DATED 15th April, 1997
XXXXXXXX R. AND M. HOLDINGS LIMITED
and
XXXXXXXX PLC
and
REFRACO HOLDINGS LIMITED
and
THE ALPINE GROUP, INC.
-----------------------------------------------
SHARE PURCHASE AGREEMENT
relating to the issued share capital of
Xxxxxxxx Refractories (Holdings) Limited
-----------------------------------------------
Xxxxxxxxx and May
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
(TNC/KMH)
CONTENTS
Page
1. INTERPRETATION 1
2. SALE AND PURCHASE 2
3. CONSIDERATION 2
4. LITIGATION PROVISION 3
5. COMPLETION 6
6. SELLER'S WARRANTIES 6
7. PURCHASER'S WARRANTIES 7
8. PURCHASER'S UNDERTAKINGS AND SELLER'S UNDERTAKING 8
9. INTRA-GROUP GUARANTEES AND BORROWINGS 9
10. RESTRICTIONS ON SELLER 12
11. SELLER'S INDEMNITY 13
12. PROVISION RELATING TO RESTRICTIONS 13
13. XXXXXXXX XXXXXXXXX 00
00. ALPINE GUARANTEE 15
15. PENSIONS 16
16. EFFECT OF COMPLETION 16
17. REMEDIES AND WAIVERS 16
18. ASSIGNMENT 16
19. FURTHER ASSURANCE 17
20. ENTIRE AGREEMENT 17
21. NOTICES 18
22. ANNOUNCEMENTS 19
23. CONFIDENTIALITY 20
24. RESTRICTIVE TRADE PRACTICES ACT 1976 21
25. COSTS AND EXPENSES 21
26. TIME OF ESSENCE 22
27. COUNTERPARTS 22
28. INVALIDITY 22
29. GOVERNING LAW 22
30. JURISDICTION 22
31. AGENT FOR SERVICE 23
SCHEDULE 1 (Interpretation) 25
SCHEDULE 2 (Completion Arrangements) 38
SCHEDULE 3 (The Warranties) 44
SCHEDULE 4 (Limitations on Liability) 64
SCHEDULE 5 (The Company) 71
SCHEDULE 6 Part A (The Subsidiaries) 73
Part B (The Associated Company) 113
SCHEDULE 7 (Pensions) 114
SCHEDULE 8 (The Property) 133
SCHEDULE 9 (Completion Accounts) 140
SCHEDULE 10 (Disputes) 148
ATTACHMENT A (Data Room List)
ATTACHMENT B (Deed of Release)
ATTACHMENT C (Disclosure Letter)
ATTACHMENT D (Licences)
ATTACHMENT E (Xxxxxxxx'x Press Announcement)
ATTACHMENT F (Alpine Press Announcement)
ATTACHMENT G (Registered Intellectual Property)
ATTACHMENT H (Tax Covenant)
ATTACHMENT I (Accounting Pack)
ATTACHMENT J (Worked Example Schedule)
ATTACHMENT K (Environmental Indemnity)
ATTACHMENT L (Loxley Lease)
ATTACHMENT M (Confidentiality Release Letters)
ATTACHMENT N (Report Letters)
ATTACHMENT O (Employer's Liability Insurance Policy)
ATTACHMENT P (Minerals Lease)
ATTACHMENT Q (Completion Accounts Format)
SHARE PURCHASE AGREEMENT
DATED 15th April, 1997
BETWEEN:
1. XXXXXXXX R. and M. HOLDINGS LIMITED whose registered office is at Xxxxxx
Xxxx Xxxx, Xxxxxxxxx X00 0XX (registered in England and Wales No. 2369751)
(the "Seller");
AND
2. XXXXXXXX PLC whose registered office is at Xxxxxx Xxxx Xxxx, Xxxxxxxxx X00
0XX (registered in England and Wales No. 965093) (the "Xxxxxxxx
Guarantor");
AND
3. Refraco Holdings Limited whose registered office is at 00 Xxxxx Xxxxxx,
Xxxxxx XX0X 0XX (registered in England and Wales No. 3354257) (the
"Purchaser").
AND
4. The Alpine Group, Inc., a corporation registered under the laws of
Delaware with IRS employer identification number 00-0000000, whose
principal place of business is at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 (the "Alpine Guarantor").
WHEREAS:
(A) The Seller has agreed to sell, or procure the sale of, and the Purchaser
has agreed to purchase and pay for the Shares (as defined in this
Agreement) on the terms and subject to the conditions of this Agreement.
(B) The Xxxxxxxx Guarantor has agreed to guarantee the obligations of the
Seller under this Agreement and the Alpine Guarantor has agreed to
guarantee the obligations of the Purchaser under this Agreement.
WHEREBY IT IS AGREED as follows:
1. INTERPRETATION
(A) Certain words and expressions used in this Agreement are defined in
Schedule 1.
(B) The Schedules form part of this Agreement and shall have the same force
and effect as if set out in the body of this Agreement and any reference
to this Agreement shall include the Schedules.
2
2. SALE AND PURCHASE
(A) On the terms and subject to the conditions set out in this Agreement, the
Seller shall sell, or procure the sale of, and the Purchaser shall
purchase and pay for the Shares as at and with effect from Completion
together with all rights attached or accruing to them at Completion.
(B) The Seller has the right to transfer, or procure the transfer of, the
legal and beneficial title to the Shares.
(C) The Shares shall be sold free from all liens, charges, encumbrances or
other third party rights.
(D) The Shares shall be sold together with all rights attached or accruing to
the Shares including, without limitation, the right to receive all
dividends, distributions or any return of capital declared, paid or made
by the Company on or after the Completion Date.
(E) The Xxxxxxxx Guarantor will procure the waiver of all rights of
pre-emption over any of the Shares conferred upon any member of the
Seller's Group by the articles of association of the Company or in any
other way.
(F) For the avoidance of doubt, Part I of the Law of Property (Miscellaneous
Provisions) Xxx 0000 shall not apply for the purpose of this Clause 2.
3. CONSIDERATION
(A) The initial consideration for the sale of the Shares (the "Initial
Consideration") shall be the payment by the Purchaser to the Seller of the
sum of (pound)62,500,000, payable in accordance with Clause 5.
(B) The Initial Consideration shall be subject to adjustment in accordance
with the provisions of sub-clauses (C) and (D) below and as adjusted shall
constitute the consideration for the Shares (the "Consideration").
(C) Within seven (7) Business Days of the final determination of the value of
the Net Assets identified in the Completion Accounts in accordance with
the provisions of Schedule 9:-
(i) in the event that the value of the Net Assets is greater than the
sterling amount of (pound)47.1 million (the "Target Value"), the
Purchaser shall pay to the Seller, by way of adjustment to the
Initial Consideration, a sum equivalent to the excess over the
Target Value together with an amount equivalent to interest thereon
at the Agreed Rate for the period from the date of Completion to the
date of payment; and
3
(ii) in the event that the value of the Net Assets is less than the
Target Value, the Seller shall pay to the Purchaser, by way of an
adjustment to the Initial Consideration, a sum equivalent to the
shortfall below the Target Value together with an amount equivalent
to interest thereon at the Agreed Rate for the period from the date
of Completion to the date of payment.
For the avoidance of doubt, if the value of the Net Assets equals the
Target Value, no payment shall be made by either party.
(D) A further adjustment shall be made to the Initial Consideration in the
circumstances set out in, and in accordance with, Clause 4.
(E) Any amounts to be paid pursuant to sub-clauses (C) or (D) above shall be
paid in pounds sterling through a CHAPS transfer for same day value to the
Seller's Account or the Purchaser's Account, as applicable.
(F) All payments by the Seller or the Purchaser under the Warranties or
indemnities contained in this Agreement shall (so far as possible) be made
by way of adjustment to the Consideration.
4. LITIGATION PROVISION
(A) The Purchaser acknowledges and agrees that it shall not utilise the
(pound)2,000,000 general provision referred to in paragraph 4(vii) of
Schedule 9 (the "Litigation Provision") for any purpose whatsoever except
for any purpose relating to the disputes listed in Schedule 10 (the
"Disputes"). For the purposes of this Clause 4, references to "the
Litigation Provision, or any part thereof," being "released by the
Purchaser unutilised" shall mean released for a reason other than in
relation to any payments made in relation to any of the Disputes (and any
associated costs and expenses).
(B) An adjustment, in accordance with clause (C) below, shall be made to the
Initial Consideration:
(i) on any date on which the Litigation Provision, or any part thereof,
is released by the Purchaser unutilised; and/or
(ii) on the later of:
(aa) the date falling 5 years after the Completion Date (the
"Release Date"); and
(bb) if, prior to the Release Date, legal proceedings of any
description (including arbitration, administrative or criminal
proceedings) have been commenced against any member of the
Group, or any member of the Group has been joined in any such
proceedings, in relation to any
4
of the Disputes ("Legal Proceedings"), the date on which, in
relation to each set of Legal Proceedings, one or more of the
following has occurred:-
(1) such Legal Proceedings have been fully and finally
settled or awards, and the corresponding payments, of
damages have been made;
(2) such Legal Proceedings have been irrevocably
discontinued;
(3) the claims underlying such Legal Proceedings have been
fully waived and released; or
(4) in relation to such Legal Proceedings, no formal step
has been taken by, and no correspondence specifically
relating to the continuance of such Legal Proceedings,
or the settlement thereof, has been received from, any
other party to such Legal Proceedings or their legal
representatives during a consecutive period of three
calendar years.
(C) (i) Subject to clause (C)(iii) below, in the circumstances, and
within seven (7) Business Days of any date referred to in clause
(B)(i) above, the Purchaser shall pay to the Seller by way of
adjustment to the Initial Consideration a sum equal to 50 per cent.
of that part of the Litigation Provision released by the Purchaser
unutilised.
(ii) Subject to clause (C)(iii) below, in the circumstances, and within
seven (7) Business Days of the later of the dates, referred to in
clause (B)(ii) above, the Purchaser shall pay to the Seller by way
of adjustment to the Initial Consideration a sum equal to 50 per
cent. of that part of the Litigation Provision remaining unutilised.
(iii) The maximum aggregate amount payable to the Seller as an adjustment
to the Initial Consideration pursuant to Clause (C)(i) and Clause
(C)(ii) shall not exceed (pound)500,000.
(D) In relation to any Legal Proceedings, the Seller may, at any time after
the date falling 5 years after the Completion Date, request, and the
Purchaser shall procure, that the relevant members of the Group apply to
the appropriate judicial authorities to have the relevant proceedings
struck out for want of prosecution PROVIDED THAT, in each case, in the
circumstances the Purchaser, in good faith, believes that it is reasonable
for the Seller to make such a request and that to do so would not result
in an increase in the liability of the relevant member of the Group in
relation to the relevant Dispute (other than the costs and expenses of the
application) and PROVIDED THAT the relevant members of the Group each have
the appropriate judicial grounds and capacity to make such an application
and FURTHER PROVIDED THAT the Seller shall
5
indemnify the Purchaser against 50 per cent. of all reasonable costs and
expenses incurred by any member of the Group in relation to the making,
and prosecution, of such an application.
(E) The Purchaser undertakes (upon the request of the Seller) to provide to,
or procure the provision of, to the Seller or its representatives as soon
as reasonably practicable, such information as the Seller may reasonably
require from time to time in relation to the performance of the
Purchaser's obligations under this Clause 4 and to co-operate fully with
the Seller or its representatives in this regard. In particular, but
without limitation to the generality of the foregoing, the Purchaser shall
give the Seller reasonable access to all correspondence and other relevant
documentation relating to any Legal Proceedings in the possession or
control of any member of the Group, any member of the Purchaser's Group
or, to the extent that the Purchaser or any member of the Group can
require such access, any such person's legal advisers PROVIDED THAT due
regard shall be given to the privileged nature of any such correspondence
or documentation in relation to which legal privilege may attach. Any
information or documents provided pursuant to the foregoing shall be
subject to the confidentiality provisions in Clause 23.
(F) Notwithstanding Clause (E) above, the Purchaser shall notify the Seller as
soon as reasonably practicable after:
(i) the date on which the Litigation Provision, or any part thereof, is
released by the Purchaser either unutilised or for any purpose
relating to the Disputes; and/or
(ii) the date on which any Dispute is settled without commencing Legal
Proceedings; and/or
(iii) in relation to Legal Proceedings:
(aa) to the extent that such Legal Proceedings are commenced after
the Completion Date, the date on which each such Legal
Proceedings is commenced; and/or
(bb) in relation to each Legal Proceedings, the date on which it is
fully and finally settled or on which an award, and the
corresponding payment, of damages has been made or on which it
has been irrevocably discontinued or on which the relevant
claims have been fully waived and released or on which three
years have passed since any formal step has been taken or
relevant correspondence received,
that such event has occurred.
(G) Notwithstanding Clauses 4(E) and (F) above, on the Release Date, the
Purchaser shall notify the Seller in writing whether an adjustment to the
Initial Consideration
6
falls to be made and, if no such adjustment falls to be made pursuant to
Clause 4(C)(ii), shall set out in reasonable detail the reasons why,
including details of any release of the Litigation Provision or any part
thereof which has not resulted in an adjustment pursuant to Clause 4(C)(i)
and details of any Legal Proceedings which are still outstanding.
5. COMPLETION
(A) Completion of the sale and purchase of the Shares shall take place at
11.00 a.m. (or immediately following the signing of this Agreement, if
later) on the Completion Date at the offices of the Seller's Solicitors.
(B) At Completion the Seller and the Purchaser shall do those things
respectively listed and required of them in Schedule 2.
(C) The Initial Consideration shall be payable by or on behalf of the
Purchaser in immediately available funds in pounds sterling at Completion
as referred to in Schedule 2.
(D) Receipt of funds in accordance with sub-clause (C) shall constitute a good
discharge of the Purchaser in respect of the payment of the Initial
Consideration.
(E) Receipt of funds in accordance with sub-clause 3(E) shall constitute a
good discharge of the Purchaser or the Seller, as applicable, in respect
of any further payments to be made pursuant to Clause 3.
6. SELLER'S WARRANTIES
(A) Subject as provided in this Agreement, the Seller warrants to the
Purchaser in the terms set out in Schedule 3.
(B) The only Warranties given:
(i) in respect of Property are those contained in paragraphs 3(A) and
(B), 6(D) and (E), 9(A)(i) and 17 of Schedule 3 and each of the
other Warranties shall be deemed not to be given in relation to
Property;
(ii) in respect of Intellectual Property are those contained in paragraph
18 of Schedule 3 and each of the other Warranties shall be deemed
not to be given in relation to Intellectual Property;
(iii) in respect of competition, anti-restrictive trade practices or
anti-trust legislation are those contained in paragraph 19 of
Schedule 3 and each of the other Warranties shall be deemed not to
be given in relation to competition, anti-restrictive trade
practices or anti-trust legislation;
7
(iv) in respect of pensions are those contained in paragraph 10 of
Schedule 7 and each of the other Warranties shall be deemed not to
be given in relation to pensions; and
(v) in respect of Environmental Matters are those contained in paragraph
22 of Schedule 3 and each of the other Warranties shall be deemed
not to be given in relation to Environmental Matters.
(C) The liability of the Seller under or in relation to the Warranties shall
be limited as set out in Schedule 4.
(D) Breach of Warranty shall not entitle the Purchaser to rescind or terminate
this Agreement, or any part of it, after Completion.
(E) The Seller accepts that the Purchaser is entering into this Agreement in
reliance upon the Warranties.
(F) The Seller undertakes (if any claim is made against it in connection with
the Warranties and in the absence of fraud or dishonesty) not to make any
claim against any member of the Group or the Associated Company or any
director or employee of any member of the Group or the Associated Company
on whom it may have relied before agreeing to any terms of this Agreement
or of the Tax Covenant or authorising any statement in the Disclosure
Letter.
(G) Save as stated in sub-clause (B), each of the Warranties shall be
construed as a separate and independent warranty and shall not be limited
or restricted by reference to any other Warranty.
7. PURCHASER'S WARRANTIES
The Purchaser warrants to the Seller that:
(i) each of the Purchaser and the Alpine Guarantor has the requisite
power and authority to enter into and perform this Agreement and the
other documents which are to be executed by the Purchaser and/or the
Alpine Guarantor (as the case may be) at Completion and which are
listed in paragraph (C)(i) of Schedule 2 (the "Purchaser's
Completion Documents");
(ii) this Agreement constitutes and the Purchaser's Completion Documents
will, when executed by the Purchaser and/or the Alpine Guarantor (as
the case may be), constitute binding obligations of the Purchaser
and/or the Alpine Guarantor (as the case may be) in accordance with
their respective terms; and
(iii) the execution and delivery of, and the performance by each of the
Purchaser and the Alpine Guarantor of its obligations under, this
Agreement and the Purchaser's Completion Documents will not:
8
(a) result in a breach of any provision of the memorandum or
articles of association or equivalent constitutional documents
of the Purchaser or the Alpine Guarantor (as the case may be);
(b) result in a breach of, or constitute a default under, any
instrument to which the Purchaser or the Alpine Guarantor (as
the case may be) is a party or by which the Purchaser or the
Alpine Guarantor (as the case may be) is bound; or
(c) result in a breach of any order, judgment or decree of any
court or governmental agency to which the Purchaser or the
Alpine Guarantor (as the case may be) is a party or by which
the Purchaser or the Alpine Guarantor (as the case may be) is
bound.
8. PURCHASER'S UNDERTAKINGS AND SELLER'S UNDERTAKINGS
(A) The Purchaser undertakes that, in the absence of fraud or dishonesty or
save as provided in this sub-clause (A), it has no rights against and
shall not make any claim against any employee, director, agent, officer or
adviser of any member of the Seller's Group on whom it may have relied
before agreeing to any term of this Agreement or any other agreement or
document referred to herein or entering into this Agreement or any other
agreement or document referred to herein including, without prejudice to
the generality of the foregoing, any such persons as are named in the
definition of "so far as the Seller is aware" in Schedule 1, PROVIDED that
nothing contained in this sub-clause (A) shall restrict or prevent the
Purchaser or the Alpine Guarantor from bringing any claim against
Chesterton, the Investigating Accountants or Fugro in relation to any
matters contained in their respective Reports.
(B) The Purchaser undertakes on behalf of itself and each member of the
Purchaser's Group that, any future use of Seller Confidential Information
is at the risk of the Purchaser and other members of the Purchaser's
Group. No updates of the Seller Confidential Information will be provided
by any member of the Seller's Group to any member of the Purchaser's Group
after Completion.
(C) The Purchaser acknowledges and agrees on behalf of itself and each member
of the Purchaser's Group that, for the avoidance of doubt, nothing in this
Agreement shall operate as an agreement to transfer (nor shall transfer)
any right, title, or interest in any trade xxxx, house xxxx or company
name to the extent it contains or consists of the word "Xxxxxxxx" or in
any other xxxx in which that element appears or the word "Xxxxxxxx" in the
translational or transliteral form appears (together the "Xxxxxxxx Marks")
and agrees that it will use all reasonable endeavours to procure, as soon
as reasonably practicable after Completion, and, in any event, within 18
months of the Completion Date, that the Xxxxxxxx Marks will be removed
from all signage, stocks, sales literature, or other promotional material
and all other assets whatsoever of each member of the Group and the
Associated Company and the Purchaser agrees that neither it nor any other
member of the Purchaser's Group will use the Xxxxxxxx
9
Marks or any signage, stocks, sales literature or other promotional
literature bearing or containing a Xxxxxxxx Xxxx nor shall the Purchaser
or any other member of the Purchaser's Group hold itself out as being part
of or in any way connected with the Seller's Group.
(D) The Purchaser shall procure that originals of all notices, correspondence,
information, orders or enquiries relating solely to the business of any
member of the Seller's Group and copies of all other notices,
correspondence, information, orders or enquiries to the extent that they
otherwise relate to the business of any member of the Seller's Group which
are received by any member of the Purchaser's Group on or after Completion
shall be passed as soon as practicable to the Seller.
(E) The Purchaser undertakes that it will, within two Business Days after
Completion, or as soon as reasonably practicable thereafter, procure that
the name of the Company and any other Subsidiary which contains the word
"Xxxxxxxx" shall be changed to a name not including the word "Xxxxxxxx".
(F) The Purchaser undertakes that it will, subject to the granting of
landlord's consent, promptly complete the assignation by Xxxxxxxx
Refractories Limited to Xxxxxxxx Minerals and Chemicals Limited of the
Minerals Lease.
(G) The Seller shall procure that whatever title, including both legal and
beneficial title, which Xxxxxxxx European Holdings Limited holds as at the
date of this Agreement to the parcels of land at the Bawtry site,
identified in the schedule for Bawtry at Index A, Part 7 of the property
section of the Data Room List as parcels numbered 1, 3, 5 and 6, shall be
transferred from Xxxxxxxx European Holdings Limited to Xxxxxxxx
Refractories (Holdings) Limited for the consideration of a peppercorn,
payable on demand, and the Seller undertakes to use reasonable endeavours
to procure that this transfer is effected within five Business Days of the
date of this Agreement.
(H) The Seller shall procure that Xxxxxxxx Properties Limited shall grant and
the Purchaser shall procure that the Company shall take the Loxley Lease
within five Business Days of this Agreement. From the date of this
Agreement until the grant of the Loxley Lease, the Company may occupy the
premises to be demised by the Loxley Lease as licensee as if the Loxley
Lease had been granted.
(I) The Seller shall procure that originals of all notices, correspondence,
information, orders or enquiries relating solely to the business of any
member of the Group and copies of all other notices, correspondence,
information, orders or enquiries to the extent that they otherwise relate
to the business of any member of the Group which are received by any
member of the Seller's Group on or after Completion shall be passed as
soon as practicable to the Purchaser.
(J) The Seller undertakes to lodge the Land Certificate relating to the title
of Xxxxxxxx Properties Limited to the freehold of the Loxley site with the
appropriate Land
10
Registry for the purposes of registration of the First Option and the
Second Option referred to in the Loxley Lease.
9. INTRA-GROUP GUARANTEES AND BORROWINGS
(A) The Purchaser, for itself and its successors and assigns, covenants that,
at any time and from time to time on or after Completion, it will execute
and deliver all such instruments of assumption and acknowledgements
(including, without limitation, the Purchaser's Completion Release
Documents) or take such other action as the Seller may reasonably request
in order to effect the release and discharge in full of any Assurance
given by any member of the Seller's Group to any person (including any
member of the Group or the Associated Company) in respect of any
obligation or liability of any member of the Group or the Associated
Company and the Purchaser's assumption of, and the substitution of the
Purchaser as the primary obligor in respect of, each such Assurance in
each case on a non-recourse basis to any member of the Seller's Group.
Pending such release and discharge, the Purchaser hereby agrees with the
Seller (on behalf of itself and each member of the Seller's Group) that it
will assume and pay and discharge when due, and indemnify each member of
the Seller's Group against, all such Assurances.
(B) The Seller, for itself and its successors and assigns, covenants that, at
any time and from time to time on or after Completion, it will execute and
deliver all such instruments of assumption and acknowledgements
(including, without limitation, the Deed of Release) or take such other
action as the Purchaser may reasonably request in order to effect the
release and discharge in full of any Assurance given by any member of the
Group or the Associated Company to any person in respect of any obligation
or liability of any member of the Seller's Group and the Seller's
assumption of, and the substitution of the Seller as the primary obligor
in respect of, each such Assurance on a non-recourse basis to the
Purchaser, any member of the Group or the Associated Company. Pending such
release and discharge, the Seller hereby agrees with the Purchaser (on
behalf of itself, each member of the Group and the Associated Company)
that it will assume and pay and discharge when due, and indemnify each
member of the Group and the Associated Company against, all such
Assurances.
(C) If any action, claim or demand is brought or alleged against any member of
the Seller's Group or, as the case may be, any member of the Group or the
Associated Company (the "Relevant Indemnified Party") in respect of which
an indemnity is to be sought from the Purchaser or, as the case may be,
the Seller (the "Relevant Indemnifying Party") pursuant to this Clause,
the Relevant Indemnified Party shall forthwith notify the Relevant
Indemnifying Party thereof and the Relevant Indemnifying Party shall have
the option to assume the defence thereof. If the Relevant Indemnifying
Party fails to assume such defence, it will be liable to the Relevant
Indemnified Party for any reasonable legal or other expenses subsequently
incurred by the Relevant Indemnified Party in connection with such
defence.
11
(D) All sums payable by the Relevant Indemnifying Party to any Relevant
Indemnified Party under this Clause shall be paid free and clear of all
deductions or withholdings whatsoever, save only as may be required by
law.
(E) If any deductions or withholdings are required by law to be made from any
of the sums payable as mentioned in sub-clause (D), the Relevant
Indemnifying Party shall be obliged to pay to the Relevant Indemnified
Party such sum as will, after such deduction or withholding has been made,
leave the Relevant Indemnified Party with the same amount as it would have
been entitled to receive in the absence of any such requirement to make
such deduction or withholding.
(F) If any sum payable by the Relevant Indemnifying Party to any Relevant
Indemnified Party under this Clause shall be subject to a liability to
Taxation in the hands of such Relevant Indemnified Party, the Relevant
Indemnifying Party shall be under the same obligation to make an increased
payment in relation to that liability to Taxation as if the liability were
a deduction or withholding required by law.
(G) The Seller and the Purchaser hereby undertake to each other that:
(i) on Completion, all Intra-Group Borrowings will be repaid by the
relevant members of the Seller's Group and/or the Group and the
Seller will confirm such repayment in writing to the Purchaser at
Completion;
(ii) following Completion, each of the Intra-Group Currency Agreements
which is a sales contract shall be cancelled at the banks' forward
selling rate shown at the time of cancellation on Reuters' screen
(Money calc facility) and each of the Intra-Group Currency
Agreements which is a purchase contract shall be cancelled at the
banks' forward buying rate shown at the time of cancellation on
Reuters' screen (Money calc facility). The differences between the
value of each Intra-Group Currency Agreement on cancellation and the
original value of the relevant contract shall be calculated as shown
in the Worked Example Schedule and the difference so calculated in
relation to each contract shall be discounted on a monthly basis at
67% of the base rate quoted on the Completion Date by National
Westminster Bank plc. The differences as so calculated and
discounted in respect of each Intra-Group Currency Agreement shall
be netted off against each other and the sum resulting (a) if
positive, shall be paid by Xxxxxxxx Group Services Limited to
Xxxxxxxx Refractories Limited; or (b) if negative, shall be paid by
Xxxxxxxx Refractories Limited to Xxxxxxxx Group Services Limited.
The parties acknowledge that the process of cancellation of all
Intra-Group Currency Agreements may take 24 hours to complete; and
(iii) following Completion, any amounts, if any, outstanding between any
member of the Seller's Group and any member of the Group (other than
the Intra-Group Borrowings and the Intra-Group Currency Agreements)
shall be paid off in the ordinary course of business.
12
(H) If any claim is made by any member of the Group or the Associated Company
under an insurance policy in force prior to Completion which results in
any liability of any member of the Seller's Group to pay, and the actual
payment by any member of the Seller's Group of, any excess or deductible
amount to the relevant insurer, a sum equal to such amount shall be paid
by the Purchaser to the relevant member of the Seller's Group or as it may
direct.
(I) If any claim is capable of being made or is made by any member of the
Group under any insurance policy maintained by the Seller's Group prior to
Completion, then the Seller will, and will procure that each member of the
Seller's Group as appropriate will, provide to the relevant member of the
Group such co-operation and assistance as the member of the Group making
such claim may reasonably require PROVIDED THAT the Purchaser shall
indemnify the Seller against all reasonable costs and expenses incurred by
any member of the Seller's Group in providing such assistance.
10. RESTRICTIONS ON SELLER
(A) The Seller undertakes that it will not, and shall procure that each member
of the Seller's Group will not, do any of the following things:
(i) for a period of five years after the Completion Date either alone or
jointly with any person directly or indirectly carry on or be
engaged or economically interested in any business which competes
(directly or indirectly) with any of the Group Businesses and which
is carried on within any one of the member states of the European
Union;
(ii) within a period of three and one half (3 1/2) years from the
Completion Date, entice away from the employment of any member of
the Group any Senior Employee EXCEPT for those who answer an
advertisement for a post with any member of the Seller's Group
available to members of the public generally which is not aimed
specifically at a person with experience of working for the Group;
nor
(iii) intentionally assist any person to do either of the foregoing
things.
(B) Nothing in sub-clause (A) shall prevent any member of the Seller's Group:
(i) carrying on or being engaged in or economically interested in
any business (other than any Group Business) which, at the
date of this Agreement, it currently carries on or is engaged
in or is economically interested in or any reasonable
extension or development thereof which does not directly
involve the manufacture of products of a type produced, or the
provision of services of a type provided, by the Group in the
12 months prior to Completion (PROVIDED THAT, for the
avoidance of doubt, this shall not prevent any member of the
Seller's Group from supplying materials used in the
manufacture of such products);
13
(ii) carrying on or being engaged in or economically interested in any
business referred to in paragraph (i) of sub-clause (A) twelve
months after such time as such business, in its entirety, has been
sold to a third party and/or all members of the Purchaser's Group
have ceased to be engaged in or economically interested in such
business;
(iii) being the holder of shares of a company (conferring not more than
five per cent. of the votes which would normally be cast at a
general meeting of that company) or debentures of a company which is
engaged in any business referred to in paragraph (i) of sub-clause
(A);
(iv) acquiring the whole or any part of a business, the carrying on of
which would otherwise amount to a breach of the undertaking
contained in sub-clause (A), as part of a larger acquisition or
series of related acquisitions PROVIDED THAT such acquisition is not
made with the sole or main purpose of acquiring such business and
PROVIDED FURTHER THAT the member of the Seller's Group which is the
acquiring party shall, within a period of eighteen months after such
acquisition (and provided that the business is not liquidated and/or
does not cease to trade within such period), use its reasonable
endeavours to sell such business to a third party and PROVIDED
FURTHER THAT, prior to any member of the Seller's Group or its
representatives endeavouring to sell such business to any person,
the Seller shall procure that the relevant member of the Seller's
Group shall first give the Purchaser written notice of its intention
to sell such business. The Seller agrees to procure that for a
period of 30 days immediately after such notice has been given to
the Purchaser, no member of the Seller's Group shall directly or
indirectly negotiate the sale of, or sell, such business to any
person whatsoever except any member of the Purchaser's Group and
their representatives; and/or
(v) trading with its existing customers or any future customers provided
that it does not solicit or accept the custom of any person in
respect of goods or services competitive with those manufactured or
supplied by any member of the Group during the 12 months prior to
Completion.
11. SELLER'S INDEMNITY
With effect from Completion, the Seller shall indemnify, and keep
indemnified, the Purchaser on demand (on an after tax basis) against any
liability, cost, damage or loss and any expense suffered or incurred by
the Purchaser or any member of the Group which arises from any liability
(whether actual or contingent) of either AS Furmol Kompagnet or ApS United
Xxxxx
12. PROVISION RELATING TO RESTRICTIONS
Clause 10 contains an entirely separate and independent restriction and if
any such restriction shall be adjudged by any court or authority of
competent jurisdiction to be
14
unlawful, against the public interest, void or unenforceable but would be
valid if part of the wording thereof were to be deleted and/or the period
thereof were to be reduced and/or the area dealt with thereby were to be
reduced, the said restriction shall be applied within the jurisdiction of
that court or competent authority with such modifications as are necessary
to make it valid and effective and shall continue to bind the Seller.
13. XXXXXXXX GUARANTEE
(A) In consideration of the Purchaser entering into this Agreement, the
Xxxxxxxx Guarantor hereby unconditionally and irrevocably guarantees to
the Purchaser the full, due and punctual performance and observation by
the Seller of all its obligations under the terms of this Agreement, the
Tax Covenant and the Environmental Indemnity. In the event of any matter
as aforesaid, the Xxxxxxxx Guarantor shall be liable for the obligations
of the Seller arising hereunder as if it were a primary obligor.
(B) The Xxxxxxxx Guarantor shall from time to time pay to the Purchaser on
demand any sum of money which the Seller shall at any time be liable to
pay to the Purchaser under or pursuant to the terms of this Agreement, the
Tax Covenant or the Environmental Indemnity and which has not been paid
when due.
(C) The obligations of the Xxxxxxxx Guarantor under this Clause 13:
(i) shall be continuing obligations and shall not be satisfied,
discharged or affected by any intermediate payment or settlement of
account or any change in the constitution or control of, or the
insolvency of, or any liquidation, winding up or analogous
proceedings relating to, the Seller or any change in the terms,
conditions and undertakings on the part of the Seller contained in
this Agreement, the Tax Covenant or the Environmental Indemnity; and
(ii) shall not be discharged, prejudiced, lessened, affected or impaired
by any act, omission or circumstance whatsoever which but for this
provision might operate to release or exonerate the Xxxxxxxx
Guarantor from all or any part of such obligations or in any way
discharge, prejudice, lessen, affect or impair the same.
(D) All sums payable by the Xxxxxxxx Guarantor under this Clause shall be paid
free and clear of all deductions or withholdings whatsoever, save only as
may be required by law.
(E) If any deductions or withholdings are required by law to be made from any
of the sums payable as mentioned in sub-clause (D), the Xxxxxxxx Guarantor
shall be obliged to pay to the Purchaser such sum as will, after such
deduction or withholding has been made, leave the Purchaser with the same
amount as it would have been
15
entitled to receive in the absence of any such requirement to make such
deduction or withholding.
(F) If any sum payable by the Xxxxxxxx Guarantor under this Clause shall be
subject to a liability to Taxation in the hands of the Purchaser, the
Xxxxxxxx Guarantor shall be under the same obligation to make an increased
payment in relation to that liability to Taxation as if the liability were
a deduction or withholding required by law.
14. ALPINE GUARANTEE
(A) In consideration of the Seller entering into this Agreement, the Alpine
Guarantor hereby unconditionally and irrevocably guarantees to the Seller
the full, due and punctual performance and observation by the Purchaser of
all its obligations under the terms of this Agreement, the Tax Covenant
and the Environmental Indemnity. In the event of any matter as aforesaid,
the Alpine Guarantor shall be liable for the obligations of the Purchaser
arising hereunder as if it were a primary obligor.
(B) The Alpine Guarantor shall from time to time pay to the Seller on demand
any sum of money which the Purchaser shall at any time be liable to pay to
the Seller under or pursuant to the terms of this Agreement, the Tax
Covenant or the Environmental Indemnity and which has not been paid when
due.
(C) The obligations of the Alpine Guarantor under this Clause 14:
(i) shall be continuing obligations and shall not be satisfied,
discharged or affected by any intermediate payment or settlement of
account or any change in the constitution or control of, or the
insolvency of, or any liquidation, winding up or analogous
proceedings relating to, the Purchaser or any change in the terms,
conditions and undertakings on the part of the Purchaser contained
in this Agreement, the Tax Covenant or the Environmental Indemnity;
and
(ii) shall not be discharged, prejudiced, lessened, affected or impaired
by any act, omission or circumstance whatsoever which but for this
provision might operate to release or exonerate the Alpine Guarantor
from all or any part of such obligations or in any way discharge,
prejudice, lessen, affect or impair the same.
(D) All sums payable by the Alpine Guarantor under this Clause shall be paid
free and clear of all deductions or withholdings whatsoever, save only as
may be required by law.
(E) If any deductions or withholdings are required by law to be made from any
of the sums payable as mentioned in sub-clause (D), the Alpine Guarantor
shall be obliged to pay to the Seller such sum as will, after such
deduction or withholding has been made, leave the Seller with the same
amount as it would have been entitled to
16
receive in the absence of any such requirement to make such deduction or
withholding.
(F) If any sum payable by the Alpine Guarantor under this Clause shall be
subject to a liability to Taxation in the hands of the Seller, the Alpine
Guarantor shall be under the same obligation to make an increased payment
in relation to that liability to Taxation as if the liability were a
deduction or withholding required by law.
15. PENSIONS
Each of the parties shall comply with the requirements pertaining to that
party set out in Schedule 7.
16. EFFECT OF COMPLETION
Save as otherwise provided herein, any provision of this Agreement or of
any other document referred to herein which is capable of being performed
after but which has not been performed at or before Completion and all
Warranties and other Assurances contained in this Agreement shall remain
in full force and effect notwithstanding Completion.
17. REMEDIES AND WAIVERS
(A) No delay or omission on the part of either party to this Agreement in
exercising any right, power or remedy provided by law or under this
Agreement or any other documents referred to in it shall impair such
right, power or remedy or operate as a waiver thereof.
(B) The single or partial exercise of any right, power or remedy provided by
law or under this Agreement shall not preclude any other or further
exercise thereof or the exercise of any other right, power or remedy
except where expressly stated herein.
(C) The rights, powers and remedies provided in this Agreement are cumulative
and not exclusive of any rights, powers and remedies provided by law
unless otherwise stated herein including, without prejudice to the
generality of the foregoing, as stated in Clauses 6(D), 6(F), 8(A) and 20.
18. ASSIGNMENT
(A) Obligations under this Agreement shall not be assignable.
(B) The benefits of this Agreement (including, without limitation, the
benefits of the Warranties) shall not be assignable except that the
Purchaser may, upon giving written notice to the Seller and the Xxxxxxxx
Guarantor, (i) assign the benefit of the Warranties to the Administrative
Agent under the Credit Agreement (the "Warranty Assignment") PROVIDED THAT
the provisions of sub-clause (C) are complied with;
17
and (ii) assign the benefit of this Agreement to a member of the
Purchaser's Group (a "Permitted Assignee") provided that and subject to
the condition that if such Permitted Assignee shall subsequently cease to
be a member of the Purchaser's Group, the Purchaser shall procure that
prior to its ceasing to be a member of the Purchaser's Group the Permitted
Assignee shall assign so much of the benefit of this Agreement as has been
assigned to it to the Purchaser or (upon giving further written notice to
the Seller and the Xxxxxxxx Guarantor) to another member of the
Purchaser's Group. Any purported assignment in contravention of this
Clause shall be void.
(C) The Purchaser hereby agrees and undertakes that the liabilities of the
Seller and the Xxxxxxxx Guarantor under this Agreement shall not be
increased by the Warranty Assignment, and that the rights conferred on the
Administrative Agent pursuant to the Assignment shall only be exercisable
by the Administrative Agent at the same time as the Administrative Agent
exercises its security under the Credit Agreement.
19. FURTHER ASSURANCE
Without prejudice to any restriction or limitation on the extent of any
party's obligations under this Agreement contained in this Agreement, each
of the parties shall from time to time so far as each is reasonably able
do or procure the doing of all such acts and/or execute or procure the
execution of all such documents in a form reasonably satisfactory to the
party concerned as they may reasonably consider necessary to transfer the
Shares to the Purchaser or otherwise to give the other party the full
benefit of this Agreement.
20. ENTIRE AGREEMENT
(A) This Agreement, the Tax Covenant and the Environmental Indemnity
constitute the whole and only agreement between the parties relating to
the sale and purchase of the Shares and, save if and only to the extent
expressly repeated in any such document, supersede and extinguish any
prior drafts, agreements, undertakings, representations, warranties and
arrangements of any nature whatsoever, whether or not in writing, relating
thereto.
(B) The Purchaser acknowledges and agrees with the Seller (on behalf of itself
and each other member of the Seller's Group) that:
(i) it does not rely on and has not been induced to enter into this
Agreement or any other agreement or document referred to herein on
the basis of any Assurance made or given by or on behalf of any
member of the Seller's Group or any of their respective agents,
officers, employees or advisers other than those expressly set out
in this Agreement or in any document entered into pursuant to this
Agreement or, to the extent that it has been, it has (in the absence
of fraud or dishonesty or subject to the proviso in Clause 8(A)) no
rights or remedies in relation thereto; and
18
(ii) no member of the Seller's Group, or any of their respective agents,
officers, employees or advisers, has given or made any Assurance
other than those expressly set out in this Agreement or in any
document entered into pursuant to this Agreement or, to the extent
that they have, the Purchaser hereby unconditionally and irrevocably
waives (in the absence of fraud or dishonesty) any claim which it
might otherwise have had in relation thereto.
(C) This Agreement may only be varied by a document signed by each of the
parties hereto and expressed to be a variation to this Agreement.
21. NOTICES
(A) Any notice or other communication given or made under or in connection
with the matters contemplated by this Agreement shall be in writing.
(B) Any such notice or other communication shall be addressed as provided in
sub-clause (C) and, if so addressed, shall be deemed to have been duly
given or made as follows:
(i) if sent by personal delivery, upon receipted delivery at the address
of the relevant party;
(ii) if sent by air mail recorded delivery between the United States and
the United Kingdom, four Business Days after the date of posting;
(iii) if sent by recorded post within the United Kingdom, two Business
Days after the date of posting;
(iv) if sent by facsimile, when received;
PROVIDED THAT if, in accordance with the above provisions, any such notice
or other communication would otherwise be deemed to be given or made
outside Working Hours, such notice or other communication shall be deemed
to be given or made at the start of Working Hours on the next Business
Day.
(C) The relevant addressee, address and facsimile number of each party for the
purposes of this Agreement, subject to sub-clause (D), are:
Name of party Address Facsimile No.
------------- ------- -------------
Xxxxxxxx R. and M. Holdings Tapton Park Road, 0114 230 8642
Limited Xxxxxxxxx X00 0XX
For the attn. of: Company Secretary
00
Xxxxxxxx XXX Xxxxxx Xxxx Road, 0114 230 8642
Xxxxxxxxx X00 0XX
For the attn. of: Company Secretary
Refraco Holdings Limited
Swanwick Court, 01773 522645
Xxxxxxxx,
Xxxxxxxxxx XX00 0XX
For the attn. of: Company Secretary
The Alpine Group Inc. 0000 Xxxxxxxx, 001 212 757
00xx Xxxxx, Xxx 0000
Xxxx, XX00000,
Xxxxxx Xxxxxx of
America
For the attn. of: General Counsel
(D) A party may notify the other parties to this Agreement of a change to its
name, relevant addressee, address or facsimile number for the purposes of
sub-clause (C) PROVIDED THAT such notification shall only be effective
on:-
(i) the date specified in the notification as the date on which the
change is to take place; or
(ii) if no date is specified or the date specified is less than five
clear Business Days after the date on which notice is given, the
date falling five clear Business Days after notice of any such
change has been given.
(E) For the avoidance of doubt, the parties agree that the provisions of this
Clause shall not apply in relation to the service of any writ, summons,
order, judgment or other document relating to or in connection with any
Proceedings.
22. ANNOUNCEMENTS
(A) Subject to sub-clause (B), no announcement concerning the sale or purchase
of the Shares or any ancillary matter (other than the Press Announcements)
shall be made by any party without the prior written approval, in the case
of the Purchaser or the Alpine Guarantor, of the Xxxxxxxx Guarantor and,
in the case of the Xxxxxxxx Guarantor or the Seller, of the Alpine
Guarantor, such approval not to be unreasonably withheld or delayed.
20
(B) Any party may make an announcement concerning the sale or purchase of the
Shares or any ancillary matter if required by:-
(i) the law of any relevant jurisdiction;
(ii) any securities exchange or regulatory or governmental body to which
either party is subject or submits, wherever situated (including,
without limitation, the London Stock Exchange or the New York Stock
Exchange), whether or not the requirement has the force of law,
in which case the party concerned shall take all such steps as may be
reasonable and practicable in the circumstances to agree the contents of
such announcement with, in the case of the Purchaser or the Alpine
Guarantor, the Xxxxxxxx Guarantor and, in the case of the Xxxxxxxx
Guarantor or the Seller, the Alpine Guarantor before making such
announcement and PROVIDED THAT any such announcement shall be made only
after notice to such other party.
(C) Each of the Purchaser and the Xxxxxxxx Guarantor shall procure that
forthwith, and in any event not later than 8.30 a.m. on the date of this
Agreement (or, if this Agreement is signed after 8.30 a.m. on any day, the
immediately following Business Day), its respective Press Announcement is
released to the London Stock Exchange or the New York Stock Exchange, as
applicable, and the Purchaser and the Xxxxxxxx Guarantor shall endeavour
to procure that the Press Announcements are released to the London Stock
Exchange and the New York Stock Exchange as near to simultaneously as
possible.
23. CONFIDENTIALITY
(A) Subject to sub-clause (B) and Clause 22, each party shall treat as
strictly confidential all information received or obtained as a result of
entering into or performing this Agreement which relates to:-
(i) the provisions or the subject matter of this Agreement or any
document referred to herein (excluding those documents contained in
the Data Room to the extent that they do not relate to the Seller's
Group);
(ii) the negotiations relating to this Agreement or any document referred
to herein (excluding those documents contained in the Data Room to
the extent that they do not relate to the Seller's Group);
(iii) (in the case of the Purchaser only) the Seller's Group, (in the case
of the Seller only) the Purchaser's Group and the Group and the
business carried on by each member of each of them respectively.
(B) Any party may disclose information which would otherwise be confidential
if and to the extent:-
21
(i) required by the law of any relevant jurisdiction or for the purpose
of any judicial proceedings;
(ii) required by any securities exchange or regulatory or governmental
body to which that party is subject or submits, wherever situated,
including (without limitation) the London Stock Exchange or the New
York Stock Exchange, whether or not the requirement for information
has the force of law;
(iii) that the information is disclosed on a strictly confidential basis
to the professional advisers, auditors and bankers of that party;
(iv) that the information has come into the public domain through no
fault of that party;
(v) that the other party has given prior written approval to the
disclosure, such approval not to be unreasonably withheld or
delayed;
(vi) that the information has been included in a filing by the Alpine
Guarantor with the Securities and Exchange Commission in the US
which has been approved in writing by the Xxxxxxxx Guarantor; or
(vii) required to enable that party to enforce its rights under this
Agreement,
PROVIDED THAT any such information disclosed pursuant to paragraphs (i) or
(ii) shall be disclosed, where reasonably practicable, only after notice
to the other parties, in which case the party concerned shall take all
such steps as may be reasonable and practicable in the circumstances to
agree the contents of such disclosure with, in the case of the Purchaser,
the Xxxxxxxx Guarantor and, in the case of the Xxxxxxxx Guarantor or the
Seller, the Purchaser before making such disclosure, unless such notice
would itself constitute a breach of the relevant law or regulation
referred to therein.
(C) The restrictions contained in this Clause shall continue to apply after
the sale and purchase of the Shares under this Agreement without limit in
time.
24. RESTRICTIVE TRADE PRACTICES ACT 1976
If there is any provision of this Agreement, or of any agreement or
arrangement of which this Agreement forms part, which causes or would
cause this Agreement or that agreement or arrangement to be subject to
registration under the RTPA 1976, then that provision shall not take
effect until the day after particulars of this Agreement or of that
agreement or arrangement (as the case may be) have been furnished to the
Director General of Fair Trading pursuant to section 24 RTPA 1976.
22
25. COSTS AND EXPENSES
(A) Save as otherwise stated in any other provision of this Agreement, each
party shall pay its own costs and expenses in relation to the negotiations
leading up to the sale of the Shares and to the preparation, execution and
carrying into effect of this Agreement and all other documents referred to
in it.
(B) Without prejudice to sub-clause (A), all stamp duty and stamp duty reserve
tax and other similar United States stamp, transfer or registration taxes,
duties and charges payable in connection with the sale or purchase of the
Shares under this Agreement shall be paid by the Purchaser.
26. TIME OF ESSENCE
Save as otherwise expressly provided, time is of the essence of each
provision of this Agreement.
27. COUNTERPARTS
(A) This Agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
(B) Each counterpart shall constitute an original of this Agreement, but all
the counterparts shall together constitute but one and the same
instrument.
28. INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
that shall not affect or impair:-
(i) the legality, validity or enforceability in that jurisdiction of any
other provision of this Agreement; or
(ii) the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this Agreement.
29. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
30. JURISDICTION
(A) Each of the parties to this Agreement irrevocably agrees for the exclusive
benefit of each of the other parties that the courts of England are to
have jurisdiction to settle
23
any disputes which may arise out of or in connection with this Agreement
and that accordingly any Proceedings may be brought in such courts.
Nothing contained in this Clause shall limit the right of any party to
take Proceedings against the others in any other court of competent
jurisdiction, nor shall the taking of Proceedings in one or more
jurisdictions preclude the taking of Proceedings in any other
jurisdiction, whether concurrently or not, to the extent permitted by the
law of such other jurisdiction.
(B) Each party irrevocably waives (and irrevocably agrees not to raise) any
objection which it may have now or hereafter to the laying of the venue of
any Proceedings in any such court as is referred to in sub-clause (A) and
any claim of forum non conveniens and further irrevocably agrees that a
judgment in any Proceedings brought in any court referred to in this
Clause shall (provided that there is no appeal pending or open) be
conclusive and binding upon such party and may be enforced in the courts
of any other jurisdiction.
31. AGENT FOR SERVICE
(A) The Alpine Guarantor irrevocably agrees that any Service Document may be
sufficiently and effectively served on it in connection with Proceedings
in England and Wales by service on the Purchaser, as its agent (if no
replacement agent has been appointed and notified to the Seller pursuant
to sub-clause 31(D)), or on the replacement agent if one has been
appointed and notified to the Seller.
(B) Any Service Document served pursuant to this clause shall be marked for
the attention of:-
(i) the Purchaser at its address set out in Clause 21(C) or such other
address within England and Wales as may be notified to the Seller by
the Alpine Guarantor; or
(ii) such other person as is appointed as agent for service pursuant to
sub-clause 31(D) at the address notified pursuant to sub-clause
31(D).
(C) Any document addressed in accordance with sub-clause 31(B) shall be deemed
to have been duly served if:-
(i) sent by personal delivery to the specified address, upon receipted
delivery at such address; or
(ii) sent by registered post, two Business Days after the date of
posting.
(D) If the Purchaser (or any replacement agent appointed pursuant to this
sub-clause) at any time ceases for any reason to act as agent, the Alpine
Guarantor shall appoint a replacement agent to accept service having an
address for service in England or Wales and shall notify the Seller of the
name and address of the replacement agent; failing
24
such appointment and notification, the Seller shall be entitled by notice
to the Alpine Guarantor to appoint such a replacement agent to act on the
Alpine Guarantor's behalf.
(E) A copy of any Service Document served on an agent pursuant to this clause
shall be sent by post to the Alpine Guarantor at its address for the time
being for the service of notices and other communications under clause 21
(Notices), but no failure or delay in so doing shall prejudice the
effectiveness of service of the Service Document in accordance with the
provisions of sub-clause 31(A).
(F) "Service Document" means a writ, summons, order, judgment or other
document relating to or in connection with any Proceedings.
IN WITNESS whereof the parties have entered into this Agreement the day and year
first before written.
25
SCHEDULE 1
(Interpretation)
(A) In this Agreement and the Schedules to it:-
"Accounting Pack" means the consolidated accounting pack for the
Group for the accounting reference period ended
on the Accounts Date, together with an
associated note on contingent liabilities, in
the Agreed Form as set out in Attachment I;
"Agreed Rate" interest at a rate of 2 per cent. per annum
above the base rate from time to time of the
Bank of England;
"Accounts Date" means 31st December, 1996;
"Administrative Agent" means Bankers Trust Company;
"Agreed Form" in relation to any document means such document
in the form initialled for the purposes of
identification only by the Purchaser's
Solicitors and the Seller's Solicitors;
"Associated Company" means Rotary Nozzle International SA, the
undertaking in which the Company has a
participating interest (as defined in section
260 of the Companies Act 1985) but which is not
a Subsidiary, basic information concerning which
is set out in Part B of Schedule 6;
"Associated Company Shares" means the 20,000 shares of 2000
Belgian Francs each in the Associated Company,
which represent 50% of the total issued share
capital of the Associated Company;
"Assurance" means any warranty, representation, statement,
assurance, covenant, agreement, undertaking,
indemnity, guarantee or commitment of any nature
whatsoever;
"Business Day" means a day (other than a Saturday or a Sunday)
on which banks are generally open for business
in London;
26
"Chesterton" means Chesterton plc;
"Chesterton Report" means the report dated 1st June, 1996 prepared
by Chesterton in relation to certain of the
Properties;
"Clause 11 Indemnity" has the meaning given in paragraph 3 of Schedule
4;
"Companies Acts" means the Companies Xxx 0000, the Companies
Consolidation (Consequential Provisions) Xxx
0000, the Companies Xxx 0000 and Part V of the
Criminal Justice Xxx 0000;
"Company" means Xxxxxxxx Refractories (Holdings) Limited
(formerly GR-Xxxxx Refractories Limited), basic
information concerning which is set out in
Schedule 5;
"Completion" means completion of the sale and purchase of the
Shares under this Agreement;
"Completion Accounts" has the meaning given to it in Schedule 9;
"Completion Date" means the date of this Agreement;
"Completion Accounts Date" means 31st March, 1997;
"Consideration" has the meaning given thereto in Clause 3;
"Confidentiality Release means letters in the Agreed Form from the
Letters" Xxxxxxxx Guarantor and Schroders
releasing the Alpine Guarantor, its
subsidiaries and their respective
representatives from their respective
obligations arising pursuant to the
confidentiality letter from Schroders to
the Alpine Guarantor dated 18th December,
1996, as set out in Attachment M;
"Credit Agreement" means the credit agreement dated on or after the
date hereof among, inter alia, the Purchaser,
the Administrative Agent and various banks;
"Data Room" means those documents referred to in the Data
Room List;;
27
"Data Room List" means the list of documents in the Agreed Form
entitled "Data Room List" and forming Attachment
A;
"Deed of Release" means the deed releasing Xxxxxxxx Refractories
Limited, Xxxxxx Xxxxxxxx (Loxley) Limited and
various members of the Seller's Group from
certain of their obligations under the NatWest
Cross Guarantees in the Agreed Form forming
Attachment B;
"Disclosure Letter" means the letter dated with the same date as
this Agreement written by the Seller to the
Purchaser for the purposes of paragraph 10 of
Schedule 4 in the Agreed Form forming Attachment
C;
"Disputes" has the meaning given thereto in Clause 4;
"Employees" means persons employed by any member of the
Group including directors of the Company and/or
the Subsidiaries at the date of this Agreement;
"Employer's Liability means the insurance policy issued by
Insurance Policy" London & Edinburgh, forming Attachment O;
"Environment" means all, or any, of the following media namely
the air (including without limitation the air
within buildings and the air within other
natural or man-made structures above or below
ground), water and land and any living organisms
or systems supported by those media;
"Environmental Indemnity" means the environmental indemnity in the
Agreed Form as set out in Attachment K;
"Environmental Laws" means the following each as in existence
at the date of Completion:
28
(a) all European Community, national,
state or local statutes, codes, or
other laws or legislation
concerning Environmental Matters
which are applicable to the
business of the Company or to the
Properties and all rules,
regulations, ordinances, orders,
notices and directives made
thereunder; and
(b) judicial and administrative
interpretation of each of the
foregoing;
"Environmental Matters" means, in relation to the business assets and
operations of the Group and the Properties, all
matters relating to Pollution of or Harm to the
Environment or to the health and safety of the
Employees of the Group or any other person;
"Environmental Permits" means the permits, consents, licences,
certificates and other authorisations and
approvals required under the Environmental Laws
to be obtained in connection with the use of the
Properties or the conduct of the Group Business;
"Event" has the same meaning as in the Tax Covenant;
"Fugro" means Fugro Environmental Limited;
"Fugro Report" means the environmental reports dated
August, 1996 prepared by Fugro;
"Xxxxxxxx Marks" has the meaning given thereto in Clause 8(C);
"Group" means the Company and all Subsidiaries;
"Group Business" means the business of a member of the Group as
carried on by that member in a particular
jurisdiction in the 12 months immediately
preceding the date of this Agreement and "Group
Businesses" shall be construed accordingly;
"Harm" means harm to the health of any living organism
or other interference with the ecological
systems of which it forms a part and, in the
case of human beings, includes offence to any of
the senses,
29
impairment of amenity and damage to property;
"Hazardous Materials" means pollutants, contaminants and dangerous,
toxic or radioactive substances;
"Xxxxxxxx Refractories Inc. means the Stock Purchase Agreement
Stock Purchase Agreement" relating to the issued common stock of
Xxxxxxxx Refractories Inc. between (1)
the Xxxxxxxx Guarantor and (2) Xxxxxx
Xxxxxxxx (Overseas Investments) Limited
dated 12th December, 1996;
"ICTA 1988" means the Income and Corporation Taxes Xxx 0000;
"Information Memorandum" means the information memorandum relating to
Xxxxxxxx Refractories (Holdings) Limited
prepared by Schroders on behalf of the Seller
and dated 17th July, 1996;
"Initial Consideration" has the meaning given thereto in Clause 3;
"Intellectual Property" means patents, trade marks and service marks,
rights in designs, trade or business names or
signs, copyrights (including rights in computer
software) and topography rights (whether or not
any of these is registered and including
applications for registration of any such thing)
and rights under licences and consents in
relation to any such thing and all rights or
forms of protection of a similar nature or
having equivalent or similar effect to any of
these which may subsist anywhere in the world;
"Intra-Group Borrowings" means any borrowings or other indebtedness owed
by or to any member of the Seller's Group to or
by any member of the Group but excluding, for
the avoidance of doubt, any amounts outstanding
pursuant to any contract between such parties
entered into in the ordinary course of trading
(including, for the avoidance of doubt, the
Intra-Group Currency Agreements);
"Intra-Group Currency means contracts to exchange currency at a
Agreements" future date made between Xxxxxxxx Group
Services Limited and Xxxxxxxx Refractories
Limited which
30
are outstanding at the Completion Date;
"Investigating Accountants" means KPMG of Xxx Xxxxxxxx Xxxxxxxx, 0 Xxxx
Xxxxx, Xxxxxxxxx X0 0XX;
"KPMG Report" means the reports on the Group prepared
by the Investigating Accountants and dated 28th
August, 1996, 18th September, 1996 and 14th
October, 1996 and addressed to the Seller and
the Purchaser;
"Legal Proceedings" has the meaning given thereto in Clause 4;
"Licences" means the licences, agreements or arrangements
referred to in Clause 18(B) of Schedule 3
forming Attachment D;
"Litigation Provision" has the meaning given thereto in Clause 4;
"London Stock Exchange" means the London Stock Exchange Limited;
"Loxley Lease" means the lease in relation to land at Loxley in
the Agreed Form as set out in Attachment L;
"Material Asset" means an asset of a member of the Group with a
value of more than (pound)100,000;
"Material Contract" means any written contract relating to the Group
Businesses calling for payments by any party
thereto in excess of (pound)500,000 in any one
year;
"Minerals Lease" means the lease made between (1) Xxxxxxxx
Xxxxxxxx and others and (2) The Glenboig Union
Fire Clay Company Limited dated 29th July, 17th
and 27th August and 8th September, 1966 and
relating to extraction rights at Levenseat in
Scotland, as set out in Attachment P;
"NatWest Cross Guarantees" means the cross-guarantee arrangements entered
into by various members of the Seller's Group,
by Xxxxxxxx Refractories Limited and by Xxxxxx
Xxxxxxxx (Loxley) Limited in favour of National
Westminster Bank plc;
"Net Assets" means the aggregate value of the consolidated
assets of the Group less the aggregate amount of
31
the consolidated liabilities of the Group, as
shown by the Completion Accounts;
"Overseas Subsidiaries" means Xxxxxxxx Refractories (Belgium) SA,
Refinter, Auxiref, Xxxxxxxx Refractories
Deutschland GmbH, Xxxxxxxx Refractories Italiana
SRL, Les Produits Siliceux SA, Constructions
Thermiques Europeennes SA, S.C.I.47, Xxxxxxxx
Refractories Canada Limited and Xxxxxxxx
Refractories Inc and "Overseas Subsidiary" shall
be construed accordingly;
"Permitted Assignee" has the meaning given thereto in Clause 18;
"Press Announcements" means the press announcements to be issued by
each of the Xxxxxxxx Guarantor and the Alpine
Guarantor in the Agreed Form of Attachments E
and F and the "Xxxxxxxx Press Announcement and
the Alpine Press Announcement" shall be
construed accordingly;
"Pollution" means the discharge or release into the
Environment whether intentionally or otherwise
of any substances or energy (including, but not
limited to, sound, vibration, heat and ionising
and non-ionising radiation);
"Proceedings" means any proceeding, suit or action arising out
of or in connection with this Agreement;
"Properties" means the properties specified in Schedule 8
and, where the context so requires, includes all
or any of such properties and "Property" shall
be construed accordingly;
"Purchaser's Account" such account as the Purchaser shall notify to
the Seller within 30 Business Days of the
Completion Date;
"Purchaser's Auditors" Xxxxxx Xxxxxxxx of Xx. Xxxx'x Xxxxx, Xxxx
Xxxxxx, Xxxxx XX0 0XX;
"Purchaser's Completion are the documents listed in paragraph
Documents" 1(C)(i) of Schedule 2;
32
"Purchaser's Completion means the documents to be delivered by
Release Documents" the Purchaser at Completion which are
listed in paragraph 1(C)(i)(b) of Schedule 2;
"Purchaser's Group" means the Purchaser, its subsidiaries, any
holding company of the Purchaser and all other
subsidiaries of any such holding company from
time to time;
"Purchaser's Solicitors" means Freshfields, 00 Xxxxx Xxxxxx,
Xxxxxx XX0X 0XX;
"Registered Intellectual means the registered Intellectual Property and
Property" applications therefor referred to in paragraph
18(A) of Schedule 3 forming Attachment G;
"Release Date" has the meaning given thereto in Clause 4;
"Relevant Indemnified Party" has the meaning given thereto in Clause 9(C);
"Relevant Indemnifying Party" has the meaning given thereto in Clause 9(C);
"Relief" means any allowance, credit, deduction,
exemption or set off in respect of any Tax or
relevant to the computation of any income,
profits or gains for the purposes of any Tax or
any other saving of Tax;
"Reports" means the Chesterton Report, the Fugro Report
and the KPMG Report;
"Report Letters" means the letters from Chesterton, Fugro and the
Investigating Accountants relating to the
Reports in the Agreed Form, as set out in
Attachment N;
"Revenue Authority" means the Inland Revenue and the Commissioners
of Customs and Excise;
"RTPA 1976" means the Restrictive Trade Practices Xxx 0000;
"Schroders" means J. Xxxxx Xxxxxxxx & Co. Limited;
"Seller Confidential means all information which is not in the
Information" public domain in whatever form held:-
(i) relating to any member of the Seller's
33
Group or the business of any such member;
(ii) supplied by or on behalf of any member of
the Seller's Group to any member of the
Group or any other member of the
Purchaser's Group; or
(iii) supplied in confidence to any member of
the Seller's Group by any third party;
"Seller's Account" means the Seller's account with National
Westminster Bank PLC of 00 Xxxx Xxxxxx,
Xxxxxxxxx X0 0XX, sort code 56-00-09, account
name: Xxxxxxxx PLC, account number 00000000;
"Seller's Auditors" KPMG of The Xxxxxxxx Xxxxxxxx, 0 Xxxx Xxxxx,
Xxxxxxxxx X0 0XX;
"Seller's Completion has the meaning given thereto in paragraph 2(A)
Documents" of Schedule 3;
"Seller's Group" means the Xxxxxxxx Guarantor and its
subsidiaries (but excluding each member of the
Group);
"Seller's Solicitors" means Xxxxxxxxx and May;
"Senior Employee" means any one of the Employees who is entitled
to a salary and bonus at a rate (or, in the case
of fluctuating amounts, has or would have been
entitled to an average annual rate over the last
three financial years) in excess of(pound)40,000
per annum and every director who is also an
Employee;
"Service Document" has the meaning given thereto in Clause 31(F);
"Shares" means all the issued shares in the capital of
the Company;
"so far as the Seller is means so far as is within the actual knowledge
aware" (having made reasonable enquiries) of the
following parties:-
34
Xxxx Xxxxxx,
Xxxxxxx Xxxxx,
Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx,
Xxxx Xxxxxxxx,
Xxx Xxxxx,
Xxx Xxxxxxxxxx,
Xxxxxxx de xx Xxxxx,
(in relation to the Warranties in Schedule 7
only)
Xxxxx Xxxxxxxx and Xxx Xxxxxx,
(in relation to the Warranties in respect of
Property in Schedule 3 only)
Xxxxxxx Xxxxxxx,
(PROVIDED THAT, for these purposes, the actual
knowledge of Xxxxxx Xxxxxxxxx shall be his
actual knowledge as at 21st March, 1997 and
shall not include any actual knowledge he may
have obtained after that date)
and all other phrases in this Agreement relating
to the knowledge, information and belief or
awareness of the Seller shall be construed as a
reference to "so far as the Seller is aware" as
so defined;
"Subsidiaries" means any of the subsidiaries of the Company
(basic information concerning each current
subsidiary of the Company being set out in Part
A of Schedule 6) and, where the context so
requires, includes any or all of such companies
and "Subsidiary" shall be construed accordingly;
"Target Value" has the meaning given in Clause 3;
"Tax" or "Taxation" includes all forms of taxation and statutory,
governmental, supra-governmental, state,
principal, local governmental or municipal
impositions, duties, contributions and levies,
in each case whether of the United Kingdom or
elsewhere, whenever imposed and all penalties,
charges, costs and interest relating thereto and
without limitation all employment taxes and any
deductions or withholdings of any sort;
35
"Tax Authority" means any taxing or other authority (whether
within or outside the United Kingdom) competent
to impose any Tax Liability;
"Tax Covenant" means the tax covenant in the Agreed Form as set
out in Attachment H;
"Tax Liability" has the meaning given thereto in the Tax
Covenant;
"Tax Warranties" means the Warranties set out in paragraphs 23 to
46 of Schedule 3 and "Tax Warranty" shall be
construed accordingly;
"UK Subsidiaries" means Ice Limited, Ice International Limited,
The Meltham Silica & Firebrick Co. Limited,
Coolee Limited, Industry Connect Limited
(formerly Porthgain Village Industries Limited),
Genefax Transport Ltd, XX Xxxxx Refractories
Limited (formerly Xxxxxx Xxxxxx & Sons Ltd.),
The Glenboig Union Fireclay Co. Limited, British
Refractories Corporation Limited, Genefax
Monolithics Limited, General Refractories
Limited, High Peak Silica Co. Limited, Xxxx X
Xxxxx & Co. Limited, Bonnybridge Refractories
Limited, Bonnybridge Silica & Fireclay Co.
Limited, Xxxxxx Xxxxxxxx (Loxley) Limited,
Xxxxxx Xxxxxxxx (Overseas Investments) Limited,
Xxxxx Products Limited, Colchester Mineral
Products Limited, MM Monolithics Limited, MPK
Insulation Limited, Xxxxxxxx Leasing (Loxley)
Ltd, Carblox Ltd, Xxxxxxx Xxxxxxxx Limited,
Xxxxxxxx Refractories Limited, and FFrith
Fireclay Limited and, where the context so
requires, includes any or all of such companies
and "UK Subsidiary" shall be construed
accordingly;
"VATA 1994" means the Value Added Tax Xxx 0000;
"Warranties" means the warranties set out in Schedule 3 and
in Schedule 7 and "Warranty" shall be construed
accordingly;
"Waste" means any waste including anything which is
abandoned, unwanted or surplus irrespective of
whether it is capable of being recovered or
36
recycled or has any value;
"Worked Example Schedule" means the schedule showing worked examples in
relation to the cancellation of the Intra-Group
Currency Agreements in the Agreed Form as set
out in Attachment J; and
"Working Hours" means 9.30 a.m. to 5.30 p.m. on a Business Day.
(B) In this agreement, unless otherwise specified:-
(i) references to Clauses, Schedules and Attachments are to Clauses of,
and Schedules and Attachments to, this Agreement;
(ii) a reference to a sub-clause is to a sub-clause of the Clause in
which such reference appears, to a paragraph is to a paragraph of
the sub-clause or Schedule (as the case may be) in which such
reference appears and to a sub-paragraph is to a sub-paragraph of
the paragraph in which such reference appears;
(iii) a reference to any statute or statutory provision shall be construed
as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted except to the extent that
any amendment or modification made after the date of this Agreement
would increase the liability of the Seller under this Agreement;
(iv) references to a "company" shall be construed so as to include any
company, corporation or other body corporate, wherever and however
incorporated or established;
(v) references to a "person" shall be construed so as to include any
individual, firm, company, government, state or agency of a state or
any joint venture, association or partnership (whether or not having
separate legal personality);
(vi) the expressions "holding company", "subsidiary" and "wholly-owned
subsidiary" shall have the respective meanings given in the
Companies Xxx 0000;
(vii) a person shall be deemed to be connected with another if that person
is connected with another within the meaning of section 839 ICTA
1988;
(viii) references to writing shall include any modes of reproducing words
in a legible and non-transitory form;
(ix) references to times of the day are to London time;
37
(x) headings are for convenience only and do not affect the
interpretation of this Agreement;
(xi) references to any English legal term for any action, remedy, method
of judicial proceeding, legal document, legal status, court,
official, or any legal concept or thing shall in respect of any
jurisdiction other than England be deemed to include what most
nearly approximates in that jurisdiction to the English legal term;
(xii) references in any Warranty to any monetary sum expressed in pounds
sterling shall, where such sum is referable in whole or in part to a
particular jurisdiction, be deemed to be a reference to an
equivalent amount in the local currency of that jurisdiction
translated at the prevailing exchange rate applicable to that amount
of sterling by reference to middle-market rates quoted by National
Westminster Bank plc immediately before close of business in London
on the date of this Agreement or, if such day is not a Business Day,
on the Business Day immediately preceding such day; and
(xiii) where it is necessary to determine whether a monetary limit or
threshold set out in paragraph 1 of Schedule 4 has been reached or
exceeded (as the case may be) and the value of the relevant claim or
any of the relevant claims is expressed in a currency other than
pounds sterling, the value of each such claim shall be translated
into pounds sterling at the prevailing exchange rate applicable to
that amount of that non-sterling currency by reference to
middle-market rates quoted by National Westminster Bank plc
immediately before close of business in London on the date of
receipt by the Seller of written notification from the Purchaser in
accordance with paragraph 2 of Schedule 4 of the existence of such
claim or, if such day is not a Business Day, on the Business Day
immediately preceding such day.
38
SCHEDULE 2
(Completion Arrangements)
1. GENERAL
(A) Obligations on signing
Prior to signing this Agreement:-
(i) the Seller shall have provided to the Purchaser or the Purchaser's
Solicitors a copy of the minutes of a duly held meeting of the
directors of each of the Seller and the Xxxxxxxx Guarantor (or duly
constituted committees thereof) authorising the execution by the
Seller or (as the case may be) the Xxxxxxxx Guarantor of this
Agreement and the Seller's Completion Documents and, in the case
where such execution is authorised by a committee of the board of
directors of the Seller or (as the case may be) the Xxxxxxxx
Guarantor, a copy of the minutes of a duly held meeting of the
directors constituting such committee (in each case such copy
minutes being certified as correct by the secretary of the relevant
company); and
(ii) the Purchaser shall have provided to the Seller or the Seller's
Solicitors a signed opinion from each of the Purchaser's Solicitors
and Proskauer, Rofe, Xxxxx & Xxxxxxxxxx LLP in a form satisfactory
to the Seller and a copy of the minutes of a duly held meeting of
the directors of the Purchaser (or a duly constituted committee
thereof) authorising the execution by the Purchaser of this
Agreement and the Purchaser's Completion Documents and, in the case
where such execution is authorised by a committee of the board of
directors of the Purchaser, a copy of the minutes of a duly held
meeting of the directors constituting such committee or the relevant
extract thereof (in each case such copy minutes being certified as
correct by the secretary of the relevant company).
(B) Seller's obligations
At Completion (or, in the case of (B)(iv), as soon as practicable
thereafter) the Seller shall deliver to the Purchaser or the Purchaser's
Solicitors:
(i) a counterpart of the Tax Covenant, duly executed by the
Seller;
(ii) a counterpart of the Environmental Indemnity, duly executed and
delivered as a deed by the Seller and the Xxxxxxxx Guarantor;
(iii) subject to receipt of any money owing to Xxxxxxxx Group Services
Limited, confirmation that the Purchaser's undertaking in Clause
9(G)(iii) has been fulfilled;
39
(iv) signed copies of the Confidentiality Release Letters and the Report
Letters;
(v) a copy of the Employer's Liability Insurance Policy issued by the
relevant insurers;
(vi) the Deed of Release, duly executed by the relevant members of the
Seller's Group, by Xxxxxxxx Refractories Limited, by Xxxxxx Xxxxxxxx
(Loxley) Limited and by National Westminster Bank plc; and
(vii) subject to receipt of the relevant funds, written confirmation of
the repayment of all Intra-Group Borrowings.
(C) Purchaser's obligations
At Completion (or, in the case of C(i)(c), as soon as practicable
thereafter), the Purchaser shall:
(i) deliver to the Seller or the Seller's Solicitors:
(a) a counterpart of the Tax Covenant, duly executed by the
Purchaser;
(b) a counterpart of the Environmental Indemnity, duly executed
and delivered as a deed by the Purchaser
(c) subject to receipt of any money owing to Xxxxxxxx Refractories
Limited, confirmation that the Seller's undertaking in Clause
9(G)(ii) has been fulfilled; and
(ii) pay the sterling amount of the Consideration by CHAPS transfer for
same day value to the Seller's Account.
2. IN RELATION TO THE COMPANY AND THE UK SUBSIDIARIES
At Completion the Seller shall:
(i) deliver to the Purchaser or the Purchaser's Solicitors (or confirm
where such documents are held and that they are held to the
Purchaser's order):-
(a) duly executed transfers in respect of the Shares (including
any shares held by any nominee of the Seller) and any nominee
shares in any of the UK Subsidiaries held by a member of the
Seller's Group in favour of the Purchaser or such person as
the Purchaser shall have nominated in writing to the Seller
two Business Days prior to Completion and share certificates
for such shares in the names of the relevant transferors and
any power of attorney under which any transfer is executed on
behalf of the Seller or its nominee;
40
(b) share certificates in respect of all the issued share capital
of each of the UK Subsidiaries (where such certificates have
not been produced pursuant to sub-paragraph (i)(a));
(c) the statutory registers (which shall be written up to but not
including the Completion Date), the certificate of
incorporation (and any certificate of incorporation on change
of name) and common seal (if any) of the Company and each of
the UK Subsidiaries;
(d) a power of attorney in the Agreed Form duly executed as a deed
by the Seller and/or its nominees appointing the Purchaser as
its attorney in respect of the Shares;
(e) a power of attorney in the Agreed Form duly executed as a deed
by the nominee of any relevant member of the Group appointing
the Purchaser as its attorney in respect of any shares in any
member of the Group held by it; and
(f) the deeds and documents of title relating to the Properties,
save in relation to Bawtry where the documents will be held by
the Seller to the order of the Purchaser pending completion of
the transfer referred to at Clause 8(G); and
(ii) procure that the present auditors of the Company and each of the UK
Subsidiaries resign their office as such and deposit at the
registered office of the Company and/or the relevant UK Subsidiary
(as the case may be) a letter notifying their resignation
acknowledging that, save for the payment of fees in the ordinary
course, they have in each case no claim against the relevant company
and containing a statement pursuant to section 394(1) Companies Xxx
0000 that there are no circumstances connected with their ceasing to
hold office which they consider should be brought to the attention
of any members or creditors, and the Seller shall procure that a
copy of each letter referred to in this sub-paragraph (ii) shall be
delivered to the Purchaser on Completion;
(iii) procure that resolutions of the boards of directors of the Company
and, where applicable, each of the UK Subsidiaries are passed by
which:-
(a) the transfers of the Shares referred to in sub-paragraph
(i)(a) shall be approved for registration and (subject only to
the transfers being duly stamped) the transferee registered as
the holder of the Shares in the register of members of the
Company;
(b) each of the persons nominated by the Alpine Guarantor shall be
appointed directors and/or secretary of the Company and/or any
of the UK Subsidiaries, as the Purchaser shall direct, such
appointments to take effect on Completion; and
41
(c) the resignation or removal from the office of director or
secretary of the Company and/or any of the UK Subsidiaries of
such persons as the Alpine Guarantor has identified to the
Seller and the Xxxxxxxx Guarantor in writing three Business
Days prior to Completion shall be tendered and accepted so as
to take effect at the close of the meeting and, in the case of
Xxxx Xxxxxx, delivery to the relevant company of an
acknowledgement executed as a deed in the Agreed Form stating
that he has no claim against the relevant company for breach
of any contract of employment with the relevant company,
compensation for loss of office, redundancy or unfair
dismissal or on any other account whatsoever and that no
agreement or arrangement is outstanding under which the
relevant company has or could have any obligation to him; and
(iv) procure that either the originals or copies of the resolutions
referred to above, certified as correct by the secretary of the
relevant company, and the resignations and acknowledgements referred
to above are delivered to the Purchaser or the Purchaser's
Solicitors.
3. IN RELATION TO XXXXXXXX REFRACTORIES (BELGIUM) SA, REFINTER, AUXIREF AND
THE ASSOCIATED COMPANY
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, share transfer
agreements and powers of attorney signed by Pierre Halleux in order to
transfer all the issued shares in Xxxxxxxx Refractories (Belgium) SA,
Refinter and Auxiref held by him;
(B) deliver the statutory books of Xxxxxxxx Refractories (Belgium) SA,
Refinter and Auxiref, (which shall be written up to but not including the
Completion Date), including the shareholders' registers and the minute
books for meetings of the shareholders and directors, where these are not
held to the order of the Purchaser.
(C) deliver to the Purchaser or the Purchaser's Solicitors a letter from KPMG
addressed to Xxxxxxxx Refractories (Belgium) SA tendering their
resignation as auditors, subject to various conditions;
(D) procure shareholders' meetings of Refinter and Auxiref at which Xxxxxxx X.
Xxxxxxx shall be appointed director of the relevant company, such
appointment to take effect on the Completion Date; and
(E) procure that a copy of the minutes of the shareholders' meetings referred
to above are delivered to the Purchaser or the Purchaser's Solicitors.
42
4. IN RELATION TO XXXXXXXX REFRACTORIES DEUTSCHLAND GMBH
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, a notarial deed
purporting to transfer the one issued share in Xxxxxxxx Refractories
Deutschland GmbH held by Xxxxxxxx Nominee Limited to Xxxxxxxx Refractories
(Holdings) Limited and letters from Xxxxxxxx Nominee Limited and Xxxxxxxx
Refractories (Holdings) Limited confirming the transfer of the share; and
(B) deliver a shareholders' resolution of Xxxxxxxx Refractories Deutschland
GmbH approving the transfer of the share from Xxxxxxxx Nominee Limited to
Xxxxxxxx Refractories (Holdings) Limited.
5. IN RELATION TO XXXXXXXX REFRACTORIES ITALIANA SRL
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, a notarial deed
transferring the quota of Italian Lire 200,000 (representing 1% of the
corporate capital) of Xxxxxxxx Refractories Italiana Srl held by Xxxxxxxx
Nominee Limited to Coolee Limited; and
(B) deliver to the Purchaser or the Purchaser's Solicitors, (i) originals of
all the corporate books and ledgers of Xxxxxxxx Refractories Italiana Srl
(which shall be written up to but not including the Completion Date) and
(ii) a certificate of incorporation issued by the competent Chamber of
Commerce on a date not earlier than 10 days preceding Completion where
these are not held to the order of the Purchaser.
6. IN RELATION TO LES PRODUITS SILICEUX SA, CONSTRUCTIONS THERMIQUES
EUROPEENNES SA AND S.C.I.47
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, the shareholders'
account forms in respect of all of the issued shares in Les Produits
Siliceux SA, Constructions Thermiques Europeennes SA and S.C.I.47;
(B) deliver to the Purchaser or the Purchaser's Solicitors, share transfer
forms transferring the one issued shares in Les Produits Siliceux SA and
five issued shares in Constructions Thermiques Europeennes SA held by
Xxxxxxx Xxxx;
(C) deliver the statutory registers (which shall be written up to but not
including the Completion Date) of Les Produits Siliceux SA, Constructions
Thermiques Europeennes SA and S.C.I.47 where these are not held to the
order of the Purchaser; and
43
(D) deliver a letter of resignation from Xxxxxxx Xxxx from the office of
director of Les Produits Siliceux SA and of Constructions Thermiques
Europeennes SA.
7. IN RELATION TO HEPWORTH REFRACTORIES CANADA LIMITED
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, share certificates
in respect of all of the issued shares in Hepworth Refractories Canada
Limited;
(B) deliver the statutory registers (which shall be written up to but not
including the Completion Date), the certificate of incorporation (and any
certificate of incorporation on change of name) and common seal (if any)
of Hepworth Refractories Canada Limited or their equivalents where these
are not held to the order of the Purchaser.
(C) deliver to the Purchaser or the Purchaser's Solicitors a letter from the
auditors of Hepworth Refractories Canada Limited addressed to that company
tendering their resignation as auditors;
(D) deliver a letter of resignation from Xxx Xxxxxx Xxxxxxxxxx from the office
of director of Hepworth Refractories Canada Limited; and
(E) deliver a shareholders' resolution of Hepworth Refractories Canada Limited
that Xxxxxxx X. Xxxxxxx be appointed director of Hepworth Refractories
Canada Limited, such appointment to take effect on the Completion Date and
that the resignation of Xxx Xxxxxx Xxxxxxxxxx as director of Hepworth
Refractories Canada Limited be accepted.
8. IN RELATION TO XXXXXXXX REFRACTORIES INC.
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, share certificates
in respect of all of the issued shares in Xxxxxxxx Refractories Inc.;
(B) deliver the statutory registers (which shall be written up to but not
including the Completion Date) and the certificate of incorporation (and
any certificate of incorporation on change of name) of Xxxxxxxx
Refractories Inc. or their equivalents where these are not held to the
order of the Purchaser;
(C) deliver to the Purchaser a letter from the auditors of Xxxxxxxx
Refractories Inc. addressed to that company tendering their resignation as
auditors;
(D) deliver a shareholder's resolution of Xxxxxxxx Refractories Inc. that
Xxxxxxx X. Xxxxxx, Bragi X. Xxxxx and Xxxxxxx X. Xxxxxxx be appointed
directors or secretary
44
of Xxxxxxxx Refractories Inc., such appointments to take effect on the
Completion Date.
45
SCHEDULE 3
(The Warranties)
For the purpose of this Schedule 3, a "material adverse effect on the Group
taken as a whole" or a "material adverse change in the financial position of the
Group taken as a whole" shall be deemed to have occurred if, as a result of any
circumstances, acts or omissions, or event or series of events, relevant to the
particular Warranty in which either of the terms, or any similar term, is used,
there is a material adverse effect on, or a material adverse change in the
financial position of, either of the Principal Operating Companies, or a
material adverse effect on, or a material adverse change in the financial
position of, the Group taken as a whole.
Unless otherwise expressly provided, any circumstances, acts or omissions, or
event or series of events, will be "material in the context of the Group taken
as a whole" or "material in relation to the Group Businesses taken as a whole"
in relation to the particular Warranty in which either of the terms, or any
similar term, is used, where such circumstances, acts or omissions, or events or
series of events are material to any one of the Principal Operating Companies,
or are material to the Group taken as a whole.
"Principal Operating Companies" shall mean Xxxxxxxx Refractories Limited and
Xxxxxxxx Refractories (Belgium) SA.
1. OWNERSHIP OF THE SHARES
(A) The Seller is the sole legal and beneficial owner of the Shares.
(B) There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance or equity on, over or affecting the
Shares or any of them and there is no agreement or commitment entered into
by any member of the Seller's Group to give or create any of the
foregoing.
2. CAPACITY OF THE SELLER AND THE XXXXXXXX GUARANTOR
(A) Each of the Seller and the Xxxxxxxx Guarantor has the requisite power and
authority to enter into and perform this Agreement and the other documents
which are to be executed by the Seller and/or the Xxxxxxxx Guarantor (as
the case may be) at Completion (the "Seller's Completion Documents").
(B) This Agreement constitutes and the Seller's Completion Documents will,
when executed by the Seller and/or the Xxxxxxxx Guarantor (as the case may
be), constitute binding obligations of the Seller and/or the Xxxxxxxx
Guarantor (as the case may be) in accordance with their respective terms.
(C) The execution and delivery of, and the performance by each of the Seller
and the Xxxxxxxx Guarantor of its respective obligations under, this
Agreement and the Seller's Completion Documents will not:-
46
(i) result in a breach of any provision of the memorandum or articles of
association of the Seller or the Xxxxxxxx Guarantor (as the case may
be);
(ii) result in a breach of, or constitute a default under, any instrument
to which the Seller or the Xxxxxxxx Guarantor (as the case may be)
is a party or by which the Seller or the Xxxxxxxx Guarantor (as the
case may be) is bound; or
(iii) result in a breach of any existing order, judgment or decree of any
court or governmental agency to which the Seller or the Xxxxxxxx
Guarantor (as the case may be) is a party or by which the Seller or
the Xxxxxxxx Guarantor (as the case may be) is bound.
3. ARRANGEMENTS BETWEEN THE COMPANY AND THE SELLER
(A) No arrangement or contract other than on arm's length terms is outstanding
between any member of the Group and any member of the Seller's Group or
any person who is a director of or connected with any such member of the
Seller's Group.
(B) Since the Accounts Date, there has been no transfer of any interest in
real property between any member of the Group and any member of the
Seller's Group or any person who is a director of or connected with any
such member of the Seller's Group.
4. GROUP STRUCTURE, ETC.
(A) The Shares comprise the whole of the issued and allotted share capital of
the Company and all of them are fully paid up and there are no
restrictions of any kind on the voting or transfer of any of the shares.
(B) There is no agreement or commitment outstanding entered into by any member
of the Group which calls for the allotment, issue or transfer of, or
accords to any person the right to call for the allotment or issue of, any
shares (including the Shares) or debentures in or securities of any member
of the Group.
(C) The information given in Schedule 5 and Parts A and B of Schedule 6 is
true and accurate.
(D) Either the Company or another member of the Group is the sole legal and
beneficial owner of the entire issued share capital of each of the
Subsidiaries free and clear of all pledges, securities, liens (other than
liens arising by operation of law in the ordinary course of trading),
charges, encumbrances, equities, claims, restrictions, options or
limitations affecting the Company's ability to vote or transfer such
shares.
(E) Xxxxxxxx Refractories (Belgium) SA is the sole legal and beneficial owner
of the Associated Company Shares and there is no option, right to acquire,
mortgage, charge, pledge, lien or other form of security or encumbrance
on, over or affecting
47
any of the Associated Company Shares and there is no agreement or
commitment to give or create any of the foregoing.
(F) No member of the Group has any interest in the share capital of or other
equity interest in any company other than the Subsidiaries or the
Associated Company.
(G) No member of the Group acts nor carries on business in partnership with
any other person or is a member (otherwise than through the holding of
share capital) of any corporate or unincorporated body, undertaking or
association (other than a trade association) or holds or is liable on any
share or security which is not fully paid up or which carries any
liability.
(H) No member of the Group trades under a name other than its corporate name
(excluding trademarks registered or applied for in its corporate name
details of which are contained in Attachment G).
(I) The Data Room contains all agreements outstanding between all or any of
the shareholders of the Associated Company to which any member of the
Group is a party and, so far as the Seller is aware, no party to any such
agreement has received notice of any kind from any other party to such
agreement of any intention to terminate any such agreement.
5. OWNERSHIP OF ASSETS
(A) Each of the Material Assets included in the Accounting Pack or acquired by
any member of the Group since the Accounts Date (other than current assets
sold, realised or applied in the normal course of business) is owned both
legally and beneficially by a member of the Group and each of those assets
capable of possession is in the possession of a member of the Group.
(B) No option, right to acquire, mortgage, charge, pledge, lien (other
than a lien arising by operation of law in the ordinary course of
business) or other form of security or encumbrance or equity (an
"Encumbrance") on, over or affecting the whole or any part of the
Material Assets of any member of the Group is outstanding (other
than any asset acquired in the ordinary course of business on terms
that the property does not pass until payment is made) and there is
no agreement or commitment entered into by any member of the Group
to give or create any and no claim has been made against any member
of the Group by any person to be entitled to any such Encumbrance.
(C) The Seller has been informed by Xx. X. Xxxxx, the Group's production
director, that he is not actually aware of any material item of plant or
machinery owned by the Group which (on the assumption that currently
planned maintenance and repair takes place) is either not reasonably
useable for the purpose for which it is currently used as at the date of
this
48
Agreement or which is likely not to be reasonably useable for the purpose
for which it is currently used within 2 months after the date of this
Agreement other than in any such case as a result of current, planned or
anticipated maintenance or repair or as a result of normal wear and tear
bearing in mind the age of such plant or machinery.
For this purpose, there is no requirement for Xx. X. Xxxxx to have made
any enquiries and an item is only material if its replacement value is in
excess of (pound)200,000 and the Group neither owns a reasonably useable
replacement nor has a means of avoiding the adverse effects of the loss of
use of such item without direct expenditure (excluding loss of profit) in
excess of (pound)100,000.
(D) The plant registers of each member of the Group (other than any dormant
Subsidiary) comprise a record of the plant, machinery, equipment and
vehicles owned by that member of the Group which is, in all material
respects, complete and accurate.
6. ACCURACY OF INFORMATION
(A) All statutory books, books of accounts, registers and minute books
required to be kept by the law of the relevant jurisdiction of each member
of the Group are up-to-date and have in all material respects been
properly kept in accordance with all applicable law and contain a record
of the matters which should be dealt with in those books and no notice or
allegation that any of them is materially incorrect or should be rectified
has been received by any member of the Group.
(B) The copy of the memorandum and articles of association or other like
constitutional documents of each member of the Group contained in the Data
Room is a complete and accurate and up to date copy in all material
respects.
(C) All returns and other documents relating to each member of the Group
required to be delivered to the Registrar of Companies or any equivalent
body under the law of the relevant jurisdiction of each member of the
Group have been properly made and delivered.
(D) The information provided to the Purchaser in the Data Room was provided by
the Seller in good faith.
(E) The information provided by the Seller for the purpose of preparing each
of the KPMG Report, the Fugro Report and the Chesterton Report was
provided by the Seller in good faith.
7. ACCOUNTS
The Accounting Pack:-
(i) was prepared in accordance with accounting principles and practices
generally accepted in the United Kingdom as at the Accounts Date;
and
49
(ii) gives a true and fair view of the state of affairs of the Group at
such date.
8. EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:-
(i) there has been no material adverse change in the financial position
of the Group taken as a whole;
(ii) the Group Businesses have in all material respects been carried on
in the ordinary course;
(iii) no Material Asset of any member of the Group has been acquired or
disposed of or has been agreed to be acquired or disposed of;
(iv) no resolution of any member of the Group in general meeting has been
passed other than resolutions relating to the routine business of
annual general meetings;
(v) no member of the Group has declared, authorised, made or paid to its
members any dividend or other similar distribution;
(vi) no member of the Group has allotted or issued or agreed to issue or
granted an option or other right to acquire any share capital; and
(vii) no member of the Group has redeemed or purchased or offered or
agreed to redeem or purchase any of its share capital.
9. CONTRACTS AND COMMITMENTS
(A) The Data Room contains each outstanding contract or arrangement entered
into by any member of the Group which:
(i) is a Material Contract; or
(ii) restricts it from carrying on the business of that member of the
Group in any part of the world; or
(iii) is a joint venture agreement or arrangement, consortium, partnership
or profit (or loss) sharing agreement under which it is to
participate with any other person in any business; or
(iv) is an agency, distributorship or marketing contract or arrangement,
which is material in the context of the Group taken as a whole; or
50
(v) is a contract or arrangement which has an unexpired term of three or
more years and which is material in relation to the Group Businesses
taken as a whole; or
(vi) can be terminated by any other party thereto in the event of a
change of control of that member of the Group and which is material
in relation to the Group Businesses taken as a whole; or
(vii) makes it liable to make any investment in securities or make any
loan (other than trade credit) to any person.
(B) No member of the Group is in material breach of any Material Contract and,
so far as the Seller is aware, no other party to any Material Contract is
in material breach of any such Material Contract and, so far as the Seller
is aware, there are no circumstances likely to give rise to any such
breach by any member of the Group or any other party. For the purposes of
this warranty, a "material breach" shall be a breach which, in the
ordinary course of business of the Group Businesses as they have been
conducted during the 12 months prior to the date of this Agreement, is
reasonably likely to result in termination of the Material Contract or in
litigation leading to the award and payment of damages to the party which
is not in default.
(C) So far as the Seller is aware, no member of the Group is in material
breach of any obligation of confidentiality imposed on it by any third
party. For the purposes of this warranty, a "material breach" shall be a
breach which, in the ordinary course of business of the Group Businesses
as they have been conducted during the 12 months prior to the date of the
Agreement, is reasonably likely to result in termination of any material
arrangements made pursuant to, or in connection with, the relevant member
of the Group accepting such an obligation of confidentiality or is
reasonably likely to result in litigation leading to the award of damages
to the party which is not in default.
(D) The Data Room contains details as at close of business on 14th April, 1997
of all currency and/or interest rate swap agreements, asset swap, future
rate or forward rate agreements, interest cap, collar and/or floor
agreements or other exchange or rate protection transactions or
combinations thereof or any options with respect to any such transfers or
any other similar transaction, in each case to which a member of the Group
and a member of the Seller's Group are party.
10. BANK ACCOUNTS AND BORROWINGS
(A) The Data Room contains the terms of each material overdraft, loan and
other similar financial facility currently available to each member of the
Group other than from a member of the Seller's Group.
(B) The total amount borrowed by each member of the Group does not exceed any
limitation in its financial facilities or articles of association.
51
(C) So far as the Seller is aware, no member of the Group has received any
notice to repay under any agreement relating to any borrowing or
indebtedness in the nature of borrowing which is repayable on demand.
11. POWERS OF ATTORNEY
No member of the Group has given any power of attorney, proxy or similar
authority in relation to the Group Businesses (other than such given to an
officer of a member of the Group or to a patent or trademark agent, in
each case in the ordinary course of the business of that member of the
Group) which is outstanding as at the date of this Agreement.
12. GRANTS AND ALLOWANCES
No member of the Group has received or applied for any grant, allowance,
aid or subsidy, in each case in excess of (pound)100,000, in relation to
the Group Businesses from any supranational, national or local authority
or government agency which would be repayable as a result of the sale of
the Shares to the Purchaser.
13. SUBSTANTIAL DEPENDENCE
The details of the top ten customers of Xxxxxxxx Refractories Limited for
the years ending 31st December, 1993, 1994, 1995 and 1996 provided at
document 4.1 in the Data Room are materially complete and accurate.
14. INSOLVENCY
(A) No order has been made, and no resolution has been passed for, and no
meeting has been convened for the purpose of, the winding up of the
Company or any UK Subsidiary or for a provisional liquidator to be
appointed in respect of the Company or any UK Subsidiary and, so far as
the Seller is aware, no petition has been presented for the purpose of
winding up the Company or any UK Subsidiary.
(B) No administration order has been made and, so far as the Seller is aware,
no petition for such an order has been presented in respect of the Company
or any UK Subsidiary.
(C) No receiver (which expression shall include an administrative receiver)
has been appointed in respect of the Company or any UK Subsidiary or all
or any of its assets.
(D) No event analogous to any of the foregoing has occurred in respect of any
Overseas Subsidiary PROVIDED THAT this Warranty 14(D) is subject to
Seller's awareness where the relevant event is analogous to an event
referred to in Warranties 14(A) and 14(B) to the extent that they are
given subject to the Seller's awareness.
52
15. LITIGATION
(A) No member of the Group is engaged in any litigation or arbitration,
administrative or criminal proceedings, whether as plaintiff, defendant or
otherwise, in relation to which a claim of (pound)50,000 or above has been
made against, or by, any member of the Group.
(B) So far as the Seller is aware, no such litigation or arbitration,
administrative or criminal proceedings as are referred to in sub-paragraph
(A) (but substituting a sum of (pound)100,000 for the sum of (pound)50,000
referred to therein) are pending or threatened.
16. DELINQUENT AND WRONGFUL ACTS
(A) No member of the Group has committed any criminal or illegal act which
would have a material adverse effect on the Group taken as a whole.
(B) So far as the Seller is aware, no member of the Group has received
notification that any investigation or inquiry is being or has been
conducted by any supranational, national or local authority or
governmental agency in respect of the business or affairs of any member of
the Group.
(C) Each member of the Group has conducted its business materially in
accordance with its Memorandum and Articles of Association (or the
equivalent in the relevant jurisdiction other than the UK) and in all
material respects with all applicable law and regulations.
(D) Each member of the Group has obtained all licences, permissions,
authorisations and consents which are material to the business of the
Group taken as a whole (the "Material Permits") and, so far as the Seller
is aware, no notice of withdrawal of any of such Material Permits has been
received by any member of the Group and no material breach of such
Material Permits is outstanding..
(E) The Data Room contains details, on a monthly basis, of all claims notified
to the Group in writing which were outstanding as at the specified date in
each month (commencing with January 1996 and ending with March 1997) in
relation to faulty, defective or dangerous products or products not
meeting relevant specifications, in each case which had been manufactured,
sold or supplied by any member of the Group.
17. PROPERTY
(A) The Properties referred to in Schedule 8 are the only Properties owned,
used or occupied by any member of the Group or in respect of which any
member of the Group has any estate, interest, right or actual or
contingent liability.
53
(B) So far as the Seller is aware, each written reply of the Seller's
Solicitors to written enquiries relating to the Properties referred to in
Schedule 8 made by the Purchaser's Solicitors is true and accurate in all
material respects and is not misleading in a material way.
(C) A member of the Group is in possession of the whole of each of the
Properties and no other person is in or, so far as the Seller is aware, is
entitled to occupation of any of the Properties.
(D) The relevant member of the Group shown in Schedule 8 as the owner of each
Property is the sole legal and beneficial owner thereof, and all
materially relevant deeds and documents are in its possession or under its
control.
(E) So far as the Seller is aware, no member of the Group is for any reason
anticipating the expenditure of any material sum of money in respect of
any of the Properties.
(F) Within the last seven years, no member of the Group has received any
materially adverse surveyors', engineers' or other professional report in
respect of any of the Properties.
(G) The details of the Properties referred to in Schedule 8 are true and
accurate and not misleading.
(H) So far as the Seller is aware, there are no material current, contingent
or anticipated notices, actions, disputes, complaints, liabilities, claims
or demands relating to or in respect of the Properties or their uses.
(I) Neither the Seller nor any member of the Group has received notice that
the Properties and all uses of and developments on the Properties do not
comply with all town and country planning legislation and any orders,
regulations, consents or permissions made or granted under any of the
same.
(J) No planning permission in respect of any of the Properties is for a
limited period or personal, and so far as the Seller is aware, there are
no onerous planning conditions.
(K) During the ten year period preceding the date of this Agreement, a member
of the Group has enjoyed uninterrupted access to and use of the Properties
numbered 1, 2, 5, 6, 7, 8, 13, 19, 20 and 23 in Schedule 8 for the
purposes for which they are currently used.
(L) In relation to the Properties or any properties formerly occupied by any
member of the Group (or in relation to which minerals were excavated) all
restoration and aftercare obligations and obligations under planning
permissions or planning agreements, highway agreements and other statutory
agreements have been discharged in all material respects.
54
(M) There are no financial bonds relating to any planning permission which
have not been discharged. In relation to the Properties, there are no
planning agreements or conditions which require the monitoring of
environmental conditions.
(N) Neither the Seller nor any member of the Group has received any
written notices relating to ground pollution, water pollution,
subsidence, gas leakage, air emission or flooding in respect of any
of the Properties or in respect of any properties formerly mined by
the Company (including completed landfill sites) or in respect of
which the Company formerly had an interest (excluding any such
notices which have been resolved without any prospect of further
liability).
(O) In respect of the Properties and any properties mined by the Company in
the past, no royalties for minerals extractions are payable and no
royalties are outstanding.
(P) Neither the Vendor nor any member of the Group has at any time in the past
twenty five years carried out any landfill operations at Old Ewloe Works,
Xxxxxxx, nor at Ewloe Barns Works, Xxxxxxx.
18. INTELLECTUAL PROPERTY
(A) Details of all registered Intellectual Property, and applications for
registration, owned by any member of the Group are set out in Attachment G
(the "Registered Intellectual Property"). The relevant member of the Group
is the sole legal owner of such registered Intellectual Property.
(B) Details of all licences, agreements and arrangements:-
(i) granted by any member of the Seller's Group or any third party to
any member of the Group in respect of any Intellectual Property
material to the on-going operations of the Group Businesses; or
(ii) granted by any member of the Group to any member of the Seller's
Group or any third party in respect of any Intellectual Property
material to the on-going operations of the Group Businesses,
in each case, as carried on at the date of this Agreement, are set
out in Attachment D (the "Licences").
(C) All renewal fees and steps required for the maintenance or protection of
the Registered Intellectual Property have been paid or taken and none of
such rights are subject to any challenge or attack by a third party or
competent authority of which the Seller has been notified.
(D) No member of the Group nor any other party is, so far as the Seller is
aware, in material breach of any of the Licences .
55
(E) So far as the Seller is aware, the processes and methods employed, the
services provided, the businesses conducted and the products manufactured,
used or dealt in by any member of the Group, in each case in relation to
the Group Businesses as carried on at the date of this Agreement, do not
infringe the rights of any other person in any Intellectual Property and
the Seller has not received any notification of any such infringement.
(F) So far as the Seller is aware, there is no current unauthorised use or
infringement by any person of any registered Intellectual Property.
(G) So far as the Seller is aware, none of the Registered Intellectual
Property is subject to any charge, lien or other security interest.
(H) No member of the Group has received notification of any liability on its
behalf to pay any compensation, or notification of any request for
compensation under Section 40 of the Patents Xxx 0000 or any analogous
rights anywhere in the world.
(I) No member of the Group has received notification from the Comptroller
General of Patents, Designs and Trade Marks that he may exercise his
discretion to grant a compulsory licence in relation to any patents
currently owned and used by such member of the Group.
(J) So far as the Seller is aware, to the extent that any information
of a confidential nature owned by any member of the Group has been
used by any member of the Group in the two year period prior to the
date hereof such information (except in so far as it has fallen into
the public domain through no fault of such member of the Group) has
not been disclosed to any third party by such member of the Group
otherwise than subject to an obligation of confidentiality being
imposed on the person to whom the information was disclosed, where
such disclosure would be in breach of a duty of confidence owed to a
third party or where such disclosure would have a material effect on
the ongoing operations of the Group Businesses.
19. COMPETITION AND TRADE REGULATION LAW
(A) So far as the Seller is aware, no member of the Group is or has been a
party to any agreement material in relation to the business of the Group
taken as a whole which:-
(i) has been registered under the RTPA 1976; or
(ii) contravenes the provisions of the Resale Prices Xxx 0000; or
(iii) infringes Article 85 or 86 of the Treaty establishing the European
Union; or
(iv) so far as the Seller is aware, contravenes or infringes any
equivalent legislation to the provisions referred to in sub-clauses
(A)(i), (ii) and (iii) embodied in the domestic anti-trust or
similar legislation of Germany (in the
56
case of Xxxxxxxx Refractories Deutschland GmbH), Belgium (in the
case of Xxxxxxxx Refractories (Belgium) SA, Refinter and Auxiref),
Italy (in the case of Xxxxxxxx Refractories Italiana SRL), France
(in the case of Les Produits Siliceux SA, Constructions Thermiques
Europeennes SA and S.C.I.47), the United States (in the case of
Xxxxxxxx Refractories Inc.), and Canada (in the case of Xxxxxxxx
Refractories Canada Limited).
(B) No member of the Group is a party to any agreement material in relation to
the Group Businesses as a whole in respect of which any undertaking has
been given by or any order made against any member of the Group pursuant
to the RTPA 1976 or in respect of which an undertaking has been given by
or an order made against any member of the Group pursuant to the Resale
Prices Xxx 0000.
(C) No member of the Group has given any assurance or undertaking to, nor is
it subject to any specific order, decision or ruling of:-
(i) the Office of Fair Trading, the Monopolies and Mergers Commission,
the Secretary of State or any equivalent authority in Germany,
Belgium, Italy, France, the United States of America or Canada under
competition legislation of the relevant country; or
(ii) the Commission of the European Union under EU competition
legislation,
in relation to the Group Businesses where such assurance, undertaking,
order, decision or ruling is likely to cause a material loss or liability
to the Group taken as a whole.
(D) No member of the Group is or has been a party to or is or has been
concerned in any agreement or arrangement relating to the Group Businesses
in respect of which an application for negative clearance and/or exemption
has been made to the Commission of the European Union.
20. INSURANCE
Details of the current insurance policies in respect of which any member
of the Group has an interest are set out in the Data Room and, so far as
the Seller was aware on 11th April, 1997, no individual or related claims
for amounts in excess of (pound)100,000 are outstanding thereunder.
21. EMPLOYMENT
(A) A list of the names, jobs and short details of the terms of employment
(including the emoluments) of every Employee as at 5th April is set out in
the Data Room, together with copies of all standard form contracts and
terms and conditions of employment of general application.
57
(B) A list of the names, jobs and details of the terms of employment
(including the emoluments) of, and a copy of the Employment contract for,
each Senior Employee are set out in the Disclosure Letter.
(C) Short details of any material benefit received by any Employee otherwise
than in cash, and of any benefit received by any Employee in cash which is
related in whole or in part to sales, profits, turnover or performance, or
which is otherwise variable (other than normal overtime), are set out in
the Disclosure Letter.
(D) Any contract of employment with any Employee to which any member of the
Group is a party can be terminated by the employing company without
damages or compensation (other than that payable under statute) by giving
at any time six months' notice in writing to that Employee.
(E) As at 14th April, 1997, no Senior Employee has given notice terminating
his contract of employment or is under notice of dismissal and no amount
due to or in respect of any such Senior Employee, director or Employee or
former Senior Employee is in arrears and unpaid other than his salary for
the month current at the date of this Agreement.
(F) Since the Accounts Date, no material change has been made in the
emoluments or other terms of employment of any Senior Employee save for
increases in emoluments made in accordance with the normal practice of the
Seller's Group not exceeding an overall increase of 5% to payroll costs.
(G) So far as the Seller is aware, no member of the Group has outstanding any
material undischarged liability to pay to any governmental or regulatory
authority in any jurisdiction any contribution, Taxation or other impost
arising in connection with the employment or engagement in that
jurisdiction of personnel by any member of the Group.
(H) No member of the Group has entered into any arrangement regarding any
future material variation in any contract of employment in respect of any
of its Employees or any agreement imposing an obligation on any member of
the Seller's Group to increase the basis and/or rates of remuneration
and/or the provision of other benefits in kind to or on behalf of any of
its Employees at any future date which could have the effect of increasing
payroll costs by 5% or more.
(I) Each member of the Group has in relation to each of its Employees (and,
insofar as relevant, to each of its prospective, future or former
employees) complied in all material respects with all legislation and
statutory regulations relevant to their conditions of service or to the
relations between it and its employees or any recognised trade union and
no member of the Group has received notice that it has not complied with
the terms of the contracts of employment of any of its Employees (or
former employees).
58
(J) The number of persons who have been offered employment with any member of
the Group which offer remains outstanding and who are employed (or were
previously employed) by any member of the Group who are on secondment,
maternity leave, absence on grounds of disability or other leave of
absence and have, or may have, a statutory or contractual right to return
to work for any member of the Seller's Group shall not exceed 10% of the
number of Employees whose names are listed in accordance with Clause
21(A).
(K) There is no provision in any contract of employment or other arrangement,
in either case involving a member of the Group, giving a right or an
increased right to any Senior Employee which may arise on the acquisition
of the Shares by the Purchaser under this Agreement or which is contingent
on a change of control or ownership of any member of the Group.
(L) No member of the Group has established or informed its employees that it
intends to introduce any share incentive scheme, share option scheme,
profit related pay scheme or profit sharing bonus or other incentive
scheme for all or any of its employees save those disclosed in the
Disclosure Letter and the Data Room.
(M) No payment (gratuitous or otherwise) has been made or promised to be made
by any member of the Group in connection with the actual or proposed
termination or suspension of employment or variation of any contract of
employment of any present or former Employee employed to work in the UK
except in accordance with their contracts of employment, relevant
legislation and the collective agreements which have been disclosed.
(N) No member of the Group has:
(a) within the period of one year preceding the date of this Agreement,
given notice of any dismissals or redundancies to the relevant
Secretary of State or started consultations with any independent
trade union under the provisions of Part IV of the Trade Union and
Labour Relations (Consolidation) Xxx 0000 or Part IV of the
Employment Protection Act 1975 or failed to comply with any such
obligation under that legislation; or
(b) within the period of 6 months preceding the date of this Agreement,
been a party to any "relevant transfer" (as defined in the Transfer
of Undertakings (Protection of Employment) Regulations 1981) or
agreement for a relevant transfer or failed to comply with any duty
to inform and consult any independent trade union under the said
Regulations.
(O) No member of the Group has an agreement or other arrangement (binding or
otherwise) with any trade union or other body representing its employees
in the UK or any of them and does not recognise to any extent any trade
union or other body representing its employees in the UK or any of them
for the purpose of collective bargaining or other negotiating purposes.
59
(P) No member of the Group is involved (or has been so involved at any time
during the last year in any industrial or trade disputes in the UK which
caused stoppages of one day or more, and no member of the Seller's Group
is aware of any such dispute that may be pending or threatened, or of any
present circumstances which may give rise to any such dispute.
22. ENVIRONMENTAL
(A) (i) Each member of the Group has all Environmental Permits required
to enable it to conduct its business lawfully under the terms of the
Environmental Laws.
(ii) Each such Environmental Permit is in full force and effect.
(iii) No proceeding or other action of whatever nature is pending or is
threatened or, so far as the Seller is aware, is under consideration
seeking the suspension, revocation, variation, limitation of or
otherwise relating to any Environmental Permit or seeking to impose
any penalty under any Environmental Permit or Environmental Laws.
This warranty does not apply to the Properties at Bawtry or Loxley
in so far as it relates to matters other than suspension or
revocation.
(iv) There are no facts or circumstances which will or are likely to
result in any Environmental Permit being suspended, revoked or, so
far as the Seller is aware, varied or limited prior to renewal or
expiry. This warranty does not apply to the Properties at Bawtry or
Loxley in so far as it relates to matters other than suspension or
revocation and only applies to variation or limitation where the
seller is aware both (a) of the relevant facts or circumstances; and
(b) that such facts or circumstances are likely to lead to a
variation or limitation prior to renewal or expiry.
(v) No appeals are pending or being contemplated in respect of the
refusal of or conditions contained in any Environmental Permit or
any action taken in respect of any Environmental Permit. This
warranty does not apply to the Properties at Bawtry and Loxley.
(B) (i) So far as the Seller is aware, each member of the Group is and
always has been in full compliance with the Environmental Permits
and Environmental Laws in all material respects and the use of all
the Properties and the machinery and other property employed in the
conduct of the Group Business has been and is in accordance with the
Environmental Permits and Environmental Laws in all material
respects.
(ii) No notice, notification, demand, request for information, summons,
complaint or order has been issued, no complaint has been made, no
penalty has been assessed and, so far as the Seller is aware, no
investigation or review is
60
pending or is threatened, by any public authority having
responsibility for Environmental Matters or by any other person with
respect to:
(a) any alleged violation by each member of the Group of any
Environmental Law including the failure by each member of the
Group to report to the proper governmental entity the
occurrence of any event which is required to be so reported by
any Environmental Law; or
(b) any alleged failure by each member of the Group to have or to
operate in compliance with any Environmental Permit; or
(c) any Environmental Matter relating to the acts or omissions of
each member of the Group (or of those other persons for whom
it is liable) or any of the Properties.
This warranty 22(B)(ii) does not apply to the renewal of
Environmental Permits or to matters relating to routine compliance
with Environmental Laws or routine monitoring under Environmental
Laws or in relation to any matter which does not constitute or
relate to an actual or potential breach of Environmental Laws.
(C) None of the warranties in this Warranty 22 apply to Relevant Environmental
Matters as defined in the Environmental Deed.
23. TAX RETURNS, DISPUTES, RECORDS AND CLAIMS ETC.
(A) Each member of the Group has made or caused to be made within any
appropriate time limits all proper returns required to be made, and has
supplied or caused to be supplied all information required to be supplied,
to any Tax Authority and all such information was and so far as the Seller
is aware remains complete and accurate in all material respects and all
such returns were and so far as the Seller is aware remain complete and
accurate in all material respects and were made on the proper basis and do
not, and so far as the Seller is aware are not likely to, reveal any
transactions which may be the subject of any dispute with any Tax
Authority.
(B) So far as the Seller is aware, there is no material dispute or
disagreement outstanding at the date of this Agreement with any Tax
Authority regarding liability or potential liability to any Tax (including
in each case penalties or interest) recoverable from any member of the
Group or regarding the availability of any relief from Tax to any member
of the Group. So far as the Seller is aware in relation to each member of
the Group there is no planned investigation or non-routine visit by any
Tax Authority and there are no facts which might cause an investigation or
non-routine visit to be instituted.
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24. ACCOUNTS AND TAX
No member of the Group has any liability in respect of Tax assessable or
payable by reference to profits, gains, income or distributions earned,
received or paid or arising or deemed to arise on or at any time prior to
the Accounts Date or in respect of any period starting before the Accounts
Date (whether actual or contingent) that is not fully provided for in the
Accounting Pack.
25. TAX EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:-
(i) no member of the Group has declared, made or paid any distribution
within the meaning of ICTA 1988;
(ii) no accounting period of any member of the Group has ended;
26. RESIDENCE
The country which is given in Schedule 5 or Part A of Schedule 6 as the
Tax residence of each member of the Group is and has within the last 6
years been the only country whose Tax Authorities seek to charge Tax on
the world-wide profits or gains (or any part of those profits or gains) of
that member of the Group.
27. GROUP ARRANGEMENTS
So far as the Seller is aware, there are no circumstances by virtue of
which section 410 or 413 of ICTA 1988 would prevent each member of the
Group resident in the United Kingdom being treated as a member of the same
group of companies as each other such member so resident within Chapter IV
Part X of ICTA 1988 for any accounting period commencing on or before the
date of this Agreement.
28. CLOSE COMPANY
No UK Subsidiary is, was or has been a close company as defined in ICTA
1988 in the last six years.
29. No relief has been claimed by and/or given to any member of the Group, or
taken into account in computing or eliminating any provision for Tax or
deferred Tax in the Accounting Pack, which could or might be effectively
withdrawn, postponed, restricted or otherwise lost by virtue of this
Agreement or any other event or circumstance occurring or arising at any
time after the Accounts Date.
30. There has been no change in the ownership of any member of the Group nor
any major change in the nature or conduct of any trade or business carried
on by any member of the Group nor has any other event or series of events
occurred before
62
Completion which might cause the disallowance of the carry forward or back
of losses or excess charges, set-off or surrender of advance corporation
tax under the provisions of section 768 or 768A of the Taxes Act or
sections 245 to 245B of that Act or which might cause a trade to be
disregarded by virtue of paragraph 8 of Schedule 7A to the Taxation of
Chargeable Gains Xxx 0000.
31. SINCE THE ACCOUNTS DATE:
(a) no member of the Group has been involved in any transaction
which has given or may give rise to a liability to Tax on any
member of the Group (or would have given or might give rise to
such a liability but for the availability of any relief) other
than Tax in respect of normal trading income or receipts of
the member of the Group concerned arising from transactions
entered into by it in the ordinary course of business; and
(b) no material disposal has taken place or other event occurred
outside the ordinary course of business which has or may have
the effect of crystallising a liability to Tax which, if such
disposal or event had been planned or predicted at the
Accounts Date, should have been reflected in the provision for
deferred Tax contained in the Accounting Pack.
32. Within the past six years, no member of the Group nor any director or
officer of any member of the Group (in his capacity as such) has paid or
become liable to pay, and so far as the Seller is aware there are no
circumstances by reason of which it or they may become liable to pay to
any Tax Authority, any penalty, fine, surcharge or interest in respect of
Tax (including in respect of any failure to make any return, give any
notice or supply any information to any relevant Tax Authority, or any
failure to pay Tax on the due date for payment).
33. No transaction in respect of which any consent or clearance was required
by law or sought from any Tax Authority has been entered into or carried
out by any member of the Group without such consent or clearance having
first been properly obtained and all information supplied to any Tax
Authority or other appropriate authority in connection with any such
consent or clearance fully and accurately disclosed all facts and
circumstances material to the giving of such consent or clearance. Any
transaction for which such consent or clearance was obtained has been
carried out only in accordance with the terms of such consent or clearance
and the application on which the consent or clearance was based and at a
time when such consent or clearance was valid and effective. So far as the
Seller is aware, no facts or circumstances have arisen since any such
consent or clearance was obtained which would cause the consent or
clearance to become invalid or ineffective.
34. No Tax Authority has operated or agreed to operate any special arrangement
(being an arrangement which is not based on relevant legislation or any
published practice) in relation to the Tax affairs of any member of the
Group.
63
35. No member of the Group is liable for any Tax as the agent of any other
person or business or constitutes a permanent establishment of any other
person, business or enterprise for any Tax purpose.
36. All amounts payable to any Tax Authority in respect of any employee
(including any Tax deductible from any amounts paid to an employee, and
any national insurance, social fund or similar contributions required to
be made in respect of employees) due and payable by any member of the
Group up to the date hereof have been duly paid and each member of the
Group has made all such deductions and retentions as should have been made
under applicable laws or regulations.
37. If each member of the Group disposed of each of its assets (except trading
stock and work-in-progress) for a consideration equal to the book value of
that asset as shown in or adopted for the purposes of the Accounting Pack
to a person not connected with it and by way of bargain at arm's length,
no liability to Tax would arise by reference to any actual or deemed gain
and no member of the Group has acquired any such asset (otherwise than
from another member of the Group) except by way of bargain at arm's
length.
38. Details of all material transactions whereby the value of the shares of
any of the Subsidiaries has been materially reduced by virtue of a
depreciatory or value shifting transaction of which the Seller is aware
have been disclosed to the Purchaser.
39. If each member of the Group disposed of each of its assets, or of any pool
of assets (that is to say all those assets expenditure relating to which
would be taken into account in computing whether a balancing charge or
corresponding Tax would arise on a disposal of any of those assets) for a
consideration equal to their book value as shown in or adopted for the
purpose of the Accounting Pack, no balancing charge (or corresponding Tax
of any relevant foreign jurisdiction) would arise in respect of any such
asset or pool of assets under any legislation relating to capital
allowances (or corresponding legislation of the relevant foreign
jurisdiction).
40. All material transactions in the last 6 years between members of the
Group, or between any member of the Group and any current or past member
of the Seller's Group have been and are on arm's length terms. There are
no circumstances which could cause any Tax Authority to make any
adjustment for Tax purposes to the terms on which any such transaction is
treated as taking place, and no such adjustment has been made or attempted
in fact.
41. No Tax Authority has denied relief for interest paid by any member of the
Group.
42. For the purposes of this warranty the expression "VAT" means value added
tax or any similar sales or turnover tax of any relevant jurisdiction, and
"VAT legislation" means any relevant enactments in relation to VAT and all
notices, provisions and conditions made or issued thereunder including the
terms of any agreement reached with any relevant Tax Authority, and any
concession referred to in the Disclosure Letter.
64
In relation to each member of the Group:
(a) it is registered for the purposes of VAT, has been so registered at
all times that it has been required to be registered by VAT
legislation, and such registration is not subject to any conditions
imposed by or agreed with the relevant Tax Authority;
(b) it has complied fully with and observed in all material respects the
terms of VAT legislation;
(c) it has maintained and obtained at all times complete, correct and
up-to-date records, invoices and other documents (as the case may
be) appropriate or requisite for the purposes of VAT legislation and
has preserved such records, invoices and other documents in such
form and for such periods as are required by VAT legislation;
(d) it only obtains credit for input tax paid in connection with taxable
supplies;
(e) it is not and has not been treated as a member of a group for the
purposes of VAT legislation, and has not applied for such treatment;
and
(f) it is not and has not been subject under VAT legislation to any
penalty, fine or surcharge, or any warning or notice which could
(whether with or without other events) lead to the imposition of any
penalty, fine or surcharge, and has not been required to give any
security as a condition of making supplies for the purposes of VAT.
43. Since the Accounts Date all VAT, import duty and other taxes or charges
payable upon the importation of goods or services and all excise duties
payable in respect of any assets (including trading stock) imported or
owned by any member of the Group have been paid in full.
44. All documents in the possession or under the control of each member of the
Group or to the production of which any member of the Group is entitled
which establish or are necessary to establish the title of any member of
the Group to any asset have been duly stamped and any applicable stamp
duties or similar duties or charges in respect of such documents have been
duly accounted for and paid.
45. All capital duties, fees and penalties payable in respect of the share
capital of each member of the Group (including any premium over nominal
value at which any share was issued) have been duly accounted for and
paid, and there are no circumstances under which any relief obtained
against payment of any such amount could be withdrawn.
46. The details as set out in the document listed at 15A48 in the Data Room
Index are correct insofar as they relate to the acquisition cost and the
date of acquisition of
00
Xxxxxxxx Xxxxxxxxxxxx (Xxxxxxx) SA and Les Produits Siliceux SA, subject
to the reorganisation of the French companies which took place in 1994,
details of which are disclosed in the Data Room.
66
SCHEDULE 4
(Limitations on Liability)
1. LIMITATION ON QUANTUM AND GENERAL
(A) The Purchaser shall not be entitled in any event to damages or other
payment in respect of any claim or claims under any of the Warranties in
respect of any individual claim (or series of related claims with respect
to related facts or circumstances):
(i) unless and until the amount of that claim exceeds (pound)15,000 but,
once the amount of that claim has exceeded such sum, the Seller's
liability shall arise in respect of the full amount of that claim
and not merely in respect of the excess over such sum; and
(ii) unless and until the amount of all claims made in respect of the
Warranties and the Tax Covenant in aggregate exceeds (pound)630,000
and, once the amount of all such claims has exceeded such sum, the
Seller's liability shall only arise in respect of the amount by
which such claims exceed a sum of (pound)250,000.
(B) The total aggregate liability of the Seller under the Warranties, the Tax
Covenant and the Environmental Indemnity together, shall not in any event
exceed an amount equal to the Initial Consideration.
(C) Each provision of this Schedule shall be read and construed without
prejudice to each of the other provisions of this schedule.
(D) As regards the Tax Covenant, the provisions of this Schedule shall operate
to limit the liability of the Seller in so far as any provision in this
Schedule is expressed to be applicable to the Tax Covenant and the
provisions of the Tax Covenant shall further operate to limit the
liability of the Seller in respect of any claim thereunder. In particular,
and without limitation to the foregoing, the provisions of Clauses 3,
4(A), 7 and 8 of the Tax Covenant shall apply mutatis mutandis to any
claim under the Tax Warranties.
2. TIME LIMITS FOR BRINGING CLAIMS
(A) No claim shall be brought against the Seller in respect of any of the
Warranties (other than the Tax Warranties and the Warranties contained in
paragraphs 1 and 4(D) and (E) of Schedule 3) unless the Purchaser shall
have given to the Seller written notice of such claim specifying (in
reasonable detail) the matter which gives rise to the claim, the nature of
the claim and the estimated amount claimed in respect thereof (detailing
the Purchaser's calculation of the loss thereby alleged to have been
suffered by it on a without prejudice basis), in the case of all relevant
Warranties other than
67
those contained in paragraph 22 of Schedule 3, on or before 31 December
1998 or, in the case of Warranties contained in paragraph 22 of Schedule
3, on or before the fifth anniversary of the date of this Agreement,
PROVIDED that the liability of the Seller in respect of such claim shall
absolutely determine (if such claim has not been previously satisfied,
settled or withdrawn) if legal proceedings in respect of such claim shall
not have been commenced within 18 months of the service of such notice and
for this purpose proceedings shall not be deemed to have been commenced
unless they shall have been properly issued and validly served upon the
Seller.
(B) None of the limitations contained in this Clause 2 shall apply to any
breach of Warranty which (or the delay in discovery of which) is the
consequence of fraudulent mis-statement, concealment or other conduct by
any member of the Seller's Group or any officer or employee of any member
of the Seller's Group.
3. CONDUCT OF LITIGATION
(A) Upon the Purchaser or any member of the Purchaser's Group becoming aware
of any claim, action or demand against it or any other matter likely to
give rise to any claim in respect of any of the Warranties (other than the
Tax Warranties) or under the indemnity set out in Clause 11 (the "Clause
11 Indemnity"), the Purchaser shall:-
(i) notify the Seller by written notice as soon as it appears to the
Purchaser that any assessment or claim of a third party received by
or coming to the notice of the Purchaser or any member of the
Purchaser's Group may result in a claim under the Warranties or the
Clause 11 Indemnity;
(ii) subject to the Seller indemnifying the Purchaser in a form
reasonably satisfactory to the Purchaser against any liability,
cost, damage or expense (including legal expenses) which may be
incurred by the Purchaser or any member of the Group, take such
action and give such information and access to personnel, premises,
chattels, documents and records to the Seller and its professional
advisers as it may reasonably request to investigate the claim and
the Seller shall be entitled to require (if such requirement is
reasonable in the circumstances) any relevant member of the
Purchaser's Group to take such action and give such information and
assistance in order to avoid, dispute, resist, mitigate, settle,
compromise, defend or appeal any claim in respect thereof or
adjudication with respect thereto;
(iii) in the case of any claim pursuant to the Warranties, cause the
relevant member of the Group to consult as fully as is reasonably
practicable with the Seller as regards the conduct of any
proceedings arising out of such third party claim;
68
(iv) in the case of any claim under the Clause 11 Indemnity and at the
request of the Seller, allow the Seller to take the sole conduct of
such actions as the Seller may deem appropriate in connection with
any such assessment or claim in the name of the Purchaser or any
relevant member of the Purchaser's Group or the Group and in that
connection the Purchaser shall give or cause to be given to the
Seller all such assistance as the Seller may require in avoiding,
disputing, resisting, settling, compromising, defending or appealing
any such claim and shall instruct such solicitors or other
professional advisers as the Seller may nominate to act on behalf of
the Purchaser or any relevant member of the Purchaser's Group or the
Group, as appropriate, but to act in accordance with the Seller's
sole instructions; and
(v) make no admission of liability, agreement, settlement or compromise
with any third party in relation to any such claim or adjudication
without the prior written consent of the Seller (such consent not to
be unreasonably withheld).
(B) In relation to the Clause 11 Indemnity only, the Seller shall be entitled
at any stage and at its sole discretion to settle any such third party
assessment or claim PROVIDED THAT it shall notify the Purchaser of its
decision so to settle prior to it settling such assessment or claim.
4. NO LIABILITY IF LOSS IS OTHERWISE COMPENSATED FOR
(A) The Purchaser shall not be entitled to recover damages or otherwise obtain
reimbursement or restitution more than once in respect of any individual
breach of the Warranties.
(B) No liability shall attach to the Seller by reason of any breach of any
term of the Warranties to the extent that the same loss has been recovered
by the Purchaser or any member of the Group under any other terms of this
Agreement or any other document referred to herein, including, without
limitation, the Xxxxxxxx Refractories Inc. Stock Purchase Agreement and
the Tax Covenant.
5. RECOVERY FROM INSURERS AND OTHER THIRD PARTIES
(A) If, in respect of any matter which would give rise to a claim under the
Warranties, (other than the Tax Warranties), any member of the Group or
the Purchaser's Group is entitled to claim under any policy of insurance,
then, as soon as reasonably practicable and prior to taking action against
the Seller (other than to notify the Seller of the claim against the
Seller pursuant to paragraph 2 of this Schedule), the Purchaser shall make
a claim against its insurers and use all reasonable endeavours to pursue
such claim and such claims under the Warranties shall be reduced by the
amounts recovered, less any costs or expenses (including reasonable costs
of legal counsel and other advisers) incurred by the Purchaser or any
member of the Group in connection with any action taken by the Purchaser
or such members of the Group in recovering such claim from any insurer.
69
Notwithstanding paragraph 2 above, no claim made under the Warranties, and
for which there has been a related claim made under any policy of
insurance in accordance with this sub-paragraph (A), shall absolutely
determine unless legal proceedings in respect of such claim under the
Warranties shall not have been commenced within 18 months after final
determination of the related claim made under any such insurance policy.
(B) Where the Purchaser or any member of the Purchaser's Group is at any time
entitled to recover from some other person any sum in respect of any
matter giving rise to a claim under the Warranties other than the Tax
Warranties, the Purchaser shall, and shall procure that the member of the
Purchaser's Group concerned shall, take all reasonable steps to enforce
such recovery prior to taking action against the Seller (other than to
notify the Seller of the claim against the Seller pursuant to paragraph 2
of this Schedule) (subject to the Purchaser being indemnified to its
reasonable satisfaction by the Seller against all reasonable costs and
expenses incurred by the Purchaser in connection with any legal
proceedings taken in recovering any amount from the third party) and, in
the event that the Purchaser or any member of the Purchaser's Group shall
recover any amount from such other person, the amount of the claim against
the Seller under the Warranties shall be reduced by the amount recovered.
Notwithstanding paragraph 2 above, no claim made under the Warranties, and
for which action has been taken to enforce such recovery from such other
person in accordance with this sub-paragraph (B), shall absolutely
determine unless legal proceedings in respect of such claims under the
Warranties shall not have been commenced 18 months after all such efforts
to enforce such recovery have ceased.
(C) If the Seller pays at any time to the Purchaser or any member of the
Purchaser's Group an amount pursuant to a claim in respect of the
Warranties or under any provision of this Agreement and the Purchaser or
other member of the Purchaser's Group subsequently becomes entitled to
recover from some other person any sum in respect of any matter giving
rise to such claim, the Purchaser shall, and shall procure that the other
member of the Purchaser's Group shall, take all necessary steps to enforce
such recovery and shall forthwith repay to the Seller so much of the
amount paid by the Seller to the Purchaser or other member of the
Purchaser's Group (less any reasonable costs and expenses incurred by the
Purchaser or the relevant member of the Group in connection with any legal
proceedings taken in recovering from the third party any sum in respect of
any matter giving rise to a claim under the Warranties and any tax
suffered on the receipt) as does not exceed the sum recovered from such
other person.
6. ACTS OF PURCHASER
(A) No claim shall lie against the Seller under or in relation to the
Warranties (other than the Tax Warranties) to the extent that such claim
is attributable to:
70
(i) any voluntary act, omission, transaction, or arrangement carried out
by the Purchaser or by a member of the Purchaser's Group on or after
Completion; or
(ii) any admission of liability made in breach of the provisions of this
schedule after the date hereof by the Purchaser or on its behalf or
by persons deriving title from the Purchaser or by a member of the
Purchaser's Group on or after Completion.
(B) The Seller shall not be liable for any breach of any Warranty (other than
a Tax Warranty) to the extent that a claim for any breach of any Warranty
occurs or is increased as a result of any reorganisation or change in
ownership of any member of the Group after Completion or change in any
accounting basis on which any member of the Group values its assets or any
accounting basis, method, policy or practice of any member of the Group.
7. ALLOWANCE, PROVISION OR RESERVE IN THE ACCOUNTS
(A) No matter shall be the subject of a claim under the Warranties to the
extent that allowance, provision or reserve in respect of such matter
shall have been made in the Accounting Pack or the Completion Accounts or
has been included in calculating creditors or deducted in calculating
debtors in the Accounting Pack or the Completion Accounts or shall have
been otherwise taken account of or reflected in the Accounting Pack or the
Completion Accounts.
(B) Where any circumstances which would otherwise constitute a breach of
Warranty come to the attention of the Purchaser after the Completion
Accounts Date but prior to the end of the "review period" referred to in
paragraph 9 of Schedule 9, then PROVIDED THAT the Seller was not aware of
the circumstances or the fact that the circumstances constituted a breach
of Warranty prior to the Completion Date and PROVIDED FURTHER THAT the
circumstances and their treatment are discussed between the Purchaser and
the Seller prior to the end of the "review period" referred to in
paragraph 9 of Schedule 9 and either (i) agreement is reached between them
as to the treatment thereof in the Completion Accounts; or (ii) the matter
is notified to the expert (as defined in Schedule 9) in the statement of
either party referred to in paragraph 13(i) of Schedule 9 and the expert
is requested to, and confirms that he has, considered the matter when
coming to his conclusion, then no claim shall be made by the Purchaser
against the Seller for the breach of Warranty that would otherwise arise.
This limitation shall not apply to the extent that any relevant facts have
been fraudulently withheld or fraudulently misstated by any member of the
Seller's Group or any officer or agent of the Seller's Group.
8. RETROSPECTIVE LEGISLATION
No liability shall arise in respect of any breach of any of the Warranties
(other than the Tax Warranties) to the extent that liability for such
breach occurs or is increased directly or indirectly as a result of any
legislation not in force on or prior to the date
71
of this Agreement or as a result of the withdrawal of any extra-statutory
concession or other agreement or arrangement currently granted by or made
with any governmental authority or Tax Authority or as a result of any
change after the date of this Agreement of any generally accepted
interpretation or application of any legislation or the enforcement policy
or practice of the relevant authorities or as a result of the withdrawal
of any extra-statutory concession or any other formal agreement or
arrangements with any Tax Authority (whether or not having the force of
law) currently granted by or made with any Tax Authority (whether within
or outside the United Kingdom).
9. PURCHASER'S KNOWLEDGE
Without prejudice to paragraph 10, the Seller shall not be liable under
the Warranties if and to the extent that the Purchaser was aware at the
date of this Agreement of the facts, matters, events or circumstances
which are the subject matter of the claim under the Warranties and that
those facts, matters, events or circumstances amounted to a breach of any
of the Warranties as at the date of this Agreement. For the avoidance of
doubt, the foregoing limitation shall not apply to any breach of any
indemnities given by the Seller to the Purchaser.
10. DISCLOSURE
The Purchaser shall not be entitled to claim that any fact, matter or
circumstance causes any of the Warranties to be breached if fairly
disclosed in the Disclosure Letter or in any document listed in the Data
Room List or otherwise specifically agreed in the Disclosure Letter to
have been disclosed to the Purchaser.
11. NO LIABILITY FOR CONTINGENT OR NON-QUANTIFIABLE CLAIMS
If any breach of the Warranties arises by reason of some liability of any
member of the Group which, at the time any such claim is notified to the
Seller, is contingent only or otherwise not capable of being quantified,
then the Seller shall not be under any obligation to make any payment in
respect of such claim unless and until such liability ceases to be
contingent or becomes capable of being quantified, as the case may be.
Notwithstanding paragraph 2 above, any claim made under the Warranties and
notified pursuant to paragraph 2 of this Schedule which is contingent only
or otherwise not capable of being quantified at the time such claim was
made, shall not absolutely determine unless legal proceedings in respect
of such claim shall not have been commenced within 18 months of the
contingent liability ceasing to be so contingent or becoming quantifiable,
as the case may be PROVIDED THAT no such notified claim shall remain
outstanding for longer than the sixth anniversary of the Completion Date.
72
12. CLAIM TO BE REDUCTION OF CONSIDERATION
Any payment made by Seller in respect of any claim under the Warranties
shall be deemed to be a reduction of the Consideration.
13. NON-APPLICABILITY OF LIMITATIONS TO INDEMNITIES
For the avoidance of doubt, none of the limitations (other than paragraph
3 of this Schedule) contained in this Schedule shall apply to any breach
of the Clause 11 Indemnity EXCEPT THAT the limitation in paragraph 2 shall
apply to claims under the Clause 11 Indemnity as if the reference to 31
December, 1998 were to the date falling seven years after the Completion
Date.
14. INFORMATION MEMORANDUM
(A) The Purchaser acknowledges and agrees with the Seller (for itself and for
the benefit of the other members of the Seller's Group and on behalf of
their respective officers, employees and advisers and as trustees for such
officers, employees and advisers) that, subject to sub-clause (B) and
without prejudice to the provisions of Clause 20:-
(i) no representation or warranty was given as to the accuracy or
completeness of the Information Memorandum or the contents of the
Data Room and that none of the persons listed shall be under any
liability to the Purchaser in the event that such information is or
becomes inaccurate, incomplete or misleading in any particular; and
(ii) the Seller shall have no liability whatsoever in relation to, or
arising from (whether directly or indirectly), the Reports.
(B) The Seller acknowledges that the limitations set out in sub-clause A(i)
are without prejudice to the proviso contained in Clause 8(A) of this
Agreement.
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SCHEDULE 7
(Pensions)
UK PENSIONS
1. DEFINITIONS
(A) For the purposes of this Schedule the following expressions shall have the
following meanings:-
"Actuarial Assumptions" means the actuarial assumptions and
methods specified in the Actuary's
Letter.
"Actuary" means a person who is a Fellow of the
Institute of Actuaries or a Fellow of
the Faculty of Actuaries in Scotland.
"Actuary's Letter" means the letter from the
Seller's Actuary to the Purchaser's
Actuary a copy of which is attached as
ANNEXA.
"Agreed Interest Rate" means the base rate from
time to time prescribed by National
Westminster Bank plc.
"Condition Satisfaction Date" means the date falling 25 business days
after the date on which the Pension
Liabilities are determined and agreed in
accordance with paragraph 4 (or where
paragraph 8 applies, the 25th working
day after the Pension Liabilities are
certified pursuant to that paragraph) or
such later date as the conditions in
paragraph 3(B) are complied with or such
later date as the Seller may agree in
writing.
"Market Value Adjustment" means the market value adjustment set
out in the Actuary's Letter.
"Payment Date" means whichever is the later of:
(a) the 30th working day after the date
on which the Pension Liabilities
are determined and agreed in
accordance with paragraph 4 (or,
where paragraph 8 applies, the 30th
working day after the Pension
Liabilities are certified pursuant
to that paragraph); and
(b) the 5th working day after the
Condition
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Satisfaction Date.
"Pensionable Age" NPA (as defined in and in
accordance with the rules of the
Seller's Scheme).
"Pensionable Employees" means:
(i) such of the Relevant Employees at
Completion as are then active
members of the Seller's Scheme; and
(ii) such of the Relevant Employees at
Completion who become active
members of the Seller's Scheme
during the Transitional Period.
"Pension Liabilities" means the pension liabilities,
calculated in accordance
with the Actuary's Letter and, in
particular, on the basis that:
(i) any limitation on the level of the
pensionable salary of a
Transferring Employee under the
Finance Xxx 0000 shall be taken
into account in accordance with the
Actuarial Assumptions; and
(ii) it shall be assumed that there is
no obligation to equalise accrued
rights to guaranteed minimum
pensions of and in respect of the
Transferring Employees under
Article 119 of the Treaty of Rome.
"Purchaser's Actuary" means the Actuary or firm of Actuaries
appointed by the Purchaser for the
purposes of this Schedule.
"Purchaser's Scheme" means the retirement benefits
scheme (or, if the context so requires,
the trustees of that scheme) nominated
by the Purchaser pursuant to paragraph
3(A)(i).
"Relevant Employees" means such of the Employees as are
employed by the Company and the UK
Subsidiaries at the Completion Date.
"Seller's Actuary" means the Actuary or firm of Actuaries
appointed by the Seller for the purposes
of this Schedule.
"Seller's Scheme" means the Xxxxxxxx Pension Scheme
currently constituted by a definitive
trust deed and rules
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dated 12th October, 1992 or, if the
context so requires, the trustees of
that scheme.
"Timing Adjustment" means:
(i) in respect of each sum to which
this definition applies, the
formula found by calculating the
proportionate change during the
period specified of an index
comprising 80 per cent. of the
Total Return on the FT-SE -
Actuaries All Share Index and 20
per cent. of the FT-SE - Actuaries
British Government Over 15 Year
Index with an adjustment on account
of accrued interest at monthly
intervals and multiplied by 1-n x
0.000167 where n is the number of
complete months in the relevant
period; or
(ii) if either or both Indices are not
compiled to cover the period
specified, the Timing Adjustment
for that period shall be that
determined by the Seller's Actuary
and agreed by the Purchaser's
Actuary (or in default of agreement
the amount certified pursuant to
paragraph 8).
"Transfer Amount" means such amount as shall be determined
by the Seller's Actuary and agreed by
the Purchaser's Actuary (or where
paragraph 8 of this Schedule applies,
the amount certified pursuant to
paragraph 8) as being equal to the
aggregate of:
(i) the Pension Liabilities multiplied
by the Timing Adjustment for the
period from and including the
Completion Date to and excluding
the Payment Date; plus
(ii) the Transitional Period Pension
Contributions; less
(iii) the Transitional Period Costs.
"Transfer Date" means 31st December, 1997 or such
earlier date as the Purchaser by not
less than 30 days' notice to the Seller
designates as the Transfer Date.
"Transferring Employees" means those of the Pensionable
Employees:
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(i) who join the Purchaser's Scheme
with effect from the Transfer Date
pursuant to paragraph 3(A)(ii); and
(ii) who elect or consent in the Agreed
Form to a payment (in cash or in
other assets) being made by the
Seller's Scheme to the Purchaser's
Scheme in lieu of their accrued
rights under the Seller's Scheme;
and
(iii) who do not withdraw that election
or consent.
"Transitional Period" means the period commencing on the
Completion Date and ending immediately
before the Transfer Date.
"Transitional Period Costs" means the amount equal to:
(i) an allowance in respect of the cost
of insuring or notionally insuring
lump sum benefits and spouse and
dependants' benefits payable on
death-in-service in respect of all
or any of the Transferring
Employees in respect of the
Transitional Period calculated at
the rate specified in and otherwise
in accordance with Part III of
ANNEX B;
(ii) the administrative expenses
calculated at the rate specified in
accordance with Part II of Annex B
payable in respect of Transferring
Employees; and
(iii) any amounts payable but unpaid
under paragraph 2(B)(i) in respect
of any Pensionable Employees who
are not Transferring Employees,
adjusted, in respect of each such
amount, by the Timing Adjustment for the
period from and including the date on
which such cost is incurred or as the
case may be on which such amount becomes
payable to and excluding the Payment
Date. For this purpose each such cost
shall be deemed to be incurred or to
have become payable on the first day of
the month in which it is so incurred or
becomes payable.
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"Transitional Period Pension means an amount equal to the
Contributions" contributions made in respect of the
Transitional Period to the Seller's
Scheme by and in respect of the
Transferring Employees adjusted, in
respect of each such contribution, by
the Timing Adjustment for the period
from and including the date of payment
of each such contribution to and
excluding the Payment Date.
(B) Save where specifically defined or where the context otherwise requires,
words and expressions used in Chapter I of Part XIV of the Income and
Corporation Taxes Xxx 0000 or in the Xxxxxxx Xxxxxxx Xxx 0000 shall have
the same meanings in this Schedule.
(C) References in this Schedule to any statute or statutory provision shall
include any statute or statutory provision which amends, extends,
consolidates or replaces the same.
(D) References in this Schedule to paragraphs are references to paragraphs of
this Schedule.
(E) If any index used for the purposes of this Schedule is not compiled or
ceases to exist it shall be replaced by such index as is agreed between
the Seller's Actuary and the Purchaser's Actuary or, in default of
agreement, as is determined under paragraph 8.
(F) References to Article 119 of the Treaty of Rome shall be deemed to include
any current or future legislation which implements Article 119 or which
implements any EC Directive relating to equal treatment. References to the
EC shall be taken to include the European Community (formerly the European
Economic Community) and the European Union.
2. MATTERS RELATING TO THE SELLER'S SCHEME
(A) The Seller's undertakings
The Seller shall use its reasonable endeavours to procure that:
(i) subject to the consent of the Commissioners of Inland Revenue (which
the Seller shall use its reasonable endeavours to obtain) Xxxxxxxx
Refractories Limited is permitted to continue its participation in
the Seller's Scheme throughout the Transitional Period; and
(ii) the Seller's Scheme will be maintained, in relation to the
Pensionable Employees, in full force and effect until after the
Transfer Date; and
(iii) except with the consent (such consent not to be unreasonably
withheld or delayed) of the Purchaser, the provisions of the
Seller's Scheme will
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not be amended until after the Transfer Date in a manner which may
affect materially and adversely the Transfer Amount; and
(iv) the Seller's Scheme shall not be terminated or wound-up or closed in
whole or in part prior to the Transfer Date.
(B) The Purchaser's undertakings
The Purchaser undertakes that Xxxxxxxx Refractories Limited will:-
(i) pay promptly to the Seller's Scheme the contributions due and
payable in respect of the Transitional Period to the Seller's Scheme
by and in respect of the Pensionable Employees, calculated at the
rate specified in and otherwise in accordance with Part I of ANNEX
B;
(ii) comply during the Transitional Period in all other material respects
with the provisions of the Seller's Scheme;
(iii) not do or omit to do during the Transitional Period any act or thing
whereby the approval of the Seller's Scheme as an exempt approved
scheme or as a contracted-out scheme would be prejudiced;
(iv) not increase the pensionable earnings (for the purposes of the Rules
of the Seller's Scheme) of any Pensionable Employee during the
Transitional Period by an amount which exceeds 7 per cent. per annum
except on such terms (whether as to payment of additional
contributions to the Seller's Scheme or otherwise) as the Seller may
agree;
(v) The Purchaser hereby agrees that Xxxxxxxx Refractories Limited :
(a) will not exercise any power, right or discretion conferred on
it under or in relation to the Seller's Scheme, including
(without limitation) any power, right or discretion conferred
by any statutory provision, without the prior written consent
of the Seller and on such terms (whether as to payment of
additional contributions to the Seller's Scheme or otherwise)
as the Seller may agree;
(b) will from time to time exercise any such power, right or
discretion and execute any deed or document as, in each case,
the Seller may reasonably require in order to enable the
Seller's Scheme to implement or comply with any applicable
legislation;
(c) will co-operate with the Seller and the Seller's Scheme in
providing such information about, and access to, Relevant
Employees as the Seller or the Seller's Scheme may reasonably
require for the purposes of the Seller's Scheme.
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(vi) The Purchaser irrevocably appoints the Seller as its attorney to
execute (in its name or otherwise) from time to time any deeds or
documents referred to in paragraph 2(B)(v)(b).
(vii) Subject to paragraph 2(B)(viii), the Purchaser undertakes that
Xxxxxxxx Refractories Limited will pay to the Seller's Scheme, in
respect of any Pensionable Employees who, during the Transitional
Period, begin to receive an early retirement pension under Rule D2
of the Seller's Scheme, the aggregate, being not less than zero, of
the differences at the date of commencement of the payment of
pension calculated in accordance with the Actuarial Assumptions
between:
o the actuarial value, excluding the Market Value Adjustment, of
the aggregate of the benefits actually payable by the Seller's
Scheme to and in respect of each such Pensionable Employee
(including any earnings-related lump sum payable on death
before NPA); and
o the Pension Liabilities, excluding the Market Value
Adjustment, calculated as if the Completion Date were the date
of the retirement of the Pensionable Employee in respect of
that Pensionable Employee
multiplied by the Market Value Adjustment, as at the date of
commencement of the payment of the pension, determined in accordance
with the Actuarial Assumptions and multiplied by the Timing
Adjustment for the period from and including the date of
commencement of the payment of each such pension to and excluding
the date of payment of the aggregate difference, such aggregate
difference to be determined by the Seller's Actuary and agreed with
the Purchaser's Actuary (the "Early Retirement Pension Cost").
The Seller undertakes that in determining whether or not to give its
consent to any early retirement of any Pensionable Employee on
grounds of Incapacity under Rule D2 during the Transitional Period,
it shall apply similar criteria to those used by it in respect of
members of the Seller's Scheme other than the Pensionable Employees.
(viii) The Early Retirement Pension Cost in respect of any Excluded
Individual who begins to receives an early retirement pension during
the Transitional Period under Rule D2 will be zero.
"Excluded Individual" means any Pensionable Employee who prior to
the Completion Date has applied in writing to the trustees of the
Seller's Scheme to receive an early retirement pension on account of
incapacity under Rule D2:01(ii).
(C) Submission of notices for Seller's approval
The Purchaser undertakes to procure that the notices to be issued (if any)
pursuant to paragraphs 2(D) and 3(A)(ii) will be submitted in advance of
their
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issue to the Seller and will not be issued until the Seller has approved
them, such approval not to be unreasonably withheld or delayed.
(D) Parties to do everything necessary to comply with contracting-out
requirements
The Seller and the Purchaser shall take, and the Purchaser shall procure
that Xxxxxxxx Refractories Limited takes, such steps as may be required of
them (if any ), including the completion of any notices and elections, to
procure that Xxxxxxxx Refractories Limited:
(i) holds or continues to be named in a contracting-out certificate in
relation to the Seller's Scheme in respect of the Transitional
Period; and
(ii) ceases to hold or be named in such certificate with effect from the
end of the Transitional Period.
3. THE PURCHASER'S SCHEME
(A) The Purchaser to nominate a pension scheme and offer membership
The Purchaser shall procure that:
(i) before the Transfer Date it will nominate a contracted-out
retirement benefits scheme:
(a) which Xxxxxxxx Refractories Limited will have established (or
become a party to) with effect from a date no later than the
Transfer Date;
(b) which is approved or is capable of approval as an exempt
approved scheme; and
(c) to which the Seller's Scheme can make a transfer payment
without prejudicing approval of the Seller's Scheme as an
exempt approved scheme;
(ii) such of the Pensionable Employees as have not ceased to be in the
employment of the Company or any UK Subsidiary or attained
Pensionable Age in the Seller's Scheme at the Transfer Date and who
remain active members of the Seller's Scheme will be offered
membership of the Purchaser's Scheme with effect from the Transfer
Date; and
(iii) the offer to be made pursuant to paragraph 3(A)(ii) will not be
conditional upon the Pensionable Employee agreeing to transfer his
benefits in respect of past service to the Purchaser's Scheme,
(B) Tax approval and contracting-out matters relating to the Purchaser's
Scheme
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The Purchaser shall use all reasonable endeavours to procure by the date
defined in paragraph (a) of the definition of Payment Date:
(i) that the Purchaser's Scheme is an exempt approved scheme or that the
Commissioners of Inland Revenue have specifically approved the
transfer of the Transfer Amount from the Seller's Scheme to the
Purchaser's Scheme; and
(ii) that Xxxxxxxx Refractories Limited holds or is named in a
contracting-out certificate in relation to the Purchaser's Scheme.
(C) Compliance with statute and schedule by Purchaser and financial matters
relating to the Purchaser's Scheme
The Purchaser shall procure by the Condition Satisfaction Date that the
Purchaser and the Purchaser's Scheme will enter into an agreement under
seal with the Seller and the Seller's Scheme in such form as the Seller
may reasonably require under which the Purchaser's Scheme:
(a) agrees to accept the Transfer Amount in full and final settlement of
all claims against the Seller's Scheme in respect of the
Transferring Employees;
(b) agrees to provide benefits to the Transferring Employees in
accordance with paragraph 7 and the announcement made to the
Transferring Employees; and
(c) agrees to comply with the applicable requirements of the
Commissioners of the Inland Revenue, the relevant preservation
requirements of the Xxxxxxx Xxxxxxx Xxx 0000 and contracting-out
requirements of that Act and the relevant provisions of clause 9.03
of the Rules of the Seller's Scheme; and
4. DETERMINATION OF PENSION LIABILITIES AND OTHER MATTERS
(A) Actuaries to be instructed
(i) Immediately after the Completion Date the Seller and the Purchaser
shall respectively instruct the Seller's Actuary and the Purchaser's
Actuary to consult with a view to the Seller's Actuary determining
and the Purchaser's Actuary agreeing the Pension Liabilities
(ignoring for the time being the adjustment for the period from the
Completion Date) within 90 days after the Transfer Date in
accordance with paragraph 4(A)(ii).
(ii) The Seller's Actuary will determine the Pension Liabilities and
provide the result and the underlying calculations to the
Purchaser's Actuary within 60 days of the Transfer Date, and the
Seller's Actuary and the Purchaser's Actuary shall have 30 days from
the receipt of such
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determination by the Purchaser's Actuary to agree the Pension
Liabilities.
(B) Accuracy of information to be provided to the Actuaries by the Seller
(i) The Seller shall procure that all such information in its
possession, custody or control as the Seller's Actuary or the
Purchaser's Actuary may reasonably request for the purpose of
calculating the Pension Liabilities and the Transfer Amount shall be
made available promptly to such Actuary.
(ii) The Seller hereby warrants to the Purchaser that all such
information shall be true, complete and accurate in all material
respects as at the date the information is required for the purpose
of this Schedule and shall contain no omission material to the
calculation of the Transfer Amount or material to any other
calculation or determination for the purposes of this Schedule.
(C) Accuracy of information to be provided to the Actuaries by the Purchaser
(i) The Purchaser shall procure that all such information in its or the
Group's possession, custody or control as the Seller's Actuary or
the Purchaser's Actuary may reasonably request for the purpose of
calculating the Pension Liabilities and the Transfer Amount shall be
made available promptly to such Actuary and to the Seller's Scheme.
(ii) The Purchaser hereby warrants to the Seller that all such
information shall be true, complete and accurate in all material
respects as at the date the information is required for the purpose
of this Schedule and shall contain no omission material to the
calculation of the Transfer Amount or material to any other
calculation or determination for the purposes of this Schedule.
5. PAYMENT OF TRANSFER AMOUNT AND EXCESS PAYMENT
(A) Seller's obligations conditional upon Purchaser's obligations being duly
performed
The Seller's obligations in this paragraph 5 are conditional upon the
Purchaser's obligations in paragraphs 2 and 3 being duly performed in all
material respects on or before the Payment Date.
(B) Seller to procure payment of Transfer Amount on the Payment Date by the
Seller's Scheme Trustees
Subject to paragraph 5(A), the Seller shall use its reasonable endeavours
to procure that on the Payment Date the Seller's Scheme (to the extent
that it can lawfully make such payment) shall pay the Transfer Amount to
the Purchaser's Scheme.
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(i) The payment of the Transfer Amount shall be satisfied by the
transfer of a reasonable cross-section of the assets of the Seller's
Scheme, excluding any direct holdings of real property (as agreed by
the Seller's Scheme and the Purchaser's Scheme) having a mid-market
value on the day before the Payment Date equal to the Transfer
Amount.
(ii) If the Seller's Scheme and the Purchaser's Scheme are unable to
agree some or all of the particular assets to be transferred or the
mid-market value of any such assets, the payment of the Transfer
Amount (or the appropriate part of it) shall be satisfied by the
Seller's Scheme transferring cash equal to 99 per cent. of that part
of the Transfer Amount in respect of which there has been no
agreement as to the assets to be transferred.
(C) Shortfall
(i) Subject to paragraph 5(A) if the amount which has been actually
transferred (if any) by the Seller's Scheme to the Purchaser's
Scheme on or before the Payment Date in respect of the Transferring
Employees is less (other than by the application of the final
sentence of paragraph 5(B)) than the Transfer Amount, then the
Seller shall immediately pay to the Purchaser, by way of an
adjustment of the consideration payable for the Shares pursuant to
this Agreement, and the Purchaser shall procure that Xxxxxxxx
Refractories Limited then pays to the Purchaser's Scheme, a sum in
cash (the "Shortfall") calculated according to the formula:
((A - B) + C) where
A = the Transfer Amount
B = the amount actually transferred on or before the Payment
Date plus interest at the Agreed Interest Rate for the
period from and including the date or dates on which
such amount was transferred to and excluding the Payment
Date;
C = the amount representing interest at the Agreed Interest
Rate on an amount equal to A - B for the period from and
including the Payment Date to and excluding the date on
which payment is made under this sub-paragraph;
The amount of the Shortfall shall be determined by the Seller's
Actuary and agreed by the Purchaser's Actuary or, in default of
agreement, be determined under paragraph 8.
(ii) If, after the date the Seller pays the Shortfall to the Purchaser
under paragraph 5(C)(i), the Seller's Scheme makes any payment in
respect of any benefits retained by the Seller's Scheme in respect
of any
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Transferring Employee the Purchaser shall pay forthwith to the
Seller by way of an adjustment of the consideration payable for the
Shares pursuant to this Agreement a sum equal to that payment
If the Purchaser does not pay the amount due under the previous
sentence within 2 days of the date of the payment in respect of
benefits by the Seller's Scheme, the Purchaser shall, in addition,
pay interest at the Agreed Interest Rate (as well after as before
judgment) on the amount due from and including the date on which the
payment was made by the Seller's Scheme to and excluding the date on
which payment actually is made by the Purchaser.
(iii) If, in the period of five tax years beginning with tax year
1997/1998, after any payment in respect of the Shortfall under
paragraph 5(C)(i), the Purchaser or any member of the Purchaser's
Group achieves a reduction in its liability to corporation tax
("Reduction") as a result of being able to treat a payment to the
Purchaser's Scheme of an amount equal to the payment in respect of
the Shortfall as deductible for corporation tax purposes, the
Purchaser shall pay to the Seller, within 7 days after the Purchaser
would otherwise have been liable to pay the saved corporation tax, a
sum equal to that Reduction.
(iv) The Purchaser shall use all reasonable endeavours to obtain a
Reduction at the earliest time possible after its receipt of any
payment in respect of the Shortfall.
6. VOLUNTARY FUND
(A) Meaning of "Voluntary Fund"
In this paragraph 6, the expression "Voluntary Fund" means a fund
comprising those voluntary contributions, or the investments or moneys
representing them and any income derived from them, in respect of which
the entitlements of the members who have paid them are not related to
earnings (however defined) but are based on the respective parts of such
Voluntary Fund which are attributable to them.
(B) Voluntary Fund to be disregarded for calculations
Notwithstanding the preceding provisions of this Schedule, if within the
Seller's Scheme there is a Voluntary Fund, the Voluntary Fund, the
benefits payable from it, the contributions payable to it and any transfer
payment made from it shall be disregarded for all the preceding provisions
of this Schedule.
(C) Transfer of Voluntary Fund
The Seller shall nevertheless use its reasonable endeavours to procure
that the part of the Voluntary Fund attributable to the Transferring
Employees in
128
accordance with the provisions of the Seller's Scheme is transferred to
the Purchaser's Scheme on the Payment Date.
7. TRANSFER AMOUNT TO PURCHASE BENEFITS FOR TRANSFERRING EMPLOYEES
(A) Purchaser to provide benefits of equal actuarial value
Subject to receipt of the Transfer Amount (as reduced in accordance with
the final sentence of paragraph 5(B), if applicable) by the Purchaser's
Scheme (or, as the case may be, the payment of the Shortfall by the Seller
under paragraph 5(C)), the Purchaser shall procure that the Purchaser's
Scheme shall provide benefits in respect of the pensionable service
(including transfer credits) of each Transferring Employee in the Seller's
Scheme before Completion which are of equal actuarial value on the basis
of the Actuarial Assumptions to the benefits applying in the Seller's
Scheme (as in force on the date of this Agreement) in relation to such
service.
(B) Purchaser not to discriminate against Transferring Employees
The Purchaser shall procure that, in granting any benefit improvement in
the Purchaser's Scheme, the Purchaser's Scheme will not discriminate
against any of the Transferring Employees or persons claiming through or
in respect of them.
(C) Benefit of covenants
The Purchaser declares as trustee for the benefit of the Transferring
Employees that the benefit of the covenants contained in paragraphs 7(A)
and (B) shall be directly enforceable by each Transferring Employee and by
persons claiming through or in respect of them.
8. DISPUTES
(A) Referral to an independent Actuary
(i) Any dispute between the Seller's Actuary and the Purchaser's Actuary
concerning the determination or agreement of the Transfer Amount or
of any other matters to be determined or agreed by them for the
purposes of this Schedule shall, in the absence of agreement between
them, be referred to an independent Actuary.
(ii) The independent Actuary shall be nominated jointly by the Seller and
the Purchaser or, failing such nomination, shall be nominated by the
President for the time being of The Institute of Actuaries at the
instance of the party first applying to him.
(B) Independent Actuary to act as expert and direct payment of costs
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The independent Actuary so appointed shall act as an expert and not as an
arbitrator. His decision shall be final and binding. His costs shall be
borne between the Seller of the one part and the Purchaser of the other
part as the independent Actuary may direct.
9. INDEMNITIES
(A) Deficiency
Subject to paragraph 9(D), the Seller shall indemnify the Purchaser
against any Covered Liability which the Purchaser may incur (whether or
not pursuant to Section 144 of the Xxxxxxx Xxxxxxx Xxx 0000 or Section 75
of the Pensions Act 1995 (as appropriate) and any regulations made
pursuant to such section) to contribute to the Seller's Scheme.
(B) Relevant Deficit
Subject to paragraph 9(D), in the event that there is a Relevant Deficit
in the Seller's Scheme, the Seller shall make a payment to the Seller's
Scheme of such amount as is required to discharge the Purchaser from any
liability pursuant to the Relevant Provisions to contribute to or in
respect of any Deficit arising in respect of the Seller's Scheme.
(C) Definitions
For the purpose of this paragraph 9:
"Covered Liability" means any Liability other than a Liability which
arises under paragraph 2(B) of this Schedule or which arises from an act
or omission (other than the cessation of participation in the Seller's
Scheme by the Purchaser in the manner envisaged by this Schedule) of the
Purchaser or any member of the Purchaser's Group;
"Deficit" means a deficit in terms of the Relevant Provisions;
"Liability" means any loss, cost, expense, damage or other liability;
"Relevant Deficit" means any Deficit in respect of the Seller's Scheme
which arises as at the date Xxxxxxxx Refractories Limited ceases to
participate in the Seller's Scheme or as at the first actuarial valuation
of such scheme with an effective date falling after 5th April, 1997 except
to the extent that any Deficit arises from an act or omission (other than
the cessation of participation in the Seller's Scheme by Xxxxxxxx
Refractories Limited) of the Purchaser or any member of the Purchaser's
Group;
"Relevant Provisions" means section 75 of the Pensions Xxx 0000 and
regulations made pursuant to that section.
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10. PENSION WARRANTIES
The Seller represents, warrants and undertakes, so far as the Seller is aware
and save as disclosed in the Disclosure Letter, that:
(A) Seller's Scheme is the only funded pension/disability arrangement
Other than the Seller's Scheme and schemes to which the State requires
contributions to be made (including the statutory sick pay scheme) there
is no arrangement to which the Company or any of the Subsidiaries is or
within the five year period prior to Completion has been a party or to
which it contributes or may be liable to contribute under which benefits
of any kind are payable to or in respect of any of the Employees or any
former employees of the Company or the UK Subsidiaries on retirement,
death or disability or on the attainment of a specified age or on the
completion of a specified number of years of service.
(B) All material Seller's Scheme documents supplied
The trust deeds and rules of the Seller's Scheme, together with the Inland
Revenue approval letter, contracting-out certificate, material deeds of
amendment and participation, all material announcements (to members of the
Seller's Scheme who are Relevant Employees) which have not been
incorporated into the Trust Deed and Rules of the Seller's Scheme and the
scheme booklet and accounts for the Seller's Scheme for 1995 and 1996 have
been supplied to the Purchaser or the Purchaser's advisers and are
attached to the Disclosure Letter.
(C) Exercise of discretion or power
No discretion or power has been exercised under the Seller's Scheme in
respect of members of that Scheme who are Relevant Employees to augment
benefits or to provide a benefit which would not otherwise be provided.
(D) Contributions duly paid
The Company and the Subsidiaries have no liability to make payments to the
Seller's Scheme or to any insurance company in respect of benefits
provided under the Seller's Scheme in respect of any period ending on or
before the Completion Date.
(E) Adherence
Xxxxxxxx Refractories Limited and Industry Connect Limited adhere to the
Seller's Scheme in respect of the Pensionable Employees. So far as the
Seller is aware, Xxxxxxxx Refractories Limited and Industry Connect
Limited have each duly complied with all their obligations and duties
(including statutory obligations) under and in respect of the Seller's
Scheme.
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(F) Exempt Approval
The Seller's Scheme is an exempt approved scheme.
(G) Contracting-out
The Seller's Scheme is a contracted-out scheme and Xxxxxxxx Refractories
Limited is named in a contracting-out certificate in relation to the
Seller's Scheme.
(H) So far as the Seller is aware nothing has been done or omitted to be done
which would result in the Seller's Scheme ceasing to be an exempt approved
scheme or the contracting-out certificate being cancelled or surrendered.
(I) All benefits (other than a refund of contributions with interest where
appropriate) payable under the Seller's Scheme on the death of a member or
beneficiary while in an employment to which the Seller's Scheme relates
are fully insured under a policy effected in the name of the trustees of
the Seller's Scheme.
(J) None of the Employees who are members of the Seller's Scheme in
pensionable service are employed outside Great Britain.
(K) The principal employer and the trustees or administrator of the Seller's
Scheme do not intend that the Seller's Scheme will contract out of the
State Earnings Related Pension Scheme using the protected rights basis
after 6 April 1997.
(L) So far as the Seller is aware, there are no actions, claims or suits
(other than routine claims for benefits) outstanding, pending or
threatened in respect of any of the Employees or former employees and
former officers of any member of the Group against the trustees or
administrators of the Seller's Schemes or against any member of the Group,
in respect of any act, event or omission or other matter arising out of or
in connection with the Seller's Schemes or otherwise in relation to the
provisions of any relevant benefit (as defined in sub-paragraph (B)
above).
(M) Any employee benefit plans which are operated by the Overseas Subsidiaries
or in which they participate has, so far as the Seller is aware, been
operated in compliance with all applicable laws and in all material
respects in accordance with their provisions.
(N) No employee or former employee of any member of the Group participating in
the Seller's Scheme has, in the five years prior to Completion, been
excluded from membership of the Seller's Scheme in contravention of
Article 119 of the Treaty of Rome.
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11. NO ASSISTANCE TO BE GIVEN BY THE PURCHASER
(i) The Purchaser undertakes neither to take any action nor to assist,
whether directly or indirectly, any person in any manner which would
result in the Seller's Scheme having to pay a larger amount than the
Transfer Amount to the Purchaser's Scheme.
(ii) The Purchaser agrees that this undertaking extends to the Purchaser
and any other company directly or indirectly controlled or connected
with the Purchaser and applies both during and after the
Transitional Period.
12. CALCULATION OF LIABILITY
In quantifying any liability, loss, damage, cost, claim or expense which either
party may incur or sustain arising out of or in connection with the breach by
the other of any of the provisions of this Schedule, the parties agree that the
Actuarial Assumptions shall be applied as nearly as may be and in default of
agreement as to how they should apply, the disagreement shall be resolved in
accordance with paragraph 8.
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SCHEDULE 9
(Preparation and agreement of the Completion Accounts)
1. The Completion Accounts shall be prepared and agreed in accordance with
the provisions of this Schedule. The general purpose of the Completion
Accounts is to enable the Purchaser to confirm that the Net Assets
disclosed in the Accounting Pack remain in existence at the Completion
Accounts Date.
2. Subject to paragraphs 3 and 4 below or as otherwise expressly stated in
this Schedule, the Completion Accounts shall:
(i) be prepared as if the period (the "Completion Period") beginning
with the opening of business on the day following the Accounts Date
and ending as at the close of business on 31st March, 1997 (the
"Completion Accounts Date") was a financial year of the Company,
with appropriate apportionment of income and expenditure;
(ii) be based on the books and records of each member of the Group
(together with appropriate consolidation adjustments;
(iii) comprise:
(a) a consolidated balance sheet of the Group as at the close of
business on the Completion Accounts Date in the format set out
in Attachment Q; and
(b) a statement of the value of Net Assets as at the close of
business on the Completion Accounts Date as set out on the
line marked "Net Assets" in Attachment Q,
but shall not include any notes;
(iv) be prepared in accordance with the same accounting principles,
policies, treatments, categorisations and practices as were used in
the preparation of the Accounting Pack, applied (including in
relation to the exercise of discretion and judgement) on a basis
which is in all respects consistent with the basis of application
which was used in the preparation of the Accounting Pack, or, in the
absence thereof, in accordance with accounting principles, policies
and practices generally accepted in the United Kingdom;
(v) in relation to stock in trade (including raw materials, work in
progress, finished goods and packaging), be based on a stock take
carried out over the period 27th March to 1st April, 1997;
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(vi) take appropriate account of:
(a) wages, salaries and other periodic outgoings in respect of the
employees, assets and liabilities of each member of the Group
for any period of time prior to the Completion Accounts Date;
(b) any payment (by way of deposit, prepayment or otherwise) made
by any member of the Group in respect of the price or cost of
anything (including any service) to be provided to it after
the Completion Accounts Date;
(c) any payment (by way of deposit, prepayment or otherwise)
received by any member of the Group in respect of the price or
cost of anything (including any service) to be provided by it
after the Completion Accounts Date;
(d) end-of-period accounting "cut-off" procedures which are
consistent with those adopted for the purposes of the
preparation of the Accounting Pack; and
(vii) no post balance sheet event occurring after the end of the review
period referred to in paragraph 9 shall be taken into account.
3. The Completion Accounts shall, subject to paragraph 4, be prepared on the
basis of the following assumptions:
(i) that the Completion Accounts relate to each member of the Group as a
going concern and excluding any effect of the change of control or
ownership of any member of the Group contemplated by this Agreement
or any other effect of this Agreement, the Tax Covenant or the
Environmental Deed (including any new or amended arrangements which
it may be necessary or desirable for any member of the Group to
enter into after the date of this Agreement by reason of any of the
foregoing) and in all respects as if each member of the Group was to
remain a member of the Seller's Group; and
(ii) that all levels of materiality in relation to individual items shall
be the levels of materiality which were applied in relation thereto
in compiling the Accounting Pack; and
(iii) that the currency conversion rates to be applied to all currencies
other than sterling shall be the relevant mid-market rates as at the
close of business on the Completion Accounts Date (or, if such date
is not a business day, on the immediately preceding business day) as
published in "The Financial Times".
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4. In the balance sheet comprised within the Completion Accounts:
(i) no fixed asset or investment reflected in the Accounting Pack shall
be written up or down by way of revaluation above or below the
amount ascribed to it in the Accounting Pack (other than, subject to
paragraph 4(xiv), with respect to depreciation which shall be
applied in accordance with paragraph 2(iv));
(ii) subject to any other sub-paragraphs of this paragraph 4, where a
provision was made in the Accounting Pack in relation to any matter
or series of related matters no decrease or increase in that
provision shall be made unless and to the extent that since the
preparation of the Accounting Pack new facts or circumstances have
arisen which, in accordance with paragraph 2(iv), justify such
increase or decrease;
(iii) the aggregate provision in respect of or relating to deferred tax
shall be (pound)689,000;
(iv) no provision shall be made in respect of or relating to any
post-Completion reorganisation, redundancy, dismissal, closure or
rationalisation proposed or contemplated by the Purchaser, the
Seller or any member of the Group whether at the Group's site at
Loxley or otherwise (save for redundancy costs where the relevant
employees have by the Completion Accounts Date been given formal
notice of redundancy) and save for any planned or actual redundancy
disclosed in the Disclosure Letter, including in relation to Xxxxxxx
Xxxxx;
(v) the investment in Rotary Nozzle International SA ("RNI") shall be
valued on a basis consistent with the Accounting Pack, save that, to
the extent that the management accounts of RNI for March 1997 are
not available, and unless such management accounts become available
before the end of the review period (as defined in paragraph 9), the
valuation shall be based on the management accounts of RNI for
January and February and the figure for the Group's "Best Estimate"
of its share of the RNI results contained in the flash results for
the Group listed at document 2-8 in the Data Room List;
(vi) no provision (whether in respect of taxation or otherwise) shall be
made in respect of or relating to payments made to past or current
employees via the private social fund, the Fonds Ceram, by Xxxxxxxx
Refractories (Belgium) SA or any associated costs, penalties or
interest;
(vii) subject to paragraph 4(xx), the aggregate provision which shall be
made in respect of or relating to all facts and circumstances which
have resulted or may result in claims of any nature (including
product warranty or defective product claims) against any member of
the Group by any past or present customer, supplier or employee of
any member of the Group (including claims to the effect that any
such customer is or may be entitled to withhold, set-off or not make
any payment which
145
may otherwise be payable) and all associated costs, expenses,
penalties and interest shall be (pound)2 million and for the
avoidance of doubt no separate provision shall be made in respect of
the receivable from Kvaerner Davy Limited;
(viii) the Intra-Group Currency Agreements shall not be marked to market;
(ix) no provision shall be made in respect of or relating to any
liability to which the Clause 11 Indemnity relates;
(x) no provision shall be made in respect of or relating to any cost to
the Group of assisting with the preparation of any draft or final
Completion Accounts, including the stock take in relation thereto;
(xi) the Wallhouse clay stock shall be valued at (pound)265,000;
(xii) no provision shall be made in respect of or relating to any amount
which may be payable after the Completion Account Date under any
senior managers bonus scheme in relation to the period from the
Accounts Date to the Completion Accounts Date or thereafter;
(xiii) other than any provision made in respect of Belgian holiday pay on
the same basis as in the Accounting Pack, no provision shall be made
in respect of or relating to UK staff holiday pay;
(xiv) the aggregate adjustment to the provision made in respect of or
relating to accelerated depreciation in Belgium shall be the same as
that reflected in the Accounting Pack;
(xv) no provision shall be made in respect of or relating to any cost
payable to Xxxxxxxx or Kaiser other than in respect of the unpaid
invoices raised by Xxxxxxxx in France during the period from the
Accounts Date to the Completion Accounts Date, amounting to 75,000FF
per week;
(xvi) the provision reflected in the Accounting Pack in respect of costs
payable after the Accounting Date to Kaiser and/or Xxxxxxxx shall
not constitute a precedent for reflecting any provision in the
Completion Accounts for any costs payable after the Completion
Accounts Date;
(xvii) the aggregate provision made in respect of or relating to costs
associated with Environmental Matters, including any restoration
liabilities, shall not be greater than the aggregate provision for
restoration liabilities of (pound)205,000 reflected in the
Accounting Pack;
(xviii) no consolidation adjustment shall be made in respect of or
relating to inter company profit in stock as between members of the
Group;
(xix) no adjustment shall be made to the procedure used at the Accounts
Date to value UK stock in respect of or relating to the inclusion
therein of a
146
proportion of the pension charge raised by the Seller's Group and
accruals shall include the pension charge raised by the Seller's
Group in March 1997;
(xx) the aggregate provision made in respect of or relating to credit
notes issued in the UK after the Completion Accounts Date in
relation to sales before the Completion Accounts Date shall be
(pound)113,000;
(xxi) the corporation tax liability accruing for the Completion Period
shall be the profit before tax of each member of the Group for the
Completion Period multiplied by the local corporation income tax
rates less the value of any tax losses within the Group brought
forward and utilisable by the relevant member of the Group in
respect of the Completion Period. Local corporation income tax rates
shall include national and local taxes on corporation income and
includes surcharges;
(xxii) no provision shall be made against raw materials and bought out
parts in the UK and Belgium; and
(xvxiii) no provision shall be made against work in progress in the UK.
In this Schedule, where the word "provision" is made in the context of the
Completion Accounts that shall be deemed to include any other accrual,
charge, write-off or adjustment which would have an equivalent effect on
the value of Net Assets as at the close of business on the Completion
Accounts Date.
5. The Seller shall, with the assistance of the Group management (in
particular, Xxxxxxx Xxxxx), as soon as practicable after Completion, and
in any event by the date falling 45 days after the date of this Agreement
(the "preparation period"), prepare, with the assistance of the Seller's
Auditors, and deliver to the Purchaser draft Completion Accounts (the
"draft Completion Accounts") . The fees and costs of the Seller's Auditors
shall be paid by the Seller.
6. Following Completion the Purchaser shall, and shall procure that each
member of the Group and the Purchaser's Auditors shall, give the Seller
and the Seller's Auditors reasonable access at reasonable times to all
books, records and working papers in their respective possession or
control relating to the Group Businesses or members of the Group and
generally shall provide the Seller and the Seller's Auditors with such
other information and assistance as the Seller and the Seller's Auditors
may reasonably require (including the reasonable provision and assistance
at reasonable times of financial personnel employed by members of the
Group and reasonable copies of such books, records and papers) for the
purposes of preparing and reviewing the draft Completion Accounts,
discussing them with the Purchaser or the Purchaser's Auditors or making
submissions to the expert (as defined below).
7. If the Purchaser fails to comply with the provisions of paragraph 6 the
Seller (in addition to any other remedies it may have):
147
(a) shall give written notice to the Purchaser to the effect that the
Purchaser has failed to comply with its obligations pursuant to
paragraph 6 above and such notice shall describe such non-compliance
in reasonable detail. The preparation period shall then be extended
by such number of days as is necessary, in the Seller's reasonable
opinion, to take account of such failure (in which event it shall be
deemed to be so extended); and/or
(b) if such failure has resulted, in the Seller's reasonable opinion, in
the Seller being unable to comply with its obligations under
paragraph 5 for a period of 20 days or more beyond the end of the
original preparation period , or, if later, the end of any extension
given under paragraph 7(a), may give written notice to the
Purchaser, giving reasons for the notice, to the effect that no
Completion Accounts shall be delivered by it (in which event there
shall be no Completion Accounts and no adjustment to the
Consideration).
The Seller shall be entitled to give one or more notices under paragraph
7(a).
8. If the Purchaser shall not agree that the Seller is entitled either to
extend the preparation period or to give notice that no Completion
Accounts shall be delivered and such dispute is not resolved in good faith
negotiations within seven (7) days after receipt by the Purchaser of the
notice referred to in paragraph 7(a) or in paragraph 7(b) above (as
appropriate), such dispute shall be referred at the election of either
party for the determination of the "expert" referred to in paragraph 11
below. The expert shall act as an expert (and not as an arbitrator) in
making a determination of the dispute and the expenses of the
determination by the expert shall be borne between the Seller and the
Purchaser in such proportions as the expert shall in its discretion
determine.
9. The Purchaser shall have a period of 30 days (the "review period") after
the delivery to it of the draft Completion Accounts to review, in
conjunction with the Purchaser's Auditors, the draft Completion Accounts
and to present to the Seller in writing any objections (particularising
the matters in dispute, the reasons why they are not in accordance with
this Schedule and the effect thereof on the value of Net Assets) it may
have as to whether the draft Completion Accounts have been prepared in
accordance with this Schedule.
10. The Seller shall, following the Completion Date, give the Purchaser and
the Purchaser's Auditors reasonable access at reasonable times to all
books, records and working papers in its possession or control or (subject
to the execution of a hold harmless letter in the Seller's Auditors'
customary form) in the possession or control of the Seller's Auditors
relating to the Group on or prior to the Completion Accounts Date and
generally shall provide the Purchaser and the Purchaser's Auditors with
such other information and assistance as the Purchaser or the Purchaser's
Auditors may reasonably require (including reasonable access to the
relevant senior financial officers of the Seller) for the purpose of
enabling the Purchaser to present any such written objections as are
referred to in paragraph 9, provided that the Purchaser and the
Purchaser's
148
Auditors shall not be entitled to any such access, information or
assistance which goes beyond that reasonably necessary to review whether
the draft Completion Accounts have been prepared in accordance with the
provisions of this Schedule. The fees and costs of the Purchaser's
Auditors shall be paid by the Purchaser.
11. If no such written objections as are referred to in paragraph 9 are
presented to the Seller by the end of the review period, then the draft
Completion Accounts shall, as between the Seller and the Purchaser, be
deemed to have been accepted and approved by the Seller and the Purchaser
and shall be final and binding on the Seller and the Purchaser and shall
be deemed to constitute the "Completion Accounts" for all purposes of this
Agreement.
12. If any such written objections as are referred to in paragraph 9 are
presented to the Seller by the end of the review period, then the Seller
and the Purchaser shall attempt to resolve the matters in dispute in good
faith negotiations. If there are any such matters in dispute between the
Seller and the Purchaser which have not been resolved in good faith
negotiations within a period of 14 days after the end of the review
period, then the matters remaining in dispute shall be referred at the
election of either party for determination to a partner of at least 10
years qualified experience at , with experience of acting as an expert, at
Price Waterhouse or, if no such partner is able to act, by an independent
firm of internationally recognised chartered accountants to be selected,
on the application of either the Purchaser or the Seller, by the President
for the time being of the Institute of Chartered Accountants in England
and Wales (the "expert"), who shall be instructed to notify both the
Seller and the Purchaser of his determination within 14 days of such
referral, or as soon as practicable thereafter.
13. The following terms of reference for the expert shall apply:
(i) the Purchaser and the Seller shall each promptly prepare a written
statement on the matters remaining in dispute which (together with
the relevant documents) shall be submitted to the expert for
determination, provided that no matters shall be disputed by the
Purchaser which were not included within the written statement of
objections referred to in paragraph 9;
(ii) in giving such determination, the expert shall state what
adjustments (if any) are necessary to the draft Completion Accounts
in respect of the matters in dispute in order to comply with the
requirements of this Schedule and the reasons for such adjustments,
and shall also, if requested, confirm that his determination has
taken into account any matters referred to him pursuant to paragraph
7(B) of Schedule 4;
(iii) the expert shall act as an expert (and not as an arbitrator) in
making any such determination;
149
(iv) the expenses of any such determination by the expert shall be borne
between the Seller and the Purchaser in such proportions as the
expert shall in its discretion determine.
14. The Seller shall, and shall procure that the Seller's Auditors shall, and
the Purchaser shall and shall procure that each member of the Group and
the Purchaser's Auditors shall, give the expert reasonable access at
reasonable time to all books and records in their respective possession or
control relating to the Group on or prior to the Completion Accounts Date
and generally shall provide the expert with such other information and
assistance as the expert may reasonable require.
15. The draft Completion Accounts as amended by the expert shall, as between
the Seller and the Purchaser and in the absence of manifest error, be
deemed to have been accepted and approved by the Seller and the Purchaser.
The draft Completion Accounts accepted and approved, or deemed to be
accepted and approved, by the Seller and the Purchaser at any stage in the
procedures set out in this Schedule shall be final and binding on the
Seller and the Purchaser and shall be deemed to constitute the "Completion
Accounts" for all purposes of this Agreement.
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Signed by XXXX XXXXXX )
for and on behalf of )
XXXXXXXX R. AND M. HOLDINGS LIMITED ) /s/ X.X. Xxxxxx
) ----------------------------
Signed by XXXX XXXXXX )
for and on behalf of ) /s/ X.X. Xxxxxx
XXXXXXXX PLC ) ----------------------------
Signed by XXXXXX XXXXXX )
for and on behalf of ) /s/ X. Xxxxxx
REFRACO HOLDINGS LIMITED ) ----------------------------
Signed by XXXXXX XXXXXX )
for and on behalf of ) /s/ X. Xxxxxx
THE ALPINE GROUP, INC. ) ----------------------------
