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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event
reported): April 29, 1999 (April 15, 1999)
Commission File No. 1-9625
CENTEX DEVELOPMENT COMPANY, L.P.
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(Exact name of registrant as specified in its
charter)
DELAWARE
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(State of incorporation)
75-2168471
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(I.R.S. Employer Identification No.)
3100 MCKINNON, SUITE 370,
DALLAS, TEXAS 75291-1081
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(Address of principal executive offices)
(214) 981-5000
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(Registrant's telephone number)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 15, 1999 Centex Development Company UK Limited ("Purchaser"),
a company incorporated in England and Wales and a wholly owned subsidiary of
Centex Development Company, L.P. (the Registrant) closed its acquisition from
AMEC Finance Limited ("Seller"), a company incorporated in England and Wales, of
the entire issued class A share capital of Fairclough Homes Group Limited, a
company incorporated in England ("Fairclough"). In return for such share
capital, which carries 100% of the voting rights in Fairclough, the Purchaser
issued two non-interest bearing promissory notes to the Seller. No payments will
be required under either note until March 30, 2001, at which time both notes
will mature and become payable. The principal amounts of both notes total
approximately $175 million, which equates to 120% of the net asset value of
Fairclough as of December 31, 1998. Further, an accounting will be made to
calculate any increase in the net asset value of Fairclough between January 1
and April 15, 1999. The amount of such increase, if any, after deducting
approximately $1.4 million, will be added to the principal amount of the notes.
Fairclough is a regional home builder operating in the northwest,
midland and southeast of Britain, building a range of houses and apartments.
During 1998, Fairclough sold 1,717 homes with an average selling price of
$181,000. In that year, Fairclough had revenues of approximately $322 million
and reported pre-tax profits of approximately $25 million.
During the two year period between closing and March 31, 2001 the
Seller will receive all of Fairclough's income up to a pre-determined level and
the Purchaser will receive a portion of Fairclough's income above those amounts.
Pursuant to a shareholders agreement, the Purchaser will have operating control
of Fairclough during the two year time period, subject to reasonable constraints
to protect the interest of the Seller.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
This Form 8-K will be amended within sixty (60) days
from the date hereof in order to include the required
financial statements.
(b) Pro Forma Financial Information.
This Form 8-K will be amended within sixty (60) days
from the date hereof in order to include the required
financial statements.
(c) Exhibits.
Exhibits required by Item 601 of Regulation S-K:
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<CAPTION>
Exhibit No. Exhibit
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<S> <C>
10.18 Share Purchase Agreement dated April 15, 1999 by among
AMEC p.l.c., as Guarantor, AMEC Finance Limited, as
Seller, and Centex Development Company UK Limited, as
Purchaser
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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 hereunto duly authorized.
CENTEX DEVELOPMENT COMPANY, L.P.
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Registrant
By: 3333 Development Corporation,
General Partner
April 29, 1999 By: /s/ RAYMOND G. SMERGE
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Raymond G. Smerge
Secretary
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EXHIBIT TO INDEX
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
10.18 Share Purchase Agreement dated April 15, 1999 by among AMEC p.l.c., as
Guarantor, AMEC Finance Limited, as Seller, and Centex Development
Company UK Limited, as Purchaser
</TABLE>
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CONFORMED COPY
SHARE PURCHASE AGREEMENT
BY AND AMONG
AMEC p.l.c.
AS GUARANTOR
AND
AMEC FINANCE LIMITED
AS SELLER
CENTEX DEVELOPMENT COMPANY UK LIMITED
AS PURCHASER
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AGREEMENT FOR THE SALE AND PURCHASE OF THE
ENTIRE ISSUED CLASS A SHARE CAPITAL OF
FAIRCLOUGH HOMES GROUP LIMITED
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EFFECTIVE DATE FOR US ACCOUNTING PURPOSES
31 MARCH 1999
CLIFFORD CHANCE
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CONTENTS
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CLAUSE PAGE
<S> <C> <C>
1. Definitions And Interpretation..................................................................2
2. Terms Of The Transaction.......................................................................11
3. Representations And Warranties Of AMEC.........................................................24
4. Certain Covenants..............................................................................50
5. Representations And Warranties Of Purchaser....................................................51
6. Condition Precedent To The Obligations Of Purchaser To Close...................................51
7. Survival Of Representations, Warranties, Covenants And Agreements..............................52
8. Further Undertakings By AMEC And Acknowledgements..............................................52
9. Compliance With The Reorganisation.............................................................56
10. Indemnification................................................................................56
11. Right Of Set Off...............................................................................59
12. Payments Free Of Withholding, Etc..............................................................66
13. Miscellaneous Provisions.......................................................................68
SCHEDULE 1 INFORMATION ABOUT THE COMPANY AND THE SUBSIDIARIES........................................73
SCHEDULE 2 ITEMS FOR DELIVERY AT CLOSING BY AMEC....................................................108
SCHEDULE 3 PENSION ARRANGEMENTS.....................................................................110
SCHEDULE 4 INTELLECTUAL PROPERTY RIGHTS.............................................................116
SCHEDULE 5 REAL PROPERTY SCHEDULE...................................................................119
SCHEDULE 6 ACCOUNTING POLICIES......................................................................120
SCHEDULE 7 ASSETS SCHEDULE..........................................................................133
SCHEDULE 8 ASSUMED LIABILITIES AS AT 31 DECEMBER 1998...............................................134
SCHEDULE 9 OPTION LAND BANK.........................................................................136
SCHEDULE 10 FAIRCLOUGH MANAGEMENT....................................................................137
SCHEDULE 11 PLANNING SCHEDULE........................................................................139
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AGREED FORM DOCUMENTS
(A) Tax Deed
(B) Negotiable Loan Note Instrument
(C) Set Off Loan Note Instrument
(D) Shareholders' Agreement
(E) Articles of Association of the Company
(F) Financial Statements
(G) Pro-forma Balance Sheet
(H) Letter of Credit
(I) Guarantee
(J) Transitional Services Agreement
(K) Purchaser Opinion
(L) CDC Resolutions
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SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT ("AGREEMENT") is made and entered into this 15th
day of April 1999 between AMEC p.l.c., a company incorporated in England and
Wales (the "GUARANTOR"), registered no. 1675285 whose registered office is at
Sandiway House, Hartford Northwich, Cheshire CW8 2YA; AMEC Finance Limited, a
company incorporated in England and Wales ("AMEC") registered no. 01332332
whose registered office is at Sandiway House, Hartford Northwich, Cheshire CW8
2YA and Centex Development Company UK Limited, a company incorporated in
England and Wales (the "PURCHASER"), registered no. 3720116 whose registered
office is at Goldvale House, Church Street West, Woking GU21 1DJ.
RECITALS:
AMEC a wholly owned subsidiary of the Guarantor owns all of the issued and
outstanding share capital of the Company, which is engaged in the residential
development business in the United Kingdom.
The Board of Directors of AMEC deems it advisable and in the best interests of
AMEC that the transaction described herein be consummated upon the terms and
subject to the conditions set forth herein, and the Board of Directors has
approved this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements set forth herein, the
parties do hereby agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 As used in this Agreement, the terms set forth below shall have the
following meanings:
"ACCOUNTING POLICIES" means the accounting policies set out in Schedule
6;
"ACT" means the Companies Act 1985 as amended by the Companies Act
1989;
"AFFILIATE" shall mean a company which is a subsidiary of the party
concerned or which is a holding company of such party or a subsidiary
of such a holding company and in the case of the Purchaser it shall
include CDC;
"AGREED FORM" means in relation to any document, such document in the
terms agreed between the parties and signed by or on behalf of the
Purchaser and AMEC for the purposes of identification;
"AGREEMENT" means this Share Purchase Agreement, as the same may be
amended from time to time;
"AMEC'S AUDITORS" means KPMG Audit plc of St. James' Square, Manchester
M2 6OS;
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"AMEC RETAINED GROUP" means the Guarantor, AMEC and their subsidiary
undertakings from time to time other than the Group Companies;
"AMEC'S SOLICITORS" means Linklaters & Paines, One Silk Street, London
EC2Y 8HQ;
"ASSETS" means all undeveloped land, land under development, developed
land and lots, show homes, homes under construction, computers, show
home furnishings, equipment, furniture, fixtures, accounts receivable,
house plans and other tangible and intangible personal property owned
by the Group Companies relative to the conduct of their homebuilding
business, including executory agreements to buy or option land and to
sell homes, and all licences, permits, trademarks and trade names held
by the Group Companies relating to their homebuilding business. The
Assets as of the Last Accounting Date are described in the Asset
Schedule as set out in Schedule 7.
"ARTICLES" means the articles of association of a company incorporated
in England and Wales;
"ASSUMED LIABILITIES" means those obligations and liabilities incurred
in the ordinary course of business of the Group Companies (including by
way of example and not limitation trade accounts payable, sundry
creditors, customer deposits) when accounted for in accordance with
GAAP as set out in Schedule 8;
"BUILDING GUARANTEE SCHEME" means the Building Guarantee Scheme
operated by Zurich Municipal of Zurich House, Stanhope Road,
Portsmouth, Hampshire, PO1 1DU;
"BUSINESS DAY" means any day on which banks are open in England except
a Saturday, Sunday or public holiday;
"BUSINESS PLAN" means the business plan appended to the Shareholders
Agreement;
"CENTEX CORPORATION" means Centex Corporation, a Nevada (USA)
corporation whose stock is listed on the London and New York Stock
Exchanges;
"CDC" means Centex Development Company, LP, a Delaware (USA) limited
partnership;
"CDC RESOLUTIONS" means resolutions of Centex Corporation, Centex Homes
and Centex Development Company, LP in the agreed form;
"CENTEX HOMES" means Centex Homes a Nevada (USA) general partnership;
"CLASS 1 AND 2 REAL PROPERTY" means the Real Property identified as
such in the Real Property Schedule;
"CLOSING" has the meaning set forth in clause 2.6;
"CLOSING DATE" has the meaning set forth in clause 2.6;
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"COMPANY" means Fairclough Homes Group Limited details of which are set
out in Part A of Schedule 1;
"COMPANY INTELLECTUAL PROPERTY RIGHTS" means Intellectual Property
Rights owned by each of the Group Companies;
"COMPLETION ACCOUNTS" has the meaning set forth in clause 2.5.1;
"CONDITIONAL PROPERTIES" means any Real Property in respect of which
the Company has exchanged contracts to acquire conditional on any
matter or in respect of which the Company has an option to acquire;
"CONSENT" means any consent, approval, permit or authorisation of any
Person not a party to this Agreement;
"CONTRACT" means any contract, subcontract, letter contract, agreement,
lease or other instrument, obligation or commitment (whether oral or
written) (other than relating to Real Property but including Contractor
Contracts as defined in clause 3.26.3(d));
"DEVELOPMENT" means the development of a Development Site in accordance
with the relevant Development Appraisal which includes, inter alia,
grading, landscaping, construction of roads, installation of utilities
and facilities and house construction which is contemplated or which is
being carried out or which has been completed on each Real Property and
includes any works required to be carried out on land outside the Real
Property including under any Planning Agreement, Property Agreement or
otherwise;
"DEVELOPMENT APPRAISAL" means a site viability assessment, a plan and
description of and a financial budget for the Development of a Real
Property;
"DEVELOPMENT SITES" means those Real Properties acquired for
development purposes and listed in Part I of the Real Property
Schedule;
"DISCLOSURE DOCUMENTATION" means the documents identified in the
Disclosure Letter and documents included on a schedule of disclosure
documentation copies of certain of which are contained in agreed
bundles;
"DISCLOSURE LETTER" means the letter in the agreed form from AMEC to
the Purchaser in relation to the Warranties having the same date as
this Agreement and delivered to, and received by, the Purchaser prior
to its execution of this Agreement;
"ENCUMBRANCE" means (i) with respect to any share capital or other
equity securities of, or ownership interest in, any corporation,
partnership or other Person, any charge, claim, mortgage, pledge,
security interest, lien, option, hypothecation, limitation or
restriction applicable to or affecting such share capital, equity
securities or ownership interest (including any restriction on the
right to vote, sell or otherwise dispose of such share capital, equity
securities or other ownership interest), other than any restriction on
transfer arising under any applicable securities laws, (ii) with
respect to any Real Property, any lien, agreement, obligation,
condition, right, exception, reservation,
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overriding interest (as defined in Section 70(1) of the Land
Registration Act 1925), easement, covenant, restriction, claim, charge,
levy or assessment against or relating to any portion of the Real
Property and (iii) with respect to any of the Assets (other than Real
Property) any lien;
"ENVIRONMENTAL CLAIM" means any claim, action, cause of action,
investigation or notice by any Person alleging potential liability
(including, but not limited to, potential liability for investigatory
costs, assessment costs, cleanup costs, damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting
from (a) the release by the Company into the Environment of any
Hazardous Materials at any location, whether or not owned by the
Company, (b) the presence of any Hazardous Materials at any location
owned, leased or occupied by the Company or (c) circumstances forming
the basis of any liability under or any violation of Environmental
Laws;
"ENVIRONMENT" means any ecological system, including without limitation
living organisms (including man) and the following media (alone or in
combination): air, water (including ground or surface water, water
under or within land or in drains, culverts or sewers, and coastal and
inland waters) and land (including land under water);
"ENVIRONMENTAL AGREEMENT" means any agreement, covenant, guarantee or
indemnity under which the Company has duties or obligations in respect
of Environmental Laws;
"ENVIRONMENTAL LAWS" means all laws (including common law), statutes,
codes, orders, statutory guidance, rules and regulations in force in
the United Kingdom and the European Union relating to pollution or
protection of the Environment including, without limitation, laws,
statutes, codes, ordinances, rules and regulations relating to
emissions, discharges, releases or threatened releases of Hazardous
Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, management
or handling of Hazardous Materials and capable of enforcement by legal
process as at Closing providing that it shall be deemed that Part IIA
of the Environmental Protection Act 1990 and the second full draft set
of statutory guidance were fully in force as at Closing or any such
laws which were in force at an earlier date, are no longer in force but
under which the Company still has obligations and liabilities;
"ENVIRONMENTAL PERMITS" means any permits, permissions, licences,
consents, variations, modifications or transfers (and any conditions or
requirements thereof) required by the Company in relation to the
operation of its business under Environmental Laws on or before
Closing;
"EQUITY" means the fully paid "A" ordinary shares of L.1 each of
the Company comprising the whole of the issued "A" share capital of the
Company;
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"EXCHANGED PROPERTIES" means those properties listed in Part 3 of the
Real Property Schedule which the Company has acquired in part
consideration for the sale of any plot or unit developed by the Company
and "EXCHANGED PROPERTY" means each of them;
"FAIRCLOUGH MANAGEMENT" means those individuals identified in Schedule
10;
"FAIRPINE" means Fairpine Limited details of which are set out in Part
C of Schedule 1;
"FINANCIAL STATEMENTS" means the audited consolidated balance sheet of
and profit and loss account and the shareholders equity of the Company
and the audited balance sheet of and profit and loss account and the
shareholders equity of Fairclough Homes Limited and Viewton Properties
Limited for the 12 month period to the Last Accounting Date in the
agreed form;
"GAAP" means United Kingdom generally accepted accounting principles as
in effect at the time of preparation of the relevant accounts described
in or contemplated by this Agreement;
"GOVERNMENTAL AUTHORITY" means any nation or government (including
local government), any state or political subdivision thereof, any
court of law and any other agency or authority exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government;
"GROUP COMPANIES" means the Company, the Subsidiaries, Fairpine and the
Management Companies and "GROUP COMPANY" means any one of them as well
as all of them; "GUARANTEE" means the guarantee in the agreed form
executed by the Purchaser, CDC, Centex Homes and Centex Corporation and
delivered to AMEC for the use and benefit of the Beneficiaries defined
therein;
"HAZARDOUS MATERIALS" means (i) any substance, material or waste
defined or characterised as hazardous, extremely hazardous, toxic or
dangerous within the meaning of any Environmental Law, (ii) any
substance, material or waste classified as a contaminant or pollutant
under any Environmental Law or (iii) any other substance (including,
but not limited to, petroleum), material or waste, the manufacture,
processing, distribution, use, treatment, storage, placement, disposal,
removal or transportation of which is subject to regulation under any
Environmental Law and including without limitation asbestos,
polychlorinated biphenyls and formaldehyde and any other substance
capable of causing pollution or contamination of the Environment;
"IMPROVEMENTS" has the meaning described in clause 3.17.8;
"INTELLECTUAL PROPERTY RIGHTS" means all rights in (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks,
service marks, trade dress, trade names, logos and corporate names and
registrations and applications for registration thereof, (iii)
copyrights (registered or unregistered) and copyrightable works and
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registrations and applications for registration thereof, (iv) computer
software, data, data bases and documentation thereof, (v) trade secrets
and other confidential information (including, but not limited to,
ideas, formulas, compositions, inventions (whether patentable or
unpatentable), know-how, manufacturing and production processes and
techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, financial
and marketing plans and customer and supplier lists and information),
(vi) other intellectual property rights and (vii) all goodwill
associated with any of the foregoing intellectual property rights;
"LAST ACCOUNTING DATE" means 31 December 1998;
"LICENSED PROPERTY" means any land or premises in respect of which the
Company has a licence to enter and carry out the Development;
"LIQUIDATED LOSS" means for the purposes of clause 11 any claim by the
Purchaser pursuant to the Warranties in respect of which:-
(a) the Purchaser and AMEC have agreed in writing, the fact and
quantum of liability of AMEC; or
(b) a determination in favour of the Purchaser by a Court of
competent jurisdiction in England has in relation to the fact and
quantum of liability of AMEC been obtained and in respect of such
determination no right of appeal exists, or any right to appeal
has expired or been waived.
The amount of a Liquidated Loss being the amount agreed or the amount
of such judgement. For the avoidance of doubt, the amount of any such
claim shall be determined in sterling;
"LOAN NOTE" means either the Negotiable Loan Note or the Set Off Loan
Note;
"MANAGEMENT COMPANIES" means the companies details of which are set out
in Part D of Schedule 1;
"MEMORANDUM" means the memorandum of association of a company
incorporated in England and Wales;
"NEGOTIABLE LOAN NOTE" means the loan note of the Purchaser having the
rights set out in the Negotiable Loan Note Instrument having a nominal
value equivalent to the aggregate of L.98,930,000 and an amount
equal to the amount of the additional consideration payable pursuant to
the clause 2.2.2;
"NEGOTIABLE LOAN NOTE INSTRUMENT" means the instrument in the agreed
form constituting the Negotiable Loan Note;
"NET ASSET VALUE" means the book value of the Assets of the Group
Companies free and clear of all Encumbrances, including inter-company
indebtedness and all non-ordinary course of business liabilities, and
reduced by those liabilities which are
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incurred by the Group Companies in the ordinary course of business
(including by way of example and not limitation, current accounts
payable and customer deposits);
"NHBC" means the National House Building Council of Buildmark House,
Chiltern Avenue, Amersham, Bucks, HP6 5AP;
"OFFICE PREMISES" means the premises which any Group Company occupies
listed in Part 2 of the Real Property Schedule;
"OPERATING PROFIT" means the consolidated operating profit of the Group
Companies;
"PERMIT" means, save in relation to the Environment, any licence,
permit, approval, authorisation, exemption, registration and similar
document or instrument;
"PERMITTED ENCUMBRANCES" means all covenants, obligations, agreements,
rights, exceptions, reservations, conditions, restrictions and
easements relating to the Real Property except those which prevent or
restrict the development of such property and the construction and use
of houses or other improvements thereon;
"PERSON" means any individual, corporation, limited liability company,
partnership, association, trust or any other entity or organisation of
any kind or character, including a Governmental Authority;
"PLANNING AGREEMENTS" means the agreements described in the Planning
Schedule and "PLANNING AGREEMENT" means each of them;
"PLANNING SCHEDULE" means the schedule containing details of the
planning permissions and Planning Agreements relating to the Real
Property and which is Schedule 11 of this Agreement;
"PRO-FORMA BALANCE SHEET" means the consolidated balance sheet as at
the Last Accounting Date of the Group Companies in the agreed form;
"PROPERTY AGREEMENTS" means any agreement entered into by any Group
Company which relates to (i) the acquisition of the Real Property or
(ii) the carrying out of Development (but excluding Planning Agreements
referred to in the Planning Schedule) including, but without
limitation, any development agreement relating to Licensed Property;
"PURCHASER'S AUDITORS" means Arthur Andersen of 1 Surrey Street, London
WC2R 2PS;
"PURCHASER OPINION" means an opinion from the Chief Legal Officer of
Centex Corporation in the agreed form;
"PURCHASE PRICE" has the meaning set forth in clause 2.2;
"PURCHASER'S SOLICITORS" means Clifford Chance of 200 Aldersgate
Street, London EC1A 4JJ;
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"REAL PROPERTY" means every plot and site in which any Group Company
has any freehold, leasehold or equitable interest whatsoever (excluding
the Exchanged Properties), including, but not limited to, any right to
purchase any land, the Conditional Properties and the Licensed
Properties and which is identified in the Real Property Schedule;
"REAL PROPERTY CONSENT" means all permissions, consents, licences,
certificates, authorisations and other approvals (whether statutory or
otherwise) which may, from time to time, be required from any local or
other competent authority or any fire officer for the use and
occupation of any office premises and/or for the carrying out of any
Development including any referred to in the Planning Schedule;
"REAL PROPERTY SCHEDULE" means the schedule containing brief details of
the Real Property and which is Schedule 5 to this Agreement;
"REORGANISATION" means the reorganisation of certain assets of the
Company and Fairclough Homes Limited pursuant to the Reorganisation
Agreement;
"REORGANISATION AGREEMENT" means the Reorganisation Agreement dated 25
March 1999 and contained in the Disclosure Documentation;
"REPORTING ACCOUNTANTS" means PricewaterhouseCoopers or, if that firm
is unable or unwilling to act in any matter referred to them under this
Agreement, a firm of Chartered Accountants to be agreed by AMEC and the
Purchaser within 5 Business Days of a notice by one to the other
requiring such agreement or failing such agreement to be nominated on
the application of either of them by or on behalf of the President for
the time being of the Institute of Chartered Accountants in England and
Wales;
"SET OFF LOAN NOTE" means the loan note of the Purchaser having the
rights set out in the Set Off Loan Note Instrument having a nominal
value of L.10 million which is subject to the set off provisions
contained in clause 11 (as reflected in the Set Off Loan Note
Instrument);
"SET OFF LOAN NOTE INSTRUMENT" means the instrument in the agreed form
relating to the Set Off Loan Note;
"SHAREHOLDERS' AGREEMENT" means the shareholders agreement in the
agreed form between AMEC and the Purchaser to be entered into on
Closing;
"SUBSIDIARIES" means the subsidiaries of the Company details of which
are set out in Part B of Schedule 1;
"TAX" and "TAXATION" have the meaning given in the Tax Deed;
"TAX AUTHORITY" and "TAXATION AUTHORITY" have the meaning set forth in
the Tax Deed;
"TAX DEED" means the tax deed in the agreed form between AMEC and the
Purchaser;
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"TAX RETURNS" means any returns, declarations, reports, claims for
refund and informational returns or statements relating to Taxes,
including any schedules or attachments thereto;
"TAXES ACT" means the Income and Corporation Taxes Act 1988;
"TCGA" means the Taxation of Chargeable Gains Act 1992;
"THIRD PARTY" means any Person other than AMEC, the Guarantor or the
Purchaser or any of their respective Affiliates;
"TRANSACTION" means the sale and purchase transaction described herein;
"TRANSITIONAL SERVICES AGREEMENT" means the transitional services
agreement in the agreed form between the Guarantor, the Purchaser and
certain of the Group Companies;
"UNDEVELOPED PROPERTY" means the Real Property which has been acquired
for the purpose of development but on which Development has not yet
commenced;
"VATA" means, the Value Added Tax Act 1994;
"WARRANTY" means a statement contained in clause 3 and "WARRANTIES"
means all those statements;
"WARRANTY CLAIM" means a claim by the Purchaser relating to breach of
clause 3; and
"ZURICH MUNICIPAL" means the Zurich Insurance Company trading as Zurich
Municipal of PO Box 45, Farnborough, Hants GU14 OYS.
1.2 In this Agreement:
1.2.1 any reference to a statutory provision shall include any
subordinate legislation made under that provision which is in
force as at the date of this Agreement;
1.2.2 any reference to a statutory provision shall include such
provision as from time to time modified or re-enacted or
consolidated whether before or after the date of this
Agreement so far as such modification, re-enactment or
consolidation applies or is capable of applying to any
transactions entered into under this Agreement prior to
closing and (so far as liability thereunder may exist or can
arise) shall include also any past statutory provision (as
from time to time modified, re-enacted or consolidated) which
such provision has directly or indirectly replaced provided
that in any case any such modification, re-enactment or
consolidation shall not extend the liability of (or create any
liability of) AMEC (except in relation to Part IIA of the
Environmental Protection Act 1990 to the extent provided in
the definition of Environmental Laws).
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1.2.3 the words "HOLDING COMPANY", "SUBSIDIARY" and "SUBSIDIARY
UNDERTAKING" shall have the same meanings in this Agreement as
their respective definitions in the Act;
1.2.4 the Interpretation Act 1978 shall apply to this Agreement in
the same way as it applies to an enactment unless this
Agreement contains provisions contrary thereto in which case
this Agreement shall prevail;
1.2.5 references to this Agreement shall include any Recitals and
Schedules to it and references to clauses and Schedules are to
clauses of and schedules to this Agreement;
1.2.6 references to the knowledge, information, belief or awareness
of AMEC shall be deemed to refer to the knowledge information,
belief or awareness of Peter Mason, Simon Batey, Steve
Williams, Tony Irvine, Michael Bardsley, John Fenwick, Mike
Witchell and Lawrence Gilmore and includes knowledge,
information, belief or awareness which AMEC would have having
made all usual and reasonable enquiries of the Fairclough
Management;
1.2.7 The headings herein are for convenience of reference only, do
not constitute a part of the Agreement and shall not be deemed
to limit, extend or otherwise affect the meaning of any of the
provisions hereof; and
1.2.8 The obligations of AMEC set forth in this Agreement shall in
no event be limited by or subject to its obligations under any
other agreement or document to which it is a party or is bound
as of the date hereof other than any agreements or documents
referred to herein.
2. TERMS OF THE TRANSACTION
2.1 PURCHASE AND SALE
Upon the terms and conditions set forth herein, the Purchaser hereby
agrees to purchase and AMEC hereby agrees to sell to the Purchaser with
full title guarantee the Equity and each right attaching to such shares
from and after the date of this Agreement, free of any Encumbrance.
2.2 COMPUTATION OF THE PURCHASE PRICE
2.2.1 In consideration for the sale of the Equity, the Purchaser
will pay to AMEC L.108,930,000 (the "PURCHASE PRICE")
(calculated on the basis of a premium of 120% multiplied by
the Net Asset Value as stated in the Pro-forma Balance Sheet,
excluding cash for which no premium will be paid) subject to
the adjustments (if any) referred to in clause 2.2.2.
2.2.2 There shall be added to the Purchase Price an amount, if any,
equal to the increase in the Net Asset Value between the Last
Accounting Date as reflected in the Pro-forma Balance Sheet
and the Closing Date as reflected in the Completion Accounts
less L.869,000.
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<PAGE> 14
2.2.3 For the avoidance of doubt, the premium over Net Asset Value
to be paid by the Purchaser to AMEC for the Equity reflects
the value of the goodwill of the businesses of the Group
Companies, save for the Intellectual Property Rights
identified in Schedule 4 which it is agreed have a value of
L.1.
2.3 PAYMENT OF PURCHASE PRICE
The Purchaser will pay the Purchase Price by delivering to AMEC at the
Closing the Loan Notes, which will provide for payment of the principal
amount of each Loan Note on 30 March 2001.
2.4 EFFECT OF ANY ADJUSTMENTS
Any payments made by AMEC to the Purchaser or by the Guarantor pursuant
to the terms of this Agreement shall, so far as possible, be treated as
an adjustment to the Purchase Price.
2.5 ADJUSTMENTS TO PURCHASE PRICE
2.5.1 PREPARATION OF COMPLETION ACCOUNTS
AMEC shall procure that as soon as reasonably practicable
following Closing there shall be drawn up a consolidated
balance sheet of the Group Companies as at Closing in the same
form as the Pro-forma Balance Sheet and a consolidated profit
and loss account of such companies in respect of the period
from the Last Accounting Date to Closing (the "COMPLETION
ACCOUNTS") and that the same are reviewed by AMEC's Auditors.
2.5.2 BASIS OF PREPARATION OF THE COMPLETION ACCOUNTS
In preparing the draft Completion Accounts the accounting
policies to be applied shall be (in descending order of
priority):
(i) the Accounting Policies set out in Schedule 6; and
(ii) GAAP
save that to the extent that after Closing such Accounting
Policies are no longer in accordance with GAAP, the Accounting
Policies shall prevail.
2.5.3 PROCEDURE FOR THE PREPARATION OF THE COMPLETION ACCOUNTS
(a) The draft Completion Accounts shall be delivered to the
Purchaser and the Purchaser's Auditors by AMEC's
Auditors as soon as is practicable following Closing
and, in any event, not later than thirty five (35)
Business Days after Closing. Prior to such delivery,
AMEC shall so far as is practicable consult with the
Purchaser with a view to reducing the potential areas of
future disagreement.
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<PAGE> 15
(b) In order to enable AMEC's Auditors to prepare the draft
Completion Accounts, the Purchaser shall keep
up-to-date and make available to AMEC's Auditors its
books and records relating to the businesses of the
Group Companies during normal office hours and
co-operate with them with regard to the preparation and
review of the draft Completion Accounts. The Purchaser
agrees, in so far as it is reasonable to do so, to make
available the services of the employees of the Group
Companies to assist AMEC and AMEC's Auditors with the
preparation of the draft Completion Accounts.
(c) The Purchaser shall ensure that within twenty (20)
Business Days starting on the day after receipt of the
draft Completion Accounts the Purchaser's Auditors
advise the Purchaser whether or not they agree with the
draft Completion Accounts. If the Purchaser notifies
its agreement with the draft Completion Accounts to
AMEC they shall be final and binding on the parties for
all purposes. If the Purchaser notifies its
disagreement with the draft Completion Accounts (the
"PURCHASER'S CERTIFICATE") to AMEC, the parties shall
attempt in good faith to reach agreement in respect
thereof and, if they are unable to do so within fifteen
(15) Business Days of such notification, either party
may by notice to the other require that the draft
Completion Accounts be referred to the Reporting
Accountants (an "APPOINTMENT NOTICE"). The Purchaser
shall provide in the Purchaser's Certificate the
reasons for its disagreement with the draft Completion
Accounts in reasonable detail. If the Purchaser does
not notify its disagreement to AMEC within the twenty
(20) Business Days referred to above, the draft
Completion Accounts shall be final and binding on the
parties for all purposes.
(d) The Reporting Accountants shall be engaged jointly by
the parties on the terms set out in this clause 2.5 and
otherwise on such terms as shall be agreed; provided
that neither party shall unreasonably (having regard,
inter alia, to the provisions of this clause 2.5 )
refuse its agreement to terms proposed by the Reporting
Accountants or by the other party.
(e) Except to the extent that the parties agree otherwise,
the Reporting Accountants shall determine their own
procedure but:
(i) apart from procedural matters and as otherwise set
out in this Agreement shall determine only:
(1) whether any of the arguments for an
alteration to the draft Completion Accounts
put forward in the Purchaser's Certificate
is correct in whole or in part and if so
what consequential amendments need to be
taken into account; and
(2) if so, what alterations should be made to
the draft Completion Accounts;
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<PAGE> 16
(ii) shall apply the Accounting Policies as provided
for in clause 2.5.2;
(iii) shall make their determination pursuant to this
clause 2.5.3(e) within thirty (30) Business Days;
(iv) the procedure of the Reporting Accountants shall:
(1) give the parties a reasonable opportunity
to make written and oral representations to
them;
(2) require that the parties supply each other
with a copy of any written representations
at the same time as they are made to the
Reporting Accountants;
(3) permit each party to be present while oral
submissions are being made by any other
party; and
(4) for the avoidance of doubt, the Reporting
Accountants shall not be entitled to
determine the scope of their own
jurisdiction.
(f) The determination of the Reporting Accountants pursuant
to clause 2.5.3(e) shall (i) be made in writing and
made available to the parties and (ii) unless otherwise
agreed by the parties include reasons for each relevant
determination.
(g) The Reporting Accountants shall act as experts and not
as arbitrators and their determination of any matter
falling within their jurisdiction shall be final and
binding on the parties save in the event of manifest
error (when the relevant part of their determination
shall be void and the matter shall be remitted to the
Reporting Accountants for correction). In particular,
without limitation:
(i) their determination shall be deemed to be
incorporated into the draft Completion Accounts,
which shall then be final and binding on the
parties save as aforesaid;
(ii) their determination of any fact which they have
found it necessary to determine for their
determination pursuant to clause 2.5.3(e) shall
be final and binding on the parties for all
purposes.
(h) The expenses of the Reporting Accountants shall be
borne by the Purchaser, unless the determination of the
Reporting Accountants results in an adjustment equal to
more than 50% of the adjustment sought by the
Purchaser, in which case AMEC will bear such expense.
(i) The parties shall co-operate with the Reporting
Accountants and comply with their reasonable requests
made in connection with the carrying out of their
duties under this Agreement. In particular, without
limitation,
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<PAGE> 17
the Purchaser shall keep up to date and, subject to
reasonable notice, make available to AMEC, the
Guarantor, AMEC's Auditors, AMEC's accountants and the
Reporting Accountants, its books and records relating
to the businesses of the Group Companies during normal
office hours during the period from the appointment of
the Reporting Accountants down to the making of the
relevant determination.
(j) Subject to clause 2.5.3(k), nothing in this clause
2.5.3 shall entitle a party or the Reporting
Accountants access to any information or document which
is protected by legal professional privilege, or which
has been prepared by the other party or its accountants
and other professional advisers with a view to
assessing the merits of any claim or argument.
(k) A party shall not be entitled by reason of clause
2.5.3(j) to refuse to supply such part or parts of
documents as contain only the facts on which any
Warranty Claim or argument is based.
(l) Each party and the Reporting Accountants shall, and
shall procure that its accountants and other advisers
shall, keep all information and documents provided to
them pursuant to this clause 2.5 confidential and shall
not use the same for any purpose, except for disclosure
or use in connection with the preparation of the draft
Completion Accounts, the proceedings of the Reporting
Accountants or another matter arising out of this
Agreement or in defending any claim or argument or
alleged claim or argument relating to this Agreement or
its subject matter.
2.6 THE CLOSING
2.6.1 Subject to the provisions of clause 6 the transaction
contemplated by this Agreement will be consummated at a
closing (the "CLOSING") at the offices of the Purchaser's
Solicitors immediately following execution of this Agreement.
The date upon which the Closing will occur is herein called
the "CLOSING DATE".
2.6.2 Whilst Closing will occur after 1 April 1999, the effective
date of Closing for US accounting purposes only will be 31
March 1999.
2.6.3 The Purchaser is not obliged to complete this Agreement
unless:
(a) AMEC complies with all its obligations under this
clause 2.6; and
(b) the purchase of all the Equity is completed
simultaneously.
2.6.4 At Closing AMEC shall give the Purchaser each item specified
in Schedule 2.
2.6.5 AMEC shall ensure that at Closing the Company's directors
hold a meeting of the board of directors of the Company at
which the directors:
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<PAGE> 18
(a) vote in favour of the registration of the Purchaser or
its nominee(s) as member(s) of the Company in respect
of the Equity (subject to the production of properly
stamped transfers);
(b) change the Company's registered office to a place
nominated by the Purchaser; and
(c) appoint the persons nominated by the Purchaser as
directors, secretary and auditors of the Company with
effect from the end of the meeting.
2.6.6 AMEC shall ensure that, immediately after the board meeting
referred to in clause 2.6.5 meetings of the board of
directors of Fairclough Homes Limited and Viewton Properties
Limited are held to deal with the matters referred to in
clause 2.6.5 (other than (a)).
2.6.7 At Closing the Purchaser shall give AMEC:
(a) the Negotiable Loan Note and the Set Off Loan Note each
duly executed by the Purchaser;
(b) a letter of credit from National Westminster Bank PLC,
in the agreed form in respect of the Negotiable Loan
Note;
(c) the Tax Deed duly executed by the Purchaser;
(d) the Shareholders' Agreement duly executed by the
Purchaser;
(e) duly adopted resolutions of the Board of Directors of
the Purchaser authorising the execution, delivery and
performance of this Agreement and the consummation of
transactions contemplated hereby, certified by an
officer of the Purchaser;
(f) the Guarantee duly executed by the Purchaser, CDC,
Centex Homes and Centex Corporation;
(g) the Purchaser Opinion;
(h) the Transitional Services Agreement executed by each of
the Group Companies which are party thereto and the
Purchaser; and
(i) the CDC Resolutions.
2.7 OPTION LAND BANK
The following provisions shall apply to each option agreement (the
"OPTIONS") entered into by the Group Companies in respect of certain
Real Property and as set out in Schedule 9:
2.7.1 The Group Companies shall be entitled in their absolute
discretion to determine whether or not they wish to exercise
each of the Options but in the
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<PAGE> 19
event that a Group Company exercises an Option on or prior to
31 March 2001 the Purchaser shall within 5 Business Days
following completion of the acquisition of a Real Property
pursuant to such Option pay to AMEC by way of additional
consideration for the Equity an amount equal to the aggregate
of:
(a) the value attributed to that Option as set out in
Schedule 9 (the "OPTION COST"); plus
(b) 50 (MV - PP - OC - FC)
---
100
Unless such sum is negative in which case only the
Option Cost is payable
Where:
MV = market value of such Real Property as determined
by valuation pursuant to the terms of the relevant
Option or if no valuation process is provided for
in such agreement, by a third party valuer
mutually selected by the Purchaser and AMEC;
PP = the purchase price paid by any Group Company for
such Real Property upon completion under the terms
of that Option;
OC = Option Cost as defined in (a) above; and
FC = further costs validly incurred by any Group
Company from and after Closing in relation to the
relevant Option until exercise of that Option.
2.7.2 In the event that a Group Company exercises an Option after
31 March 2001 the Purchaser shall pay to AMEC by way of
additional consideration for the Equity a sum calculated in
the same manner as referred to in clause 2.7.1 above together
with interest on such sum at the rate of 1% per annum above
the base rate of National Westminster Bank PLC from 31 March
2001 until the later of (i) the date the Group Company serves
notice to exercise the Option and (ii) the date on which the
sum is paid to AMEC.
2.7.3 In the event that any Group Company elects not to exercise
any Option it shall give notice (the "COMPANY'S NOTICE") to
AMEC at least 10 Business Days prior to the date the Option
expires who may elect by written notice ("AMEC'S NOTICE")
given to the Purchaser within 10 Business Days after the
Company's Notice to take an assignment of the Option in which
event the Purchaser shall procure that the Group Companies
shall for L.1:
(a) either assign the benefit of the Option to AMEC; or
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<PAGE> 20
(b) in the event that the Option is not capable of
assignment without the consent of the grantor of the
Option (or of any other third party), from the date of
receipt of AMEC's Notice hold the benefit of the Option
on trust for AMEC and apply for consent to assign the
Option to AMEC.
2.7.4 From the date of AMEC's Notice AMEC shall indemnify and keep
indemnified the Group Companies against all actions,
proceedings, claims, costs, demands, reasonable fees and
expenses which may be brought against or suffered or incurred
by the Group Companies by reason of or arising out of an
Option after the date of AMEC's Notice or in any way arising
out of the declaration of trust and within 5 Business Days
after receipt from the Group Companies of details of all
costs incurred by the Group Companies after Closing up to the
date of AMEC's Notice (including all option fees, reasonable
costs and fees paid by the Group Companies) shall reimburse
such costs to the Group Companies. Any risk arising under
such Option shall pass to AMEC on such date.
2.7.5 If consent to assign the Option is not obtained and AMEC
instructs the relevant Group Company to exercise the Option
and as a result the relevant Group Company is required to
take a transfer of the Real Property the subject of the
Option then AMEC shall wherever possible join in the transfer
as a sub-purchaser or shall take a transfer of the Real
Property from the Group Companies for L.1 and shall fully
indemnify the Group Companies for any liabilities they may
have as a result of entering into such documents.
2.7.6 AMEC shall indemnify and keep indemnified on demand the Group
Companies against all reasonable costs and expenses incurred
by the Group Companies in connection with any assignment of
an Option pursuant to the preceding clauses 2.7.3 to 2.7.5
including (but without prejudice to the generality of the
foregoing) any further Option fees, deposits, purchase price,
stamp duty, disbursements and reasonable legal fees and any
unrecoverable VAT on any such sums.
2.7.7 In the event that any Group Company disposes of an Option the
Purchaser shall pay to AMEC the sum of:
(a) the lower of (i) the amount of consideration received
or receivable in respect of such Option (the "SELLING
PRICE") and (ii) Option Cost (as defined in clause
2.7.1.); plus
(b) 50 (SP - OC - FC)
---
100
Where:
SP means the Selling Price and OC and FC have the
meanings set out in clause 2.7.1
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<PAGE> 21
Unless such sum is negative in which case only the
amount specified in clause 2.7.7.(a) is payable. Where
such sum is paid to AMEC after 31 March 2001, the sum
will attract interest at the rate of 1% per annum above
the base rate of National Westminster Bank PLC from 31
March 2001 until the date on which the sum is paid to
AMEC.
2.8 GUARANTOR
2.8.1 The Guarantor hereby unconditionally and irrevocably
guarantees to the Purchaser the due and punctual performance
and observance by AMEC of all its obligations, commitments,
undertakings, warranties and indemnities under or pursuant to
this Agreement and the Tax Deed (the "GUARANTEED
OBLIGATIONS") and agrees to indemnify the Purchaser against
all losses, liabilities, costs (including, without
limitation, reasonable legal costs), charges, expenses,
actions, proceedings, claims and demands which the Purchaser
may suffer through or arising from any breach by AMEC under
this Agreement or for which AMEC is liable under the Tax
Deed. The liability of the Guarantor under this clause shall
not be released or diminished by any variation of the terms
of the Guaranteed Obligations, or any forbearance, neglect or
delay in seeking performance of the Guaranteed Obligations or
any granting of time for such performance.
2.8.2 If and whenever AMEC defaults for any reason whatsoever in
the performance of any of the Guaranteed Obligations the
Guarantor shall forthwith upon demand unconditionally perform
(or procure performance of) and satisfy (or procure the
satisfaction of) the Guaranteed Obligations in regard to
which such default has been made in the manner prescribed by
this Agreement and/or the Tax Deed and so that the same
benefits shall be conferred on the Purchaser as it would have
received if the Guaranteed Obligations had been duly
performed and satisfied by AMEC.
2.8.3 This guarantee is to be a continuing guarantee and
accordingly is to remain in force until all the Guaranteed
Obligations shall have been performed or satisfied. This
guarantee is in addition to and without prejudice to and not
in substitution for any rights or security which the
Purchaser may now or hereafter have or hold for the
performance and observance of the Guaranteed Obligations. The
Purchaser acknowledges that the Guarantor's obligations set
out therein, this clause does not afford it any greater
rights against the Guarantor than it would have against AMEC
and any limitations relating to the liability of AMEC under
this Agreement shall apply to any liability of the Guarantor
under this Agreement. The Guarantor confirms that the
provisions of this sub-clause regarding the limitation of the
Guarantor's obligations do not apply to the provisions of
clauses 8.1 to 8.5.
2.8.4 As a separate and independent stipulation the Guarantor
agrees that any of the Guaranteed Obligations (including,
without limitation, any moneys payable)
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<PAGE> 22
which may not be enforceable against or recoverable from AMEC
by reason of any legal limitation, disability or incapacity
on or of AMEC or any other fact or circumstance shall
nevertheless be enforceable against and recoverable from the
Guarantor as though the same had been incurred by the
Guarantor and the Guarantor were the sole or principal
obligor in respect thereof and shall be performed or paid by
the Guarantor on demand.
2.9 VALUE ADDED TAX: GROUP REGISTRATION/ADJUSTMENTS
For the purposes of this clause:
"CESSATION DATE" means the date on which the VAT Group
Companies cease to be members of the Vendor VAT Group.
"INPUT TAX" and "OUTPUT TAX" shall have the meanings given in
section 24 VATA.
"REPRESENTATIVE MEMBER" means the representative member of
the Vendor VAT Group for the purposes of section 43 VATA.
"VAT GROUP COMPANIES" means each of the Company, Fairclough
Homes Limited and Viewton Properties Limited.
"VENDOR VAT GROUP" is the VAT group (for the purposes of
section 43 VATA) under VAT reference 163270774 of which AMEC
p.l.c. is the Representative Member.
The deeming provisions of Section 43(1) VATA shall be
disregarded in determining for the purposes of this clause
2.9 what supplies or acquisitions or importations have been
made or are deemed to have been made by or to any person.
2.9.1 The Guarantor shall as soon as reasonably practicable make an
application or procure the making of an application to H.M.
Customs and Excise for the exclusion of each VAT Group
Company with effect from Closing from the Vendor VAT Group.
If the Commissioners of Customs and Excise do not permit
exclusion of any VAT Group Company from the Vendor VAT Group
from Closing, the Guarantor shall use all reasonable
endeavours to secure such exclusion of the VAT Group Company
with effect from the earliest date possible following
Closing. The Guarantor and the Purchaser shall give each
other all such reasonable assistance and co-operation as
shall be necessary for the purpose of supporting the
application. The Guarantor shall provide the Purchaser with
copies of all material correspondence with Customs and Excise
in relation to securing that each VAT Group Company is
excluded from the Vendor VAT Group and shall keep the
Purchaser informed in respect of any such exclusion.
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<PAGE> 23
2.9.2 Pending the Cessation Date and for so long thereafter as may
be necessary, the Guarantor and the Purchaser shall
respectively furnish one another with such information as may
be required for the making of returns and the furnishing to
H.M. Customs & Excise of such information as may be required
by law.
2.9.3 If the Cessation Date falls after Closing the Purchaser
shall, or shall procure that each relevant VAT Group Company
shall, pay to the Guarantor as Representative Member in
cleared funds a sum equal to so much of that person's
liability to account for VAT as is attributable to supplies
(including self supplies) made by or to or importations or
acquisitions made by any relevant VAT Group Company in the
period commencing at midnight on the date of Closing and
ending on the Cessation Date (both days to be excluded from
such period), together with an amount equal to any refund,
credit or input tax attributable to such period as may be
subsequently disallowed by the Commissioners of Customs &
Excise, one (1) Business Day prior to the date on which the
Guarantor as Representative Member is liable to account for
such VAT or one (1) Business Day after the date of the
disallowance (as the case may be) and the Guarantor shall pay
or procure payment in cleared funds to any relevant VAT Group
Company of an amount equal to any refund (and any repayment
supplement) or credit for an excess of input tax over output
tax received by such Representative Member and attributable
to such period within five (5) Business Days of receipt of
the refund or utilisation of the credit.
2.9.4 The Guarantor warrants and represents to the Purchaser for
itself and on behalf of each Group Company that until the
Cessation Date the Guarantor in its capacity as the
Representative Member shall comply with all its material VAT
obligations relating to each VAT Group Company including
without limitation accounting to Customs and Excise for all
VAT in respect of which it is required to so account on or
before the last date on which the Representative Member is
able to so account without incurring interest or penalties,
subject to being put in funds by the Purchaser to the extent
required under clause 2.9.3.
2.9.5 Neither the Guarantor (subject to clause 2.9.4) nor the
Purchaser nor any VAT Group Company shall after Closing in
respect of VAT accounting periods beginning prior to but not
ended before the Cessation Date admit liability to or pay or
settle any claim for or refund of VAT which could be relevant
to any liability of the parties under this clause 2.9
(together referred to as a "RELEVANT CLAIM") unless the
relevant company shall have obtained the consent of the other
or others to do so, such consent not to be unreasonably
withheld or delayed and if any of the Guarantor, the
Purchaser or any VAT Group Company shall become aware of any
Relevant Claim or of circumstances likely to give rise to a
Relevant Claim, such person shall promptly give written
notice thereof to each or to the other party to this
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<PAGE> 24
Agreement and to the relevant VAT Group Company and the
Guarantor shall take such action as any of them may
reasonably request to avoid, dispute, resist, appeal,
compromise or defend the Relevant Claim and the Purchaser and
each VAT Group Company shall indemnify the Guarantor from
time to time against all costs and expenses reasonably and
properly incurred in complying with any such request.
2.9.6 The Guarantor covenants (for itself and for each member of
the AMEC Retained Group which is also a member of the Vendor
VAT Group) with the Purchaser (for itself and for each VAT
Group Company) that where the Guarantor receives any refund
or credit after Closing for an excess of input tax over
output tax in its capacity as Representative Member then to
the extent that such refund or credit is attributable to
supplies (including self supplies) made by or to or
importations or acquisitions made by any VAT Group Company up
to and including Closing and to the extent that the receipt
or giving of such refund or credit was included as an asset
in computing Net Asset Value in the Completion Accounts, the
Guarantor shall pay or procure the payment to the VAT Group
Company concerned of a sum equal to the amount of that refund
(and any interest or repayment supplement received thereon)
or credit within five (5) Business Days of receipt of the
refund or utilisation of the credit.
2.9.7
(a) If the Commissioners of Customs & Excise disallow to
the Guarantor as Representative Member any refund of or
credit for VAT or any input tax after Closing, then to
the extent that the refund, credit or input tax so
disallowed is attributable to supplies (including self
supplies) made by or to or importations or acquisitions
by any VAT Group Company up to and including Closing
and to the extent that the receipt or giving of such
refund or credit or the allowance of such input tax was
included as an asset in computing Net Asset Value in
the Completion Accounts, the Guarantor shall:
(i) be entitled, should it so request, to take such
action as it may reasonably request, on behalf of
the relevant VAT Group Company, to resist appeal
or challenge such disallowance by Customs, such
action to be undertaken at the Guarantor's own
expense; and
(ii) (unless payment has already been made pursuant to
clause 2.9.6) pay or procure the payment to the
VAT Group Company concerned of a sum equal to
that disallowed within five (5) Business Days of
the date on which the Guarantor is notified by
the said Commissioners of the disallowance.
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<PAGE> 25
For the avoidance of doubt, the Guarantor shall
not be liable to make any payments under this
clause 2.9.7 in respect of any disallowance of
any refund of or credit for VAT or any input tax
to the extent that the same arises solely as a
result of any adjustments which the Purchaser or
the relevant VAT Group Company is required to
make after Closing in respect of capital assets
of a VAT Group Company pursuant to the provisions
of Part XV of the VAT Regulations 1995 (Capital
Goods Scheme).
(b) If, pursuant to the successful exercise of the
Guarantor's rights under (i) above the refund or
credit or input tax disallowed is subsequently
allowed, the Purchaser shall repay or procure the
payment of the sum paid by the Guarantor under
this clause 2.9.7 within five (5) Business Days
of receipt of the said refund, credit or input
tax.
2.9.8 The Purchaser covenants (for itself and for each VAT Group
Company) with the Guarantor (for itself and for each member
of the AMEC Retained Group which is also a member of the
Vendor VAT Group at Closing) that where the Guarantor as
Representative Member is liable to account for any VAT in its
capacity as Representative Member after Closing then to the
extent that such VAT is attributable to supplies (including
self supplies) made by or to or importations or acquisitions
made by any VAT Group Company up to and including Closing and
to the extent that a provision or reserve in respect of VAT
was expressly made in the Completion Accounts (and taken into
account in computing Net Asset Value) the Purchaser shall, or
shall procure that the VAT Group Company concerned shall, pay
to the Guarantor as Representative Member a sum equal to so
much of the amount to be so accounted for as is so
attributable (less any payments already made in respect of
such amounts) no later than one (1) Business Day before the
date on which the Guarantor as Representative Member is
liable to account for it. For the avoidance of doubt, the
Purchaser shall not be liable to make any payments under this
clause 2.9.8 to the extent that the same arises solely as a
result of any adjustments which the Guarantor is required to
make after Closing in respect of any capital assets (except
those of a VAT Group Company) pursuant to the provisions of
Part XV of the VAT Regulations 1995 (Capital Goods Scheme).
2.9.9 The Guarantor shall:
(a) retain the benefit of any refund or credit as is
mentioned in clause 2.9.7 that is not included as an
asset in computing Net Asset Value in the Completion
Accounts; and
(b) pay any VAT as is mentioned in clause 2.9.8 that is not
included as a liability in computing Net Asset Value in
the Completion Accounts.
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<PAGE> 26
2.9.10 The Purchaser agrees to pay the Guarantor any amount of VAT
for which the Guarantor or any of its subsidiaries other than
the VAT Group Companies becomes liable as a result of
supplies made by the VAT Group Companies after Closing.
2.9.11 The Guarantor and Purchaser undertake with each other to, on
request, promptly supply or procure that there is supplied to
the other all information, particulars and access to and
copies of records reasonably relevant to any liability of the
parties under this clause 2.9.
3. REPRESENTATIONS AND WARRANTIES OF AMEC
3.1 AMEC represents and warrants to the Purchaser that each Warranty is
true and accurate and not misleading at the date of this Agreement. If
there is a breach of this clause 3.1 and:
3.1.1 the value of an asset of a Group Company is or becomes less
than the value would have been had the breach not occurred;
or
3.1.2 a Group Company is subject to or incurs a liability or an
increase in a liability which it would not have been subject
to or would not have incurred had the breach not occurred,
AMEC shall pay the Purchaser (at the Purchaser's option) and subject
to the provisions of clauses 3.5, 7 and 11 an amount equal to either:
3.1.3 the reduction in the value of the asset or, as the case may
be, the liability or increased liability; or
3.1.4 the reduction caused in the value of the Equity.
3.2 The Warranties are qualified by the facts and circumstances fairly
disclosed in the Disclosure Letter and any matter hereafter done or
omitted to be done pursuant to a request in writing from the Purchaser
or with the approval in writing of the Purchaser. No constructive or
imputed knowledge of the Purchaser relating to the Group Companies
prevents or limits a claim made by the Purchaser for breach of this
clause 3. AMEC may not invoke any constructive or imputed knowledge of
the Purchaser of a fact or circumstance which might make a Warranty
untrue, inaccurate, incomplete or misleading as a defence to a claim
for breach of this clause 3.
3.3 The Purchaser confirms and acknowledges that neither it nor its
Affiliates (but excluding the Group Companies) are actually aware of
any breach of the Warranties at the date hereof other than those
matters set out in the Disclosure Letter.
3.4 AMEC waives and may not enforce a right which it may have in respect
of a misrepresentation, inaccuracy or omission in or from information
or advice supplied or given by a Group Company or a director, officer
or employee of a Group Company for the purpose of assisting AMEC to
give a Warranty or prepare the Disclosure Letter.
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3.5 Each Warranty is to be construed independently and (except where this
Agreement provides otherwise) is not limited by a provision of this
Agreement or another Warranty. For the avoidance of doubt, the
Purchaser shall not be entitled to recover twice in respect of any
claim under both this Agreement and the Tax Deed to the extent that
such claim has already been satisfied and, shall not be entitled to
make any claim to the extent that the amount of any such claim is or
has been reflected in a diminution of the Operating Profits of the
Group Companies (and the preferential dividend payable in respect of
the "B" Shares in the capital of the Company held by AMEC or any
member of the AMEC Retained Group) during the period ending on 31
March 2001.
3.6 CORPORATE ORGANISATION OF THE GROUP COMPANIES AND RELATED MATTERS
3.6.1 Each Group Company is a private limited company duly
incorporated under English law and has been in continuous
existence since incorporation and does not, directly or
indirectly, through the ownership of share capital or
otherwise, have any subsidiaries, other than the
Subsidiaries.
3.6.2 The Group Companies do not have the power to control the
management and operations of any other Person (other than
another Group Company). Except as disclosed in the Disclosure
Letter, the Group Companies do not serve as general partner
or managing partner of, nor do they have any interest in, any
limited partnership, limited liability company (other than
another Group Company), general partnership or joint venture.
3.6.3 The Group Companies have no interest in and have not agreed
to acquire an interest in any corporate body (other than
another Group Company).
3.7 POWER AND AUTHORITY OF THE COMPANY
3.7.1 The Group Companies have the right, power and authority to
own or lease their Assets and properties and to conduct their
business as and in the places where such Assets and
properties are now owned, leased or operated, and such
business is now conducted, and the Group Companies have
complied in all material respects with all national and local
laws which relate to their operations and the conduct of its
business.
3.7.2 The corporate minutes of the Group Companies contain records
of all meetings of their shareholders and directors since
March 1996, all of which meetings were duly called and held,
and all of which records are complete and correct in all
material respects.
3.8 EQUITY
3.8.1 All of the Equity, which comprises all of the "A" ordinary
share capital of the Company which is allotted and issued,
has been validly allotted and issued and is fully paid. There
are no outstanding options, warrants, rights, calls,
commitments, conversion rights or other agreements of any
character
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providing for the allotment or issue of any share capital or
other securities of the Company.
3.8.2 AMEC is the only beneficial owner of the Equity.
3.9 THE SUBSIDIARIES
3.9.1 Each allotted and issued share in the capital of each
Subsidiary registered in the names of any other Group Company
is legally and beneficially owned by the Company alone, has
been properly allotted and issued and is fully paid or
credited as fully paid.
3.9.2 There is no Encumbrance, and there is no agreement,
arrangement or obligation to create or give an Encumbrance, in
relation to a share or unissued share in the capital of a
Subsidiary. No person has claimed to be entitled to an
Encumbrance in relation to any of those shares.
3.10 CORPORATE ORGANISATION OF AMEC
AMEC is a public limited company duly incorporated under English law
and has been in continuous existence since incorporation.
3.11 POWER AND AUTHORITY OF AMEC
AMEC has the right, power and authority to execute and perform this
Agreement and the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by AMEC and is a valid
and binding obligation of AMEC, enforceable in accordance with its
terms.
3.12 NO DEFAULT RESULTING FROM AGREEMENT
Neither the execution and delivery of this Agreement nor the
performance of its terms will result in any breach of the terms and
conditions of, or constitute a default under, the Articles or
Memorandum of AMEC or any undertaking, judgment, decree, governmental
order or other restriction or obligation to which the Group Companies
are a party and by which AMEC and/or the Group Companies or any of
their properties or assets may be bound or affected.
3.13 FINANCIAL STATEMENTS
The Financial Statements which comprise a true, correct and complete
copy of (i) the audited balance sheets of and (ii) the profit and loss
accounts and shareholder's equity of the Group Companies for the
twelve month period ended on the Last Accounting Date, have been
prepared in accordance with GAAP as at the Last Accounting Date and
show a true and fair view of the Assets, liabilities and shareholder's
equity and state of affairs of the Group Companies as of the Last
Accounting Date. Among other things:
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3.13.1 The Financial Statements (or the notes thereto in respect of
contingent liabilities) provide adequately for all bad and
doubtful debts and all liabilities (actual or contingent)
existing at the Last Accounting Date.
3.13.2 The results shown by the audited profit and loss account of
the Group Companies for each of the three financial years of
the Group Companies ended on 31 December 1996, 1997 and 1998
have not (except as disclosed in those accounts) been
affected by an extraordinary, exceptional or non-recurring
item or by another fact or circumstance making the profit or
loss for a period covered by any of those accounts unusually
high or low.
3.13.3 The Financial Statements make proper provision or reserve in
accordance with GAAP for all Tax liable to be assessed on the
Group Companies, or for which they are or may become
accountable, for the accounting period starting on or before
the Last Accounting Date (whether or not the Group Companies
have or may have a right of reimbursement against another
Person). The Financial Statements make proper provision or
reserve in accordance with GAAP for all contingent or
deferred liabilities to Tax for the accounting period
starting on or before the Last Accounting Date.
3.13.4 In the Financial Statements stock was valued in the same way
as in the two preceding financial years and on the basis of
the lower of cost or net realisable value.
3.13.5 The bases and rates of depreciation and amortisation used in
the Financial Statements were the same as those used in the
audited accounts of the Group Companies for the two preceding
financial years.
3.13.6 The rates of depreciation and amortisation used in the
audited accounts of the Group Companies for the three
financial years of the Group Companies ended on the Last
Accounting Date were sufficient to ensure that each fixed
asset of the Group Companies will be written down to nil by
the end of its useful life.
3.14 NOTES AND ACCOUNTS RECEIVABLE
All notes receivable and accounts receivable reflected in the
Financial Statements (net of reserves stated therein) were not at the
Last Accounting Date, and all such receivables held by the Group
Companies on the date hereof, are not, so far as AMEC is aware subject
to any valid offset or counterclaim, and, to the knowledge of AMEC,
are collectible in the ordinary course of business.
3.15 ABSENCE OF UNDISCLOSED LIABILITIES
Other than as disclosed in the Pro-forma Balance Sheet and the
Financial Statements, the Group Companies do not have individually or
in the aggregate, any debt, liability or obligation of any kind,
whether accrued, absolute, contingent or otherwise, including, without
limitation, any governmental charges or penalty, interest or fines
which would have a material effect on the Group Companies taken as a
whole other
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<PAGE> 30
than any such debts, liabilities or obligations incurred in the
ordinary course of business as reflected in the Completion Accounts.
3.16 TITLE TO ASSETS (OTHER THAN REAL PROPERTY AND INTELLECTUAL PROPERTY)
The Group Companies have good title to all property (other than the
Real Property and the Intellectual Property which are dealt with
below), and all other tangible and intangible Assets used by and
material to the Group Companies and free and clear of all liens and
Encumbrances. All property (other than Real Property and Intellectual
Property which are dealt with below), and all other tangible and
intangible Assets which are material to the conduct of the business of
the Group Companies are owned by the Group Companies solely and
exclusively, and are free and clear of all liens and Encumbrances.
AMEC further represents and warrants that neither AMEC nor any member
of the AMEC Retained Group owns or has possession or control of, or
any interest in, any of the Assets of any Group Company.
3.17 REAL PROPERTY
3.17.1 The Real Property comprises all the real property owned
and/or occupied by the Group Companies for the purposes of
the business of the Group Companies and the details set out
in Real Property Schedule are complete and accurate in all
material respects.
3.17.2 Each Development Site comprises all land and premises
required for the carrying out of the Development on that
Development Site without the acquisition of any further land,
interest or entitlement.
3.17.3 The Group Companies have, and at Closing will have, good
title to the Real Property (other than the Conditional
Properties and the Licensed Properties) and no Real Property
is subject to any Encumbrances (other than the Permitted
Encumbrances) that would have a material adverse effect on
the ability of the Group Companies to develop the Real
Property in accordance with the relevant Development
Appraisal.
3.17.4 Each plot and site constituting the Real Property (other than
the Conditional Properties where one of the conditions to be
satisfied is the acquisition of such access or rights) either
adjoins and has full, free and adequate access to and from
public highways or has the benefit of all necessary rights of
way to such highways to enable access to be gained to the
Real Property and AMEC has no knowledge of any circumstances
which could result in the termination of such rights of way.
3.17.5 There is appurtenant to the Real Property each right and
easement necessary for its proper and existing use or in the
case of each Development Site its proposed use after the
completion of the Development which is either held in fee
simple or on a lease for a term of not less than 125 years
and no right or easement is restricted in any way or is
capable of being lawfully interrupted or terminated (other
than by effluxion of time or for breach of covenant) by any
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<PAGE> 31
person which would materially affect the ability of any Group
Company to use and occupy the Office Premises as the same is
being used and occupied currently or to carry out the
Development on the Development Site.
3.17.6 To the knowledge of AMEC there is (i) no existing or proposed
plan to modify or realign any street or highway, which could
result in the compulsory purchase of all or any part of any
Real Property or which could affect the current or planned
use and the Development of each Real Property, (ii) no
contemplated sale of any Real Property in lieu of compulsory
purchase, (iii) no resolution or proposal for compulsory
acquisition of the Property by a local or other authority,
and (iv) no other action, suit or proceeding pending or
threatened before any court or other Governmental Authority
relating to or affecting any Real Property or affecting the
use, occupancy, value or marketability thereof. 3.17.7 The
Group Companies have performed or complied with each material
obligation, condition, restriction, and agreement affecting
the Real Property, its ownership, occupation, possession,
development or existing use and any proposed development of
the Undeveloped Property will not be in breach of any such
obligation, condition, restriction or agreement.
3.17.8 All dwellings and associated infrastructure improvements (the
"IMPROVEMENTS") on the Real Property which have reached
practical completion other than those owned and used
exclusively by any public utility or third party (but
including such Improvements which have been carried out under
a Property Agreement under which the Group Companies do not
take a transfer of the title to the Real Property); (i) have
received all Real Property Consents required in connection
with the Development thereof, all of which Real Property
Consents are in full force and effect; (ii) comply in all
material respects with all applicable laws, ordinances,
statutes, rules and regulations (other than Environmental
Laws which are dealt with in clause 3.30) of any Governmental
Authority; (iii) are supplied with all appropriate utilities
and other services necessary for the use thereof and AMEC has
no knowledge of any circumstances which could reasonably be
expected to result in the termination or material impairment
thereof, and (iv) (where they have not been sold to a third
party) are in good condition and repair and are suitable for
the purposes for which they are intended to be used, ordinary
wear and tear excepted. The Improvements are in good working
order and repair. All Improvements which are either in the
course of construction or are intended to be constructed
will, if constructed in accordance with all Real Property
Consents and otherwise in accordance with the specification
applying to such Development, comply with each of the above
statements.
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<PAGE> 32
3.17.9 The Planning Schedule which includes the material details of
relevant planning permissions and Planning Agreements in
relation to each Development and plot or site comprising the
Class 1 and 2 Real Property is complete and accurate in all
material respects.
3.17.10 There is no fact or circumstance which would or could
reasonably be expected to prevent the Group Companies from
obtaining (without incurring any unusual cost or expense
which has not been taken into account in calculating the
profit margin in the Business Plan) for such property all
necessary Real Property Consents for the Development of each
Real Property, other than normal and customary conditions
imposed by Governmental Authorities.
3.17.11 Except as set out in the relevant Development Appraisal,
Planning Schedule or Real Property Schedule no commitments
have been made to any Governmental Authority or to any other
Person which imposes an obligation upon any Group Company to
make any contribution or dedication of money or land
(including but not limited to any rights of access or
reciprocal easement agreements) or to construct, install or
maintain any Improvements upon or in the vicinity of the Real
Property, and no Governmental Authority has imposed any
requirement that any developer or owner of such Real Property
make directly or indirectly any contributions or incur any
expenses or obligations whatsoever in connection with any
Development or ownership thereof which have not been taken
into account in calculating the profit margin in the Business
Plan.
3.17.12 The Group Companies have all Real Property Consents necessary
for the existing use and occupation of the Office Premises.
3.17.13 The Group Companies have complied in all material respects
with the terms and conditions of each and every Real Property
Consent and Planning Agreement relating to the Development
Sites and Office Premises and the Group Companies have not
received notice that they are in breach of any of the
foregoing.
3.17.14 There are no leases, subleases, licences, concessions or
other agreements, whether written or oral, granting to any
Person any right to use or occupy any portion of a plot or
site constituting the Real Property which are not either:
(a) temporary arrangements which can be terminated by the
Group Companies without cost prior to commencing the
Development;
(b) for the provision of services for the development by
utility companies; or
(c) have been granted for a premium and otherwise on terms
which permit the Group Companies to fully recover the
costs incurred by the Company in complying with any
obligations or its part contained in such documents,
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<PAGE> 33
and to AMEC's knowledge there are no other Persons in
possession of any part of, or who has or claims a right or
interest of any kind in the Real Property adverse to the
Group Companies' Interests.
3.17.15 To AMEC's knowledge the Group Companies have complied in all
material respects with each and every undertaking, covenant
and obligation under the Property Agreements and no
circumstances exist that constitute or, with the passage of
time or the giving of notice or both, would constitute a
breach or default by the Group Companies or, to the knowledge
of AMEC, the other party to the Property Agreements. Except
as set out in the Disclosure Letter. (i) there are no
payments due under any Property Agreement which have not been
taken into account in calculating the profit margin in the
Business Plan and (ii) there are no contracts of sale (other
than contracts entered into in the normal course of business
and on standard terms) or outstanding options, rights of
first refusal or similar rights to purchase any plot or site
included in the Real Property, or any portion thereof or
interest therein (except the options described in the Real
Property Schedule).
3.17.16 Each Exchanged Property has been acquired following an
average of at least two valuations carried out by independent
agents instructed by the Group Companies who value on the
basis of procuring a sale within 90 days.
3.17.17 To the knowledge of AMEC, no plot or site constituting the
Real Property is currently classified or regulated (or is
under investigation by any Governmental Authority) or an
endangered habitat or is currently affected by endangered
species under national or European laws (including common
law), statutes, codes, ordinances, rules or regulations.
3.17.18 The Group Companies have provided all information necessary
to enable their solicitors to prepare certificates of title
for the Class 1 Real Property and the certificates of title
are true and accurate in all material respects.
3.18 COMPLETED IMPROVEMENTS
The contract for sale (whether completed or not) and any transfer of
any completed Improvement is in a standard form and does not create
any Encumbrance which is not a Permitted Encumbrance or require a
Group Company to incur costs for the ongoing repair and maintenance of
roads or common parts of the Development Site or parts of any building
on a Development Site in multiple occupation which could not be
recovered from the transferees or successors in title and reserves all
rights necessary for the development use and occupation of the
remainder of the Development Site.
3.19 LEASES
A list of all leases of property (other than Real Property) and
Assets, whether real, personal or mixed, leased by the Group Companies
(and under which the aggregate consideration exceeds Ten Thousand
Pounds (L.10,000) per annum) is set out in the Disclosure Letter and
except as described therein:
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<PAGE> 34
3.19.1 the Group Companies enjoy peaceful and undisturbed possession
of all such properties and Assets; and
3.19.2 all leases of the Group Companies are valid, subsisting and
in full force and effect, with no default on the part of the
Group Companies or, to the knowledge of AMEC, any other party
thereunder, except for defaults the cost of which to remedy
will not, in the aggregate, exceed Ten Thousand Pounds
(L.10,000).
3.20 CONSTRUCTION OF HOUSES
All Improvements constructed by the Group Companies or their
predecessors were constructed in a good and workmanlike manner and in
accordance with the plans and specifications and, where relevant, the
customer sales contracts applicable thereto, and the Financial
Statements contain provisions for warranty claims which are sufficient
to address any and all claims for defects in construction which may be
made against the Group Companies. For the avoidance of doubt for the
purpose of this warranty "IMPROVEMENTS" shall include dwellings
whether the sales of the same are now pending or have already been
concluded. Each Group Company (including but without limitation
Fairclough Homes Limited) is currently registered with the NHBC and
under the Building Guarantee Schemes operated by Zurich Municipal. All
completed dwellings comprised in the Improvements have received either
an Insurance Certificate (formerly known as a Ten Year Notice) and
Build Mark Warranty issued in each case by the NHBC or an Initial
Certificate and Final Certificate (free from endorsements) issued in
each case by Zurich Municipal.
3.21 CONDITION OF INVENTORY AND EQUIPMENT
All tangible Assets owned or used by the Group Companies are in usable
condition, ordinary wear and tear excepted.
3.22 LITIGATION AND PROCEEDINGS
There are no actions, lawsuits, claims or proceedings pending or, to
the knowledge of AMEC, threatened against the Group Companies in any
court or before any arbitrator or Governmental Authority which if
adversely determined would result in a liability of more than L.5,000
being incurred by any Group Company. The Group Companies have not been
charged with, nor so far as AMEC is aware are they under investigation
with respect to, any charge concerning or any violation of any
provision of any applicable law or administrative regulation with
respect to its business which would have a material adverse effect on
the Group Companies taken as a whole. There are no judgements
unsatisfied against the Group Companies and no outstanding court
orders, settlements or consent decrees to which the Group Companies
are subject.
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3.23 TAX MATTERS
Any warranties given in clauses 3.23 and 3.24 in relation to the
Management Companies shall only be given insofar as AMEC is aware of
any of the matters referred to in clauses 3.23 and 3.24.
3.23.1 Each Group Company has filed all Tax Returns that it was
required to file and all such Tax Returns were correct and
complete in all material respects. All Taxes owed by each
Group Company and due have been paid. No Group Company is
currently the beneficiary of any extension of time within
which to file any Tax Return. There are no liens, security
interests or other Encumbrances on any of the Assets of the
Group Companies that arose in connection with any failure (or
alleged failure) to pay any Tax.
3.23.2 Each Group Company has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor,
creditor, shareholder, or other third party.
3.23.3 There is no dispute or claim concerning any Tax liability of
any Group Company either claimed or raised by any Taxation
Authority in writing. The Disclosure Letter lists all Tax
Returns filed with respect to each Group Company which are
not yet agreed with the relevant Taxation Authority.
3.23.4 Each Group Company is resident only in the United Kingdom for
all Tax purposes.
3.23.5 Each Group Company has submitted each claim and disclaimer
assumed to have been made for the purposes of the Financial
Statements.
3.23.6 In preparing the Financial Statements the value used for each
asset or class of asset in respect of which a separate
computation for capital allowances is required (whether as a
result of an election or otherwise) is such that, on a
disposal of that asset or all the assets in that class for a
consideration equal to the value used (and disregarding a
statutory right to claim an allowance or relief), no
balancing charge would be made.
3.23.7 No liability to Tax (other than value added tax) would arise
if a Group Company were to dispose of an asset acquired since
the Last Accounting Date for a consideration equal to the
consideration actually given for the acquisition.
3.23.8 No claim under section 152 or 153 of the TCGA (replacement of
business assets) has been made before the date of this
Agreement to which section 154 of the TCGA (new assets which
were depreciating assets) applies and which affects any asset
owned by a Group Company on or after the Last Accounting Date
(except where the held-over gain is treated as having accrued
before the Last Accounting Date).
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3.23.9 Since incorporation no Group Company has made a repayment of
share capital to which section 210 of the Taxes Act (bonus
issue following repayment of share capital) applies or issued
share capital as paid up other than by the receipt of new
consideration within the meaning of Part VI of the Taxes Act
(company distributions, tax credits etc.).
3.23.10 All documents by virtue of which a Group Company has any
right (which has not ceased to have legal effect) which the
Group Company may need to produce in any proceedings or at
the request of any Tax Authority or other Governmental
Authority and which are required to be stamped have been
stamped (or adjudicated as not being stampable with any duty)
and all duty, interest and penalties on those document have
been paid, and none has any unsatisfied liability to stamp
duty reserve tax or interest or penalties on stamp duty
reserve tax.
3.23.11
(a) Each Group Company:
(i) is registered for the purposes of the VATA (as
detailed in paragraph (b) below);
(ii) has made, given, obtained and kept up-to-date,
full and accurate records, invoices and documents
appropriate or required for the purposes of the
VATA;
(iii) is not in arrears with payment or returns due
under the VATA; and
(iv) has not been required by a Tax Authority to give
security under the VATA.
(b) The VAT Group Companies (as defined in clause 2.9) are
members of a group of companies for the purpose of
section 43 of the VATA (groups of companies) (the "VAT
GROUP") of which the current representative member is
the Guarantor. Fairpine Limited is separately registered
for VAT purposes.
(c) In the three years ending on the date of this Agreement
none of the Group Companies have (nor, so far as it is
relevant to the VAT affairs of the VAT Group Companies,
has the representative member for the time being of the
VAT Group) been in default in respect of an accounting
period, as the terms "default" and "accounting period"
are used in sub-section 59(1) of the VATA (the default
surcharge).
(d) No claims for bad debt relief under section 36 of the
VATA (bad debts) or section 22 of the Value Added Tax
Act 1983 (refund of tax in cases of bad debts) have been
made by the Group Companies not by the
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representative member for the time being of the Vendor
VAT Group (as defined in clause 2.9) in respect of each
VAT Group Company.
(e) No Group Company owns any asset which is a capital item,
the input tax on which may be subject to adjustment in
accordance with Part XV of the Value Added Tax
Regulations 1995.
(f) No Group Company nor any company of which such Group
Company is a relevant associate within the meaning of
paragraph 3(7) of Schedule 10 to the VATA (election to
waive exemption), has elected to waive exemption under
paragraph 2 of Schedule 10 in relation to any land.
(g) No Group Company has received a notice or is aware of
anything which indicates that the grant to it of an
interest in or right over land or of a license to occupy
land will not be an exempt supply because of an election
under Schedule 10 to the VATA (election to waive
exemption).
(h) No Group Company has agreed to become an agent, manager
or factor for the purposes of section 47 of the VATA
(agents, etc.) of a person not resident in the United
Kingdom.
3.23.12 No charge to Tax will arise in any Group Company under
section 179 of the TCGA (company ceasing to be member of a
group) directly as a result of the Transaction.
3.24 GROUP RELIEF, TAX REFUNDS AND ACT
3.24.1 The Disclosure Letter contains details of each claim made and
each surrender by each Group Company for the six years ending
on the Last Accounting Date for or of:
(a) group relief under Chapter IV of Part X of the Taxes Act
(loss relief and group relief) ("Group Relief");
(b) the surrender of advance corporation tax under section
240 of the Taxes Act (set-off of company's surplus ACT
against subsidiary's liability to corporation tax)
("ACT"); and
(c) the surrender of tax refund under section 102 of the
Finance Act 1989 (surrender of company tax refund etc.
within group) ("Tax Refund").
3.24.2 No Group Company is liable to make a payment for Group
Relief, ACT or Tax Refund surrendered to it.
3.24.3 No Group Company is liable to surrender Group Relief, ACT or
Tax Refund.
3.24.4 There is no arrangement by which any Group Company may become
liable to repay a sum paid to it for the surrender of Group
Relief, ACT or Tax Refund.
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3.24.5 No Group Company is a company concerned in an exempt
distribution made within the five years ending on the date of
this Agreement for the purposes of section 214 of the Taxes
Act (chargeable payments connected with exempt
distributions).
3.25 GOVERNMENTAL REGULATION
All Permits necessary for carrying on the businesses of the Group
Companies as they are now carried on (other than building permits and
waivers obtained in the ordinary course of business) are in full force
and effect. The Group Companies are not in violation of or in default
with respect to any applicable law or any applicable rule, regulation,
order, writ or decree of any court or any Governmental Authority
having the force of law or delinquent with respect to any report
required by law to be filed with any Governmental Authority except
where such violation, default or failure to file timely would not have
a material adverse effect on the Group Companies taken as a whole. The
consummation of the transaction contemplated hereby will not
extinguish or adversely affect any such Permit which the Group
Companies have on the date of this Agreement, and which are necessary
for carrying on the businesses as they are now carried on.
3.26 CONTRACTS
3.26.1 None of the Group Companies is a party to or liable under a
long-term, onerous or unusual agreement, arrangement or
obligation which for these purposes means:
(a) a Contract entered into other than in the ordinary and
usual course of its business;
(b) a Contract entered into other than on arm's length
terms;
(c) a Contract which the Group Companies cannot comply with
without undue or unusual expenditure of money or effort;
(d) a Contract containing any provision or covenant limiting
the ability of the Group Companies to engage in any line
of business currently carried on or to compete with or
to obtain products or services from any Person;
For the purposes of this clause 3.26.1 a long term Contract is
one which is unlikely to have been fully performed in
accordance with its terms more than 18 months after the date
on which it was entered into or undertaken.
3.26.2 No Group Company is a party to or liable under:
(a) any partnership, joint venture, agency, management,
consortium or similar Contracts;
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(b) any Contracts (other than Planning Agreements) that
involve the payment or potential payment by or to it of
aggregate amounts exceeding Twenty Five Thousand Pounds
(L.25,000) in any year, other than Contracts which are
on standard terms (copies of such standard terms being
contained in the Disclosure Documentation) or which are
terminable by it without penalty on not more than ninety
(90) days' notice;
(c) any Contracts containing any "change of control"
provision or agreement;
(d) any proxies, powers of attorney or similar delegations
of authority of a Group Company to a party who is not
director, officer or employee of such entity;
(e) any Contracts (including, but not limited to, those
relating to allocations of expenses, personnel, services
or facilities) between or among a Group Company on the
one hand and any member of the AMEC Retained Group on
the other hand other than (i) those entered into or
subsisting with the agreement of the Purchaser and (ii)
the Reorganisation Agreement;
(f) any Contracts which by their terms provide for the
creation, existence or maintenance of a lien or other
Encumbrances on any properties or Assets of any Group
Company;
3.26.3 The Disclosure Letter contains:
(a) copies of all Contracts with customers which are not in
(or substantially in the form of) the standard form of
sales contract used by the Group Companies, a copy of
which is contained in the Disclosure Letter;
(b) a list as at 4 April 1999 of all pending sales contracts
with customers, including the principal terms of such
sales such as names, date, sales price, location and
delivery date;
(c) details of any sales contract that would entitle a
customer on Closing to cancel such agreement because of
the change in control of any Group Company, any
arrangement with a lender that would entitle a lender on
Closing to cancel its existing commitment to fund
construction of any home or to fund the purchase of such
home by a customer because of the change in control;
(d) copies of all Contracts with subcontractors, architects,
engineers and other consultants relevant to the
development of the Real Property (the "CONTRACTOR
CONTRACTS"), other than those which are in the relevant
standard form a copy of which standard form in each case
is contained in the Disclosure Letter;
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3.26.4 Each material Contract to which any Group Company is a party
is in full force and effect and constitutes a legal, valid
and binding obligation of such Group Company and is
enforceable against the Group Company in accordance with its
terms subject to bankruptcy, insolvency, reorganisation and
other laws of general application relating to creditors'
rights and to general principles of equity. Neither any Group
Company nor (to the knowledge of AMEC) any other party to any
such Contract is in violation or breach of or default under
any such Contract, except any violation, breach or default
which could reasonably be expected not to have a material
adverse effect on such Group Company. Except for any such
provision which could not be reasonably expected to have a
material adverse effect on the Group Companies taken as a
whole no such Contract contains any provision which prohibits
or restricts, or provides that the other party thereto may
terminate such Contract in the event or by reason of, the
transactions contemplated by this Agreement, or contains any
other provision that would be altered or otherwise become
applicable by reason of such transactions.
3.26.5 AMEC is not aware of the invalidity of, or a ground for
termination, avoidance or repudiation of, an agreement,
arrangement or obligation to which any of the Group Companies
are a party the termination, avoidance or repudiation of
which would have a material adverse effect on the Group
Companies taken as a whole. No party with whom the Group
Companies have entered into an agreement, arrangement or
obligation has given notice of its intention to terminate, or
so far as AMEC is aware has sought to repudiate or disclaim,
the agreement, arrangement or obligation the termination,
avoidance or repudiation of which would have a material
adverse effect on the Group Companies taken as a whole.
3.26.6 So far as AMEC is aware, no fact or circumstance exists which
is likely to give rise to any party with whom any of the
Group Companies have entered into an agreement or arrangement
being in material breach of such agreement or arrangement.
The Purchaser acknowledges that for the purposes of giving
this warranty AMEC has not made any enquiry of any third
party and/or counterparty.
3.26.7 The Group Companies have received no notices of any material
claims of non-payment or claims of liens by any contractors,
subcontractors or suppliers with respect to any work
performed on or materials furnished to the Real Property.
3.27 BANK ACCOUNT DETAILS, INDEBTEDNESS AND GUARANTEES
3.27.1 The Disclosure Letter contains details of:
(a) all Contracts relating to the borrowing of money by the
Group Companies or providing for any direct or indirect
guarantee by the Group Companies of any indebtedness of
any other Person; and
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<PAGE> 41
(b) the name and address of each bank or other financial
institution in which the Group Companies have an account
or a safe deposit box, the account numbers and the names
of all persons authorised to draw thereon or to have
access thereto.
3.27.2 Except as disclosed in the Financial Statements or in the
Disclosure Letter, no Group Company has outstanding or agreed
to create or incur loan capital, borrowing or indebtedness in
the nature of borrowing, including, without limitation, a
bank overdraft, a liability under an acceptance (other than a
normal trade bill) and an acceptance credit.
3.27.3 No Group Company is a party to or is liable (including
without limitation, contingently) under a guarantee,
indemnity or other agreement to secure or incur a financial
or other obligation with respect to another Person's
obligation (other than any other Group Company).
3.27.4 No part of the loan capital, borrowing or indebtedness in the
nature of borrowing of a Group Company is dependent on the
guarantee or indemnity of, or security provided by, another
Person other than a Group Company.
3.27.5 No event has occurred or so far as AMEC is aware has been
alleged which:
(a) constitutes an event of default, or otherwise gives rise
to an obligation to repay, under an agreement relating
to borrowing or indebtedness in the nature of borrowing
(or will do so with the giving of notice or lapse of
time or both); or
(b) will lead to an Encumbrance constituted or created in
connection with borrowing or indebtedness in the nature
of borrowing, a guarantee, an indemnity or other
obligation of a Group Company becoming enforceable (or
will do so with the giving of notice or lapse of time or
both).
3.28 BROKERS OR FINDERS
No broker or finder has acted on behalf of the Group Companies, in
connection with this Agreement or the transactions contemplated
hereby.
3.29 INSURANCE
The Disclosure Letter contains a list of each current insurance and
indemnity policy in respect of which the Group Companies have an
interest (the "POLICIES"). In addition, each Group Company has at all
times maintained or had an interest in insurance policies written on a
"losses occurring basis" covering against all third party liabilities
to which a person carrying on the types of business carried on by the
Group Companies is or may be exposed (the "HISTORIC POLICIES").
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<PAGE> 42
3.29.1 Each of the Policies and each of the Historic Policies is
valid and enforceable and is not void or voidable. Neither
AMEC nor any Group Company has done anything or omitted to do
anything which might cause or entitle the insurers under any
of the Policies or the Historic Policies to refuse to pay any
claims under the Policies or the Historic Policies.
3.29.2 None of the Policies written on a losses occurring basis or
the Historic Policies contains provisions as to change of
control or ownership of the insured or as to the definition
of the insured that would affect the ability or entitlement
of any of the Group Companies to claim under such policies
after the date of this Agreement for losses occurring prior
to the date of this Agreement.
3.29.3 INSURANCE OF ASSETS
Each insurable asset of each Group Company has at all material
times been and is at the date of this Agreement insured to its
full replacement value (with no provision for deduction or
excess) against each risk normally insured against by a person
operating the types of business operated by each Group
Company.
3.29.4 OTHER INSURANCE
Each Group Company has at all material times been and is at
the date of this Agreement adequately insured against
accident, damage, injury, third party loss (including, without
limitation, product liability), loss of profits and any other
risk normally insured against a person operating the types of
business operated by each Group Company.
3.29.5 CLAIMS
Full details of claims made under the Policies and under the
Historic Policies since 1994 are provided in the Disclosure
Letter.
In relation to the claims referred to in the Disclosure Letter
and in relation to all other claims under Historic Policies
(the "CLAIMS"):
(a) no insurer has refused to pay any of the Claims in full
or has advanced any counterclaim or cross-claim, or has
indicated that they propose to do so;
(b) neither AMEC nor any Group Company has done anything or
omitted to do anything which might cause or entitle the
insurers to refuse to pay any of the Claims in full or
to make any counterclaim or any cross-claim.
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<PAGE> 43
3.30 ENVIRONMENTAL MATTERS
The Warranties in this clause 3.30 shall be the only warranties
relating to the Environment. The Warranties in this clause 3.30 shall
not apply to the options referred to in the Real Property Schedule.
Except as set out in the Disclosure Letter:
3.30.1 The facilities and property presently owned or leased by the
Group Companies have been (to the knowledge of AMEC) prior to
the date hereof, and continue to be, operated by the Group
Companies in compliance in all material respects with all
applicable Environmental Laws.
3.30.2 The Group Companies have not received notice from any Person
of any Environmental Claim that is currently pending or
threatened against the Group Companies.
3.30.3 To the knowledge of AMEC there are no past or present
actions, activities, circumstances, conditions, events or
incidents (including, but not limited to, the release,
emission, discharge, presence, or disposal of any Hazardous
Material) that are reasonably likely to form the basis of an
Environmental Claim against the Group Companies or, to the
knowledge of the Group Companies, any Person whose liability
for such an Environmental Claim the Group Companies have or
may have retained or assumed either contractually or by
operation of law.
3.30.4 The Disclosure Letter contains details of all material
Environmental Permits and the Group Companies are in
compliance in all material respects with the terms thereof.
3.30.5 So far as AMEC is aware, no asbestos polychlorinated
biphenyls (PCBs) or other Hazardous Materials are used,
disposed of, stored or otherwise present in, on under or at
any Real Property or property that was owned or, to the
knowledge of the Group Companies, that was leased by the
Group Companies, and no formaldehyde containing material is
contained in any of the homes constructed by the Group
Companies.
3.30.6 All written reports and studies (including, but not limited
to, any site assessments or environmental, health or safety
audit report) obtained by or in the possession of the Group
Companies within the last 2 years with respect to any of the
matters referred to in this clause 3.30 are identified in the
Disclosure Letter. The Group Companies have heretofore
provided the Purchaser correct and complete copies of all
such reports and studies in the possession of or otherwise
available to the Group Companies. Reasonable financial
provision has been made by the Group Companies in their
accounts up until Closing, to cover any incurred cost of any
remediation, removal, treatment or monitoring works referred
to in the said reports and studies
- 41 -
<PAGE> 44
arising from the presence of Hazardous Materials or required
under Environmental Laws.
3.30.7 The Group Companies have not owned, operated, or used any
underground storage tanks at any facility and have not
engaged in or permitted any activities or incidents at any
property now or formerly owned leased or occupied by the
Group Companies that have caused or contributed to the
release of any Hazardous Material into the soil or
groundwater underlying those properties.
3.30.8 The Group Companies are not in material violation of or in
default with respect to and have no liability under any
applicable Environmental Law or Environmental Agreements nor
are they delinquent with respect to any report required by
Environmental Law to be filed to any Governmental Authority
except where such violation, default or failure to timely
file would not have a material adverse effect on the Group
Companies taken as a whole.
3.31 INTELLECTUAL PROPERTY RIGHTS
The Warranties in this clause 3.31 shall be the only Warranties
relating to Intellectual Property Rights and to any licences or other
agreements relating thereto.
3.31.1 Schedule 4 contains a true, correct and complete list of all
(i) registered Intellectual Property Rights owned or used by
the Group Companies, (ii) applications for registrations of
Intellectual Property Rights filed by the Group Companies,
(iii) material unregistered trade names and corporate names
owned or used by the Group Companies and (iv) material
unregistered trademarks and service marks owned or used by
the Group Companies. It also contains a true, correct and
complete list of all licences granted by the Group Companies
to any third party with respect to any Intellectual Property
Rights and all licences granted by any third party to the
Group Companies (or to any member of the AMEC Retained Group
on behalf of the Group Companies) with respect to any
Intellectual Property Rights (other than standard form
licences with respect to commercial software that is
generally available from third parties). The Group Companies
own all right, title and interest to, or have the right to
use pursuant to a valid licence, all Intellectual Property
Rights identified in the Disclosure Letter. The Group
Companies have taken all actions which are reasonably
necessary to maintain and protect Company Intellectual
Property Rights, except to the extent that failure to take
such actions would not have a material adverse effect on the
Group Companies taken as a whole.
3.31.2 There have been no written claims made against the Group
Companies asserting the invalidity, misuse or
unenforceability of Company Intellectual Property Rights, (i)
the Group Companies have not received any written notices of
any infringement or misappropriation by, or conflict with,
any third party with respect to Company Intellectual Property
Rights (including, but not
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<PAGE> 45
limited to, any demand or request that the Group Companies
license any rights from a third party), (ii) to the knowledge
of AMEC, the conduct of the businesses conducted by the Group
Companies do not infringe or misappropriate in any material
respect, and is not in conflict in any material respect with,
any Intellectual Property Rights of other Persons, and (iii)
to the knowledge of AMEC, the Intellectual Property Rights
owned by or licensed to the Group Companies are not being
infringed or misappropriated in any material respect by any
other Persons.
3.31.3 The Group Companies have obtained and maintained in force
each registration under the Data Protection Act 1984
necessary in relation to their business including, without
limitation, each registration relating to the obtaining,
holding, processing, transfer and disclosure of personal data
by the Group Companies (including, without limitation, to the
Purchaser). The Group Companies have in respect of personal
data relating to their businesses at all times complied with
the Data Protection Principles contained in Schedule 1 to the
Data Protection Act 1984.
3.32 PENSIONS AND LIFE ASSURANCE
For the purposes of clauses 3.32.1 to 3.32.9:
"APPROVED" means approved by the Inland Revenue for the purposes of
Chapter I of Part XIV of the Taxes Act and a reference to "Approval"
is to be construed accordingly;
"DISCLOSED SCHEME" means the AMEC Staff Pension Scheme, the AMEC
Executive Pension Scheme and the AMEC Group Life Assurance Scheme;
"EMPLOYEE" means a director or employee or former director or employee
of the Company or the Subsidiaries; and
"SPECIAL ARRANGEMENT" means the arrangement by which Fairclough Homes
Limited contributes to Mr R L Fraser's personal pension plan.
3.32.1 Save for the Disclosed Scheme and the Special Arrangement
there is not in operation at the date of this Agreement, and
no proposal has been announced to enter into or establish,
any agreement, arrangement, custom or practice (whether
legally enforceable or not and Approved or not) for the
payment of, or payment of a contribution towards, a pension,
allowance, lump sum or other similar benefit on retirement,
death or during periods of sickness or disablement after
retirement, for the benefit of an Employee or an Employee's
dependants. The Disclosed Scheme and the Special Arrangement
are the only arrangements to which the Group Companies make
or could become liable to make payments for providing the
above benefits in respect of an Employee or an Employee's
dependants.
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<PAGE> 46
3.32.2 Details of the Disclosed Scheme have been given to the
Purchaser in the form of:
(a) a copy of each deed and the rules governing or relating
to the Disclosed Scheme and any deeds supplemental
thereto;
(b) a copy of the current explanatory booklet issued to an
Employee who is or may become a member of the Disclosed
Scheme;
(c) a copy of the announcement issued to an Employee who is
a member of the Disclosed Scheme in respect of the
improvement or a benefit or another amendment not yet
incorporated into the documentation of the Disclosed
Scheme;
(d) a copy of the audited accounts of the AMEC Staff Pension
Scheme and the AMEC Executive Pension Scheme for the
scheme year to 31 March 1998;
(e) a list of Employees who are members of the Disclosed
Scheme with all details relevant to their membership of
the Disclosed Scheme and necessary to establish their
entitlements to benefits; and
(f) details of any transfer payment received by the
Disclosed Scheme in respect of an Employee (whether an
individual transfer of part of a bulk transfer) since 17
May 1990 sufficient to establish whether the transfer
complied with the requirements of Article 119 of the
Treaty of Rome.
3.32.3 Except as referred to in the Disclosure Letter no discretion
or power has been exercised under the Disclosed Scheme in
respect of an Employee to:
(a) augment benefits;
(b) admit to membership an Employee who would not otherwise
have been eligible for admission to membership; or
(c) provide a benefit which would not otherwise be provided.
3.32.4 No plan, proposal or intention to amend, discontinue (in
whole or in part) or exercise a discretion in relation to the
Disclosed Scheme has been communicated to an Employee who is
a member of the Disclosed Scheme.
3.32.5 No contribution due to the Disclosed Scheme or the Special
Arrangement is unpaid by the Group Companies.
3.32.6 The Disclosed Scheme is Approved and AMEC is not aware of a
matter which might give the Inland Revenue reason to withdraw
Approval.
3.32.7 The AMEC Staff Pension Scheme is a contracted-out scheme for
the purposes of the Pension Schemes Act 1993 and has been
administered in accordance with the contracting-out
requirement of that Act. Fairclough Homes Limited
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<PAGE> 47
is named in a current contracting-out certificate issued in
relation to the AMEC Staff Pension Scheme.
3.32.8 The Disclosed Scheme has been designed to comply with, and
has been administered in accordance with, all applicable
legal and administrative requirements (including, without
limitation, Article 119 of the Treaty of Rome as it is
currently interpreted and applied to equal access and equal
benefits except contracted-out benefit rights) and the
trusts, powers and provisions of the Disclosed Scheme. The
Group Companies have complied with Article 119 of the Treaty
of Rome as it is currently interpreted and applied to the
eligibility of an Employee to join, contributions made to and
the provisions of a benefit (except contracted-out benefit
rights) referred to in paragraph 3.32.1 under the Disclosed
Scheme.
3.32.9 The basis on which Fairclough Homes Limited has undertaken to
contribute to the Special Arrangement has been disclosed to
the Purchaser in the Disclosure Letter. No assurance, promise
or guarantee (oral or written) has been made or given to Mr
Fraser of a particular level or amount of benefits to be
provided for or in respect of him under the Special
Arrangement on retirement, death or leaving employment.
Fairclough Homes Limited may terminate any obligation it may
have to contribute to the Special Arrangement without
incurring a liability to Mr Fraser under an agreement or
arrangement with him, other than any contributions payable on
the disclosed basis in respect of a notice period.
3.33 INSIDER AGREEMENTS
There is, and during the three years ending on the date of this
Agreement there has been, no agreement or arrangement (legally
enforceable or not) to which a Group Company is or was a party and in
which either AMEC or any member of the AMEC Retained Group, a director
or former director of a Group Company or a person connected with any
of them is or was interested in any way. For this purpose, "CONNECTED"
has the meaning given by section 839 of the Taxes Act, except that in
construing section 839 "CONTROL" has the meaning given by section 840
or section 416 of the Taxes Act so that there is control whenever
either section 840 or 416 requires.
3.34 EMPLOYMENT MATTERS
3.34.1 There is no employment or other contract of engagement
(written or otherwise) between the Group Companies and any of
their directors or other officers. The Group Companies are
not a party to a consultancy contract.
3.34.2 There is no employment contract between the Group Companies
and any of their employees which cannot be terminated by
three months' notice or less without giving rise to a claim
for damages or compensation (other than a statutory
redundancy payment or statutory compensation for unfair
dismissal). Neither the Group Companies nor the Guarantor
have received notice of
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<PAGE> 48
resignation from Mr W Gosling, Mr R Sarraff, Mr G H Fogden or
Mr D E Stagg.
3.34.3 There is no employment or consultancy contract or other
contract of engagement between the Group Companies and any
person which is in suspension or has been terminated but is
capable of being revived or enforced or in respect of which
the Group Companies have a continuing obligation.
3.34.4 The Disclosure Letter contains:
(a) a true and complete list of all directors and officers
of the Group Companies;
(b) the total number of the Group Companies' employees
including those who are on maternity leave or absent
because of disability or other long-term leave of
absence, and have or may have a right to return to work
with the Group Companies;
(c) the name, date of start of employment, salary and other
benefits, grade and date of birth of each employee of
the Group Companies and, where an employee has been
continuously absent from work for more than one month,
the reason for the absence; and
(d) the terms of the contract of each director, other
officer and employee of the Group Companies entitled to
remuneration at an annual rate, or an average annual
rate over the last three financial years, of more than
Forty Thousand Pounds (L.40,000).
3.34.5 The basis of the remuneration currently payable to the Group
Companies directors, other officers and employees is the same
as that in force on 1 January 1999. The Group Companies are
not obligated to increase, nor have they made provision to
increase, the total annual remuneration payable to their
directors, other officers or employees by more than three
percent (3%) or to increase the remuneration of a director,
other officer or employee entitled to annual remuneration of
more than Twenty Five Thousand Pounds (L.25,000).
3.34.6 The Group Companies owe no material amount to a present or
former director, other officer or employee of the Group
Companies (or his dependant) other than for accrued
remuneration, holiday pay or reimbursement of business
expenses.
3.34.7 There is no agreement or arrangement between the Group
Companies and an employee or former employee with respect to
his employment, his ceasing to be employed or his retirement
which is not included in the written terms of his employment
or previous employment. The Group Companies have not
provided, or agreed to provide, a gratuitous payment or
benefit to a director, officer or employee or to any of their
dependants.
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3.34.8 The Group Companies have in all material respects maintained
up-to-date, full and accurate records regarding the
employment of each of their employees (including, without
limitation, details of terms of employment, payments of
statutory sick pay and statutory maternity pay, income tax
and social security contributions, disciplinary and health
and safety matters) and termination of employment.
3.34.9 Except as disclosed in the Financial Statements, the Group
Companies have not:
(a) incurred but not yet fully discharged a material
liability for breach or termination of an employment
contract including, without limitation, a redundancy
payment, protective award and compensation for wrongful
dismissal, unfair dismissal, discrimination or failure
to comply with an order for the reinstatement or
re-engagement of an employee;
(b) incurred but not yet fully discharged a material
liability for breach or termination of a consultancy
agreement; or
(c) made or agreed to make a payment which has not yet been
fully paid, provided or agreed to provide a benefit
(which has not yet been provided in full) to a present
or former director, other officer or employee of the
Group Companies or to any of their dependants in
connection with the actual or proposed termination or
suspension of employment or variation of an employment
contract.
3.34.10 The Group Companies have complied in all material respects
with:
(a) each obligation imposed on them by, and each order and
award made under, statute, regulation, code of conduct
and practice, collective agreement, custom and practice
relevant to the relations between them and their
employees or a trade union or the terms of employment of
their employees; and
(b) any recommendation made by the Advisory, Conciliation
and Arbitration Service and each award and declaration
made by the Central Arbitration Committee.
3.34.11 Within the year ending on the date of this Agreement the
Group Companies have not:
(a) given notice of redundancies to the relevant Secretary
of State or started consultations with a trade union
under Chapter II of Part IV of the Trade Union and
Labour Relations (Consolidation) Act 1992 or failed to
comply with their obligations under Chapter II of Part
IV of that Act; or
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<PAGE> 50
(b) been a party to a relevant transfer (as defined in the
Transfer of Undertakings (Protection of Employment)
Regulations 1981) or failed to comply with a duty to
inform and consult a trade union under those
Regulations.
3.34.12 (a) The Group Companies have no agreement or arrangement
with and does not recognise a trade union, works
council, staff association or other body representing
any of their employees; and
(b) The Group Companies are not involved in, and no fact or
circumstance exists which might give rise to, a dispute
with a trade union, works council, staff association or
other body representing any of their employees.
3.34.13 The Group Companies do not have and are not proposing to
introduce a share incentive, share option, profit sharing,
bonus or other incentive scheme for any of their directors,
other officers or employees.
3.34.14 There is and has been no training scheme, arrangement or
proposal in relation to the Group Companies in respect of
which a levy may become payable by the Group Companies under
the Industrial Training Act 1982.
3.35 ACCURACY OF THE AGREEMENT AND THE DISCLOSURE LETTER
The factual information set forth in the Schedules and Appendices to
this Agreement and the specific disclosures set out in the Disclosure
Letter (other than references to any disclosure document not expressly
mentioned in the Warranties) are true and accurate in all material
respects and not misleading in any material respect. The documents
marked with an asterisk on the Schedule of disclosure documentation
are true and complete copies of the original documents. The factual
information in the documents marked with two asterisks on the schedule
of disclosure documentation was at the date of preparation of the
relevant document true and accurate in all material respects and not
misleading in any material respect.
3.36 MATERIAL CHANGES
Since the Last Accounting Date:
3.36.1 there has not been any material adverse change in the
business, Assets, liabilities, results of operations or
financial condition of the Group Companies (other than
changes which have affected other companies carrying on the
same or a substantially similar business which are in the
public domain);
3.36.2 there has not been any declaration, waiver or payment of any
dividend or other distribution on or in respect of the issued
share capital of the Group Companies, nor has there been any
direct or indirect redemption or purchase of any of the
issued share capital of the Group Companies, or any issue of
any such shares;
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3.36.3 there has not been any disposition of or Encumbrance or
agreement to dispose of or to encumber, or any pledge or
grant of a security interest in or agreement to pledge an
interest in, any of the properties or Assets of the Group
Companies (other than in the ordinary course of business), or
any increase or any agreement to increase any indebtedness of
the Group Companies;
3.36.4 there has not been any merger, consolidation or other
business combination involving the Group Companies, or any
agreement to merge, consolidate or combine with any other
Person; nor has there been any acquisition of or agreement to
acquire any share capital, business, property or Assets of
any other Person (other than in the ordinary course of
business);
3.36.5 there has not been any settlement in respect of any actions,
lawsuits or proceedings at law or in equity involving any
payment by the Group Companies (other than debt recovery
actions in the ordinary course) which were material in the
context of the Group Companies as a whole;
3.36.6 there has not been any loan or advance to any officer,
director, employee or shareholder of the Group Companies
except a normal travel advance, a reasonable expense advance
or advances to employees not exceeding their accrued and
unpaid wages or advances otherwise provided for in an
employee's contract of employment;
3.36.7 there has not been any cancellation by the Group Companies,
without payment in full, of any promissory notes, loans, or
other obligations receivable from any officer, director,
employee, shareholder or other Affiliate of the Group
Companies, or any member of their families, or from any
Person in which any officer, director, employee or
shareholder of the Group Companies have any direct or
indirect interest;
3.36.8 there has not been any sale or grant to any party or parties
of any licence, franchise, option or other right of any
nature whatsoever to sell, purchase, distribute, or otherwise
deal in or with the property of the Group Companies, other
than in the ordinary course of business;
3.36.9 there has not been any change in the accounting methods or
practices of the Group Companies;
3.36.10 there has not been any contract or agreement entered into, or
any business transaction engaged in, by the Group Companies
with any Affiliate of the Group Companies;
3.36.11 there has not been any action taken by the Group Companies
other than in the ordinary course of business; and
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3.36.12 except as contemplated in this Agreement, there has not been
any agreement or commitment by the Group Companies, to do or
take any of the actions referred to in clause 3.36.
3.37 The Purchaser undertakes that it shall procure that the Group Companies
shall pursue any remedies and actions that it may have under the terms
of the documentation relating to Fairpine so far as it is reasonably
able.
4. CERTAIN COVENANTS
4.1 USE OF NAMES AND SYMBOLS
4.1.1 Subject to clause 4.1.2 below as soon as reasonably
practicable after Closing AMEC and the Guarantor will, and
will procure that all of their subsidiaries and associated
undertakings, cease to use the names "Fairclough" and
"Faircloughs" and all names similar thereto, in any way
whatsoever, including, without limitation, in connection with
the use of such names as or as part of the name of a company
or business.
4.1.2 The Purchaser acknowledges and consents to the continued use
of the name "Fairclough" in relation to (i) Leonard
Fairclough House, Church Street, Adlington, Lancashire PR7
4LB and (ii) Fairclough House, 160 Hadleigh Road, Ipswich,
Suffolk, IP2 0HJ which are properties owned and/or operated
by AMEC or members of the AMEC Retained Group.
4.1.3 The Guarantor and AMEC hereby grant to each Group Company a
non-exclusive royalty free licence to use the "flying
triangles" symbol in the manner in which and to the extent to
which it is currently used by the Group Companies for a
maximum of 6 months after Closing. By the end of that period
the "flying triangles" mark shall either have been removed or
obliterated from all items on which it appears or
alternatively any such items shall have been destroyed.
4.1.4 The Purchaser shall take all steps necessary to remove, and
shall procure that the Group Companies remove any reference
to any member of the AMEC Retained Group from all business
materials including without limitation letterhead, invoices,
stationery and advertising materials, all company vehicles,
the Real Properties and signs as soon as reasonably
practicable and in any event within 3 months after Closing.
The Purchaser shall, and shall procure that, whenever any
written materials are provided by it or any of the Group
Companies or any of its or their Affiliates to any person any
references to AMEC, the Guarantor, any member of the AMEC
Retained Group and any Affiliate of AMEC shall be concealed
and/or a separate note attached which makes it clear that the
Group Companies have no relationship and are not in any way
connected to any member of the Retained AMEC Group.
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4.1.5 The Purchaser shall indemnify AMEC and the Guarantor (on
their own behalf and as trustee for other members of the AMEC
Retained Group) against any and all proceedings, costs,
liabilities, injury, loss or damage brought against or
suffered by any of them, arising out of the use by either the
Company or any of the Subsidiaries of the AMEC name or the
"flying triangles" logo, whether permitted under this
Agreement or otherwise. If, in the reasonable opinion of the
Guarantor, at any time while such use is permitted under this
Agreement, the products or services provided by the Company
or the Subsidiaries falls below the standards applied at the
date hereof by any member of the AMEC Retained Group or the
Group Companies, all use of the AMEC mark and "flying
triangles" logo shall cease forthwith.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to AMEC to enter into this Agreement and to
consummate the transactions contemplated hereby, the Purchaser
represents and warrants as follows:
5.1 ORGANISATION
The Purchaser is a private limited company duly incorporated under
English law and has been in continuous existence since incorporation.
5.2 NO DEFAULT RESULTING FROM AGREEMENT
Neither the execution and delivery of this Agreement nor the
performance of its terms will result in any breach of the terms and
conditions of, or constitute a default under, the Articles or
Memorandum of the Purchaser or undertaking, judgment, decree or
governmental order or other restriction or obligation to which the
Purchaser is a party or by which Purchaser or any of its properties or
may be bound or affected.
5.3 POWER AND AUTHORITY OF THE PURCHASER
The Purchaser has the right, power and authority to execute and
perform this Agreement and the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the
Purchaser and is a valid and binding obligation of the Purchaser,
enforceable in accordance with its terms.
5.4 OWNERSHIP OF EQUITY
At the time of Closing and of the issue of the Loan Notes the
Purchaser has not and will not have assigned or transferred its
beneficial interest in the Equity, or such interest as it obtains in
the Equity, to CDC or any other Person.
6. CONDITION PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE
6.1 Immediately prior to Closing and as a condition to Closing AMEC and
each of the Company, Fairclough Homes Limited and Viewton Properties
Limited shall file with the appropriate United States Internal Revenue
Service a completed and duly executed Form 8832 and Form SS-4 (or their
equivalents) in order to treat each of the Company,
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Fairclough Homes Limited and Viewton Properties Limited as a branch for
United States federal income tax purposes.
6.2 The Purchaser shall defend at its cost and covenants to indemnify and
hold harmless the Guarantor, AMEC (on their own behalf and as trustee
for other members of the AMEC Retained Group) from any Losses that the
Guarantor, AMEC or any other member of the AMEC Retained Group incurs
as a result of the Guarantor complying with the obligations set out in
clause 6.1.
7. SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
7.1 The representations, warranties, covenants and agreements of the
parties to this Agreement shall survive the making of this Agreement
and the Closing, and remain fully binding and enforceable thereafter,
without the necessity of any other document being delivered at the
Closing. Notwithstanding the foregoing, the Purchaser acknowledges and
agrees that the time periods during which the Purchaser may assert a
warranty claim are as set out in clause 7.2 below.
7.2 Subject to the provisions of clause 11.2 no Warranty Claim will be
enforceable except a Warranty Claim a notice of which is given in
writing by the Purchaser to AMEC setting out such details as are
available of the specific matter in respect of which the Warranty Claim
is made and an estimate of the amount of such claim, by 31 December
2001 except that the limit will be seven years from Closing in relation
to a claim in respect of Tax Warranties in clauses 3.23 and 3.24 and
four years from Closing in respect of the Environmental Warranties in
clause 3.30 and any such Warranty Claim shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to be withdrawn
12 months after the relevant time limit set out above unless legal
proceedings in respect of it (i) have been commenced by being both
issued and served and (ii) are being pursued with reasonable diligence.
8. FURTHER UNDERTAKINGS BY AMEC AND ACKNOWLEDGEMENTS
8.1 Subject to clause 8.4, until the third anniversary of the Closing Date
(the "NON-COMPETE PERIOD"), the Guarantor agrees that it will not
participate in the residential development business including, without
limitation, the design, construction and sale of single family or
multi-family houses as carried on by the Group Companies at the date of
this Agreement (the "BUSINESS"), in the territory in which that
Business is carried on at the date hereof, directly or indirectly,
either through any form of ownership (other than ownership of
securities of a publicly held company of which the Guarantor owns, or
has real or contingent rights to own, less than five (5) per cent of
any class of outstanding securities), or as a principal, agent,
employee, employer, advisor, consultant, lender, partner, or in any
other capacity whatsoever, either for the Guarantor's own benefit or
for the benefit of any other Person.
8.2 Subject to clause 8.4, during the Non-Compete Period, the Guarantor
will not, directly or indirectly, (i) solicit the customers of the
Group Companies, or take any action with
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a view to interfering with the relationships of the Group Companies
with customers, contractors, dealers, distributors, or sources of
supply or (ii) solicit or otherwise induce any of the employees of the
Group Companies to leave the employment of their employer.
8.3
8.3.1 The Guarantor recognises and acknowledges that the Purchaser
will suffer irreparable harm if the Guarantor violates any of
the terms or provisions of this Agreement. Accordingly, the
Guarantor agrees that Purchaser shall be entitled to an
injunction restraining the Guarantor from competing with the
Group Companies in violation of this Agreement, which relief
shall be in addition to, and not in lieu of, the Purchaser's
right to seek all other remedies which the Purchaser may have
at law and in equity.
8.3.2 Subject to clause 8.3.3, if the covenants contained in this
clause 8 should be held by any court to be void or
unenforceable in any particular area or jurisdiction, then
the parties hereto shall consider this Agreement to be
amended and modified so as to eliminate therefrom that
particular area or jurisdiction as to which the covenants are
held to be void or otherwise unenforceable, and as to all
other areas and jurisdictions covered by this Agreement, the
terms and provisions hereof shall remain in full force and
effect as originally written.
8.3.3 If the covenants contained in this Agreement should be held
by any court to be effective in any particular area or
jurisdiction only if said covenants are modified to limit
their duration, geography (within that jurisdiction) or scope
of activity, then the parties hereto shall consider such
covenants to be amended and modified with respect to that
particular area or jurisdiction so as to comply with the
order of any court, and as to all other matters, the
covenants contained herein shall remain in full force and
effect as originally written.
8.3.4 The Guarantor and the Purchaser agree that the covenants set
forth herein are appropriate and reasonable when considered
in light of the nature and extent of the business conducted
by the Group Companies. The Guarantor acknowledges that the
Purchaser has a legitimate interest in protecting the
business of the Group Companies, the restrictive covenants
set forth above are not oppressive to the Guarantor, and are
reasonable in the limitations as to time, geographical area
and activity.
8.4 The provisions of this clause 8 shall not apply to any of the
following:-
8.4.1 the shareholding by any member of the AMEC Retained Group in
Annington Homes Limited or Ician Developments Limited; or
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8.4.2 any developments which involve varied uses of land (such as
commercial, industrial, leisure, distribution or residential
uses) provided that the development of speculative
residential units does not constitute a substantial part of
any such development; or
8.4.3 the involvement of any member of the AMEC Retained Group in
the provision of consultancy services for or the design or
construction of residential developments which are not
speculative residential developments of the AMEC Retained
Group; or
8.4.4 the development of residential units pursuant to or in
connection with any private finance initiative undertaken by
any member of the AMEC Retained Group or in which any such
member is interested or is involved; or
8.4.5 subject to the provisions of clause 8.5 below the acquisition
by any member of the AMEC Retained Group of a business or the
shares in a company which in either case has a speculative
residential development business as an ancillary business; or
8.4.6 the development of any Assets (as defined in the
Reorganisation Agreement) whether for the development of
speculative residential units or otherwise; or
8.4.7 the acquisition of any land or property and the application
for planning permission in respect of any such land or
property where any member of the AMEC Retained Group is not
to develop such land or property; or
8.4.8 the development of any land which has been acquired by AMEC
(or any member of the AMEC Retained Group) pursuant to clause
2.7.
8.5 If the Guarantor acquires a business or the shares in a company which
in either case has a speculative residential development business as an
ancillary business, the Guarantor shall as soon as reasonably practical
give the Purchaser written notice of such acquisition and shall
negotiate in good faith with the Purchaser with a view to the Purchaser
acquiring the speculative residential development business acquired by
the Guarantor (the "SPECULATIVE RESIDENTIAL BUSINESS"). If the parties
have been unable to agree the terms on which the Purchaser shall
acquire the Speculative Residential Business within 90 Business Days of
the Guarantor acquiring the Speculative Residential Business, the
Guarantor shall use reasonable endeavours to sell the Speculative
Residential Business to a third party within six months of the
negotiations with the Purchaser ending providing that any such sale is
not contrary to the Guarantor's obligations to maximise shareholder
value.
8.6 The Guarantor agrees that all reference to itself in this clause 8 will
be deemed to include all of its Affiliates, and guarantees that they
will all comply with the provisions of this clause 8. For the purposes
of clauses 8.1 to 8.5, "speculative residential units" are units which
are to be sold to the public on a private basis and which have not been
sold or reserved at the time of commencement of the development of the
relevant land.
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8.7 AMEC agrees to make a payment (the "PRINCIPAL PAYMENT") to the
Purchaser as agent for the Company of an amount equivalent to the final
payment which would have been due under Rule 5.7 of the 1998 AMEC
Profit Related Pay Scheme (the "SCHEME") to employees of Group
Companies, had their employing companies not been transferred out of
the Employment Unit (as defined in Rule 1.1 of the Scheme Rules) prior
to 6 April 1999, together with a further payment of an amount
representing a gross-up at the rate of 23% of that part of the
Principal Payment that would have otherwise been received tax-free by
employees of the Group Companies. The Purchaser undertakes to procure
that Fairclough Homes Limited utilises the Principal Payment for the
purposes set out in this clause.
8.8 The Purchaser acknowledges that the benefit of the litigation relating
to a dispute between Fairclough Homes Limited and Southend United
Football Club relating to a development agreement dated 13 July 1987
(the "SOUTHEND UNITED LITIGATION") has been transferred by the Company
and Fairclough Homes Limited to AMEC Developments Limited pursuant to
an agreement dated 15 April 1999. The Purchaser acknowledges that
pursuant to the terms of that agreement, AMEC and their accountants and
professional advisers have the right to investigate the matters or
circumstances alleged to give rise to the Southend United Litigation
and have the benefit of any awards and that:-
8.8.1 Without AMEC's written consent no admission of liability
should be made by or on behalf of the Purchaser or any Group
Company and no significant action shall be taken by the
Purchaser or any Group Company except as is necessary to
avoid a default judgment or other adverse ruling and a claim
shall not be compromised, disposed of or settled in relation
to the Southend United Litigation;
8.8.2 AMEC shall be entitled at its own expense in its absolute
discretion to take such action as it shall deem necessary to
avoid, dispute, deny, defend, resist, appeal, compromise or
contest such Southend United Litigation (including, without
limitation, making counter-claims or other claims against
third parties) in the name of and on behalf of the Purchaser
or the Group Company concerned and have the conduct of any
related proceedings, negotiations or appeals; and
8.8.3 the Purchaser will give and procure that the relevant Group
Company gives, subject to their being paid all reasonable
costs and expenses, all such information and assistance,
including access to premises and personnel and the right to
examine and copy or photograph any assets, accounts,
documents and records, for the purpose of avoiding,
disputing, denying, defending, resisting, appealing,
compromising or contesting such Southend United Litigation as
AMEC or its professional advisers reasonably request.
8.9 AMEC acknowledges that the Group Companies are interested in developing
two sites at Garforth and Hulme which are currently owned or held under
option by members of
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the AMEC Retained Group and AMEC shall or shall procure that the
relevant members of the AMEC Retained Group shall continue in good
faith negotiations for the sale and purchase (or other relevant
contractual arrangement) that would enable the Group Companies to
develop such sites. If AMEC or the relevant member of the AMEC Retained
Group receives a bona fide offer from a third party (the "OFFER") in
relation to either such site it shall notify the Group Companies who
shall have the right to match the Offer within 5 Business Days of
receiving notice of the Offer and if the Group Companies match the
Offer, they shall have 45 Business Days to conclude and exchange a
contract (or other relevant contractual arrangement) with the relevant
member of the AMEC Retained Group. If the Group Companies decline to
match the Offer in accordance with this clause but the Offer is not
completed, the Group Companies shall have the right to match any
subsequent Offer or Offers. The parties acknowledge that this clause
does not constitute a binding agreement for sale and does not create
any interest in either site in favour of the Group Companies or the
Purchaser.
9. COMPLIANCE WITH THE REORGANISATION
Subject to clause 10.1 the Purchaser shall with effect from Closing
procure that, to the extent permitted by law, the Group Companies
comply with their express obligations under the Reorganisation
Agreement. The Vendor shall with effect from Closing procure that, to
the extent permitted by law, the relevant members of the AMEC Retained
Group comply with their express obligations under the Reorganisation
Agreement.
10. INDEMNIFICATION
10.1 INDEMNIFICATION BY AMEC
Subject to clause 10.2 AMEC shall defend at its cost, and covenants to
indemnify and hold harmless the Purchaser and its Affiliates
(including the Group Companies after the Closing Date) from any and
all liabilities (including without limitation, Tax Liabilities),
obligations, claims (including third party claims), damages, losses,
fines, penalties, interest, costs and expenses (including all court
costs and reasonable attorneys' fees) (individually a "LOSS" and
collectively, "LOSSES") that the Purchaser or any such Person suffers
or incurs as a result of or arising out of or in connection with:
10.1.1 actions or events occurring prior to the Closing Date
relating to the indictment issued in St. Albans Crown Court
against Fairclough Homes Limited for failure to discharge its
duty under section 3(1) Health and Safety at Work Etc. Act
1974 and in relation to Case No. HA700997 between the
Plaintiff Daniel George Brede, the first defendant and
Fairclough Homes Limited as Second defendant;
10.1.2 the implementation of the Reorganisation or any part of it or
any step taken in respect of it;
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10.1.3 any obligation of any member of the AMEC Retained Group
existing at the date of this Agreement to make any payment
(including all legal and/or costs or expenses) to Richard
Fraser in relation to change of control of any of the Group
Companies;
10.1.4 the Southend United Litigation referred to in clause 8.8
above;
10.1.5 the breach of restrictive covenants affecting the Real
Property known as Highlands Village, Worlds End Lane and for
any payments due under a Section 106 Agreement affecting that
Property;
10.1.6 the dispute regarding the wall demolished by a Group Company
at Highlands Village;
10.1.7 any application to a court or other tribunal by an aggrieved
person under section 288 of the Town and Country Planning Act
1990 by any person for judicial review of the planning
permission issued on 8 March 1999 in respect of the property
known as the Dick Sheppard School, Tulse Hill, London SW2
which results in such planning permission being revoked or
withdrawn;
10.1.8 the Company being unable to establish title to the whole of
the land required for the development at Cedars, Radlett
Road, Shenley in the event that the Company is unable to
enter into a deed of rectification with Shenley Park Trust;
10.1.9 the ownership by any Group Company of shares of Carlinian
Limited or Mutanderis (23) Limited;
10.1.10 the charge affecting the Real Property known as Swallowfield,
Oaktree Road, Knaphill;
individually and collectively, a "COVERED EVENT")
10.2 AMEC shall not be liable under clause 10.1 for any Losses to the extent
that the same would not have occurred but for:-
10.2.1 any voluntary act or omission by the Purchaser and/or the
Group Companies after Closing;
10.2.2 fraud or wilful default on the part of any Group Company or
its officers, employees or agents after the Closing Date; or
10.2.3 any admission of liability or voluntary disclosure of
information to a third party or regulatory authority by the
Purchaser, save where AMEC has previously proposed or
approved this course of action in writing.
10.3 The Purchaser acknowledges that it and its Affiliates shall not be
entitled to recover twice in respect of any claim for indemnity under
clause 10.1 and under the Tax Deed to the extent that claim has been
satisfied. The Purchaser further acknowledges that to
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the extent that a claim can be made under the Tax Deed in respect of
Tax Liabilities that it will pursue such claim under the Tax Deed
before pursuing a claim in respect of the same under clause 10.1.
10.4 INDEMNIFICATION BY THE PURCHASER
10.4.1 The Purchaser shall defend at its cost and covenants to
indemnify and hold harmless AMEC (on its behalf and as
trustee for other members of the AMEC Retained Group), from
any and all Losses that AMEC or any member of the AMEC
Retained Group incurs as a result of the guarantee or
indemnification by AMEC or any relevant member of the AMEC
Retained Group of any of the obligations of any of the Group
Companies under any of the following:
(a) performance bonds and promissory notes outstanding at
the Closing Date and issued by The Royal Bank of
Scotland plc;
(b) bonds outstanding at the Closing Date and entered into
by Aegon Insurance Company (UK) Limited;
(c) performance guarantee bonds outstanding at the Closing
Date and issued by Zurich GSG Limited (formerly General
Surety and Guarantee Company Limited);
(d) bonds outstanding at the Closing Date and issued by
Barclays Bank PLC;
(e) bonds outstanding at the Closing Date (and any bonds
issued after the Closing Date which are issued with the
benefit of the indemnity of AMEC) and issued by NHBC;
(f) bonds outstanding at the Closing Date and issued by
Royal & Sun Alliance/Chubb;
(g) bonds outstanding at the Closing Date and issued by
Midland Bank plc;
(h) bonds outstanding at the Closing Date and issued by
Hermes Kreditversicherungs AG; and
(i) bonds outstanding at the Closing Date and issued by
National Westminster Bank PLC.
10.4.2 The Purchaser shall use all reasonable endeavours to provide,
or procure the provision of, such alternative security and/or
take, or procure the taking of, any such steps as are
required to effect the release of AMEC and any members of the
AMEC Retained Group from all liabilities and obligations of
whatever nature in relation to, or arising in connection
with, the instruments issued by The Royal Bank of Scotland
plc and National Westminster Bank PLC and referred to in
clauses 10.4.1(a) and (i) above within 30 Business Days of
the Closing Date.
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10.5 THIRD-PARTY CLAIMS
Other than Tax claims which are addressed in the Tax Deed, if any
claim under clause 10 for indemnification by the party(ies) seeking
indemnification or in respect of any Warranty Claim (in either case
the "INDEMNITEE") arises out of a third-party claim (i.e., out of a
claim made by or an action of a person or entity other than the
Indemnitee), the party(ies) from whom the Indemnitee seeks
indemnification or against whom the Indemnitee makes a Warranty Claim
(the "INDEMNITOR") may, by written notice to the Indemnitee, undertake
to conduct the defence thereof and to take all other steps or
proceedings to defeat or compromise any such action or claim,
including the employment of lawyers reasonably satisfactory to the
Indemnitee; provided that Indemnitor shall fully consider and have due
regard to the advice of the Indemnitee as to the defence or compromise
of such actions and claims, and the impact on the business, assets or
standing of the Indemnitee of any proposed course of action. The
Indemnitee shall provide all reasonable co-operation in connection
with such proceedings. Lawyer and auditor costs and expenses and court
costs and fees of all proceedings with respect to any such action or
claim shall be borne by the Indemnitor. If any such claim is made
hereunder and Indemnitor does not elect to undertake the defence
thereof by written notice to the Indemnitee, then the Indemnitee shall
be entitled to control such proceedings and any reasonable costs and
expenses incurred by the Indemnitee in controlling such proceedings
shall be taken into account when assessing any liability of the
Indemnitor. If the Indemnitor shall assume the defence of such claim,
it shall not settle such claim unless such settlement includes as an
unconditional term thereof the giving by the claimant or the plaintiff
of a release of the Indemnitee, reasonably satisfactory to the
Indemnitee, from all liability with respect to such claim and the
Indemnitee shall have no right of action pursuant to this clause 10
against the Indemnitor.
10.6 NOTICE
Within twenty (20) days after notice of any action, receipt of any
claim in writing or similar form of actual notice of any claim as to
which it asserts a right to indemnification, the Indemnitee shall
notify the Indemnitor. The failure of the Indemnitee to give the
notification to the Indemnitor contemplated above in this clause shall
not relieve Indemnitor from any liability or obligation that it may
have pursuant to this Agreement unless the failure to give such notice
within such time shall have been materially damaging or prejudicial to
the Indemnitor, and in no event shall the failure to give such
notification relieve the Indemnitor from any liability it may have
other than pursuant to this Agreement.
11. RIGHT OF SET OFF
11.1 LIQUIDATED LOSSES; SET OFF
11.1.1 Subject to AMEC's right to object to any set off or
recoupment of any Loss which has become a Liquidated Loss,
the Purchaser shall be entitled to set off
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or recoup any Liquidated Loss that has been actually incurred
by or imposed upon the Purchaser against the Set Off Loan Note
(a "SET OFF").
11.1.2 Prior to or concurrently with each exercise by the Purchaser
of its right of Set Off, the Purchaser shall deliver a
written notice to AMEC (the "SET OFF NOTICE"), which notice
shall set forth the amount of the Liquidated Loss, together
with a reasonably detailed statement of the circumstances
under which such Liquidated Loss was incurred and the total
of all Liquidated Losses that have been Set Off by the
Purchaser up to the date of the Set Off Notice.
11.1.3 The Purchaser acknowledges that other than where the
provisions of clause 11.1.4 below apply, the Purchaser shall
not be entitled to a Set Off to the extent that the amount of
any loss is or has been reflected in a diminution of the
Operating Profits or a provision or reserve has been made by
the Purchaser or the Group Company (and not disputed by
AMEC).
11.1.4 If at the time the Purchaser is entitled to a Set Off the
Purchaser has injected equity capital into the Group
Companies or any of them pursuant to the Shareholders'
Agreement, and accordingly the Purchaser is entitled to a
proportionate share of the net after tax earnings of the
Group Companies, then such Set Off will be applied against
the Set Off Loan Note as opposed to reducing the Operating
Profits.
11.2 UNLIQUIDATED LOSSES; SET OFF RESERVES
11.2.1 ESTABLISHMENT OF SET OFF RESERVES
Subject to AMEC's right to object to any set off or recoupment
of any Loss as provided below, at any time prior to the date
of redemption of the Set Off Loan Note (the "REDEMPTION
DATE"), if and to the extent that the Purchaser reasonably
determines that it has a bona fide claim under the Warranties
that has not yet become a Liquidated Loss (an "UNLIQUIDATED
LOSS"), the Purchaser shall be entitled to establish a reserve
equivalent to the amount it reasonably considers to be a
genuine estimate of the amount of the loss (a "SET OFF
RESERVE") against the Set Off Loan Note in respect of such
Unliquidated Loss, provided that AMEC receives from the
Purchaser the Set Off Reserve Notice 10 Business Days prior to
the Redemption Date. The Purchaser shall take into
consideration the availability of insurance coverage for any
Unliquidated Loss in establishing any Set Off Reserve.
11.2.2 SET OFF RESERVE NOTICE
10 Business Days prior to the establishment of a Set Off
Reserve, the Purchaser shall deliver a written notice to AMEC
(the "SET OFF RESERVE NOTICE"), which notice shall set forth
the amount of the Unliquidated Loss, together with a
reasonably detailed statement of the basis for the Purchaser's
determination that such Unliquidated Loss is reasonably likely
to be incurred
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and the total of all Unliquidated Losses that have been
reserved by the Purchaser to the date of the Set Off Reserve
Notice.
11.2.3 SUSPENSION OF OBLIGATIONS
The obligation of the Purchaser to pay the Set Off Loan Note
to AMEC, as provided in the Set Off Loan Note Instrument,
shall be suspended (but not the accrual of interest payable
pursuant to clause 11.2.4) to the extent of the aggregate
amount of Set Off Reserves not settled pursuant to this clause
11.2 at the time of such payment.
11.2.4 SETTLEMENT OF SET OFF RESERVES
If at any time it is determined (whether by agreement between
the parties or pursuant to the dispute resolution procedures
set forth in clause 11.4 or as a result of a judicial
determination of the Final Loss Amount as defined below) that
any Set Off Reserve exceeds the aggregate amount of the Losses
ultimately incurred by or imposed upon the Purchaser as a
result of or based upon the events or conditions to which the
Set Off Reserve relates (or that the claim to which the Set
Off Reserve relates is not a valid claim) (the "FINAL LOSS
AMOUNT"), the amount of such Set Off Reserve in excess of such
Final Loss Amount or, as appropriate the entire Set Off
Reserve, shall cease to be suspended and shall be paid within
2 Business Days under and in accordance with the terms of the
Set Off Loan Note together with interest at the rate of 1%
above the base rate of National Westminster Bank PLC from 30
March 2001 until the date of payment.
If and to the extent that at any time an Unliquidated Loss (in
respect of which a Set Off Reserve has been established)
becomes a Liquidated Loss which has not otherwise been
satisfied (the "FINAL LOSS AMOUNT"), the nominal value of the
Set Off Loan Note equivalent to the Final Loss Amount shall be
paid by the Purchaser immediately upon such Unliquidated Loss
becoming a Liquidated Loss but the Purchaser shall be deemed
to be irrevocably and conditionally instructed by AMEC or the
relevant noteholder (if appropriate) to apply the proceeds of
such repayment in payment of the Liquidated Loss in full and
final settlement of the Liquidated Loss and so that AMEC shall
have no further liability to the Purchaser in respect of the
amount of Set Off Reserve relating to such Liquidated Loss
but, without prejudice to the Purchaser's right to recover the
balance of such Liquidated Loss from AMEC and the Purchaser
shall have no further liability to any noteholder in relation
to the Set Off Loan Note subject to such repayment.
If and to the extent any Set Off Reserve has been established
and a provision is subsequently made in the accounts prepared
pursuant to clause 5 of the Shareholders' Agreement, then the
amount of such Set Off Reserve shall be reduced to the extent
that the preferential dividend paid to the holders of the "B"
Shares in the Company on or around 30 June 2001 is reduced by
the
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inclusion of such provision and the relevant amount shall
cease to be suspended and shall be paid within 2 Business Days
of the date on which the Preferential Dividend is paid
together with interest at a rate of 1% above the base rate of
National Westminster Bank PLC from 30 March 2001 until the
date of payment.
11.2.5 TAX
(a) For the purposes of clause 11 "Loss" or "Losses" shall
not include any amount of a claim in respect of
Taxation.
11.3 OBJECTION PROCEDURE
If AMEC disputes any exercise by the Purchaser of its right to make a
Set Off or a Set Off Reserve, then AMEC shall deliver a written notice
to Purchaser ("OBJECTION NOTICE") within five (5) Business Days
following receipt of a Set Off Reserve Notice. The Objection Notice
shall state the portion of the applicable Loss to which AMEC objects
and a reasonably detailed description of the basis of such objection.
AMEC and the Purchaser shall negotiate in good faith to resolve any
dispute with respect to the matters set forth in the Objection Notice
for a period of twenty (20) days following receipt of such Objection
Notice by the Purchaser.
11.4 DETERMINATION BY AN EXPERT
11.4.1 If AMEC and the Purchaser are not able to agree during the
dispute resolution period provided above:
(a) whether or not there are reasonable grounds for making a
claim under the Warranties; and/or
(b) whether or not the amount of the claim under the
Warranties represents a reasonable estimate of the loss
and/or liability which is likely to be awarded in
respect of such claim.
((a) and (b) together being the "CLAIM CRITERIA"), either of
them may by written request to the other specify a counsel of
at least 10 years' standing (or other appropriate person) whom
they wish to opine on the Claim Criteria. If they cannot agree
on the counsel or other appropriate person within 3 Business
Days of the written request then either of them may at any
time thereafter apply to the President of the Bar Counsil to
nominate a counsel of at least 10 years' standing to opine on
the Claim Criteria. The counsel or other appropriate person so
agreed or appointed (who shall act as an expert and not as an
arbitrator and whose costs shall be borne as he shall direct
and whose determination shall (subject to clause 11.4.2) be
final and binding on the Purchaser and AMEC) shall be asked to
opine on the Claim Criteria.
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11.4.2 Any Claim Criteria determined in accordance with this clause
11.4 shall be relevant solely for the purpose of determining
whether a claim under the Warranties constitutes an
Unliquidated Loss and if so what the appropriate amount of
such loss is and shall have no other effect whatsoever, and
in particular shall not operate to determine or settle any
actual liability or the quantum thereof on account of any
claim under the Warranties.
11.4.3 If the amount of the Unliquidated Loss determined by the
expert is less than any Set Off Reserve already established,
the amount of such difference shall cease to be suspended and
shall be paid to AMEC within two Business Days together with
interest at the rate of 1% above the base rate of National
Westminster Bank PLC from 30 March 2001 until the date of
payment.
11.5 OBLIGATION TO RESOLVE WARRANTY CLAIMS
To the extent that any Set Off Reserve has been established in
relation to any Unliquidated Loss, the Purchaser shall use reasonable
endeavours to pursue the claim in respect of such Unliquidated Loss
under the Warranties to which such Unliquidated Loss applies with a
view to ensuring that the Set off Reserve is reduced as quickly as
possible.
11.6 BASKET AND MAXIMUM RECOVERY
Notwithstanding anything in this Agreement to the contrary, except for
Warranty Claims based on fraud or wilful default, the Purchaser shall
not have any rights of set off or recoupment or be entitled to recover
in respect of a Warranty Claim unless:
11.6.1 the amount that would otherwise be recoverable from AMEC (but
for clause 11.6.1.) in respect of the following Warranty
Claims exceeds:
(a) in the case of a claim under clause 3.17.16 ("EXCHANGE
PROPERTY WARRANTY") -L.0;
(b) in the case of a claim under clause 3.20 ("CONSTRUCTION
WARRANTY") -L.15,000;
(c) in the case of a claim under clause 3.22 ("LITIGATION
WARRANTY") -L.5,000;
(d) in the case of a claim under clauses 3.23 and 3.24 ("TAX
WARRANTIES") -L.0; and
(e) in the case of any other claim under clause 3 ("GENERAL
WARRANTIES") -L.50,000.
each being a category of Warranty Claim; and
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11.6.2 until the amount that would otherwise be recoverable from
AMEC (but for this paragraph 11.6.2) in respect of the
following Warranty Claims (when aggregated with any other
amount or amounts recoverable in respect of the same category
of Warranty Claim, excluding any amounts in respect of a
relevant Warranty Claim for which AMEC has no liability
because of paragraph 11.6.1) exceeds:
(a) in the case of an Exchange Property Warranty -L.0;
(b) in the case of a Construction Warranty -L.250,000;
(c) in the case of a Litigation Warranty -L.5,000;
(d) in the case of Tax Warranties -L.0; and
(e) in the case of any other General Warranties -L.750,000.
and in the event that the aggregated amount exceeds the
relevant amount specified in paragraphs (a) to (e) above AMEC
will be liable for the whole amount of such claim.
11.6.3 Notwithstanding anything in this Agreement to the contrary,
except for claims based on fraud or wilful default, the
maximum amount of all claims which may be recovered by the
Purchaser from AMEC under the Warranties and the Tax Deed
will not exceed in aggregate one half of the Purchase Price.
11.6.4 For the purposes of clause 11.6.2(e) General Warranties any
amounts arising pursuant to claims under clause 11.6.2(b)
Construction Warranty shall be aggregated with any other
claims falling under clause 11.6.2(e).
11.7 CONTINGENT LIABILITIES
The Purchaser shall not be entitled to any Warranty Claim in respect
of any liability which is contingent unless and until such contingent
liability becomes an actual liability and is due and payable save that
this clause shall not operate to avoid a claim made in respect of a
contingent liability within the periods specified in clause 7.2 to the
extent that the amount of such claim is quantified within 12 months of
the date or period specified in clause 7.2.
11.8 LIMITATION ON WARRANTY CLAIMS DUE TO INSURANCE COVERAGE
The Purchaser shall not be entitled to any Warranty Claim to the
extent of any insurance proceeds actually recovered in respect of such
claims and any indemnity, contribution or similar payment paid to the
Purchaser from any third party with respect thereto. The Purchaser
undertakes to pursue any claim it may have against its insurers in
respect of a matter that constitutes a warranty claim.
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11.9 PROVISIONS IN THE FINANCIAL STATEMENTS
11.9.1 The Purchaser shall not have any rights of set off pursuant
to clause 11 or a Warranty Claim if and to the extent that
proper provision or reserve is made for the matter giving
rise to the claim in the Financial Statements (and not
subsequently released) or in the Completion Accounts or in
the accounts prepared pursuant to clause 5 of the
Shareholders Agreement or any sum is received by any Group
Company which has been written off as irrecoverable in any
such statements or accounts.
11.9.2 The Purchaser shall not have any rights of set off or a
Warranty Claim in respect of any matter, act, omission or
circumstance (or any combination thereof) (including, for the
avoidance of doubt, the aggravation of a matter or
circumstance) which does or may constitute a Warranty Claim
to the extent that the same would not have occurred but for:
(a) Voluntary Acts of the Purchaser
any voluntary act, omission or transaction of the
Purchaser or any of its Affiliates or any of the Group
Companies or their respective directors after Closing
which shall not include any non-negligent investigative
or other remediation work in accordance with sound
environmental practice reasonably carried out by any
such person to prevent or mitigate an Environmental
Claim; or
(b) Changes in Legislation
the passing of, or any change in, after the date of this
Agreement, any law, rule, regulation or published
administrative practice of any Government Authority
including (without prejudice to the generality of the
foregoing) any increase in the rates of Taxation or any
imposition of Taxation or any withdrawal of relief from
Taxation not actually (or prospectively) in effect at
the date of this Agreement (except in relation to Part
IIA of the Environmental Protection Act 1990 as
incorporated into the definition of Environmental Laws);
or
(c) Accounting and Taxation Charges
any change in accounting or Taxation policy, bases or
practice of the Purchaser or any of the Group Companies
introduced or having effect after Closing (other than
any change required to be made to comply with GAAP).
11.10 MITIGATION OF LOSS
The Purchaser shall procure that all reasonable steps are taken and
all reasonable assistance is given to avoid or mitigate any losses
which in the absence of mitigation might give rise to a liability in
respect of a Warranty Claim or under the Tax Deed
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including, for the avoidance of doubt, pursuing any claims which any of
the Group Companies may have against third parties which are likely to
be recovered following reasonable efforts.
11.11 DOUBLE CLAIMS
The Purchaser shall not be entitled to recover from AMEC in respect of
a Warranty Claim and the Tax Deed more than once in respect of the
same damage suffered, and accordingly AMEC shall not be liable in
respect of a Warranty Claim if and to the extent that the losses are
or have been included in a claim under the Tax Deed which has been
satisfied nor shall AMEC be liable in respect of any claim under the
Tax Deed if and to the extent that the losses are or have been
included in a claim for breach of the Agreement which has been
satisfied.
11.12 TAX
In calculating the liability of AMEC in respect of any Warranty Claim,
there shall be taken into account the net present value of the amount
(if any) by which any Taxation for which the Purchaser or any Group
Company would otherwise have been accountable or liable to be assessed
is actually reduced or extinguished as a result of the matter giving
rise to the Warranty Claim.
11.13 PRIOR RECEIPT
If AMEC pays an amount in discharge of any claim under this Agreement
and the Purchaser or any Group Company subsequently recovers (whether
by payment, discount, credit, relief or otherwise) from a third party
a sum which is referable to the subject matter of the claim and which
would not otherwise have been received by the Purchaser, the Purchaser
shall pay, or shall procure that the relevant Group Company pays, to
AMEC an amount equal to (i) the sum recovered from the third party
(net of any Tax on that sum) less any reasonable costs and expenses
incurred in obtaining such recovery or (ii) if less, the amount
previously paid by AMEC to the Purchaser.
12. PAYMENTS FREE OF WITHHOLDING, ETC.
12.1 All payments made by any party to this Agreement (but for the avoidance
of doubt not pursuant to the Loan Notes) to another, or amounts liable
to be set-off, under this Agreement shall be made gross, without
deduction or withholding of any kind other than any deduction or
withholding required by law.
12.2 If the paying party makes a deduction or withholding required by law
from a payment, or amount liable to be set-off, under this Agreement,
the sum due from the paying party, or the amount liable to be set-off,
shall be increased to the extent necessary to ensure that, after the
making of any deduction or withholding, the recipient of the payment
receives, or becomes entitled to set-off, as the case may be, a sum
equal to the sum it would have received or been entitled to set-off had
no deduction or withholding been made. Provided that this clause 12.2
will not apply to any deduction or withholding to the extent that:
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12.2.1 the deduction or withholding arises solely as a result of the
Purchaser being resident otherwise than in the United
Kingdom; or
12.2.2 the deduction or withholding arises solely as a result of an
assignment of this Agreement under clause 13.4 or otherwise
in which case the non assigning party will only be liable to
pay additional amounts (or the amount liable to be set-off
will only be increased) under this clause 12.2 to the extent
that such amounts (or such adjustment to the amount of
set-off) would have been due to the original assignor.
12.3 If a payment, (other than for the avoidance of doubt, pursuant to the
Loan Notes) or amount liable to be set-off, under this Agreement will
be or has been subject to Tax, the paying party on demand from the
party making the claim (the "CLAIMANT") shall pay to the Claimant the
amount (after taking into account Tax payable in respect of the amount)
that will ensure that the Claimant receives and retains, or, as
appropriate, is entitled to a net sum equal to the sum it would have
received, or been entitled to set-off, had the payment not been subject
to Tax. Provided that this clause 12.3 will not apply to any Tax to the
extent that:
12.3.1 the Tax arises solely as a result of the Purchaser being
resident otherwise than in the United Kingdom; or
12.3.2 the Tax arises solely as a result of an assignment of this
Agreement under clause 13.4 or otherwise in which case the
non assigning party will only be liable to pay additional
amounts (or the amount liable to be Set Off will only be
increased) under this clause 12.3 to the extent that such
amounts (or such adjustment to the amount of Set Off) would
have been due to the original assignor.
12.4 To the extent that the Claimant is satisfied (acting in good faith) it
can so do without prejudice to the retention of any credit refund or
similar benefit it receives, if the Claimant receives a credit for a
refund of any Tax by reason of any deduction or withholding for or on
account of Tax in respect of payments made under this Agreement it
shall reimburse to the paying party such part of such additional
amounts paid to it pursuant to clause 12.2 above as the Claimant
certifies to the paying party will leave it (after such reimbursement)
in no better and in no worse position than it would have been if the
paying party had not been required to make such deduction or
withholding. The Claimant shall use reasonable endeavours to obtain any
available credit or refund and shall where possible claim credit or
relief from or against its corporate profits or similar tax liability
in respect of the amount of such withholding or deduction in priority
to any other reliefs or credits available to it.
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13. MISCELLANEOUS PROVISIONS
13.1 NOTICES
Any notice or other communication required, permitted or contemplated
by this Agreement ("Notice") must be in writing and delivered to the
other party by registered or certified mail, or delivered by facsimile
mail with the original counterpart thereof being sent on the same
Business Day or on the Business Day immediately following the date of
facsimile transmission. Such Notice shall be deemed received three
Business Days after a registered or certified letter containing such
Notice, properly addressed with the postage prepaid, is posted or on
the same day if transmitted by facsimile mail. Notice shall go to the
parties at the following addresses:
If to AMEC or the Guarantor : The Company Secretary
AMEC p.l.c.
Sandiway House
Hartford, Northwich
Cheshire
England CW8 2YA
Fax: 01606 301 204
If to the Purchaser: Stewart A Baseley
Centex Homes International Limited
Goldvale House
Church Street West
Woking GU21 1DJ
Fax: 01483 775 909
13.2 ENTIRE AGREEMENT
This Agreement (including the Schedules hereto and the certificates,
opinions and documents delivered in accordance with the provisions
hereof) constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior written
or oral agreements and understandings and all contemporaneous oral
agreements and understandings among the parties or any of them with
respect to the subject matter hereof, including the Heads of Terms
signed on 15 February 1999.
13.2.1 The Purchaser acknowledges that it has not been induced to
enter into this Agreement by, and so far as is permitted by
law and except in the case of fraud or wilful default hereby
waives any remedy in respect of, any warranties,
representations and undertakings not incorporated into this
Agreement.
13.2.2 So far as is permitted by law and except in the case of fraud
or wilful default the parties agree and acknowledge that the
only right and remedy which shall
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be available to the Purchaser in connection with or arising
out of or related to any of the statements contained in this
Agreement shall be damages in contract for breach of this
Agreement and not rescission of this Agreement, nor damages in
tort or under statute (whether under the Misrepresentation Act
1967 or otherwise), nor any other remedy. AMEC acknowledges
and confirms that any claim for damages in contract for breach
of this Agreement shall take into account the amount of the
premium paid for the Equity.
13.2.3 Each party to this Agreement confirms it has received
independent legal advice relating to all the matters provided
for in this Agreement, including the provisions of this
clause, and agrees having considered the terms of this clause
and the Agreement as a whole, that the provisions of this
clause are fair and reasonable.
13.2.4 In this clause "this Agreement" includes the Disclosure
Letter and the documents in the agreed form.
13.3 COUNTERPART ORIGINALS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute
one and the same instrument.
13.4 BINDING EFFECT; ASSIGNMENT
This Agreement shall be binding upon and shall inure to the benefit of
the Purchaser and AMEC and their respective successors and assigns,
provided, however, this Agreement may not be assigned by either party
without the written consent of the other party hereto except that
either party may without consent assign to an Affiliate, but no such
assignment shall relieve the transferring party of any obligations it
has or may have under this Agreement.
13.5 FURTHER ASSURANCES
13.5.1 After Closing, each party, at the request of any other party,
shall take such further actions and execute, deliver and
acknowledge where necessary from time to time such other and
further things as may be reasonably necessary to complete the
transactions contemplated by this Agreement, including
furnishing assistance in the prosecution or defence of any
lawsuit, action or claim and acting as witnesses therein.
13.5.2 Subject to clause 13.5.5 AMEC will provide such co-operation
and assistance as it is reasonably able to provide to the
Group Companies in relation to any dispute between the
shareholders of Fairpine Limited. The Purchaser shall procure
that the Group Companies use reasonable endeavours to pursue
any claims that they may have in relation to Fairpine
Limited.
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13.5.3 Subject to clause 13.5.5 AMEC will provide such co-operation
and assistance as it is reasonably able to provide to the
Group Companies in providing, upon request, copies of and
information about the Policies and the Historic Policies and
documentation relating thereto.
13.5.4 Subject to clause 13.5.5 AMEC will also provide such
co-operation and assistance as it is reasonably able to
provide, upon request, in relation to any claim or inquiry
which any of the Group Companies seek to make on or under any
of the Policies or the Historic Policies.
13.5.5 AMEC shall not be required to provide any information or
documentation pursuant to clauses 13.5.2 to 13.5.4 to the
extent that it is not permitted by law or by any regulatory
authority or the relevant information or documentation is
protected by legal privilege which is not expressly waived by
AMEC.
13.6 PARTIAL INVALIDITY OF THIS AGREEMENT
In the event that any provision of this Agreement is invalid or
unenforceable as written but may be rendered valid and enforceable by
limitation thereof, then such provision shall be construed as valid
and enforceable to the maximum extent permitted by law and shall not
affect any other provision hereof.
13.7 GOVERNING LAW
This Agreement shall be governed by, and construed and enforced in
accordance with, English law, without regard to the conflict of law
rules thereof. The parties irrevocably agree that, the Courts of
England are to have exclusive jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement and any
documents referred to or entered into pursuant hereto.
13.8 APPOINTMENT OF PROCESS AGENT
13.8.1 The Purchaser hereby irrevocably appoints Clifford Chance
Secretaries Limited as its agent for the service of process
in England in relation to any matter arising out of this
Agreement, service upon whom shall be deemed completed
whether or not forwarded to or received by the Purchaser.
13.8.2 The Purchaser shall inform AMEC, in writing, of any change in
the address of its process agent within 28 days.
13.8.3 If such process agent ceases to have an address in England,
the Purchaser irrevocably agrees to appoint new process
agents acceptable to AMEC and to deliver to AMEC within 14
days a copy of a written acceptance of appointment by the
process agents.
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13.8.4 Nothing contained in this Agreement shall affect the right to
serve process in any other manner permitted by law or the
right to bring proceedings in any other jurisdiction for the
purposes of the enforcement or execution of any judgement or
other settlement in any other courts.
13.9 PUBLIC ANNOUNCEMENTS
The Guarantor, AMEC and the Purchaser will consult with each other as
to the terms of, the timetable for and the manner of publication
before issuing any press release or otherwise making any public
announcements or making any announcement to or sending any circular to
any employees, contractors or customers with respect to this
Agreement, or the other transactions contemplated by this Agreement,
and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law
or by obligations pursuant to any listing rules of any national
securities exchange or automated quotation system upon which the
securities of such issuer are traded and subject to the requirements
of any regulatory body or recognised stock exchange in any
jurisdiction.
13.10 AMENDMENT; WAIVERS
The terms and provisions of this Agreement may be modified or amended
only by a written instrument executed by each of the parties hereto,
and compliance with any term or provision hereof may be waived only by
a written instrument executed by each party entitled to the benefits
of the same. Except as expressly provided herein to the contrary, no
failure to exercise any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege granted hereunder.
13.11 PENSIONS
AMEC and the Purchaser shall implement the pension arrangements in
Schedule 3.
13.12 COSTS
Except where this Agreement provides otherwise, each party shall pay
its own costs relating to the negotiation, preparation, execution and
performance by it of this Agreement and of each document referred to
in it.
13.13 GENERAL
Except to the extent that they have been performed and except where
this Agreement provides otherwise, the obligations contained in this
Agreement remain in force after Closing.
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IN WITNESS WHEREOF the Purchaser, AMEC and the Guarantor have executed this
Agreement as a deed on the date first above written.
Executed as a deed by:
AMEC P.L.C.
By: SIMON BATEY
Director
By: MIKE BARDSLEY
Secretary
Executed as a deed by:
AMEC FINANCE LIMITED
By: SIMON BATEY
Director
By: MIKE BARDSLEY
Director
Executed as a deed by:
CENTEX DEVELOPMENT COMPANY UK LIMITED
By: STEWART BASELEY
Director
By: PAUL BAK
Director
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