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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) MARCH 2, 1998
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BRUNSWICK TECHNOLOGIES, INC.
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(Exact Name of Registrant as Specified in Its Charter)
MAINE
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(State or Other Jurisdiction of Incorporation)
0-22089 01-402052
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(Commission File Number) (IRS Employer Identification No.)
43 BIBBER PARKWAY, BRUNSWICK , MAINE 04011
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(Address of Principal Executive Offices) (Zip Code)
207-729-7792
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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TABLE OF CONTENTS
FORM 8-K
March 2, 1998
ITEM PAGE
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Item 2. Acquisition of Assets pursuant to Agreement by and
among T&N PLC, Tech Textiles International Limited,
Brunswick Technologies Europe Limited and Brunswick
Technologies, Inc. dated as of March 2, 1998 1
Item 7. Financial Statements and Exhibits 1
Signature 3
Exhibits E-1
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 2, 1998, Brunswick Technologies, Inc. (the "Company")
acquired the technical know-how and intellectual property of Tech Textiles
International Limited ("TTI"), and through the Company's wholly owned
subsidiary, Brunswick Technologies Europe Limited ("BTE"), acquired
substantially all of the remainder of the assets of TTI, pursuant to the terms
of an Agreement dated March 2, 1998 among the Company, BTE, TTI and TTI's
parent, T&N PLC (the "Agreement"). The purchase price was three million, six
hundred thousand pounds Sterling ($5,919,480 based on an exchange rate of
1.6443). The Agreement provides for a post-closing adjustment between the
parties to the extent of any variation in working capital of TTI as of March 2,
1998 from 800,000 pounds Sterling (approximately $1,300,000). BTE assumed
substantially all of TTI's contractual obligations, which consist principally of
a real estate lease, personal property leases, ordinary trade debt and ongoing
contracts.
The assets acquired were those used by TTI in the manufacture and
distribution of non-crimp composite reinforcing fabrics for composite materials.
The products produced by TTI have applications in marine, aerospace, automotive
and wind generation products. BTE will continue the existing business based in
Andover, England and plans to expand in its existing and new markets. In
addition, it will manufacture and market products currently produced and later
developed by the Company.
The acquisition was financed with proceeds of the Company's public
offering closed in February 1997. The acquisition was effected pursuant to the
Agreement, and the purchase price and other terms were determined by negotiation
between the Company's management and the management of T&N PLC. The transaction
will be accounted for by the Company as a purchase effective as of March 2,
1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a. Financial statements of businesses acquired.
Financial statements required by this item shall be filed
not later than 60 days after the date that this initial
report on Form 8-K must be filed.
b. Pro forma financial information.
Pro forma financial information required by this item
shall be filed not later than 60 days after the date that
this initial report on Form 8-K must be filed.
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c. Exhibits.
The following exhibit is filed with this report:
EXHIBIT NO. DESCRIPTION
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2 Agreement by and among Brunswick
Technologies, Inc., Brunswick
Technologies Europe Limited, T&N PLC
and Tech Textiles International
Limited, dated as of March 2, 1998.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BRUNSWICK TECHNOLOGIES, INC.
Date: March 13, 1998 By: /S/ ALAN CHESNEY
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Alan Chesney, Treasurer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
Agreement by and among Brunswick Technologies, Inc.,
2 Brunswick Technologies Europe Limited, T&N PLC and Tech
Textiles International Limited, dated as of March 2,
1998.
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Exhibit 2
T&N PLC
- AND -
TECH TEXTILES INTERNATIONAL LIMITED
- AND -
BRUNSWICK TECHNOLOGIES EUROPE LIMITED
-AND -
BRUNSWICK TECHNOLOGIES INC.
AGREEMENT relating to the sale of the business
and assets of Tech Textiles International Limited
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CONTENTS
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CLAUSE HEADING PAGE NO.
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1. Definitions and Interpretation 1
2. Agreement for Sale 8
3. Consideration 10
4. Completion 10
5. The Properties 10
6. Debtors, Creditors and Defective Products 11
7. Determination of the Consideration 12
8. Contracts 13
9. Employees & Pensions 14
10. VAT 16
11. Warranties 18
12. Limitations to the Warranties 19
13. Information 22
14. Guarantee 23
15. Further Assurance and Transitional Assistance 24
16. Announcements 24
17. Costs and Duties Etc. 24
18. Communications 24
19. Successors and Assigns 25
20. Invalidity 25
21. Variation 25
22. Restrictive Trade Practices Act - European and other Notifications 25
23. Entire Agreement and Remedies for Breach 26
24. Waiver 26
25. Counterparts 27
27. Conduct of Matters the Subject of Full Indemnification 27
28. Use of "T&N" Name 28
29. Default Interest 29
30. Restrictive Covenants 29
31. Law and Courts 32
32. Maintenance of Tech Textiles Limited Records 32
33. Payment for Services 32
SCHEDULES
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1. Completion Requirements 34
2. Registered Intellectual Property 36
3. Employees 42
4. Properties 44
5. Accounting Policies 49
6. The Warranties 53
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7. Apportionment of the Consideration 75
8. Pensions 76
9. Leasing Agreements 86
10. Excluded Leasing Agreements 87
11. Excluded Debtors 88
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Date:..............................................................1998
PARTIES:
1. T&N PLC (registered no 163992) whose registered office is at Manchester
International Office Centre, Styal Road, Manchester, M22 5TN ("T&N");
and
2. TECH TEXTILES INTERNATIONAL LIMITED (registered no 490602 whose
registered office is at Bowdon House, Ashburton Road, Trafford Park,
Manchester, M17 1RA ("TTIL");
3. BRUNSWICK TECHNOLOGIES EUROPE LIMITED whose registered office is at
(the "Purchaser"); and
4. BRUNSWICK TECHNOLOGIES INC. whose registered office is at 43 Bibber
Parkway Brunswick Maine 04011 USA ("BTI").
RECITALS
A. T & N is the ultimate holding company of TTIL which carries on the
Business from the Properties as agent of T & N pursuant to the Agency
Agreement.
B. Legal title to the Assets (other than the Leased Assets) is vested in
TTIL. Beneficial ownership of the Assets (other than the Leased Assets)
is vested in T&N.
C. The Vendors have agreed to sell and the Purchaser and BTI have agreed
to purchase the Business as a going concern together with the Assets
upon the terms set out below.
D. BTI has agreed to guarantee the performance of the Purchasers'
obligations contained in this Agreement and any Ancillary Agreements.
AGREEMENT
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement including its recitals and the Schedules each of the
following words and expressions has the meaning ascribed to it, unless
it is inconsistent with the context:
"ACCOUNTING POLICIES" means the accounting policies contained in
Schedule 5.
"AGENCY AGREEMENT" means the agreement dated the 1st November 1993 made
between T&N and TTIL relating to the appointment of TTIL as agent of
T&N in connection with the operating of the Business.
"AGREED FORM" means in relation to any document that document in the
form agreed between and initialled for the purpose of identification by
or on behalf of T&N and the Purchaser.
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"ANCILLARY AGREEMENTS" means the Patent Assignments and the Trade Mark
Assignments.
"ANNOUNCEMENTS" means all announcements to be made by any of the
parties in respect of the subject matter of this Agreement.
"ASSETS" means the property assets and rights of the Business listed
or referred to in clause 2.1 (a) and (b).
"ASSOCIATE COMPANY" means in relation to any company:
(i) any body corporate which controls such company (a "Parent
Company");
(ii) any body corporate which such company controls; and
(iii) any body corporate which a parent company of such company
controls,
and for the purposes of this definition the expression
"controls" shall have the meaning attributed thereto by section
840 of the Income and Corporation Taxes Act 1988.
"BUSINESS" means the business of the manufacture and distribution of
non crimp reinforcing fabrics for composite materials carried on by
TTIL as agent of T&N at the Effective Date.
"BUSINESS DAY" means any day which is not a Saturday, a Sunday or a
bank or public holiday in England and Wales.
"CASH" means the cash-in-hand and at bank (other than Petty Cash) of
the Vendors in connection with the Business at the Effective Date.
"CONSIDERATION" means the sum of (pound)3.6 million as adjusted by the
adjustment provisions of Clause 7.
"COMPLETION" means the completion of the sale and purchase of the
Business and the Assets in accordance with Clause 4 and Schedule 1.
"COMPLETION DATE" means the date on which Completion actually occurs.
"CONTRACTS" means without limitation, all contracts, engagements,
grants, licences or other contractual obligations of any kind entered
into in the ordinary course of business relating to the Business which
remain executory at the Effective Date but excluding contracts with
employees.
"CREDITORS" means all trading debts and accruals owing by either of the
Vendors relating exclusively to the Business at the Effective Date
whether due for payment or not including any prepayment made or
deposits paid to either of the Vendors under the Contracts but
excluding:
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(i) amounts owed (other than in the ordinary course of trading) by
either of the Vendors in connection with the Business to any
other member of the Vendors' Group;
(ii) any loans made by banks or other financial institutions to
either of the Vendors;
(iii) all trade debts in respect of which either of the Vendors had
dispatched to the relevant creditor a cheque by way of payment
and that cheque had not at the Effective Date cleared the bank
account of the Vendor on which it was drawn; and
(iv) any liability of the Vendors in respect of Taxation other than
PAYE, National Insurance and VAT due as at the Effective Date;
"DEBTORS" means all debts (other than the Excluded Debtors) due to and
prepayments made or deposits paid by either of the Vendors in
connection with the Business at the Effective Date including all
cheques received from third parties in respect of such debts which
remained unpresented for clearance as at the Effective Date and
including all securities, guarantees indemnities or other rights
whatsoever of the Vendors in respect of the same.
"DISCLOSURES" means the terms of the Disclosure Letter qualifying the
terms of the Warranties or relating to the Vendors' liability in
respect of any breach of the Warranties.
"DISCLOSURE LETTER" means the letter of even date from the Vendors to
the Purchaser qualifying the Warranties.
"EFFECTIVE DATE" means 00.01 GMT on 2nd March, 1998 on the Completion
Date.
"EMPLOYEES" means the persons employed by the Vendors for the purposes
of the Business at Completion the identities of which are detailed in
Schedule 3 excluding (for the avoidance of doubt) but without
limitation Mr. Jeffrey Vane, Mrs. Christine Vane and Mr. Fred Heaton.
"EXCLUDED ASSETS" means the assets listed in Clause 2.2 which are
excluded from the sale and purchase effected by this Agreement.
"EXCLUDED DEBTORS" means the Debtors which are not included in the sale
and purchase and which are listed in Schedule 11.
"EXCLUDED (LEASING) AGREEMENTS" means the agreements and their
associated assets which are excluded from the transaction and listed in
Schedule 10.
"EXCLUSIVE BOOKS AND RECORDS" means the books and records of the
Vendors relating to the Business:
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(i) all stationery labels stickers advertising materials brochures
catalogues manuals sales literature technical information and
data owned or used by the Vendors in relation to the Business to
the extent that they relate to the Business;
(ii) all lists of stock customers and suppliers computer records and
programs sales records customer and supplier files and records
books of account all sales targets sales statistics market share
statistics marketing surveys and reports and promotional
literature all other books and records relating to the Business;
and
(iii) Personnel files payroll records and medical and other records
relating to the Employees (including the accident book or books)
engineering inspection records test certificates and
specifications relating to any of the Assets, but not the
Retained Books and Records;
"FULLY INDEMNIFIED" means fully indemnified from and against all costs,
claims, demands, expenses, liabilities, losses and proceedings in
respect of the matter or action concerned, and related expressions
shall be construed accordingly.
"GOODWILL" means the goodwill of the Vendors in relation to the
Business, together with the exclusive right for the Purchaser to
represent itself as carrying on the Business in succession to the
Vendors under the name or style of Tech Textiles International, Tech
Textile, or the Tech Textile logo or any variation thereof and all
other names or styles associated with the Business.
"HISTORIC TRADING RIGHTS" means to the extent not forming part of the
benefit of the Contracts the benefit of all rights and claims which the
Vendors had against third parties at the Effective Date relating to
either the Assets or the Business or both including (without
limitation) all manufacturers' and suppliers' warranties and
representations.
"INTELLECTUAL PROPERTY" means all industrial and intellectual property
owned, held, used or enjoyed by the Vendor insofar as the same exist
(wherever located and whether registered or unregistered or incapable
of registration and applications and rights to apply for registration)
and patents, trade marks, service marks, registered designs, design
rights, copyright and all similar property rights in connection with
the Business including, without limitation: all and any inventions,
discoveries, improvements, trade and business names, copyrights of all
descriptions (and rights by whatever name called affording equivalent
or similar protection), computer software, and/or programs and tables
of data, bills of material, calculations, product codings and
designations (and any licences and permissions in respect of any of the
aforesaid) and including (without limitation) those items listed in
Schedule 2 and the full right to the benefit (if any) of any
intellectual property and legal protection relating to the same in
every case of or belonging to the Vendor and used in any way in
connection with the Business.
"LEASED ASSETS" means those Assets which are the subject of the Leasing
Agreements.
"LEASES" means the leases or underleases under any of the Properties
are leased by TTIL as more particularly described in Schedule 4 Part 1.
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"LEASING AGREEMENTS" means those of the Contracts (other than the
Excluded (Leasing) Agreements) relating to the Vendors' leasing or hire
of goods or equipment for use exclusively in the Business as set out in
Schedule 9.
"NET WORKING CAPITAL" means the aggregate of the Debtors, Stock and
Petty Cash less the amount of the Creditors as determined in accordance
with the Accounting Policies.
"NET WORKING CAPITAL ACCOUNT" means the account showing the Net Working
Capital of the Business as at the Effective Date to be prepared in
accordance with Clause 7.
"NON TITLE WARRANTED INTELLECTUAL PROPERTY" means:-
(i) the Vendor's interest in any joint patents held with Snia Fibra
SpA and all rights and registrations derived therefrom if any;
(ii) the United States registration 5442935 patent included within
the Patents;
(iii) the Business' right to use the unregistered trade mark
Acoustech.
"PATENTS" means the patents and patent applications listed in
Schedule 2.
"PATENT ASSIGNMENTS" means the deed(s) of assignment relating to the
Patents in the Agreed Form.
"PENSION SCHEME" means the T&N Retirement Benefits Scheme (1989).
"PETTY CASH" means the cash held for minor disbursements by the
Business at the Effective Date.
"PLANNING ACTS" means the Town and Country Planning Acts for the time
being in force including (without limitation) the Town and Country
Planning Act 1990.
"PLANT" means all items of fixed and moveable plant, machinery,
equipment, furniture, fixtures and fittings, tools and tooling,
computer hardware, fixtures and fittings vehicles and other items used
by the Vendors in the Business at the Effective Date other than the
Leased Assets.
"PROPERTIES" means the properties details of which are set out in Part
I of Schedule 4.
"PURCHASER'S GROUP" means the Purchaser, all subsidiaries and
subsidiary undertakings of the Purchaser from time to time and all
companies of which the Purchaser is from time to time a subsidiary or
subsidiary undertaking.
"PURCHASER'S SOLICITORS" means Davies Wallis Foyster of 5 Castle
Street, Liverpool, L2 4XE.
"REGULATIONS" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981 (as amended).
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"REGULATORY MATTERS" means any permit, licence, authorisation, consent
or other approval obtained or which ought to have been obtained at any
time by the Vendor in relation to the carrying on the Business pursuant
to the provisions of the Environmental Protection Act 1990, the Water
Resources Act 1991, the Water Industry Act 1991, the Water Act 1989,
the Water Resources Act 1963, the Control of Pollution Act 1974, the
Clean Air Acts 1951 and 1961, the Town and Country Planning Act 1990,
the Planning and Compensation Act 1991, the Planning (Hazardous
Substances) Act 1990 and all subordinate legislation under such
legislation together with, insofar as they relate to the subject matter
of the aforementioned legislation and have the force of law enforceable
against an individual or entity, all Treaties, Directives, Bylaws,
Codes of Practice, Circulars, Guidance Notes, Notices and Orders of any
governmental authority or agency or any regulatory or other body in the
jurisdiction of England and Wales.
"RESIDUAL ASSETS" means all other physical assets used in the Business
at the Completion Date and not otherwise excluded from the sale and
purchase effected by this Agreement.
"RESTRICTED AREA" means United Kingdom and the Republic of Ireland.
"RETAINED BOOKS AND RECORDS" means all books and records of the Vendors
which:-
(i) the Vendors are required by law to retain after Completion;
(ii) relate to the assets or liabilities of the Vendors which are not
part of or do not relate to the Business or the Assets;
(iii) relate exclusively to any of the Excluded Assets; and
(iv) comprise the statutory books of either T&N or TTIL;
"STOCK EXCHANGE" means London Stock Exchange Limited.
"STOCK" means the stock in trade, including raw materials, work in
progress, finished goods, and consumable stocks, owned or under the
control of the Vendors at the Effective Date for use in connection with
the Business, including stock provided on a consignment basis to
customers, agents or distributors of the Business but excluding:
(a) the high performance polyethylene and aramid stocks in the
finished goods held by the Business at the Effective Date which
the Vendors are retaining; and
(b) stock or materials provided to the Business on a consignment
basis.
"TAXATION" means all sums due by the Vendors to the Inland Revenue, HM
Customs and Excise and any other taxation authority whether in the
United Kingdom or otherwise whether in respect of income or corporation
tax, pay as you earn, national insurance, VAT or any other form of
taxation in respect of any period before the Effective Date.
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"TECHNICAL KNOW HOW" means manufacturing intangibles and knowledge of
the manufacturing and business process industrial, commercial and
technical information, confidential processes and information, business
and strategic studies, unregistered inventions and techniques,
including data, patterns, drawings, formulations, test and technical
reports, operating and testing procedures, formulae instruction
manuals, tables of operating conditions and procedures, machinery
designs, raw materials or production specifications, design standards,
feasibility studies and the results of research and development work,
relating to the Business.
"TECH TEXTILES LOGO" means the logo used by TTIL in connection with the
Business which is the subject of the Trade Mark Assignments.
"TRADE MARKS" means the registered and unregistered trade marks listed
in Schedule 2 to be assigned to the Purchaser.
"TRADE MARK ASSIGNMENTS" means the assignments relating to the Trade
Marks in the Agreed Form.
"TRANSFER(S)" means the transfer (s) of the Properties in the Agreed
Form.
"VAT" means value added tax or any similar tax from time to time
replacing it or performing a similar fiscal function.
"VENDORS" means T&N and TTIL.
"VENDORS' GROUP" means T&N and all subsidiaries and subsidiary
undertakings of T&N; and
"WARRANTIES" means the warranties set out in Schedule 6.
1.2 Any term or expression to which meaning is ascribed under the
Companies Act 1985 (as amended) shall when used in this Agreement bear
that meaning unless the contrary is indicated.
1.3 Except where the context otherwise requires, words denoting any gender
include all genders. words denoting persons include firms and
corporations and vice versa.
1.4 Unless otherwise stated, a reference to a clause, sub-clause or
Schedule is a reference to a clause or a sub-clause of, or a schedule
to, this Agreement.
1.5 Clause headings are for ease of reference only and do not affect the
construction of or interpretation this Agreement.
1.6 Each of the Schedules and Appendices form part of this Agreement.
1.7 Any obligation assumed, undertaking or indemnity given or
acknowledgement made in this Agreement by more than one person shall be
assumed, given or made jointly and severally.
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1.8 In construction of this Agreement general words introduced by the word
"other" shall not be given a restrictive meaning by reason of the fact
that they are preceded by words indicating a particular class of acts,
matters or things and general words shall not be given a restrictive
meaning by reason of the fact that they are followed by particular
examples intended to be embraced by the general words.
1.9 (i) If any liability of one of TTIL or T&N is or becomes
unenforceable in any respect, that shall not affect or impair
the liabilities of the other under this Agreement.
(ii) T&N hereby undertakes to the Purchaser that it will take all
necessary action to procure that each company in the Vendor's
Group for the time being shall observe and perform the
provisions of this Agreement which fall to be observed and
performed by it.
1.10 All references in this Agreement to statutes or any statutory provision
shall be construed as including references to those provisions as
respectively replaced, amended, modified, consolidated or re-enacted
(whether before or after today's date) from time to time. Provisions of
which they are re-enactments (whether with or without modification) and
any subordinate legislation made under such provisions so far as such
modification or re-enactment applies or is capable of applying to any
transactions entered into prior to Completion and (so far as liability
hereunder may exist or can arise) shall include also any past statutory
provisions or regulations (as from time to time modified or re-enacted)
which such provisions or regulations have directly or indirectly
replaced provided that no liability shall accrue in respect of any such
re-enactment or modification where the effect of the same would be
retrospective and as a result:-
(i) put any party to this Agreement in breach thereof; or
(ii) constitute a breach of the Warranties.
2. AGREEMENT FOR SALE
2.1 Subject to the terms and conditions of this Agreement the Vendors shall
sell and transfer the Business as a going concern to the Purchaser and
BTI and the Vendors shall sell (or as the case may be procure that
there be sold) for the consideration as set out in Clause 3 with full
title guarantee (subject in the case of Stock purchased on retention of
title terms and the Leased Assets to the interests of the owner or any
superior lessor of those assets) to the Purchaser and BTI which shall
purchase with effect from the Effective Date the Business as a going
concern the following assets:
(a) The Purchaser shall acquire:-
(i) the Goodwill;
(ii) the Properties;
(iii) the Plant;
(iv) the benefit (subject to the burden) of the Contracts;
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(v) the Exclusive Books and Records (except so far as
they relate to the Technical Know-How);
(vi) such right, title and interest as the Vendors may
have in the Leased Assets;
(vii) the Residual Assets;
(viii) the Historic Trading Rights (except so far as they
relate to the Technical Know-How) so far as the
Vendors are able to assign the same and subject to
their being fully indemnified should they be required
to take any enforcement action at the Purchaser's
request;
(ix) the Debtors;
(x) the Stock; and
(xi) the Petty Cash.
(b) BTI shall acquire:-
(i) the Technical Know How;
(ii) the Intellectual Property;
(iii) the Exclusive Books and Records so far as they relate
to the Technical Know-How; and
(iv) the Historical Trading Rights so far as they relate
to the Technical Know-How.
In relation to the Non Title Warranted Intellectual Property the
Vendors convey only such title as they may have and no covenant or
warranty relating to the title thereof is given other than that the
Vendors have not themselves charged, encumbered or granted third party
rights.
(c) Immediately on Completion BTI will license to the Purchaser the
Intellectual Property and the Technical Know-How.
2.2 The following shall be expressly excluded from the sale and purchase
of the Business and Assets:-
(a) the benefit and burden of the Agency Agreement;
(b) the Cash;
(c) the benefit of any policy of insurance or arrangement for self
insurance effected by the Vendors prior to Completion;
(d) the right to use the name "T&N" or any variation thereof;
(e) any right to repayment of Taxation in respect of trading prior
to the Effective Date other than PAYE, VAT and National
Insurance;
(f) the Excluded Debtors;
(g) the Excluded (Leasing) Agreements; and
(h) the high performance polyethylene and aramid stocks held in the
finished goods.
2.3 Title to and risk in the Assets and the Business shall pass to the
Purchaser and BTI with effect from the Effective Date. Title to any
item comprised in the Stock which is the subject of any retention of
title shall pass to the Purchaser immediately upon discharge of the
relevant retention of title provision.
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2.4 The Purchaser and BTI shall not be obliged to complete the purchase of
the Business or any of the Assets unless the purchase of the Business
and all of the Assets is completed in accordance with this Agreement.
3. CONSIDERATION
3.1 The total consideration for the Assets and the Business and the
obligations of the Vendors under this Agreement shall, subject to
Clause 7, be Three Million Six Hundred Thousand Pounds sterling
((pound)3.6m) of which a provisional payment of (pound)3.6m shall be
payable in cash upon Completion.
3.2 The Purchaser shall pay for those assets it is acquiring pursuant
to 2.1(a) and BTI shall pay for those assets it is acquiring pursuant
to 2.1(b).
3.3 The total amount payable pursuant to clause 3.1 shall (subject to
clause 10) be exclusive of any VAT and shall be apportioned amongst the
Assets and between the Purchaser and BTI in accordance with Schedule 7.
4. COMPLETION
4.1 Completion shall take place at the registered office of T&N in
accordance with Schedule I immediately following exchange of this
Agreement when all the matters set out therein shall be effected.
4.2 Subject to compliance with this clause, payment of any sums due to the
Vendors on Completion or otherwise under this Agreement shall be
effected by telegraphic transfer to the following account:-
Account Name: T&N plc
Bank: National Westminster Bank plc
Branch: Spring Gardens
Branch Address: 55 King Street, Manchester
Sort Code: 011001
Account Number: 02894866
5. THE PROPERTIES
The terms of Part 2 of Schedule 4 shall apply to the sale and purchase
of the Properties.
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6. DEBTORS, CREDITORS AND DEFECTIVE PRODUCTS
6.1 From Completion the Purchaser shall:-
6.1.1 be entitled to collect the Debtors for its own account and if
requested so to do each of T&N and TTIL shall execute at its own
cost a formal assignment thereof in favour of the Purchaser;
6.1.2 discharge each of the Creditors in accordance with the terms of
the relevant Contract and indemnify the Vendors in respect of
such obligation.
6.2 (a) Both the Vendors and the Purchaser shall for a period of 240
days from date of invoice use all reasonable endeavours to
collect the debt due from each of the Debtors such measures to
include letter before action and the commencement of legal
action or the issue of a statutory demand and subsequent action
thereunder.
(b) At the expiration of the said period and at any time thereafter
the Purchaser shall notify the Vendors that it requires either
or both of them or a nominee thereof to repurchase those debts
which remain unpaid The Purchaser shall formally assign such
debts and arrange the giving of any notices required by any
relevant law.
(c) In the event that the Purchaser or anyone on its behalf
subsequently receives any payment in respect of such repurchased
debt then it shall forthwith as soon as practicable and not
later than 14 days from the date of receipt account to the
Vendors or any nominee for the amount so received.
(d) In the event that following Completion the Vendors or anyone on
their behalf receives payments of any debts due from the Debtors
then they shall forthwith as soon as practicable and not later
than 14 days from the date of receipt account to the Purchaser
for the amount so received.
(e) The Purchaser shall permit a representative of the Vendors to
have access during business hours upon reasonable notice to the
relative part of the books of the Purchaser to review the
performance of the Purchaser of its obligations pursuant to the
foregoing.
6.3 (a) The Purchaser shall as agent for the Vendors use all
reasonable endeavours, but without being required to commence
legal proceedings, to collect the debts of the Excluded Debtors
and shall forthwith as soon as practicable and not later than 14
days from the receipt of payment account to the Vendors for the
amounts so received.
(b) If it becomes apparent that recovery of any of the debts of the
Excluded Debtors is not likely to be possible within a
reasonable period unless legal proceedings are instituted, the
Purchaser will advise the Vendors in writing and furnish the
Vendor with full particulars of the steps taken by the Purchaser
to effect recovery.
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<PAGE> 15
(c) Subject to any valid appropriation by the Excluded Debtor, any
amounts received from any Excluded Debtor shall first be applied
in payment of the debts which are so excluded from the purchase
and sale.
(d) The Purchaser shall for a period of 12 months from the Effective
Date give to the Vendors reasonable access to its books and
records in relation to the collection of the debts of the
Excluded Debtors.
6.4 Subject to clause 6.5 the Purchaser shall perform the obligations of
the Vendors to provide after-sales service or to meet warranty claims
of customers arising in the normal course of the Business as a result
of any goods sold, leased or otherwise disposed of or services provided
by the Vendors prior to the Effective Date.
6.5 The Vendors shall continue to be liable for all claims by third parties
in respect of any service or product supplied by the Vendors and for
all loss, damage or liability arising out of any act or omission of the
Vendors or arising from any defective goods or parts manufactured,
sold, leased or otherwise disposed of or defective or negligent
services provided by the Vendors prior to the Effective Date even if
such defective products or parts are sold by the Purchaser (provided
that nothing shall make the Vendors liable where such act or omission
or defective product or part manufactured was sold, leased or disposed
of in circumstances where prior to sale thereof and/or prior to any raw
material being used in their manufacture they would in the normal
course of business have been subjected to standards of testing and
quality control to which standards the Business was operated prior to
the Effective Date and such testing and quality control would have
revealed the deficiency) and shall keep the Purchaser fully indemnified
accordingly provided always that where a recipient of such goods or
services as are referred to in Clause this 6.5 either:-
6.5.1 requires a refund, repair or replacement of such goods in
accordance with the terms of the contract the Purchaser shall,
effect that refund, repair or replacement promptly in accordance
with the contractual terms. The liability of the Vendors for any
repair or replacement shall be limited to the lower of (i) the
direct labour and material cost of the repair and (ii) the
direct ex-works price of any replacement product; or
6.5.2 requires a remedy other than that referred to in clause 6.5 and
clause 6.5.1, the Purchaser complies with the provisions of
clause 27 in respect of the indemnification by the Vendors.
7. DETERMINATION OF THE CONSIDERATION
7.1 The Purchaser shall, with the assistance and co-operation of the
Vendors, as soon as practicable following Completion and in any event
within 20 Business Days of Completion prepare the Net Working Capital
Account in accordance with the Accounting Policies and the Purchaser
shall deliver to the Vendors a copy of the Net Working Capital Account
and its working papers in respect thereof.
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<PAGE> 16
7.2 The Vendors shall have 20 Business Days to review the Net Working
Capital Account and if they so desire to request that their
representatives have access to the relevant books and records to verify
the Net Working Capital Account.
7.3 If the Net Working Capital Account is not agreed within the period
referred to in 7.2 then the Vendors and the Purchaser shall endeavour
to agree the value of the Net Working Capital (meeting together as
necessary) within the period of 20 Business Days following the Vendors'
review under Clause 7.2 or such other period as they may agree in
writing between them. If the total amount disputed is less than
(pound)10,000 in aggregate then the dispute shall be determined
automatically by settling the total disputed amount so as to equal one
half of the amount which has been in dispute.
7.4 If they fail to agree the value of the Net Working Capital within the
period or periods referred to in 7.3 then either party shall be
entitled to give written notice of objection to the other and require
the dispute to be referred for determination to an independent first
ranking firm of chartered accountants in England and Wales to be
mutually agreed upon or, in the absence of agreement, to be appointed
by the President for the time being of the Institute of Chartered
Accounts for England & Wales. Such independent firm shall receive the
submissions of the Vendors and the Purchaser in such manner as it may
think fit and each party shall supply copies to it and to each other of
its submissions and other relevant documents. Such accountants shall
act as experts and not as arbitrators and their decision shall be final
and binding except in the case of manifest error.
7.5 If the Net Working Capital as agreed or determined in accordance with
the foregoing amounts to less then Eight Hundred Thousand Pounds
sterling ((pound)800,000) then the provisional consideration of
(pound)3.6m shall be reduced pound for pound by the amount of such
shortfall. If the Net Working Capital is greater than the said sum of
Eight Hundred Thousand Pounds sterling ((pound)800,000) then the
provisional consideration shall be increased pound for pound by the
amount of the excess and payment shall be made within 7 days of
agreement under clauses 7.2, 7.3 or determination under clause 7.4 as
the case may be.
7.6 The amount of any payment shall bear default interest as provided
for in clause 29 from the payment day provided for in clause 7.5.
8. CONTRACTS
8.1 Subject to clauses 6.5 and 8.3 from the Effective Date the Purchaser
shall perform and discharge the outstanding obligations and liabilities
of the Vendors under the Contracts (other than any such which arise as
a result of omission or default of the Vendors) and shall fully
indemnify the Vendors accordingly in respect of any losses, damages or
costs which the Vendors may be liable for as a result of anything done
or omitted to be done in respect thereof, which is a contractual
requirement under the respective Contract, by the Purchaser following
the Effective Date.
8.2 The Vendors shall fully indemnify the Purchasers in respect of any
losses, damages or costs which the Purchasers may be liable for as a
result of anything done or omitted to be done in respect thereof by the
Vendors prior to the Effective Date.
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8.3 Insofar as the Assets comprise the benefit of any Contract which cannot
effectively be assigned to the Purchaser except with the consent of a
third party or by an agreement of novation:
8.3.1 the Vendors and the Purchaser shall use all reasonable
endeavours to obtain that consent or to procure such a novation
on terms no less favourable to the hirer for the remainder of
the Contract;
8.3.2 until such time as such Contract is assigned or novated pursuant
to 8.3.1 the Vendors shall hold such Contract upon trust for the
benefit of the Purchaser.
8.3.3 unless and until consent is obtained or that Contract is novated
the Purchaser shall, for its own benefit and to the extent that
the Contract permits, perform on behalf of the Vendors (but at
the Purchaser's expense) all the outstanding obligations of the
Vendors under that Contract and fully indemnify the Vendors
accordingly. The Purchaser shall perform all the obligations of
the Vendors as sub-contractor of the Vendor concerned.
8.4 All sums due pursuant to the Contracts are to be for the sole benefit
of the Purchaser. If the Vendors receive any payment direct which
become or are cleared funds they shall immediately following such
receipt remit that payment in full to the Purchaser.
9. EMPLOYEES & PENSIONS
9.1 The Vendors and the Purchaser intend that the sale and purchase of the
Business and Assets pursuant to this Agreement will constitute a
relevant transfer for the purpose of the Regulations, that such sale
and purchase and/or the provisions of this Agreement will not of
themselves operate so as to terminate any of the contracts of
employment of the Employees and that such contracts shall be
transferred to the Purchaser pursuant to the Regulations with effect
from Completion.
9.2 The Vendors and the Purchaser have agreed the procedure to be followed
by the Vendors in complying with regulation 10 of the Regulations and
the Vendors warrant that they have complied with the provisions of
regulation 10 and the Purchaser undertakes to provide to the Vendors
any information held by the Purchaser required by the Vendors for the
purposes of such compliance.
9.3 Without prejudice to the provisions of clause 9.6 the Vendors confirm
that it has procured the termination of the employment and directors
service contract of Mr. Jeffrey Albert Vane ("Mr. Vane") with effect
from 31st December, 1997. The Vendors shall further procure that the
employment of Mrs. Christine Vane ("Mrs. Vane") shall be reassigned
prior to Completion so that as a result of such re-assignment she shall
not be an employee whose employment is transferred to the Purchaser by
virtue of the Regulations. In the event that Mrs. Vane shall assert
that her contract of employment has been transferred to the Purchaser
by virtue of the Regulations the provisions of Clause 9.6 shall be
applicable in respect of her. The Vendors shall fully indemnify the
Purchaser in respect of all and any liability arising from or connected
with Mr. Vane's employment or its termination and/or Mrs. Vane's
employment or its termination
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<PAGE> 18
and/or Fred Heaton's employment or its termination and/or the
employment of any other person employed on or prior to Completion by
either of the Vendors (except for any of the Employees) or its
termination including (but not limited to) any claim for wrongful
and/or constructive dismissal, unfair dismissal, loss of office,
redundancy or otherwise and any liability for loss of benefit arising
therefrom
9.4 Subject to clause 9.5 the Vendors shall fully indemnify the
Purchaser in respect of:-
9.4.1 the termination of the employment of any of the Employees by
either of the Vendors (or any resignation of any of the
Employees) on or prior to the Effective Date including (without
limitation) redundancy, unfair, wrongful and/or constructive
dismissal, loss of office or otherwise and any liability for
loss of benefit arising therefrom.
9.4.2 any acts or omissions (including, without limitation, any
tortious act (including any act of negligence) and any breach of
contract) of either of the Vendors in relation to any of the
Employees on or prior to the Effective Date; and
9.4.3 any failure to comply with the provisions of regulation 10 of
the Regulations.
9.5 The Purchaser shall not be kept fully indemnified in accordance with
clause 9.4 in respect of a claim if and to the extent that it relates
to
9.5.1 any termination, act or omission as referred to in clause 9.4
which has been effected or carried out or has occurred on the
written instructions of the Purchaser; or.
9.5.2 any change to any pension rights or benefits of any Employee (or
any person who becomes and remains an Employee of the Purchaser
by operation of Clause 9.6) is implemented by the Purchaser
after Completion whether as a result of any action by the
Purchaser or action by the Purchaser following a change in the
law which has a retrospective effect.
9.6 If any transfer of a contract of employment of a person who is not one
of the Employees (including for the avoidance of doubt (but without
limitation) Mr. Vane or Mrs. Vane or Fred Heaton) is deemed to have
been effected between either of the Vendors and the Purchaser as a
result of the provisions of regulation 5 of the Regulations then:-
9.6.1 the Purchaser may within fourteen (14) days of becoming aware of
the application of regulation 5 to any such contract give notice
to terminate such contract; and
9.6.2 the Vendors shall keep the Purchaser fully indemnified in
respect of such termination including (without limitation)
redundancy, unfair, wrongful and/or constructive dismissal, loss
of office or otherwise and any liability for loss of benefit
arising therefrom and against any sums payable to or in respect
of or benefits to be provided to or in respect of such person as
a result of his employment by the Purchaser or by either of the
Vendors at any time up to and including the date of such
termination.
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9.7 The Purchaser shall fully indemnify the Vendors in respect of :-
9.7.1 any change in the working conditions or terms of employment of
the Employees (save in relation to pension) occurring for
whatever reason after the Effective Date including the change in
the identity of their employer occurring after the Effective
Date;
9.7.2 any breach by the Purchaser of any obligation under or in
connection with any contract of employment of any of the
Employees after the Effective Date;
9.7.4 any tortious act including any act of negligence of the
Purchaser in relation to any of the Employees after the
Effective Date;
9.7.5 any act or omission of the Vendors in relation to any of the
Employees which is effected or carried out or has occurred on
the written instructions of the Purchaser prior to the Effective
Date;
and for the purposes of this clause 9.7 only the word "Employee"
shall also include any person whose contract of employment is
transferred from either of the Vendors to the Purchaser as a
result of the provisions of regulation 5 of the Regulations and
whose contract of employment is not then terminated by the
Purchaser by giving notice in accordance with Clause 9.6.1.
9.8 The Vendors and the Purchaser agree with each other that the provisions
of Schedule 8 shall apply to the Pension Scheme.
10. VAT
10.1 It is intended that the Business shall be transferred to the Purchaser
and BTI as a going concern and that the provisions of section 49 of the
VAT Act 1994 and Article 5 of the VAT (Special Provisions) Order 1995
shall apply to such transfer and the sale and purchase of the Assets,
and the Vendors and the Purchaser and BTI shall each use reasonable
endeavours to procure that the sale of the Business is so treated as,
save that neither party shall be required by virtue of this clause 10.1
to make any appeal to any court or tribunal against any determination
of H.M. Custom and Excise that the sale does not fall to be so treated.
10.2 The Vendors and the Purchaser and BTI shall within thirty (30) days of
Completion give notice of such transfer to the appropriate office of
H.M. Commissioners of Customs and Excise in accordance with such
regulations and requirements as may be applicable.
10.3 The Purchaser and BTI undertake to the Vendors that:-
10.3.1 after Completion the Business will be carried on by it as a
going concern and the Assets will be used by it in carrying on
after Completion the same kind of business as that carried on
by the Vendors prior to completion in relation to the Assets;
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10.3.2 the Purchaser will at Completion be a taxable person (as
defined in Section 3 of the VAT Act 1994).
10.4 In the event that H.M. Commissioners of Customs and Excise shall
determine that any VAT is payable on the supply of the Assets (or some
of them) the Purchaser and BTI shall, subject to its receiving a proper
tax invoice to support a claim for recovery of that VAT, which the
Vendors undertake to give, pay to the Vendors an amount equal to that
VAT at least five (5) Business Days prior to the date on which the
Vendors are due to account for the same to H.M. Commissioners of
Customs and Excise (or if later, immediately following the issue of the
tax invoice).
10.5 In the event that VAT becomes chargeable in whole or in part on the
supply of any of the Assets pursuant to this Agreement then should
either the Vendors or the Purchaser and BTI decide to appeal against
such decision any costs of conducting the appeal will be borne by the
party making that appeal and that party will keep the other party fully
indemnified in respect of any action which it requires the other party
to take in connection with that appeal.
10.6 In the event of any failure of the Vendors or the Purchaser, and BTI to
comply with the obligations undertaken and undertakings given by them
respectively in this clause 10, resulting in VAT being charged on the
sale of the Assets (or some of them) and interest and/or penalties
being charged thereon in consequence, such interest and/or penalties
shall be payable by the defaulting party. In all other circumstances
interest and/or penalties shall be borne as to fifty per cent by the
Vendors and fifty per cent by the Purchaser and the Vendors and the
Purchaser shall fully indemnify one another accordingly.
10.7 VAT payable in respect of goods and services supplied or deemed to be
supplied by the Vendors prior to the Effective Date and all interest
payable and penalties attributable to such VAT (unless they relate to
default by the Vendors) shall be paid to HM Commissioners of Customs
and Excise by the Purchaser and any refund in respect of such supplies
shall belong to the Purchaser.
10.8 On Completion the Vendors shall deliver to the Purchaser all records of
the Business for VAT purposes (the "VAT Records") which are required by
section 49(1)(b) of the VAT Act 1994 to be preserved by the Purchaser.
10.9 The Purchaser undertakes to preserve the VAT Records for a period of
six years following Completion and to permit the Vendors to inspect and
obtain copies thereof in accordance with clause 13.2.
10.10 The Vendors warrant that neither they nor any member of the Vendors'
Group at any time has made any election pursuant to provisions of
paragraph 2 Schedule 10 VAT Act in respect of any of the Properties or
any part thereof.
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11. WARRANTIES
11.1 The Vendors jointly and severally warrant, represent and undertake to
the Purchaser and BTI that each of the Warranties set out in Schedule 6
are true and accurate in all respects and not misleading in any respect
and the provisions of Schedule 6 shall have effect accordingly.
11.2 The Vendors acknowledge that the Purchaser and BTI are entering into
this Agreement in reliance on the Warranties made by the Vendors and
that the Vendors have made those representations with the intention of
inducing the Purchaser and BTI to enter into this Agreement and that
accordingly the Purchaser and BTI have been induced to enter into this
Agreement.
11.3 The Vendors hereby agree with the Purchaser and BTI to waive any right
which they may have in respect of any misrepresentation, inaccuracy or
omission in or from any information or advice supplied or given by any
of the Employees in connection with the giving of the Warranties and
the preparation of the Disclosure Letter by the Vendors and agree that
it shall take no action in relation to any such matter.
11.4 Each of the Warranties shall be construed as a separate and independent
warranty and (save where expressly provided to the contrary) shall not
be limited or restricted by reference to or inference from any other
term of this Agreement or any other Warranty.
11.5 The rights and remedies of the Purchaser and BTI in respect of any
breach of Warranty shall continue to subsist notwithstanding
Completion.
11.6 The Warranties shall be qualified by reference to those matters
disclosed but only to the extent fairly and specifically disclosed, in
the Disclosure Letter and not otherwise.
11.7 For the avoidance of doubt, the acquisition by BTI of those of the
Assets it is acquiring under this Agreement (in this clause 11.7 called
"the BTI Assets") shall be subject to the terms of this Agreement.
No claim under the Warranties in respect of the BTI Assets shall be the
subject of any double claim by both the Purchaser and BTI. No warranty
claim in respect of the BTI Assets shall be made otherwise than upon
the basis of the BTI Assets being used (to the extent they are so used)
by the Purchaser within the Business and not further or otherwise.
The limit of liability of the Vendors to the Purchaser and BTI in
respect of any claim under the Warranties in respect of the BTI Assets
shall in no event exceed in aggregate the Consideration (as adjusted).
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12. LIMITATIONS TO THE WARRANTIES
LIMITATION IN TIME
------------------
12.1 The Vendors shall be under no liability in respect of the Warranties
unless the Vendors shall have been given written notice by the
Purchaser prior to the second anniversary of the Completion Date
stating the grounds for such liability contingent or otherwise and
reasonable details of the circumstances giving rise to and the
Purchaser's or BTI's best estimate of the aggregate amount of such
liability.
LIMITATION IN AMOUNTS
---------------------
12.2 The aggregate liability of the Vendors in respect of the Warranties
shall not in any event exceed the Consideration (as adjusted).
12.3 The Vendors shall have no liability in respect of any individual claim
under the Warranties where that claim is for a sum less than
(pound)2,000.
12.4 The Vendors shall not be obliged to make any payment to the Purchaser
or BTI by way of damages for breach of the Warranties unless the total
amount of the liability of the Vendors relative to claims for breach of
Warranty in aggregate exceeds (pound)35,000 in which event the Vendors
shall be liable for the whole amount and not merely the excess over
(pound)35,000.
GENERAL LIMITATIONS
-------------------
12.5 12.5.1 The Vendors shall have no liability in respect of the Warranties
to the extent that any of the following circumstances apply:-
12.5.1.1 where such liability would not have arisen but
for some voluntary act or transaction carried out
by or on behalf of the Purchaser and/or some
voluntary omission of (or on behalf of) the
Purchaser after the Effective Date.
12.5.1.2 where any breach of Warranties occurs as a result
of changes in or enactments of legislation or
taxation occurring after Completion which take
effect retrospectively;
12.5.1.3 where any breach of the Warranties is capable of
remedy unless the Purchaser shall have first
afforded to the Vendors opportunity to remedy
such breach provided that this shall only apply
in circumstances where such breach is capable of
remedy within a reasonable period of time and
where the Business and the Purchaser shall not be
materially prejudiced by allowing the Vendors
such opportunity;
12.5.1.4 where any breach of the Warranties occurs as a
result of any change in the accounting policies
or practices of the Business (including the
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effect of any absorption of the Business into the
Purchaser's other businesses) after Completion;
12.5.1.6 where any breach of the Warranties occurs wholly
or partly as a result of any change in the nature
of the business or manner in which it is
conducted after the Effective Date;
12.5.1.7 to the extent that it would not have arisen or
could have been instigated by any action, or
inaction which it would be reasonable for the
Business to have undertaken upon becoming aware
of such potential claim and the Purchaser
accordingly shall take all reasonable steps to
reduce or mitigate any potential claims under the
Warranties;
12.5.1.8 to the extent that it is proven that the
Purchaser and its professional advisers were
aware at Completion of specific facts or specific
circumstances which can fairly be said to have
shown that a Warranty was untrue;
12.5.1.9 to the extent that the Business shall have the
benefit of any insurance to cover such liability
in which event the liability of the Vendors shall
subject to the other provisions of this clause 12
only be in respect of the amount of which such
claim together with all costs and expenses in
respect thereof exceeds the net insurance
proceeds received.
12.6 Where any claim for breach of the Warranties relates to some liability
of the Business which at the time the breach is notified to the Vendors
is contingent only, the Vendors shall be under no obligation to make
any payment to the Purchaser in respect of the breach until such time
as the contingent liability has become an actual liability.
12.7 Where in relation to any matter, which either is the subject of any
claim against the Vendors in respect of the Warranties or has been the
subject of a payment by the Vendors to the Purchaser for breach of the
Warranties, the Purchaser shall recover any sum from a third party
(including insurers) the Purchaser shall reduce its claim by or as the
case may be repay to the Vendors an amount equal to the lesser of:-
12.7.1 that recovered from the third party after deduction of all
reasonable costs and expenses of recovery; and
12.7.2 the value of the claim or as the case may be the original
payment by the Vendors to the Purchaser for breach of the
Warranties and any such repayment shall be made within five
Business Days after the receipt of monies pursuant to such
recovery.
12.8 If by operation of clause 12.7 the aggregate liability of the Vendors
under the Warranties is reduced below the sum referred to in clause
12.4 then any amounts previously paid by the Vendors under the
Warranties shall be repaid by the Purchaser within fourteen Business
Days after such reduction occurring.
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12.9 If the Purchaser, acting reasonably and in good faith, or the Vendors
acting reasonably and in good faith reach the conclusion that there is
an entitlement to recovery from some person any monies, loss or damage
which is or has been the subject of a claim for breach of the
Warranties:-
12.9.1 The Purchaser shall promptly advise the Vendors of such an
entitlement in any circumstances where the Vendors are not
aware of a possibility;
12.9.2 The Vendors and the Purchaser shall consult as to the most
expeditious and cost effective method of dealing with the
matter;
12.9.3 Upon request by the Vendors, the Purchaser shall use its
reasonable endeavours to enforce such right of recovery
including doing or omitting to do all such things as would or
might in similar circumstances in accordance with the normal
practice of the Business have been done by or on behalf of the
Vendors prior to the Effective Date, but so that the Purchaser
shall not be required to do or omit doing any act where such
act or omission would on a balance of probabilities damage any
trading relationship or goodwill of the Business.
12.9.4 where pursuant to 12.9.3 the Vendor has requested the
Purchaser to take the action envisaged in Clause 12.9.3 and
the Purchaser does so then the Vendors shall fully indemnify
the Purchaser in respect of any costs or damages incurred in
respect of such litigation.
DOUBLE JEOPARDY
---------------
12.10 The Purchaser shall not be entitled to recover damages or obtain
reimbursement or restitution in respect of the Warranties more than
once in respect of any one event constituting a shortfall, damage,
deficiency or breach.
CLAIM AGAINST THE PURCHASER
---------------------------
12.11 In the event of a claim (the "Underlying Claim") being made against the
Purchaser which might give rise to a liability of the Vendors for
breach of any of the Warranties then, without prejudice to the duty of
the Purchaser to mitigate its loss in respect of that breach the
Purchaser shall:-
12.11.1 forthwith notify the Vendors giving reasonable details of the
Underlying Claim;
12.11.2 subject to its being fully indemnified by the Vendors, do or
refrain from doing all such things relative to the Underlying
Claim as the Vendors may reasonably request; and
12.11.3 thereafter keep the Vendors properly informed of all material
developments and the Vendors shall be entitled to see copies
of all relevant correspondence relating to the Underlying
Claim.
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NO SET OFF
----------
12.12 Neither the Vendors nor the Purchaser nor BTI nor any Associate Company
of theirs respectively shall exercise any rights of set-off in relation
to any monies owed between any of the said parties relating to or
arising out of this Agreement.
BEST OF KNOWLEDGE AND BELIEF
----------------------------
12.13 All Warranties which relate to the Vendors' "knowledge, information,
belief or awareness" or any similar expression that statement shall be
deemed to include an additional statement that it has been made after
full and careful enquiry of all appropriate persons within the members
of the Vendors' Group and their professional advisers and experts
having knowledge of the relevant matters but not implying that the
Vendors have made enquiries of third parties (except as herein
expressly provided) or have made any additional searches of public
registers.
APPORTIONMENT OF CLAIM
----------------------
12.14 Any sum paid by the Vendors in satisfaction of a claim under the
Warranties shall serve to reduce the Consideration and in particular
the reduction shall so far as possible be allocated to that Asset to
which the subject matter of the claim most closely relates.
NO WARRANTY IN RELATION TO MATTERS PRIOR TO
-------------------------------------------
12.15 The Warranties shall not apply in respect of any event, fact or
circumstance prior to 29th October, 1993 being the date upon which the
Vendors acquired the Business from the receivers of Tech Textiles
Limited.
13. INFORMATION
13.1 In relation to the Retained Books and Records the Vendors agree that
insofar as any relate to the Business and Assets and are not subject to
obligations of confidentiality to third parties entered into prior to
the date of this Agreement, the latter being identified in the
Disclosure Letter the Vendors shall retain the same for the period
prescribed by law and throughout that period shall allow the Purchaser
to have reasonable access to and to examine and take copies of the same
on any Business Day between 10.00 a.m. and 3.00 p.m. provided that the
Purchaser shall give at least two prior Business Days notice of its
intention to obtain such access, and to make such examination and
copies.
13.2 In relation to the Exclusive Books and Records the Purchaser and BTI
agree that insofar as any Exclusive Books and Records relate to any
liabilities or obligations retained by the Vendors, the Purchaser and
BTI shall retain the same for the period prescribed by law and
throughout that period shall allow the Vendors reasonable access to and
to examine and take copies of the same on any Business Day between
10.00 a.m. and 3.00 p.m. provided that the Vendors shall give at least
two prior Business Days notice of their intention to obtain such
access, and to make such examination and copies. In particular, the
Purchaser and BTI shall ensure that all health and safety related
documentation (included but not limited to), employee records, medical
files, personal sampling records,
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dust sampling data, product or process methodology and manufacturing
procedures and all other documents and records delivered pursuant to
the sale and purchase shall be retained for the maximum period required
by law and in any event until 31st December 2038 and if the Purchaser
and BTI shall not require the same then they shall offer them to the
Vendors and only if the Vendors do not accept them may the Purchaser
and/or BTI take action to dispose of the same.
13.3 In the event that the Vendors shall be in receipt of any claim which
might constitute or give rise to any liability of the Vendors and/or
the Vendors require assistance with regard to the fulfilment of any
obligation (which shall, for the avoidance of doubt, include the
completion of tax returns and/or the preparation of month and year end
accounts by the Vendors) arising out of the carrying on of the Business
prior to the Effective Date, the Purchaser and BTI shall upon receipt
of a written request at the cost of the Vendors (such costs to be
reasonable) provide such staff and services to the Vendors as may be
reasonably necessary to assist the Vendors in dealing with any such
claim and/or obligation.
14. GUARANTEE
14.1 In consideration of the agreement of the Vendors at the specific
request of BTI that the sale and purchase is to the Purchaser, being a
newly constituted company, BTI as a direct, primary and unconditional
liability and obligation hereby guarantees to the Vendors or either of
them the performance, obligations and liabilities of the Purchaser in
this Agreement or arising as a result of any termination of this
Agreement (including without limitation, any interest or other costs
and expenses which the Vendors or either of them incur as a result of
any default of the Purchaser) without the need for any claim or
recourse on the part of the Vendors or either of them against the
Purchaser and shall be unaffected by any time or indulgence granted to
the Purchaser or any act, deed or matter whatsoever of any nature which
would otherwise but for this provision release or limit in any way the
ability of the Vendors or either of them to recover or enforce this
guarantee.
14.2 This guarantee shall not be affected by any legal limitation,
disability or other circumstances relating to the Purchaser or any
irregularity, unenforceability or invalidity of any obligation of the
Purchaser under this Agreement.
14.3 This guarantee shall be a continuing guarantee and shall remain in
force until all liabilities hereby guaranteed have been disclosed and
no intermediate discharge shall affect the continuance thereof and
shall continue in force notwithstanding any change in status or
insolvency of the Purchaser.
14.4 As a separate, additional and continuing obligation, BTI
unconditionally and irrevocably undertakes with the Vendors that,
should any amounts not be recoverable from BTI under this clause by
reason of any other provision of this agreement becoming void,
unenforceable or otherwise invalid, then BTI will, as a sole, original
and independent obligor, make payment of such liabilities or in respect
of the costs and expenses of performing such obligations by way of a
full indemnity.
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15. FURTHER ASSURANCE AND TRANSITIONAL ASSISTANCE
15.1 The Vendors shall co-operate with the Purchaser and BTI to ensure that
the Purchaser and BTI obtain the benefit of the Business and Assets and
shall at the Purchaser's cost and expense execute such other documents
and take such other reasonable steps (or procure other member of the
Vendors' Group so to do) as are appropriate for vesting in the
Purchaser its rights and interests in the Assets.
15.2 T&N hereby undertakes to the Purchaser and BTI that it will take all
necessary action to procure that each company in the Vendors' Group for
the time being shall observe and perform the provisions of this
Agreement which fall to be observed and performed by it or the Vendors.
15.3 For a period of three months following Completion the Vendors will use
all reasonable endeavours to make available to the Purchaser Christine
Vane to facilitate the handover of the Business. The reasonable costs
thereof being for the account of the Purchaser. The provision of
Christine Vane shall not necessarily be on a full time basis.
16. ANNOUNCEMENTS
No Announcements of any kind shall be made except as specifically
agreed between the Vendors and the Purchaser or as required by the
Stock Exchange or any other regulatory body.
17. COSTS AND DUTIES ETC.
17.1 All expenses incurred by or on behalf of any party, including all fees
of agents, solicitors, accountants, and actuaries employed by it in
connection with the negotiation, preparation and execution of this
Agreement shall be solely for its own account.
17.2 All costs in the nature of stamp duty whether payable on this Agreement
or any other agreement or assignment contemplated by this Agreement
shall be payable by the Purchaser.
18. COMMUNICATIONS
18.1 All communications between the parties with respect to this Agreement
shall be delivered by hand or sent by recorded delivery to the address
of the addressee as set out in this Agreement, or to such other address
as the addressee may from time to time have notified for the purpose of
this clause.
18.2 Communications shall be deemed to have been received:
18.2.1 if sent by recorded delivery: 3 Business Days after posting
exclusive of the day of posting;
18.2.2 if delivered by hand: at the time of delivery;
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18.3 Communications addressed to any party shall be marked for the attention
of the Company Secretary of that party.
18.4 In proving service:-
18.4.1 by recorded delivery: it shall be necessary only to prove
that the communication was contained in an envelope which was
duly addressed and posted by recorded delivery;
18.4.2 by delivery by hand: it shall be necessary only to produce a
receipt for the communication signed by or on behalf of the
addressee or an affidavit of the person effecting delivery
attesting to the fact of delivery.
19. SUCCESSORS AND ASSIGNS
This Agreement shall enure for the benefit of each party's successors
but shall not wholly or partly be assignable.
20. INVALIDITY
If any term or provision of this Agreement shall in whole or in part be
held to any extent to be illegal or unenforceable under any enactment
or rule of law, that term or provision or part shall to that extent be
severed from the remainder of this Agreement the enforceability of
which shall not be affected.
21. VARIATION
No variation of this Agreement shall be effective unless made in
writing, expressed to be such a variation and signed by or on behalf of
each of the parties.
22. RESTRICTIVE TRADE PRACTICES ACT - EUROPEAN AND OTHER NOTIFICATIONS
If there are provisions of this Agreement (or of any agreement of which
it forms part) by virtue of which particulars of this Agreement (or of
an agreement of which it forms part) are, at the date of this
Agreement, required to be furnished to the Director General of Fair
Trading under the Restrictive Trade Practices Act 1976 and 1977:-
22.1 the parties shall ensure that those particulars are furnished as soon
as possible and in any event within the time specified by those Acts;
and
22.2 those provisions do not take effect until the day after those
particulars have been furnished.
Following Completion the Vendors and the Purchaser shall meet and
consider what notifications may be necessary to be provided to any
European or other territorial competition authorities.
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23. ENTIRE AGREEMENT AND REMEDIES FOR BREACH
23.1 This Agreement, together with the Disclosure Letter, the documents in
the Agreed Form and all the Ancillary Agreements entered, or to be
entered into, pursuant to the terms of this Agreement (collectively the
"Agreement").
23.1.1 together constitute the entire agreement and understanding
between the parties with respect to the subject matter of
this Agreement; and
23.1.2 (in relation to such subject matter) supersede all prior
discussions, understandings and agreements between the
parties and their agents (or any of them) and all prior
representations and expressions of opinion by any party (or
its agent) to any other party (or its agent)
and there shall be expressly excluded (insofar as it can be in law) the
application of any implied terms, conditions or warranties under the
Sale of Goods Act 1979 (as amended) and the Supply of Goods and
Services Act 1982 or otherwise.
23.2 Any remedy conferred on the Purchaser or BTI by this Agreement for
breach of this Agreement for breach thereof shall be in addition and
without prejudice to all other rights and remedies available to it
provided always that:-
23.2.1 the Purchaser and BTI warrant and acknowledge to the Vendors
that they have not been induced to enter into this Agreement
by any representation other than as contained in this
Agreement, the Warranties (as qualified by the Disclosures)
and the Vendors' replies to the Purchaser's pre-contract
enquiries in respect of the Properties as attached to the
Disclosure Letter;
23.2.2 for the avoidance of doubt, the Purchaser and BTI acknowledge
that in the absence of fraud on the part of either of the
Vendors, the Purchaser and BTI shall not in any event be
entitled to rescind this Agreement following Completion.
23.3 The Vendors warrant and acknowledge to the Purchaser and BTI in the
terms of clauses 23.2.1 and 23.2.2 mutatis mutandis.
24. WAIVER
24.1 Any failure to exercise or any delay in exercising any right afforded
to a party in respect of any breach of this Agreement shall not
constitute a waiver of that right, which waiver shall only be capable
of being given in writing by a duly authorised officer.
24.2 Any waiver of a breach or default under any of the terms of this
Agreement shall not constitute a waiver of any subsequent breach or
default.
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25. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and which together shall
constitute one and the same Agreement. Unless otherwise provided in
this Agreement, this Agreement shall become effective and be dated (and
each counterpart shall be dated) on the date on which this Agreement
(or a counterpart of this Agreement) is signed by the last of the
parties to execute this Agreement or, as the case may be, a counterpart
thereof.
26. POST COMPLETION EFFECT
This Agreement shall remain in full force and effect after and
notwithstanding Completion in respect of all obligations, agreements,
covenants, undertakings or conditions contained in this Agreement which
have not been done, observed or performed at or prior to Completion and
the parties may take action for any breach or non-fulfilment of any of
them either before or after Completion.
27. CONDUCT OF MATTERS THE SUBJECT OF FULL INDEMNIFICATION
27.1 For the purposes of this Clause 27 the party providing full
indemnification under the terms of this Agreement shall be referred to
as the "indemnifying party" and the party benefiting from that full
indemnification shall be referred to as the "indemnified party".
27.2 If either the indemnified party or the indemnifying party becomes aware
of any claim or action of a third party in respect of which either may
have recourse against the other under this Agreement (a "third party
claim") it shall as soon as reasonably practicable inform the other in
writing and in reasonable detail of that third party claim.
27.3 The indemnified party shall take or shall procure that, the relevant
member of its group shall take such action as the indemnifying party
may reasonably require in relation to that third party claim including
doing or omitting to do all such things as would or might in similar
circumstances and in accordance with the normal practice of the
business affected by the subject matter of that third party claim have
been done by the indemnifying party but not so that the indemnified
party shall be required to do or omit from doing any act or to procure
that the relevant member of its group does or omits from doing any act
where such act or omission would on the balance of probabilities damage
any trading relationship or goodwill of the business concerned to a
disproportionate extent having regard to the magnitude of that third
party claim.
27.4 The indemnifying party shall keep the indemnified party fully
indemnified in respect of its doing or omitting to do anything required
by the indemnifying party pursuant to Clause 27.3.
27.5 The indemnified party will keep the indemnifying party informed as to
the action being taken in connection with any third party claim.
27.6 If the indemnified party or any member of its group is or becomes
entitled to recover from some person any monies, loss or damage in
relation to the matter giving rise to a
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third party claim (whether or not the indemnified party has already
been indemnified in relation to that claim by the indemnifying party)
the indemnified party shall use or procure that any relevant member of
its group shall use all its reasonable endeavours to enforce such right
of recovery including doing or omitting to do all such things as would
or might in similar circumstances in accordance with the normal
practice of the business affected by that third party claim have been
done by or on behalf of the indemnifying- party but so that the
indemnified party shall (other than in the case of action involving
insurers) be required to do or omit from doing any act or to procure
that the relevant member of its group does or omits from doing any act
where such act or omission would on a balance of probabilities damage
any trading relationship or goodwill of the business concerned to a
disproportionate extent having regard to the magnitude of that third
party claim.
27.7 Neither the indemnified party nor any member of its group shall settle
or discharge any third party claim without the prior written consent of
the indemnifying party unless settlement or discharge of that third
party claim is necessary on the balance of probabilities to avoid
damage to any trading relationship or goodwill of the business
concerned to a disproportionate extent having regard to the magnitude
of that third party claim.
27.8 In the event that recovery is made by the indemnified party or a member
of its group in relation to a matter giving rise to a claim for which
the indemnified party or a member of its group has already been
indemnified by the indemnifying party the indemnified party shall
procure payment to the indemnifying party of an amount equal to the
lesser of.-
27.8.1 the amount recovered referable to the third party claim after
deduction of all reasonable expenses of recovery (to the
extent not recovered from the third party and for which
recovery has not yet been made from the indemnifying party
under this Clause 27); and
27.8.2 the amount paid by the indemnifying party in or towards
discharge or settlement of that third party claim
within two working days of the indemnified party effecting such
recovery.
27.9 Any sums paid by the Vendors in order to fully indemnify the Purchaser
under the terms of this Agreement shall serve to reduce the
Consideration and in particular the reduction shall so far as possible
be allocated to that Asset to which the subject matter of the indemnity
most closely relates.
28. USE OF "T&N" NAME
28.1 Any Stock, packaging, promotional materials or other items delivered to
the Purchaser pursuant to this Agreement which bear any name or mark
retained by the Vendors or belonging to any other member of the
Vendors' Group may be traded out by the Purchaser for a maximum period
of six (6) months following Completion.
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28.2 In no circumstances shall the Purchaser be entitled to use after
Completion any letterhead or note paper of T&N or any other stationery
referring to T&N, its registered office, its registered number or its
connection with T&N.
28.3 TTIL shall as soon as possible but in any event within 28 days of the
Completion Date change its name and the Vendors shall procure that if
there is any ambiguity or duplication of any other company in the
Vendors' Group it shall change its name, in each case to a name which
is acceptable to the Purchaser which does not include the words "Tech
Textiles International" or any similar words and does not suggest any
connection with the Business or any business concerned with the
Business and shall not (and T&N shall procure that no other member of
the Group shall) at any time after today's date trade under any such
name or any name which suggests such a connection with such business.
28.4 The Vendors shall procure that immediately following Completion the
name "Tech Textiles International" and all references thereto shall be
removed from all business stationery and all catalogues price lists
brochures and other promotional documents of the Vendors provided that
the Vendors shall be entitled to use up existing stocks of promotional
materials (for example the T&N Composite and Camshafts Group brochures)
for a maximum period of six (6) months following Completion and,
subject to the foregoing, the Vendors agree that the Vendors will not
use any name or names identical or similar to "Tech Textiles
International" or any colourable imitation thereof in connection with
any activity whatsoever.
29. DEFAULT INTEREST
In the event that any payment provided for in this Agreement is not
made on its due date, that payment shall attract interest at the rate
of 3% per annum above the bank lending rate of National Westminster
Bank plc from and including that due date to but excluding the date of
actual payment (before as well as after any judgement).
30. RESTRICTIVE COVENANTS
30.1 For the purpose of assuring the Purchaser and BTI the full benefit of
the Business and the Goodwill the Vendors jointly and severally agree
with the Purchaser and BTI that they will not (and will procure that no
company in the Vendors' Group nor any company over which either of the
Vendors or any such company has direct or indirect or de facto control
will), whether as principal, agent, partner, investor or otherwise,
directly or indirectly:-
30.1.1 (at any time after the date hereof) disclose or communicate
to any person or use for any purpose whatsoever (and shall
use its best endeavours to prevent the publication or
disclosure of) any Confidential Information relating to the
Business or any Confidential Information relating to any
person who had dealings with either of the Vendors in
relation to the Business prior to Completion;
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30.1.2 for a period of two years after the Completion Date, solicit,
contact, canvass, or approach, or endeavour to solicit,
contact, canvass or approach on behalf of a Competing
Business any person who, to either of the Vendors'
knowledge:-
30.1.2.1 was provided with goods or services by either of
the Vendors in relation to the Business at any
time during the two years up to and including the
Completion Date; or
30.1.2.2 was negotiating with either of the Vendors in
relation to the Business for the supply of goods
or services at any time during the one year up to
and including the Completion Date,
in either case for the purpose of offering to that person
Restricted Goods or Services;
30.1.3 for a period of two years after the Completion Date, supply
on behalf of a Competing Business Restricted Goods or
Services to any person who, to either of the Vendors'
knowledge, was provided with goods or services by either of
the Vendors in relation to the Business at any time during
the two years up to and including the Completion Date;
30.1.4 for a period of two years after the Completion Date, carry on
or be engaged or interested in a Competing Business SAVE THAT
each of the Vendors may hold for investment purposes up to
three per cent of any class of securities dealt in or traded
on any market of London Stock Exchange Limited or any other
recognised stock exchange;
30.1.5 for a period of two years after the Completion Date, solicit
or entice away or endeavour to solicit or entice away from
the Purchaser on behalf of a Competing Business any of the
Employees employed in an executive, technical or sales
capacity at the Completion Date (whether or not any such
person would commit any breach of his contract of employment
by reason of his leaving the service of the Purchaser) with a
view to inducing that person to leave his employment and to
act for another employer in the same or a similar capacity in
relation to the same field of work; or
30.1.6 do or say anything which is harmful to the goodwill or
reputation of the Business and/or the Purchaser and/or BTI or
which may lead any person to terminate any contract with the
Business and/or the Purchaser or not continue such contracts
on substantially equivalent terms to those previously
applicable.
with the intent that each of the foregoing shall constitute an entirely
separate and independent restriction on each of the Vendors.
30.2 For the purpose of Clause 30:-
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30.2.1 "Competing Business" means any business in the Restricted
Area which competes with the Business or any part of the
Business as it is carried on at Completion; and
30.2.2 "Restricted Goods or Services" means goods or services of the
same type as or similar to any goods or services supplied by
the Business as at Completion.
30.2.3 "Confidential Information" means such intellectual property,
industrial property, trade secrets, confidential operations
systems, processes, business methods or dealings and
information concerning the organisation, business, finances
and affairs of the Business or its customers clients or
suppliers as are not within the public domain.
30.3 Nothing in this clause 30 shall prevent or restrict the Vendors or
any member of the Vendors' Group from:-
30.3.1 carrying on the business of the manufacture, sale and
distribution of woven and non woven textile composite
reinforcement fabrics as now carried on by TA Industrial
Products Limited or other TBA related companies but excluding
knitted multi-axial composite reinforcement fabrics;
30.3.2 carrying on the business of the manufacture, sale and
distribution of composite textile reinforced products as now
carried on by Bentley-Harris Limited or other Bentley-Harris
related companies;
30.3.3 the manufacture, sale or distribution by Bentley-Harris
Limited or other Bentley-Harris related companies of
multi-axial fabrics in their sleeving products or the use of
multi-axial fabrics in the reinforcement of composite parts
which it or they manufacture;
30.3.4 the development, manufacture or sale by Bentley-Harris
Limited or other Bentley-Harris related companies of sleeving
products which are manufactured from non-woven or needle-felt
materials or processes;
30.3.5 the manufacture, sale or distribution of zero degree
unidirectional composite reinforcements in any material; and
30.3.6 the sale of the high performance polyethylene and aramid
stocks within finished stocks which are excluded from the
sale of the stocks hereunder.
30.4 Each of the restrictions contained in each paragraph of Clause 30 is a
separate and distinct restriction and is to be construed separately
from the other restrictions. The Vendors hereby acknowledge that such
restrictions are reasonable when taken together as well as
individually, that the duration, extent and application of each
restriction are no greater than is necessary for the protection of the
goodwill of the Business and that the purchase price paid by the
Purchaser for the Business and Assets takes into account and provides
adequate compensation for the restraints and restrictions imposed by
Clause 30. If any restriction (including the defined expressions in
Clause 30.2) is found to be void or
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unenforceable without the deletion of some part of it that restriction
shall apply with such deletion as may be necessary to make it valid.
31. LAW AND COURTS
This Agreement shall be construed and interpreted in accordance with
the law of England and the parties submit to the exclusive jurisdiction
of the English courts.
32. MAINTENANCE OF TECH TEXTILES LIMITED RECORDS
The Purchaser shall store, preserve and provide access to the Excluded
Records as defined in clause 13 of the agreement between Tech Textiles
Limited, T&N plc and receivers of Tech Textiles Limited dated 29th
October, 1993.
33. PAYMENT FOR SERVICES
The Purchaser shall as and from the Effective Date pay T&N plc or any
member of the Vendor's Group the costs incurred in respect of any
services provided by them to the Business following the Effective Date.
AS WITNESS the hands of the parties to this Agreement or their duly authorised
representative on the date written on page one of this Agreement.
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SIGNED by
for and on behalf of
T&N plc
in the presence of.
/s/ /s/ Philip Allery
Secretary Solicitor
T & N Legal Dept. T & N plc Legal Department
SIGNED by
for and on behalf of
Tech Textiles International Limited
in the presence of.
/s/ /s/ Peter Chadwick
SIGNED by
for and on behalf of
Brunswick Technologies Europe Limited
in the presence of.
/s/ WM Dubay /s/ Martin S. Grimnes
SIGNED by
for and on behalf of
Brunswick Technologies Inc.
in the presence of.-
/s/ WM Dubay /s/ Martin S. Grimnes
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LIST OF SCHEDULES
-----------------
1. Completion Requirements
2. Registered Intellectual Property
3. Employees
4. Properties
5. Accounting Policies
6. The Warranties
7. Apportionment of the Consideration
8. Pensions
9. Leasing Agreements
10. Excluded Leasing Agreements
11. Excluded Debtors
Pursuant to Regulation S-K, copies of the schedules will be provided to the
Commission upon request.
