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FORM 1O-Q/A
Amendment #1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-898.
AMPCO-PITTSBURGH CORPORATION
Incorporated in Pennsylvania.
I.R.S. Employer Identification No. 25-1117717.
600 Grant Street, Pittsburgh, Pennsylvania 15219
Telephone Number 412/456-4400
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 (or for such shorter periods that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO____
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On August 17, 1999, 9,590,121 common shares were outstanding.
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SIGNATURES
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.
AMPCO-PITTSBURGH CORPORATION
DATE: August 17, 1999 BY: /s/ Robert A. Paul
Robert A. Paul
President and
Chief Executive Officer
DATE: August 17, 1999 BY: /s/ Marliss D. Johnson
Marliss D. Johnson
Vice President
Controller and Treasurer
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SIGNATURE COPY
Share Purchase Agreement
Dated 2 August 1999
between
DAVY METALS LIMITED
as Seller
KVAERNER PLC
as Seller's Guarantor
HAMSARD 2043 LIMITED
as Purchaser
and
AMPCO - PITTSBURGH CORPORATION
as Purchaser's Guarantor
relating to
the sale and purchase of the whole issued share capitals of The Davy Roll
Company Limited, Kvaerner Formet Limited and Turner Chilled Rolls Limited (each
a "company" and together "the Companies")
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
1. Interpretation................................................... 1
2. Sale and Purchase................................................ 7
3. Consideration.................................................... 8
4. Completion....................................................... 9
5. Sellers' Warranties and Obligations.............................. 10
6. Restrictive Covenants............................................ 10
7. Purchaser's Warranties........................................... 11
8. Seller's Limitations on Liability................................ 13
9. Access to Records and Preparation of Tax Returns................. 13
10. Post Completion Obligation....................................... 14
11. Effect of Completion............................................. 15
12. Remedies or Waivers.............................................. 15
13. Assignment....................................................... 15
14. Further Assurance................................................ 15
15. Entire Agreement................................................. 16
16. Notices.......................................................... 17
17. Announcements.................................................... 18
18. Confidentiality.................................................. 18
19. Costs and Expenses............................................... 19
20. Counterparts..................................................... 19
21. Time of Essence.................................................. 20
22. Invalidity....................................................... 20
23. Agent for Service................................................ 20
24. Pension Arrangements............................................. 21
25. BUPA and Payroll................................................. 21
26. Guarantee........................................................ 21
27. Choice of Governing Law.......................................... 21
28. Jurisdiction..................................................... 22
</TABLE>
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SCHEDULES
<TABLE>
<S> <C> <C>
Schedule 1 (Completion Arrangements)........................................... 23
Schedule 2 (Warranties)........................................................ 25
Schedule 3 (Limitations on the Seller's Liability under the Warranties and
Undertakings)....................................................... 43
Schedule 4 (Basic Information about the Companies)............................. 51
Schedule 5 (Pension Arrangements).............................................. 53
Schedule 6 (Completion Accounts)............................................... 63
Schedule 7 (Agreed Net Assets)................................................. 65
Schedule 8 (Guarantees)........................................................ 66
Schedule 9 (Properties)........................................................ 67
Schedule 10 (Intercompany Debts)................................................ 68
Schedule 11 (Leasing Contracts)................................................. 69
Schedule 12 (Consideration Apportionment)....................................... 70
Schedule 13 (KMEB Agreement).................................................... 71
</TABLE>
Agreed Form Documents
1. Tax Deed
2. Disclosure Letter
4. Director's Resignation Letter
5. Auditor's Resignation Letter
6. Power of Attorney in respect of shares
7. Environmental Deed of Indemnity
8. Trade Mark Licence - "Davy Roll" name
2
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THIS AGREEMENT is made on 2 August 1999
BETWEEN:
1. DAVY METALS LIMITED of St James's House, 23 King Street, London SWIY 6QY,
England (the "Seller")
2. KVAERNER PLC of 68 Hammersmith Road, London W14 8YW , England (the
"Seller's Guarantor");
3. HAMSARD 2043 LIMITED of 7 Devonshire Square, London EC2, England (the
"Purchaser")
AND
4.. AMPCO - PITTSBURGH CORPORATION of 600 Grant Street, Suite 4600, Pittsburgh,
PA15 219, USA (the "Purchaser's Guarantor")
WHEREAS:-
(A) Particulars of the Companies to be sold to the Purchaser pursuant to this
transaction are set out in Schedule 4 (Basic Information).
(B) Kvaerner PLC, as beneficial owner of the Sale Shares under the KMEB
Agreement (as defined in the Agreement) has procured that the Seller shall
agree to sell and the Purchaser has agreed to purchase and pay for the Sale
Shares (as defined in this Agreement) on the terms and subject to the
conditions of this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
1.1 In this Agreement and the Schedules to it:-
"Accounts" means each of the Company's individual accounts
(as that term is used in Section 226 of the Act)
for the financial year ended on the Accounts Date,
the Auditors report on those accounts, the
directors' report for that year and the notes to
those accounts;
"Act" means the Companies Act 1985;
"Accounts Date" means 31 December 1998;
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"Agreed Rate" means 2% above the base rate from time to time of
Barclays Bank Plc
"Associated Company" means an undertaking in which a company has an
associated participating interest (as defined in
section 260 of the Act) which is not a Subsidiary
of any of the Companies;
"Business Day" means a day (other than a Saturday or a Sunday) on
which banks are open for business in London;
"Companies Acts" means the Act, the Companies Consolidation
(Consequential Provisions) Act 1985, the Companies
Act 1989 and Part V of the Criminal Justice Act
1993;
"Companies Legislation" means the Companies Acts and all applicable
legislation which governs the regulation and
operation of companies in England;
"Companies" means together Davy, Formet and Turner, basic
information concerning each is set out in Schedule
4 (Basic Information) and "Company" shall mean any
of them;
"Completion" means completion of the sale and purchase of the
Sale Shares under this Agreement;
"Completion Accounts" means the profit and loss account of the Companies
for the period starting on the day after the
Accounts Date and on the Completion Date and the
balance sheet of the Companies as at the
Completion Date and all attached notes if
applicable, to be prepared in accordance with
Schedule 6 (Completion Accounts);
"Completion Balance means the balance sheets of each Company as at the
Sheets" close of business on the date of Completion, to be
prepared in accordance with Schedule 6 (Completion
Accounts);
"Completion Date" means the date of this Agreement;
"Davy" means Davy Roll Company Limited with company
registration number 162966;
"Debt Free Price" means the total consideration minus all debt, as
more particularly set out in clause 3
(Consideration);
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"Designated Account" means Barclays Bank plc, 54 Lombard Street, London
EC3V 9EX, Account No. 30287334, Sort Code: 20-00-
00;
"Disclosure Letter" means the letter dated 2 August 1999 written by
the Seller to the Purchaser for the purposes of
sub-clause 9.1 (Seller's Limitations on Liability)
and delivered to the Purchaser's Solicitors before
the execution of this Agreement;
"Event" means any transaction, action or omission, any
distribution, any change in the residence of any
person for the purposes of any Tax, the death of
any person, and a failure to take any action
whether the same shall have actually occurred or
shall be deemed to have occurred for the purposes
of any Tax and shall also include Completion;
"Environment" means:
(a) land, including, without limitation, surface
land, sub-surface strata, sea bed and river
bed under water (as defined in paragraph (b))
and natural and man-made structures;
(b) water, including, without limitation, coastal
and inland waters, surface waters, ground
waters and water in drains and sewers; and
(c) air, including, without limitation, air
inside buildings and other natural and man-
made structures above or below ground;
"Environmental Law" means all applicable laws Common Laws, Statutes,
Directives, Regulations, Notices, Standards,
having force of law, clean-up standards (including
but not limited to ICRCL threshold figures)
Judgements, Decrees or Orders, Codes of Practice,
Circulars, Guidance Notes (Statutory or otherwise)
and the like which the sole exception of (a) below
are in effect in the United Kingdom at the date
hereof concerning the protection of human health
or the Environment or the conditions of the work
place or the generation, transportation, storage,
treatment or disposal of any Hazardous Material
but in the case of (a) below Environmental Law
shall also include:
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(a) the Contaminated Land Regime in Part IIA
Environmental Protection Act 1990 and
Statutory Guidance issued thereunder as
first enacted after the Completion Date;
"Environmental Permit" means a permit concerned with the pollution or
protection of the Environment (including the
disposal of waste) or harm to or the protection of
the health of humans, animals or plants in
relation to the operation of the business of the
Companies;
"Environmental means a civil, criminal, arbitration or
Proceeding" administrative or other proceeding concerning the
pollution or protection of the Environment
(including the disposal of waste) or harm to or
the protection of the health of humans, animals or
plants;
"Environmental means a governmental, quasi-governmental or
Investigation" governmental agency investigation, enquiry or
disciplinary proceedings relating to the pollution
or protection of the Environment (including the
disposal of waste) or harm or the protection of
the health of humans, animals or plants;
"Expert" has the meaning given to it in clause 4.2 (Intra-
Group Debt);
"Formet" means Kvaerner Formet Limited (formerly Formet
Limited) with company registration number 1025431;
"GAAP" means accounting practice in accordance with
Schedule 4 of the Act and accounting standards in
the United Kingdom;
"Hazardous Material" shall mean a natural or artificial substance,
organism, preparation or article in any form
which, if generated, manufactured, processed,
used, treated, stored, distributed, disposed of,
transported or handled (or the actual combination
of) is or proves to be harmful to the Environment
or a living organism is subject to regulation or
restriction or prohibition, under Environmental
Law.
"ICTA" means the Income and Corporation Taxes Act 1988.
"Kvaerner Group" means the Seller's Guarantor, its subsidiaries and
Associated Companies other than the Companies;
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"KMEB Agreement" means the Agreement dated 13 April 1999 between
Kvaerner PLC and Davy Metals and others
effectively transferring beneficial ownership of
the Sale Shares to Kvaerner PLC, as attached in
Schedule 13 (KMEB Agreement);
"Net Assets" means a sterling sum equal to the aggregate amount
of the assets of each Company less the aggregate
amount of the liabilities of each Company as
derived from the Completion Balance Sheets
excluding cash and debt as set out in Schedule 10
(Intercompany Debts);
"Payroll Accounts" means the account held by Kvaerner Services
Limited at Barclays Bank Plc, 54 Lombard Street,
London EC3V 9EX;
"Pre-contractual Statement" has the meaning given to it in clause 15 (Entire
Agreement);
"Proceedings" means any proceeding, suit or action arising out
of or in connection with this Agreement;
"Purchaser's Group" means the Purchaser, its subsidiaries and
subsidiary undertakings, any holding company of
the Purchaser and all other subsidiaries or
subsidiary undertakings of any such holding
company from time to time;
"Purchaser's Solicitors" means Hammond Suddards;
"Relief" means any loss, relief, allowance or credit in
respect of any Tax or any deduction in computing
income, profits or gains for the purposes of any
Tax or the right to any repayments of Taxation;
"Retained Group" means the Seller and its subsidiaries and
subsidiary undertakings from time to time (other
than the Companies) its holding companies and
subsidiaries and subsidiary undertakings of any
such holding company;
"Sale Shares" means all the issued shares in the capital of each
of Davy, Formet and Turner;
"Seller's Group Company" means the Seller or a company which is, on or at
any time after the date of this Agreement, a
subsidiary or holding company of the Seller or a
subsidiary of a holding company of the Seller;
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"Service Documents" has the meaning given to it in clause 24 (Agent
for Service);
"Share Purchase" has the meaning given to it in clause 16 (Entire
Agreement);
"Statement of Net Assets" means a statement of the Net Assets of the
Companies, as derived from the Completion Balance
Sheets (as more particularly set out in Schedule 7
(Agreed Net Assets);
"Tax Authority" has the meaning given to it in the Tax Deed;
"Tax" or "Taxation" means and includes all forms of taxation and
statutory governmental, supra-governmental, state,
principal, local governmental or municipal
impositions, duties, contributions charges, rates
and levies, in each case whether of the United
Kingdom or elsewhere and whenever imposed, and all
fines, surcharges, penalties, charges, costs and
interest relating thereto and without limitation
all employment taxes and any deductions or
withholdings of any sort and National Insurance
and similar contributions of stamp duty and stamp
duty reserve tax;
"Tax Deed" means the Taxation Deed to be entered into between
the Seller, the Seller's Guarantor and the
Purchaser;
"TCGA" means the Taxation and Chargeable Gains Act 1992;
"Tax Statutes" includes statutes (and all regulations and
arrangements made thereunder) providing for and
imposing any Taxation;
"Tax Warranties" means the warranties set out in paragraph 8 of
Schedule 2 (Warranties) given by the Seller and
"Tax Warranty" shall be construed accordingly;
"Turner" means Turner Chilled Rolls Limited with company
registration number 1180365;
"Undertakings" any undertaking given by the Seller in this
Agreement (other than the Tax Deed or any
undertaking in the Tax Deed and the Indemnity or
Deed of Environmental Indemnity or any undertaking
in the Deed of Environmental Indemnity;
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"Warranties" means the representations, warranties and
undertakings contained or referred to in Schedule
2 (Warranties) of the Agreement.; and
"Working Hours" means 9.30 a.m. to 5.30 p.m. (local time) on a
Business Day.
1.2 In this Agreement, unless otherwise specified:-
(a) references to clauses, sub-clauses, paragraphs, sub-paragraphs and
Schedules are to clauses, sub-clauses, paragraphs, sub-paragraphs of,
and Schedules to, this Agreement;
(b) a reference to any statute or statutory provision shall be construed
as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted except to the extent that any
amendment or modification made after the date of this Agreement would
increase or after the liability of the Seller under this Agreement;
(c) references to a "company" shall be construed so as to include any
company, corporation or other body corporate, wherever and however
incorporated or established;
(d) references to a "person" shall be construed so as to include any
individual, firm, company, government, state or agency of a state or
any joint venture, association or partnership (whether or not having
separate legal personality);
(e) the expressions "accounting reference date", "holding company",
"subsidiary" "subsidiary undertaking" and "wholly-owned subsidiary"
shall have the meaning given in the Companies Legislation as
applicable;
(f) a person shall be deemed to be connected with another if that person
is connected with another within the meaning of section 839 of the
Income and Corporation Taxes Act 1988;
(g) references to writing shall include any modes of reproducing words in
a legible and non-transitory form;
(h) headings to clauses and Schedules are for convenience only and do not
affect the interpretation of this Agreement;
(i) the Schedules form part of this Agreement and shall have the same
force and effect as if expressly set out in the body of this
Agreement, and any reference to this Agreement shall include the
Schedules;
(j) references to documents in the "agreed form" means in the form agreed
in writing by or on behalf of each of the Parties; and
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(k) where any statement is qualified by the expression "to the best of the
Seller's knowledge and belief", such qualification refers to the
constructive knowledge of the Seller having made all reasonable
enquiries of the senior management within the Companies, Colin Randall
(Tax Manager) and Lyn Ellis (Kvaerner Pensions Director).
2. Sale and Purchase
2.1 The Seller shall sell (having been so procured by the beneficial owner of
all Sale Shares, Kvaerner PLC), and the Purchaser shall purchase and pay
for, `the Sale Shares with all rights attached or accruing to them at
Completion.
2.2 The Sale Shares shall be free from all charges and encumbrances and from
all other rights exercisable by third parties.
2.3 The Purchaser shall be entitled to exercise all rights attached or accruing
to the Sale Shares including, without limitation, the right to receive all
dividends, distributions or any return of capital declared, paid or made by
the Company in respect of periods commencing on or after Completion.
2.4 For the avoidance of doubt, Part 2 of the Law of Property (Miscellaneous
Provisions) Act 1994 shall not apply for the purposes of this claim.
3. Consideration
3.1 Schedule 10 (Intercompany Debts) sets forth the amounts (1) payable to the
Companies from the Kvaerner Group and (2) payable to Kvaerner Group from
the Companies. The net of the outstanding aggregate amounts payable by the
Purchaser on behalf of the Companies to the Kvaerner Group is
(Pounds)1,049,000 (the "Intercompany Debt").
3.2 The debt free value of the Companies is hereby recognised as
(Pounds)14,800,000 (the "Total Consideration"). The Total Consideration
less the amount of the Intercompany Debt amounting to (Pounds)13,751,000
(the "Debt Free Price"). The Debt Free Price has been apportioned between
the Companies according to Schedule 12 (Debt Free Price Apportionment) less
(Pounds)500,000 in respect of estimated cheques drawn but not presented for
payment before Completion which the Purchaser agrees to discharge on behalf
of the Seller.
3.3 The Purchaser shall pay at Completion in accordance with Clause 4
(Completion) the Total Consideration.
3.4 Following Completion the Seller shall indemnify and hold harmless the
Purchaser and the Companies from and against any claim for payment of any
Intercompany Debt payable to the Kvaerner Group. The Purchaser shall
indemnify and hold harmless the Seller and the Kvaerner Group from and
against any claim for payment of any Intercompany Debt payable to the
Companies.
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3.5 Owing to timing differences between accounting entry and bank transaction,
there may exist at Completion payments to be made by the Companies and
receipts due to the Companies which have not cleared the banking system and
which have not been accounted for in clause 3.2. Any such payments or
receipts are to be made in accordance with clause 3.6 below.
3.6 Within 15 Business Days of Completion, the Seller and the Purchaser shall
endeavour in good faith to agree a schedule of payments and receipts (the
"Schedule") (the Seller shall be given and entitled to have reasonable
access to, and (where reasonable) to take copies of any records or
information belonging to the Companies in order to verify and compile the
Schedule in respect of the Companies. The amounts referred to in Clause 3.5
and set out in the Schedule shall be paid by the Purchaser on behalf of the
Companies to the Seller or by the Seller on behalf of the Companies to the
Purchaser, as the case may be. All amounts specified in the agreed Schedule
are to be paid within 15 Business Days. In the absence of agreement as to
the Schedule, the determination of the Schedule may be referred by either
the Seller or the Purchaser to a partner of at least 10 years qualified
experience at an independent firm of chartered accountants agreed by the
parties in writing or, failing agreement on the identity of the firm of
chartered accountants within 25 Business Days of Completion, appointed on
the application of either party by the President for the time being of the
Institute of Chartered Accountants in England and Wales (the "Expert").
3.7 The Expert shall act on the following basis:
(a) the Expert shall act as an expert and not as an arbitrator;
(b) the Expert shall be instructed to notify both the Seller and the
Purchaser of his determination within 21 days of his appointment;
(c) the Expert's determination shall, in the absence of fraud or manifest
error, be final and binding on the parties and shall be deemed to
constitute the agreed Schedule for all purposes of this Agreement;
(d) the Seller and the Purchaser shall each pay for one half of the
Expert's costs or as the Expert may determine; and
(e) For the purposes of agreeing or determining of the Schedule the Seller
and the Purchaser shall, and the Purchaser shall procure that any of
the Companies shall, give the Expert and each other all information
relating to the drafting of the Schedule which they may reasonably
require and the Expert shall be entitled (to the extent that he
considers appropriate) to base his opinions on such information and on
the accounting and other records of the Companies.
3.8 Within 5 Business Days of the agreement or determination of the Completion
Accounts pursuant to Schedule 7 (Agreed Net Assets):
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(a) if the increase in the Net Assets exceeds (Pounds)250,000 as
compared to Schedule 7 (Agreed Net Assets) the Purchaser shall
pay to the Seller in cash the full amount of any such excess
(together with interest as provided for in Clause 3.9
(Consideration); and
(b) if the decrease in the Net Assets exceeds (Pounds)250,000 as
compared to Schedule 7 (Agreed Net Assets) the Seller shall
repay to the Purchaser in cash the full amount of any such
shortfall (together with interest as provided for in clause 3.9
(Consideration).
3.9 Any payment made pursuant to clause 3.8 (Consideration) above shall
carry interest at the Agreed Rate calculated on a daily basis from 15
Business Days of the final determination of amounts payable or within
15 Business Days of determination of the Completion Accounts as the
case may be. .
4. Completion
4.1 Completion shall take place on the Completion Date at the offices of the
Purchaser's Solicitors.
4.2 At Completion, the Seller and the Purchaser shall do those things listed in
Schedule 1 (Completion Arrangements).
4.3 Payment by telegraphic transfer of the Total Consideration (less the amount
of (Pounds)500,000 to be deducted in accordance with clause 3.2) in
accordance with Schedule 1 (Completion Arrangements) shall constitute
payment of the consideration for the Sale Shares and shall discharge the
obligations of the Purchaser under clause 2 (Sale and Purchase).
5. Sellers' Warranties and Obligations
5.1 Subject to clause 9 (Seller's Limitations on Liability), the Seller
warrants to the Purchaser that each of the Warranties are accurate at the
date of this Agreement.
5.2 The Seller accepts that the Purchaser is entering into this Agreement in
reliance upon the Warranties.
5.3 The Purchaser acknowledges that it does not rely on, and has not been
induced to enter into this Agreement on the basis of, any warranties,
representations, covenants, undertakings, indemnities or other statements
(including any Pre-Contractual Statement) whatsoever, other than the
Warranties and acknowledges that none of the Seller, the Companies, or any
of their agents, officers or employees have given any such warranties,
representations, covenants, undertakings indemnities or other statements.
5.4 Each of the Warranties shall be construed as a separate and independent
Warranty and (except where expressly provided to the contrary) shall not be
limited or restricted by reference to or inference from the terms of any
other Warranty.
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5.5 The Seller will, subject to any obligations of confidentiality by which it
is bound or to any regulatory or legal restraints, provide such information
and co-operation as it reasonably and practicably may to assist the
Purchaser to obtain any necessary regulatory and/or merger control
clearances from the relevant United Kingdom and European Union authorities.
5.6 The Seller warrants to the Purchaser that neither the execution of this
Agreement by the Seller nor the consummation of the transaction as
contemplated by this Agreement will violate, conflict with or result in the
breach of any term, limitation in or provision of, or constitute a default
(or an event that, with the giving of notice or the lapse of time or both,
would constitute a default) under the terms, provisions or conditions of
the constitutional documents of the Seller or violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Seller.
6. Restrictive Covenants
6.1 The Seller Covenants with the Purchaser (for itself and as trustee for each
member of the Purchaser's Group) that without the prior written consent of
the Purchaser no member of the Retained Group will:
(a) for a period of 5 years after the date of Completion directly or
indirectly, carry on or be engaged, concerned or interest in the
business of cast or forged steel rolls (the "Business") anywhere in
the world in competition with the Business of the Companies as carried
on at the date of Completion save for such businesses that are
acquired incidentally by the Retained Group which are engaged,
concerned or interested in the Business. If the Retained Group
acquires a business through acquisition or merger and chooses to
dispose of such company incidentally acquired and involved in the
Business such company will be offered for sale to the Purchaser who
will have a first right of refusal;
(b) for a period of 12 months after the date of Completion, solicit or
entice away or seek to entice away any manager who is, and was at the
date of Completion, employed by Companies save for those managers that
freely respond and are engaged from advertisements in trade press and
other publications;
(c) for a period of 12 months after the date of Completion, solicitor or
endeavour to solicit in competition with the Business of the Companies
(as carried on at the date of Completion) the custom of, or order
from, any person, firm or company who has been a customer of the
Companies at any time during the period of 12 months immediately
preceding the date of Completion; or
(d) will for a period of 12 months after the date of Completion, interfere
with or seek to interfere with the continuance of supplies to the
Companies (or the terms relating to such supplies) from any suppliers
who have been supplying components, materials or services to the
Companies at any time during the period of 12 months immediately
preceding the date of Completion.
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6.2 The parties agree that the Retained Group will continue to trade with
Formet for at least 12 months following Completion PROVIDED THAT Formet
offers competitive prices, prompt delivery schedules and it remains
convenient to continue trading.
6.3 The restrictions contained in this clause 6 (Restrictive Covenants) are
considered to be reasonable by the Seller in all respects but if any of
those restrictions shall be held to be void in the circumstances where it
would be valid if some part were deleted, the parties agree that such
restrictions shall apply with such deletion as may be necessary to make it
valid and effective.
6.4 The Seller shall procure that each member of the Retained Group shall
comply with the provisions of this clause 6 (Restrictive Covenants) as if
each such person were a party covenanting with the Purchaser.
6.5 The Seller acknowledges that the Purchaser is accepting the benefit of the
covenants contained in this clause on its own behalf and each of the
Companies with the intention that the Purchaser may claim against the
Seller on behalf of the Companies for loss sustained by that person as a
result of any breach of any of the covenants contained in this clause.
6.6 The provisions of clause 6.1(a) to 6.1(d) (Restrictive Covenants) are
separate and severable and shall be enforceable accordingly.
7. Purchaser's Warranties
7.1 The Purchaser warrants to the Seller that: -
(a) neither the execution of this Agreement by the Purchaser nor the
consummation of the transaction as contemplated by this Agreement will
violate, conflict with or result in the breach of any term, limitation
in or provision of, or constitute a default (or an event that, with
the giving of notice or the lapse of time or both, would constitute a
default) under the terms, provisions or conditions of the
constitutional documents of the Purchaser or violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the
Purchaser; and
(b) no consent or approvals by, notice to, or registration with, any
governmental or other authority is required on the part of the
Purchaser in connection with the execution of this Agreement or the
consummation of the transaction contemplated in it.
7.2 Subject to exceptions set out below the Purchaser, the Companies and
each of them agree not to carry out intrusive sampling and analysis
of soils sediments, groundwater, and surface water at the Properties
for (i) the purpose of discovering, identifying or accessing any
contamination or pollution of the Environment at the Properties or
(ii) voluntarily reporting to any Environmental Regulator as defined
in the Deed of Environmental Indemnity or other body the existence
of or data on contamination existing in the Environment at the
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Properties as of Completion for a period of 6 years from the date
hereof subject to the following exceptions:-
(a) In circumstances where intrusive sampling and/or analysis is
required in writing to be carried out by an Environmental
Regulator; or
(b) In circumstances where Environmental Law requires intrusive
sampling and/or analysis; or
(c) Where intrusive sampling is required to assist or facilitate the
defence of any Claim as defined in the Deed of Environmental
Indemnity; or
(d) Where intrusive sampling and/or analysis is required to be carried
out pursuant to the Dispute Resolution mechanisms at clause 7
(Dispute Resolution) under the Deed of Environmental Indemnity; or
(e) With the agreement in writing of Kvaerner PLC.
7.3 Clause 7.2 shall not be construed in such a way as to prevent or restrict
the sampling and analysis of soils at the Properties for the purposes of
construction and development in the ordinary course of business at the
Properties. The Purchaser or the Companies or any one of them shall
provide Kvaerner PLC with 30 days notice of such party's intent to
undertake such sampling and analysis, and with the results of such sampling
and analysis promptly upon receipt.
7.4 In the event that the Purchaser or the Companies or any one of them wishes
to take action at any of the Properties as provided by sub-clauses (a),
(b), (c), (d) or (e) of clause 7 above, such party shall provide Kvaerner
PLC with 30 days notice of its intent to commence such action with full
documentation evidencing the existence of the exception to the prohibition
contained in this clause. The party providing such notice and Kvaerner PLC
shall consult in good faith with the aim or reaching agreement regarding
the necessity and scope of any action contemplated under sub-clauses (a),
(b), (c), (d) or (e). In the event that the party providing notice under
this clause 7.3 and Kvaerner PLC are unable to reach agreement, they shall
refer their dispute to resolution pursuant to the provisions of the Deed of
Environmental Indemnity. Provided however, that the Purchaser or the
Companies or any one of them shall not be obliged to provide 30 days notice
and consult with the Kvaerner PLC in the event that:
(a) The Purchaser or the Companies or any one of them believe that a
failure to undertake the intrusive sampling and analysis referred to
in the Deed of Environmental Indemnity will result in a criminal
liability; or
(b) In the circumstances of an emergency requiring timely action to comply
with Environmental Laws such that implementation of the consultation
process would prohibit compliance with such Environmental Laws.
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In such event the Purchaser or the Companies or any one of them shall
provide the notice described above as soon as practicable after becoming
aware of the need for intrusive investigation or reporting described in (a)
and (b) above.
7.5 In no event shall the provisions of this clause 7 be construed to prevent
the Purchaser or the Companies from performing intrusive sampling and
analysis or reporting to any Environmental Regulator to the extent
required by Environmental Laws applicable to the routine operations
conducted at the Properties.]
8. Seller's Limitations on Liability
8.1 The Purchaser shall not be entitled to claim that any fact or matter causes
any of the Warranties to be breached if such fact or matter is disclosed or
referred to in the Disclosure Letter or in any document attached to the
Disclosure Letter or delivered with it.
8.2 No liability shall attach to the Seller in respect of claims under the
Warranties if and to the extent that the limitations set out in Schedule 3
(Limitations on the Seller's Liability under the Warranties and
Undertakings) apply.
8.3 If after Completion, the Purchaser becomes aware that there has been any
material breach of the Warranties or any other term of this Agreement, the
Purchaser shall not be entitled to treat this Agreement as terminated but
shall only be entitled to claim damages or exercise any other right, power
or remedy under this Agreement or as otherwise provided by law.
9. Access to Records and Preparation of Tax Returns
9.1 The Purchaser acknowledges that, following Completion, the Seller, other
members of the Retained Group and their accountants and any competent
regulatory body may require access to the books and records of the
Companies in order to enable such companies to prepare their accounts, to
avail themselves of any tax credit for foreign taxes paid, to prepare and
file any returns, including returns for UK Taxation, or provide any
information required by any regulatory body and to defend any returns and
to participate in any audit on such returns. The Purchaser shall give, and
shall procure that the relevant Companies give, all such information and
assistance, including access to premises and personnel, and the right to
examine and copy (at the expense of the party so requesting) any accounts,
documents and records of the relevant Companies, as any such member of the
Retained Group or their accountants may reasonably request, subject to such
member of the Retained Group and/or their accountants giving such
undertaking relating to the maintenance of confidentiality as the Purchaser
shall reasonably require.
(i) The Seller or its duly authorised agent shall prepare the UK
Corporation Tax returns of the Companies for all accounting periods
ended on or prior to Completion, to the extent that the same shall
not have been prepared before Completion.
(ii) The Purchaser shall procure that the Companies shall cause the
returns mentioned in sub-clause (i) to be authorised, signed and
submitted to the UK Inland Revenue
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without amendment or with such amendments as the Seller shall agree
(such agreement not to be unreasonably withheld) and shall give the
Seller or its agent all such assistance as may be required to agree
those returns with the UK Inland Revenue; PROVIDED THAT the
Purchaser shall not be obliged to procure that the Companies takes
any such action as is mentioned in this sub-clause in relation to
any Tax return that is not true and accurate in all material
respects.
(iii) The Seller or its duly authorised agent shall prepare all
documentation and deal with all matters (including correspondence)
relating to the Tax returns mentioned in (i) above and the
Purchaser shall procure that the Companies shall afford such access
to their books, accounts and records as is necessary and reasonable
to enable the Seller or its duly authorised agent to prepare those
returns and conduct matters relating thereto.
(iv) The Purchaser shall procure that the Companies or their duly
authorised agents shall prepare and submit to the relevant Tax
Authority the tax returns, other than those mentioned in (i) above
for all Accounting Periods ended on or prior to Completion, to the
extent that the same shall not have been prepared before
Completion.
(v) The Purchaser shall procure that the returns in (iv) above are
properly prepared on a basis consistent with past returns (provided
that such past returns comply with relevant law and practice) and
that any material issues or concerns are notified to the Seller as
soon as reasonably practical after the Purchaser becomes aware of
such issues or concerns and the Seller shall have the right to
require any reasonable amendments to be made to such returns
PROVIDED THAT:
(A) if such material issues or concerns shall also constitute a
Claim for Taxation (as the same is defined in the Tax Deed),
notification of such material issues or concerns pursuant to
this Clause shall also constitute a notice for the purposes of
Clause 4.1 of the Tax Deed; and
(B) the provisions of Clause 4 of the Tax Deed shall be unaffected
by and take precedence over the provisions of this Clause.
10. Post-Completion Obligations
10.1 The Purchaser undertakes to the Seller that within 180 days of Completion
it will procure that the Companies will remove or delete from all
notepaper, invoices, facias, promotional matter, notices whether written or
electronic references to "Kvaerner". The Purchaser further undertakes to
the Seller that within 60 days of Completion it will procure that the
Companies will remove or delete or destroy all signage and business cards
with references to "Kvaerner".
10.2 The Purchaser undertakes to the Seller to procure as soon as practicable
after Completion the novation to the Purchaser (or such of its
subsidiaries as it chooses) of the vehicle leasing contracts specified in
Schedule 11 (Leasing Contracts). Pending such novation
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the Purchaser shall indemnify and hold harmless the Seller from and
against any claim for payment and expenses in relation to the paid leasing
contracts.
11. Effect of Completion
11.1 Any provision of this Agreement and any other documents referred to in it
which is capable of being performed after but which has not been performed
at or before Completion, and all warranties and covenants and other
undertakings contained in or entered into pursuant to this Agreement, shall
remain in full force and effect notwithstanding Completion.
12. Remedies or Waivers
12.1 No delay or omission on the part of any party to this Agreement in
exercising any right, power or remedy provided by law or under this
Agreement or any other documents referred to in it shall: -
(a) impair such right, power or remedy; or
(b) operate as a waiver thereof,
EXCEPT in respect of any right, power or remedy arising from the Seller's
limitation of liability under the Warranties and Undertakings as set out in
Schedule 3 (Limitations on the Seller's Liability under the Warranties and
Undertakings).
12.2 The single or partial exercise of any right, power or remedy provided by
law or under this Agreement shall not preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
12.3 The rights, powers and remedies provided in this Agreement are cumulative
and not exclusive of any rights, powers and remedies provided by law unless
stated expressly.
13. Assignment
Obligations under this Agreement shall not be assignable save to the
holding company of the Purchaser or to another of the holding company's
subsidiaries and provided that such obligations will terminate and be void
in respect of any of the Purchaser's Companies or subsidiary undertakings
that cease to be a part of the Purchaser's Group.
14. Further Assurance
14.1 Each of the parties shall from time to time, on being required to do so by
the other party to this Agreement now or at any time in the future, do or
so far as each is able procure the doing of all such acts and/or execute or
procure the execution of all such documents in a form satisfactory to the
party concerned as they may reasonably consider necessary forgiving full
effect to this Agreement and securing to them the full benefit of the
rights, powers and remedies conferred upon them in this Agreement.
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14.2 The Purchaser shall use all reasonable endeavors to secure on or as soon
as reasonably practicable following Completion a release of the Kvaerner
Group from all the guarantees, indemnities, letters of credit and other
contingent liabilities given or guaranteed and which have been fully and
fairly disclosed to the Purchaser, set forth in Schedule 8 (Guarantees) in
respect of or otherwise relating to any obligations or liabilities of any
of the Companies (if requested by the Seller, offering its own covenant in
substitution or, in the case of a letter of credit, such form of back-to-
back letter of credit with due receipt from each of the recipient and agent
banks respectively). The Purchaser shall in the meantime from Completion
hold harmless, indemnify and keep indemnified each member of the Retained
Group against any liability including those arising from all actions,
proceedings, claims or events of default contained in or arising (whether
directly or indirectly) from any banking, financing or other Agreement to
which any of the Companies is a party and costs, damages and expenses which
may be incurred in relation thereto.
14.3 The Seller shall use all reasonable endeavors to secure on or as soon as
reasonably practicable following Completion a release of the Purchaser's
Group from all the guarantees, indemnities, letters of credit given or
guaranteed and which have been fully and fairly disclosed to the Purchaser
in respect of or otherwise relating to any obligations or liabilities of
any of the Companies (if requested by the Purchaser, offering its own
covenant in substitution or, in the case of a letter of credit, such form
of back-to-back letter of credit with due receipt from each of the
recipient and agent banks respectively). The Seller shall in the meantime
from Completion hold harmless, indemnify and keep indemnified each member
of the Purchasers group against any liability including those arising from
all actions, proceedings, claims or events of default contained in or
arising (whether directly or indirectly) from any banking, financing or
other Agreement to which any of the Companies is a party and costs, damages
and expenses) which may be incurred in relation thereto
15. Entire Agreement
15.1 For the purpose of this clause, "Pre-contractual Statement" means a draft,
Agreement, undertaking, representation, warranty, promise, assurance or
arrangement of any nature whatsoever, whether or not in writing, relating
to the Share Purchase Documents or any of them made or given by a party to
any of the Share Purchase Documents or any other person at any time prior
to execution of the Share Purchase Documents.
15.2 This Agreement and the Disclosure Letter referred to in sub-clause 8.1
(Seller's Limitations on Liability) and any other documents referred to in
this Agreement (the "Share Purchase Documents") constitute the whole and
only Agreement between the parties relating to the sale and purchase of the
Sale Shares.
15.3 Except to the extent repeated in any of the Share Purchase Documents, the
Share Purchase Documents supersede and extinguish any prior Pre-contractual
Statement relating thereto.
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15.4 Each party acknowledges that in entering into the Share Purchase Documents
or any of them on the terms set out therein, it is not relying upon any
Pre-contractual Statement, which is not expressly set out therein.
15.5 None of the parties shall have any right of action in contract, tort or
otherwise which is asserted by one party to be applicable to this
Agreement against any other party to this Agreement arising out of or in
connection with any Pre-contractual Statement (except in the case of
fraud).
16. Notices
16.1 Any notice or other communication given or made under or in connection
with the matters contemplated by this Agreement shall, except where
expressly stated otherwise be in writing.
16.2 Any such notice or other communication shall be addressed as provided in
sub-clause 16.3 and, if so addressed, shall be deemed to have been duly
given or made as follows:-
(a) if sent by personal delivery, upon delivery at the address of the
relevant party;
(b) if sent by first class post or (if between continents) air mail, two
Business Days after the date of posting; and
(c) if sent by facsimile, when dispatched (provided a valid
acknowledgement of receipt is received by the sender),
PROVIDED THAT if, in accordance with the above provisions, any such notice
or other communication would otherwise be deemed to be given or made
outside Working Hours, such notice or other communication shall be deemed
to be given or made at the start of Working Hours on the next Business
Day.
16.3 The relevant addressee, address and facsimile number of each party for the
purposes of this Agreement, subject to sub-clause 16.4, are:-
Name of party Address Facsimile No.
Davy Metals Ltd St James's House +44 (0)171 766 2311
23 King Street
London SW1Y 6QY
Attention: George Pierson
Kvaerner PLC 68 Hammersmith Road +44 (0)171 766 2311
London W14 8YW
Attention: Jan Greve
Hamsard 2043 Limited 7 Devonshire Square +44 (0)171 655 1000
London
EC2M 4YH
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Attention: The Secretary
Ampco - Pittsburgh 600 Grant Street +1 412 456 4463
Corporation Suite 4600 Pittsburgh
PA15219
USA
Attention: Ernest Siddons
16.4 A party may notify the other parties to this Agreement of a change to its
name, relevant addressee, address, telex number or facsimile number for
the purposes of sub-clause 16.3 PROVIDED THAT such notification shall only
be effective on:-
(a) the date specified in the notification as the date on which the
change is to take place; or
(b) if no date is specified or the date specified is less than five clear
Business Days after the date on which notice is given, the date
falling five clear Business Days after notice of any such change has
been given.
16.5 For the avoidance of doubt, the parties agree that the provisions of this
clause shall not apply in relation to the service of Service Documents.
17. Announcements
17.1 Subject to sub-clause 17.2, and save for a mutually agreed statement to be
made at Completion, no announcement concerning the sale of the Sale Shares
or any ancillary matter shall be made by either party without the prior
written approval of the other, such approval not to be unreasonably
withheld or delayed.
17.2 Either party may make an announcement concerning the sale of the Sale
Shares or any ancillary matter if required by:-
(a) the law of any relevant jurisdiction;
(b) existing contractual obligations; or
(c) any securities exchange or regulatory or governmental body to which
either party is subject or submits, wherever situated, including
(without limitation) the Oslo Stock Exchange, or the New York Stock
Exchange whether or not the requirement has the force of law,
in which case the party concerned shall take all such steps as may be
reasonable and practicable in the circumstances to agree the contents of
such announcement with the party before making such announcement PROVIDED
THAT any such announcement shall be made (if practicable) only after
consultation with the other party.
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17.3 The restrictions contained in this clause shall continue to apply after
termination of this Agreement or Completion without limit in time.
18. Confidentiality
18.1 Subject to sub-clause 18.2. each party (and will ensure that it employees,
agents, advisers and representatives) shall treat as strictly confidential
all information received or obtained as a result of entering into or
performing this Agreement which relates to:-
(a) the provisions of this Agreement;
(b) the negotiations relating to this Agreement;
(c) the subject matter of this Agreement; or
(d) the other party.
18.2 Either party may disclose information which would otherwise be
confidential if and to the extent: -
(a) required by the law of any relevant jurisdiction;
(b) required by existing contractual obligations;
(c) required by any securities exchange or regulatory or governmental
body to which either party is subject or submits, wherever situated,
including (without limitation) the Oslo Stock Exchange or New York
Stock Exchange, whether or not the requirement for information has
the force of law;
(d) required to vest the full benefit of this Agreement in either party;
(e) disclosed to the professional advisers, auditors and bankers of each
party;
(f) the information has come into the public domain through no fault of
that party; or
(g) the other party has given prior written approval to the disclosure,
such approval not to be unreasonably withheld or delayed,
PROVIDED THAT any such information disclosed pursuant to paragraph (a),
(b) or (c) shall be disclosed only after consultation with the other
party.
18.3 The restrictions contained in this clause shall continue to apply after
termination of this Agreement or Completion of the sale and purchase of
the Sales Shares under this Agreement without limit in time.
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19. Costs and Expenses
Each party shall pay its own costs and expenses in relation to the
negotiations leading up to the sale of the Sale Shares and to the
preparation, execution and carrying into effect of this Agreement and all
other documents referred to in it. For the avoidance of doubt, all stamp
duty or stamp duty reserve tax payable on the sale of the Sale Shares is
for the account of the Purchaser.
20. Counterparts
20.1 This Agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
20.2 Each counterpart shall constitute an original of this Agreement, but all
the counterparts shall together constitute but one and the same
instrument.
21. Time of Essence
Except as otherwise expressly provided, time is of the essence of this
Agreement.
22. Invalidity
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
that shall not affect or impair: -
(a) the legality, validity or enforceability in that jurisdiction of any
other provision of this Agreement; or
(b) the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this Agreement.
23. Agent for Service
23.1 The Purchaser's Guarantor irrevocably agrees that any Service Document may
be sufficiently and effectively served on it in connection with
Proceedings in England and Wales by service on or for the Purchaser, as
its agent (if no replacement agent has been appointed and notified to the
Seller pursuant to sub-clause 23.4), or on the replacement agent if one
has been appointed and notified to the Seller.
23.2 Any Service Document served pursuant to this clause shall be marked for
the attention of Mr E. Siddons.
(a) the Seller may notify the Purchaser's Guarantor at -7 Devonshire
Square, London EC2 or such other address within England and Wales.
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(b) such other person as is appointed as agent for service pursuant to
sub-clause 23.4 at the address notified pursuant to sub-clause 23.4.
23.3 Any document addressed in accordance with sub-clause 23.2 shall be deemed
to have been duly served if:-
(a) sent by personal delivery to the specified address, upon receipted
delivery at such address; or
(b) sent by registered post, two Business Days after the date of posting.
23.4 If the Purchaser (or any replacement agent appointed pursuant to this sub-
clause) at anytime ceases for any reason to act as agent, the Purchaser's
Guarantor shall appoint a replacement agent to accept service having an
address for service in England or Wales and shall notify the Seller of the
name and address of the replacement agent; failing such appointment and
notification, the Purchaser's Guarantor shall be entitled by notice to the
Seller to appoint such a replacement agent to act on the Purchaser's
Guarantor's behalf.
23.5 A copy of any Service Document served on an agent pursuant to this clause
shall be sent by post to the Purchaser's Guarantor at its address for the
time being for the service of notices and other communications under
clause 16 (Notices), but no failure or delay in so doing shall prejudice
the effectiveness of service of the Service Document in accordance with
the provisions of sub-clause 23.1.
23.6 "Service Document" means a writ, summons, order, judgment or other
document relating to or in connection with any Proceedings.
24. Pension Arrangements
The Sellers Pension Scheme shall be dealt with in accordance with the
provisions of Schedule 5 (Pension Arrangements).
25. BUPA and Payroll
25.1 The payroll facility for monthly salaried employees will continue to be
provided by the Kvaerner Group for a period of up to a maximum of 90 days
post Completion subject to all funds required being paid into the Payroll
Account 5 Business Days prior to the required payroll date and for an
administration charge payable by the Purchaser at the time of paying the
payroll equating to (Pounds)5 (five pounds) per salaried employee;
25.2 BUPA medical cover ("BUPA") will continue to be provided by the Kvaerner
Group (to the same level and benefits enjoyed by the senior management
prior to Completion) for a period of up to a maximum of 90 days post
Completion for which the Purchaser will fully indemnify and hold harmless
the Kvaerner Group from and against any payment, costs or claim associated
with the operation of BUPA;
26. Guarantee
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26.1 Kvaerner PLC hereby irrevocably guarantees to AMPCO-Pittsburgh Corporation
the performance of, and the compliance with, all of the agreements,
undertakings, covenants, and obligations of the Seller contained in,
arising out of, resulting from or based upon this Agreement. The
liabilities and obligations of Kvaerner PLC to the Purchaser under this
Agreement and of the Seller to the Purchaser under the Agreement shall not
either individually or when aggregated together be greater than or
different in character or extent from the liabilities and obligations of
the Seller to the Purchaser under the terms of this Agreement.
26.2 AMPCO - Pittsburgh Corporation hereby irrevocably guarantees to Kvaerner
PLCthe performance of and the compliance with all of the agreements,
undertakings, covenants and obligations of the Purchaser contained in
arising out of, resulting from or based upon this Agreement. The
liabilities and obligations of AMPCO - Pittsburgh Corporation to the
Seller under this Agreement and of the Purchaser to the Seller under the
Agreement shall not either individually or when aggregated together be
greater than or different in character or extent from the liabilities and
obligations of the Purchaser to the Seller under the terms of this
Agreement.
27. Choice of Governing Law
27.1 This Agreement shall be governed by and construed in accordance with
English law.
28. Jurisdiction
28.1 For the exclusive benefit of the other parties hereto, each party to this
Agreement irrevocably agrees that any Proceedings against it shall be
subject to the exclusive jurisdiction of the courts of England.
28.2 Each party irrevocably waives (and irrevocably agrees not to raise) any
objection which it may have now or hereafter to the laying of the venue of
any Proceedings in any such court as is referred to in sub-clause 28.1 and
any claim of for urn nonconveniens and further irrevocably agrees that a
judgment in any Proceedings brought in any court referred to in this
clause shall (provided that there is no appeal pending or open) be
conclusive and binding upon such party and may be enforced in the courts
of any other jurisdiction.
IN WITNESS whereof the parties have entered into this Agreement the day and year
first before written.
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Schedule 1
(Completion Arrangements)
Referred to in clause 4 (Completion)
At Completion:-
1. the Seller shall deliver to the Purchaser or the Purchaser's Solicitors:-
(a) duly executed transfers in respect of the Sale Shares in favour of the
Purchaser or such person as the Purchaser may nominate and share
certificates for the Sale Shares in the name of the relevant
transferor(s) and any power of attorney under which any transfer is
executed on behalf of the Seller or its nominee;
(b) such waivers or consents as the Purchaser may reasonably require to
enable the purchaser or its nominees to be registered as holders of
the Sale Shares; and
(c) powers of attorney in relation to the Sale Shares in agreed terms;
(d) the Tax Deed duly executed by the Seller and each of the Companies;
(e) the Environmental Deed of Indemnity duly executed by the Seller's
Guarantor, Purchaser and Companies;
(f) the Trade Mark Licence Agreement duly executed by each of the
respective parties thereto.
2. the Seller shall deliver to the Purchaser (or to any person whom the
Purchaser may nominate as agent for any of the Companies ) such of the
following as the Purchaser may require:-
(a) the statutory documents required under Companies Legislation for each
of Davy, Formet and Turner; and
(b) a copy of the minutes of a duly held meeting of the directors (or of a
committee of the directors) of the Seller authorising the execution by
the Seller of this Agreement (such copy minutes being certified as
correct by the secretary of that company);
(c) any common seal of the Companies;
(d) title deed in relation to any Property owned by the Companies as
detailed in Schedule 7 (Properties)
3. the Seller shall procure the present directors of each of Davy, Formet and
Turner (other than any director whom the Purchaser has notified the Seller
prior to Completion that it
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wishes to continue in office) to resign their offices as such, such
resignations to be tendered at the board meetings referred to in paragraph
4;
4. the Seller shall procure a board meeting for each of Davy, Formet and
Turner to be held at which:-
(a) the Companies shall resolve that each of the transfers relating to the
Sale Shares shall be approved for registration and (subject only to
the transfer being duly stamped) each transferee registered as the
holder of the Sale Shares concerned in the register of members;
(b) each of the persons nominated by the Purchaser prior to Completion
shall be appointed directors and/or secretary, as the Purchaser shall
direct, such appointments to take effect on the Completion Date;
(c) the resignations of the directors and secretary referred to in
paragraph 3 above shall be tendered and accepted so as to take effect
at the close of the meeting;
(d) the resignation of the existing auditors of each of the Companies in
the agreed term to be tendered and accepted so as to take effect at
the close of the meeting; and
(e) an extraordinary general meeting shall be convened on short notice by
Formet to resolve that the name of Formet be changed to remove any
reference to the name "Kvaerner".
and the Seller shall procure that minutes of the duly held board meetings
and general meeting, and copies of the resignations referred to, are
delivered to the Purchaser's Solicitors; and
5. the Purchaser shall:-
(a) pay to the Designated Account by way of telegraphic transfer the Total
Consideration less the amount of (Pounds)500,000 deducted in
accordance with Clause 3.2;
(b) deliver to the Seller a copy (certified by the secretary of the
Purchaser to be a true copy of a resolution in force at Completion) of
the resolution of the directors of the Purchaser which authorised the
purchase of the Sale Shares for the consideration and upon the terms
set out in this Agreement;
(c) procure that forthwith after Completion, the Companies shall (where
relevant) change their corporate names to names that do not include
the name "Kvaerner" or any name intended or likely to be confused or
associated with it, and the Purchaser shall supply a copy of the
official confirmation given in accordance with Companies Legislation
to the Seller when each such change is effected;
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(d) deliver to the Seller a legal opinion from the Purchaser's Solicitors
as to the Purchaser's Guarantor's capacity to enter into this
Agreement in a form agreed between the Purchaser and the Seller.
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Schedule 2
(Warranties)
Referred to in clause 5 (Seller's Warranties)
No. Subject Matter
1. Ownership of the Sale Shares
2. Companies Structure
3. Changes in Share Capital Since the Accounts Date
4. Directors and Accuracy of Information
5. Accounts
6. Other Borrowings
7. Memorandum and Articles of Association
8. Events Since the Accounts Date
9. Commissions and Company Records
10. Insolvency
11. Loans by the Companies
12. Compliance
13. Government Grants
14. Material Contracts
15. Outstanding Offers
16. Power of Attorney and Authority
17. Business Names
18. Licences and Consents
19. Litigation
20. Data Protection
21. Employment
22. Bonus and other Schemes
23. Changes in remuneration and terms and conditions
24. Liabilities to employees
25. Transfer
26. Employment Claims
27. Discrimination
28. Effect of Sale
29. Redundancies
30. Industrial Disputes
31. Ownership of Assets
32. Lease Assets
33. Millennium Compliance
34. Properties
35. Taxation
36. Environmental Matters
36.1. Operation of Business
36.2. Land and other assets
36.3. Environmental Permits and Law
36.4. Environmental Proceedings
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36.5. Environmental Investigations
36.6. Environmental Liabilities
The Seller warrants to the Purchaser as follows, except as disclosed in the
Disclosure Letter: -
1. Ownership of the Sale Shares
1.1. The Seller is the beneficial owner of the Sale Shares and such shares in
aggregate constitute the entire issued share capital of the Companies.
1.2. There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance or equity on, over or affecting the
Sale Shares or any of them and there is no Agreement or commitment to give
or create any such security, encumbrance or equity.
2. Companies Structure
2.1. The Sale Shares comprise the whole of the issued and allotted share
capital of the Companies and all of them are duly paid up.
2.2. There is no Agreement or commitment outstanding which calls for the
allotment, issue or transfer of, or accords to any person the right to
call for the allotment or issue of, any shares(including the Sale Shares)
or debentures in or securities of the Companies.
3. Changes in Share Capital Since the Accounts Date
3.1. No share capital has been issued or alloted or agreed to be issued or
alloted by the Companies.
3.2. The Companies have not redeemed or purchased or agreed to redeem or
purchase any of their share capital.
4. Directors and Accuracy of Information
4.1. The only directors of the Companies are the person whose names are so
listed in relation to each Company in Schedule 4 (Basic Information about
the Companies)
4.2. The information contained in Schedule 4 is true, accurate and correct.
5. Accounts
The Accounts:-
5.1.1 have been prepared in accordance with GAAP on a consistent basis as
adopted in preparing the audited accounts of the Companies in
respect of the last 3 preceding accounting periods, save for the
FRS 12 adjustment;
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5.1.2 showed a true and fair view of the assets and liabilities of the
Companies to which they relate, at the Accounts Date; and
5.1.3 comply with the requirements of the Companies Act 1985.
6. Other Borrowings
6.1. Save for trade debts incurred in the ordinary course of business the
Companies have no liability for indebtedness and the Companies have not
entered into any guarantee or agreement for indemnity or for surietyship
in respect of any debt, liability or obligation of any third party.
7. Memorandum and Articles of Association
7.1. The copy of the Memorandum and Articles of Association of each of the
Companies which is attached to the Disclosure Letter are true, accurate
and complete in all respects.
8. Events Since the Accounts Date
Since the Accounts Date and so far as the Seller is aware:-
8.1.1 there has been no material adverse change in the financial position
of the Companies;
8.1.2 the business of the Companies has, in all material respects, been
carried on in the ordinary and usual course; and
8.1.3 no dividends have been declared, paid or made by the Companies
except as disclosed in the Disclosure Letter.
9. Commissions & Company Records
9.1. No one is entitled to receive from any of the Companies any finder's fee,
brokerage or other commission in connection with the sale and purchase of
the Sale Shares under this Agreement.
9.2. All the accounts, books, ledgers, financial and other records, of
whatsoever kind, of the Companies are in their possession or under their
control, are up-to-date and have been maintained in accordance with all
applicable laws.
10. Insolvency
10.1. No order has been made and no resolution has been passed for the winding
up of any the Companies or for a provisional liquidator to be appointed in
respect of the Companies and, so far as the Seller is aware, no petition
has been presented and no meeting has been convened for the purpose of
winding up the Companies.
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10.2. No administration order has been made and, so far as the Seller is aware,
no petition for such an order has been presented in respect of the
Companies.
10.3. So far as the Seller is aware, no receiver (which expression shall
include an administrative receiver) has been appointed in respect of the
Companies or all or any of its assets.
10.4. So far as the Seller is aware, the Companies are not is insolvent, or
unable to pay its debts within the meaning of section 123 of the
Insolvency Act 1986, or has stopped paying its debts as they fall due.
11. Loans by the Companies
11.1. Save for any Intercompany Debt, none of the Companies has lent any money
which has not been repaid to it nor has it made any loan or quasi-loan
contrary to the Companies Act 1985.
12. Compliance
12.1. So far as the Seller is aware, each of the Companies have conducted their
business and corporate affairs in all material respects in accordance
with all applicable laws and, so far as the Seller is aware, the
Companies have not received notification that any investigation or
inquiry is being or had been conducted by any authority, governmental
agency or regulator in respect of the business or affairs of the
Companies which will or is reasonably likely to have a material adverse
effect on the Companies.
13. Government Grants
13.1. Full details of all grants, subsidies or financial assistance applied for
or received by the Companies from any governmental department or agency
or any local or other authority or other body are set out in the
Disclosure Letter.
13.2. The Companies have not done or omitted to do any act or thing which could
result in all or any part of any such grant, subsidy or financial
assistance made or due to be made to them becoming repayable or being
forfeited or withheld in whole or in part.
13.3. The acquisition of the Companies by the Purchaser will not result in the
withdrawal of, or an obligation on the Companies to repay, any such
grant, subsidy or financial assistance.
14. Material Contracts
14.1. The Companies are not parties to any material contract which:
14.1.1 is for a fixed term of more than 6 months; or
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14.1.2 is of a long-term nature (that is, unlikely to have been fully
performed in accordance with its terms more than 6 months after
the date on which it was entered into or undertaken); or
14.1.3 is incapable of termination by it in accordance with its terms on
3 months' notice or less; or
14.1.4 provides income to any of the Companies in excess of
(Pounds),750,000 per annum or requires expenditure by the
Companies in excess of (Pounds)7500,000 per annum; or
14.1.5 involves payment by it of amounts determined by reference to
fluctuations in the index of retail prices or any other index or
in the rate of exchange for any currency; or
14.1.6 involves or is likely to involve the supply of goods, the
aggregate sales value of which would represent in excess of 5 per
cent. of any of the Company's turnover for the preceding
financial year.
15. Outstanding Offers
No offer, tender, bid or proposal is outstanding which is capable of being
converted into an obligation on the part of the Companies by acceptance or
other act of some other person, firm or Companies.
16. Power of Attorney and Authority
16.1.1 No power of attorney given by any of the Companies is in force.
16.1.2 There are not outstanding any authorities (express or implied) by
which any person (other than a director of any of the Companies)
may enter into any contract or commitment to do anything on
behalf of the Companies.
17. Business Names
None of the Companies use a name for any purpose other than its full
corporate name.
18. Licences and Consents
18.1. Each Company has obtained all material licences, permissions,
authorisations and consents from any person authority or body which are
necessary for the carrying on of their businesses in the places and in
the manner in which such business is now carried on.
18.2. In so far as the Seller is aware, all such licences, permissions,
authorisations and consents are in full force and effect.
18.3. In so far as the Seller is aware the Companies are not in breach of any
of the terms or conditions of any such licence, permission, authorisation
or consent and there are no
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facts, matters or circumstances which might in any way prejudice the
continuation or renewal of any such licence, permission, authorisation or
consent.
19. Litigation
19.1. So far as the Seller is aware, the Companies are not engaged in any legal
or administrative or arbitration proceedings (whether as plaintiff or
defendant or otherwise).
19.2. There is no unfulfilled or unsatisfied judgement or court order
outstanding against any of the Companies.
20. Data Protection
20.1. The Companies have duly complied with all relevant requirements of the
Data Protection Act 1984 including compliance with the following:
20.1.1 the data protection principles established in that Act;
20.1.2 request from data subjects for access to data held by them; and
20.1.3 the requirements relating to the registration of data users.
20.2. The Companies have not received a notice or allegation from either the
data protection registrar or a data subject alleging non-compliance with
the data protection principles or prohibiting the transfer of data to a
place outside the United Kingdom. No individual has claimed, or will have
the right to claim, compensate from any of the Companies under the Data
Protection Act 1984 for loss or unauthorised disclosure of data.
21. Employment
21.1. No outstanding offer of employment has been made by the Companies to any
person nor has any person accepted an offer of employment made by any of
the Companies but who has not yet commenced such employment.
21.2. There are no contracts for services (including without limitation
consultancy agreements) between any of the Companies and any person.
21.3. All subsisting contracts of service or contracts for services to which
the Companies are party are determinable at any time by the Companies on
3 months' notice or less without compensation.
21.4. No contracts of employment or contracts for services with any of the
Companies contain pay in lieu clauses, liquidated damages clauses or
other terms and conditions giving rise to any debt payable by any of the
Companies on the termination of any such contract.
21.5. No director or employee has given notice to any of the Companies
terminating his contract of employment which is outstanding as at the
date of this Agreement.
22. Bonus and other Schemes
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22.1. The Companies do not have in existence or participate in any share
incentive scheme or share option scheme nor are they proposing to
introduce or participate in any such scheme save as disclosed in the
Disclosure Letter.
22.2. There are no schemes (whether contractual or discretionary) in operation
by, or in relation to, the Companies under which any director or employee
of the Companies or former director or employee is entitled to any bonus,
profit-share, commission or other incentive scheme (whether calculated by
reference to the whole or part of the turnover, profits/losses or sales
of the Companies or otherwise).
22.3. None of the Companies have registered a profit-related pay scheme under
the provisions of Part V Chapter III of ICTA.
22.4. The Companies are not bound (other than in respect of contractual
remuneration or emoluments of employment or pension benefits) to or for
the benefit of any director or employee of the Companies.
23. Changes in remuneration and terms and conditions
23.1. Since the Accounts Date or (where the relevant employment or holding of
office commenced after such date) since the commencing date of the
employment or holding of office:
23.1.1 no abnormal change has been made in the rate of remuneration, or
the emoluments or pension benefits, of any director or employee;
23.1.2 no abnormal change has been made in any other terms of employment
of any director or employee.
23.2. No agreement has been reached with any director, employee, trade union or
other body representing employees that will on a future date result in an
increase in any director's or employee's rate of remuneration or enhanced
emoluments of employment or pension benefits.
24. Liabilities to employees
24.1. The salaries and other benefits of all employees have been paid up to the
last pay date prior to Completion.
24.2. No outstanding tribunal court order has been incurred by any of the
Companies for breach of any contract of employment or contract for
services or redundancy payments, protective awards, compensation for
wrongful dismissal or unfair dismissal or for failure to comply with any
order for the reinstatement or re-engagement of any employee or in
respect of any other liability arising out of the termination of any
contract of employment or contract for services.
25. Transfer
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During the period of 3 months preceding the date of this Agreement, the
Companies have not been a party to any "relevant transfer" (as defined
in the Transfer of Undertakings (Protection of Employment) Regulations
1981, as amended) or failed to comply with any duty to inform and
consult with appropriate representatives of any affected employees under
Regulation 10 of the Transfer of Undertakings (Protection of Employment)
Regulations 1981, as amended.
26. Employment Claims
26.1. There are no legal proceedings between the Companies.
26.2. There are no claims against the Companies by an employee, independent
contractor or any other third party, in respect of any accident,
disease, illness or injury.
26.3. In the 12 months preceding this Agreement, no improvement or prohibition
notice has been served on the Companies in connection with the conduct
of their businesses by any body responsible for Health and Safety.
27. Discrimination
27.1. In the 12 months preceding this Agreement, there has been no
recommendation made by an industrial tribunal nor any investigation by
any statutory body responsible for investigating or enforcing matters
relating to sex, race or disability discrimination.
28. Effect of Sale
28.1. No director nor any employee of the Companies has given or received
notice terminating his employment or office, except as expressly
contemplated in this Agreement and no such director or employee will be
entitled to give such notice as a result of the provisions of this
Agreement.
28.2. No director or employee will be entitled by reason of the transactions
contemplated by this Agreement to any one-off payment, bonus or
commission or to terminate his employment other than on normal
contractual terms.
29. Redundancies
29.1. During the 3 months preceding the date of this Agreement, the Companies
have not given notice of any redundancies to the relevant Secretary of
State or started consultations with any trade union under Chapter II of
Part IV Trade Union and Labour Relations (Consolidation ) Act 1992 or
failed to comply with any of its obligations under Chapter II of Part IV
of such Act.
29.2. The Companies have not given any notice of termination or dismissal or
notice of redundancy to any of their employees which is outstanding as
at the date of this Agreement.
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29.3. There are no severance, redundancy or other similar agreements or
schemes conferring any entitlement on any of the directors and employees
of the Companies to receive any payment on the termination of their
employment (except for contractual notice pay).
30. Industrial Disputes
Neither the Companies nor their directors or employees is involved in
any trade dispute as defined by Section 218 Trade Union or Labour
Relations (Consolidation) Act 1992.
31. Ownership of Assets
31.1. The Companies are the legal and beneficial owner and have good and
marketable title to all assets included in the Accounts or acquired by
them since the Accounts Date (except for any current assets sold or
realised in the ordinary and normal course of business).
31.2. All of the assets owned by the Companies or which the Companies has a
right to use are in their possession or under their control and are
situated in the United Kingdom.
32. Leased Assets
32.1. No circumstance has arisen or is likely to arise in relation to any
asset held by the Companies under a lease or similar agreement whereby
the rental payable has been or is likely to be increased and, in
particular, all such assets have at all relevant times been used for a
qualifying purpose within the meaning of Section 39 Capital Allowances
Act 1990.
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33. Millennium Compliance
33.1. Neither the performance nor the functionality of any of the computer
systems and/or computer software and/or any plant, machinery and
equipment which is currently used by the Companies for the purposes of
their business is or will be affected and as a result of the change in
the calendar from 1999 to 2000.
33.2. To the best of the knowledge information and belief of the Seller, all
suppliers and customers of the Companies have audited their systems and
software and plant, machinery and equipment for year 2000 compliance and:
33.2.1 in the case of such material suppliers, that they will be able to
continue to supply the Companies as they do now and in accordance
with the current standards and requirements of any contract
between them before, during and after the year 2000; and
33.2.2 in the case of such customers, that they will not cease to be
customers or fail to fulfil their obligations as customers to the
Companies by reason (either directly or indirectly) of their
systems or software or plant, machinery and equipment not being
year 2000 compliant;
33.2.3 As far as the Seller is aware additional year 2000 compliance
costs will not exceed (Pounds)25,000 (being remaining costs to be
expended at the Gateshead Site).
34. Properties
34.1. The Properties comprise all the properties owned by or occupied under
lease licence or otherwise by the Companies.
34.2. The information set out in schedule 9 (Properties) is true and accurate
in all respects, and any leases are valid and in full force and effect.
34.3. The title to each of the Properties is good (save for the Davy Roll
Sheffield Site all of its land and buildings) and is properly constituted
by documents of title which are properly stamped and are in the
possession and control of the Companies.
34.4. Each of the Properties is free from any mortgage, debenture charge, rent
charge lien encumbrance or other third party right in the nature of
security.
34.5. Each of the Properties is free from any inhibition or notice; any option,
right of pre-emption or right of first refusal.
34.6. The relevant Company as named in schedule 9 (Properties) has vacant
possession of each of the Properties vested in it and there are no
circumstances which may result in the continued sole and exclusive
possession or occupation of the Properties by the Companies to be
restricted or terminated.
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34.7. The actual use of each of the Properties is as set out in schedule 9
(Properties) and to the best of the Seller's knowledge, information and
belief is the permitted use either as of right or under the Town and
Country Planning Act 1990 covenants.
34.8. The relevant Company has paid all rent all licence fees and other
outgoings which have become due in respect of the Properties and has
performed and observed to the best of the Seller's knowledge, information
and belief all its obligations and all covenants, conditions, agreements,
statutory requirements, planning consents, byelaws, orders, directives
and regulations affecting the Properties and any business of the
Companies there carried on and to the best of the Seller's knowledge,
information and belief no use of the Properties contravenes any of the
same;
34.9. There are no outstanding rent reviews under any leases or any rent
reviews which are currently in progress.
34.10. There are no outstanding notices affecting any of the Properties and to
the best of the Seller's knowledge, information and belief there are no
proposals of any local or other authority or any other circumstances
which may result in any such order or notice being made or served or
which may otherwise adversely affect any of the Properties.
34.11. Each means of access to each of the Properties is over roads which have
been adopted as public highways and which are maintainable at the public
expense.
34.12. The Properties are insured until Completion in their respective full
reinstatement values for not less than three years' loss of rent and
against third party and public liabilities in sufficient amount and no
circumstances have arisen which would render any insurance policies held
in respect of any of the Properties to be void or avoidable.
34.13. Since dated of last Accounts no Company has acquired or disposed of or
agreed to acquire or dispose of the whole or any part of any land or
buildings or any interest therein.
34.14. No Company has at any time conveyed or transferred any property (whether
freehold or leasehold) with full title guarantee save where such Company
acquired the same property with an unqualified full title guarantee.
34.15. No Company has at any time entered into any authorised guarantee
agreement (as defined in the Landlord & Tenant (Covenants) Act 1995 which
remains capable of being enforced by any party).
34.16. No Company is entitled to require nor has it required the grant of an
overriding lease of any property pursuant to Section 19 of the Landlord &
Tenant (Covenants) Act 1995.
34.17. There is no claim or dispute subsisting pending or expected either by or
with any Company in relation to, or by or with any then sub-tenant,
licensee or occupier or Landlord of premises formerly owned or occupied
by such Company.
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34.18. No Company as lessor has at any time assigned conveyed or transferred
its interest in reversion in any property without obtaining a full and
unconditional release from its covenants as Landlord pursuant to
Sections 6 or 7 of the Landlord & Tenant (Covenants) Act 1995.
34.19. No solicitors are instructed by or on behalf of any Company in
connection with any matter relating to the Properties except for this
Agreement.
35. Taxation
Administration
35.1.1. The Companies have duly and punctually paid all Taxation which
they have become liable to pay or for which they have become
liable to account and are under no liability (and have not
within the 6 years prior to the date hereof been liable) to pay
any penalty, fine, surcharge or interest in connection with any
claim for Taxation.
35.1.2. All Payments by the Companies to any person which ought to have
been made under deduction of Taxation have been so made and the
Companies have if required by law to do so accounted to the
relevant Taxation Authority for the Taxation so deducted.
35.1.3. The Companies have operated the Pay As You Earn system
accurately and correctly and have complied with all their
reporting obligations to the Inland Revenue and the
Contributions Agency in connection with benefits provided for
employees and former employees of the Companies.
35.1.4. All returns which should have been made by the Companies for
any Taxation purpose have been made, were and remain correct
and complete in all material respects, were made on a proper
basis and are not nor so far as the Seller is aware are likely
to be the subject of any dispute with any Taxation Authority
and the computations and returns have been agreed with or are
the subject of a determination by the relevant Taxation
Authority and the Companies have provided all information
required to be provided under the Taxation Statutes or pursuant
to any notice served thereunder.
35.1.5. The Companies are not involved in any dispute with any Taxation
Authority.
35.1.6. No Taxation Authority has agreed to operate any special
arrangement (being an arrangement which is not based on a
strict application of the relevant legislation) in relation to
the Companies' affairs, whether in respect of benefits provided
by the Companies to their officers or employees, or in relation
to the valuation of stocks or depreciation of assets or in
respect of any administrative or other matter whatsoever.
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35.2. Status of the Companies
The Companies are and have always been resident in the United Kingdom for
Taxation purposes.
35.3. Capital Gains
35.3.1. If each of the capital assets of the Companies were disposed of
for a consideration equal to the book value of the asset in, or
adopted for the purpose of, the Accounts, no liability for
corporation tax on capital gains would arise and for this
purpose there shall be disregarded any reliefs available other
than amounts falling to be deducted under s 38 TCGA.
35.3.2. Neither the Companies (nor any company which was a member of
the same group of companies at the relevant time) has made any
claim under Sections 152 and 153 TCGA (Replacement of business
assets) as respects the consideration for the disposal of or
their interest in any assets which are defined in the said
Section 152(1) as "the old assets".
35.3.3. The Companies have not received any asset by way of gift or by
way of bargain not at arm's length to which Section 165 or
Section 282 TCGA has applied or could apply.
35.3.4. The Companies have not been party to or involved in any scheme
or arrangements whereby the value of any asset has been
materially reduced so that on a disposal of the asset by the
Company Sections 29 to 34 TCGA (Capital Gains: value shifting)
may be applicable.
35.3.5. No gain chargeable to corporation tax will accrue to the
Companies on the disposal or satisfaction of a debt by reason
of Section 251 TCGA (Debts).
35.3.6. No part of the consideration given by the Companies for a new
holding of shares (within the meaning of Section 126 TCGA)
(Application of Sections 127 to 130) will be disregarded by
virtue of Section 128(2) TCGA.
35.3.7. The Companies have not been a party to or involved in any share
for share exchange nor any scheme of reconstruction or
amalgamation such as are mentioned in Sections 135 and 136 TOGA
or Section 139 TCGA under which shares or debentures have been
issued or any transfer of assets affected.
35.3.8. The Companies have not effected or been concerned in any
demerger such as is mentioned in Section 213 ICTA.
35.3.9. The Companies have not made any election under Section 35(5)
TCGA or paragraph 4 Schedule 2 TCGA.
35.3.10. The Companies have not disposed of or acquired any asset in
circumstances falling within Section 17 TCGA and are not
entitled to any capital loss to which Section 18(3) TCGA will
apply.
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35.3.11. The Companies are not liable and no circumstances exist whereby
the Companies may become liable to be assessed to any Taxation
under the provisions of Section 189 or Section 190 TCGA.
35.3.12. No loss which has arisen or may arise on the disposal by the
Companies of shares in or securities of any company is liable
to be disallowed in whole or in part by virtue of Section 176
or Section 177 TCGA.
35.3.13. The Companies do not own any asset which was acquired from
another company which was at the time a member of a group of
companies for the purposes of Sections 178 and 179 TCGA.
35.3.14. The execution or completion of this Agreement will not result
in any profit or gain being deemed to accrue to the Companies
for Taxation purposes.
35.4. Profits and Losses
35.4.1. The Companies are not, and will not become, liable to make any
payment for an amount surrendered by any other company under or
in connection with the provisions of Sections 240 and 402 ICTA
or Section 102 Finance Act 1989.
35.4.2. Save as referred to in the Disclosure Letter the Companies have
not surrendered or agreed to surrender any tax refund under the
provisions of Section 102 Finance Act 1989.
35.4.3. The Disclosure Letter contains particulars of all elections
made by the Companies under Section 247 ICTA which are now in
force.
35.4.4. All capital expenditure incurred by the Companies prior to the
date of this Agreement, or to be incurred under any subsisting
commitment, has qualified or will qualify for capital
allowances and all such allowances have been made, or will be
made, in taxing the Companies trade.
35.4.5. No capital allowances have been claimed by the Companies which
are liable to be reduced or withdrawn by virtue of Sections
1(6), 42 or 47 Capital Allowances Act 1990.
35.4.6. There are no arrangements in place whereby the Companies will
be obliged, at any time after Completion, to make any payment
of an income nature which will or may not be allowable in full
for corporation tax purposes or which may be disallowed as a
deduction, as a set off or as a charge on income or otherwise
be unrelieved for corporation tax purposes whether by virtue of
Section 787 ICTA (Restriction of relief for payments of
interest) or Section 125 ICTA (Annual payments for non-taxable
consideration) or otherwise.
35.4.7. The Companies are not, and have not at any time been, party to
any arrangements falling within Section 410 ICTA (Arrangements
for transfer of company to another group or consortium).
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35.4.8. Save as referred to in the Disclosure Letter the Companies have
not surrendered or claimed any ACT under the provisions of
Section 240 ICTA (Set-off of company's surplus ACT against
subsidiary's liability to corporation tax).
35.4.9. No balancing charge under the Capital Allowances Act 1990 (or
other legislation relating to any capital allowances) would be
made on the Companies on the disposal of any asset, or of any
pool of assets (that is to say all those assets expenditure
relating to which would be taken into account in computing
whether a balancing charge would arise on a disposal of any
other of those assets), on the assumption that the disposals
are made for a consideration equal to the book value shown in
or adopted for the purpose of the Last Accounts for each of the
assets.
35.5. Stamp duty and stamp duty reserve
35.5.1. All instruments (other than those which have ceased to have any
legal effect) to which the Companies are a party or in the
enforcement of which the Companies are interested and which,
whether in the United Kingdom or elsewhere, attract either
stamp duty or require to be stamped with a particular stamp
denoting that no duty is chargeable or that the document has
been produced to the appropriate authority, have been properly
stamped; and no such documents which are outside the United
Kingdom would attract stamp duty if they were brought into the
United Kingdom.
35.5.2. The Companies have duly paid all stamp duty reserve tax, for
which they have at any time been liable.
35.6. Anti avoidance
The Companies have not entered into or been a party to any schemes or
arrangements designed partly or wholly for the purpose of avoiding
Taxation.
35.7. Overseas elements
35.7.1. The Companies have made all appropriate claims for relief under
Double Taxation Relief Conventions, orders or other agreements
current at the date of this Agreement and have obtained full
double tax relief for all income from outside the United
Kingdom.
35.7.2. The Companies have not transferred a trade carried on by them
outside the United Kingdom in circumstances such that a
chargeable gain may be deemed to arise at a date after such
transfer under Section 140 TCGA (Postponement of charge on
transfer of assets to non-resident company).
35.7.3. The Companies have not been a party to any election made under
Section 187(1)(b) TCGA.
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35.7.4. No company over which the Companies had control or which was a
member of the same group of companies as the Companies have
ceased to be resident in the United Kingdom.
35.7.5. The Companies do not have any overseas subsidiaries.
35.7.6. The Companies have not entered into any unlawful transaction
under Section 765 ICTA (Migration of companies).
35.7.7. The Company has not received foreign loan interest on which
double taxation relief will or may be restricted under Section
798 ICTA (Interest on certain overseas loans).
35.7.8. The Companies do not have and never have had an interest in a
controlled foreign company within the meaning of Section 747
ICTA (Imputation of chargeable profits and creditable tax of
foreign controlled companies).
35.7.9. The Companies will not at Completion have any liability for any
Taxation outside the United Kingdom.
35.7.10. The Companies have not been a party to any transaction to which
Sections 140A and 140D TCGA apply.
35.8. Value Added Tax
35.8.1. The Companies are duly registered for Value Added Tax purposes
in the United Kingdom and are not registered or liable to be
registered for such purposes in any territory outside the United
Kingdom.
35.8.2. The Companies have complied with all requirements of the
Taxation Statutes relating to Value Added Tax and all applicable
regulations and orders, have maintained complete, correct and up
to date records, invoices and other necessary documents, have
not received a surcharge liability notice under Section 59 Value
Added Tax Act 1994 (default charge) or a penalty liability
notice under Section 64 Value Added Tax Act 1994 (serious
misdeclaration resulting in understatements or overclaims) and
has not been required by H M Commissioners of Customs and Excise
to give any security.
35.8.3. The Companies are not members of a group of companies pursuant
to Section 43 Value Added Tax Act 1994 for Value Added Tax
purposes and never have been a member of a group for such
purposes.
35.8.4. The Companies have not made any exempt supplies in consequence
of which they are or will be unable credit for all input tax
paid by it during any VAT quarter ending after the Last Accounts
Date.
35.8.5. No circumstances exist whereby the Company would or might become
liable for Value Added Tax as an agent or otherwise by virtue of
Section 47 Value Added Tax Act 1994 (Agents etc.).
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35.8.6. The Disclosure Letter contains copies of all elections to waive
exemption which have been submitted to H M Commissioners of
Customs and Excise (together with acknowledgements thereof from
H M Commissioners of Customs and Excise) by the Companies (or a
relevant associate for the purposes of paragraph 2(1) Schedule
10 Value Added Tax Act 1994).
35.8.7. The Disclosure Letter sets out the input tax incurred in respect
of each capital item to which Part VA of the Value Added Tax
(General) Regulations 1985 (Capital good scheme) applies
(irrespective of whether credit was obtained for all such input
tax) and in respect of each item the extent to which it was used
in its making taxable supplies in the first interval for the
purposes of Regulation 37D.
35.9. General
35.9.1. The Companies have not issued any share capital to which the
provisions of Section 249 ICTA (Stock dividends treated as
income) could apply nor do they own any such share capital.
35.9.2. No security issued by the Companies and remaining in issue at
the date of this Agreement were issued in such circumstance that
the interest payable thereon falls to be treated as a
distribution under Section 209 ICTA (Meaning of distribution).
35.9.3. The Companies have not issued or acquired any deep discount
securities as defined in Schedule 4 ICTA, any deep gain
securities as defined in Schedule 11 Finance Act 1989, any
qualifying convertible securities as defined in paragraph 2
Schedule 10 Finance Act 1990, any securities to which any of the
provisions of Section 710 to 728 ICTA (Accrued income scheme) or
any qualifying debt to which Sections 60 to 66 Finance Act 1993
could apply or have applied.
35.9.4. The Companies have not at any time:
(a) Repaid, purchased or redeemed or agreed to repay, purchase
or redeem any shares of any class of their share capital or
otherwise reduced or agreed to reduce their share capital
or any class thereof; or
(b) Capitalised or agreed to capitalise in the form of shares,
debentures or other securities or in paying up any amounts
unpaid on shares, debentures or other securities any
profits or reserves of any class or description or passed
or agreed to pass any resolution to do so.
36. Environmental Matters
36.1. Operation of Business
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The business operations of each of the Companies does not involve and has
never involved the use, or the release or discharge of a Hazardous
Material that contravene Environmental Laws.
36.2. Land and other assets
36.2.1 To the best of the Seller's actual knowledge, no land or other
asset owned, occupied, possessed or used by the Companies on or
at any time before the date of this Agreement;
(a) contains or has contained (in the case of land, above or
below ground) a Hazardous Material; or
(b) is referred to or listed in a register of polluted or
contaminated land and not fact or circumstance exists which
might give rise to an entry in such a register.
36.3. Environmental Permits and Law
(a) The Companies have obtained each Environmental Permit required to
operate in accordance with Environmental Law.
(b) The Companies have complied with the terms and conditions of each
Environmental Permit.
(c) Each action required for the renewal or extension of each
Environmental Permit has been taken.
(d) To the best of the Seller's knowledge, no Environmental Permit will
be revoked, suspended, cancelled, varied or not renewed as a result
of the execution or performance of this Agreement or any document to
be executed at or before Completion.
(e) No release or discharge of a Hazardous Material has been made in
contravention of any Environmental Law or any Environmental Permit.
36.4. Environmental Proceedings
36.4.1 Neither the Company, nor a person for whose acts or defaults the
Company may be vicariously liable, is involved or has, during the
two years ending on the date of this Agreement, been involved in
an Environmental Proceeding. No Environmental Proceeding is
pending or threatened by or against any one of the Companies or a
person for whose acts or defaults any of the Companies is
vicariously liable. To the best of the Seller's knowledge,
information and belief, no fact or circumstance exists which
might give rise to an Environmental Proceeding involving the
Company or a person for whose acts or defaults the Company may be
vicariously liable. There is no outstanding notice, judgement,
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order, decree, arbitiral award or decision of a court, tribunal,
arbitrator or governmental agency involving any of the Companies
or any such person relating to any such matters as are mentioned
in this Warranty.
36.4.2 Copies of all current environmental policy statements,
environmental audit reports and assessments, assessment on
substances hazardous to health, correspondence between the Seller
and any relevant enforcement authority, copies or details of any
waste disposal contracts and any information that is liable to
appear on any public register under any Environmental Laws
whether or not the same is registered relating to the Business
and Premises, have been supplied to the Purchaser.
36.5. Environmental Investigations
There is and has been no Environmental Investigation concerning any of
the Companies and none is threatened. To the best of the Seller's
knowledge, information and belief, no fact or circumstance exists which
might give rise to an Environmental Investigation.
36.6. Environmental Liabilities
The Company has no liability to make good, repair, re-instate or clean up
land or another asset on or before the date of this Agreement owned,
occupied, possessed or used by the Company.
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Schedule 3
(Limitations on the Seller' Liability under the Warranties and Undertakings)
Referred to in clause 9 (Seller's Limitations on Liability)
No. Subject Matter
1. Warranties and Undertakings
2. Limitations on Liability under Warranties and Undertakings
2.1. Limitation on Quantum
2.2. Time Limits for Bringing Claim
2.3. Conduct of Litigation
2.4. No Liability if Loss is Otherwise Compensated for
(a) Purchaser can only claim once
(b) Taxation
(c) Insurances
(d) Recovery from Third Parties
2.5. Acts of the Purchaser
2.6. Allowance, Provision or Reserve in the Completion Accounts
2.7. Future Legislation
2.8. Taxation
2.9. Purchaser's Knowledge
2.10. No Liability for Contingent or Non-Quantifiable Claims
2.11. Information received by and Independent Advice of Purchaser
2.12. Payment of Claim to be Reduction in Total Consideration
1. Warranties and Undertakings
Notwithstanding anything in this Agreement to the contrary, the provisions
of this schedule shall operate to limit the liability of the Seller in
respect of any claim by the Purchaser for any breach of or inaccuracy in
the Warranties or in respect of the Undertakings. For the avoidance of
doubt, "Damages" includes any payment under any Undertaking. The
provisions of this Schedule shall apply to the Tax Deed or Deed of
Environmental Indemnity, only as the case may be where express references
to the Tax Deed or Deed of Environmental Indemnity as the case may be are
made in this Schedule 3.
2. Limitations on Liability under Warranties and Undertakings
2.1. Limitation on Quantum
(a) The Purchaser shall not be entitled in any event to damages or any
other amount in respect of any claim or claims under any of the
Warranties or Undertakings unless and until: -
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(i) the aggregate amount of all such substantiated claims exceeds
(Pounds)250,000 (in which event the liability of the Seller shall
be limited to the amount by which such aggregate amount exceeds
(Pounds)250,000; and
(ii) the amount of any individual substantiated claim shall exceed
(Pounds)25,000.
where "substantiated" means a claim for which the Seller may be
liable after taking into account the provisions of sub-paragraph
2.1 (a) (ii) and which is admitted or proved in a court of
competent jurisdiction.
(b) The total aggregate liability of the Seller under or pursuant to this
Agreement (whether for breach of the Warranties or under the
Undertakings or otherwise shall not in any event exceed
(Pounds)5,000,000 save for claims in respect of the environment under
the Deed of Environmental Indemnity for which the total aggregate
liability is an additional (Pounds)5,000,000. For the avoidance of
doubt, it is hereby understood that the maximum total liability of
the Seller including claims in respect of the Environment under the
Deed of Environmental Indemnity is (Pounds)10,000,000. The Purchaser
shall not be entitled to claim more than once in respect of a loss,
cost or expense which would give rise to a claim both under the
Warranties relating to the Environment (Paragraph 36 of Schedule 2)
and under the Deed of Environmental Indemnity and it is hereby agreed
that to the extent any claim is met in relation to the Warranties
relating to the Environment (Paragraph 36 of Schedule 2), claims in
relation to the Deed of Environmental Indemnity shall be cancelled
correspondingly. Should a claim in relation to the Environment be
made, such claim shall in the first instance be made under this
Agreement. The foregoing limitations to liability under the
Warranties and Undertakings and Deed of Environmental Indemnity shall
not apply to the Tax Deed.
(c) For the purpose of sub-paragraph 2.1 (a) (ii), where a claim relates
to more than one event, circumstance, act or omission which event,
circumstance, act or omission would separately constitute a breach of
or give rise to a claim for breach of any of the Warranties or under
the Undertakings, such claim shall be treated as a separate claim in
respect of each such event, circumstance, act or omission.
2.2. Time Limits for Bringing Claim
No claim shall be brought against the Seller in respect of any breach of
the Warranties or under any of the Undertakings or the Tax Deed or the
Deed of Environmental Indemnity unless the Purchaser shall have given to
the Seller written notice of such claim specifying (in reasonable detail)
the matter which gives rise to the breach or claim, the nature of the
breach or claim and the amount claimed in respect thereof (detailing the
Purchaser's calculation of the loss thereby alleged to have been suffered
by it):
(a) on or before the seventh anniversary of Completion in respect of
claims relating to Tax Warranties or the Tax Deed; or
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(b) on or before the sixth anniversary of Completion in respect of claim
relating to the Deed of Environmental Indemnity;
(c) on or before the second anniversary of Completion in respect of any
other matters,
PROVIDED that the liability of the Seller under this subparagraph
shall absolutely determine (if such claim has not been previously
satisfied, settled or withdrawn) if legal proceedings in respect of
such claim shall not have been commenced within six months of the
service of such notice and for this purpose proceedings shall not be
deemed to have been commenced unless they shall have been properly
issued and validly served upon the Seller and the Seller's Guarantor
(or where the Seller has been liquidated, dissolved, or is otherwise
insolvent upon the Guarantor only).
2.3. Conduct of Litigation
(a) Upon the Purchaser becoming aware of any claim, action or demand
against it or matter likely to give rise to any of these in respect of
the Warranties and Undertakings, the Purchaser shall --
(i) forthwith notify the Seller by written notice as soon as it
appears to the Purchaser that any assessment or claim of a third
party received by or coming to the notice of the Purchaser may
result in a claim under the Warranties or Undertakings;
(ii) and shall procure that the Davy, Formet and /or Turner shall
take such action and give such information and access to
personnel, premises, chattels, documents and records to the
Seller and its professional advisers as the Seller may
reasonably request and the Seller shall be entitled to require
the Companies to take such action and give such information and
assistance in order to avoid, dispute, resist, mitigate, settle,
compromise, defend or appeal any claim in respect thereof or
adjudication with respect thereto;
(iii) and shall procure that the Davy, Formet and /or Turner shall at
the request of the Seller, allow the Seller to take the sole
conduct of such actions as the Seller may deem appropriate in
connection with any such assessment or claim in the name of the
Purchaser and in that connection the Seller shall consult with
the Purchaser as to the conduct of such action the Purchaser
shall give or cause the Companies to give to the Seller all such
assistance as the Seller may require in avoiding, disputing,
resisting, settling, compromising, defending or appealing any
such claim and shall instruct such solicitors or other
professional advisers as the Seller may nominate to act on
behalf of the Purchaser, as appropriate, but to act in
accordance with the sole instructions of the Seller or the
Companies (as applicable);
(iv) and shall procure that the Davy, Formet and /or Turner shall
make no admission of liability, agreement, settlement or
compromise with any third
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party in relation to any such claim or adjudication without the
prior written consent of the Seller; and
(v) and shall procure that the Davy, Formet and /or Turner shall take
all reasonable action to mitigate any loss suffered by it or the
Companies in respect of which a claim could be made under the
Warranties or the Undertakings.
(b) In any event, the Seller shall be entitled at any stage and at its
sole discretion to settle any such third party assessment or claim and
shall be under no obligation in this respect to notify the Purchaser
of its decision so to settle such assessment or claim.
2.4. No Liability if Loss is Otherwise Compensated For
(a) Purchaser can only claim once
(i) The Purchaser and those deriving title from the Purchaser on or
after Completion shall not be entitled to recover damages or
otherwise obtain reimbursement or restitution more than once
between them in respect of any individual breach of the
Warranties or claim under the Undertakings.
(ii) No liability shall attach to the Seller by reason of any breach
of the Warranties to the extent that the same loss occasioned to
the Purchaser or the Companies by reason of such breach has been
recovered under the Tax Deed or the Deed of Environmental
Indemnity or the Undertakings and no liability shall attach to
the Seller under the Tax Deed or the Deed of Environmental
Indemnity or the Undertakings to the extent that the same loss
has been recovered by a claim under the Warranties given by it.
(iii) The Seller shall not be liable for breach of any of the
Warranties or under any of the Undertakings to the extent that
the subject of the claim has been or is made good or is
otherwise compensated for without cost to the Purchaser.
(b) Insurances
If, in respect of any matter which would give rise to a breach of the
Warranties or a claim under the Undertakings, the Companies are
entitled (or would have been so entitled had the Purchaser maintained
in force, or but for any change in the terms of, the policies of
insurance maintained by or on behalf of the Companies immediately
prior to Completion or policies providing equivalent cover thereto) to
claim under any policy of insurance, then no such matter shall be the
subject of a claim under the Warranties or the Undertakings unless and
until the Companies shall have made a claim against its insurers and
any such insurance claim (or any claim which could have been made had
such policies or their equivalents been maintained as aforesaid) shall
then reduce by the amount recovered or extinguish any such claims for
breach of the Warranties or under the Undertakings.
(c) Recovery from Third Parties
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(i) Where the Purchaser and/or the Companies are at any time
entitled to recover from some other person any sum in respect of
any matter giving rise to a claim under the Warranties and/or
the Undertakings or the Deed of Environmental Indemnity under
any of the other provisions of this Agreement (other than the
Tax Deed) the Purchaser shall, and shall procure that the
Companies shall, undertake all necessary steps to enforce such
recovery prior to taking action against the Seller (other than
to notify the Seller of the claim against the Seller) and, in
the event that the Purchaser or the Companies or relevant member
of the Kvaerner Group shall recover any amount from such other
person, the amount of the claim against the Seller shall be
reduced by the amount recovered.
(ii) If the Seller pays at any time to the Purchaser or the Companies
an amount pursuant to a claim in respect of the Warranties
and/or the Undertakings or the Deed of Environmental Indemnity
or under any provisions of this Agreement (other than the Tax
Deed) and the Purchaser or the Companies subsequently become
entitled to recover from some other person any sum in respect of
any matter giving rise to such claim, the Purchaser shall, and
shall procure that the Companies shall take all necessary steps
to enforce such recovery, and shall forthwith repay to the
Seller so much of the amount paid by the Seller to the Purchaser
or the Companies as does not exceed the sum recovered from such
other person.
(iii) If any amount is repaid to the Seller by the Purchaser or the
Companies pursuant to sub-paragraph (D) (ii) above, an amount
equal to the amount so repaid shall be deemed never to have been
paid by the Seller to the Purchaser for the purposes of
paragraph 2. 1.
2.5. Acts of the Purchaser
(a) The Seller shall not be liable under the Warranties or the Tax Deed or
the Undertakings to the extent that such claim is attributable to:-
(i) any voluntary act, omission, transaction or arrangement carried
out by the Purchaser or on its behalf or by persons deriving
title from the Purchaser on or after Completion (including any
reorganisation or change in ownership of the Companies after
Completion) other than any act, omission, transaction or
arrangement carried out pursuant to any obligation entered into
before Completion or carried out by the Purchaser and/or a
Company in accordance with the Seller's instructions pursuant to
any provision of the Agreement; or
(ii) any admission of liability (where there has been no liability but
for such admission) made after the date hereof by the Purchaser
or on its behalf or by persons deriving title from the Purchaser
on or after Completion (save where such admission of liability is
made in accordance with the Seller's instructions).
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(b) The Seller shall not be liable for any breach of Warranties or claims
under the Undertakings which would not have arisen but for any
reorganisation or change in ownership of the Companies after
Completion or any changes in the accounting basis on which any of the
Companies values its assets or any other change in accounting or
taxation policy or practice of the Companies after Completion.
2.6. Allowance, Provision or Reserve in the Completion Accounts
No matter shall be the subject of a claim for breach of any of the
Warranties, the Tax Deed or the Deed of Environmental Indemnity, or under
the Undertakings to the extent that allowance, provision or reserve in
respect of such matter shall have been made in the Completion Accounts of
the relevant Company or has been included in calculating creditors or
deducted in calculating debtors in the Completion Accounts and (in the case
of creditors or debtors) is identified in the records of the Companies or
shall have been otherwise taken account of or reflected in calculating a
provision in the Completion Accounts.
2.7. Future Legislation
No liability shall arise in respect of any breach of any of the Warranties
or under the Undertakings if and to the extent that liability for such
breach occurs or is increased as a result of any legislation not in force
at the date of this Agreement.
2.8. Taxation
No liability shall arise in respect of any breach of any of the Warranties,
the Tax Deed, or under the Undertakings to the extent that such breach or
claim would not have occurred or arisen but for: -
(A)
(i) any change in the basis of, method of calculation of, or increase
in the rate or rates of Taxation or changes in the published
practice of the relevant Tax Authority made or coming into effect
after the date hereof but with retrospective effect or the
withdrawal of any extra-statutory concession currently granted by
any Tax authority; or
(ii) a failure or omission on the part of the Purchaser or the
Companies after Completion to make any election or claim any
Relief, the making or claiming of which was taken into account in
computing the provision or reserve for Tax in the Completion
Accounts and the making or claiming of which the Seller or its
duly authorised agent notifies of the Purchaser or the Companies
in writing and in reasonable time to make such election or claim
for Relief; or
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(iii) any changes after Completion in the bases, methods or policies
of accounting of the Purchaser or the Companies except where
such change is made in order to comply with generally accepted
accounting principles; or
(iv) a disclaimer by the Companies after Completion of any capital
allowances assumed to have been made in computing the provision
for Taxation in the Completion Accounts or of any claim for
Relief made (whether provisionally or otherwise) prior to
Completion and taken into account in computing the provisions
for Taxation in the Completion Accounts; or
(v) any failure by the Purchaser and/or the Companies to comply with
any of their respective obligations under clause 8.2 (Access to
Records and Preparation of Tax Returns).
(b) The Purchaser shall, at the direction in writing of the Seller
(subject to the Seller holding harmless the Purchaser and/or the
Company against all reasonable third party costs and expenses thereby
incurred), procure that the Companies take all such steps as the
Seller may require to:-
(i) use all such Reliefs arising as a consequence of or by reference
to any Event occurring (or deemed to occur) on or before
Completion or in respect of a period ended on or before
Completion as may be available to reduce or eliminate insofar as
permitted by law any Tax liability in respect of which the
Purchaser would have been able to make a claim against the
Seller under this Agreement and to provide to the Seller, at the
Seller's expense, a certificate from the auditors (for the time
being) of the Companies confirming that all such Reliefs have
been so used PROVIDED THAT the provisions of this paragraph
shall not apply to any Relevant Reliefs (as the same is defined
in the Tax Deed);
(ii) make all such claims and elections specified by the Seller in
respect of any accounting period of the Companies commencing
before Completion, provided that no such claim or election shall
require the Companies to use any Relevant Relief (as the same is
defined in the Tax Deed); and
(iii) allow the Seller to reduce or eliminate any Tax liability by
surrendering, or procuring the surrender by any company other
than the Companies or any Subsidiaries, of Group Relief or
advance corporation tax to the extent permitted by law but
without any payment being made in consideration for such
surrender.
2.9. Purchaser's Knowledge
The Seller shall not be liable under the Warranties or Undertakings the
extent that the Purchaser has constructive knowledge (having made all
reasonable enquiries of the senior management of the Companies the
Purchaser acting through its officers and agents) shall be deemed to have
constructive knowledge by the conduct of its employees and agents
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during visits made to the Company sites and the enquiries made of the
Seller's employees and agents and the matters discovered at which the
Companies operate. Such visits and all enquiries occurred during the
months of July 1999. The Purchaser acknowledges that the constructive
knowledge which the Purchaser is deemed by virtue of this paragraph to
have does not give grounds for claim by the Purchaser for breach of
Warranties. Notwithstanding the foregoing, no constructive knowledge shall
be deemed on the part of the Purchaser in respect of latent defects or the
presence of Hazardous Material in the Environment.
2.10. No Liability for Contingent or Non-Quantifiable Claims
If any breach of the Warranties or claim under the Undertakings arises by
reason of some liability of the Companies which, at the time such breach
or claim is notified to the Seller, is contingent only or otherwise not
capable of being quantified, then the Seller shall not be under any
obligation to make any payment in respect of such breach or claim unless
and until such liability ceases to be contingent or becomes capable of
being quantified. So long as such claim shall have been notified to the
Seller in accordance with paragraph 2.2, as appropriate, then the first
proviso to the relevant paragraph 2.2 shall be amended in relation to such
claim so as to require that legal proceedings be commenced within six
months from the date on which the said liability ceases to be contingent
or becomes capable of being quantified, as the case may- be, in order for
the liability of the Seller not to determine.
2.11. Information received by and Independent Advice of the Purchaser
The Purchaser acknowledges and agrees with the Seller (for itself and for
the benefit of the members of the Retained Group and their officers,
employees and advisers and as trustees for such companies, officers,
employees and advisers) that: -
(a) the provision of information relating to the Companies, its
undertaking, financial position or prospects was made on behalf of the
Seller and accepted by the Purchaser, and this Agreement is entered
into, on the basis and condition that neither the Seller nor any of
its subsidiaries nor any of the Seller or its subsidiaries' officers,
employees and advisers has made or makes any representation or
warranty as to the accuracy or completeness of such information, or
accepts any duty of care in relation to the Purchaser in respect of
the provision of such information and that none of such persons shall
be under any liability to the Purchaser in the event that, for
whatever reason, such information (including in particular but without
limitation, the information contained in the information memorandum
referred to above) is or becomes inaccurate, incomplete or misleading
in any particular; and
(b) the Purchaser has had independent legal and financial advice relating
to the purchase of the Sales Shares and to the terms of this Agreement
and the documents to be executed pursuant to it, including the terms
of this paragraph.
2.12. Payment of Claim to be Reduction in Total Consideration.
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Any payment made by the Seller in respect of any claim under the Warranties
the Tax Deed or the Deed of Environmental Indemnity or under the
Undertakings shall be deemed to be a reduction in the Total Consideration
payable under clause 3 (Consideration) of this Agreement.
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Schedule 4
(Basic Information about the Companies)
(i) Davy Roll Company Limited (formerly Davy - Ashmore Foundries Limited)
1. Registered number: 162966
2. Date of incorporation: 17 January 1920
3. Place of incorporation: England and Wales
4. Address of registered office: PO Box 21, Close Works, Gateshead
Tyne & Wear
NE8 3DX
5. Authorised share capital: 60,000 ordinary shares
6. Issued share capital: 60,000 ordinary shares of (Pounds)1 each
7. Directors: Michael G. Foster
Christopher Hersey
Barry L. Phillipo
Peter E. Gardner (Secretary)
8. Accounting reference date: 31 December
9. Auditors: Arthur Andersen
10. Tax residence: United Kingdom
11. Business activities: Iron Masters, Forge Masters, Smelter
Engineers
(2710)
(ii) Kvaerner Formet Limited (formerly Formet Limited)
1. Registered number: 1025431
2. Date of incorporation: 28 September 1971
3. Place of incorporation: England and Wales
4. Address of registered office: Wincomblee Road
Low Walker,
Newcastle Upon Tyne
Tyne & Wear, NE6 3QQ
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5. Authorised share capital: 3,000 ordinary shares
6. Issued share capital: 3,000 ordinary shares at (Pounds)1 each
7. Directors: Michael G. Foster
John Rylatt
Sylvia Marshall (Secretary)
8. Accounting reference date: 31 December 1999
9. Auditors: Arthur Andersen
10. Tax residence: United Kingdom
11. Business activities: Forge Press Stamp & Roll Form Metal
(2840)
(iii) Turner Chilled Rolls Limited (formerly Coppermoss Limited)
1. Registered number 1180365
2. Date of incorporation: 9 August 1974
3. Place of incorporation: England and Wales
4. Address of registered office: Farthing Road
Ipswich
Suffolk, 1P1 5AP
5. Authorised share capital: 138,830 Ordinary Shares
6. Issued share capital: 138 830 ordinary shares at (Pounds)1
each
7. Directors: Michael G. Foster
John Rylatt
Graham J. Ward (Secretary)
8. Accounting reference date: 31 December
9. Auditors: Arthur Andersen
10. Tax residence: United Kingdom
11. Business activities: Manufacturing and roll making (2710)
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Schedule 5
(Pension Arrangements)
1. DEFINITIONS
In this Schedule references to paragraphs are reference to paragraphs in
this Schedule and the following expressions shall have the following
meanings:
"Additions" means an amount equal to the Employee Contributions and
Employer Contributions specified in Appendix B excluding the Expense
Allowances specified in Appendix B paid from Completion to the Membership
Transfer Date by and in respect of DBS Members who become Transferring
Employees.
"Adjustment" means the proportionate change in the FT-Actuaries All Share
Total Return Index between the close of business on the working day
immediately prior to Completion and the close of business on the working
day immediately before the date on which payment of the Transfer Amount is
made.
"DBS Members" means those Pensionable Employees who were designated as
Defined Benefit Section Members or Kvaerner Pension Plan Section Members of
the Kvaerner Pension Fund. The identity of the DBS members has been
disclosed.
"DCS Members" means those Pensionable Employees who were designated as
Defined Contributions Section Members for the purposes of the Kvaerner
Pension Fund and retain an entitlement, or who are members of the Kvaerner
Protected Rights Pension Scheme. The identity of the DCS members has been
disclosed.
"Guaranteed Minimum Pension" shall have the meaning given to that
expression by the Pension Schemes Act 1993.
"Interest Rate" means a rate equal to the base rate from time to time of
Barclays Bank PLC.
"Membership Transfer Date" means the date six months after Completion, or
another date agreed in writing by the Seller and the Purchaser, and
acceptable to the Pension Schemes Office of the Inland Revenue.
"Past Service Reserve" means such amount as is agreed or certified under
the provisions of paragraph 4 as being equal to the value at Completion of
the aggregate of the benefits accrued for and in respect of each
Transferring Employee under the Seller's Schemes excluding benefits under
the Defined Contributions Section of the Kvaerner Pension Fund and under
the Kvaerner Protected Rights Pension Scheme based on their Pensionable
Salary at Completion, projected to the date of retirement or death in
service and as calculated in accordance with the assumptions set out in
Appendix A hereto.
"Payment Date" means the date on which payment is due under paragraph
4.3.2.
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<PAGE>
"Pensionable Employees" means those employees of the Companies who are
members of the Seller's Schemes at Completion and for so long as each
employee remains so employed during the Transitional Period.
"Pensionable Salary" shall have the meaning ascribed to that expression in
the Seller's Schemes.
"Purchaser's Actuary" means Towers Perrin or any other Actuary or firm of
Actuaries appointed by the Purchaser for the purposes of this Schedule.
"Purchaser's Scheme" means the pension scheme or schemes referred to in
paragraph 2 and where appropriate shall include the Trustees of the
Purchaser's Scheme.
"Relevant Forms" means forms in a format acceptable to the Seller (such
acceptance not to be unreasonably withheld or delayed) sent by the
Purchaser to the Pensionable Employees for them to complete indicating
whether or not they consent to their accrued benefits under the Seller's
Schemes being transferred to the Purchaser's Scheme. The Purchaser will
ensure that the Seller receives those forms within the period of three
months after the Membership Transfer Date.
"Seller's Actuary" means Lane Clark & Peacock or any other actuary or firm
of actuaries appointed by the Seller for the purposes of this Schedule.
"Seller's Schemes" means the Kvaerner Pension Fund, and the Kvaerner
Protected Rights Pension Scheme, and where appropriate shall include the
Trustees of the Seller's Schemes.
"Seller" means Kvaerner PLC.
"Transfer Amount" means such amount in cash (or such other assets as may be
agreed between the Seller and the Purchaser) as shall be calculated by the
Seller's Actuary and agreed by the Purchaser's Actuary as being equal to
the aggregate of the following:-
(a) In respect of the DCS Members who become Transferring Employees
(i) A sum equal to the total net realised value of all investments and
deposits standing to the credit of each such Member's individual fund.
plus
(ii) if the DCS member is also a DBS Member the Past Service Reserve (if
any) adjusted by the Adjustment.
(b) In respect of DBS Members who become Transferring Employees:-
(i) The Past Service Reserve in respect of such DBS Member adjusted by the
Adjustment and then reduced by the amount of any unpaid Age Related
National
Page 58
<PAGE>
Insurance Rebates.
Plus
(ii) The Additions adjusted by the Interest Rate for the period from the
date on which the contributions are paid to the Seller's Schemes to
the date on which payment is made to the Purchaser's Scheme.
"the Actuary" means the actuary (if any) appointed for the purpose of
paragraph 4.3.1..
"Transferring Employees" means such of the Pensionable Employees who
consent to a transfer of assets being made in respect of them from the
Seller's Schemes to the Purchaser's Scheme.
"Transitional Period" means the period commencing the day after Completion
and ending the day before the Membership Transfer Date.
2. THE PURCHASER'S SCHEME
2.1 The Purchaser will nominate a pension scheme no later than by the
Membership Transfer Date which will be an exempt approved defined
benefit scheme or a scheme capable of such approval for the purposes
of Chapter I Part XIV of the Income and Corporation Taxes Act 1988.
2.2 The Seller and the Purchaser will use all reasonable endeavours to
ensure that each Pensionable Employee who is a member of the Seller's
Schemes immediately before the Membership Transfer Date is invited, in
terms approved by the Seller (such approval not to be unreasonably
withheld or delayed), to join the Purchaser's Scheme with effect from
the Membership Transfer Date.
2.3 Any employee of the Companies who has not become eligible to join the
Seller's Schemes by the Membership Transfer Date because he has
insufficient service or is too young will be able to join the
Purchaser's Scheme on the date on which he would have become eligible
to join the Seller's Schemes if it had continued to apply to him.
2.4 The Purchaser's Scheme will provide benefits and require employee
contributions in respect of each Transferring Employee's pensionable
service from the Membership Transfer Date on a basis which is broadly
no less favourable (to such reasonable satisfaction as the Seller's
Actuary and the Purchaser's Actuary agree) than the basis on which
benefits are being provided for (and contributions required from) the
Transferring Employees under the Seller's Schemes as at Completion.
3. TRANSITIONAL PERIOD OF PARTICIPATION
3.1 The Seller shall use all reasonable endeavours to procure that each of
the Companies may continue to participate in each of the Seller's
Schemes in which
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<PAGE>
they currently participate until the last day of the Transitional
Period (provided that the approval of the Seller's Schemes as exempt
approved schemes would not be prejudiced thereby) and that the
Pensionable Employees as shall be employed by the Companies shall
remain eligible to participate as members.
Such continuation of membership is conditional upon the Pensionable
Employees remaining on a payroll operated by the Seller.
3.2 The Purchaser will use all reasonable endeavours to procure that the
Companies observe all the provisions of the Seller's Schemes and that
they will pay the contributions and expense allowance specified in
Appendix B.
3.3 The Purchaser shall procure that none of the Companies increase in
aggregate the Pensionable Salary of the Pensionable Employees in their
respective employment by an amount greater than that assumed in the
assumption set out in Appendix A, except on such terms as to the
payment of further employer contributions or otherwise as the Seller
may reasonably require. If there is any increase beyond that assumed
in Appendix A, the Purchaser will ensure that which ever of the
Companies pays an additional contribution to the Seller's Scheme to
cover the extra cost to the Seller's Scheme. The additional
contribution will be calculated by the Seller's Actuary and agreed by
the Purchaser's Actuary on the basis of the assumptions set out in
Appendix A.
3.4 If the amount required under paragraphs 3.2 and 3.3 is not paid within
14 working days after payment is requested by the Seller or the
Seller's Scheme, the Purchaser will pay an amount equal to that amount
to the Seller by way of adjustment to the purchase price.
3.5 The Seller undertakes and shall procure that during the Transitional
Period, no amendment is made to the rules of the Seller's Schemes, and
no power or discretion shall be exercised which would, or might,
affect the benefit or contributions payable to, by or in respect of
any Pensionable Employees, or which would or might affect the
calculation of the payment of the Transfer Amount, except with the
prior written consent of the Purchaser (such consent not to be
unreasonably withheld).
The Seller undertakes with the Purchaser to use its best endeavours to
ensure that during the Transitional Period the Seller's Schemes are
not placed in full or partial winding up.
4. TRANSFER PAYMENT FROM SELLER'S SCHEMES
4.1 The Seller will use its reasonable endeavours to ensure that on the
Payment Date, the Seller's Schemes transfer to the Buyer's Scheme the
Transfer Amount.
4.2 Calculation of Transfer Amount
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4.2.1 If any of the Transferring Employees do not become contracted-out of
the State Earnings Related Pension Scheme by reference to the
Purchaser's Schemes at the Membership Transfer Date the proportion
of the Past Service Reserve representing the cost of the Guaranteed
Minimum Pension and Protected Rights retained in the Seller's
Schemes or of paying transfer premiums in respect of those
Transferring Employees will be deducted from the Transfer Amount.
4.3.1 Immediately after the Membership Transfer Date the Seller will
procure that the Transfer Amount will be calculated by the Seller's
Actuary within the period of three months after the Membership
Transfer Date (or of receipt by the Seller of the Relevant Forms if
later) and shall provide the Purchaser's Actuary with such data and
other information as the Purchaser's Actuary may reasonably require
in order to review the computation of the Transfer Amount. The
Purchaser's Actuary may review such computation and in the event
that the Purchaser's Actuary is not able to agree the Transfer
Amount, within a period of 2 months of the Seller's Actuary making
the calculation result available to the Purchaser's Actuary, they
shall jointly appoint (or in the event of their failure jointly to
appoint, the Purchaser's Actuary or the Seller's Actuary, shall
apply to the President of the Institute of Actuaries to appoint) the
Actuary who shall certify the Transfer Amount. A certificate agreed
by the Purchaser's Actuary or given by the Actuary under this
paragraph shall, in the absence of manifest error, be conclusively
binding on the parties. The Actuary shall act as an expert and not
as an arbitrator. The costs of the Actuary shall be borne as the
Actuary directs.
4.3 Payment of Transfer Amount
4.3.1 Payment of the Transfer Amount to the Purchaser's Scheme will only
be made on the following conditions:-
(a) the approval of the Inland Revenue in principle has been obtained to
the payment of the Transfer Amount to the Purchaser's Scheme (if
such approval is necessary);
(b) the Purchaser has complied with all its material obligations in this
Schedule;
(c) the Trustees of the Purchaser's Scheme have confirmed that they will
accept the payment of the Transfer Amount on the terms set out in
paragraph 5;
(d) receipt by the Seller of a written confirmation that the Purchaser's
Scheme has a valid contracting-out certificate if the Purchaser's
Scheme is contracted out of the State Earnings Related Pension
Scheme.
4.3.2 Payment of the Transfer Amount to the Purchaser's Scheme is due on
the later of the following:-
(a) the date which is 30 days after the date when the Transfer Amount
has been agreed by the Purchaser's Actuary or certified by the
Actuary; or
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(b) the date which is 30 days after the date when the last of the
conditions in paragraph 4.3.1 have been satisfied.
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4.3.3 On receiving the Transfer Amount the Purchaser's Scheme will provide
the Seller's Schemes with an acknowledgement of receipt.
4.3.4 If the total amount transferred by the Seller's Schemes to the
Purchaser's Scheme on or before the Payment Date is less than the
Transfer Amount, or if the Seller's Schemes fail to make any
payments whatsoever (the amount of such difference being referred to
in this paragraph being referred to as the "Shortfall") then the
Seller shall pay to the Purchaser within 7 days of the Payment Date
a sum in cash equal to 100% of the Shortfall less an amount
representing such percentage of that Shortfall as is arrived at by
applying the rate of mainstream corporation tax in force at the time
at which such Shortfall payment becomes due. In the event of the
transfer pursuant to Paragraph 4.1, or the payment of an additional
amount in respect of any Shortfall pursuant to this paragraph being
made wholly or partly after the Payment Date, this shall be added to
the Transfer Amount an amount equal to the interest on the
outstanding balance at the Interest Rate plus 1% (accruing daily and
compounding quarterly) in respect of the period from the day after
the Payment Date to the date or dates of payment.
5. BENEFITS TO BE PROVIDED BY THE PURCHASER'S SCHEME IN RESPECT OF SERVICE
UNDER THE SELLER'S SCHEMES
5.1 Subject to receipt of the Transfer Amount the Purchaser will ensure
that the Purchaser's Scheme provides, in respect of each
Transferring Employee, such benefits as the Seller's Actuary and the
Purchaser's Actuary agree to be equal in value to the amount
actually received in respect of each Transferring Employee
calculated in accordance with the actuarial assumptions in Appendix
A.
5.2 If the Purchaser's Scheme is contracted-out then the Purchaser will
ensure that the Purchaser's Scheme accepts liability for each
transferring Employee's accrued rights to a Guaranteed Minimum
Pension.
6. MONEY PURCHASE VOLUNTARY CONTRIBUTIONS
Nothing previously contained in this Schedule will apply to voluntary
contributions that are invested to provide money purchase benefits or to
benefits secured by these contributions. However, the Seller will use
reasonable endeavours to ensure that the assets representing Transferring
Employees, voluntary contributions will be transferred to the Purchaser's
Scheme, and the Purchaser will ensure that in that event its scheme
provides benefits for the members concerned equal in value to the assets
transferred.
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7. The Seller undertakes to the Purchaser to indemnify and keep indemnified
the Purchaser, the Companies and the Purchaser's Scheme against all and any
liabilities, obligations, costs, expenses, demands, actions, suits, claims
or proceedings whatsoever arising out of or in connection with:
(a) any breach of Article 141 of the Treaty of Amsterdam or of Section 62
of the Pensions Act 1995 except insofar as it relates to Guaranteed
Minimum Pensions; and
(b) any debt falling on the Companies under Section 75 of the Pensions Act
1995 or under any regulation made thereunder in relation to the
Seller's Schemes.
Page 64
<PAGE>
APPENDIX A
<TABLE>
<CAPTION>
<S> <C>
Benefits to be valued : Pensions payable from the Kvaerner Pension
Fund on retirement, withdrawal or death, in
respect of pensionable service accrued prior
to Completion, excluding money purchase
benefits from the Defined Contributions
Scheme and Additional Voluntary
Contributions.
For the avoidance of doubt, the benefits
valued on death in service do not include
cash benefits or that part of any pension
which relates to service after Completion.
Rate of discount : 8.25% pa
Salary increases:
Inflationary : 5.75% pa
Promotional : applicable only to members of the Defined
Benefits Scheme of the Kvaerner Pension Fund:
age and sex related; varying for men from 3%
pa at age 30 to nil after age 45
Section 148 Orders : 5.75% pa
Pension increases
(excluding GMPs) :
in deferment : 4% pa
in payment : 4% pa
Increases to post-88 GMPs
in payment : 3% pa
Increases in State earnings
limits : 4% pa
Mortality:
Before retirement : A80
After retirement : PA80 (by year of birth)
Rates of Withdrawal : an age-related scale falling from 7% pa at
age 30 to nil after age 50; 50% higher for
women.
Rates of Early Retirement : Men: 10% retire at each age 60 to 64;
Women: 50% of women retire at age 60 and
10% at each age 61 to 64
</TABLE>
Page 65
<PAGE>
<TABLE>
<S> <C>
Ill-health early retirement : One half of the mortality decrement.
Family statistics:
Proportion married : 80%
Age difference : men three years older than wives
Addition to spouse's
pensions on death
before retirement,
to allow for
dependants' pensions : 15%
Commutation : no allowance
Expenses : no allowance
</TABLE>
Asset value adjustment
Pension liabilities determined using the above assumptions will be multiplied by
X where D is equal to the net dividend yield on the FTSE Actuaries All Share
- -
D
Index (as quoted in the Financial Times, subject to amendment if subsequently
corrected), relating to the working day immediately prior to Completion and X is
3.1
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<PAGE>
APPENDIX B
Active Members of the Kvaerner Protected Rights Pension Scheme
--------------------------------------------------------------
(i) Employee
--------
The amount by which the Members' National Insurance contributions on
earnings from the Employer are less than would be the case had the
member not been contracted-out.
(ii) Employer
--------
The contracted-out rebated percentage of the members' earnings from
the Employer between the Lower and Upper Earnings Limits for
National Insurance purposes.
(iii) Expense Allowance
-----------------
Plus 2%, applied to total Pensionable Salary without in this case
any deductions in respect of Lower Earnings Limit (LEL).
(iv) Active DBS Members
------------------
(a) Those of the Pensionable Employees who are members of the Defined
Benefits Scheme of the Kvaerner Pension Fund.
(i) Employee Contributions - 3% applied to Pensionable Salary
-----------------------
above LEL. In addition for a member who was a member on 5
April 1978 3% applied to Pensionable Salary below LEL.
(ii) Employer Contributions - 12.1% applied to total Pensionable
----------------------
Salary without any deduction in respect of LEL.
(8.5% in respect of members of the Plan Section)
(iii) Expense Allowance
-----------------
Plus 2% applied to total Pensionable Salary without in this
case any deductions in respect of the LEL.
67
<PAGE>
Schedule 6
(Completion Accounts)
1. The Purchaser shall procure, within 75 days after the date of Completion,
each of the Companies will prepare the draft of the Completion Balance
Sheets and a draft of the Statement of Net Assets (free of debt and cash)
and submit both for approval to the Seller. The Seller and its advisers
(and, if applicable such independent firm as required) shall participate in
all material aspects and activities associated with the preparation of the
draft of the Completion Balance Sheets and the draft of the Statement of
Net Assets.
2. The Completion Balance Sheets shall be prepared:
(a) in a manner consistent with the procedures and policies bases and
methods of valuation adopted in the preparation of the Accounts;
(b) on the basis that Completion will be treated as bringing an end to an
accounting period for the purposes of United Kingdom corporation tax;
(c) in a manner consistent with the Accounts;
(d) in accordance with GAAP; and
(e) on the assumption that no payment will be made by the Companies in
consideration for the surrender of Group Relief.
3. Within 90 days of the receipt by the Seller of the draft Completion Balance
Sheets and the draft Statement of Net Assets, the Seller shall inform the
Purchaser in writing whether or not it accepts the draft Completion Balance
Sheets and the draft Statement of Net Assets and, if not, shall specify in
writing the amount and nature of any item which it does not accept.
4. If the Seller confirms in writing that it accepts the draft Completion
Balance Sheets and the draft Statement of Net Assets, or if it fails to
inform the Purchaser within 90 days of receipt whether or not it accepts
the draft Completion Balance Sheets and the draft Statement of Net Assets,
such drafts shall be the Completion Balance Sheets and Statement of Net
Assets.
5. If the Seller informs the Purchaser, in accordance with Paragraph 3, that
it does not accept the draft Completion Balance Sheets and the draft
Statement of Net Assets, the Seller and the Purchaser shall hold
discussions in good faith with a view to agreeing the Completion Balance
Sheets and the Statement of Net Assets. If such agreement is reached and
is confirmed in writing by the parties, it shall be final and binding on
the parties.
6. Any dispute about the draft Completion Balance Sheets and the draft
Statement of Net Assets which remains unresolved 90 days after receipt by
the Seller of the draft Completion
68
<PAGE>
Balance Sheets and the draft Statement of Net Assets shall, at the request
of either party be referred for final determination to an independent firm
of chartered accountants nominated jointly by the Seller and the Purchaser
or, failing such nomination, within 10 Business Days after request by
either the Seller or the Purchaser, nominated at the request of either
party by the President for the time being of the Institute of Chartered
Accountants in England and Wales. Such independent firm shall act as
experts and not as arbitrators and (in the absence of manifest error) its
decisions (both as to the manner in which its determination is to be made
and as to the subject matter of its determination) shall be final and
binding on the parties.
7. All costs incurred by the Seller in reviewing and agreeing the Completion
Balance Sheets and the Statement of Net Assets shall be borne by the Seller
and all such costs incurred by the Purchaser shall be borne by the
Purchaser. The fees of such independent firm shall be payable by the Seller
and the Purchaser in such proportions as such independent firm determines
(or failing such determination equally by the Seller on the one hand and
the Purchaser on the other hand).
8. Each party will co-operate fully with the other and, if applicable, with
the independent firm appointed under this Schedule 6 (Completion Accounts)
(including giving all reasonable access to records, information, and to
personnel) with a view to enabling the draft Completion Balance Sheets and
the draft Statement of Net Assets to be prepared within the prescribed time
limits and subsequently discussed and, if applicable, with a view to
enabling any such independent firm to make any determination required by
Paragraph 6, and in particular the Purchaser shall procure that the
Companies shall permit the Seller and its advisers (and, if applicable,
such independent firm) participate in the preparation of and to have
reasonable access to, and (where reasonable) to take copies of any records
or information belonging to the Companies which the Seller may reasonably
require for the purpose of participating in preparation and reviewing the
draft Completion Balance Sheets and the draft Statement of Net Assets.
69
<PAGE>
SCHEDULE 7
(Agreed Net Assets)
70
<PAGE>
SCHEDULE 8
(Guarantees)
<TABLE>
<CAPTION>
Type Reference Date Opened CCY Amount Expiry Date
<S> <C> <C> <C> <C> <C>
Performance 4433971 10 Jul 1998 GBP 19,807.00 11 Jul 1999
Performance 4461327 15 Dec 1998 GBP 1,101.00 30 Sep 1999
Performance 4412298 05 Mar 1998 GBP 4,122.96 15 Nov 1999
Performance 4461293 15 Dec 1998 GBP 2,142.40 10 Dec 1999
Performance 4486712 15 Jun 1999 GBP 14,566.00 31 May 2000
Tender 4484465 15 Jun 1999 USD 2,000.00 31 May 2000
TOTAL 41,739.36 GBP
2,000.00 USD
</TABLE>
71
<PAGE>
SCHEDULE 9
(Properties)
72
<PAGE>
SCHEDULE 10
(Intercompany Debts)
73
<PAGE>
SCHEDULE 11
(Leasing Contracts)
74
<PAGE>
SCHEDULE 12
(Debt Free Price Apportionment)
<TABLE>
<S> <C>
The Davy Roll Company Limited (Pounds) 7,800,000
Turner Chilled Rolls Limited (Pounds) 3,497,000
Kvaerner Formet Limited (Pounds) 2,454,000
TOTAL (Pounds)13,751,000
</TABLE>
75
<PAGE>
SCHEDULE 13
(KMEB Agreement)
76
<PAGE>
For and on behalf of ) .............................................
DAVY METALS LTD )
.............................................
For and on behalf of ) .............................................
KVAERNER PLC )
by its duly authorised ) .............................................
attorneys, Peter White )
and John Wilson ) .............................................
.............................................
For and on behalf of ) .............................................
HAMSARD 2043 )
LIMITED ) .............................................
For and on behalf of ) .............................................
AMPCO - PITTSBURGH )
CORPORATION ) .............................................
77
