 The decision of the independent expert is to be conclusive and
binding on the parties in the absence of manifest error. The
Vendor and the Purchaser agree to pay the independent expert's
costs and expenses in the proportions determined by the
independent expert in connection with the reference. The
independent expert will be appointed as an expert and not as an
arbitrator.
(a) Subject to clause 20.9(b) the Purchaser is liable for all
costs associated with the Development in the Developed
Areas;
(b) Subject to clause 20.9(c) the Vendor is liable for:
(i) the costs of its employees in relation to their
involvement in the co-ordination and supervision of all
works involving the Development and the Excavated Soil;
(ii) the costs of consultants and contractors necessarily
engaged in the performance of its obligations under
this clause 20;
(iii) the costs associated with the transport,
remediation or disposal of the Excavated Soil
pursuant to clause 20.3(f);
(iv) any incremental increase in the Purchaser's costs for
the Development in the Developed Areas which the
Purchaser
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<PAGE>
can reasonably establish are directly attributable to
the existence of Contamination in surface soils in
those areas; and
(v) the costs of the Purchaser complying with any direction
served on the Purchaser by the EPA under section 35 of
the Environmental Hazardous Chemicals Act 1985
requiring the taking of prescribed remedial action in
respect of any Contamination on the Business Site
where:
(A) the Contamination was caused by the Vendor prior
to the Completion Date; and
(B) the prescribed remedial action specified in the
direction is required to be carried out as a
result of the Development.
(c) The Vendor's liability pursuant to clause 20.9(b):
(i) is limited to a period of 3 years after the Completion
Date;
(ii) does not include any indirect or consequential loss
suffered or incurred by the Purchaser due either wholly
or in part to the existence of Contamination in the
Developed Areas, including, without limitation, loss of
profits;
(iii) does not include any liability or loss whatsoever
in relation to any delay to the Development due
either wholly or in part to the existence of
Contamination in the Developed Areas or the
exercise by the Vendor of its rights or
performance by the Vendor of its obligations under
this agreement;
(iv) shall, in relation to clauses 20.9(b)(ii),
20.9(b)(iii), 20.9(b)(iv) and 20.9(b)(v), be capped at
a total amount of $500,000.
(d) Subject to the other provisions of this clause 20.9, the
Purchaser agrees that:
(i) it shall not itself or through others make any claim
against the Vendor or any of its Related Bodies
Corporate as a result of any costs, liability,
expenses, losses or damages that it may incur or suffer
arising directly or indirectly from
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the existence of Contaminants on, in under or migrating
from or onto the Business Site;
(ii) it shall fully indemnify and keep indemnified and hold
the Vendor harmless without deduction, from and against
any and all costs, liabilities, expenses, losses,
damages and claims incurred by, or brought against the
Vendor or any of its subsidiaries or related bodies
corporate by any other person, in respect of the
existence of Contaminants on, in, under or migrating
from or onto the Business Site including, without
limitation, any costs associated with compliance with
any notice or direction issued by any governmental
authority in respect of those Contaminants; and
(iii) if it sells or transfers the Business Site, or any
part of it, to a third patty or a Related Body
Corporate, it shall obtain from the purchaser or
transferee indemnities in its favour in the form
set out in clause 20.9(d)(i) and 20.9(d)(ii)
without modification or variation.
Notification to EPA
20.10 If pursuant to an Environmental Law, whether existing at the
date of this agreement or enacted subsequently, the
Purchaser is required to notify the EPA of the fact that the
Business Site may be Contaminated or to provide reports on
the condition of the Business Site, it shall discuss the
notification details with the Vendor and they shall first
agree in good faith an approach which satisfies
Environmental Laws but is also in the interests of both
parties.
License
20.11 The Purchaser grants the Vendor and its employees,
representatives, agents or contractors a license to access
the Business Premises at all reasonable times with all
vehicles and equipment that they require in the exercise of
the rights or the performance of the obligations of the
Vendor under this clause 20.
Definitions
20.12 For the purposes of this clause 20, the following words
shall have the following meanings:
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"Contaminant" means a solid, liquid, gas, odour, heat, sound,
vibration, radiation or substance, or property of any substance,
which makes or may make the Business Site:
(a) unsafe, unfit or harmful for habitation or occupation by any
person or animal or cause damage to the Business Site;
(b) fail to comply with an Environmental Law; or
(c) is such that it does not satisfy the contamination criteria
or standards published, or adopted, by the EPA, as
evidencing the need for a contamination assessment (as
amended from time to time). As at the Completion Date'
those criteria are contained in the Australian and New
Zealand Guidelines for the Assessment and Management of
Contaminated Sites, published by ANZECC in January 1992; and
the words "Contaminated" and "Contamination" shall have the same
meaning.
"Environment" includes the meaning given to that word in any
legislation which has force in New South Wales, from time to
time.
"Environmental Law" means a Law whether existing at the date of
this agreement or not, regulating or otherwise relating to the
environment current at the date of this agreement, including
without limitation, any law relating to land use, planning,
pollution of air or water, soil or ground water contamination,
chemicals, asbestos, waste use and storage of dangerous goods or
to any other aspect of protection of the environment or person or
property.
"EPA" means the New South Wales Environment Protection Authority.
"Law" includes any statute, legislation, law, regulation, by-law,
determination of any government authority, statutory instrument
or otherwise, including without limitation, any development
consent granted under Part 4 of the Environmental Planning and
Assessment Act 1979 ("EPA Act"), any approval under Part 5 of the
EPA Act or any approval or order issued or made under the Local
Government Act 1993.
"Vendor" means, jointly and severally, ICI and ICI Australia
Operations Pty Ltd.
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Non Merger
20.13 This clause 20 shall not merge on Completion but shall
continue to have full force and effect.
21. Costs and Stamp Duty
21.1 The Vendor and the Purchaser agree' except as provided in clause
21.2, respectively to bear their own legal and other costs and
expenses of and incidental to the preparation' execution and
completion of this agreement and of other related documentation.
21.2 The Purchaser agrees to bear all stamp duty payable or assessed
in relation to this agreement and the transfer of the Assets to
the Purchaser.
22. Non-Competition
22.1 The Vendor undertakes to the Purchaser that it will not:
(a) for a period of 5 years from the Completion Date' be engaged
or involved in any capacity in any business or activity
which is the same as or similar to the Business or any
material part of it throughout Australia and New Zealand or
sell products manufactured by the Business as at the
Completion Date into Australia or New Zealand. For the
purposes of this clause "engaged or involved in" includes
direct or indirect involvement as a principal, agent,
partner, employee, shareholder, unitholder, director,
trustee, beneficiary, manager, consultant, adviser or
financier. This restriction applies throughout Australia
and New Zealand;
(b) at any time after the Completion Date:
(i) use or disclose any of the Purchaser's Confidential
Information to anyone other than the Purchaser, except
as required by law; or
(ii) use a logo, symbol, trade mark or business name
substantially identical or deceptively similar to a
Trade Mark or Business Name.
22.2 The prohibitions or restrictions contained in clause 22.1 shall
not apply for a period of 12 months from the Completion Date to
sales of greenhouse film by the Vendor's merchanted film
business.
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22.3 If any of the prohibitions or restrictions contained in clause
22.1 is judged to go beyond what is reasonable in the
circumstances and necessary to protect the Goodwill, but would be
judged reasonable and necessary if any activity were deleted or a
period or area were reduce' then the prohibitions or restrictions
apply with that activity deleted or period or area reduced by the
minimum amount necessary.
22.4 Each of the prohibitions and restrictions in clause 22.1 has
effect as a separate and severable prohibition or restriction and
is to be enforced accordingly.
22.5 Notwithstanding clause 22.1(a) the Vendor may hold in aggregate
up to 5% of the shares in any public company the shares of which
are quoted on Australian Stock Exchange Limited' even though that
company carries on any of the activities referred to in clause
22.1 (a).
22.6 The Vendor acknowledges that all the prohibitions and
restrictions contained in clause 22 are reasonable in the
circumstances and necessary to protect the Goodwill.
23. Notices
23.1 A notice, approval' consent or other communication in connection
with this agreement:
(a) must be in writing;
(b) must be marked for the attention of Mr. Kelvyn Doolan in
respect of the Purchaser and the Company Secretary in
respect of the Vendor; and
(c) must be left at the address of the addressee' or sent by
prepaid ordinary post (airmail if posted to or from a place
outside Australia) to the address of the addressee or sent
by facsimile to the facsimile number of the addressee which
is specified in this clause or if the addressee notifies
another address or facsimile number then to that address or
facsimile number.
The address and facsimile number of each party is:
Vendor
Address: 1 Nicholson Street
Melbourne Vic 3000
Facsimile: (03) 9665 7573
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Purchaser
Address: 2 Urban Street
Braeside Vic 3195
Facsimile: (03) 9587 3287
23.2 A notice, approval, consent or other communication takes effect
from the time it is received unless a later time is specified in
it.
23.3 A letter or facsimile is taken to be received:
(a) in the case of a posted letter, on the third (seventh, if
posted to or from a place outside Australia) day after
posting;
(b) in the case of facsimile, on production of a transmission
report by the machine from which the facsimile was sent
which indicates that the facsimile was sent in its entirety
to the facsimile number of the recipient.
24. Access to the Business
The Vendor must facilitate and ensure that the Purchaser, its agents,
representatives' accountants and solicitors are authorized and
provided with access to the Business Site' the Records and the
Employees at 311 reasonable times upon reasonable notice before the
Completion Date to enable the Purchaser to become familiar with the
conduct of the Business.
25. Assignment
A party may not assign its rights under this agreement without the
consent of the other party.
26. Miscellaneous
Exercise of Rights
26.1 A party may exercise a right, power or remedy at its discretion,
and separately or concurrently with another right, power or
remedy. A single or partial exercise of a right, power or remedy
by a party does not prevent a further exercise of that or of any
other right, power or remedy. Failure by a party to exercise or
delay in exercising a right, power or remedy does not prevent its
exercise.
Waiver and Variation
26.2 A provision of or a right created under this agreement may not
be:
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(a) waived except in writing signed by the party granting the
waiver; or
(b) varied except in writing signed by the parties.
Approvals and consent
26.3 A party may give conditionally or unconditionally or withhold its
approval or consent in its absolute discretion unless this
agreement expressly provides otherwise.
Remedies cumulative
26.4 The rights' powers and remedies provided in this agreement are
cumulative with and not exclusive of the rights, powers or
remedies provided by law independently of this agreement.
No merger
26.5 The Warranties in this agreement do not merge on Completion.
Survival of indemnities
26.6 Each indemnity in this agreement is a continuing obligation'
separate and independent from the other obligations of the
parties and survives termination of this agreement.
Enforcement of indemnities
26.7 It is not necessary for a party to incur expense or make payment
before enforcing a right of indemnity conferred by this
agreement.
Further assurances
26.8 Each party agree, at its own expense, on the request of the other
party, to do everything reasonably necessary to give effect to
this agreement and the transactions contemplated by it (including
the execution of documents) and to use all reasonable endeavours
to cause relevant third parties to do likewise.
Publicity
26.9 A party may not make press or other announcements or releases
relating to this agreement and the transactions the subject of
this agreement without the approval of the other party to the
form and manner of the
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announcement or release unless that announcement or release is
required to be made by law or by a stock exchange.
Entire agreement
26.10 This agreement constitutes the entire agreement of the
parties about its subject matter and any previous
agreements, understandings and negotiations on that subject
matter cease to have any effect.
Severability
26.11 If the whole or any part of a provision of this agreement is
void, unenforceable or illegal in a jurisdiction it is
severed for that jurisdiction. The remainder of this
agreement has full force and effect and the validity or
enforceability of that provision in any other jurisdiction
is not affected. This clause has no effect if the severance
alters the basic nature of this agreement or is contrary to
public policy.
Time of the essence
26.12 Time is of the essence of this agreement in respect of any
date or period determined under this agreement.
27. Governing law, jurisdiction and service of process
27.1 This agreement and the transactions contemplated by this
agreement are governed by the law in force in New South Wales.
27.2 Each party irrevocably and unconditionally submits to the
non-exclusive jurisdiction of the courts of New South Wales and
courts of appeal from them for determining any dispute concerning
this agreement or the transactions contemplated by this
agreement. Each party waives any right it has to object to an
action being brought in those courts, to claim that the action
has been brought in an inconvenient forum, or to claim that those
courts do not have jurisdiction.
27.3 Without preventing any other mode of service, any document in an
action (including, but not limited to, any writ of summons or
other originating process or any third or other party notice) may
be served on any party by being delivered to or left for that
party at its address for service of notices under clause 23.
EXECUTED as an agreement
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<PAGE>
Appendix Warranties, Representations and Indemnities
Warranty 1
(Authority)
1.1 The Vendor:
(a) is incorporated in Victoria; and
(b) has full corporate power to own the Assets and to carry on
the Business.
1.2 The Vendor has the power to enter into and perform this agreement
and has obtained all necessary consents to enable it to do so.
1.3 No order has been made for the winding-up of the Vendor and no
distress, execution or other similar order or process has been
levied on any of the Assets. No voluntary arrangement has been
proposed or reached with any creditors of the Vendor. No
receiver, receiver and manager' provisional liquidator,
liquidator or other officer of the court has been appointed in
relation to the Assets.
1.4 The Vendor is the legal and beneficial owner of the Assets.
There are no mortgages, pledges, liens, encumbrances, charges or
other security interests over or affecting any of the Assets
except as set out in schedule 9.
Warranty 2
(Accounts and records)
2.1 The Accounts' as far as the Vendor is aware,
(a) have been prepared in accordance with generally accepted
accounting principles in Australia and give a correct view
of the revenue and expenses of the Business on their
respective dates;
(b) except as set out in the Accounts, are not affected by any
unusual, extraordinary or non-recurring items;
(c) have been prepared in accordance with the same accounting
policies, including policies in relation to the valuation of
Plant and Equipment and Stock as were applied in the
corresponding accounts for the previous three years; and
(d) have not revalued upwards any Assets on their respective
dates.
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2.2 Since the Accounts for period ending 30 April 1997 ("Management
Accounts") were prepared:
(a) the Business has been carried on in the ordinary and usual
course and no contracts or commitments
differing from those ordinarily necessitated in the conduct
of the Business have been entered into or incurred;
(b) there has been no change in the Assets' the financial
condition and the profitability of the Business from that
set out in the Management Accounts, except changes in the
ordinary course of Business none of which individually or in
aggregate have had a material adverse effect on the
Business; and
(c) none of the Assets nor the financial condition or
profitability of the Business have been materially and
adversely affected by any act, event or circumstance whether
covered by insurance or not.
2.3 The rate of depreciation applied to the Plant and Equipment as
shown in the Accounts has been consistently applied.
2.4 The accountable profits of the Business shown in the Accounts for
the years ending 30 September 1995 and 1996 and the trend of
accountable profit thereby shown have not resulted to any
material extent from:
(a) inconsistencies in accounting principles;
(b) the inclusion of non-recurring, extraordinary or abnormal
items of income or expenditure;
(c) transactions entered into other than on normal commercial
terms;
(d) other factors rendering the profits for all or any of those
periods abnormally high or low.
2.5 No person has given or entered into any guarantee, indemnity or
letter of comfort in respect of the Business.
2.6 The accounting records of the Business:
(a) have been and are being fully, properly and accurately kept
and completed in all material respects;
(b) reflect the trading transactions and the financial position
of the Business.
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2.7 The originals of all material Records which ought to be in the
possession of the Vendor are in its possession and will be
delivered to the Purchaser at Completion.
Warranty 3
(Plant and Equipment)
3.1 Plant and Equipment:
(a) is in a good state of repair and condition given its age;
(b) is in good working order;
(c) is used in and reasonably meets the requirements of the
Business; and
(d) as far as the Vendor is aware, is in a safe state of repair
and condition.
3.2 The Plant and Equipment
(a) is all located at the Business Site;
(b) comprises the principal assets used by the Vendor in the
Business;
(c) each item of Plant and Equipment and Leased Plant and
Equipment is in the physical possession of the Vendor; and
(d) is the only plant and equipment required for the conduct of
the Business.
Warranty 4
(Stock)
Other than Stock on consignment with customers of the Business'
all the Stock is in the physical possession of the Vendor.
Warranty 5
(Intellectual Property Rights)
5.1 To the best of the Vendor's knowledge, the Vendor's use of the
Intellectual Property Rights does not infringe, breach an
obligation of confidence or wrongfully use any confidential
information, trade secrets, copyright, letters patent, trade
marks, trade names, designs, business names or other similar
industrial, commercial or intellectual property rights of any
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<PAGE>
corpora ion or person and no Claims have been asserted
challenging the Vendor's use of the Intellectual Property Rights.
5.2 Other than the license agreement between the Vendor and Colorpak
Pty Ltd in relation to the VisQueen trade mark in Papua New
Guinea, the Vendor has not licensed, assigned, authorized or
permitted any person or corporation to use the Intellectual
Property Rights or the Business Name.
5.3 Schedule 4 is a complete and accurate list of:
(a) all registered and unregistered business names and trade
marks;
(b) all registered patents and designs; and
(c) all applications for registration of patents and designs,
owned by the Vendor in connection with the Business.
Warranty 6
(Compliance with statutory requirements)
6.1 The Vendor has provided the Purchaser with either access to or
copies of all development consents' local government approvals,
licenses and authorizations required under any Environmental Law
and in the possession of the Vendor.
6.2 The Vendor warrants that it does not actually know of any
continuing breach of any Environmental Law in respect of the use
of the Business Site and the Assets for the purpose of the
Business, as at the date of execution of this agreement.
6.3 Other than in relation to any Environmental Law and as far as the
Vendor is aware, the use of the Business Site for the carrying on
of the Business does not breach any applicable law, statute,
ordinance, rule, regulation, by-law, planning scheme, development
consent, order' permit or determination of any governmental
authority.
Warranty 7
(Equipment Leases)
7.1 The Equipment Leases constitute all the lease and hire purchase
agreements used in the Business.
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<PAGE>
7.2 With respect to each Equipment Lease:
(a) the Vendor has received no notice of any breach of the
Equipment Leases;
(b) as far as the Vendor is aware, it is valid and subsisting;
and
(c) it has not been amended or modified.
Warranty 8
(Employees)
8.1 In respect of each Employee:
(a) the details of that Employee's salary, bonus and other
benefits and other material terms of employment listed in
Schedule 5 are true and correct in all material respects;
(b) as far as the Vendor is aware, the Vendor has complied in
all material respects with all obligations imposed on it by
statutes, orders, regulations, collective agreements and
awards;
(c) the Vendor has properly calculated and paid all Group Tax
and Fringe Benefits Tax due before the Completion Date; and
(e) the Vendor has made all payments in respect of occupational
superannuation required under any statute or award;
8.2 The Vendor is not involved in any industrial or trade dispute or
any dispute regarding any claim with any of the Employees or with
a trade union and, as far as the Vendor is aware, there are no
facts or circumstances which are likely to result in such a
dispute with any of the Employees.
8.3 The Vendor's Fund is a complying fund for the purposes of the
Superannuation Industry (Supervision) Act 1993 and the Income Tax
Assessment Act 1936.
Warranty 9
(Contracts)
9.l There are no written agreements, arrangements or understandings
affecting the Assets or the carrying on of the Business that:
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(a) are material to the operation of the Business and have not
been disclosed in writing to the Purchaser;
(b) are outside the ordinary and proper course of business of
the Business; and
(c) are incapable of being fulfilled or performed on time
without undue or unusual expenditure of money.
9.2 With respect to each Contract listed in schedule 6:
(a) no party to the contract is in default;
(b) the Vendor is not aware of any grounds for rescission or
avoidance or repudiation of that contract.
9.3 To the best of the knowledge, information and belief of the
Vendor, no customer or supplier of the Business will cease to
purchase from or sell to the Business by reason of the change in
ownership of the Business.
Warranty 10
(Litigation)
10.1 There is no material Claim threatened or pending against the
Vendor in respect of the Business or the Assets nor is the Vendor
aware of any fact' matter or circumstance likely to give rise to
any Claim or Liability which could affect the ability of the
Business to continue operating.
10.2 There are no unsatisfied or outstanding judgments, orders or
awards affecting The Vendor, the Business or any of the Assets or
to which it is or may become a party.
10.3 Except for debt collection proceedings instigated by the Vendor,
the Vendor is not currently involved in any legal proceedings
relating to the Business.
Warranty 11
(Insurance)
11.1 The Vendor has maintained insurance in connection with the
Business with a recognized insurer against all risks, and in
those amounts, which would be maintained in accordance with
ordinary business practice.
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<PAGE>
Warranty 12
(Material disclosure)
12.1 The Vendor has used all reasonable endeavours to provide the
Purchaser and its representatives prior to the date of this
agreement with all information which would be material to a
prudent intending purchaser of the Business and the Assets and as
far as the Vendor is aware that information is true and correct
in all material respects.
Warranty 13
(Stamp duties)
13.1 All documents which are necessary to establish the tide of the
Vendor to the Assets that are required to be stamped have been
duly stamped.
For the purposes of this schedule:
"Claim" means any claim, demand, action, proceeding, litigation,
investigation or judgement whether based in contract, tort' statute
otherwise;
"Liabilities" means all liabilities' losses, damages, outgoings,
costs and expenses of whatever nature.
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<PAGE>
Schedule 1 Business Premises
Business Premises
Address: 149 Orchard Road'
Chester Hill and associated rail spur
Registered plan: Lot I Deposited Plan 700896
Folio identifier 1/700896
Registered plan: Lot 35 Deposited plan 25402
Volume 15191 Folio 201
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AEP
INDUSTRIES INC. FORM 10-Q FOR THE YEAR ENDED OCTOBER 31, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<CASH> 4,143
<SECURITIES> 0
<RECEIVABLES> 117,445
<ALLOWANCES> 5,226
<INVENTORY> 92,021
<CURRENT-ASSETS> 236,361
<PP&E> 436,942
<DEPRECIATION> 144,199
<TOTAL-ASSETS> 613,083
<CURRENT-LIABILITIES> 180,316
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 87,882
<TOTAL-LIABILITY-AND-EQUITY> 613,083
<SALES> 759,123
<TOTAL-REVENUES> 762,598
<CGS> 599,391
<TOTAL-COSTS> 559,391
<OTHER-EXPENSES> 118,236
<LOSS-PROVISION> 1,644
<INTEREST-EXPENSE> 30,061
<INCOME-PRETAX> 13,266
<INCOME-TAX> 4,695
<INCOME-CONTINUING> 8,571
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,571
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 1.15
</TABLE>
