Document:

ex10_7.htm

    
      

    

    Exhibit
      10.7

    

    
      	
              DATED

            	
              May
                10

            	
              2007

            

    

     

     

    
 

    
      	
               

            	
              (1)

            	
              THOSE
                COMPANIES PARTICULARS OF  WHICH ARE SET OUT IN SCHEDULE
                1

            

    

    

    
      	
               

            	
              (2)

            	
              BABCOCK
                INTERNATIONAL GROUP PLC

            

    

    

    
      	
               

            	
              (3)

            	
              KBR,
                INC.

            

    

    

    

    
      	
               

              AGREEMENT

               

              relating
                to the sale and purchase of the entire issued share capital of Devonport
                Management Limited

               

            

    

    

     

    
 

    

    Kirkpatrick
      & Lockhart Preston Gates Ellis LLP

    110
      Cannon Street London EC4N 6AR

    Tel:
      +44
      (0)20 7648 9000

    Fax:
      +44
      (0)20 7648 9001

    Ref:
      HDK/JRD/6011542.0001

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CONTENTS

    

    

    
      	
              Clause

            	 	
              Page

            
	 	 	 
	
              1.

            	
              Interpretation

            	
              1

            
	 	 	 
	
              2.

            	
              Sale
                of Shares

            	
              10

            
	 	 	 
	
              3.

            	
              Conditions

            	
              11

            
	 	 	 
	
              4.

            	
              Conduct
                of the Group before Completion

            	
              12

            
	 	 	 
	
              5.

            	
              Consideration

            	
              14

            
	 	 	 
	
              6.

            	
              Completion

            	
              16

            
	 	 	 
	
              7.

            	
              Post-Completion
                Undertakings

            	
              17

            
	 	 	 
	
              8.

            	
              Sellers'
                Warranties

            	
              18

            
	 	 	 
	
              9.

            	
              Scope
                of Sellers' Warranties

            	
              19

            
	 	 	 
	
              10.

            	
              Purchaser
                Remedies

            	
              21

            
	 	 	 
	
              11.

            	
              Purchaser's
                Warranties

            	
              23

            
	 	 	 
	
              12.

            	
              Restrictions
                on Sellers' Business Activities

            	
              23

            
	 	 	 
	
              13.

            	
              Information,
                Records and Assistance

            	
              24

            
	 	 	 
	
              14.

            	
              Guarantee

            	
              24

            
	 	 	 
	
              15.

            	
              Announcements

            	
              26

            
	 	 	 
	
              16.

            	
              Costs

            	
              26

            
	 	 	 
	
              17.

            	
              Interest
                on Late Payment

            	
              26

            
	 	 	 
	
              18.

            	
              Further
                Assurance

            	
              27

            
	 	 	 
	
              19.

            	
              Entire
                Agreement

            	
              27

            
	 	 	 
	
              20.

            	
              Variation

            	
              27

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              21.

            	
              Waivers
                and Remedies

            	
              28

            
	 	 	 
	
              22.

            	
              Counterparts

            	
              28

            
	 	 	 
	
              23.

            	
              Invalidity

            	
              28

            
	 	 	 
	
              24.

            	
              Effect
                of Completion

            	
              29

            
	 	 	 
	
              25.

            	
              Assignment

            	
              29

            
	 	 	 
	
              26.

            	
              Notices

            	
              29

            
	 	 	 
	
              27.

            	
              Contracts
                (Rights of Third Parties) Act 1999

            	
              30

            
	 	 	 
	
              28.

            	
              Confidential
                Information

            	
              31

            
	 	 	 
	
              29.

            	
              Governing
                Law and Jurisdiction

            	
              31

            
	 	 	 
	
              SCHEDULE
                1  The Sellers

            	
              33

            
	 	 	 
	
              SCHEDULE
                2  The Company

            	
              34

            
	 	 	 
	
              SCHEDULE
                3  The Subsidiaries

            	
              35

            
	 	 	 
	
              SCHEDULE
                4  The Properties

            	
              49

            
	 	 	 
	
              SCHEDULE
                5  Conditions To Completion

            	
              56

            
	 	 	 
	
              SCHEDULE
                6  Conduct of the Group before Completion

            	
              57

            
	 	 	 
	
              SCHEDULE
                7  Completion

            	
              60

            
	 	 	 
	
              SCHEDULE
                8  Sellers' Warranties

            	
              64

            
	 	 	 
	
              SCHEDULE
                9  Limitations on Sellers' Liability

            	
              88

            
	 	 	 
	
              SCHEDULE
                10  Purchaser's Warranties

            	
              96

            
	 	 	 
	
              SCHEDULE
                11  Registered Intellectual Property Rights

            	
              97

            
	 	 	 
	
              SCHEDULE
                12  IT Systems and IT Contracts

            	
              100

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              THIS
                AGREEMENT is made on  May 10

            	
              2007

            

    

     

    BETWEEN:

    

    
      	
              (1)

            	
              THOSE
                COMPANIES PARTICULARS OF WHICH ARE SET OUT IN SCHEDULE 1 (the
                "Sellers");

            

    

    

    
      	
              (2)

            	
              BABCOCK
                INTERNATIONAL GROUP PLC, a company incorporated in England and
                Wales with company number 02342138 and whose registered office is
                at 2
                Cavendish Square, London W1G 0PX (the "Purchaser");
                and

            

    

    

    
      	
              (3)

            	
              KBR,
                INC., a company incorporated in the state of Delaware, USA and
                whose principal place of business is at 601 Jefferson Street, Houston,
                Texas 77002, USA (the
                "Guarantor").

            

    

    

    WHEREAS:

    

    
      	
              (A)

            	
              The
                Company is a private company limited by shares incorporated in England
                and
                Wales with company number 02959785.

            

    

    

    
      	
              (B)

            	
              The
                Sellers have agreed to sell and the Purchaser has agreed to purchase
                all
                of the issued shares in the capital of the Company on the terms and
                subject to the conditions set out in this
                Agreement.

            

    

    

    
      	
              (C)

            	
              The
                Guarantor has agreed to guarantee the performance of the obligations
                of
                KBR under this Agreement.

            

    

    

    NOW
      IT IS AGREED as follows:

     

    
      	
              1.

            	
              Interpretation

            

    

    

    
      	
              1.1

            	
              In
                this Agreement, unless the context requires
                otherwise:

            

    

    

    "Accounts"
      means the audited consolidated financial statements of the Company for the
      accounting period ended on the Accounts Date comprising a balance sheet of
      the
      Company, a consolidated balance sheet, profit and loss account and cash flow
      statement of the Group and notes thereon together with the directors' report
      and
      the auditors' report;

    

    "Accounts
      Date" means 31 December 2006;

    

    "Alliance
      Agreement" means an agreement dated 8 April 1997 between (1) DRDL; (2)
      Kellogg Brown & Root Limited (formerly known as Brown and Root Limited); (3)
      Rolls Royce Power Engineering Plc; (4) Strachan & Henshaw Limited; (5)
      Jacobs U.K. Limited (formerly known as Babtie Group Limited); and (6) BNFL
      Engineering Limited, and relating to the D154 Agreement;

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    "Alliance
      Deed of Adherence" means the deed of adherence in the agreed form in
      respect of the Alliance Agreement together with such amendments thereto as
      are
      required by any third party thereto, and are consented to by the Purchaser
      and
      the Sellers, such consent not to be unreasonably withheld or
      delayed;

    

    "ASL"
      means Appledore Shipbuilders (2004) Limited;

    

    "Authority"
      means The Secretary of State for Defence;

    

    "Authority
      Contracts" means all and any agreements entered into between any member
      of the Group and the Authority;

    

    "Business
      Day" means a day (other than a Saturday or Sunday) on which banks
      generally are open for business in London for the transaction of normal banking
      business;

    

    "Company"
      means Devonport Management Limited, brief details of which are set out in
      Schedule 2;

    

    "Completion"
      means completion of the sale and purchase of the Shares in accordance with
      Clause 6;

    

    "Completion
      Date" has the meaning given to that expression in Clause
      6.1;

    

    "Conditions"
      means the conditions referred to in Clause 3 and set out in Schedule
      5;

    

    "Confidential
      Information" means confidential information, know-how and records, in
      each case, to the extent relating to any Group Company's business or affairs,
      including (i) drawings, designs, formulae, specifications, processes, data
      relating to inventions, testing procedures, test results and instruction and
      trading manuals; (ii) customer lists, sales targets and statistics, market
      research surveys and reports and marketing and promotional information; (iii)
      business plans and forecasts; and (iv) technical expertise;

    

    "Connected
      Persons" means, in relation to any party, that party's group
      undertakings, other than in the case of the Sellers, any Group
      Company;

    

    "Consideration"
      means the consideration for the sale and purchase of the Shares as stated in
      Clause 5.1;

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    "D154
      Agreement" means an agreement for the provision of refitting and
      refuelling of submarines at Devonport Royal Dockyard dated 13 March 1997 and
      entered into between the Authority and DRDL (as varied from time to
      time);

    

    "Data
      Room" means the data room operated by the Sellers' Solicitors and made
      available to the Purchaser for the purpose of reviewing information relating
      inter alia to the Company, the Subsidiaries and the Properties;

    

    "Deeds
      of Adherence" means the deeds of adherence in the agreed form together
      with such amendments thereto as are required by the Authority and are consented
      to by the Purchaser and the Sellers, such consent not to be unreasonably
      withheld or delayed, in respect of various guarantees and parent company
      guarantees given by the Sellers and the Sellers' parent companies pursuant
      to
inter alia the Principal Agreement and the D154 Agreement (but
      excluding, for the avoidance of doubt, the Alliance Deed of
      Adherence);

    

    "Disclosure
      Letter" means the letter of the same date as this Agreement from the
      Sellers to the Purchaser qualifying the Sellers' Warranties;

    

    "DRDL"
      means Devonport Royal Dockyard Limited, brief details of which are set out
      in
      Schedule 3;

    

    "Enabling
      Agreement" means an agreement dated 13 March 1997 between (1) the
      Authority; and (2) DRDL, entered into pursuant to the Principal Agreement
      relating to the terms on which DRDL can carry out certain work (placed other
      than by competitive tender) on behalf of the Authority;

    

    "Encumbrance"
      means a mortgage, charge, pledge, lien or other form of security or any
      proprietary interest or right of any third party including any option, right
      of
      pre-emption or right of first refusal;

    

    "Environment"
      means all or any living organism (including man), ecosystems and the media
      of
      the air (including air within natural or man-made structures above or below
      ground), water and land;

    

    "Environmental
      Laws" means all Laws concerning the protection or prevention of harm to
      the Environment or worker health and safety which are in force and binding
      on
      any Group Company at or prior to the date of this Agreement but excluding for
      the avoidance of doubt Nuclear Laws, laws relating to fire precautions and
      laws
      relating to town and country planning;

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    "Environmental
      Licences" means any permit, licence, consent, exemption, registration
      or authorisation required under Environmental Laws or Nuclear Laws in relation
      to the operation of the business of any Group Company;

    

    "FNC
      Group" means Frazer-Nash Consultancy Group Limited and its
      subsidiaries;

    

    "full
      title guarantee" has the meaning given to that expression by the Law of
      Property (Miscellaneous Provisions) Act 1994;

    

    "Group"
      means the Company and the Subsidiaries and "Group Company"
      means a member of the Group;

    

    "group
      undertaking" shall be construed in accordance with section 259 of the
      Companies Act 1985;

    

    "Hazardous
      Substances" means any natural or artificial substance (whether solid,
      liquid, gas, noise, ion, vapour, electromagnetic or radiation, and whether
      alone
      or in combination with any other substance) which is capable of causing harm
      to
      or have a deleterious effect on the Environment;

    

    "holding
      company" means a holding company within the meaning of section 736 of
      the Companies Act 1985;

    

    "Information
      Memorandum" means the information memorandum relating to the Group
      dated  March 2007;

    

    "Intellectual
      Property Rights" means patents, trade marks, service marks, logos,
      get-up, rights in design, trade or business names, copyright (including rights
      in computer software) and moral rights, topography rights and database rights
      (whether or not any of these is or are registered and including applications
      for
      registration);

    

    "Interest
      Payment" means the sum, if any, calculated in accordance with Clause
      5.2;

    

    "IT
      Contracts" means all agreements under which any third party provides to
      a Group Company any material element of, or material services relating to,
      the
      IT Systems (including leasing, licensing, maintenance and service agreements)
      as
      listed in Part 2 of Schedule 12;

    

    "IT
      Systems" means the material computer and communications systems
      (including all material computer hardware) owned or used by a Group Company
      (but
      excluding the IT Contracts) as listed in Part 1 of Schedule 12;

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    "KBR"
      means Kellogg Brown & Root Holdings (U.K.) Limited (registered number
      01870934), being one of the Sellers;

    

    "Laws" means
      all laws, statutes, orders, regulations or subordinate legislation or common
      law, all orders, ordinances, decrees or regulatory codes of practice, circulars,
      statutory guidance, written agreements with regulators and equivalent
      control;

    

    "Leakage"
      means any of the following which occur on or after the Accounts Date but on
      or
      before the Completion Date:

    

    
      	
               

            	
              (a)

            	
              any
                dividend, or distribution declared, paid or made by any Group Company
                (other than to another Group Company) on any of the issued share
                capital
                of the Company;

            

    

    

    
      	
               

            	
              (b)

            	
              any
                payments made (including management fees), or agreed to be made,
                by any
                Group Company, to (or assets transferred or surrendered to or liabilities
                assumed, indemnified, or incurred for the benefit of) any of the
                Sellers
                or any of their Connected Persons (including, without limitation,
                any
                payment or accrual of interest) by any Group
                Company;

            

    

    

    
      	
               

            	
              (c)

            	
              any
                payments made or agreed to be made by any Group Company other than
                to
                another Group Company in respect of any share capital or other securities
                of any Group Company being issued, redeemed, purchased or repaid,
                or any
                other return of capital;

            

    

    

    
      	
               

            	
              (d)

            	
              any
                payments made or agreed to be made by any Group Company (other than
                to
                another Group Company) to the Sellers or any of their Connected Persons
                in
                respect of any loan capital of any Group
                Company;

            

    

    

    
      	
               

            	
              (e)

            	
              the
                waiver by any Group Company of any amount owed to that Group Company
                by
                any of the Sellers or any of their Connected
                Persons;

            

    

    

    
      	
               

            	
              (f)

            	
              any
                payment by any Group Company of any fees or expenses in connection
                with
                the preparation for, negotiation or consummation of the sale of the
                Shares
                pursuant to, or the entry into of, this Agreement;
                and

            

    

    

    
      	
               

            	
              (g)

            	
              the
                agreement or undertaking by any Group Company to do any of the matters
                set
                out in (a) to (f) above,

            

    

    

    but
      does
      not include the following items:

    

    
      	
               

            	
              (i)

            	
              management
                fees payable to the Sellers or any of their Connected Persons in
                respect
                of the period up to Completion of an amount equal to £11,220 multiplied by
                the number of days elapsed from (and including) 1 January 2007 to
                (but
                excluding) the Completion Date;

            

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (ii)

            	
              payments
                to the Sellers or any of their respective Connected Persons for goods
                or
                services in the ordinary course of business and on an arms length
                basis of
                a kind supplied by any of them to persons (other than their Connected
                Persons) in the ordinary course of their
                business;

            

    

    

    
      	
               

            	
              (iii)

            	
              the
                services provided by KBR or any of its Connected Persons as detailed
                in
                Clause 7.2;

            

    

    

    
      	
               

            	
              (iv)

            	
              the
                dividend declared by the Company on 14 December 2006 in the sum of
                £10,000,000 (ten million pounds) and paid on 18 January
                2007;

            

    

    

    
      	
               

            	
              (v)

            	
              any
                fees and expenses incurred by any Group Company and reimbursed on
                or prior
                to Completion by any of the Sellers or their respective Connected
                Persons
                to any such Group Company; and

            

    

    

    
      	
               

            	
              (vi)

            	
              any
                fees paid by any Group Company to KBR or any of its Connected Persons
                in
                respect of the secondment of J. Lofty to any Group
                Company;

            

    

    

    "Lease"
      means a lease under which a Property is held by a Group Company;

    

    "Licences
      In" and "Licences Out" have the meanings given to
      those expressions in paragraph 26.2 of Schedule 8;

    

    "Losses"
      means all losses, damages, liabilities, costs (including without limitation
      reasonable legal costs) charges, expenses, actions, proceedings, claims and
      demands;

    

    "LSC
      Group" means LSC Group Holdings Limited and its
      subsidiaries;

    

    "Management
      Accounts" means the unaudited consolidated management accounts of the
      Company for the period from the Accounts Date to 31 March 2007 copies of which
      are attached to the Disclosure Letter;

    

    "Material
      Contract" means any contract between a Group Company and any person
      supplying goods or services to it in relation to which estimated expenditure
      for
      the calendar year 2007 by the Group is in excess of £5,000,000 (five million
      pounds), any contract between a Group Company and any customer of it in relation
      to which estimated expenditure for the calendar year 2007 by the customer is
      in
      excess of £5,000,000 (five million pounds), the contracts referred to in
      paragraph 10.7 of Schedule 8, the Privatisation Agreements and all other
      agreements with the Authority listed in Document 1.17.1 of the Data
      Room;

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    "Nuclear
      Laws" means all Laws (including without limitation the Nuclear
      Installations Act 1965 and the Ionising Radiation Regulations 1999) concerning
      radioactive substances which are in force and binding on any Group Company
      at or
      prior to the date of this agreement;

    

    "Operating
      Agreement" means an agreement dated 13 March 1997 between the Authority
      and DRDL entered into pursuant to the Principal Agreement relating to terms
      and
      conditions with which DRDL is required to comply in relation to the operation
      of
      Devonport Royal Dockyard;

    

    "Permit"
      means a permit, licence, consent, approval, certificate, qualification,
      specification, registration and other authorisation and a filing of a
      notification report or assessment necessary in any jurisdiction for the proper
      and efficient operation of any Group Company's business, its ownership,
      possession, occupation or use of an asset or the execution and performances
      of
      this Agreement;

    

    "Principal
      Agreement" means the agreement dated 11
      February 1997 between (1) the Authority; (2) KBR (formerly known as Halliburton
      Holdings Limited); (3) The Weir Group plc; (4) Balfour Beatty Plc (formerly
      known as BICC plc); (5) DRDL; (6) Kellogg Brown & Root Limited (formerly
      known as Brown & Root Limited); (7) Halliburton Company; (8) ASL; and (9)
      and the Company pursuant to which, inter alia, the entire issued ordinary share
      capital of DRDL (save for the Special Share retained by the Authority) was
      acquired by the Sellers;

    

    "Privatisation
      Agreements" means the Principal Agreement, the Operating Agreement, the
      Enabling Agreement and the Services Agreement, each as amended by the
      Privatisation Amendment Agreement;

    

    "Privatisation
      Amendment Agreement" means the agreement dated on or about 17 September
      2002 between the Authority (1) KBR (formerly known as Halliburton Holdings
      Limited); (2) The Weir Group plc; (3) Balfour Beatty Plc (formerly known as
      BICC
      plc); (4) DRDL; (5) Kellogg Brown & Root Limited (formerly known as Brown
& Root Limited); (6) Halliburton Company; (7) ASL (formerly known as
      Devonport Management Limited); and (8) and the Company amending certain
      provisions of the Principal Agreement, the Enabling Agreement, the Operating
      Agreement and the Services Agreement;

    

    "Properties"
      means the freehold and leasehold properties referred to in Schedule
      4;

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    "Purchaser's
      Group" means the Purchaser, its subsidiaries, any holding company of
      the Purchaser and all other subsidiaries of any such holding company, in each
      case from time to time;

    

    "Purchaser's
      Solicitors" means Ashurst of Broadwalk House, 5 Appold Street, London
      EC2A 2HA;

    

    "Purchaser's
      Warranties" means the warranties given by the Purchaser pursuant to
      Clause 11 and set out in Schedule 10;

    

    "Sellers'
      Solicitors" means Kirkpatrick & Lockhart Preston Gates Ellis LLP of
      110 Cannon Street, London EC4N 6AR;

    

    "Sellers'
      Warranties" means the warranties given by the Sellers pursuant to
      Clause 8 and set out in Schedule 8;

    

    "Senior
      Employee" means any employee of any Group Company whose basic rate of
      remuneration exceeds £75,000 per annum;

    

    "Services
      Agreement" means an agreement dated 13 March 1997 between the Authority
      and DRDL entered into pursuant to the Principal Agreement relating to the
      provision of specified services;

    

    "Shares"
      means 204 fully paid ordinary A shares of £1 each and 196 fully paid ordinary B
      shares of £1 each in the capital of the Company comprising the entire issued
      share capital of the Company;

    

    "Special
      Share" means the one special share of £1 in the capital of DRDL owned
      by the Authority;

    

    "Subsidiaries"
      means the companies brief details of which are set out in Schedule
      3;

    

    "subsidiary"
      means a subsidiary within the meaning of section 736 of the Companies Act
      1985;

    

    "Tax"
      or "Taxation" has the meaning given to that expression in the
      Tax Covenant;

    

    "Tax
      Authority" has the meaning given to that expression in the Tax
      Covenant;

    

    "Tax
      Covenant" means the tax covenant in the agreed form;

    

    "Taxation
      Statute" means any statute, statutory instrument, decree, order,
      enactment, law, bye law, regulation or legislative provision, whether domestic
      or foreign, providing for or imposing any Taxation including, for the avoidance
      of doubt, any directives and regulations adopted by the Council of the European
      Union;

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    "Tax
      Warranties" means the Sellers' Warranties set out in paragraph 29 of
      Schedule 8;

    

    "Termination
      Deed" means the deed of termination in the agreed form in relation to
      the services provided to the Group by the Sellers and their respective Connected
      Persons to be entered into at Completion in accordance with Clause
      7.2;

    

    "Transaction
      Documents" means this Agreement, the Disclosure Letter, the Tax
      Covenant and any other agreement entered into pursuant to this
      Agreement;

    

    "Transfer
      Regulations" means Transfer of Undertakings (Protection of Employment)
      Regulations 2006;

    

    "the
      Transitional Services Agreement" means the Transitional Services
      Agreement between KBR (1) and the Company (2) in the agreed form;
      and

    

    "TULR(C)A"
      means Trade Unions and Labour Relations (Consolidation) Act
      1992.

    

    
      	
              1.2

            	
              In
                this Agreement, unless the context requires
                otherwise:

            

    

    

    
      	
               

            	
              (a)

            	
              references
                to Clauses and Schedules are references to clauses of and schedules
                to
                this Agreement;

            

    

    

    
      	
               

            	
              (b)

            	
              the
                Schedules form part of this Agreement and shall have the same force
                and
                effect as if expressly set out in the body of this Agreement and
                any
                reference to this Agreement includes the
                Schedules;

            

    

    

    
      	
               

            	
              (c)

            	
              headings
                are included for convenience only and shall not affect the interpretation
                of this Agreement;

            

    

    

    
      	
               

            	
              (d)

            	
              the
                singular includes the plural and vice versa and use of any gender
                includes
                the other genders;

            

    

    

    
      	
               

            	
              (e)

            	
              references
                to a "company" mean any company, corporation or other
                body corporate (wherever
                incorporated);

            

    

    

    
      	
               

            	
              (f)

            	
              references
                to a "person" mean any individual, trust, firm, company,
                government, governmental (or supra-governmental) agency, authority
                or
                department or any joint venture, partnership or association (whether
                or
                not having separate legal
                personality);

            

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (g)

            	
              any
                reference to a party means any party to this
                Agreement;

            

    

    

    
      	
               

            	
              (h)

            	
              any
                reference to a document in the "agreed form" means the
                document in a form agreed between the parties and initialled for
                the
                purposes of identification by or on behalf of the Sellers and the
                Purchaser;

            

    

    

    
      	
               

            	
              (i)

            	
              where
                any statement is qualified by the expression "so far as the
                Sellers are aware" or any similar expression, that statement
                shall be limited to the actual awareness only of David Dunbar, Bang
                Chaun
                Liew, Alan Mitchelson, Sir Malcolm Pledger, Andrew Rose, Mark Selway,
                Bruce Stanski, Ian Tyler, Dennis Gilbert and Henry Warren and shall
                be
                treated as including an additional statement that it has been made
                after
                reasonable enquiry of the following persons only: Peter Whitehouse,
                Gareth
                Unsworth, Roger Hardy, Phil Jones, Andrew Hamilton, Stephen Hills,
                Ray
                Wyborn, David Nobes, Frank Francis, Andy Nicholls and Mark
                Lomas;

            

    

    

    
      	
               

            	
              (j)

            	
              any
                agreement, covenant, warranty, statement or undertaking on the part
                of 2
                or more parties (including, for the avoidance of doubt, the Tax Covenant)
                is made or given by such parties severally and not jointly and severally;
                and

            

    

    

    
      	
               

            	
              (k)

            	
              any
                reference to any statute or statutory provision includes that statute
                or
                statutory provision as from time to time amended, modified, consolidated
                or re-enacted (whether before or after the date of this Agreement),
                except
                to the extent that any such amendment, modification, consolidation
                or
                re-enactment would increase or extend the liability of the Sellers
                or any
                of them under this Agreement.

            

    

    
      	
               

            	 

    

    
      	
              2.

            	
              Sale
                of Shares

            

    

    

    
      	
              2.1

            	
              Subject
                to the terms of this Agreement, each Seller shall sell with full
                title
                guarantee and as legal and beneficial and free from all Encumbrances
                the
                number of Shares set out opposite its name in the second column of
                Schedule 1 and the Purchaser shall purchase all of the Shares together
                with all rights attaching to them at the Completion Date (including
                the
                right to receive all dividends and distributions declared, paid or
                made
                after the Accounts Date, other than the dividend of £10,000,000 (ten
                million pounds) declared on 14 December 2006 and paid on 18 January
                2007).

            

    

    

    
      	
              2.2

            	
              Each
                of the Sellers waives or agrees to provide the waiver of any rights
                it or
                any other person may have in relation to the Shares under the articles
                of
                association of the Company or otherwise prior to
                Completion.

            

    

    

    
      	
              2.3

            	
              The
                Sellers shall procure that the Company shall provide to the Authority
                upon
                request such information as the Authority is entitled pursuant to
                the
                articles of association of DRDL (including, without limitation, article
                7(B)(1)) to request in respect of the Purchaser or any person connected
                with the Purchaser and the Purchaser shall promptly provide such
                information to the Sellers and the Company on request for onward
                transmission to the Authority.

            

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              Conditions

            

    

    

    
      	
              3.1

            	
              Completion
                of the sale and purchase of the Shares pursuant to this Agreement
                is
                subject to the Conditions having been fulfilled or waived in accordance
                with this Agreement.

            

    

    

    
      	
              3.2

            	
              The
                Sellers and the Purchaser shall each use all reasonable endeavours
                to
                fulfil or procure the fulfilment of the Condition set out in paragraph
                2 of Schedule
                5 as
                soon as possible and in any event by not later than 5.00 p.m. on
                9 July
                2007.

            

    

    

    
      	
              3.3

            	
              The
                Purchaser shall use all reasonable  endeavours to fulfil or
                procure the fulfilment of the Condition set out in paragraph 1 of
                Schedule
                5 as soon as reasonably practicable and each of the Sellers shall
                provide,
                and shall procure that each Group Company shall provide to the Purchaser,
                as soon as reasonably practicable after being requested by the Purchaser
                therefor, all necessary information relating to the Group required
                for the
                preparation of the circular referred to in clause 3.4(a) in order
                for the
                Purchaser to fulfil or procure the fulfilment of such
                Condition.

            

    

    

    
      	
              3.4

            	
              Without
                prejudice to the generality of Clause 3.3, the Purchaser undertakes
                to
                procure that, subject to the Sellers' compliance with Clause
                3.3:

            

    

    

    
      	
               

            	
              (a)

            	
              a
                circular is despatched to its shareholders as soon as reasonably
                practicable following the date of this Agreement containing a notice
                convening an extraordinary general meeting of the Purchaser for no
                later
                than 30 June  2007 and that there is proposed at such meeting
                the resolution referred to in paragraph 1 of Schedule 5;
                and

            

    

    

    
      	
               

            	
              (b)

            	
              the
                circular referred to in sub-paragraph (a) above contains a recommendation
                by the directors of the Purchaser recommending  shareholders to
                vote in favour of such resolution.

            

    

    

    
      	
              3.5

            	
              With
                regard to the waiver of any of the
                Conditions:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                Purchaser may, with the consent of the Sellers, waive in whole or
                part the
                Condition listed in paragraph 1 of Schedule 5;
                and

            

    

    

    
      	
               

            	
              (b)

            	
              the
                Condition set out in paragraph 2 of Schedule 5 may not be waived
                by any
                party.

            

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	
              3.6

            	
              If
                either of the Conditions set out in Schedule 5 is not fulfilled or
                waived
                (if capable of being waived) on or before 5.00 p.m. on 9 July 2007
                (or
                such later time and/or date as the parties may agree), this Agreement
                shall automatically terminate and cease to have effect (save for
                this
                Clause 3.6 and Clauses 1, 3.7, 15, 16, and 19 to 27
                (inclusive)  and 29 which shall continue to have effect) and no
                party shall have any claim under this Agreement against any other
                party
                save in respect of any rights and liabilities of the parties which
                have
                accrued under this Agreement before its termination or in relation
                to
                those provisions of this Agreement referred to above which continue
                to
                have effect following its
                termination.

            

    

    

    
      	
              3.7

            	
              If
                Completion does not take place as a result of a failure by the Purchaser
                to fulfil the Condition set out in paragraph 1 of Schedule 5 (and
                provided
                such failure has not resulted from any act or omission on the part
                of any
                Seller including an omission by any Seller to act in accordance with
                its
                obligations under Clause 3.3), the Purchaser shall pay £8,000,000 (eight
                million pounds) to the Sellers in immediately available funds which
                is a
                genuine pre-estimate of the Sellers'
                damages.

            

    

    
      	
               

            	 

    

    
      	
              4.

            	
              Conduct
                of the Group before
                Completion

            

    

    

    
      	
              4.1

            	
              Subject
                to Clause 4.2, each Seller undertakes to the Purchaser to procure
                that,
                during the period between the date of this Agreement and
                Completion:

            

    

    

    
      	
               

            	
              (a)

            	
              each
                Group Company carries on its business in the ordinary and usual course
                in
                all material respects;

            

    

    

    
      	
               

            	
              (b)

            	
              each
                Group Company takes all reasonable steps to preserve and protect
                its
                assets so as to prevent a material diminution in the value thereof
                compared to the value at the date
                hereof;

            

    

    

    
      	
               

            	
              (c)

            	
              each
                Group Company continues to undertake the Authority Contracts as such
                contracts are being carried out at the date hereof;
                and

            

    

    

    
      	
               

            	
              (d)

            	
              save
                with the prior written consent of the Purchaser (such consent not
                to be
                unreasonably withheld or delayed), no Group Company shall undertake,
                carry
                out or enter into any of the acts, matters or transactions listed
                in
                Schedule 6.

            

    

    

    
      	
              4.2

            	
              (Save
                as to Clause 4.2(f) being subject to paragraph (x) of Schedule 6)
                nothing
                in Clause 4.1 and/or Schedule 6 shall operate so as to prevent or
                restrict
                or require the consent of the Purchaser
                for:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                performance by any Group Company of any of its obligations pursuant
                to a
                contract or arrangement entered into before the date of this
                Agreement;

            

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (b)

            	
              any
                action reasonably undertaken by any Group Company in an emergency
                or
                disaster situation with the bona fide intention of mitigating any
                adverse
                effect thereof;

            

    

    

    
      	
               

            	
              (c)

            	
              any
                act, matter or transaction contemplated by any of the Transaction
                Documents;

            

    

    

    
      	
               

            	
              (d)

            	
              any
                act, matter or transaction undertaken at the request of the
                Purchaser;

            

    

    

    
      	
               

            	
              (e)

            	
              the
                payment for any of the matters listed in paragraphs (i), (ii), (iii),
                (v)
                and (vi)  to the definition of "Leakage";
                or

            

    

    

    
      	
               

            	
              (f)

            	
              subject
                to paragraph (x) of Schedule 6, any act, matter or transaction taken
                by
                any Group Company with a view to preserving its relationship with
                the
                Authority and in particular (but without limitation) so as not to
                prejudice the WSMI contract or any renewal or extension of it, provided
                that the relevant Group Companies shall consult with the Purchaser
                in
                relation to any discussions with the Authority in relation to the
                WSMI
                contract.

            

    

    

    
      	
              4.3

            	
              Pending
                Completion the Purchaser and any person reasonably authorised by
                it
                (subject to all applicable security restrictions) shall be given
                access to
                the Properties and to all the books and records of each Group Company,
                and
                the directors and Senior Employees of each Group Company shall be
                instructed to give promptly all such information and explanation
                as the
                Purchaser or any such person may reasonably request, in each case,
                in
                order to allow the Purchaser to prepare for its ownership of the
                Company.

            

    

    

    
      	
              4.4

            	
              The
                Purchaser and the Sellers shall use their respective reasonable endeavours
                to agree the final form of the Alliance Deed of Adherence with the
                third
                parties thereto.

            

    

    

    
      	
              4.5

            	
              As
                soon as reasonably practicable after the final form of the Alliance
                Deed
                of Adherence shall be agreed with the third parties thereto (but
                not
                earlier than Completion):

            

    

    

    
      	
               

            	
              (a)

            	
              the
                Purchaser shall duly execute and deliver a counterpart of the final
                form
                of the Alliance Deed of Adherence to the other parties
                thereto;

            

    

    

    
      	
               

            	
              (b)

            	
              the
                Sellers shall and shall procure that any of their respective Connected
                Persons who are parties thereto shall duly execute and deliver a
                counterpart of the final form of the Alliance Deed of Adherence to
                the
                other parties thereto; and

            

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (c)

            	
              the
                Purchaser and the Sellers shall use their respective reasonable endeavours
                to procure the execution and delivery of a counterpart of the final
                form
                of the Alliance Deed of Adherence by the other parties
                thereto.

            

    

    

    
      	
              4.6

            	
              After
                the date of this Agreement KBR or its relevant Connected Persons
                shall
                contact the software providers listed in Schedule 1 of the Transitional
                Services Agreement in order to request that such software providers
                consent to the Group benefiting from such software licences in accordance
                with the terms of the Transitional Services
                Agreement.

            

    

    

    
      	
              4.7

            	
              For
                the purposes of Clause 4.1(d), the Purchaser shall nominate a person
                or
                persons  who will liaise with the Group Companies and/or the
                Sellers in order to ensure that any requests for any necessary consents
                and agreements are dealt with in an efficient
                manner.

            

    

    
      	
               

            	 

    

    
      	
              5.

            	
              Consideration

            

    

    

    
      	
              5.1

            	
              The
                consideration for the sale and purchase of the Shares shall be the
                aggregate of the cash sum of £350,000,000 (three hundred and fifty million
                pounds) and, if relevant, a sum equal to the Interest Payment, exclusive
                of stamp duty and other transfer taxes (if
                any).

            

    

    

    
      	
              5.2

            	
              The
                Interest Payment shall be a sum equal to notional interest on £350,000,000
                (three hundred and fifty million pounds) calculated, if such date
                shall be
                before the Completion Date, from 8 July 2007 until the Completion
                Date (or
                if Completion shall be delayed as a consequence of any act or omission
                of
                the Sellers, then the date Completion would have occurred, but for
                such
                act or omission) at a rate per annum of 1.5 per cent. above the average
                (rounded upward when necessary to the nearest 1/16th
                of one per
                cent) of the London Inter-Bank Offered Rates of the last 3 Business
                Days
                immediately preceding the date hereof.  The London Inter-Bank
                Offered Rates for such days shall be the rate at which Barclays Bank
                plc
                (or such other London bank as the Sellers shall nominate for the
                purpose)
                shall offer 6 month sterling deposits of £1,000,000 (one million pounds)
                to leading banks in the London Inter-Bank Market at or about 11.00
                am
                (London time) on such days.  The certificate of Barclays Bank
                plc (or such other London bank as the Sellers shall nominate for
                the
                purpose) as to the rate of interest shall be conclusive and binding
                on the
                parties and, when determining the interest rate, Barclays Bank plc
                shall
                be acting as an expert.

            

    

    

    
      	
              5.3

            	
              The
                Consideration, which shall be apportioned among the Sellers as shown
                in
                the third column of Schedule 1, shall be paid in cash on Completion
                in
                accordance with Clause 6 and paragraph 3(a) of Schedule
                7.

            

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    
      	
              5.4

            	
              The
                Consideration shall be deemed to be reduced by the amount of any
                payment
                to the Purchaser in respect of any claim under the Sellers' Warranties
                or
                under the Tax Covenant.

            

    

    

    
      	
              5.5

            	
              At
                Completion each of the Sellers covenants to pay to the
                Purchaser:

            

    

    

    
      	
               

            	
              (a)

            	
              an
                amount equal to their relevant percentage (and for this purpose the
                relevant percentage in relation to each Seller shall be the percentage
                which is set opposite its name in column 5 of Schedule 1) of all
                sums
                payable at Completion by DRDL to four of the management team of DRDL
                (being Henry Warren, Dennis Gilbert, Gareth Unsworth and Peter Whitehouse)
                under a potential retention pay plan (equating to each individual's
                annual
                base salary with a possible entitlement to an additional amount equal
                to
                twice each individual's annual base salary), together with a further
                amount equal to 12.8 per cent. thereon, and further amounts equal
                to any
                PAYE income tax and employees' national insurance contributions unless
                such amounts have already been deducted from the sums stated to be
                payable
                to the individuals and accounted for to HM Revenue & Customs;
                and

            

    

    

    
      	
               

            	
              (b)

            	
              an
                amount equal to the relevant percentage (and for this purpose the
                relevant
                percentage in relation to each Seller shall be the percentage which
                is set
                opposite its name in column 5 of Schedule 1) of all fees of DRDL
                (including any VAT) due to certain professional advisers (being
                PricerWaterhouseCoopers, Herbert Smith, KPMG, Bond Pearce and Wolferstans)
                in relation to services provided in respect of the sale of the Shares
                under this Agreement, which services (and the fees or estimates therefor)
                are set out in paragraph 7.1(l) of the Disclosure
                Letter.

            

    

    

    
      	
              5.6

            	
              The
                precise amount of the sums and fees referred to in Clause 5.5 shall
                be
                notified to the Purchaser by the Sellers not later than two Business
                Days
                prior to the Completion Date.

            

    

    

    
      	
              5.7

            	
              The
                Purchaser is hereby irrevocably authorised to deduct an amount equal
                to
                the payments to be made by each Seller to the Purchaser pursuant
                to Clause
                5.5 from the Consideration payable to that
                Seller.

            

    

    

    
      	
              5.8

            	
              Subject
                to compliance by the Sellers with Clause 5.5, the Sellers shall have
                no
                further obligation to the Purchaser or any Group Company in respect
                of the
                sums payable by DRDL referred to in Clause
                5.5.

            

    

    

    
      	
              5.9

            	
              When
                and to the extent that DRDL obtains and utilises a tax deduction
                for the
                payments made by it referred to in Clause 5.5, the Purchaser will
                pay to
                the Sellers an amount equal to one half of the amount of the tax
                saved
                (including the 12.8 per cent. paid in respect of employers' national
                insurance contributions) in the relevant percentages (and for this
                purpose
                the relevant percentage in relation to each Seller shall be the percentage
                which is set opposite its name in column 5 of Schedule
                1).

            

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    
      	
              5.10

            	
              All
                payments under Clauses 5.5 and 5.9 shall be treated as adjustments
                to the
                Consideration.

            

    

    
      	
               

            	 

    

    
      	
              6.

            	
              Completion

            

    

    

    
      	
              6.1

            	
              Completion
                shall take place on the third Business Day following the first Business
                Day on or by which all the Conditions have been fulfilled or waived
                (if
                capable of being waived) at the offices of the Sellers' Solicitors
                (or at
                such other time and place as the Sellers and the Purchaser may agree
                in
                writing) (the "Completion
                Date").

            

    

    

    
      	
              6.2

            	
              At
                Completion the Sellers and the Purchaser shall comply with their
                respective obligations set out in Schedule
                7.

            

    

    

    
      	
              6.3

            	
              Payment
                by the Purchaser of the Consideration (less the deduction referred
                to in
                Clause 5.7) in accordance with paragraph 3(a) of Schedule 7 shall
                constitute payment of the consideration for the Shares and shall
                constitute a valid discharge of the Purchaser's obligations under
                Clause
                2.1.

            

    

    

    
      	
              6.4

            	
              If
                the respective obligations of the Sellers and/or the Purchaser under
                Clause 6.2 and Schedule 7 are not complied with in full on the Completion
                Date, the Purchaser or (as the case may be) the Sellers may (in their
                sole
                discretion):

            

    

    

    
      	
               

            	
              (a)

            	
              defer
                Completion to a date not more than 28 days after the date specified
                in
                Clause 6.1 in which event the provisions of this Clause 6 shall apply
                to
                Completion as so deferred; or

            

    

    

    
      	
               

            	
              (b)

            	
              proceed
                to Completion as far as practicable without prejudice to its or their
                rights under this Agreement; or

            

    

    

    
      	
               

            	
              (c)

            	
              provided
                that the 28 day period referred to in Clause 6.4(a) has elapsed,
                terminate
                this Agreement by notice in writing to the Sellers or (as the case
                may be)
                the Purchaser.

            

    

    

    
      	
              6.5

            	
              If
                this Agreement is terminated pursuant to Clause 6.4, this Agreement
                shall
                cease to have effect (save for this Clause 6.5 and Clauses 1, 3.7,
                15, 16
                and 19 to 27 (inclusive) and 29 which shall continue to have effect)
                and
                no party shall have any claim under this Agreement against any other
                party
                save in respect of rights and liabilities of the parties which have
                accrued under this Agreement before its termination or in relation
                to
                those provisions of this Agreement referred to above which continue
                to
                have effect following its
                termination.

            

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
      	
              6.6

            	
              Neither
                the Purchaser nor any of the Sellers shall be obliged to complete
                the sale
                and purchase of any of the Shares unless the sale and purchase of
                all the
                Shares is completed at the same time in accordance with this
                Agreement.

            

    

    
      	
               

            	 

    

    
      	
              7.

            	
              Post-Completion
                Undertakings

            

    

    

    
      	
              7.1

            	
              Without
                prejudice to the provisions of Clause 6 and Schedule 7, the Purchaser
                shall use its reasonable endeavours to procure that, as soon as reasonably
                practicable after Completion, each Seller and each of its Connected
                Persons is released from any guarantee, indemnity, counter-indemnity,
                bond, letter of comfort or other similar obligation given or incurred
                by
                it prior to Completion (including, for the avoidance of doubt, any
                guarantees given in the Alliance Agreement) (provided that, if any
                such
                obligation is given or incurred after the date of this Agreement
                but prior
                to Completion, the Purchaser has consented to the grant or incurrence
                of
                such obligations) in respect of a liability or obligation of any
                Group
                Company and pending such release the Purchaser undertakes to each
                Seller
                (for itself and on behalf of each of its Connected Persons) to indemnify
                each Seller and each of its Connected Persons on demand against all
                Losses
                arising under or by reason of any such guarantee, indemnity,
                counter-indemnity, bond, letter of comfort or other similar
                obligation.

            

    

    

    
      	
              7.2

            	
              The
                parties hereby acknowledge that with effect from Completion, the
                provision
                of the following goods or services previously supplied to Group Companies
                shall (save to the extent otherwise provided for in the Transitional
                Services Agreement) cease in accordance with the Termination
                Deed:

            

    

    

    
      	
               

            	
              (a)

            	
              insurance
                policies provided by KBR or any of its Connected
                Persons;

            

    

    

    
      	
               

            	
              (b)

            	
              software
                licences provided by KBR or any of its Connected Persons;
                and

            

    

    

    
      	
               

            	
              (c)

            	
              management
                services provided by any of the Sellers or any of their respective
                Connected Persons,

            

    

    

    in
      each
      case without any liability to any Group Company and without prejudice to any
      accrued rights of any Group Company.

    

    
      	
              7.3

            	
              Without
                prejudice to the provisions of Clause 6 and Schedule 7, each of the
                Sellers shall use its reasonable endeavours to procure that, as soon
                as
                reasonably practicable after Completion, each Group Company is released
                from any guarantee, indemnity, counter-indemnity, bond, letter of
                comfort
                or other similar obligation given or incurred by it prior to Completion
                in
                respect of a liability or obligation of any of the Sellers or any
                of their
                Connected Persons and pending such release each of the Sellers undertakes
                to the Purchaser and each Group Company to indemnify the Purchaser
                and
                each Group Company on demand against all Losses arising under or
                by reason
                of any such guarantee, indemnity, counter-indemnity, bond, letter
                of
                comfort or other similar
                obligation.

            

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    
      	
              8.

            	
              Sellers'
                Warranties

            

    

    

    
      	
              8.1

            	
              Subject
                to Clause 9 and Schedule 9, each Seller warrants to the Purchaser
                that
                each of the Sellers' Warranties is true and accurate at the date
                of this
                Agreement and each Seller shall be deemed to warrant that paragraph
                10.2
                only of the Sellers' Warranties is true and accurate immediately
                prior to
                Completion by reference to the facts and circumstances then
                subsisting.

            

    

    

    
      	
              8.2

            	
              Each
                of the Sellers' Warranties shall be construed as a separate and
                independent warranty and, save as expressly otherwise provided in
                this
                Agreement, shall not be limited by reference to or inference from
                the
                terms of any other Sellers'
                Warranty.

            

    

    

    
      	
              8.3

            	
              Without
                prejudice in any way to the Sellers' Warranties, the Purchaser
                acknowledges and agrees that:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                Sellers' Warranties are the only warranties given by the Sellers
                on which
                the Purchaser may rely in entering into this
                Agreement;

            

    

    

    
      	
               

            	
              (b)

            	
              no
                representation or warranty is made or given by any of the Sellers
                as to
                the completeness, truth or accuracy of the matters disclosed in the
                Disclosure Letter;

            

    

    

    
      	
               

            	
              (c)

            	
              without
                prejudice to Clause 19 (Entire Agreement), no representation or warranty
                is made or given by any of the Sellers in relation to the Information
                Memorandum or as to the accuracy or reasonableness of any forecast,
                estimate or projection made or provided to the Purchaser or any of
                its
                advisers (in whatever form) on or before the date of this Agreement;
                and

            

    

    

    
      	
               

            	
              (d)

            	
              no
                representation or warranty is made or given by any of the Sellers
                as to
                the future requirements of the Authority for any goods or services
                to be
                provided by any Group Company.

            

    

    

    
      	
              8.4

            	
              No
                information relating to the Group of which the Purchaser or any of
                its
                agents or advisers has knowledge (whether actual, imputed or constructive
                or any of them or as a result of any investigation by or on behalf
                of the
                Purchaser), other than that contained in or referred to in this Agreement
                and/or fairly disclosed in the Disclosure Letter in accordance with
                Clause
                9.3, shall prejudice any claim by the Purchaser under the Sellers'
                Warranties or reduce any amount recoverable
                thereunder.

            

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    
      	
              8.5

            	
              The
                Sellers irrevocably and unconditionally agree with the Purchaser
                and its
                professional advisers that they will not (and will procure that none
                of
                their respective Connected Persons will) bring any claim or other
                action
                under the Civil Liability (Contribution) Act 1978 of whatever nature
                and
                which exists now or may exist in the future and whether known or
                not known
                to the Sellers at the date hereof and whether in relation to a matter
                which is past, present or future and in respect of negligence
                ("Claim") against any professional advisers of the
                Purchaser in relation to any work carried out for the Purchaser in
                respect
                of this Agreement and/or any Transaction Document.  To the
                extent that any such Claim exists (if any and without prejudice to
                the
                aforesaid), the Sellers severally irrevocably and unconditionally
                waive  the right to bring any form of claim against or recover
                any sums from any of the Purchaser's professional advisers in relation
                to
                any Claim and unconditionally and irrevocably release the Purchaser's
                professional advisers from any liability in respect of any such
                Claim.  It is intended that any relevant professional adviser of
                the Purchaser shall be entitled to the benefit of the undertakings,
                releases and waivers provided for in this clause for the purpose
                of, inter
                alia, the Contracts (Rights of Third Parties) Act 1999.  Nothing
                in this clause shall exclude or limit liability in respect of Claims
                arising directly out of any statements made fraudulently or arising
                as a
                direct result of wilful concealment by the Purchaser's professional
                advisers.

            

    

    
      	
               

            	 

    

    
      	
              9.

            	
              Scope
                of Sellers' Warranties

            

    

    

    
      	
              9.1

            	
              The
                Purchaser agrees and acknowledges
                that:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                only Sellers' Warranties given in respect of the Properties are those
                contained in paragraph 24 (Property) of Schedule 8 and that none
                of the
                other Sellers' Warranties shall or shall be deemed to be, whether
                directly
                or indirectly, a Sellers' Warranty in respect of the
                Properties;

            

    

    

    
      	
               

            	
              (b)

            	
              the
                only Sellers' Warranties given in respect of matters relating to
                or
                governed under Environmental Laws or Nuclear Laws are those contained
                in
                paragraphs 25 (Environment), 10.1(e), 10.2  (Contracts and
                Commitments) and 13.4 (Assets) of Schedule 8 and that none of the
                other
                Sellers' Warranties shall or shall be deemed to be, whether directly
                or
                indirectly, a Sellers' Warranty in respect of such
                matters;

            

    

    

    
      	
               

            	
              (c)

            	
              the
                only Sellers' Warranties given in respect of Intellectual Property
                Rights
                are those contained in paragraph 26 (Intellectual Property) of Schedule
                8
                and that none of the other Sellers' Warranties shall or shall be
                deemed to
                be, whether directly or indirectly, a Sellers' Warranty in respect
                of
                Intellectual Property Rights;

            

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (d)

            	
              the
                only Sellers' Warranties given in respect of employment matters are
                those
                contained in paragraphs 20 (Compliance), 21 (Data Protection) and
                22
                (Employment) of Schedule 8 and that none of the other Sellers' Warranties
                shall or shall be deemed to be, whether directly or indirectly, a
                Sellers'
                Warranty in respect of employment
                matters;

            

    

    

    
      	
               

            	
              (e)

            	
              the
                only Sellers' Warranties given in respect of pensions matters are
                those
                contained in paragraphs 22.18 (Employment) and 23 (Pensions) of Schedule
                8
                and that none of the other Sellers' Warranties shall or shall be
                deemed to
                be, whether directly or indirectly, a Sellers' Warranty in respect
                of
                pensions matters; and

            

    

    

    
      	
               

            	
              (f)

            	
              the
                only Sellers' Warranties given in respect of Taxation are those contained
                in paragraph 29 (Tax) of Schedule 8 and that none of the other Sellers'
                Warranties shall or shall be deemed to be, whether directly or indirectly,
                a Sellers' Warranty in respect of
                Taxation.

            

    

    

    
      	
              9.2

            	
              The
                Sellers' Warranties set out in paragraph 1 of Schedule 8 are given
                by each
                Seller in relation to itself and its Connected Persons only and not
                in
                relation to any other Seller or that Seller's Connected
                Persons.

            

    

    

    
      	
              9.3

            	
              None
                of the Sellers shall be under any liability in respect of any claim
                under
                the Sellers' Warranties if and to the extent that the fact, matter
                or
                circumstance giving rise to the claim is fairly disclosed (with sufficient
                detail reasonably to identify the nature and scope of the matters
                disclosed) in the Disclosure Letter or in any document referred to
                in the
                Disclosure Letter and delivered or deemed to be delivered with
                it.

            

    

    

    
      	
              9.4

            	
              The
                Purchaser confirms that none of William Tame, Albert Dungate and
                Kevin
                Thomas is aware that any of the Sellers' Warranties is reasonably
                likely
                to be incorrect at the date of this
                Agreement.

            

    

    

    
      	
              9.5

            	
              The
                provisions of Schedule 9 shall apply in relation to claims under
                the
                Sellers' Warranties and (to the extent provided therein), the Agreement
                and the Tax Covenant and shall in particular limit the liability
                of the
                Sellers thereunder.

            

    

    

    
      	
              9.6

            	
              Any
                information supplied by or on behalf of any Group Company to or on
                behalf
                of any of the Sellers in connection with the Sellers' Warranties,
                the
                Disclosure Letter or otherwise in relation to the business and affairs
                of
                any Group Company shall not constitute a representation or warranty
                or
                guarantee as to the accuracy thereof by any Group Company and each
                of the
                Sellers undertakes to the Purchaser and each Group Company (and their
                respective directors, officers, employees, agents and advisers) that,
                other than in the case of fraud, it will not bring any and all claims
                which it might otherwise have against any Group Company or any of
                their
                respective employees, agents or advisers in respect
                thereof.

            

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    
      	
              10.

            	
              Purchaser
                Remedies

            

    

    

    
      	
              10.1

            	
              If
                at any time between the date of this Agreement and
                Completion:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                Purchaser becomes aware of any fact, matter or circumstance which
                constitutes a material breach of any of the Sellers' Warranties or
                which
                would constitute a material breach of any of the Sellers' Warranties
                if
                the Sellers' Warranties were repeated at Completion by reference
                to the
                facts and circumstances then
                subsisting;

            

    

    

    
      	
               

            	
              (b)

            	
              there
                is any breach or non-fulfilment by a Seller of its obligations pursuant
                to
                Clause 4.1; or

            

    

    

    
      	
               

            	
              (c)

            	
              there
                has been any material adverse change in the business, operations,
                assets,
                liabilities, financial position, trading position, profits or future
                prospects, in each case of the Group as a whole, or any event or
                circumstance that is reasonably likely to result in such a material
                adverse change,

            

    

    

    and
      which, in any such case, is incapable of remedy or, if capable of remedy, has
      not been remedied by the Sellers within 15 Business Days of the Purchaser making
      a written request to the Sellers to remedy such breach (or, in any event, has
      not been so remedied by the last Business Day prior to Completion), the
      Purchaser shall be entitled by notice in writing to all the Sellers served
      prior
      to Completion to terminate this Agreement.

    

    
      	
              10.2

            	
              For
                the purpose of:

            

    

    

    
      	
               

            	
              (a)

            	
              Clause
                10.1(a), a breach or deemed breach shall only be 'material' if it
                would,
                if the Sellers' Warranties were repeated at Completion by reference
                to the
                facts and circumstances then subsisting, entitle the Purchaser to
                an
                amount in damages, following Completion, equal to £52,500,000 (fifty two
                million, five hundred thousand pounds);
                and

            

    

    

    
      	
               

            	
              (b)

            	
              Clause
                10.1(c), a "material adverse change" in respect of any of the matters
                listed in such Clause shall mean such a material adverse change resulting
                in a diminution in the value of the Company (on the basis that the
                Sellers' Warranties were true and accurate at the date hereof) equal
                to
                £52,500,000 (fifty two million, five hundred thousand
                pounds).

            

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    
      	
              10.3

            	
              If
                this Agreement is terminated pursuant to Clause 10.1, this Agreement
                shall
                cease to have effect (save for this Clause 10.3 and Clauses 1, 15,
                16, 19
                to 27 (inclusive) and 29 which shall continue to have effect) and
                no party
                shall have any claim under this Agreement against any other party
                save in
                respect of rights and liabilities of the parties which have accrued
                under
                this Agreement before its termination or in relation to those provisions
                of this Agreement referred to above which continue to have effect
                following its termination.

            

    

    

    
      	
              10.4

            	
              If
                the Purchaser having become entitled to terminate this Agreement
                pursuant
                to Clause 10.1 chooses not to do so, it shall not be entitled to
                pursue
                any claim for damages or exercise any other right, power or remedy
                under
                this Agreement or otherwise provided in law in respect of the breach
                or
                deemed breach of the Sellers' Warranty giving rise to the entitlement
                to
                terminate save in respect of any matter referred to in sub-Clause
                10.1(b).

            

    

    

    
      	
              10.5

            	
              Subject
                to Clause 10.4, the sole remedy of the Purchaser in respect of any
                breach
                of any of the Sellers' Warranties shall be an action for damages
                (subject
                to the limitations set out in this Agreement) and, save as expressly
                set
                out in this Agreement (other than pursuant to Clause 21.5) and except
                in
                the case of any fraudulent act or omission by the Sellers, the Purchaser
                shall not be entitled to terminate or rescind this Agreement in any
                circumstances whatsoever, whether before or after
                Completion.

            

    

    

    
      	
              10.6

            	
              The
                Sellers undertake to the Purchaser that they will disclose promptly
                in
                writing to the Purchaser any matter or thing of which any of them
                has
                actual knowledge after the date hereof and prior to Completion which
                constitutes a material breach of any of the Sellers'
                Warranties.  If the Sellers fail to make any disclosure required
                to be made pursuant to this Clause 10.6, which disclosure would have
                related to a breach of any of the Sellers' Warranties entitling the
                Purchaser to terminate this Agreement pursuant to Clause 10.1, then
                the
                sole remedy of the Purchaser shall be damages for its loss of opportunity
                to so terminate this Agreement as a consequence of such non-disclosure
                provided that the Sellers shall not be liable pursuant to this Clause
                10.6
                in the event that the Purchaser shall not have complied with its
                obligations pursuant to Clause
                10.7.

            

    

    

    
      	
              10.7

            	
              The
                Purchaser undertakes to the Sellers that it will disclose promptly
                in
                writing to the Sellers any matter or thing of which it has actual
                knowledge after the date hereof and prior to Completion which constitutes
                a material breach of any of the Sellers' Warranties to the extent
                that
                such material breach would give rise to a right of termination of
                this
                Agreement in favour of the
                Purchaser.

            

    

    

    
      	
              10.8

            	
              Each
                of the Sellers confirms that there has been no, and undertakes to
                procure
                that prior to Completion there will not be any,
                Leakage.  Subject to Completion, each of the Sellers undertakes,
                to the extent that there has been or is any Leakage, to pay to the
                Purchaser, or as it may direct, immediately on demand an amount equal
                to
                the Leakage together with interest on such amount at the rate set
                out in
                Clause 17 from the date of the Leakage to the date of payment to
                the
                Purchaser, or, in respect of the payment itself, as it
                directs.

            

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    
      	
              10.9

            	
              For
                the avoidance of doubt, if the Purchaser terminates this Agreement
                pursuant to Clause 10.1 as a consequence of changes in the requirements
                of
                the Authority, the Purchaser shall (subject to Clause 10.3) not have
                any
                claim under this Agreement against the
                Sellers.

            

    

     

    
      	
              11.

            	
              Purchaser's
                Warranties

            

    

    

    The
      Purchaser warrants to each Seller that each of the Purchaser's Warranties is
      true and accurate at the date of this Agreement.

     

    
      	
              12.

            	
              Restrictions
                on Sellers' Business
                Activities

            

    

    

    
      	
              12.1

            	
              Each
                Seller undertakes to the Purchaser that it will not, and that it
                will
                procure that none of its Connected Persons from time to time will
                either
                directly or indirectly and either solely or jointly with any other
                person
                (either on its own account or as the agent of any other person) and
                in any
                capacity whatsoever:

            

    

    

    
      	
               

            	
              (a)

            	
              for
                a period of 2 years from the Completion Date solicit or seek to entice
                away from the employment of any Group Company any person who was
                at any
                time during the 12 months before the Completion Date employed by
                any Group
                Company in a senior or managerial capacity;
                or

            

    

    

    
      	
               

            	
              (b)

            	
              at
                any time after the Completion Date use or hold itself out as using
                any of
                the trading or operating names of any Group Company or any similar
                such
                name, trading style or derivation
                therefrom.

            

    

    

    
      	
              12.2

            	
              Each
                undertaking in Clause 12.1 shall be construed as a separate undertaking
                and if one or more of the undertakings is held to be against the
                public
                interest or in any way an unreasonable restraint of trade, the remaining
                undertakings shall continue to bind each
                Seller.

            

    

    

    
      	
              12.3

            	
              Each
                of the Sellers agrees that the undertakings contained in this Clause
                12
                are reasonable and are entered into for the purpose of protecting
                the
                goodwill of the business of each Group
                Company.

            

    

    

    
      	
              12.4

            	
              If
                any undertaking contained in this Clause 12 shall be held to be void
                but
                would be valid if deleted in part or reduced in application, such
                undertaking shall apply with such deletion or modification as may
                be
                necessary to make it valid and enforceable.  Without prejudice
                to the generality of the foregoing, in such circumstances, any relevant
                period of time (as the same may previously have been reduced by virtue
                of
                this Clause 12.4) shall take effect as if reduced by successive six
                month
                periods until the resulting period shall be valid and
                enforceable.

            

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
      	
              13.

            	
              Information,
                Records and Assistance

            

    

    

    
      	
              13.1

            	
              Following
                Completion, the Purchaser shall procure that each Seller is provided
                with
                such financial and other information relating to, and is given such
                access
                to the books, accounts and other records of, any Group Company in
                respect
                of the period up to Completion as the relevant Seller may reasonably
                request in order to enable it to satisfy its tax, accounting and
                reporting
                requirements.

            

    

    

    
      	
              13.2

            	
              In
                the event of an audit by the Authority after Completion directly
                in
                relation to the payment of management charges paid by any Group Company
                to
                any Seller or any of their Connected Persons prior to Completion,
                each of
                the Sellers shall provide the Authority with such information and
                assistance as, in each case, the Authority may reasonably request
                for the
                purposes of providing answers to any queries raised by the Authority
                in
                respect of any such audit.

            

    

    
      	
               

            	 

    

    
      	
              14.

            	
              Guarantee

            

    

    

    
      	
              14.1

            	
              In
                consideration of the Purchaser entering into this Agreement with
                KBR, the
                Guarantor (subject to Clause 14.7) unconditionally and irrevocably
                undertakes to the Purchaser:

            

    

    

    
      	
               

            	
              (a)

            	
              to
                procure that KBR will fully and promptly perform and discharge all
                present
                and future actual and purported obligations and liabilities of KBR
                (referred to in this Clause as the "Guaranteed
                Obligations") under or in respect of the Transaction Documents;
                and

            

    

    

    
      	
               

            	
              (b)

            	
              that,
                if KBR fails to do so, it will itself (and without the need for any
                demand) perform and discharge the Guaranteed Obligations and indemnify
                the
                Purchaser against all losses, liabilities, claims, demands, costs,
                charges
                and expenses directly or indirectly suffered or incurred by or made
                against the Purchaser in connection with or arising out of such
                failure.

            

    

    

    
      	
              14.2

            	
              The
                liability of the Guarantor under this Clause 14 shall be that of
                principal
                obligor and not merely as surety and shall not be limited, discharged
                or
                otherwise affected by any time, indulgence, waiver or concession
                granted
                by the Purchaser to KBR, by the invalidity, unenforceability or
                frustration of any of the Guaranteed Obligations, by any lack of
                capacity
                or lack or misuse of authority on the part of KBR or its officers,
                by the
                liquidation, administration or dissolution of KBR or the disclaimer
                of any
                of the Guaranteed Obligations, by any variation or termination of
                any of
                the Guaranteed Obligations or by any other fact or circumstance which
                would or might (but for this provision) limit, discharge or otherwise
                affect the liability of the
                Guarantor.

            

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    
      	
              14.3

            	
              The
                obligations of the Guarantor under this Clause 14 are continuing
                obligations and shall remain in full force and effect so long as
                any of
                the Guaranteed Obligations has yet to be fully performed or
                discharged.

            

    

    

    
      	
              14.4

            	
              Until
                all of the Guaranteed Obligations have been fully performed and discharged
                the Guarantor shall not, without the prior written consent of the
                Purchaser:

            

    

    

    
      	
               

            	
              (a)

            	
              exercise
                as against KBR, in respect of any amount previously paid by the Guarantor
                under this guarantee, any right of subrogation or any other right
                or
                remedy which the Guarantor may have in respect of the
                same;

            

    

    

    
      	
               

            	
              (b)

            	
              (while
                any sum is due and payable by the Guarantor hereunder or if it is
                otherwise liable to perform any of the Guaranteed Obligations) receive,
                claim or have the benefit of any payment, distribution or security
                from
                KBR or exercise any other right or remedy (including, but not limited
                to,
                any right of set-off) which the Guarantor may have in respect of
                the same;
                or

            

    

    

    
      	
               

            	
              (c)

            	
              prove
                in any liquidation of KBR in competition with the Purchaser for any
                sums
                owing to the Guarantor by KBR,

            

    

    

    unless
      in
      any such case instructed in writing by the Purchaser to do so; and the Guarantor
      shall hold in trust for the Purchaser (for application by the Purchaser in
      or
      towards the discharge of the Guaranteed Obligations) the benefit of all such
      rights, remedies, payments, distribution and security and moneys at any time
      received or held by the Guarantor in respect of any of them.

    

    
      	
              14.5

            	
              The
                obligations of the Guarantor under this Clause 14 shall be in addition
                to
                and shall not merge with or prejudice or be prejudiced by any collateral
                or other security now or in future held by the
                Purchaser.

            

    

    

    
      	
              14.6

            	
              The
                Guarantor warrants to the Purchaser in the terms of paragraph 1 (Capacity
                and Authority) and 28 (Insolvency) of Schedule 8 both at the date
                of this
                Agreement and immediately prior to Completion save
                that:

            

    

    

    
      	
               

            	
              (a)

            	
              reference
                in paragraph 1 to Kellogg Brown & Root Holdings (U.K.) Limited and the
                Seller shall be replaced by the appropriate references to the Guarantor;
                and

            

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (b)

            	
              reference
                in paragraph 28 to any proceedings, events and appointments shall,
                for the
                purposes of this Clause 14.6, also include any analogous proceedings,
                events or appointments in any relevant
                jurisdiction.

            

    

    

    
      	
              14.7

            	
              Notwithstanding
                anything express or implied in this Agreement, the obligations and
                liabilities of the Guarantor to the Purchaser under this Clause 14
                shall
                be no greater in any respect than the obligations and liabilities
                of KBR
                to the Purchaser under this
                Agreement.

            

    

     

    
      	
              15.

            	
              Announcements

            

    

    

    
      	
              15.1

            	
              Subject
                to Clause 15.2 and Clause 15.3, no announcement or circular concerning
                the
                sale of the Shares or any related or ancillary matter shall be made
                or
                issued by any party (whether before or after Completion) without
                the prior
                written consent of the other parties, such consent not to be unreasonably
                withheld or delayed.

            

    

    

    
      	
              15.2

            	
              Without
                prejudice to Clause 15.3, a party may make an announcement concerning
                the
                sale of the Shares or a related or ancillary matter if required to
                do so
                by law or by any securities exchange or governmental or other regulatory
                or supervisory body or authority of competent jurisdiction to which
                that
                party is subject but in such circumstances the party required to
                make the
                announcement shall take such steps as shall be reasonable and practicable
                in the circumstances to agree the contents of the announcement with
                the
                other parties prior to the release of the
                announcement.

            

    

    

    
      	
              15.3

            	
              Notwithstanding
                Clauses 15.1 and 15.2, the Purchaser may (without the need for consent
                from the other parties) make such announcements and issue such circulars
                concerning the sale of the Shares or any related ancillary matter
                as may
                be required in order to satisfy its obligations to fulfil the Condition
                set out in paragraph 1 of Schedule 5 in accordance with Clause
                3.3.

            

    

     

    
      	
              16.

            	
              Costs

            

    

    

    
      	
              16.1

            	
              Unless
                expressly otherwise provided in this Agreement, each party shall
                bear its
                own legal, accountancy and other costs, charges and expenses incurred
                in
                connection with the negotiation, preparation and implementation of
                this
                Agreement and the sale and purchase of the
                Shares.

            

    

    

    
      	
              16.2

            	
              The
                Purchaser shall bear all stamp duty on the transfer of the Shares
                to it
                pursuant to the terms of this
                Agreement.

            

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    
      	
              17.

            	
              Interest
                on Late Payment

            

    

    

    If
      any
      party defaults in the payment when due of any sum which is required to be paid
      under this Agreement, the liability of the defaulting party shall be increased
      to include interest on such sum from the due date for payment until the date
      of
      actual payment (after as well as before judgment) at a rate per annum of 4
      per
      cent. above the base lending rate from time to time of Barclays Bank
      plc.  Interest shall accrue from day to day and shall be compounded
      quarterly.

     

    
      	
              18.

            	
              Further
                Assurance

            

    

    

    Insofar
      as it is reasonably able to do so after Completion, each Seller shall (at its
      own cost) do or procure the doing of such acts and execute or procure the
      execution of such documents as the Purchaser may reasonably consider necessary
      for the purpose of vesting legal and beneficial title to the Shares in the
      Purchaser in accordance with the terms of this Agreement.

     

    
      	
              19.

            	
              Entire
                Agreement

            

    

    

    
      	
              19.1

            	
              The
                Transaction Documents constitute the whole and only agreements between
                the
                parties relating to the sale and purchase of the
                Shares.

            

    

    

    
      	
              19.2

            	
              Each
                party agrees and acknowledges that:

            

    

    

    
      	
               

            	
              (a)

            	
              in
                entering into this Agreement, it is not relying on any warranty,
                representation, undertaking, assurance, promise or other commitment
                of any
                nature whatsoever (whether or not in writing) made or given by any
                other
                party or any of its Connected Persons prior to the entering into
                of this
                Agreement which is not expressly set out in this Agreement;
                and

            

    

    

    
      	
               

            	
              (b)

            	
              except
                in the case of fraud, no party shall have any right of action against
                any
                other party arising out of or in connection with any such warranty,
                representation, undertaking, assurance, promise or other commitment
                except
                to the extent that it is repeated in this
                Agreement.

            

    

     

    
      	
              20.

            	
              Variation

            

    

    

    No
      variation of this Agreement shall be effective unless it is in writing and
      signed by or on behalf of each of the parties.

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
      	
              21.

            	
              Waivers
                and Remedies

            

    

    

    
      	
              21.1

            	
              A
                waiver of any provision of, or right under, this Agreement shall
                only be
                effective if it is in writing and signed by the waiving party and
                shall
                only be applicable in the circumstances and for the purpose for which
                it
                is given.

            

    

    

    
      	
              21.2

            	
              No
                failure or delay by any party in exercising any right, power or remedy
                provided by law or under this Agreement shall affect that right,
                power or
                remedy or operate as a waiver
                thereof.

            

    

    

    
      	
              21.3

            	
              The
                single or partial exercise by any party of any right, power or remedy
                provided by law or under this Agreement shall not preclude any other
                or
                further exercise of that right, power or remedy or the exercise of
                any
                other right, power or remedy.

            

    

    

    
      	
              21.4

            	
              Except
                as otherwise expressly provided in this Agreement, the rights, powers
                and
                remedies of any party provided under this Agreement are cumulative
                and not
                exclusive of any rights, powers or remedies provided by
                law.

            

    

    

    
      	
              21.5

            	
              Subject
                to Clause 10.5, without affecting any other rights or remedies that
                any
                party may have, each party acknowledges and agrees that damages alone
                may
                not be an adequate remedy for any breach by it of any of the provisions
                of
                this Agreement, that, accordingly, each party shall be entitled to
                the
                remedies of injunction, specific performance and other equitable
                relief
                for any threatened or actual breach of this Agreement by another
                party,
                that no proof of special damages will be necessary for the enforcement
                of
                such remedies and that no party will raise any objection to the
                application by any other party for any such
                remedies.

            

    

     

    
      	
              22.

            	
              Counterparts

            

    

    

    
      	
              22.1

            	
              This
                Agreement may be executed in any number of counterparts and by the
                parties
                to it on separate counterparts but shall not be effective until each
                party
                has executed at least one
                counterpart.

            

    

    

    
      	
              22.2

            	
              Each
                counterpart shall constitute an original of this Agreement but all
                the
                counterparts shall together constitute one and the same
                instrument.

            

    

     

    
      	
              23.

            	
              Invalidity

            

    

    

    If
      any
      provision of this Agreement is held to be illegal, invalid or unenforceable,
      in
      whole or in part, under any enactment or rule of law, then such provision (or
      part thereof) shall to that extent be deemed not to be included in this
      Agreement but the legality, validity and enforceability of the other provisions
      of this Agreement shall not be affected.

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    
      	
              24.

            	
              Effect
                of Completion

            

    

    

    The
      terms
      of this Agreement (insofar as not performed at Completion and so far as capable
      of having effect after Completion) shall remain in full force and effect
      notwithstanding Completion.

     

    
      	
              25.

            	
              Assignment

            

    

    

    
      	
              25.1

            	
              Subject
                to Clause 25.2 no party shall, without the prior written consent
                of each
                other party, assign all or any part of the benefit of, or any right
                or
                interest in or under or arising from, this
                Agreement.

            

    

    

    
      	
              25.2

            	
              The
                Purchaser may (without the consent of the Sellers or the Guarantor)
                assign
                to any member of the Purchaser's Group the benefit of all or any
                of the
                Sellers' obligations or any benefit it enjoys under this Agreement
                provided however that such assignment shall not be absolute but shall
                be
                expressed to have effect only for so long as the assignee remains
                a member
                of the Purchaser's Group and that immediately before ceasing to be
                such a
                member the assignee shall assign the benefit to another member of
                the
                Purchaser's Group.  The sale or transfer of all or part of the
                business of any member of the Group to any member of the Purchaser's
                Group
                shall not affect the liability of any of the Sellers under any provision
                of this Agreement whatsoever.

            

    

     

    
      	
              26.

            	
              Notices

            

    

    

    
      	
              26.1

            	
              Any
                notice to be given under or in connection with this
                Agreement:

            

    

    

    
      	
               

            	
              (a)

            	
              shall
                be in writing;

            

    

    

    
      	
               

            	
              (b)

            	
              shall
                be marked for the attention of the person and sent to the address
                or fax
                number specified in Clause 26.3 (or such other person, address or
                fax
                number as the relevant party may notify to the other parties in accordance
                with this Clause 26); and

            

    

    

    
      	
               

            	
              (c)

            	
              shall
                be delivered personally or sent by prepaid first class post, recorded
                delivery or (if relevant) airmail or by
                fax.

            

    

    

    
      	
              26.2

            	
              Any
                notice is deemed to have been
                received:

            

    

    

    
      	
               

            	
              (a)

            	
              if
                delivered personally, at the time of
                delivery;

            

    

    

    
      	
               

            	
              (b)

            	
              if
                sent by pre-paid first class post, recorded delivery or (if relevant)
                airmail, the second Business Day after the date of posting;
                and

            

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (c)

            	
              if
                sent by fax, at the time of
                transmission,

            

    

    

    provided
      that if a notice is, or would (but for this proviso) be deemed to be, received
      on a day that is not a Business Day or after 5.00 pm on a Business Day, it
      shall
      instead be deemed to be received at 9.00 am on the Business Day next following
      that day.

    

    
      	
              26.3

            	
              The
                addresses and fax numbers of the parties for the service of notices
                are:

            

    

    

    Kellogg
      Brown & Root Holdings (U.K.) Limited

    Address:  Hill
      Park Court, Springfield Drive, Leatherhead, Surrey KT22 7NL

    Fax
      no:  01372 866 951

    For
      the
      attention of:  The Company Secretary

    

    Balfour
      Beatty plc

    Address:  130
      Wilton Road, London SW1V 1LX

    Fax
      no:  020 7216 6901

    For
      the
      attention of: The Company Secretary

    

    The
      Weir Group plc

    Address:
      Clydesdale Bank Exchange, 20 Waterloo Street, Glasgow G2 6DB

    Fax
      no:
      +44 141 221 9789

    For
      the
      attention of:  The Company Secretary

    

    KBR,
      Inc.

    Address:
      601 Jefferson Street, Houston, Texas 77002, USA

    Fax
      No:
      +1 713 753 2017

    For
      the
      attention of: The General Counsel

    

    Babcock
      International Group PLC

    Address:  2
      Cavendish Square, London W1G DPX

    Fax
      no:  020 7291 5055

    For
      the
      attention of:  The Company Secretary

    

    
      	
              26.4

            	
              To
                prove service, it shall be sufficient to prove
                that:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                envelope containing the notice was properly addressed and delivered
                to the
                appropriate address; or

            

    

    

    
      	
               

            	
              (b)

            	
              the
                envelope containing the notice was properly addressed and posted
                by

            

    

    
      	
               

            	
              pre-paid
                first class post, recorded delivery or (if relevant) airmail;
                or

            

    

    

    
      	
               

            	
              (c)

            	
              the
                notice was transmitted by fax to the fax number of the party to be
                served.

            

    

    
      	
               

            	 

    

    
      	
              27.

            	
              Contracts
                (Rights of Third Parties) Act
                1999

            

    

    

    
      	
              27.1

            	
              Subject
                to Clause 27.2, a person who is not a party to this Agreement shall
                have
                no right under the Contracts (Rights of Third Parties) Act 1999 to
                enforce
                any term of this Agreement, but this shall not affect any right or
                remedy
                of a third party which is granted by the provisions of this Agreement
                or
                which exists or is available apart from that
                Act.

            

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    
      	
              27.2

            	
              Any
                person (other than the parties) who is given any rights or benefits
                under
                Clauses 7.1, 7.3, 8.5 and 9.6 (a "Third Party") shall be
                entitled to enforce those rights or benefits against the parties
                in
                accordance with the Contracts (Rights of Third Parties) Act 1999
                but the
                Purchaser and the Sellers may amend Clauses 7.1, 7.3, 8.5 and 9.6
                without
                the consent of the Third Party.

            

    

     

    
      	
              28.

            	
              Confidential
                Information

            

    

    

    
      	
              28.1

            	
              Each
                of the Sellers shall not, and shall procure that none of its Connected
                Persons or any director, officer or employee of such Seller or any
                such
                Connected Person shall, use or disclose to any person Confidential
                Information.

            

    

    

    
      	
              28.2

            	
              Clause
                28.1 does not apply to:

            

    

    

    
      	
               

            	
              (a)

            	
              disclosure
                of Confidential Information to or at the written request of the
                Purchaser;

            

    

    

    
      	
               

            	
              (b)

            	
              use
                or disclosure of Confidential Information required to be disclosed
                by law,
                regulation, the London Stock Exchange, the UK Listing Authority or
                any
                other applicable stock exchange;

            

    

    

    
      	
               

            	
              (c)

            	
              disclosure
                of Confidential Information to any Tax
                Authority;

            

    

    

    
      	
               

            	
              (d)

            	
              disclosure
                of Confidential Information to professional advisers for the purpose
                of
                advising the relevant Seller; or

            

    

    

    
      	
               

            	
              (e)

            	
              Confidential
                Information which is in the public domain other than by a Seller's
                breach
                of Clause 28.1.

            

    

     

    
      	
              29.

            	
              Governing
                Law and Jurisdiction

            

    

    

    
      	
              29.1

            	
              This
                Agreement (and any disputes, proceedings or claims arising out of
                or in
                connection with this Agreement) shall be governed by and construed
                in
                accordance with English law.

            

    

    

    
      	
              29.2

            	
              Each
                party agrees that the courts of England are to have exclusive jurisdiction
                to settle any dispute or claim arising out of or in connection with
                this
                Agreement and each party irrevocably submits to the jurisdiction
                of the
                English courts.

            

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    
      	
              29.3

            	
              Without
                prejudice to any other permitted mode of service the parties agree
                that
                service of any claim form, notice or other document for the purpose
                of any
                proceedings begun in England which may arise out of or in any way
                relate
                to this Agreement or its formation shall be duly served upon it if
                delivered personally or sent by recorded or special delivery post
                (or any
                substantially similar form of mail), in the case
                of:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                Guarantor to KBR, Inc. c/o Kellogg Brown & Root Holdings (U.K.)
                Limited, Hill Park Court, Springfield Drive, Leatherhead, Surrey
                KT22 7NL)
                marked for the attention of The Company Secretary;
                and

            

    

    

    
      	
               

            	
              (b)

            	
              all
                other parties to this Agreement, in accordance with the notice provisions
                set out in Clause 26.3,

            

    

    

    or
      such
      other person and address in England and/or Wales as the relevant party shall
      notify the other parties from time to time.

    

    SIGNED
      by or on behalf of the parties.

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1

    

    The
      Sellers

    

    

    
      	
              (1)

            	
              (2)

            	
              (3)

            	
              (4)

            	
              (5)

            
	
              Name,
                address and registered number of each Seller

               

            	
              No.
                of Shares

            	
              Consideration

               

            	
              Maximum
                aggregate liability of each Seller

               

            	
              Relevant
                Percentage

            
	
              Kellogg
                Brown & Root Holdings (U.K.) Limited

              Hill
                Park Court

              Springfield
                Drive

              Leatherhead

              Surrey

              KT22
                7NL

              Registered
                number: 01870934

               

            	
              204
                A ordinary shares of £1 each

            	
              £178,500,000

            	
              £51,000,000

              plus
                51 per cent. of any re-calculated interest pursuant to paragraphs
                3.3(a)
                and 3.4 of Schedule 9

            	
              51%

            
	
              Balfour
                Beatty plc

              130
                Wilton Road

              London

              SW1V
                1LX

              Registered
                number: 00395826

               

            	
              98
                B ordinary shares of £1 each

            	
              £85,750,000

            	
              £24,500,000

              plus
                24.5 per cent. of any re-calculated interest pursuant to paragraphs
                3.3(a)
                and 3.4 of Schedule 9

               

            	
              24.5%

            
	
              The
                Weir Group plc

              Clydesdale
                Bank Exchange,

              20
                Waterloo Street,

              Glasgow,

              Scotland

              G2
                6DB

              Registered
                number: SC 002934

            	
              98
                B ordinary shares of £1 each

            	
              £85,750,000

            	
              £24,500,000

              plus
                24.5 per cent. of any re-calculated interest pursuant to paragraphs
                3.3(a)
                and 3.4 of Schedule 9

               

            	
              24.5%

            

    

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2

    

    The
      Company

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              17
                August 1994

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              2959785

            
	
              4.

            	
              Registered
                office

            	
              c/o
                Devonport Royal Dockyard Limited

              Devonport

              Plymouth

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   David
                Addison
                Milne Dunbar*

              ●   Dennis
                Ernest
                Gilbert

              ●   Bang
                Chuan
                Liew*

              ●   Alan
                Wallace
                Fernie Mitchelson*

              ●   Sir
                Malcolm
                David Pledger*

              ●   Andrew
                Edward
                Rose*

              ●   Mark
                Wayne
                Selway*

              ●   Bruce
                Alan
                Stanski*

              ●   Ian
                Paul
                Tyler*

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary

            	
              Henry
                William Warren

            
	
              7.

            	
              Authorised
                share capital:

            	
              £600
                divided into 204 A ordinary shares of £1 each, 196 B ordinary shares of £1
                each and 200 deferred shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £400
                divided into 204 A ordinary shares of £1 each and 196 B ordinary shares of
                £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              ●   Kellogg
                Brown
                & Root Holdings (U.K.) Limited - 204 A ordinary shares of £1
                each

              ●   Balfour
                Beatty plc - 98 B ordinary shares of £1 each

              ●   The
                Weir
                Group plc - 98 B ordinary shares of £1 each

            
	
              10.

            	
              Auditors:

            	
              KPMG
                LLP

            
	
              11.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3

    

    The
      Subsidiaries

    

    Devonport
      Royal Dockyard Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              26
                November 1986

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number

            	
              2077752

            
	
              4.

            	
              Registered
                office

            	
              Devonport
                Royal Dockyard

              Devonport

              Plymouth

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   David
                Addison
                Milne Dunbar*

              ●   Dennis
                Ernest
                Gilbert

              ●   Bang
                Chuan
                Liew*

              ●   Alan
                Wallace
                Fernie Mitchelson*

              ●   Sir
                Malcolm
                David Pledger*

              ●   Andrew
                Edward
                Rose*

              ●   Mark
                Wayne
                Selway*

              ●   Bruce
                Alan
                Stanski*

              ●   Ian
                Paul
                Tyler*

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary

            	
              Henry
                William Warren

            
	
              7.

            	
              Authorised
                share capital:

            	
              £5,350,002
                divided into 5,350,001 ordinary shares of £1 each and 1 special share of
                £1

            
	
              8.

            	
              Issued
                share capital:

            	
              £5,350,002
                divided into 5,350,001 ordinary shares of £1 each and 1 special share of
                £1

            
	
              9.

            	
              Registered
                shareholders:

            	
              ●   Devonport
                Management Limited - 5,350,001 ordinary shares of £1 each

              ●   Secretary
                of
                State for Defence - 1 special share of £1

            
	
              10.

            	
              Auditors:

            	
              KPMG
                LLP

            
	
              11.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    Appledore
      Shipbuilders (2004) Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              5
                September 1986

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              2052982

            
	
              4.

            	
              Registered
                office:

            	
              Devonport
                Royal Dockyard

              Devonport

              Plymouth

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   David
                Addison
                Milne Dunbar*

              ●   Dennis
                Ernest
                Gilbert

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary

            	
              Henry
                William Warren

            
	
              7.

            	
              Authorised
                share capital:

            	
              £1,000,000
                divided into 103,000 A ordinary shares of £1 each and 897,000 B ordinary
                shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £1,000,000
                divided into 103,000 A ordinary shares of £1 each and 897,000 B ordinary
                shares of £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              Devonport
                Management Limited

            
	
              10.

            	
              Auditors:

            	
              KPMG
                LLP

            
	
              11.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    Defence
      Supply Chain Solutions Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              29
                September 2003

            
	
              2.

            	
              Place
                of incorporation

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              4915240

            
	
              4.

            	
              Registered
                office:

            	
              Devonport
                Royal Dockyard

              Devonport

              Plymouth

              Devon

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Dennis
                Ernest
                Gilbert

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary

            	
              Henry
                William Warren

            
	
              7.

            	
              Authorised
                share capital:

            	
              £1,000
                divided into 1,000 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £1
                divided into 1 ordinary share of £1

            
	
              9.

            	
              Registered
                shareholders:

            	
              Devonport
                Management Limited

            
	
              10.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    Frazer-Nash
      Consultancy Group Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              29
                November 2001

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              4331183

            
	
              4.

            	
              Registered
                office:

            	
              c/o
                Devonport Royal Dockyard Limited

              Devonport

              Plymouth

              Devon
                PL1 4SG

            
	
              5.

            	
              Directors:

            	
              ●   Paul
                John
                Best

              ●   Robert
                Ronald
                Burge

              ●   David
                Addison
                Milne Dunbar*

              ●   Dennis
                Ernest
                Gilbert

              ●   Christopher
                Charles Henry Guyott

              ●   Andrew
                Graham
                Milton

              ●   Martin
                John
                Simon Palmer

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary

            	
              Robert
                Ronald Burge

            
	
              7.

            	
              Authorised
                share capital:

            	
              £165,000
                divided into 15,000,000 A ordinary shares of 1 penny each and 1,500,000
                B
                ordinary shares of 1 penny each

            
	
              8.

            	
              Issued
                share capital:

            	
              £115,671
                divided into 10,908,600 A ordinary shares of 1 penny each and 658,500
                B
                ordinary shares of 1 penny each

            
	
              9.

            	
              Registered
                shareholders:

            	
              Devonport
                Management Limited

            
	
              10.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    Frazer-Nash
      Consultancy Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              27
                November 1990

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              2562870

            
	
              4.

            	
              Registered
                office:

            	
              c/o
                Devonport Royal Dockyard Ltd

              Devonport

              Plymouth

              Devon

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Paul
                John
                Best

              ●   Mark
                Stephen
                Brennan

              ●   Robert
                Ronald
                Burge

              ●   David
                Addison
                Milne Dunbar*

              ●   Christopher
                Alexander Edwards

              ●   Dennis
                Ernest
                Gilbert

              ●   Steven
                Grant

              ●   Christopher
                Charles Henry Guyott

              ●   Neil
                Malcolm
                McDougall

              ●   Andrew
                Graham
                Milton

              ●   Martin
                John
                Simon Palmer

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary:

            	
              Robert
                Ronald Burge

            
	
              7.

            	
              Authorised
                share capital:

            	
              £500,000
                divided into 500,000 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £115,671
                divided into 112,671 A ordinary shares of £1 each and 3,000 B ordinary
                shares of £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              Frazer-Nash
                Consultancy Group Limited

            
	
              10.

            	
              Auditors:

            	
              KPMG
                LLP

            
	
              11.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    FNC
      Group Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              21
                February 2001

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              4168638

            
	
              4.

            	
              Registered
                office:

            	
              c/o
                Devonport Royal Dockyard Limited

              Devonport

              Plymouth

              Devon

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Robert
                Ronald
                Burge

              ●   Andrew
                Graham
                Milton

            
	
              6.

            	
              Secretary:

            	
              Robert
                Ronald Burge

            
	
              7.

            	
              Authorised
                share capital:

            	
              £10,000
                divided into 10,000 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £2
                divided into 2 ordinary shares of £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              Frazer-Nash
                Consultancy Group Limited

            
	
              10.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    FNC
      Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              7
                November 1996

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              3277619

            
	
              4.

            	
              Registered
                office:

            	
              c/o
                Devonport Royal Dockyard Limited

              Devonport

              Plymouth

              Devon

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              Andrew
                Graham Milton

            
	
              6.

            	
              Secretary:

            	
              Robert
                Ronald Burge

            
	
              7.

            	
              Authorised
                share capital:

            	
              £100
                divided into 100 shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £2
                divided into 2 shares of £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              FNC
                Group Ltd

            
	
              10.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    F
      N Consultancy Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              6
                March 1991

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              2588970

            
	
              4.

            	
              Registered
                office:

            	
              c/o
                Devonport Royal Dockyard Limited

              Devonport

              Plymouth

              Devon

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Robert
                Ronald
                Burge

              ●   Andrew
                Graham
                Milton

            
	
              6.

            	
              Secretary:

            	
              Robert
                Ronald Burge

            
	
              7.

            	
              Authorised
                share capital:

            	
              £100,000
                divided into 100,000 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £2
                divided into 2 ordinary shares of £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              FNC
                Group Ltd

            
	
              10.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    LSC
      Group Holdings Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              24
                March 1998

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              3533640

            
	
              4.

            	
              Registered
                office:

            	
              Devonport
                Royal Dockyard

              Devonport

              Plymouth

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Clive
                Laurence Bullen

              ●   Paul
                Clark

              ●   David
                Addison
                Milne Dunbar*

              ●   Dennis
                Ernest
                Gilbert

              ●   Nicholas
                Paul
                Hawkes

              ●   Andrew
                Heap

              ●   Andrew
                Graham
                Milton

              ●   Michael
                Owen

              ●   Martin
                John
                Simon Palmer

              ●   Mark
                Pearson

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary

            	
              Nicholas
                Paul Hawkes

            
	
              7.

            	
              Authorised
                share capital:

            	
              £100,000
                divided into 100,000 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £100,000
                divided into 100,000 ordinary shares of £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              Devonport
                Management Limited

            
	
              10.

            	
              Auditors:

            	
              KPMG
                LLP

            
	
              11.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    LSC
      Group Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              8
                July 1988

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              2275471

            
	
              4.

            	
              Registered
                office:

            	
              Devonport
                Royal Dockyard

              Devonport

              Plymouth

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Clive
                Laurence Bullen

              ●   Paul
                Clark

              ●   David
                Addison
                Milne Dunbar*

              ●   Dennis
                Ernest
                Gilbert

              ●   Nicholas
                Paul
                Hawkes

              ●   Andrew
                Heap

              ●   Andrew
                Graham
                Milton

              ●   Michael
                Owen

              ●   Martin
                John
                Simon Palmer

              ●   Mark
                Pearson

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary:

            	
              Nicholas
                Paul Hawkes

            
	
              7.

            	
              Authorised
                share capital:

            	
              £349,097
                divided into 349,097 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £349,097
                divided into 349,097 ordinary shares of £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              LSC
                Group Holdings Ltd

            
	
              10.

            	
              Auditors:

            	
              KPMG
                LLP

            
	
              11.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    Locam
      Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              28
                April 1999

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              3761194

            
	
              4.

            	
              Registered
                office:

            	
              Devonport
                Royal Dockyard

              Devonport

              Plymouth

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Martin
                John
                Simon Palmer

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary:

            	
              Nicholas
                Paul Hawkes

            
	
              7.

            	
              Authorised
                share capital:

            	
              £100
                divided into 100 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              1
                ordinary share of £1

            
	
              9.

            	
              Registered
                shareholders:

            	
              LSC
                Group Ltd

            
	
              10.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    Devonport
      Royal Dockyard Pension Trustees Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              17
                February 1987

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              2100466

            
	
              4.

            	
              Registered
                office:

            	
              Devonport
                Royal Dockyard

              Devonport

              Plymouth

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Robert
                Charles Docherty

              ●   Christopher
                John Elliott

              ●   John
                Patrick
                Homeyard

              ●   Philip
                Ross
                Jones

              ●   Richard
                Glanville Margetts

              ●   David
                Frank
                Nobes

              ●   Derick
                Richard Northcott

              ●   Peter
                Sydney
                Ernest Smith

              ●   The
                Trustee
                Corporation Limited

              ●   James
                Brian
                Varney

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary:

            	
              Neil
                Martin Skinner

            
	
              7.

            	
              Authorised
                share capital:

            	
              £100
                divided into 100 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              £100
                divided into 100 ordinary shares of £1 each

            
	
              9.

            	
              Registered
                shareholders:

            	
              ●   Devonport
                Royal Dockyard Limited - 99 ordinary shares of £1 each

              ●   Secretary
                of
                State for Defence - 1 share of £1

            
	
              10.

            	
              Accounting
                reference date:

            	
              31
                March

            

    

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    Devonport
      Royal Dockyard DC Pension Trustees Limited

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              14
                December 2005

            
	
              2.

            	
              Place
                of incorporation:

            	
              England
                and Wales

            
	
              3.

            	
              Registered
                number:

            	
              5653437

            
	
              4.

            	
              Registered
                office:

            	
              Central
                Office Block

              Devonport
                Royal Dockyard

              Devonport

              Plymouth

              PL1
                4SG

            
	
              5.

            	
              Directors:

            	
              ●   Robert
                Charles Docherty

              ●   Christopher
                John Elliott

              ●   John
                Patrick
                Homeyard

              ●   Philip
                Ross
                Jones

              ●   Richard
                Glanville Margetts

              ●   Derick
                Richard Northcott

              ●   Peter
                Sydney
                Ernest Smith

              ●   The
                Trustee
                Corporation Limited

              ●   Henry
                William
                Warren

            
	
              6.

            	
              Secretary:

            	
              Neil
                Martin Skinner

            
	
              7.

            	
              Authorised
                share capital:

            	
              £1,000
                divided into 1,000 ordinary shares of £1 each

            
	
              8.

            	
              Issued
                share capital:

            	
              1
                ordinary share of £1

            
	
              9.

            	
              Registered
                shareholders:

            	
              Devonport
                Royal Dockyard Limited - 1 ordinary share of £1

            
	
              10.

            	
              Accounting
                reference date:

            	
              31
                December

            

    

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    CSMG
      Inc.

    

    

    
      	
              1.

            	
              Date
                of incorporation:

            	
              12
                January 2006

            
	
              2.

            	
              Place
                of incorporation:

            	
              Ontario,
                Canada

            
	
              3.

            	
              Registered
                number:

            	
              650505-8

            
	
              4.

            	
              Registered
                office:

            	
              c/o
                Mr Alan J.H. Whiteley

              2309
                County Road

              13
                PR3 Picton

              Ontario,
                KOK2TO

              Canada

            
	
              5.

            	
              Directors:

            	
              ●   William
                Dube

              ●   Henry
                William
                Warren

              ●   Alan
                J.H.
                Whiteley

            
	
              6.

            	
              Share
                capital:

            	
              2
                issued shares

            
	
              7.

            	
              Registered
                shareholders:

            	
              ●   Devonport
                Management Limited - 1 share

              ●   Weir
                Canada
                Inc - 1 share

            

    

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    SCHEDULE
      4

    

    The
      Properties

    

     

    
      	
              Date

               

            	
              Parties

               

            	
              Description

               

            
	 	 	
              Freehold
                land and buildings being Devonport Royal Dockyard, Devonport, Plymouth,
                registered under title number DN380866

            
	 	 	
              Land
                abutting 4 Basin North (North Yard) at Devonport Road Dockyard, Devonport,
                Plymouth, registered under title number DN388779

            
	 	 	
              Land
                (known as Nuclear Transfer Route) in North Yard at Devonport Naval
                Base,
                Devonport, Plymouth registered under title number
                DN479585

            
	
              13.03.1997

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                of Land and Buildings M001A and M002 (known as Amenity Room and Refuse
                Compactor Station) in Morice Yard at Devonport Royal Dockyard, Devonport,
                Plymouth

            
	
              13.03.1997

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                of Building M002B and M004 (known as Gas Meter House and Plant/Boiler
                House) in Morice Yard at Devonport Royal Dockyard, Devonport, Plymouth,
                registered under title number DN388795

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Buildings number S081, S086, S087, S089, S084
                and
                S090 being part of Zone 1, in South Yard at Devonport Naval Base,
                Devonport, Plymouth

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Building numbered S113 Devonport Naval Base,
                Devonport, Plymouth known as Zone 2A

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                re Land and Building numbered S115 at Devonport Naval Base known
                as Zone
                2B

            

    

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    

    
      	
              Date

               

            	
              Parties

               

            	
              Description

               

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Building numbered S110, S111, S112, S114, S117,
                S122,
                S188 and S189, Devonport Naval Base, Devonport, Plymouth known as
                Zone
                2C

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Building numbered S100 (comprising Zone 3B)
                in South
                Yard, Devonport Naval Base, Devonport, Plymouth

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Building S094 (comprising Zones 3C) in South
                Yard,
                Devonport Naval Base, Plymouth

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Buildings S056, S057 and S058 in South Yard,
                Devonport Naval Base, Devonport, Plymouth

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Building numbered S130 (known as Machine Shop
                no. 3)
                and S133 (Office and Amenity Centre) being Zone 4 in South Yard at
                Devonport Naval Base, Devonport, Plymouth

            
	
              13.03.1997

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                of Land and Building S040 (known as the Dockyard Laboratory) being
                Zone 5
                in South Yard at Devonport Royal Dockyard, Devonport, Plymouth, registered
                under title number DN388781

            
	
              25.03.2003

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Building numbered S151 and known as Zone 7B
                in South
                Yard at Devonport Naval base, Devonport, Plymouth

            
	
              13.03.1997

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                of Building N005 (known as Plant/Boiler House) at Devonport Royal
                Dockyard, Devonport, Plymouth, registered under title number
                DN388786

            
	
              13.03.1997

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                of car parking spaces at Hill 60 at Devonport Royal Dockyard, registered
                under title number DN388784

            

    

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

       

    

    
      	Date	Parties	
              Description

               

            
	
              19.02.2002

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                of Land and Buildings numbered S142 (Amenity Centre and Store), S171
                (Latrine), S172 (Number 2 Machine Shop), S181 (Offices), S182 (Workshop
                and Amenity Centre) and the structures known as Number 3 Slip, Shallow
                Dock and Slip Jetty and associated parking areas in South Yard at
                Devonport Royal Dockyard, Devonport, Plymouth

            
	
              17.09.2002

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Premises at HM Naval Base Devonport, Plymouth (Parts
                of North
                Yard, Morice Yard, South Yard excluding enclave, Bull Point and Weston
                Mill - following buildings still occupied by DRDL:

              N003

              N229

              N229A

              N236

              N238

              S023

              S024

              S105

              S107

              S108

              S118

              S119

              Laydown
                Area

              Container
                Pound

              M011

              M023

              M024

              M025

              M027

              M028

              M031A

              M031B

              M031C

              M033

              M034

              BP26

              BP27

              BP28

              BP41

              BP51

              BP53

              BP53A

              WM08

              WM014

              WM015

              WM018

              Trailer
                Park

               

            

    

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    

    
      	
              Date

               

            	
              Parties

               

            	
              Description

               

            
	
              13.10.2004

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Premises at HM Naval Base Devonport Plymouth Building
                S154
                South Yard Enclave

            
	
              15.04.2005

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Buildings S167, S168, S169 and additional land, HM Naval
                Base,
                Devonport, Plymouth

            
	
              30.09.2005

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Building M006, HM Naval Base, Devonport,
                Plymouth

            
	
              13.10.2004

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Premises at HM Naval Base, Devonport, Plymouth Building
                M008
                Morice Yard

            
	
              13.10.2004

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Premises at HM Naval Base, Devonport, Plymouth Building
                M044
                Morice Yard

            
	
              15.04.2005

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Land and Buildings comprising Devonport Distribution
                Facility
                (DDF) HM Naval Base, Devonport, Plymouth

            
	
              17.09.2002

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Occupational
                Licence relating to premises at HM Naval Base, Devonport, Plymouth
                -
                following buildings still occupied by DRDL:

               

              N019
                *

              N019A

              N019B

              N213

              N215
                (Ground and Second floors only)

              N259
                (Ground floor workshops)

              S014

              S015

              WM005

              WM006

              *
                100% Ground Floor (excluding Radiological Area), 80% Mezzanine floor,
                50%
                First Floor

               

            

    

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    

    
      	
              Date

               

            	
              Parties

               

            	
              Description

               

            
	
              15.04.2005

            	
              (1)           The
                Authority

               

              (2)           DRDL

            	
              Lease
                relating to Buildings M067 and M068 HM Naval Base, Devonport,
                Plymouth

            
	
              22.01.2003

            	
              (1)           HRH
                Prince of Wales

               

              (2)           DRDL

            	
              The
                Lease of foreshore adjoining Pottery Quay in the City of
                Plymouth

            
	
              15.03.2004

            	
              (1)           Appledore
                Land Limited

               

              (2)           Dorhold
                Limited

               

              (3)           DRDL

            	
              Lease
                of Bidna and Newquay Shipyards, registered under title number
                DN495720

            
	
              31.10.2005

            	
              (1)           Keynsham
                Assets Limited and Keynsham Assets (No. 2) Limited

               

              (2)           DRDL

            	
              Lease
                relating to Durley Park, Keynsham, registered under title number
                ST241216

            
	
              20.05.2002

            	
              (1)           Dagnastar

               

              (2)           LSC
                Group Limited

            	
              Lease
                of Offices at Catherine House, 40A St Thomas Street,
                Weymouth

            

    

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    

    
      	
              Date

               

            	
              Parties

               

            	
              Description

               

            
	
              24.12.2004

            	
              (1)           Punch
                Taverns (Offices) Limited

               

              (2)           LSC
                Group Limited

            	
              Lease
                of Lincoln House, Fradley Park, Lichfield, registered under title
                number
                SF496605

            
	
              29.09.2001

            	
              (1)           Hurst
                Warne Pension Scheme

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Lease
                of 1 Trinity Street, Bristol

            
	
              29.09.2001

            	
              (1)           College
                Green Small Self-Administered Pension Scheme

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Lease
                of 4/5 College Green, Bristol

            
	
              30.03.2006

            	
              (1)           Spectrum
                Properties (Scotland) Limited

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Lease
                of 18 Woodside Place, Glasgow

            
	
              07.11.2006

            	
              (1)           Intelligenzia
                Property LLP

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Lease
                of First Floor, The Cube, 1 Lower Lamb Street, Bristol, registered
                under
                title number BL96916

            
	
              10.02.2006

            	
              (1)           Francis
                Mark Cancellor Bettison and Oliver Joseph Samuel Bettison

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Lease
                of First Floor at Gordon Court, The Millfields,
                Plymouth

            

    

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    

    
      	
              Date

               

            	
              Parties

               

            	
              Description

               

            
	
              07.11.2006

            	
              (1)           Norwich
                Property Trust Limited

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Lease
                of Stonebridge House, Dorking Business Park, Station Road, Dorking,
                registered under title number SY757595

            
	
              16.08.2005

            	
              (1)           HHC
                Advertising & Design Limited

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Sub-underlease
                of Suite A, Third Floor, The Colston Tower, Colston Street,
                Bristol

            
	
              04.11.2003

            	
              (1)           Morgan
                Industrial Properties Limited

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Lease
                of Cayman House, Crown Square, Centrum 100, Burton on Trent, registered
                under title number SF480137

            
	
              26.02.2007

            	
              (1)           MEPC
                Birchwood Park No.1 Limited and MEPC Birchwood Park No.2
                Limited

               

              (2)           Frazer-Nash
                Consultancy Limited

            	
              Licence
                to occupy of Suites 403/404 Chadwick House, Birchwood Park, Birchwood,
                Warrington Cheshire

            

    

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    SCHEDULE
      5

    

    Conditions
      To Completion

    

    
      	
              1.

            	
              Shareholder
                Approvals

            

    

    

    The
      passing, at a duly convened and held extraordinary general meeting (or any
      adjournment thereof) of the Purchaser, of any resolution or resolutions which
      are necessary, or in the opinion of the Purchaser desirable, to approve, effect
      and implement the transactions contemplated by this Agreement and to amend
      any
      restriction in the Purchaser's articles of association on the Purchaser's
      ability to borrow.

    

    
      	
              2.

            	
              Authority
                Consent

            

    

    

    Confirmation
      (to the extent required) of the consent of the Authority to the sale and
      purchase of the Shares hereunder and the execution and delivery to all the
      parties thereto of the Deeds of Adherence by the Authority provided that the
      final form of the Deeds of Adherence contain, in substantially the same form,
      those provisions of clauses 2.2 and 3.1 of the Deeds of Adherence annexed
      hereto.

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6

    

    Conduct
      of the Group before Completion

    

    The
      acts,
      matters and transactions referred to in Clause 4.1(d) are as
      follows:

    

    
      	
              (a)

            	
              the
                allotment or issue of, or the grant of any right to call for the
                allotment
                or issue of,  any share or loan capital of any Group
                Company;

            

    

    

    
      	
              (b)

            	
              the
                redemption or purchase by any Group Company of any of its own share
                capital;

            

    

    

    
      	
              (c)

            	
              the
                declaration, making or payment of any dividend (whether in cash or
                in
                specie) or other distribution (other than a dividend or other distribution
                lawfully made to another Group
                Company);

            

    

    

    
      	
              (d)

            	
              the
                passing of a shareholders'
                resolution;

            

    

    

    
      	
              (e)

            	
              the
                entering into of any transaction with any Seller or any of its Connected
                Persons otherwise than on arm's length terms and in the ordinary
                course of
                business;

            

    

    

    
      	
              (f)

            	
              the
                amendment of a Material Contract outside the ordinary course of business
                or termination of a Material
                Contract;

            

    

    

    
      	
              (g)

            	
              the
                acquisition or disposal of any interest in real
                property;

            

    

    

    
      	
              (h)

            	
              the
                approval by any Group Company of any capital expenditure (or the
                entering
                into of any such capital expenditure which has not been previously
                approved) which individually, or which, when aggregated with all
                other
                capital commitments entered into between the date of this Agreement
                and
                Completion, exceeds £500,000 (five hundred thousand
                pounds);

            

    

    

    
      	
              (i)

            	
              the
                disposal of the whole or any significant part of the business and
                undertaking of any Group Company;

            

    

    

    
      	
              (j)

            	
              the
                acquisition of any company, business or
                undertaking;

            

    

    

    
      	
              (k)

            	
              the
                acquisition, otherwise than in the ordinary course of trading, of
                any
                asset  for a consideration which individually, or which, when
                aggregated with all other such acquisitions of such assets exceeds
                £500,000 (five hundred thousand
                pounds);

            

    

    

    
      	
              (l)

            	
              the
                amendment, or agreement to amend, the terms of its borrowing or
                indebtedness in the nature of borrowing or create, incur, or agree
                to
                create or incur, borrowing or indebtedness in the nature of borrowing
                (except pursuant to facilities disclosed in the Disclosure Letter
                where
                the borrowing or indebtedness in the nature of borrowing does not
                exceed
                the amount available to be drawn by each Group Company under those
                facilities);

            

    

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

    
      	
              (m)

            	
              the
                grant of any guarantee, security or indemnity for the obligations
                of any
                person (other than a Group
                Company);

            

    

    

    
      	
              (n)

            	
              the
                cancellation of any Policy (as defined in paragraph 18.1 of Schedule
                8);

            

    

    

    
      	
              (o)

            	
              the
                offer by any Group Company to engage a new employee who would become
                a
                Senior Employee;

            

    

    

    
      	
              (p)

            	
              the
                dismissal of any Senior Employee by any Group Company except for
                cause;

            

    

    

    
      	
              (q)

            	
              any
                material amendment (including any increase in emoluments) to the
                terms of
                employment of any category of employees of any Group
                Company;

            

    

    

    
      	
              (r)

            	
              the
                amendment or discontinuance (wholly or partly) of a Disclosed Scheme
                (as
                defined in paragraph 23.1 of Schedule 8) or plan, proposal or intent
                to
                amend, discontinue (wholly or partly), or exercise a discretion in
                relation to a Disclosed Scheme;

            

    

    

    
      	
              (s)

            	
              the
                creation of any form of security (other than a lien arising by operation
                of law or in the ordinary course of business) on or over the whole
                or any
                part of the undertaking or assets of any Group
                Company;

            

    

    

    
      	
              (t)

            	
              the
                commencement of litigation or arbitration
                proceedings;

            

    

    

    
      	
              (u)

            	
              the
                compromise, settlement, release, discharge or compounding of litigation
                or
                arbitration proceedings or the waiver of a right in relation to litigation
                or arbitration proceedings or the waiver of any material right other
                than
                in the ordinary course of trading;

            

    

    

    
      	
              (v)

            	
              the
                entering into of any agreement (whether or not conditional) to do
                any of
                the foregoing;

            

    

    

    
      	
              (w)

            	
              the
                surrender or variation of or the application for any material
                Environmental Licences;

            

    

    

    
      	
              (x)

            	
              the
                entering into of any agreement for or relating to the extension of
                the
                WSMI contract;

            

    

    

    
      	
              (y)

            	
              the
                entering into or making of any contract or tender for any contract,
                or
                amendment or variation of any contract or tender with any customer
                or
                proposed customer, in each case, where the expected total revenue
                is in
                excess of £3,000,000 (three million
                pounds);

            

    

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

    
      	
              (z)

            	
              the
                entering into of any purchase order, sub-contract or service contract
                for
                an amount in excess of £500,000 (five hundred thousand pounds), unless as
                part of an approved contract or as required in order to fulfil the
                requirements of an existing
                contract;

            

    

    

    
      	
              (aa)

            	
              the
                entering into of any yacht construction contract or tender for any
                yacht
                construction contract (for the avoidance of doubt excluding the provision
                of non-binding illustrative values in respect of potential new
                business);

            

    

    

    
      	
              (bb)

            	
              the
                hiring of in excess of 20 (twenty) new employees or
                contractors;

            

    

    

    
      	
              (cc)

            	
              the
                making of in excess of 20 (twenty) redundancies;
                and

            

    

    

    
      	
              (dd)

            	
              without
                prejudice to Clauses 15.2 and 15.3, the issuing of any press releases
                or
                the giving of any press interviews in relation to the sale of the
                Shares
                or the future prospects of the business of the
                Group.

            

    

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

    SCHEDULE
      7

    

    Completion

    

    
      	
              1.

            	
              At
                Completion, the Sellers shall (save in respect of paragraph 1(r)
                in
                respect of which only KBR shall) deliver or cause to be delivered
                to the
                Purchaser or the Purchaser's
                Solicitors:

            

    

    

    
      	
               

            	
              (a)

            	
              transfers
                in respect of the Shares duly executed by the registered holders
                in favour
                of the Purchaser together with the share certificates in respect
                of the
                Shares (or an indemnity in the agreed form in respect of any missing
                certificate);

            

    

    

    
      	
               

            	
              (b)

            	
              share
                certificates in respect of all the issued shares in each Subsidiary
                other
                than the Special Share in the capital of DRDL held by the Authority,
                the
                share in the capital of Devonport Royal Dockyard Pension Trustees
                Limited
                held by the Authority and the share in the capital of CSMG, Inc.
                held by
                Weir Canada Inc.;

            

    

    

    
      	
               

            	
              (c)

            	
              powers
                of attorney in the agreed form given by each of the Sellers in favour
                of
                the Purchaser to enable the Purchaser to exercise all voting and
                other
                rights attaching to the Shares pending registration of the Purchaser
                as
                the holder of the Shares;

            

    

    

    
      	
               

            	
              (d)

            	
              the
                statutory books (written up to but not including Completion), the
                certificate of incorporation, any certificate of incorporation on
                change
                of name and the common seal of each Group Company (other than CSMG,
                Inc.);

            

    

    

    
      	
               

            	
              (e)

            	
              schedules
                of the title deeds of the Properties together with undertakings from
                the
                solicitors holding such title deeds to hold the same to the order
                of the
                Purchaser;

            

    

    

    
      	
               

            	
              (f)

            	
              written
                resignations in the agreed form from each director and the secretary
                of
                each Group Company who has an asterisk next to his name in Schedule
                2 or
                Schedule 3.

            

    

    

    
      	
               

            	
              (g)

            	
              a
                copy of the written resignation in the agreed form of the auditors
                of each
                Group Company accompanied in each case by a statement that there
                are no
                circumstances connected with their resignation which should be brought
                to
                the attention of the members or creditors of the relevant Group Company
                and confirmation that the resignation and statement will be deposited
                at
                the registered office of the Group Company in accordance with section
                394
                of the Companies Act 1985;

            

    

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (h)

            	
              a
                counterpart of the Tax Covenant duly executed by each
                Seller;

            

    

    

    
      	
               

            	
              (i)

            	
              (subject
                to the same containing the provisions referred to in the proviso
                to the
                Condition set out in paragraph 2 of Schedule 5) a counterpart of
                each of
                the Deeds of Adherence duly executed by each
                Seller;

            

    

    

    
      	
               

            	
              (j)

            	
              the
                Termination Deed duly executed by the parties
                thereto;

            

    

    

    
      	
               

            	
              (k)

            	
              certified
                copies of the minutes of the board meetings held pursuant to paragraph
                2
                of this Schedule;

            

    

    

    
      	
               

            	
              (l)

            	
              a
                certified copy of any power of attorney under which any document
                to be
                delivered to the Purchaser or the Purchaser's Solicitors pursuant
                to this
                paragraph 1 has been executed;

            

    

    

    
      	
               

            	
              (m)

            	
              a
                certified copy of resolutions of the directors of each Seller approving
                and authorising the execution of each Transaction Document to which
                it is
                a party;

            

    

    

    
      	
               

            	
              (n)

            	
              a
                certified copy of resolutions of the directors of the Guarantor approving
                and authorising the execution of each Transaction Document to which
                it is
                a party;

            

    

    

    
      	
               

            	
              (o)

            	
              to
                the extent not in the possession of any Group Company, all books
                of
                account or references as to customers and/or suppliers and other
                records
                and, all insurance policies, in each case, owned by any Group
                Company;

            

    

    

    
      	
               

            	
              (p)

            	
              to
                the extent not in the possession of any Group Company, all licences,
                consents, permits and authorisations obtained by or issued to any
                Group
                Company;

            

    

    

    
      	
               

            	
              (q)

            	
              a
                release in the agreed form duly executed as a deed, releasing each
                Group
                Company and their respective officers and employees from any liability
                whatsoever (actual or contingent) which may be owing to the Sellers
                or any
                of their Connected Persons by any Group Company;
                and

            

    

    

    
      	
               

            	
              (r)

            	
              a
                counterpart of the Transitional Services Agreement duly executed
                by
                KBR.

            

    

    

    
      	
              2.

            	
              At
                Completion, the Sellers shall procure
                that:

            

    

    

    
      	
               

            	
              (a)

            	
              a
                meeting of the directors of the Company is duly convened and held
                at which
                resolutions are passed to:

            

    

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (i)

            	
              approve
                the registration of the transfers referred to in paragraph 1(a) of
                this
                Schedule (subject to stamping of the transfers) and authorise the
                issue of
                share certificates to the
                Purchaser;

            

    

    

    
      	
               

            	
              (ii)

            	
              change
                the Company's accounting reference date to 31
                March;

            

    

    

    
      	
               

            	
              (iii)

            	
              appoint
                persons nominated by the Purchaser as directors and the secretary
                of the
                subsidiary and to accept the resignations referred to in paragraph
                1(f) of
                this Schedule;

            

    

    

    
      	
               

            	
              (iv)

            	
              appoint
                PricewaterhouseCoopers LLP as the auditors of the
                Company;

            

    

    

    
      	
               

            	
              (v)

            	
              revoke
                all existing bank mandates and give new instructions to the relevant
                bank
                in such form as the Purchaser may require if requested by the Purchaser
                at
                least 5 Business Days prior to
                Completion;

            

    

    

    
      	
               

            	
              (vi)

            	
              change
                the registered office of the Company to 2 Cavendish Square, London
                W1G
                0PX;

            

    

    

    in
      each
      case with effect from Completion; and

    

    
      	
               

            	
              (b)

            	
              a
                meeting of the directors of each Subsidiary is duly convened and
                held at
                which resolutions are passed to:

            

    

    

    
      	
               

            	
              (i)

            	
              change
                the Subsidiary's accounting reference date to 31
                March;

            

    

    

    
      	
               

            	
              (ii)

            	
              appoint
                persons nominated by the Purchaser as the directors and
                the  secretary of the Subsidiary and to accept the resignations
                referred to in paragraph 1(f) of this
                Schedule;

            

    

    

    
      	
               

            	
              (iii)

            	
              appoint
                PricewaterhouseCoopers LLP as the auditors of the
                Company;

            

    

    

    
      	
               

            	
              (iv)

            	
              revoke
                all existing bank mandates and give new instructions to the relevant
                bank
                in such form as the Purchaser may
                require,

            

    

    

    
      	
               

            	
              (v)

            	
              change
                the registered office of the Subsidiary to 2 Cavendish Square, London
                W1G
                0PX,

            

    

    

    in
      each
      case with effect from Completion.

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              At
                Completion, the Purchaser shall:

            

    

    

    
      	
               

            	
              (a)

            	
              pay
                the Consideration (less the deductions referred to in Clause 5.7)
                to the
                Sellers' Solicitors by way of bank transfer to Lloyds TSB Bank plc,
                Moorgate Branch, 34 Moorgate, London EC2R 6DN; Sort Code: 30-95-74;
                Account name: Kirkpatrick & Lockhart Preston Gates Ellis LLP Client
                account; Account No: 0214272, reference
                "HDK/6011542.0001";

            

    

    

    
      	
               

            	
              (b)

            	
              deliver
                to the Sellers' Solicitors:

            

    

    

    
      	
               

            	
              (i)

            	
              a
                counterpart of the Tax Covenant duly executed by the
                Purchaser;

            

    

    

    
      	
               

            	
              (ii)

            	
              (subject
                to the same containing the provisions referred to in the proviso
                to the
                Condition set out in paragraph 2 of Schedule 5) a counterpart of
                each of
                the Deeds of Adherence duly executed by the
                Purchaser;

            

    

    

    
      	
               

            	
              (iii)

            	
              a
                certified copy of resolutions of the directors of the Purchaser approving
                and authorising the execution of each Transaction Document to which
                it is
                a party;

            

    

    

    
      	
               

            	
              (iv)

            	
              a
                certified copy of the resolution of the shareholders of the Purchaser
                referred to in paragraph 1 of Schedule 5;
                and

            

    

    

    
      	
               

            	
              (v)

            	
              a
                counterpart of the Transitional Services Agreement duly executed
                by the
                Purchaser.

            

    

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

    SCHEDULE
      8

    

    Sellers'
      Warranties

    

    
      	
              1.

            	
              Capacity
                and Authority

            

    

    

    
      	
              1.1

            	
              Each
                of Kellogg Brown & Root Holdings (U.K.) Limited and Balfour Beatty plc
                is a company duly incorporated and validly existing under the laws
                of
                England and Wales.  The Weir Group plc is a company duly
                incorporated and validly existing under the laws of
                Scotland.

            

    

    

    
      	
              1.2

            	
              Each
                Seller has the power to enter into, perform and deliver, and has
                taken all
                necessary action to authorise its entry into, performance and delivery
                of,
                this Agreement and any Transaction Document to which it is a
                party.

            

    

    

    
      	
              1.3

            	
              The
                obligations assumed by each Seller under this Agreement and any
                Transaction Document to which it is a party are valid, legal and
                binding
                obligations.

            

    

    

    
      	
              1.4

            	
              Subject
                to the fulfilment of the Conditions, the entering into of, and the
                performance by each Seller of its obligations under, this Agreement
                and
                any Transaction Document to which it is a party will
                not:

            

    

    

    
      	
               

            	
              (a)

            	
              amount
                to a violation or breach of any law or regulation applicable to it;
                or

            

    

    

    
      	
               

            	
              (c)

            	
              violate
                or conflict with the provisions of its constitutional
                documents.

            

    

    

    
      	
              1.5

            	
              Save
                as set out in Clause 3 and Schedule 5, all necessary governmental
                and
                other consents, approvals, licences and authorisations required by
                each
                Seller to enable such Seller lawfully to enter into, and to exercise
                its
                rights and comply with its obligations under, this Agreement and
                any
                Transaction Document to which it is a party have been obtained or
                effected
                and are in full force and effect.

            

    

     

    
      	
              2.

            	
              Corporate
                Information

            

    

    

    
      	
              2.1

            	
              The
                information regarding the Company set out in Schedule 2 is true and
                accurate.

            

    

    

    
      	
              2.2

            	
              The
                information regarding each of the Subsidiaries set out in Schedule
                3 is
                true and accurate.

            

    

    

    
      	
              2.3

            	
              Each
                Group Company is a company duly incorporated and validly existing
                under
                the laws of England and Wales.

            

    

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

    
      	
              2.4

            	
              The
                copies of the memorandum and articles of association of each Group
                Company
                attached to the Disclosure Letter:

            

    

    

    
      	
               

            	
              (a)

            	
              are
                complete and accurate;

            

    

    

    
      	
               

            	
              (c)

            	
              have
                attached to them copies of all resolutions and other documents required
                by
                law to be so attached; and

            

    

    

    
      	
               

            	
              (d)

            	
              fully
                set out the rights and restrictions attaching to each class of share
                capital of the Group Company to which they
                relate.

            

    

    

    
      	
              2.5

            	
              The
                statutory books and registers of each Group Company have been properly
                maintained.

            

    

    

    
      	
              2.6

            	
              All
                returns, particulars, resolutions and other documents which any Group
                Company is required by law to file with or deliver to the Register
                of
                Companies in England and Wales have been duly filed or
                delivered.

            

    

     

    
      	
              3.

            	
              Share
                Capital of the
                Company

            

    

    

    
      	
              3.1

            	
              The
                Shares comprise the whole of the issued and allotted share capital
                of the
                Company and are fully paid or credited as fully
                paid.

            

    

    

    
      	
              3.2

            	
              There
                is no Encumbrance over or affecting any of the Shares and there is
                no
                agreement (whether actual or contingent) to create any Encumbrance
                over
                any of the Shares.  No person has claimed to be entitled to an
                Encumbrance in relation to any of the
                Shares.

            

    

    

    
      	
              3.3

            	
              There
                is no agreement or commitment outstanding which calls for the allotment,
                issue or transfer of, or confers on any person the right to call
                for the
                allotment, issue or transfer of, any shares or securities of the
                Company.

            

    

    

    
      	
              4.

            	
              Share
                Capital of the
                Subsidiaries

            

    

    

    
      	
              4.1

            	
              All
                of the issued shares of each of the Subsidiaries have been properly
                allotted and issued and are fully paid or credited as fully
                paid.

            

    

    

    
      	
              4.2

            	
              All
                of the issued shares of each of the Subsidiaries are legally and
                beneficially owned by the Company (or another Group Company) other
                than
                the Special Share in the capital of DRDL held by the Authority and
                the
                ordinary share in the capital of Devonport Royal Dockyard Pension
                Trustees
                Limited held by the Authority.

            

    

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

    
      	
              4.3

            	
              There
                is no Encumbrance over or affecting any of the issued shares of any
                of the
                Subsidiaries and there is no agreement (whether actual or contingent)
                to
                create any Encumbrance over any of such
                shares.

            

    

    

    
      	
              4.4

            	
              There
                is no agreement or commitment outstanding which calls for the allotment,
                issue or transfer of, or confers on any person the right to call
                for the
                allotment, issue or transfer of, any shares or securities of any
                of the
                Subsidiaries.

            

    

    
      	
               

            	 

    

    
      	
              5.

            	
              Other
                Interests

            

    

    

    No
      Group
      Company:

    

    
      	
               

            	
              (a)

            	
              owns
                or has any interest in any securities of any company (other than
                shares
                held by it in another Group
                Company);

            

    

    

    
      	
               

            	
              (b)

            	
              is
                a member of any partnership or other unincorporated association,
                joint
                venture or consortium (other than recognised trade associations);
                or

            

    

    

    
      	
               

            	
              (c)

            	
              has
                any branch or permanent establishment outside the United
                Kingdom.

            

    

    
      	
               

            	 

    

    
      	
              6.

            	
              Accounts

            

    

    

    
      	
              6.1

            	
              The
                Accounts were prepared in accordance with applicable statutory
                requirements and with accounting standards, policies, principles
                and
                practices generally accepted in the United Kingdom at the time they
                were
                audited.

            

    

    

    
      	
              6.2

            	
              The
                Accounts show a true and fair view of the state of affairs of the
                Company
                and of the Group as a whole as at the Accounts Date and of the profits
                and
                losses for the financial year ended on the Accounts
                Date.

            

    

    

    
      	
              6.3

            	
              The
                Accounts were prepared on a basis consistent with, and using the
                same
                accounting policies as those used in the preparation of, the audited
                consolidated financial statements of the Company for the previous
                two
                accounting periods.

            

    

    

    
      	
              6.4

            	
              The
                Management Accounts are not audited but have been prepared so far
                as
                relevant in all material respects in accordance with accounting policies
                consistent with those used in preparing the management accounts of
                the
                Company for the previous two accounting
                periods.

            

    

    

    
      	
              6.5

            	
              No
                Group Company is engaged in any financing (including incurring of
                any
                borrowing or any indebtedness in the nature of acceptances or acceptance
                credits) of a type which would not be required to be shown or reflected
                in
                the Accounts.

            

    

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

    
      	
              7.

            	
              Changes
                since the Accounts Date

            

    

    

    
      	
              7.1

            	
              Since
                the Accounts Date:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                business of the Group as a whole has been carried on in the ordinary
                and
                usual course without material alteration in its nature or
                scope;

            

    

    

    
      	
               

            	
              (b)

            	
              no
                change in the accounting reference period of any Group Company has
                been
                made and no accounting period of any Group Company has
                ended;

            

    

    

    
      	
               

            	
              (c)

            	
              no
                resolution in general meeting or written resolution of the members
                of any
                Group Company has been passed (other than resolutions relating to
                the
                routine business of annual general
                meetings);

            

    

    

    
      	
               

            	
              (d)

            	
              no
                share or loan capital has been allotted or issued or agreed to be
                allotted
                or issued by any Group Company (other than to another Group
                Company);

            

    

    

    
      	
               

            	
              (e)

            	
              no
                Material Contract has been entered into by any Group Company and
                no
                Material Contract to which a Group Company was a party as at the
                Accounts
                Date has been or terminated (other than by virtue of the expiry of
                its
                term);

            

    

    

    
      	
               

            	
              (f)

            	
              no
                dividend or other distribution has been declared, made or paid by
                any
                Group Company (except for the dividend declared by the Company on
                14
                December 2006 in the sum of £10,000,000 (ten million pounds) and paid on
                18 January 2007);

            

    

    

    
      	
               

            	
              (g)

            	
              no
                Group Company has disposed of or agreed to dispose of an asset having
                a
                value exceeding £50,000 otherwise than on an arm's length
                basis;

            

    

    

    
      	
               

            	
              (h)

            	
              so
                far as the Sellers are aware no Group Company has acquired or agreed
                to
                acquire an asset having a value exceeding £50,000 otherwise than on an
                arm's length basis;

            

    

    

    
      	
               

            	
              (i)

            	
              no
                Group Company has made, or agreed to make, capital expenditure exceeding
                in total £500,000 (five hundred thousand pounds) or incurred, or agreed to
                incur, a commitment or connected commitments involving capital expenditure
                exceeding in total £500,000 (five hundred thousand
                pounds);

            

    

    

    
      	
               

            	
              (j)

            	
              neither
                any supplier listed at document 1.36.2 of the Data Room nor the Authority
                has ceased or substantially reduced its trade with any Group Company
                or
                has altered the terms of trade to the Group Company's material
                disadvantage or so far as the Sellers are aware given written notice
                of
                its intention to do so;

            

    

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (k)

            	
              no
                Group Company has repaid, purchased or redeemed share capital or,
                to the
                Sellers, loan capital, or made (whether or not subject to conditions)
                an
                agreement to do any of those things;
                and

            

    

    

    
      	
               

            	
              (l)

            	
              there
                has been no Leakage.

            

    

    
      	
               

            	 

    

    
      	
              8.

            	
              Accounting
                Records

            

    

    

    
      	
              8.1

            	
              The
                accounting records of each Group Company have been properly maintained
                in
                all material respects in accordance with the
                law.

            

    

    

    
      	
              8.2

            	
              No
                notice that any of such records is incorrect or should be rectified
                has
                been received by any Group Company.

            

    

    

    
      	
              9.

            	
              Effect
                of Sale

            

    

    

    
      	
              9.1

            	
              So
                far as the Sellers are aware, neither the execution nor performance
                of
                this Agreement or any Transaction Document
                will:

            

    

    

    
      	
               

            	
              (a)

            	
              result
                in any Group Company losing the benefit of a material Permit or a
                material
                asset which it enjoys at the date of this Agreement in any jurisdiction;
                or

            

    

    

    
      	
               

            	
              (b)

            	
              result
                in a breach of, or give rise to an event of default under, or require
                the
                consent of a person under, any Material Contract or any legal or
                regulatory requirement in any jurisdiction;
                or

            

    

    

    
      	
               

            	
              (c)

            	
              make
                a Group Company liable to offer for sale, transfer or otherwise dispose
                of
                or purchase or otherwise acquire any assets, including shares held
                by it
                in other bodies corporate under their articles of association or
                any
                agreement or arrangement (save in accordance with the rights attaching
                to
                the Special Share); or

            

    

    

    
      	
               

            	
              (d)

            	
              result
                in any supplier listed at document 1.36.2 of the Data Room being
                entitled
                (and if such a supplier is so entitled, so far as the Sellers are
                aware,
                it will not exercise any such entitlement) to cease supplying any
                Group
                Company or substantially to reduce its supplies to or to change the
                terms
                upon which it supplies a Group
                Company.

            

    

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

    
      	
              10.

            	
              Contracts
                and Commitments

            

    

    

    
      	
              10.1

            	
              No
                Group Company is a party to:

            

    

    

    
      	
               

            	
              (a)

            	
              any
                agency, distributorship or franchise
                agreement;

            

    

    

    
      	
               

            	
              (b)

            	
              any
                joint venture agreement or any agreement under which it participates
                with
                any other person in any business;

            

    

    

    
      	
               

            	
              (c)

            	
              any
                agreement which was entered into otherwise than at arm's
                length;

            

    

    

    
      	
               

            	
              (d)

            	
              any
                Material Contract pursuant to the terms of which any other party
                will, by
                virtue of the acquisition of the Shares by the Purchaser, be relieved
                of
                any obligation or become entitled to exercise any right (including
                any
                right of termination) thereunder;

            

    

    

    
      	
               

            	
              (e)

            	
              any
                Material Contract (other than those Material Contracts which are
                listed in
                the Disclosure Letter); or

            

    

    

    
      	
               

            	
              (f)

            	
              any
                Material Contract which is incapable of termination in accordance
                with its
                terms, by such Group Company, on 12 months' notice or
                less.

            

    

    

    
      	
              10.2

            	
              No
                Group Company is in material breach of any Material Contract to which
                it
                is a party or any other agreement, the breach of which would have
                a
                material adverse effect on the business of the
                Group.

            

    

    

    
      	
              10.3

            	
              So
                far as the Sellers are aware, no party with whom any Group Company
                has
                entered into a Material Contract is in material breach
                thereof.

            

    

    
      	
               

            	 

    

    
      	
              10.4

            	
              No
                person has received or is entitled to receive from a Group Company
                any
                finder's fee, brokerage or commission in connection with the purchase
                of
                the Shares by the Purchaser.

            

    

    

    
      	
              10.5

            	
              The
                Sellers have no knowledge of the invalidity or unenforceability of,
                or a
                ground for termination, avoidance or repudiation of, any Material
                Contract.  No party with whom a Group Company has entered into
                any Material Contract or any other agreement, the termination of
                which
                would have a material adverse effect on the business of the Group
                as a
                whole, has given written notice (or, so far as the Sellers are aware,
                any
                other notice) of its intention to terminate, or has sought to repudiate
                or
                disclaim, such Material Contract or such other
                agreement.

            

    

    

    
      	
              10.6

            	
              Paragraph
                10.6 of the Disclosure Letter contains details (including all liabilities
                of the parties thereto) of all contracts or arrangements to which
                each of
                the Sellers and/or their Connected Persons are party with, or which
                relate
                in any way to, any Group
                Company.

            

    

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

    
      	
              10.7

            	
              The
                Disclosure Letter refers to and has appended to it copies of all
                contracts
                with customers of the Group for the construction of yachts by the
                Group
                (including material amendments thereto, but excluding specifications
                relating thereto) which are uncompleted or under which liabilities
                or
                obligations (in each case whether absolute or contingent) of any
                Group
                Company remain outstanding.

            

    

    

    
      	
              10.8

            	
              The
                Disclosure Letter contains details of all Phase II works which remain
                outstanding under the D154
                Agreement.

            

    

    

    
      	
              11.

            	
              Dealings
                with the Sellers

            

    

    

    There
      is
      no: (i) outstanding indebtedness (ii) other liability or obligation or (iii)
      outstanding agreement between any Group Company on the one hand and any Seller
      or any of its Connected Persons on the other.

    

    
      	
              12.

            	
              Powers
                of Attorney

            

    

    

    No
      Group
      Company has given any power of attorney or other written authority which is
      still outstanding or effective to any person to enter into any contract or
      commitment on its behalf (other than to its directors, officers and employees
      to
      enter into routine trading contracts in the normal course of their
      duties).

    
      	
               

            	 

    

    
      	
              13.

            	
              Assets

            

    

    

    
      	
              13.1

            	
              So
                far as the Sellers are aware, each material asset (other than Property)
                included in the Accounts or acquired by a Group Company since the
                Accounts
                Date (other than current assets disposed of, realised or applied
                in the
                normal course of trading) is owned both legally and beneficially
                by the
                relevant Group Company and, where capable of possession, is in the
                possession or under the control of the relevant Group
                Company.

            

    

    

    
      	
              13.2

            	
              No
                Encumbrance (other than a lien arising by operation of law in the
                ordinary
                course of trading) over or affecting the whole or any part of the
                undertaking or assets of any Group Company is outstanding and there
                is no
                agreement or commitment to give or create any and no claim has been
                made
                by any person to be entitled to
                any.

            

    

    

    
      	
              13.3

            	
              Each
                Group Company owns or has the right to use, and will immediately
                following
                Completion own or have the right to use, all material assets necessary,
                in
                the reasonable opinion of the board of directors of each Group Company,
                for the operation of its business as currently conducted in all material
                respects and without limitation no rights (other than rights as
                shareholders in the Company) relating to the business of each Group
                Company are owned or otherwise enjoyed by or on behalf of any Seller
                or
                their Connected Persons.

            

    

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

    
      	
              13.4

            	
              All
                material items of plant, machinery, vehicles and equipment in use
                in the
                ordinary course of the business as currently carried on by each Group
                Company and which are owned by a Group Company and/or which a Group
                Company is obliged to maintain are, in the reasonable opinion of
                the board
                of directors of such Group Company, in reasonable working order for
                their
                age and degree of use.

            

    

    

    
      	
              13.5

            	
              Copies
                of every bill of sale or any hiring or leasing agreement, hire purchase
                agreement, credit or conditional sale agreement, agreement for payment
                on
                deferred terms or any other similar agreement to which a Group Company
                is
                party in each case exceeding £500,000 (five hundred thousand pounds) in
                value annually, and which has been entered into since the Accounts
                Date
                are annexed to the Disclosure
                Letter.

            

    

    

    
      	
              13.6

            	
              So
                far as the Sellers are aware, and only in connection with the Supacat
                and
                rail-related businesses of the Group, no Group Company has supplied,
                since
                1 Janauary 2005, goods which have been defective or which failed
                materially to comply with their terms of
                sale.

            

    

    

    
      	
              13.7

            	
              The
                Disclosure Letter includes a list setting out details of all assets
                which
                the Authority has designated as "Strategic Assets" for the purposes
                of
                article 6 of DRDL's articles of association and has attached to it
                a true
                and complete copy of the Illustrative Programme of 29 November
                1996.

            

    

    
      	
               

            	 

    

    
      	
              14.

            	
              Bank
                Facilities

            

    

    

    
      	
              14.1

            	
              A
                summary of all overdrafts, loans and other  financial facilities
                made available to the Group is set out in the Disclosure Letter (the
                "Facilities").

            

    

    

    
      	
              14.2

            	
              So
                far as the Sellers are aware, no event which constitutes or would
                (with
                the giving of notice, lapse of time or fulfilment of any other condition)
                constitute an event of default under, or otherwise give rise to an
                obligation to repay prior to its stated maturity, any of the Facilities
                has occurred (or been alleged to have
                occurred).

            

    

    

    
      	
              15.

            	
              Debts

            

    

    

    The
      Disclosure Letter contains a list setting out details of all debts in excess
      of
£500,000 (five hundred thousand pounds) due to any Group Company which, so far
      as the Sellers are aware, are likely to be bad or doubtful
      debts.

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

    
      	
              16.

            	
              Grants

            

    

    

    
      	
              16.1

            	
              No
                Group Company has received any grant from any governmental or other
                body
                since 1 January 2005.

            

    

    

    
      	
              16.2

            	
              No
                Group Company is liable to repay an investment or other grant or
                subsidy
                made to it by any person (including the Department of Trade and Industry
                or its predecessor) which either individually or in aggregate are
                material
                to any Group Company.

            

    

    
      	
               

            	 

    

    
      	
              17.

            	
              Licences

            

    

    

    
      	
              17.1

            	
              Each
                Group Company has obtained all material licences, permissions,
                authorisations and consents necessary for carrying on its business
                effectively in the places and in the manner in which such business
                is now
                carried on.

            

    

    

    
      	
              17.2

            	
              The
                licences, permissions, authorisations and consents referred to in
                paragraph 17.1 are in full force and effect and, so far as the Sellers
                are
                aware are being complied with in all material
                respects.

            

    

    

    
      	
              17.3

            	
              No
                written notice has been received by any Group Company from any applicable
                authority since 1 January 2005 indicating that any of the licences,
                permissions, authorisations or consents referred to in paragraph
                17.1 are
                likely to be suspended, cancelled, revoked or not
                renewed.

            

    

    
      	
               

            	 

    

    
      	
              18.

            	
              Insurance

            

    

    

    
      	
              18.1

            	
              A
                summary of the insurance policies in which a Group Company has an
                interest
                (the
                "Policies") is attached to the Disclosure
                Letter.

            

    

     

    
      	
              18.2

            	
              All
                the Policies are in full force and effect and are not void or
                voidable.

            

    

    

    
      	
              18.3

            	
              There
                are no material outstanding claims under any of the Policies and
                so far as
                the Sellers are aware, no matter exists which might give rise to
                a
                material claim under any of the
                Policies.

            

    

    
      	
               

            	 

    

    
      	
              19.

            	
              Litigation

            

    

    

    
      	
              19.1

            	
              No
                Group Company is engaged in any litigation, arbitration or other
                dispute
                resolution process or administrative or criminal proceedings or regulatory
                action (whether as claimant, defendant or otherwise) where in any
                such
                case the amount in dispute or which is likely to be in dispute or
                the
                liability incurred or likely to be incurred by any Group Company
                exceeds,
                or ought reasonably to be expected to exceed, £100,000 (one hundred
                thousand pounds) in respect of an individual claim or £1,000,000 (one
                million pounds) when aggregated with all other claims and so far
                as the
                Sellers are aware, there are no current outstanding matters which
                are
                likely to lead to such a
                dispute.

            

    

    
      
        
        

      

      
        72

        
          

        

      

      
        
        

      

    

    
      	
              19.2

            	
              So
                far as the Sellers are aware, no litigation, arbitration or other
                dispute
                resolution process or administrative or criminal proceedings or regulatory
                action by or against any Group Company which would have a material
                adverse
                effect on the business of the Group as a whole is
                pending.

            

    

    

    
      	
              19.3

            	
              There
                is no outstanding judgment, order or decree of any court or any
                governmental or regulatory authority in any jurisdiction against
                any Group
                Company.

            

    

    

    
      	
              20.

            	
              Compliance

            

    

    

    
      	
              20.1

            	
              No
                Group Company has received notice in writing from any applicable
                authority
                since 1 January 2005 that it does not conduct its business in all
                material
                respects in accordance with applicable legal and administrative
                requirements.

            

    

    

    
      	
              20.2

            	
              Each
                Group Company conducts its business and affairs and deals with its
                assets
                in all material respects in accordance with all applicable legal
                and
                regulatory requirements in any jurisdiction and so far as the Sellers
                are
                aware has done so since 1 January
                2005.

            

    

    

    
      	
              21.

            	
              Data
                Protection

            

    

    

    
      	
              21.1

            	
              So
                far as the Sellers are aware, the Group complies in all material
                respects
                with the Data Protection Act
                1998.

            

    

    
      	
              21.2

            	
              No
                Group Company has received within the 12 months prior to the date
                of this
                Agreement:

            

    

    

    
      	
               

            	
              (a)

            	
              any
                notice or complaint from the office of the Information Commissioner
                under
                the Data Protection Act 1998 (including any information or enforcement
                notice) alleging non-compliance by it with that Act;
                or

            

    

    

    
      	
               

            	
              (b)

            	
              any
                claim for compensation under the Data Protection Act 1998 for loss
                or
                unauthorised disclosure of data.

            

    

    
      	
               

            	 

    

    
      	
              22.

            	
              Employment

            

    

    

    
      	
              22.1

            	
              The
                Disclosure Letter contains copies of the service agreements (including
                any
                other documents which form part of the Senior Employee's material
                terms
                and conditions of employment) for each Senior
                Employee.

            

    

    

      
        
          
          

        

        
          73

          
            

          

        

        
          
          

        

      

    
      	
              22.2

            	
              No
                Senior Employee has given notice terminating his contract of employment
                or
                is under notice of dismissal and no material dispute under any employment
                legislation is outstanding between any Senior Employee or former
                Senior
                Employee relating to his or her employment or its termination and,
                so far
                as the Sellers are aware, no such dispute is pending or
                threatened.

            

    

    

    
      	
              22.3

            	
              No
                offer of employment has been made by any Group Company which has
                not been
                accepted at the date of this Agreement but which remains capable
                of
                acceptance and which, if accepted, would result in the person to
                whom the
                offer has been made becoming a Senior
                Employee.

            

    

    

    
      	
              22.4

            	
              The
                Disclosure Letter contains copies of all of the standard terms and
                conditions of employment, staff handbook and HR policies which are
                generally applicable to employees of the Group or applicable to a
                particular grade or category
                thereof.

            

    

    

    
      	
              22.5

            	
              There
                are no terms and conditions in any contract with any employee pursuant
                to
                which such person will be entitled to receive any payment or benefit
                or
                such person's rights will change as a direct consequence of the
                transaction contemplated by this
                Agreement.

            

    

    

    
      	
              22.6

            	
              All
                contracts of employment between a Group Company and any of its employees
                can be terminated by the employing company without damages or compensation
                (other than that payable under Parts X and XI of the Employment Rights
                Act
                1996) by giving at any time only the minimum period of notice applicable
                to that contract which is specified in section 86 of the Employment
                Rights
                Act 1996.

            

    

    

    
      	
              22.7

            	
              Since
                the Accounts Date, no variation has been made in the terms of employment
                of the employees of any Group Company (except for increases in emoluments
                made in accordance with normal Group practice) and no future variation
                in
                respect of salary has been promised or agreed to any material number
                of
                employees by any Group Company and for Senior Employees no such future
                variation has been promised or agreed to by any Group
                Company.  For the purpose of this paragraph 22.7 a material
                number of employees means more than twenty (20)
                employees.

            

    

    

    
      	
              22.8

            	
              The
                Disclosure Letter contains copies of all collective agreements (whether
                with a trade union, staff association or any other body representing
                employees of the Group) concerning any Group
                Company.

            

    

    

    
      	
              22.9

            	
              Copies
                of all share incentive schemes, share option schemes or profit sharing,
                bonus or other incentive schemes (the "Schemes")
                applicable to the employees of the Group or any of them are attached
                to
                the Disclosure Letter.

            

    

    
      	
               

            	 

    

    
      	
              22.10

            	
              So
                far as the Sellers are aware, the Schemes have at all times been
                operated
                in accordance with their governing rules or terms and all applicable
                laws
                and all documents which are required to be filed with any regulatory
                authority have been so filed.

            

    

    
      
        
        

      

      
        74

        
          

        

      

      
        
        

      

    

    
      	
              22.11

            	
              So
                far as the Sellers are aware no past or present employee or any dependent
                thereof or any other participant in any Scheme has made any claim
                against
                any Group Company in respect of any Scheme and so far as the Sellers
                are
                aware no event has occurred which could or might give rise to any
                such
                claim.

            

    

    

    
      	
              22.12

            	
              No
                Group Company is engaged (or has been in the two years prior to the
                date
                of this Agreement) in any industrial or trade dispute with any trade
                union
                or other organisation representing employees of the Group and, so
                far as
                the Sellers are aware, none is pending or
                threatened.

            

    

    

    
      	
              22.13

            	
              The
                Disclosure Letter contains details of all outstanding claims brought
                by
                employees or former employees of the Group whether in the Employment
                Tribunal or otherwise.

            

    

    

    
      	
              22.14

            	
              So
                far as the Sellers are aware, no Group Company has within the 12
                months
                prior to the date of this Agreement made or promised to make, or
                given or
                promised to give, any payment or other benefit on or following the
                actual
                or proposed termination, or in connection with the variation, of
                any
                contract of employment.

            

    

    

    
      	
              22.15

            	
              Copies
                of the framework agreements for the engagement of temporary workers
                currently engaged by DRDL who are not employees of any Group Company
                are
                contained in the Disclosure Letter.

            

    

    

    
      	
              22.16

            	
              All
                salaries, wages, fees and other benefits of all employees of the
                Group
                have, to the extent due, been paid or discharged in full together
                with all
                related payments to third party benefit providers and relevant
                authorities, save for one month's arrears of employee remuneration
                accrued
                or due or for reimbursement of authorised business expenses incurred
                within the 3 months prior to the date of this
                Agreement.

            

    

    

    
      	
              22.17

            	
              So
                far as the Sellers are aware, there are no enquiries or investigations
                existing, pending or threatened affecting any Group Company in relation
                to
                any worker by the Equal Opportunities Commission, the Commission
                for
                Racial Equality, the Disability Rights Commission or the Health and
                Safety
                Executive or any other bodies with similar functions or powers in
                relation
                to workers.

            

    

    

    
      	
              22.18

            	
              Details
                are disclosed in the Disclosure Letter of any redundancy scheme or
                redundancy formula or redundancy policy (whether contractual or
                discretionary) that applies to the employees of any Group Company
                and save
                as disclosed no employee is entitled to a redundancy payment made
                in
                excess of the statutory redundancy entitlement, and so far as the
                Sellers
                are aware, there is no provision in any occupational pension scheme
                in
                which employees participate which provides enhanced benefits on
                redundancy.

            

    

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

    
      	
              22.19

            	
              All
                Group Companies have in the 12 months prior to the date of this Agreement
                complied with their obligations to inform and consult with trade
                unions an
                other representatives of employees and to send notices to the Secretary
                of
                State pursuant to sections 188 to 194 of the TULR(C)A and regulations
                10
                and 11 of the Transfer Regulations.

            

    

    

    
      	
              22.20

            	
              No
                Group Company has received, or sought to receive, any payment from
                the
                Authority in respect of the redundancy of employees of the Group
                save to
                the extent that such payments have been made to employees whose employment
                has been terminated by any Group Company by reason of redundancy
                and in
                respect of whom the Group has been entitled to receive payment under
                the
                Authority Contracts.

            

    

    

    
      	
              23.

            	
              Pensions

            

    

    

    
      	
              23.1

            	
              For
                the purposes of this paragraph 21 and Schedule 6, the following
                expressions shall have the following
                meanings:

            

    

    

    “DB
      Scheme” means the Devonport Royal Dockyard Defined Benefit
      Scheme;

    

    “DC
      Scheme” means the Devonport Royal Dockyard Defined Contribution Pension
      Scheme;

    

    "Defined
      Benefit Occupational Pension Scheme Rights" means rights or benefits
      other than money purchase benefits as defined in section 181 of the Pension
      Schemes Act 1993;

    

    “Disclosed
      Schemes” means, as the context so requires, each, any or all of the
      following:

    

    
      	
               

            	
              (a)

            	
              the
                DB Scheme;

            

    

    

    
      	
               

            	
              (b)

            	
              the
                DC Scheme;

            

    

    

    
      	
               

            	
              (c)

            	
              the
                SIPS;

            

    

    

    
      	
               

            	
              (d)

            	
              the
                LSC GPP with Norwich Union, policy number
                16554;

            

    

    

    
      	
               

            	
              (e)

            	
              the
                LSC (DML) Group Personal Pension Plan with Norwich Union, policy
                number
                17631;

            

    

    

    
      	
               

            	
              (f)

            	
              the
                LSC Group Personal Payment Plan with AXA Sunlife, policy number
                820631;

            

    

    
      
        
        

      

      
        76

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (g)

            	
              the
                LSC Group Holdings Executive Pension Plan with Clerical
                Medical;

            

    

    

    
      	
               

            	
              (h)

            	
              the
                Frazer-Nash Group Personal Pension Plan with Norwich
                Union;

            

    

    

    
      	
               

            	
              (i)

            	
              the
                Frazer-Nash Group Personal Pension Plan with
                NPI;

            

    

    

    
      	
               

            	
              (j)

            	
              the
                Frazer-Nash Stakeholder Pension Scheme with Norwich
                Union;

            

    

    

    
      	
               

            	
              (k)

            	
              the
                LSG Group Holdings Life Assurance
                Scheme;

            

    

    

    
      	
               

            	
              (l)

            	
              the
                personal pension arrangement for Mark Pearson with Norwich Union
                under
                policy number PO517999A;

            

    

    

    
      	
               

            	
              (m)

            	
              the
                self-invested personal pension scheme for Martin Palmer;
                and

            

    

    

    
      	
               

            	
              (n)

            	
              the
                self-invested personal pension schemes in respect of CA Edwards,
                NM
                McDougall, PJ Best, MR Brennan and AG
                Milton;

            

    

    

    "Relevant
      Benefits" means relevant benefits as defined in section 393B(1) of the
      Income Tax (Earnings and Pensions) Act 2003;

    

    “SIPS”
      means the Shipbuilding Industry Pension Scheme;

    

    “Employee”
      means an employee or a director of any one Group Company.

    

    
      	
              23.2

            	
              Other
                than the Disclosed Schemes, there are no legally binding agreements
                or
                arrangements under which any Group Company is required to make payment
                of
                a contribution towards or other provision of Relevant Benefits for
                the
                benefit of an Employee or an Employee's
                dependant.

            

    

    

    
      	
              23.3

            	
              No
                Group Company is making any voluntary or ex gratia payment of any
                Relevant
                Benefits to or in respect of any employee or former
                employee.

            

    

    

    
      	
              23.4

            	
              No
                promise has been given, or representation made, to any Employee (or
                employee representative) by any Group Company as to the establishment,
                continuance, alteration or improvement of any Relevant
                Benefits.

            

    

    

    
      	
              23.5

            	
              The
                Purchaser has been supplied with a true and complete list of all
                the
                Employees who are members of the Disclosed Schemes or who are eligible
                for
                such membership together with true and complete details of their
                category
                of membership and the rates of employer contributions made to the
                Disclosed Schemes in respect of each Employee. So far as the Sellers
                are
                aware, no Employee has been excluded from membership of any Disclosed
                Scheme in contravention of the law. All documents provided in the
                Data
                Room and annexed to the Disclosure Letter in respect of the Disclosed
                Schemes are true and accurate in all material
                respects.

            

    

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

    
      	
              23.6

            	
              The
                Disclosed Schemes are registered for the purposes of the Finance
                Act
                2004.

            

    

    

    
      	
              23.7

            	
              A
                valid contracting-out certificate has been issued pursuant to the
                Pension
                Schemes Act 1993 relating to the employments which are contracted
                out in
                relation to the DB Scheme.

            

    

    

    
      	
              23.8

            	
              So
                far as the Sellers are aware, the Disclosed Schemes have been operated
                in
                accordance with their governing documents in all material
                respects.

            

    

    

    
      	
              23.9

            	
              So
                far as the Sellers are aware, each Group Company has in all material
                respects complied with all its obligations and applicable primary
                and
                secondary legislation (including under European Law) in relation
                to the
                Disclosed Schemes.

            

    

    

    
      	
              23.10

            	
              There
                are not in respect of any of the Disclosed Schemes any outstanding
                contributions payable by any Group Company or the
                Employees.

            

    

    

    
      	
              23.11

            	
              So
                far as the Sellers are aware, any lump-sum ill-health or death in
                service
                benefits which may be payable under the Disclosed Schemes (other
                than a
                return of the member's own contributions and contributions in respect
                of
                him) are fully insured with an insurance company and all premiums
                due to
                the insurance company have been paid. Each member has been covered
                for
                insurance at normal rates and on normal terms for persons in good
                health.

            

    

    

    
      	
              23.12

            	
              The
                benefits payable under the Disclosed Schemes (other than the DB Scheme)
                consist exclusively of money purchase benefits as defined in section
                181
                of the Pension Schemes Act 1993.

            

    

    

    
      	
              23.13

            	
              So
                far as the Sellers are aware, no claim has been made or threatened
                in
                writing against any Group Company or the trustees or administrators
                of any
                of the Disclosed Schemes (including any complaint under any internal
                dispute resolution procedure or to the Pensions Ombudsman) in connection
                with any of the Disclosed Schemes (other than routine claims for
                benefits).

            

    

    

    
      	
              23.14

            	
              So
                far as the Sellers are aware, each Group Company complies with the
                requirements set out in section 3 of the Welfare Reform and Pensions
                Act
                1999 (duty of employers to facilitate access to stakeholder pension
                schemes), the provisions of the Stakeholder Pension Scheme Regulations
                2000 (SI 2000/1403) and any other legislation applicable to stakeholder
                pension schemes.

            

    

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

    
      	
              23.15

            	
              So
                far as the Sellers are aware, apart from the Transferred Employees
                and the
                WSMI Transferred Employees (as defined under the DB Scheme) no Employee
                has had his contract of employment transferred to any Group Company
                from
                another employer in circumstances where the Transfer of Undertakings
                (Protection of Employment) Regulations 1981 or the Transfer of
                Undertakings (Protection of Employment) Regulations 2006 applied
                and the
                Employee was entitled to Defined Benefit Occupational Pension Scheme
                Rights in respect of the former
                employment.

            

    

    

    
      	
              23.16

            	
              Since
                27 April 2004, the Pensions Regulator has not imposed a Contribution
                Notice or Financial Support Direction on any Group Company under
                sections
                38 to 51 (inclusive) of the Pensions Act 2004 and so far as the Sellers
                are aware, no circumstances exist which would result in a Contribution
                Notice or Financial Support Direction being imposed on any Group
                Company,
                other than the circumstances relating to the transaction, actions
                or
                omissions contemplated by this Agreement.

            

    

    

    
      	
              23.17

            	
              The
                DB Scheme provides broadly comparable benefits to the Civil Service
                Pension Scheme in so far as there is any legal obligation upon the
                Group
                to provide such benefits in respect of its Employees (and former
                Employees).

            

    

    

    
      	
              23.18

            	
              There
                is no impact on the funding of the DB Scheme by virtue of any redundancy
                policy, arrangement or agreement operated by any Group
                Company.

            

    

    

    
      	
              24.

            	
              Property

            

    

    

    
      	
              24.1

            	
              The
                Properties comprise the only freehold or leasehold properties owned,
                used
                or occupied by any Group Company or in which any Group Company has
                an
                interest.

            

    

    

    
      	
              24.2

            	
              The
                replies to enquiries (as contained in the Data Room at documents
                2.22.1,
                2.22.2 and 2.22.3) relating to the Properties given by or on behalf
                of the
                Sellers are true and accurate in all material
                respects.

            

    

    

    
      	
              24.3

            	
              So
                far as the Sellers are aware, no Group Company has any material actual
                or
                contingent liability in respect of any estate or interest in real
                property
                (whether arising as original tenant, assignee, guarantor or otherwise)
                other than in respect of the
                Properties.

            

    

    

    
      	
              24.4

            	
              So
                far as the Sellers are aware, there are, appurtenant to each of the
                Properties, all rights and easements necessary for its existing use
                and
                enjoyment.

            

    

    

    
      	
              24.5

            	
              Each
                Group Company has, in relation to each Lease vested in it, complied
                substantially with all material covenants on the part of the tenant
                contained therein and, so far as the Sellers are aware, no collateral
                assurances, undertakings or concessions have been made by any
                landlord.

            

    

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

    
      	
              24.6

            	
              The
                Properties are free from any Encumbrance and there is no agreement
                to
                create or permit to arise any
                Encumbrance.

            

    

    

    
      	
              24.7

            	
              No
                Group Company has, so far as the Sellers are aware, received notice
                alleging any material breach of any covenant, restriction, stipulation
                or
                other encumbrance affecting any
                Property.

            

    

    

    
      	
              24.8

            	
              No
                Group Company has, so far as the Sellers are aware, received written
                notice alleging that the existing use of any Property is not a lawful
                use
                under planning legislation or in the case of leasehold Property,
                under the
                terms of the lease or tenancy
                agreement.

            

    

    

    
      	
              24.9

            	
              So
                far as the Sellers are aware, all material permissions and consents
                have
                been obtained in respect of any alterations and improvements to any
                Property carried out by the relevant Group
                Company.

            

    

    

    
      	
              24.10

            	
              No
                Group Company has, so far as the Sellers are aware, received notice
                alleging breach of any applicable statutory requirements relating
                to the
                Properties.

            

    

    

    
      	
              24.11

            	
              So
                far as the Sellers are aware, there exists no dispute between any
                Group
                Company as the owner or occupier of a Property on the one hand and
                the
                owner or occupier of any other premises adjacent to or neighbouring
                the
                Property on the other and, so far as the Sellers are aware, there
                exists
                no circumstances that may give rise to any such
                dispute.

            

    

    

    
      	
              24.12

            	
              Each
                Group Company has under its control all material title deeds and
                documents
                necessary to prove its title to the interest it has in each Property
                in
                which it has an interest.

            

    

    
      	
               

            	 

    

    
      	
              25.

            	
              Environment

            

    

    

    For
      the
      purposes of this paragraph 25 of Schedule 8, "material" shall
      be deemed to refer to facts, matters, circumstances, issues or events which
      have
      resulted in or are likely to result in an aggregate cost of £250,000 (two
      hundred and fifty thousand pounds) or more.

    

    
      	
              25.1

            	
              No
                Group Company:

            

    

    

    
      	
               

            	
              (a)

            	
              is
                causing; or

            

    

    

    
      	
               

            	
              (b)

            	
              has
                caused since 1st
                April 2000;
                or

            

    

    

    
      	
               

            	
              (b)

            	
              so
                far as the Sellers are aware in the period since 5 April 1987 no
                other
                party has caused

            

    

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

    on
      at
      from or under the Properties or any former property owned or occupied by any
      Group Company any spillage, disposal, discharge, release, leakage, migration,
      entry, escape, deposit or emission (a "Release") of any
      Hazardous Substances where any such Release gives rise to or will prior to
      the
      expiry of the period specified in paragraph 2.1(b) of Schedule 9 give rise
      to a
      material liability (actual or contingent)  for any Group Company under
      Environmental Laws or Nuclear Laws.

    

    
      	
              25.2

            	
              There
                are no outstanding judgments orders or decrees of any court or any
                regulatory authority or any current or pending claims or proceedings
                against any Group Company with respect to any material breach of
                or
                material liability under Environmental Laws or Nuclear Laws and so
                far as
                the Sellers are aware no matters are existing at the date hereof
                that are
                likely to lead to any such claims or
                proceedings.

            

    

    

    
      	
              25.3

            	
              No
                written notice or formal regulatory action in writing from any relevant
                authority under Environmental Laws or Nuclear Laws have been received
                by
                any Group Company alleging or specifying any material breach of or
                material liability under any Environmental Laws or Nuclear Laws which
                remains outstanding at the date of this Agreement and no written
                notice or
                written correspondence has been received by any Group Company indicating
                any actual or potential revocation, suspension or any material
                modification of any Environmental
                Licence.

            

    

    

    
      	
              25.4

            	
              Each
                Group Company is complying and so far as the Sellers are aware has
                in the
                last three years complied in all material respects with all Environmental
                Laws and Nuclear Laws and all material Environmental Licences have
                been
                obtained and are in full force and
                effect.

            

    

    

    
      	
              25.5

            	
              Copies
                of all material environmental or health and safety reports, surveys,
                assessments and investigations prepared by third party consultants
                engaged
                by any Group Company or the Sellers or upon which any Group Company
                or the
                Sellers has reliance or involving intrusive investigations in the
                last
                three years in respect of the Properties or any Group Company and
                in the
                possession of the Sellers or the Group have been disclosed to the
                Purchaser.

            

    

    

    
      	
              25.6

            	
              No
                application for the surrender or variation of the terms of any
                Environmental Licences or the transfer of such Environmental Licences
                to
                or from  any Group Company is pending or has been refused for
                any reason and there are no appeals pending or being contemplated
                in
                respect of refusal of or conditions contained in any Environmental
                Licences.

            

    

    

    
      	
              25.7

            	
              The
                Group has recovered from the Authority under the Authority Contracts
                without delay or dispute all Losses arising under Environmental Laws
                or
                Nuclear Laws which it has sought to
                recover.

            

    

    
      
        
        

      

      
        81

        
          

        

      

      
        
        

      

    

    
      	
              25.8

            	
              All
                necessary insurance arrangements required, in the reasonable opinion
                of
                the directors of each Group Company, under Nuclear Laws by such Group
                Company are in place and are in full force and effect and there are
                no
                material outstanding claims under any such insurance
                arrangement.

            

    

    

    
      	
              26.

            	
              Intellectual
                Property

            

    

    

    
      	
              26.1

            	
              Details
                of registered Intellectual Property Rights (including applications
                for
                registration) owned by a Group Company is set out in Schedule
                11.  The Group is not reliant to any material extent on any
                unregistered Intellectual Property Rights which are not owned by
                or
                licensed to any Group Company.

            

    

    

    
      	
              26.2

            	
              So
                far as the Sellers are aware, there are no written licences or agreements
                which are material to the operation of the business of the Group,
                other
                than the IT Contracts pursuant to
                which:

            

    

    

    
      	
               

            	
              (a)

            	
              a
                Group Company has been licensed or otherwise permitted to use Intellectual
                Property Rights owned by a third party ("Licences In");
                or

            

    

    

    
      	
               

            	
              (b)

            	
              a
                Group Company has licensed or otherwise permitted the use of Intellectual
                Property Rights owned by it to or by a third party ("Licences
                Out").

            

    

    

    
      	
              26.3

            	
              So
                far as the Sellers are aware all material steps required for the
                maintenance and protection of the registered Intellectual Property
                Rights
                set out in Schedule 11 (including the payment of all application
                and
                renewal fees) have been taken.

            

    

    

    
      	
              26.4

            	
              No
                written notice has been received by any Group Company within the
12
                months prior to the date of this Agreement challenging or disputing
                the
                ownership or validity of any Intellectual Property Rights set out
                in
                Schedule 11.

            

    

     

    
      	
              26.5

            	
              So
                far as the Sellers are aware, the activities and operations of the
                Group
                do not materially infringe the Intellectual Property Rights of any
                third
                party and no written notice has been received by any Group Company
                within
                the 12 months prior to the date of this Agreement claiming or alleging
                that any such infringement is taking or has taken
                place.

            

    

    

    
      	
              26.6

            	
              So
                far as the Sellers are aware, no third party is infringing the
                Intellectual Property Rights owned by any Group Company and no written
                claim has been made by any Group Company within the 12 months prior
                to the
                date of this Agreement claiming or alleging that any such infringement
                is
                taking or has taken place.

            

    

    

    
      	
              26.7

            	
              Each
                Group Company owns or has licensed to it, and will immediately following
                Completion own or have licensed to it, all material Intellectual
                Property
                Rights necessary, in the reasonable opinion of the board of directors
                of
                such Group Company, to carry on in all material respects the business
                of
                such Group Company as it is carried on at the date of this
                Agreement.

            

    

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

    
      	
              27.

            	
              IT
                Systems

            

    

    

    
      	
              27.1

            	
              Details
                of:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                IT Systems; and

            

    

    

    
      	
               

            	
              (b)

            	
              the
                IT Contracts,

            

    

    

    which
      are
      material to the operation of the Group as it is carried on at the date of this
      Agreement are set out in Parts 1 and 2 respectively of Schedule 12.

    

    
      	
              27.2

            	
              The
                IT Systems:

            

    

    

    
      	
               

            	
              (a)

            	
              have
                not suffered any material failure or breakdown resulting in material
                disruption to the business of the Group within the 12 months prior
                to the
                date of this Agreement;

            

    

    

    
      	
               

            	
              (b)

            	
              have
                the benefit of maintenance and support agreements;
                and

            

    

    

    
      	
               

            	
              (c)

            	
              have
                sufficient capacity for the requirements of the business of the Group
                as
                it is carried on at the date of this
                Agreement.

            

    

    

    
      	
              27.3

            	
              So
                far as the Sellers are aware, the Group has in place appropriate
                procedures for ensuring the security of the IT Systems and the
                confidentiality and integrity of the data stored on the IT
                Systems.

            

    

    

    
      	
              27.4

            	
              No
                Group Company is in material breach of any IT Contract and, so far
                as the
                Sellers are aware, no other party is in material breach
                thereof.

            

    

    

    
      	
              27.5

            	
              No
                IT Contract is currently the subject of any dispute or proceeding
                and, so
                far as the Sellers are aware, none is pending or
                threatened.

            

    

    

    
      	
              27.6

            	
              No
                IT Contract which is material to the operation of the business of
                the
                Group as it is carried on at the date of this Agreement contains
                any term
                which would, by virtue of the acquisition of the Shares by the Purchaser,
                relieve any other party of any obligation or entitle any other party
                to
                exercise any right (including any right of termination)
                thereunder.

            

    

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

    
      	
              28.

            	
              Insolvency

            

    

    

    
      	
              28.1

            	
              No
                resolution has been passed for the winding up of any Group
                Company.

            

    

    

    
      	
              28.2

            	
              No
                order has been made and, so far as the Sellers are aware, no petition
                has
                been presented for the winding up of any Group
                Company.

            

    

    

    
      	
              28.3

            	
              No
                administration order has been made in relation to any Group Company
                and,
                so far as the Sellers are aware, no petition or application for such
                an
                order has been made or presented and no person who is entitled to do so
                has given written notice of its intention to appoint an administrator
                of
                any Group Company or filed such a notice with the
                court.

            

    

    

    
      	
              28.4

            	
              No
                receiver or administrative receiver has been appointed in respect
                of any
                Group Company or all or any of its
                assets.

            

    

    

    
      	
              28.5

            	
              No
                voluntary arrangement under section 1 of the Insolvency Act 1986
                has been
                proposed or approved in respect of any Group
                Company.

            

    

    

    
      	
              28.6

            	
              No
                compromise or arrangement under section 425 of the Companies Act
                1985 has
                been proposed or sanctioned in respect of any Group
                Company.

            

    

    

    
      	
              28.7

            	
              No
                Group Company has entered into any compromise or arrangement with
                its
                creditors or any class of its creditors
                generally.

            

    

    

    
      	
              29.

            	
              Tax

            

    

    
      	
               

            	 

    

    
      	
              29.1

            	
              Each
                Group Company has filed or caused to be filed all returns which were
                required to be filed for the purpose of any form of Taxation and
                has paid
                or caused to be paid all taxes and duties as shown on the said returns
                and
                on all assessments received by it and has duly and punctually paid
                any
                other taxes or duties, and all such returns were, so far as the Sellers
                are aware, accurate and complete in all material respects and are
                not the
                subject of any dispute with any Tax Authority and each Group Company
                has
                provided all information required to be provided under any Tax Statute
                or
                pursuant to any notice served under any Tax
                Statute.

            

    

    

    
      	
              29.2

            	
              The
                Accounts reserve or provide for all Tax or other sums imposed, charged,
                assessed, levied or payable under any Tax Statute for which each
                Group
                Company was at the Accounts Date liable whether or not that Group
                Company
                has or may have any right of reimbursement against any other person
                and
                proper provision has been made and shown in the Accounts for deferred
                taxation in accordance with generally accepted accounting principles,
                including. where relevant, International Accounting Standards, subject
                to
                the stated threshold of
                materiality.

            

    

    
      
        
        

      

      
        84

        
          

        

      

      
        
        

      

    

    
      	
              29.3

            	
              Each
                Group Company has maintained and has in its possession all records
                and
                documentation which it is required by any Tax Statute to maintain
                (including, for the avoidance of doubt, copies of all stamp duty
                land tax
                returns and/or self certificates filed by any Group
                Company).

            

    

    

    
      	
              29.4

            	
              The
                amounts of tax chargeable on any Group Company during any accounting
                period ending on or within six years before the Accounts Date has
                not, to
                any material extent, depended on any concession, agreement or other
                formal
                or informal arrangement with any Tax
                Authority.

            

    

    

    
      	
              29.5

            	
              No
                Group Company is involved in any ongoing dispute with any Tax
                Authority.

            

    

    
      	
               

            	 

    

    
      	
              29.6

            	
              Each
                Group Company is, and has been, resident solely in the United Kingdom
                for
                Tax purposes and has never been resident in any other territory or
                treated
                as so resident for the purposes of any double tax agreement nor does
                any
                Group Company have a permanent establishment or other taxable presence
                in
                any jurisdiction other than that in which it was
                incorporated.

            

    

    

    
      	
              29.7

            	
              The
                Company does not own any asset which was acquired from another company
                within the last 6 years which was at the time a member of a group
                of
                companies for the purposes of section 179 Taxation of Chargeable
                Gains Act
                1992.

            

    

    

    
      	
              29.8

            	
              All
                instruments (other than those which have ceased to have any legal
                effect)
                which are necessary to enforce a Group Company's title to an asset
                and
                which, whether in the United Kingdom or elsewhere, either attract
                stamp
                duty or are required to be stamped with a particular stamp denoting
                that
                no duty is chargeable or that the document has been produced to the
                appropriate authority, have been properly
                stamped.

            

    

    

    
      	
              29.9

            	
              The
                Disclosure Letter contains details of all land transactions, within
                the
                meaning of section 43 Finance Act 2003, in which a Group Company
                was the
                purchaser and in respect of which that Group Company has future compliance
                obligations.

            

    

    

    
      	
              29.10

            	
              No
                Group Company has within the last 6 years been treated as a member
                of a
                group under section 43 Value Added Tax Act
                1994.

            

    

    

    
      	
              29.11

            	
              No
                Group Company has within the last 6 years made an election to waive
                exemption in relation to any land in accordance with paragraph 2
                schedule
                10 Value Added Tax Act 1994.

            

    

    
      	
               

            	 

    

    
      	
              29.12

            	
              No
                action has been taken by any Group Company in respect of which any
                consent
                or clearance from HMRC or other Taxation Authority was required save
                in
                circumstances where such consent or clearance was validly obtained,
                and
                where any conditions attaching thereto were and will, immediately
                following completion, continue to be
                met.

            

    

    
      
        
        

      

      
        85

        
          

        

      

      
        
        

      

    

    
      	
              29.13

            	
              Each
                Group Company has properly operated the PAYE system deducting Tax
                as
                required by law from all payments to or treated as made to or benefits
                provided for employees, ex-employees or independent contractors of
                that
                Company.

            

    

    
      	
               

            	 

    

    
      	
              29.14

            	
              Since
                the Accounts Date:

            

    

    
      	
               

            	 

    

    
      	
               

            	
              (a)

            	
              no
                Group Company has undertaken any transaction outside the ordinary
                course
                of its business which has given, may give or would, but for the
                availability of any relief, give rise to any Tax;
                and

            

    

    
      	
               

            	 

    

    
      	
               

            	
              (b)

            	
              no
                disposal has taken place or other event occurred such that any Group
                Company would be required to bring a disposal value into account
                for the
                purposes of the Capital Allowances Act 2001 or such that a chargeable
                gain
                could or would accrue to any Group Company, in either case of an
                amount
                greater than £100,000 (one hundred thousand
                pounds).

            

    

    
      	
               

            	 

    

    
      	
              29.15

            	
              The
                Disclosure Letter contains particulars of all arrangements relating
                to the
                surrender of relief under sections 402-413 of the TA to which any
                Group
                Company remains a party.

            

    

    
      	
               

            	 

    

    
      	
              29.16

            	
              (a)

            	
              No
                Group Company has given or guaranteed a tax indemnity in respect
                of any
                company sold by any Group Company in the last seven
                years.

            

    

    

    
      	
               

            	
              (b)

            	
              No
                transaction or event, other than arrangements for the surrender of
                trading
                losses from the Sellers, has occurred in consequence of which any
                Group
                Company is or may be held liable for any Tax where any Seller is
                primarily
                liable for the Tax in question (whether by reason of any such other
                company being or having been a member of the same group of companies
                or
                otherwise).

            

    

    
      	
               

            	 

    

    
      	
              29.17

            	
              (a)

            	
              Each
                Group Company is a registered taxable person for VAT
                legislation.

            

    

    
      	
               

            	 

    

    
      	
               

            	
              (b)

            	
              In
                the past three years, each Group Company has complied in all respects
                with
                the requirements and provisions of the VAT legislation and has made
                and
                maintained and will pending Completion make and maintain accurate
                and
                up-to-date records, invoices, accounts and other documents required
                by or
                necessary for the purposes of the VAT legislation and each Group
                Company
                has punctually paid and made all payments and returns required
                thereunder.

            

    

    
      	
               

            	 

    

    
      	
               

            	
              (c)

            	
              No
                Group Company has made any exempt supplies in consequence of which
                it is
                or will be unable to obtain credit for all input tax paid by it during
                any
                VAT quarter ending after the Accounts
                Date.

            

    

    
      
        
        

      

      
        86

        
          

        

      

      
        
        

      

    

    
      	
              29.18

            	
              Any
                property beneficially owned by any Group Company is also legally
                owned by
                the same Group Company.

            

    

    
      
        
        

      

      
        87

        
          

        

      

      
        
        

      

    

    SCHEDULE
      9

    

    Limitations
      on Sellers' Liability

    

    
      	
              1.

            	
              GENERAL

            

    

    

    
      	
              1.1

            	
              The
                provisions of this Schedule shall operate to limit the liability
                of the
                Sellers under:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                Sellers' Warranties; and

            

    

    

    
      	
               

            	
              (c)

            	
              the
                Tax Covenant but only insofar as any provision in this Schedule is
                expressed to be applicable to the Tax
                Covenant.

            

    

    

    
      	
              1.2

            	
              The
                provisions of the Tax Covenant shall further operate to limit the
                liability of the Sellers in respect of any claim under the Tax Covenant
                and (to the extent stated therein) any claim under the Tax
                Warranties.

            

    

    

    
      	
              1.3

            	
              Each
                provision of this Schedule shall be read and construed separately
                and,
                unless expressly provided to the contrary, shall not be limited by
                the
                terms of any other provision of this Schedule or by any other term
                of this
                Agreement.

            

    

    

    
      	
              2.

            	
              Time
                Limitations

            

    

    

    
      	
              2.1

            	
              The
                Sellers shall be under no liability in respect of any claim under
                the
                Sellers' Warranties or the Tax Covenant and any such claim shall
                be wholly
                barred and unenforceable unless the Purchaser shall have given to
                all the
                Sellers written notice of such
                claim:

            

    

    

    
      	
               

            	
              (a)

            	
              in
                the case of a claim under the Sellers' Warranties (other than the
                Tax
                Warranties and those Sellers' Warranties given in respect of matters
                relating to or governed under Environmental Laws or Nuclear Laws
                in
                paragraphs 10.1(e), 10.2, 13.4 and 25 of Schedule 8 (together the
                "Environmental Warranties"), by not later than midnight
                on the date falling fifteen months after the Completion
                Date;

            

    

    

    
      	
               

            	
              (b)

            	
              in
                the case of a claim under the Environmental Warranties by not later
                than
                midnight on the second anniversary of the Completion Date;
                and

            

    

    

    
      	
               

            	
              (c)

            	
              in
                the case of a claim under the Tax Warranties or the Tax Covenant,
                by not
                later than midnight on the seventh anniversary of the Completion
                Date.

            

    

    

    
      	
              2.2

            	
              Save
                as provided in paragraphs 5.2 and 9.2, the liability of the Sellers
                in
                respect of any claim of which notice shall have been given to the
                Sellers
                prior to the expiry of the time limits set out in paragraph 2.1 shall
                (if
                such claim has not been previously satisfied, settled or withdrawn)
                absolutely cease and determine if legal proceedings in respect of
                such
                claim have not been commenced within 9 months of the date of such
                notification.

            

    

    
      
        
        

      

      
        88

        
          

        

      

      
        
        

      

    

    
      	
              2.3

            	
              For
                the purpose of paragraph 2.2, proceedings shall not be deemed to
                have been
                commenced unless and until they shall have been properly issued and
                validly served upon all the
                Sellers.

            

    

    

    
      	
              2.4

            	
              The
                time limitations in this paragraph 2 shall not apply to any claim
                which
                arises or is delayed as a result of any fraudulent act or omission
                by any
                of the Sellers.

            

    

    

    
      	
              3.

            	
              Financial
                Limitations

            

    

    

    
      	
              3.1

            	
              The
                Sellers shall be under no liability in respect of any claim under
                the
                Sellers' Warranties unless the liability of the Sellers to the Purchaser
                and/or its assignees in respect of the claim would be more than £100,000
                (one hundred thousand pounds) (excluding costs and interest) (a
                "Relevant Claim") provided that, for the purpose of this
                paragraph, claims arising from the same facts or circumstances shall
                be
                aggregated and regarded as a single Relevant
                Claim.

            

    

    

    
      	
              3.2

            	
              The
                Purchaser shall not be entitled to damages or any other payment or
                remedy
                in respect of any claim under the Sellers' Warranties unless and
                until the
                aggregate amount (excluding costs and interest) of all Relevant Claims
                under the Sellers' Warranties for which the Sellers are liable to
                the
                Purchaser and/or its assignees (entirely disregarding for the avoidance
                of
                doubt those claims for which the Sellers have no liability as a result
                of
                paragraph 3.1) shall exceed  £4,000,000 (four million pounds) in
                which event the Sellers' liability shall be for the total amount
                of such
                claims and shall not be limited to the
                excess.

            

    

    

    
      	
              3.3

            	
              The
                total aggregate liability of:

            

    

    

    
      	
               

            	
              (a)

            	
              all
                the Sellers to the Purchaser and/or its assignees in respect of all
                claims
                under the Sellers' Warranties and the Tax Covenant (including costs
                and
                interest) shall not in any circumstances exceed £100,000,000 (one hundred
                million pounds) increased by, if such liability includes an amount
                in
                respect of interest, an amount equal to such interest re-calculated
                at the
                rate per annum of 11⁄2per
                cent above
                the average (rounded upward when necessary to the nearest 1/16th
                of one per
                cent) of the London Inter Bank Offered Rates on each of the dates
                on which
                each successive 6 monthly period commences during the period for
                which
                such interest is calculated.  The London Inter Bank Offered
                Rates for such dates shall be the rate at which Barclays Bank plc
                (or such
                other London banks as the Sellers shall nominate for this purpose)
                shall
                offer 6 month sterling deposits of £1,000,000 (one million pounds) to
                leading banks in the London Inter Bank Market at or about 11.00 am
                (London
                time) on such days.  The certificate of Barclays Bank plc (or
                such other London bank as the Sellers shall nominate for the purpose)
                as
                to the rate of interest shall be conclusive and binding on the parties
                and, when determining the interest rate Barclays Bank plc shall be
                acting
                as an expert; and

            

    

    
      
        
        

      

      
        89

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (b)

            	
              each
                Seller to the Purchaser and/or its assignees in respect of all claims
                under the Sellers' Warranties and the Tax Covenant shall not in any
                circumstances exceed the amount set opposite its name in column 4
                of
                Schedule 1.

            

    

    

    
      	
              3.4

            	
              (Subject
                to, for the avoidance of doubt, such total aggregate liability never
                exceeding the total aggregate liability calculated under paragraph
                3.3(a)
                of this Schedule 9) with effect from the second anniversary of the
                Completion Date, the total aggregate liability of all the Sellers
                to the
                Purchaser and/or its assignees under the Tax Warranties and the Tax
                Covenant (including costs and interest) shall be reduced so as not
                to
                exceed £50,000,000 (fifty million pounds) plus the amount of any such Tax
                claim which has been notified to the Sellers pursuant to paragraph
                2.1 of
                this Schedule 9 but remains unsettled and increased by, if such liability
                includes an amount in respect of interest, an amount equal to such
                interest re-calculated at the rate per annum of 11⁄2per
                cent above
                the average (rounded upward when necessary to the nearest 1/16th
                of one per
                cent) of the London Inter Bank Offered Rates on each of the dates
                on which
                each successive 6 monthly period commences during the period for
                which
                such interest is calculated.  The London Inter Bank Offered
                Rates for such dates shall be the rate at which Barclays Bank plc
                (or such
                other London banks as the Sellers shall nominate for this purpose)
                shall
                offer 6 month sterling deposits of £1,000,000 (one million pounds) to
                leading banks in the London Inter Bank Market at or about 11.00 am
                (London
                time) on such days.  The certificate of Barclays Bank plc (or
                such other London bank as the Sellers shall nominate for the purpose)
                as
                to the rate of interest shall be conclusive and binding on the parties
                and, when determining the interest rate Barclays Bank plc shall be
                acting
                as an expert.

            

    

    

    
      	
              3.5

            	
              In
                respect of any claim or claims under this Agreement, the Sellers'
                Warranties or the Tax Covenant for which all of the Sellers are or
                may be
                liable to the Purchaser, the liability of each Seller to the Purchaser
                in
                relation thereto shall be equal to the relevant percentage of the
                total
                liability of all the Sellers in respect of such claim or claims and
                for
                this purpose the relevant percentage in relation to each Seller shall
                be
                the percentage which is set opposite its name in column 5 of Schedule
                1.

            

    

    

    
      	
              3.6

            	
              The
                financial limitations in this paragraph 3 shall not apply to any
                claim
                which arises or is delayed as a result of any fraudulent act or omission
                by the Sellers.

            

    

    
      
        
        

      

      
        90

        
          

        

      

      
        
        

      

    

    
      	
              4.

            	
              Exclusion
                of Certain Claims

            

    

    

    
      	
              4.1

            	
              The
                Sellers shall not be liable in respect of any claim under the Sellers'
                Warranties if and to the extent
                that:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                claim would not have arisen but for any act, omission, transaction
                or
                arrangement carried out at the request of the Purchaser before Completion
                or pursuant to the terms of this Agreement or any other agreement
                entered
                into pursuant to this Agreement;

            

    

    

    
      	
               

            	
              (b)

            	
              any
                claims under the Tax Warranties would not have arisen but
                for:

            

    

    

    
      	
               

            	
              (i)

            	
              the
                making of any claim, election, surrender or disclaimer made, the
                giving of
                any notice or consent or the doing of any other thing under or in
                connection with the provisions of any enactment or regulation by
                any
                member of the Purchaser's Group after Completion (other than the
                making,
                giving or doing of which was taken into account in computing the
                provision
                for Taxation in the Accounts);

            

    

    

    
      	
               

            	
              (ii)

            	
              any
                negligent failure or omission by any member of the Purchaser's Group
                to
                make any claim, election, surrender or disclaimer or give any notice
                or
                consent or do any other thing under or in connection with the provisions
                of any enactment or regulation after Completion, the anticipated
                making,
                giving or doing of which was taken into account in computing the
                provision
                for Taxation in the Accounts;

            

    

    

    
      	
               

            	
              (c)

            	
              the
                claim would not have arisen but for any reorganisation of any member
                of
                the Purchaser's Group (including any winding up or cessation of the
                whole
                or any part of any business or trade carried on by any member of
                the
                Purchaser's Group) after
                Completion;

            

    

    

    
      	
               

            	
              (d)

            	
              the
                claim would not have arisen but for any change in the accounting
                principles, practices or policies of any member of the Purchaser's
                Group
                introduced or having effect after Completion other than any change
                required to ensure compliance with GAAP;
                or

            

    

    

    
      	
               

            	
              (e)

            	
              the
                claim would not have arisen but for a change of the use of the relevant
                Property to a more sensitive use from that at the date of
                Completion.

            

    

    

    
      	
              5.

            	
              Contingent
                Claims

            

    

    

    
      	
              5.1

            	
              The
                Sellers shall be under no liability in respect of any claim under
                the
                Sellers' Warranties which is based upon a liability which is contingent
                only or otherwise not capable of being quantified (a "Contingent
                Claim") unless and until such liability becomes an actual
                liability or becomes capable of being
                quantified.

            

    

    
      
        
        

      

      
        91

        
          

        

      

      
        
        

      

    

    
      	
              5.2

            	
              For
                the avoidance of doubt, a Contingent Claim must be notified to the
                Sellers
                within the time limit specified in paragraphs 2.1(a) and
                (b).  However, provided that it has been so notified, the 9
                month period referred to in paragraph 2.2 shall, in the case of a
                Contingent Claim, commence on the date that the underlying contingent
                liability becomes an actual liability or becomes capable of being
                quantified.

            

    

    

    
      	
              6.

            	
              Changes
                in Legislation

            

    

    

    The
      Sellers shall not be liable in respect of any claim under any of the Sellers'
      Warranties to the extent that the claim arises or is increased directly or
      indirectly as a result of:

    

    
      	
               

            	
              (a)

            	
              the
                passing or coming into force of, or any change in, any legislation
                after
                the date of this Agreement; or

            

    

    

    
      	
               

            	
              (b)

            	
              any
                increase in the rate of Taxation or any imposition of new Taxation
                after
                the date of this Agreement; or

            

    

    

    
      	
               

            	
              (c)

            	
              the
                withdrawal or amendment after the date of this Agreement of any
                extra-statutory concession or other formal agreement or arrangement
                currently granted by or made with any governmental, fiscal or regulatory
                body (whether or not having the force of law);
                or

            

    

    

    
      	
               

            	
              (d)

            	
              any
                change after the date of this Agreement in any generally accepted
                interpretation or application of any legislation or in the policy
                or
                practice (if published) of any relevant governmental, fiscal or regulatory
                body.

            

    

    

    
      	
              7.

            	
              No
                Liability if Loss is Otherwise Compensated
                For

            

    

    

    
      	
              7.1

            	
              The
                Sellers shall not be liable in respect of any claim for breach of
                any of
                the Sellers' Warranties if and to the extent that the loss occasioned
                by
                the breach has been recovered by the Purchaser pursuant to a claim
                under
                any other Seller Warranty or term of this Agreement or any other
                document
                entered into pursuant to this Agreement.  The Purchaser shall
                not be entitled to recover more than once in respect of the same
                loss.

            

    

    

    
      	
              7.2

            	
              If
                the Purchaser is entitled to claim under the Tax Covenant and under
                the
                Sellers' Warranties in respect of the same matter, the Purchaser
                may in
                its discretion choose to claim under either or both but payments
                under the
                Tax Covenant shall pro tanto satisfy and discharge any claim which
                is
                capable of being made under the Sellers' Warranties in respect of
                the same
                matter and vice versa.

            

    

    
      
        
        

      

      
        92

        
          

        

      

      
        
        

      

    

    
      	
              7.3

            	
              In
                calculating the liability of the Sellers for any breach of the Sellers'
                Warranties, there shall be taken into account any benefit accruing
                to any
                member of the Purchaser's Group arising directly or indirectly as
                a result
                of the matter giving rise to the breach including without prejudice
                to the
                generality of the foregoing:

            

    

    

    
      	
               

            	
              (a)

            	
              the
                amount of any tax relief thereby obtained or obtainable by any member
                of
                the Purchaser's Group; and

            

    

    

    
      	
               

            	
              (b)

            	
              the
                amount by which any Taxation for which any member of the Purchaser's
                Group
                is now or in the future accountable or liable to be assessed is thereby
                reduced or extinguished.

            

    

    

    
      	
              8.

            	
              Third
                Party Claims

            

    

    

    
      	
              8.1

            	
              The
                provisions of this paragraph 8 shall apply in circumstances
                where:

            

    

    

    
      	
               

            	
              (a)

            	
              a
                claim, demand or action is made, brought or threatened against the
                Purchaser or any other member of the Purchaser's Group by any third
                party
                (an "Actual Third Party Claim") or the Purchaser or
                another member of the Purchaser's Group becomes aware of any fact,
                matter,
                event or circumstance which may give rise to such a claim, demand
                or
                action (a
                "Potential Third Party Claim");
                and

            

    

     

    
      	
               

            	
              (b)

            	
              the
                Actual Third Party Claim or Potential Third Party Claim (or the matter
                giving rise thereto) is likely to give rise to a claim against the
                Sellers
                under the Sellers' Warranties (other than the Tax
                Warranties).

            

    

    

    
      	
              8.2

            	
              For
                the purpose of this paragraph 8, a "Third Party Claim"
                shall mean an Actual Third Party Claim or a Potential Third Party
                Claim.

            

    

    

    
      	
              8.3

            	
              The
                Purchaser shall:

            

    

    

    
      	
               

            	
              (a)

            	
              procure
                that the Sellers are notified in writing of the Third Party Claim
                as soon
                as reasonably practicable after the relevant member of the Purchaser's
                Group becomes aware of the Third Party
                Claim;

            

    

    

    
      	
               

            	
              (b)

            	
              consult
                with the Sellers in relation to the Third Party Claim and the action
                to be
                taken in response thereto; and

            

    

    

    
      	
               

            	
              (c)

            	
              provide,
                and procure that the relevant member of the Purchaser's Group shall
                provide, such information, documentation and assistance to the Sellers
                and
                its professional advisers as the Sellers may reasonably request to
                enable
                the Sellers to investigate the Third Party Claim and to determine
                the
                action to be taken in response
                thereto.

            

    

    
      
        
        

      

      
        93

        
          

        

      

      
        
        

      

    

    
      	
              8.4

            	
              Subject
                to the relevant member of the Purchaser's Group being indemnified
                to the
                reasonable satisfaction of the Purchaser against any liability, cost,
                damage, charge or expense which may thereby be properly incurred
                (but so
                that the provision of any such indemnity shall not imply any admission
                of
                liability on the part of the Sellers) if the subject matter of the
                Third
                Party Claim is not being pursued by, or otherwise directly involves,
                the
                Authority, then the Purchaser shall, and shall procure that the relevant
                member of the Purchaser's Group
                shall:

            

    

    

    
      	
               

            	
              (a)

            	
              take
                such action as the Sellers may reasonably request to avoid, dispute,
                resist, mitigate, settle, compromise or defend the Third Party Claim
                or
                appeal any decision, judgment or adjudication with respect thereto;
                and

            

    

    

    
      	
               

            	
              (b)

            	
              not
                make any admission of liability with respect to the Third Party Claim
                or
                settle or compromise the Third Party Claim without the prior written
                consent of the Sellers (such consent not to be unreasonably withheld
                or
                delayed).

            

    

    

    
      	
              8.5

            	
              If
                the subject matter of the Third Party Claim is being pursued by,
                or
                otherwise directly involves, the Authority, then the Purchaser
                shall:

            

    

    

    
      	
               

            	
              (a)

            	
              give
                due consideration to such suggestions as the Sellers may make to
                avoid,
                resist, contest or compromise or generally in relation to the conduct
                of
                any Third Party Claim; and

            

    

    

    
      	
               

            	
              (b)

            	
              not
                settle, make any admission of liability or compromise any claim or
                matter
                which gives rise to a Third Party Claim without informing the Sellers
                in
                advance and giving the Sellers the opportunity to make representations
                in
                relation thereto.

            

    

    

    
      	
              9.

            	
              Recovery
                from Third Parties

            

    

    

    
      	
              9.1

            	
              Where
                the Purchaser or any member of the Purchaser's Group is at any time
                entitled to recover from some other person (including an insurer
                under an
                insurance policy) any sum in respect of any matter or event which
                gives
                rise to a claim under the Sellers' Warranties (other than the Tax
                Warranties), the Purchaser shall (subject to being fully indemnified
                by
                the Sellers) use reasonable endeavours to recover that sum and any
                sum
                recovered (net of all costs of recovery and any tax
                payable):

            

    

    

    
      	
               

            	
              (a)

            	
              will
                reduce the amount of the claim under the Sellers' Warranties (other
                than
                the Tax Warranties); or

            

    

    
      
        
        

      

      
        94

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (b)

            	
              in
                the event of the recovery being delayed until after the relevant
                claim
                under the Sellers' Warranties (other than the Tax Warranties) has
                been
                satisfied (to the extent of the maximum aggregate amount of the Sellers'
                liability under paragraph 3.3 of this Schedule 9) by the Sellers,
                shall be
                paid to the Sellers in the relevant
                proportions,

            

    

    

    provided
      that none of the provisions contained in this paragraph 9 shall oblige the
      Purchaser to take any action if the Purchaser reasonably considers that such
      action is likely to have a material adverse effect on the business of the Group
      or the Purchaser's Group (including, without limitation, any material effect
      on
      relationships with customers, suppliers, intermediaries, agents or
      insurers).

    

    
      	
              9.2

            	
              For
                the avoidance of doubt, a claim under the Sellers' Warranties in
                respect
                of a matter which is also the subject of a recovery claim against
                some
                other person pursuant to paragraph 9.1 must be notified to the Sellers
                within the time limit specified in paragraph 2.1(a). However, provided
                that it has been so notified, the 9 month period in paragraph 2.2
                shall,
                in the case of such a claim, commence on the date that the recovery
                claim
                against the other person is finally settled or finally
                determined.

            

    

    

    
      	
              10.

            	
              Mitigation

            

    

    

    
      	
              10.1

            	
              Nothing
                in this Agreement shall or shall be deemed to relieve the Purchaser
                of any
                common law or other duty to mitigate any loss or damage which it
                may
                suffer as a result of any matter giving rise to a claim under the
                Sellers'
                Warranties or to restrict or limit any such
                duty.

            

    

    

    
      	
              10.2

            	
              In
                the case of a claim relating to the warranty in paragraph 25.1 of
                Schedule
                8 (Environment), the Purchaser shall where relevant and reasonably
                practicable  consult with the Sellers as to methods of
                remediation and discuss with the Sellers the potential for minimising
                remediation costs.  The Purchaser shall provide the Sellers (at
                the Sellers' cost) with such information and documents as they may
                reasonably request in relation to any process of agreeing remediation
                with
                the relevant regulator.

            

    

    

    
      	
              11.

            	
              Tax
                Warranties

            

    

    

    Clause
      5.2 (Payment Date) of the Tax Covenant shall apply to the Tax Warranties as
      if a
      claim under a Tax Warranty were a claim under Clause 2.1(a) of the Tax
      Covenant.

    
      
        
        

      

      
        95

        
          

        

      

      
        
        

      

    

    SCHEDULE
      10

    

    Purchaser's
      Warranties

    

    
      	
              1.

            	
              The
                Purchaser is a company, duly incorporated, validly existing and in
                good
                standing under the laws of England and
                Wales.

            

    

    

    
      	
              2.

            	
              The
                Purchaser has the power to own its assets and carry on its business
                as it
                is currently being conducted.

            

    

    

    
      	
              3.

            	
              The
                Purchaser has the power to enter into, perform and deliver, and has
                taken
                all necessary action to authorise its entry into, performance and
                delivery
                of, this Agreement and any Transaction Document to which it is a
                party.

            

    

    

    
      	
              4.

            	
              The
                obligations assumed by the Purchaser under this Agreement and any
                Transaction Document to which it is a party are legal, valid, binding
                and
                enforceable obligations.

            

    

    

    
      	
              5.

            	
              Subject
                to the fulfilment of the Conditions, the entering into of, and the
                performance by the Purchaser under, this Agreement and any Transaction
                Document to which it is a party will
                not:

            

    

    

    
      	
               

            	
              (a)

            	
              amount
                to a violation or breach of any law or regulation applicable to either
                of
                it; or

            

    

    

    
      	
               

            	
              (b)

            	
              violate
                or conflict with the provisions of its respective constitutional
                documents.

            

    

    

    
      	
              6.

            	
              Save
                as set out in Clause 3 and Schedule 5, all necessary governmental
                and
                other consents, approvals, licences and authorisations required by
                the
                Purchaser to enable it to lawfully to enter into, and to exercise
                its
                rights and comply with its obligations under, this Agreement and
                any
                Transaction Document to which it is a party have been obtained or
                effected
                and are in full force and effect.

            

    

    

    
      	
              7.

            	
              On
                Completion, the shares held by the Company in DRDL will not become
                Foreign-held shares (as defined in the articles of association of
                DRDL).

            

    

    
      
        
        

      

      
        96

        
          

        

      

      
        
        

      

    

    SCHEDULE
      11

    

    Registered
      Intellectual Property Rights

    

    DML

    

    Patents

     

    
      	
              Patent

              Number

            	
              Title

            	
              Filing
                Date

            	
              Registration
                Date

            
	
              US5879778

            	
              Strengthening
                of Structural Members

            	
              22.01.1996

            	
              09.03.1999

            
	
              GB9501193.8

            	
              Reinforced
                Material

            	
              21.01.1995

            	
              pending

            
	
              WO9622432

            	
              PCT
                Application: Reinforcement of 

              Structural
                Members

            	
              22.01.1996

            	
              Unknown
                status

            

    

     

    

    DRDL

    

    Trade
      Marks

     

    
      	
              TM
                Number

            	
              Mark
                Text

            	
              Type

            	
              Date

            	
              Status

            	
              Classes

            
	
              EP003082658

            	
              DML
                DEVONPORT

            	
              Figurative

            	
              07/12/2004

            	
              Registration
                published

            	
              7,
                9, 12, 35, 37, 41, 42

            
	
              EP004138319

            	
              DML
                APPLEDORE

            	
              Figurative

            	
              19/01/2006

            	
              Registration
                published

            	
              7,
                9, 12, 35, 37, 41, 42

            
	
              EP004138574

            	
              DML
                GROUP

            	
              Figurative

            	
              09/01/2006

            	
              Registration
                published

            	
              7,
                9, 12, 35, 37, 41, 42

            
	
              EP003082625

            	
              DML

            	
              Word

            	
              29/11/2005

            	
              Registration
                published

            	
              7,
                9, 12, 35, 37, 41, 42

            
	
              EP003082633

            	
              DEVONPORT

            	
              Word

            	
              29/11/2005

            	
              Registration
                published

            	
              7,
                9, 12, 35, 37, 41, 42

            

    

    

    Patents

     

    
      	
              Patent

              Number

            	
              Title

            	
              Filing
                Date

            	
              Registration
                Date

            
	
              EP0827563

            	
              Strengthening
                of Structural Members

            	
              22.01.1996

            	
              17.03.1999

            
	
              CA2216631

            	
              Unknown
                (relates to Structural Members and PCT Application
                WO9622432)

            	
              Unknown

            	
              unknown

            
	
              AU706549B

            	
              Reinforcement
                of Structural Members

            	
              22.01.1996

            	
              unknown

            
	
              NZ298854

            	
              Reinforcement
                of structural members by drawing curable resin through dry fibres
                of high
                aspect ratio

            	
              Published

              1999-02-25

            	
              09.06.1999

            
	
              WO/1999/010675

            	
              Joint
                PCT Application with Rockwater Limited for Pipeline
                Manufacture.

            	
              21.08.1998

            	
              unknown

            

    

     

    
      
        
        

      

      
        97

        
          

        

      

      
        
        

      

    

    LSC
      Group Holdings Limited

    

    Trade
      marks

     

    
      	
              TM
                Number

            	
              Mark
                Text

            	
              Type

            	
              Date

            	
              Status

            	
              Classes

            
	
              2032479

            	
              MODULEMASTER

            	
              WO

            	
              05.09.1995

            	
              Expired

            	
              09

            
	
              2155438

            	
              LACE

            	
              WO

            	
              14.01.1998

            	
              Registered

            	
              09

            
	
              2161786

            	
              OFFICEMaster

            	
              WO

            	
              21.03.1998

            	
              Registered

            	
              09

            
	
              2206377

            	
              LOCAM

            	
              WO

            	
              19.08.1999

            	
              Registered

            	
              09
                16

            

    

    

    Frazer-Nash
      Consultancy Limited

    

    Trade
      marks

     

    
      	
              TM
                Number

            	
              Mark
                Text

            	
              Type

            	
              Date

            	
              Status

            	
              Classes

            
	
              2372447

            	
              D-Risk

            	
              WO

            	
              08.09.2004

            	
              Registered

            	
              09
                42

            
	
              1575494

            	
              FNGUN

            	
              WO

            	
              15.06.1994

            	
              Registered

            	
              09

            
	
              2440411

            	
              D-CIDE

            	
              WO

            	
              02.12.2006

            	
              Examined

            	
              09
                42

            

    

    

    
      
        
        

      

      
        98

        
          

        

      

      
        
        

      

    

     

    Patents

     

    
      	
              Patent
                Number

            	
              Title

            	
              Filing
                Date

            	
              Registration
                Date

            
	
              GB2383264

            	
              Seat
                Suspension System

            	
              20.12.2001

            	
              07.10.2003

            
	
              GB2348496A

            	
              Method
                and apparatus for the detection of scratching and similar surface
                action
                to glass

            	
              31.03.1999

            	
              Not
                yet registered

            
	
              GB2383264A

            	
              Seat
                suspension system

            	
              20.12.2001

            	
              Not
                yet registered

            
	
              GB2305995A

            	
              Actuator
                for ejector release units

            	
              31.01.1986

            	
              Not
                yet registered

            
	
              WO03070306

            	
              PCT
                Application for Breathing Device jointly owned with EME Electro Medical
                Equipment Ltd.

            	
              21.02.2003

            	
              Unknown
                status

            
	
              AU2003232304

            	
              Breathing
                Device

            	
              10.09.2004

            	
              21.2.2003

            
	
              JP2003569259

            	
              Breathing
                Device

            	
              20.08.2004

            	
              unknown

            
	
              NZ535238

            	
              Breathing
                Device

            	
              10.09.2004

            	
              28.10.2005

            
	
              US10505466

            	
              Breathing
                Device

            	
              14.03.2005

            	
              unknown

            

    

    
      
        
        

      

      
        99

        
          

        

      

      
        
        

      

    

    SCHEDULE
      12

    

    IT
      Systems and IT Contracts

    

    Part
      1

    

    IT
      Systems

    

    Relevant
      Group sites are as follows for the purposes of this Schedule 12 Part
      1:

    

    
      	
              ●

            	
              DRDL:
                Devonport, Keynsham and satellite offices at HMNB Clyde and Rolls
                Royce
                Derby;

            

    

    

    
      	
              ●

            	
              ASL:
                Appledore;

            

    

    

    
      	
              ●

            	
              LSC
                Group: Fradley Park (Litchfield), Weymouth and satellite office at
                RAF
                Wyton; and

            

    

    

    
      	
              ●

            	
              FNC
                Group: Bristol (7 separate office premises), Dorking, Burton on Trent,
                Glasgow, Plymouth and Warrington.

            

    

    

    
      	
              1.

            	
              The
                DRDL, ASL, LSC Group and FNC Group sites all utilise local servers,
                communications networks, desktops, printers and other peripheral
                devices
                with connectivity to other DML Group sites via the DML Group WAN
                and the
                Internet via connections at Litchfield, Dorking and
                Plymouth.

            

    

    

    
      	
              2.

            	
              The
                computing environments in use across all sites are predominantly
                client/server based.  DRDL, ASL and LSC Group back office
                services are based on the use of Windows client/server software with
                Office and Outlook basic productivity tools. The DRDL Windows Active
                Directory forest extends beyond the Devonport site and supports the
                Keynsham, ASL and LSC Group-based services and
                users.

            

    

    

    
      	
              3.

            	
              FNC
                Group sites currently use Novell/GroupWise collaboration and productivity
                software.

            

    

    

    
      	
              4.

            	
              DRDL
                utilises Windows 2000 or 2003, VMS 6/7 or HPUX servers.  DRDL’s
                eBusiness Suite enterprise application modules and the bespoke,
                Oracle-based, planning and production management application run
                in the
                UNIX environment.  Legacy applications are time and attendance,
                labour booking and material procurement and these run in the VMS
                environment on Digital VAX and Alpha servers. Windows servers also
                run CAD
                (Autodesk), document management (Documentum), asset configuration
                and
                maintenance (Maximo), Dosimetry Control System (DCS) and major project
                planning and control (Primavera
                P3).

            

    

    
      
        
        

      

      
        100

        
          

        

      

      
        
        

      

    

    
      	
              5.

            	
              LSC
                Group and FNC Group use a variety of engineering and analytical software
                packages, running them in a number of different environments as
                appropriate.

            

    

    

    
      	
              6.

            	
              The
                primary database products in use across all sites are Oracle and
                SQL*Server, with Oracle and other (eg, Crystal) reporting tools used
                for
                data extraction and report
                production.

            

    

    

    
      	
              7.

            	
              The
                DRDL Devonport site utilises two general purpose Windows attached
                Storage
                Area Networks (SANs), two UNIX SANs and one legacy VMS Shared Data
                Store.

            

    

    

    
      	
              8.

            	
              Legato
                Networker software manages corporate data backups.  These are
                taken nightly between computer suites to fully automated tape libraries
                for business resilience purposes.

            

    

    

    
      	
              9.

            	
              The
                main DRDL network backbone design carries IP traffic that is
                switched/routed between the campus nodes and the user/server sub-networks.
                DML Group networks are predominantly based on CISCO architectures
                and
                products for which there are significant internal design and support
                skills/experience.

            

    

    

    
      	
              10.

            	
              There
                is a secure wide area network (DML Group WAN) provided as a managed
                service by Affiniti, used to store, process, import and export data
                with a
                maximum security marking of "UK-Restricted".  It uses the “wires
                only” BT MPLS IP Clear Network. There are standalone Group LAN’s at other
                non-DML Group sites at RAF Whyton, Rolls Royce Derby and Faslane
                which are
                also connected to the DML Group
                WAN.

            

    

    

    
      	
              11.

            	
              The
                DRDL Devonport and Keynsham sites have secure LAN connections with
                the
                main Authority network to support joint access to MoD & DML intranets,
                collaborative working, workflow, Restricted e-mail,
                etc.

            

    

    

    
      	
              12.

            	
              DRDL
                also has a separate “commercial” Windows infrastructure that hosts a Group
                Internet Collaborative Working
                Environment.

            

    

    

    
      	
              13.

            	
              The
                Group’s primary internet connectivity is hosted from the DRDL Devonport
                site, via a BT-managed secure and accredited configuration that uses
                dual
                resilient 100 MB bearers ramped down to 10 MB and incorporating dual
                resilient in-line firewalls for content and virus
                protection.  All DRDL internet browsing, internet e-mail and
                dial-in VPN services are provided via this connection.  The LSC
                Group and FNC Group sites have their own secure internet connections
                at
                the Litchfield and Dorking sites.

            

    

    

    
      	
              14.

            	
              The
                telephone services at the main DRDL Devonport Site are provided via
                two
                Siemens Realtis switches in a resilient configuration, with integrated
                cross-site DECT services also provided.  DML Group Mobile phone
                services are provided by T-Mobile, with a direct Mobex connection
                into the
                DRDL exchange.  There are small local exchanges at the ASL,
                DRDL, Keynsham and FNC Group sites.  The LSC Group Fradley Park
                site has a Cisco VOIP service.

            

    

    
      
        
        

      

      
        101

        
          

        

      

      
        
        

      

    

    
      	
              15.

            	
              Polycom
                video conference facilities, linked via ISDN, are installed at the
                DRDL
                Devonport, Keynsham, ASL, FNC Group Dorking, Burton and Glasgow and
                LSC
                Group Fradley Park sites. These are maintained by a single service
                provider.

            

    

    

    
      	
              16.

            	
              DRDL’s
                applications portfolio comprises both Web and thick client COTS and
                bespoke applications.  Bespoke development strategy is now to
                develop for web deployment wherever possible.  DRDL Oracle
                applications are managed and developed using Oracle’s Designer and
                Developer 2000 toolset.  SQL*Server applications are developed
                using the Visual Studio software
                suite.

            

    

    

    
      	
              17.

            	
              The
                DML Group WAN and associated infrastructure is accredited (ADS Rev
                A Nov
                2005) in accordance with the Manual of Protective Security (MPS)
                issued by
                the Cabinet Office and is authorised to hold information up to and
                including UK-Restricted. Various stand alone systems are accredited
                to
                hold information up to and including Top Secret.  DML also
                complies in general with the MoD's Security Manual (JSP440) where
                required
                as this is now closely aligned to the
                MPS.

            

    

    
      
        
        

      

      
        102

        
          

        

      

      
        
        

      

    

    Part
      2

    

    IT
      Contracts

     

    
      	
              Product/Service

            	
              Start

            	
              End

            	
              Supplier

            
	
              Managed
                Service - Supply and Maintenance HP equipment

            	
              28-Jul-04

            	
              31-Mar-08

            	
              Hewlett
                Packard

            
	
              Renewal
                of Desktop licences - Microsoft through Halliburton

            	
              01-Oct-06

            	
              30-Sep-07

            	
              KBR

            
	
              PIE
                Licence

            	
              01-Jan-07

            	
              01-Mar-15

            	
              LSC
                Group

            
	
              Omnetica
                WAN Connection (incl RAF Wyton and FNC)

            	
              22-Mar-05

            	
              21-Mar-10

            	
              Affiniti

            
	
              Document
                Services Contract

            	
              01-Oct-04

            	
              30-Sep-09

            	
              Canon

            
	
              MTI
                Maintenance (New Hardware) design supply support

            	
              01-Jul-05

            	
              30-Jun-08

            	
              MTI
                Technologies

            
	
              Continuum
                (Managed Service)

            	
              01-Nov-05

            	
              31-Oct-08

            	
              TAC
                UK

            
	
              T-Mobile
                Phones

            	
              01-Nov-05

            	
              31-Dec-07

            	
              T-Mobile

            
	
              Desktop
                Software Visio

            	
              01-Oct-06

            	
              30-Sep-09

            	
              KBR

            
	
              Oracle
                licences via Halliburton Agreement

            	
              01-Jun-06

            	
              25-May-09

            	
              KBR

            
	
              Variation
                on WAN Contract

            	
              01-Oct-06

            	
              21-Mar-10

            	
              Affiniti

            
	
              Oracle
                (Migrated CPU licenses - 4 CPU's)

            	
              01-Jul-06

            	
              30-Jun-07

            	
              Oracle

            
	
              PS
                - Knowcom Amendment 6

            	
              01-Jun-06

            	
              31-May-07

            	
              Knowcom

            
	
              Documentum
                -Halliburton

            	
              01-Jan-07

            	
              31-Dec-07

            	
              KBR

            
	
              Server
                Software Desktop true-up

            	
              01-Oct-06

            	
              01-Sep-09

            	
              KBR

            
	
              Network
                Disaster (NT & VMS combined)

            	
              01-Sep-06

            	
              31-Aug-07

            	
              NDR

            

    

    
      
        
        

      

      
        103

        
          

        

      

      
        
        

      

    

    

    
      	
              Product/Service

            	
              Start

            	
              End

            	
              Supplier

            
	
              AutoCAD

            	
              01-Jan-07

            	
              31-Dec-07

            	
              Autodesk

            
	
              Maximo
                (Incl Primavera Interfaces)

            	
              01-Apr-06

            	
              31-Mar-07

            	
              MRO

            
	
              HP
                Maintenance Service

            	
              01-Jan-07

            	
              31-Mar-08

            	
              Hewlett
                Packard

            
	
              Kingston
                - Exchange Maintenance (All 3)

            	
              01-Feb-06

            	
              31-Jan-07

            	
              Affiniti

            
	
              BT
                iNet Fortinet/Fortigate 3 year managed Service

            	
              01-Nov-06

            	
              01-Nov-09

            	
              BT
                iNet

            
	
              Provision
                of support to Mercury Hardware

            	
              01-Jan-07

            	
              31-Dec-07

            	
              DML

            
	
              Usage
                charges for outgoing telephone calls

            	
              01-Jan-07

            	
              30-Jun-07

            	
              Cable
                & Wireless

            
	
              Annual
                maintenance contract for on-site desktop services

            	
              01-Apr-06

            	
              31-Mar-08

            	
              Hewlett
                Packard

            
	
              Provision
                of support services and out of hours cover for SSMG IT
                Systems

            	
              01-Sep-03

            	
              01-Mar-08

            	
              ISHELP

            

    

    
      
        
        

      

      
        104

        
          

        

      

      
        
        

      

    

    

    
      	
              SIGNED
                by

            	 	 	 
	
              for
                and on behalf of KELLOGG BROWN

            	 	 	 
	
              &
                ROOT HOLDINGS (U.K.) LIMITED

            	 	
              /S/
                Paul Ferguson

            	 
	 	 	 	 
	 	 	 	 
	
              SIGNED
                by

            	 	 	 
	
              for
                and on behalf of BALFOUR

            	 	 	 
	
              BEATTY
                PLC

            	 	
              /S/
                Peter Zinkin

            	 
	 	 	 	 
	 	 	 	 
	
              SIGNED
                by

            	 	 	 
	
              for
                and on behalf of THE WEIR GROUP PLC

            	 	
              /S/Alan
                Mitchelson

            	 
	 	 	 	 
	 	 	 	 
	
              SIGNED
                by

            	 	 	 
	
              for
                and on behalf of BABCOCK

            	 	 	 
	
              INTERNATIONAL
                GROUP PLC

            	 	
              /S/Peter
                Rogers

            	 
	 	 	 	 
	 	 	 	 
	
              SIGNED
                by

            	 	 	 
	
              for
                and on behalf of KBR, INC.

            	 	
              /S/Andrew
                D. Farley

            	 

    

    
      
        
        

      

      
        105

        
          

        

      

      
        
        

      

    

    ANNEXURE

     

     

    106ex10_1.htm

    
      

    

    
      RETENTION
        BONUS AGREEMENT

    

    
       

      This
        Retention Bonus Agreement (the “Agreement”)
by
        and between Ignis Petroleum Group, Inc., a Nevada corporation (the
“Company”)
        with its principal place of business at One Legacy Town Center,
        7160 Dallas Parkway, Suite 380, Piano, Texas 75024, and Lifestyles Integration,
        Inc. (the “Consultant”)
        shall be effective as of June 1, 2007 (the “Effective
        Date”).

    

    
       

      WHEREAS,
        the Board of Directors of the Company (the “Board”)
        has determined that it is in the best interests of the Company
        and
        its stockholders that certain key members of management and key consultants
        to
        the Company be provided with the appropriate incentives to cause them to
        continue providing services to the Company pending the Company's
        reorganization;

    

    
       

      NOW
        THEREFORE, in consideration of the agreements contained herein including
        the
        undertakings of the parties hereto, the receipt and sufficiency of which
        are
        hereby acknowledged by each of the parties hereto, it is agreed as
        follows:

    

    
       

      
        	
              	
                1. 

              	
                Definitions.    For
                  purposes of this Agreement, the following words and phrases shall
                  have the
                  following meanings:

              

      

    

    
       

      
        	
              	
                (a)

              	
                “Affiliate”means,
                  as it relates to a specified person or entity, a Person that directly,
                  or
                  indirectly through one or more intermediaries, controls, is controlled
                  by,
                  exercises a controlling influence over, or is under common control
                  with,
                  the Person specified.

              

      

    

    
       

      
        	
              	
                (b)

              	
                “Consultant's
                  Employee”means
                  Eric Hanlon, an employee of
                  Consultant.

              

      

    

    
       

      
        
          
            	
                  	
                    (c)

                  	
                    “Cause”means:

                  

          

        

      

    

    
       

      (i)  Consultant
        or
        Consultant's Employee's willful failure, neglect, refusal, or nonperformance,
        at
        any time, of Consultant's duties or obligations set forth in this Agreement
        or
        in Consultant's consulting contract with the Company, if any (the
“Consulting
        Contract”),
or(i)
        a willful breach by Consultant of this Agreement or
        Consultant's Consulting Contract;

    

    
       

      (ii)  Consultant
        or
        Consultant's Employee's conviction or no contest or guilty plea to or indictment
        for (or its procedural equivalent) a felony or crime involving moral turpitude,
        or Consultant or Consultant's Employee's guilty plea or no contest plea to
        a
        lesser included offense or crime in exchange for withdrawal of a felony
        indictment, felony charge by information, or a charged crime involving moral
        turpitude, whether the charge arises under federal, state or local
        law;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      (iii)  Consultant's
        Employee's
        death or disability rendering Consultant's employee incapable of performing
        duties or obligations set forth in this Agreement or in Consultant's consulting
        contract with the Company, if any, for longer than 4 weeks;

    

    
       

      (iv)  Consultant
        or
        Consultant's Employee's appropriation (or attempted appropriation) of a material
        business opportunity of the Company or any of its affiliates, including,
        without
        limitation, attempting to secure or securing, any personal profit in connection
        with any transaction entered into on behalf of the Company or any of its
        affiliates;

    

    
       

      (v)  Consultant
        or
        Consultant's Employee's commission of an act of fraud, illegality, theft
        or
        willful misconduct toward the Company or any of its affiliates in the course
        of
        employment with the Company that relates to the Company's or any of its
        affiliates' assets, activities, operations or other
        employees;

    

    
       

      (vi)  Consultant's
        Employee's
        repeated intoxication with alcohol or drugs while on the Company's premises
        during regular business hours; or

    

    
       

      (vii)  Consultant's
        Employee's
        gross incompetence that has a material adverse impact on the Company's finances
        or operations or a pattern of gross incompetence of Consultant's Employee,
        in
        each case as determined in good faith by the Board of Managers of the
        Company;

    

    
       

      
        	
              	
                (d)

              	
                “Change
                  of
                  Control”means,

              

      

    

    
       

      (i)  a
        merger or consolidation
        approved by the Company's stockholders in which securities possessing more
        than
        fifty percent (50%) of the total combined voting power of the Company's
        outstanding securities are transferred to a person or persons different from
        the
        persons holding those securities immediately prior to such
        transaction;

    

    
       

      (ii)  any
        stockholder-approved
        sale, transfer or other disposition of all or substantially all of the Company's
        assets in complete liquidation or dissolution of the
        Company;

    

    
       

      (iii)  any
        sale of substantially
        all of the company's assets pursuant to either Chapter 11 or Chapter 7 of
        the
        United States Bankruptcy Code (the "Code"),

    

    
       

      (iv)  confirmation
        of a Plan of
        Reorganization or a Plan of Liquidation under Chapter 11 of the
        Code;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      (v)  liquidation
        of the
        Company under Chapter 7 of the Code;

    

    
       

      (vi)  the
        acquisition, directly
        or indirectly, by any person or related group of persons (other than the
        Company
        or a person that directly or indirectly controls, is controlled by or is
        under
        common control with, the Company) of beneficial ownership (within the meaning
        of
        Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities
        possessing more than fifty percent (50%) of the total combined voting power
        of
        the Company's outstanding securities pursuant to a tender or exchange offer
        made
        directly to the Company's stockholders; or

    

    
       

      (vii)  a
        change in the
        composition of the Board over a period of six consecutive months or less
        such
        that a majority of the Board members ceases, by reason of one or more contested
        elections for Board membership, to be comprised of individuals who either
        (A)
        have been Board members continuously since the beginning of such period or
        (B)
        have been elected or nominated for election as Board members during such
        period
        by at least a majority of the Board members described in clause (A) who were
        still in office at the time the Board approved such election or
        nomination.

    

    
       

      
        	
              	
                (e)

              	
                “Employed
                  Months”
                  means the number of days between the Effective
                  Date
                  and the Transaction Date divided by
                  30.

              

      

    

    
       

      
        	
              	
                (f)

              	
                “Good
                  Reason”
                  means the Company's breach of this Agreement
                  or the
                  Consulting Contract, if any, and the continuing breach by the Company
                  after receiving written notice by the Consultant giving the Company
                  at
                  least 15 days to cure such
                  breach.

              

      

    

    
       

      
        	
              	
                (g)

              	
                “Monthly
                  Consulting Fee”
                  means $12,500, the Consultant's monthly consulting
                  fee in effect on the date of this
                  Agreement.

              

      

    

    
       

      
        	
              	
                (h)

              	
                “Person”
                  means any individual, corporation (including
                  any
                  non-profit corporation), general or limited partnership, limited
                  liability
                  company, joint venture, estate, trust, association, organization,
                  labor
                  union, governmental or quasi-governmental authority of any nature,
                  or
                  other entity.

              

      

    

    
       

      
        	
              	
                (i)

              	
                “Retention
                  Bonus”
                  means the Monthly Consulting Fee multiplied
                  by the
                  number of Employed Months.

              

      

    

    
       

      
        	
              	
                (j)

              	
                “Transaction
                  Date”
                  means the date upon which a Change of Control,
                  Reorganization or Liquidation becomes
                  effective.

              

      

    

    
       

      
        	
              	
                2.

              	
                Payment
                  of Retention Bonus.

              

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
        	
              	
                (a)

              	
                In
                  consideration for the Consultant's efforts with the Company, the
                  Company
                  shall pay to the Consultant a Retention Bonus in the manner and
                  at the
                  times set forth herein.

              

      

    

    
       

      
        	
              	
                (b)

              	
                The
                  payments provided for in this Section 2 shall commence on June
                  1, 2007 and
                  will be paid as follows: (i) Payments equal to 25% of the Monthly
                  Consulting Fee shall be paid at the commencement of each month
                  beginning
                  on the effective date and continuing so long as this agreement
                  is in
                  affect. This amount paid monthly is 25% of the Retention Bonus;
                  (ii) the
                  remaining 75% of the Retention Bonus shall be paid as a lump sum
                  on the
                  earlier of: (A) the occurrence of a Change of Control, or (B) six
                  months
                  from the Effective Date. Any Retention Bonus amount that has accrued
                  before this Agreement has been signed shall be paid at the time
                  of
                  signing. All payments under this agreement are in addition to payments
                  made in accordance with the Consultant's consulting
                  contract.

              

      

    

    
       

      
        	
              	
                (c)

              	
                if
                  the Consultant's consulting contract with the Company is terminated
                  at any
                  time during the Term (as defined in Section 3) (i) by the Company
                  without
                  Cause or (ii) by the Consultant with Good Reason, Consultant will
                  be
                  eligible for and the Company will pay to the Consultant any remaining
                  unpaid portions of the Retention Bonus so that the Consultant will
                  receive
                  an additional payment of an amount equal to (A) the Monthly Consulting
                  Fee
                  multiplied by six minus (B) all prior Retention Bonus payments
                  paid under
                  this agreement to the Consultant The Company shall pay any amount
                  owed to
                  the Consultant pursuant to this Section 2(c) within five business
                  days of
                  any such termination.

              

      

    

    
       

      
        	
              	
                (d)

              	
                If
                  the Consultant's consulting contract with the Company is terminated
                  at any
                  time during the Term by the Company for Cause as a result of the
                  Consultant's Employee's death or disability, Consultant will be
                  eligible
                  for and the Company will pay to the Consultant any remaining unpaid
                  portions of the Retention Bonus so that the Consultant will receive
                  an
                  amount equal to (i) the Monthly Consulting Fee multiplied by the
                  number of
                  Employed Months minus (ii) all prior Retention Bonus payments paid
                  to the
                  Consultant under this agreement. The Company shall pay any amount
                  owed to
                  the Consultant pursuant to this Section 2(d) within five business
                  days of
                  any such termination.

              

      

    

    
       

      
        	
              	
                (e)

              	
                Notwithstanding
                  the foregoing, the Company shall not be required to pay and the
                  Consultant
                  shall not be eligible for a Retention Bonus (except for portions
                  already
                  paid) if the Consultant's consulting contract with the Company
                  is
                  terminated at any time during the Term (i) by the Company for Cause
                  (other
                  than as a result
                  of the Consultant's Employee's death or disability) or (ii) by
                  the
                  Consultant without Good Reason. In the event of any termination
                  pursuant
                  to this Section 2(e), any amount paid to the Consultant prior to
                  such
                  termination may be retained by the
                  Consultant.

              

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                3.

              	
                Term.
                  This Agreement shall become effective as of the Effective Date
                  and shall
                  terminate upon the earlier of the date upon which the Consultant
                  is paid
                  its entire Retention Bonus, including the amount set forth in Section
                  2(b)(ii) above, or the date upon which the Consultant's consulting
                  contract with the Company is terminated (as the case may be, the
                  "Term").

              

      

    

    
       

      
        	
              	
                4.

              	
                Release
                  of Liability. In consideration for the Company's agreement to make the
                  payments provided for herein, the Company's obligation to pay such
                  amounts
                  is expressly conditioned upon Consultant's release of certain claims
                  as to
                  the Company and its Affiliates from any accrued actions, suits,
                  damages,
                  demands and claims related to the period of Consultant's employment
                  and/or
                  the termination of Consultant's consulting contract, except for
                  the
                  following: (a) any claims for fees, wages, commissions, benefits,
                  vacation
                  pay, reimbursement of expenses and any and all other ordinary or
                  accrued
                  amounts owed to the Consultant by the Company and its Affiliates;
                  and (b)
                  any and all claims, causes of action, demands, cross-claims,
                  counterclaims, rights of setoff, indemnity, contribution or subrogation
                  or
                  any other defense or claim which Consultant or Consultant's Employee
                  may
                  hold against the Company and its Affiliates where the Consultant
                  or
                  Consultant's Employee may be required to defend themselves due
                  to
                  litigation against the Consultant or Consultant's
                  Employee.

              

      

    

    
       

      
        	
              	
                5.

              	
                Indemnification.
                  Company shall indemnify, defend, protect, and hold harmless the
                  Consultant
                  and Consultant's Employee from and against alt actions, suits,
                  or
                  proceedings (collectively "Proceedings") and all other claims,
                  demands,
                  losses, damages, liabilities, judgments, awards, penalties, fines,
                  settlements, costs, and expenses (including court costs and reasonable
                  attorneys' fees) arising out of Consultant's and Consultant's Employee's
                  work on behalf of the Company, this Retention Bonus Agreement,
                  or the
                  Consulting Contract. THIS INDEMNITY SHALL APPLY TO MATTERS THAT
                  ARISE OUT OF THE NEGLIGENCE, STRICT LIABILITY OR OTHER GUILT OR
                  RESPONSIBILITY BY SUCH CONSULTANT OR CONSULTANT'S EMPLOYEE; PROVIDED,
                  HOWEVER, THAT THIS INDEMNITY SHALL NOT APPLY TO MATTERS ARISING
                  OUT OF THE
                  GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR BREACH OF THIS AGREEMENT
                  BY SUCH
                  CONSULTANT OR CONSULTANT'S
                  EMPLOYEE.

              

      

    

    
       

      
        
          	
                   

                	
                  6.

                	
                  Role
                    of Consultant.  The Company acknowledges and agrees that the
                    Consultant’s role is and has been to provide advice to the Company’s
                    management based on data provided and approved by the
                    Company.  The Company, its board of directors, and officers
                    remain solely responsible for all business decisions in accordance
                    with
                    the Company’s bylaws and other applicable law.  The Consultant
                    does not accept the legal duties owed by officers and directors
                    to the
                    Company’s shareholders, and the Company has not retained the Consultant
                    to
                    discharge any such duties.

                

        

        

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

    
       

    

    
      
        	
              	
                7.

              	
                Section
                  409A. In the event that the Company determines that any payments
                  to
                  which Consultant becomes entitled under this Agreement in connection
                  with
                  the termination of Consultant's employment constitute deferred
                  compensation subject to Section 409A of the Internal Revenue Code
                  of 1986,
                  as amended, and the regulations promulgated thereunder, the Company
                  promptly shall inform Consultant of such determination, and Consultant
                  may
                  request a delay in the receipt of any payments to be made pursuant
                  to this
                  Agreement. The Company will agree to such delay upon receipt of
                  a written
                  request from Consultant.

              

      

    

    
       

      
        	
              	
                8.

              	
                No
                  Guarantee of Employment. Nothing contained in this Agreement shall be
                  construed as a contract of employment between the Company and the
                  Consultant, or as a right of the Consultant to continue in the
                  employ of
                  the Company, or as a limitation of the right of the Company to
                  terminate
                  the Consultant with or without
                  cause.

              

      

    

    
       

      
        	
              	
                9.

              	
                Successors.

              

      

    

    
       

      
        	
              	
                (a)

              	
                This
                  Agreement shall be binding upon the Company, its successors and
                  assigns,
                  and in the event of a Change of Control of the Company or in the
                  event the
                  Company shall be merged or consolidated or otherwise combined into
                  one or
                  more other corporations or other entities, or substantially all
                  of its
                  assets are sold or otherwise transferred to one or more other corporations
                  or entities, this Agreement shall be binding upon the corporation
                  or
                  entity resulting from such merger or consolidation or to which
                  such assets
                  shall be sold or transferred and shall be assignable by it by way
                  of
                  transfer of assets, merger, consolidation or combination to the
                  same
                  extent as if it were the Company. Except as provided above in this
                  Section
                  8(a), this Agreement shall not be assignable by the Company or
                  its
                  successors and assigns. The Company will require any successor
                  or assign
                  (whether direct or indirect, by purchase, merger, consolidation
                  or
                  otherwise) to all or substantially all of the business and/or assets
                  of
                  the Company, by agreement in form and substance satisfactory to
                  the
                  Consultant, expressly, absolutely and unconditionally to assume
                  and agree
                  to perform this Agreement in the same manner and to the same extent
                  that
                  the Company would be required to perform it if no such succession
                  or
                  assignment had taken
                  place

              

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
        	
              	
                (b)

              	
                This
                  Agreement shall inure to the benefit of and be enforceable by the
                  Consultant's personal or legal representatives, executors, administrators,
                  successors, heirs, distributees, devisees and
                  legatees.

              

      

    

    
       

      
        	
              	
                10.

              	
                Assignment
                  by Consultant. This Agreement shall not be assignable by the
                  Consultant and shall not be subject to attachment, execution, pledge
                  or
                  hypothecation.

              

      

    

    
       

      
        	
              	
                11.

              	
                Notice.
                  For the purpose of this Agreement, notices and all other communications
                  provided for in this Agreement shall be in writing and either delivered
                  in
                  hand or by mail by United States registered or certified mail,
                  return
                  receipt requested, postage prepaid, or by nationally recognized
                  overnight
                  courier, and shall be deemed to have been duly given the sooner
                  of when
                  actually received or three (3) days following deposit (a) in the
                  mail by
                  United States registered or certified mail, return receipt requested,
                  postage prepaid or (b) with a nationally recognized overnight courier,
                  as
                  follows:

              

      

    

    
       

      If
        to the
        Company:

    

    
       

      One
        Legacy Town Center 

      7160
        Dallas Parkway, Suite 380 

      Plano,
        Texas 75024 

      Attn:
        Chief Executive Officer

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Eric
        Hanlon

    

    
      Lifestyles
        Integration, Inc. 

      4208
        Bamford Dr. 

      Austin,
        TX 78731

    

    
       

      or
        to
        such other address as either party may have furnished to the other in writing
        in
        accordance herewith, except that notices of change of address shall be effective
        only upon receipt.

    

    
       

      
        	
              	
                12.

              	
                Modification.
                  No provision of this Agreement may be modified, waived or discharged
                  unless such waiver, modification or discharge is agreed to in writing
                  signed by the Consultant and the Company. No waiver by either party
                  hereto
                  of, or compliance with, any condition or provision of this Agreement
                  to be
                  performed by such party shall be deemed a waiver of any other provisions
                  hereof or of any similar or dissimilar provisions or conditions
                  at the
                  same or any prior or subsequent time. No agreements or representations,
                  oral or otherwise, express or implied, with respect to the subject
                  matter
                  hereof have been made by either party which are not set forth expressly
                  in
                  this Agreement.

              

      

    

    
       

      
        	
              	
                13.

              	
                Validity.
                  The invalidity or unenforceability of any provisions of this Agreement
                  shall not affect the validity or enforceability of any other provisions
                  of
                  this Agreement, which shall remain in full force and
                  effect.

              

      

    

    
       

      
        	
              	
                14.

              	
                Governing
                  Law. This Agreement shall be governed by the laws of the State
                  of Texas without giving effect to the conflicts of law principles
thereof.
                  The parties hereby agree that the United States Bankruptcy Court
shall
                  retain exclusive jurisdiction to determine any disputes under this
Agreement
                  during the pendency of any case filed under Chapter 7 or Chapter
                  11 with the United States Bankruptcy
                  Court).

              

      

    

    
       

    

    
      
        	
              	15. 
                 

              	
                Entire
                  Agreement This Agreement constitutes the entire understanding of the
                  parties, and revokes and supersedes all prior agreements between
                  the
                  parties related to the payment of a Retention Bonus and is intended
                  as a
                  final expression of their agreement. Any consulting agreements,
                  severance
                  agreements or change of control agreements currently in place shall
                  remain
                  in place and shall not be superseded, amended or terminated as
                  a result of
                  this Agreement.

              

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
        date
        first above written.

       

    

    
      
        
          	
                  Lifestyles
                    Integration, Inc.,

                	 	
                  Ignis
                    Petroleum Group, Inc.,

                
	
                  a
                    Texas corporation

                	 	
                  a
                    Nevada corporation

                
	 	 	 	 
	 	 	 	 
	
                   /s/
                    Eric Hanlon

                	 	
                  By:

                	
                   /s/
                    Michael P. Piazza

                
	
                  Eric
                    Hanlon

                	 	 	
                  Name: 
                    Michael P. Piazza

                
	
                  President

                	 	 	
                  Title:  President
                    & CEO

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