<PAGE>
EXHIBIT 2.4
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WPI Group (UK)
and
WPI Group Inc.
and
Dynatech Nominees Limited
AGREEMENT FOR THE SALE AND PURCHASE
OF SHARES IN
WPI HUSKY TECHNOLOGY LTD AND WPI
HUSKY TECHNOLOGY GMBH
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1 Sale and Purchase of Shares.......................................... 2
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2 Completion........................................................... 3
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3 Completion Accounts.................................................. 6
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4 Warranties........................................................... 12
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5 Action Pending Completion............................................ 13
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6 Purchaser's Rights................................................... 16
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7 Limitations on the Vendor's Liability................................ 17
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8 Use of Intellectual Property Rights.................................. 20
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9 Vendor's Undertakings and Guarantee.................................. 20
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10 Confidential Information............................................. 25
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11 Announcements........................................................ 25
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12 Competition.......................................................... 25
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13 Costs................................................................ 26
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14 Interest............................................................. 26
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15 General.............................................................. 26
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16 Assignment........................................................... 27
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17 Time of the Essence.................................................. 27
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18 Further Assurance.................................................... 27
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19 Interpretation....................................................... 27
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20 Notices.............................................................. 33
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21 Governing Law and Jurisdiction....................................... 34
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22 Counterparts......................................................... 35
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</TABLE>
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SCHEDULE 1................................................................ 36
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SCHEDULE 2................................................................ 37
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SCHEDULE 3................................................................ 39
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SCHEDULE 4................................................................ 42
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SCHEDULE 5................................................................ 73
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SCHEDULE 6................................................................ 74
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SCHEDULE 7................................................................ 79
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SCHEDULE 8................................................................ 80
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SALE AND PURCHASE AGREEMENT
THIS AGREEMENT is made on 23 February, 2000.
BETWEEN:
(1) WPI Group (UK), a private unlimited liability company incorporated in
England and Wales (the "Vendor");
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(2) WPI Group Inc., a publicly listed company on the NASDAQ stock exchange
incorporated in New Hampshire (the "Guarantor"); and
---------
(3) Dynatech Nominees Limited (Company number 3925088), a limited liability
company incorporated in England and Wales (the "Purchaser").
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RECITALS
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A. WPI Husky Technology Inc., a Florida corporation (the "US Vendor") owns
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certain assets and businesses located within the US.
B. The Vendor owns all of the issued share capital (the "WPI Husky Shares")
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of WPI Husky Technology Ltd ("WPI Husky"), a limited liability company
---------
incorporated in England and Wales.
C. WPI Oyster Termiflex Ltd, a limited liability company incorporated in
England and Wales (the "UK Vendor"), owns certain assets and businesses
---------
located in the UK.
D. The Vendor owns all of the issued share capital (the "WPI GmbH Shares") of
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WPI Husky Technology GmbH, a limited liability company incorporated in
Germany and registered at the Commercial Register of the Siegburg Local
Court under file number HRB 3396, formerly Cologne Local Court, HRB 20139.
E. The Vendor wishes to sell, and the Purchaser wishes to purchase, the Shares
(as hereinafter defined) on and subject to the terms of this Agreement.
F. The US Vendor wishes to sell, and Itronix Corporation, a Delaware
corporation (the "US Purchaser") wishes to purchase, certain assets and
------------
businesses on and subject to the terms of the Asset Purchase Agreement.
G. The UK Vendor wishes to sell, and Dynatech Corporation Limited (the "UK
--
Purchaser") wishes to purchase, certain assets and businesses on and
---------
subject to the terms of the UK Asset Purchase Agreement.
NOW THEREFORE, THE PARTIES AGREE as follows:
<PAGE>
1 Sale and Purchase of Shares
---------------------------
1.1 Subject to the terms and conditions hereof, the Vendor agrees to sell, with
full title guarantee, and the Purchaser agrees to buy, the Shares and each right
attaching to the Shares at or after the date of this Agreement, free from any
Encumbrances, and the US Vendor will sell, and the US Purchaser will buy, the US
Assets pursuant to the Asset Purchase Agreement and the UK Vendor will sell, and
the UK Purchaser will buy, the UK Assets pursuant to the UK Asset Purchase
Agreement, for a purchase price of US$34,612,800 payable in US dollars as set
forth in Clause 2.2 (the "Purchase Price") and subject to an adjustment as
--------------
provided in Clause 3.
1.2 (a) The Purchase Price (including the Escrow Amount) shall be apportioned
between the Shares, the US Assets and the UK Assets in accordance with the
allocation set forth on Schedule 7. The Purchase Price adjustment determined
pursuant to Clauses 3.3(a) and 3.3(b) shall be apportioned between the Shares,
the US Assets and the UK Assets in accordance with an allocation schedule to be
prepared by the Purchaser, and provided to the Vendor, as soon as practicable
after the Completion Date or, if later, after the resolution of any dispute with
respect to the purchase price adjustment. The allocation of the purchase price
adjustment shall be prepared in a manner that is reasonably consistent with
Schedule 7.
(b) The portion of the Purchase Price that is apportioned to (i) the US
-
Assets pursuant to Clause 1.2(a) (after giving effect to the Purchase Price
adjustment), the Assumed Liabilities, (as such term is defined in the Asset
Purchase Agreement), and all other relevant items shall be allocated among the
US Assets and (ii) the UK Assets pursuant to Clause 1.2(a) (after giving effect
--
to the Purchase Price Adjustment), the UK Assumed Liabilities and all other
relevant items shall be allocated among the UK Assets, in each case in
accordance with an allocation schedule to be prepared by the US Purchaser and
the UK Purchaser, and provided to the US Vendor and UK Vendor, as soon as
practicable after the Completion Date or, if later, after the resolution of any
dispute with respect to the purchase price adjustment. Such allocation schedule
shall be prepared by the US Purchaser in a manner that is reasonably consistent
with the requirements of applicable law including, in the case of allocation
discussed in Clause (i), Section 1060 of the Code.
(c) The Purchaser, the US Purchaser and the UK Purchaser shall consult with
the Vendor, the US Vendor and the UK Vendor in preparing the final allocation
schedules pursuant to Clauses 1.2(a) and 1.2(b), provided that absent manifest
--------
error, the Purchaser's, the US Purchaser's and the UK Purchaser's final
determinations of such allocation schedules shall be binding on the parties. The
US Purchaser and the US Vendor shall each report the purchase and sale
contemplated hereby for all purposes (including the filing of IRS Form 8594) in
a manner consistent with such final allocation schedules. Neither the Purchaser,
the US Purchaser, the UK Purchaser, the Vendor, the
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<PAGE>
US Vendor nor the UK Vendor shall contend or represent that any allocation set
forth in such final allocation schedules is not a correct allocation, in any
financial statement or tax return, or any audit or other proceeding with respect
to Taxes without the express written consent of the others.
2 Completion
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2.1 Subject to the prior satisfaction of the conditions set out in Clause 2.4
below, Completion shall take place at the offices of the Purchaser's Solicitors
on February 22, 2000 or at such other Business Day and time as the parties shall
have agreed to in writing (subject always to the due satisfaction, or if
applicable, waiver of all the conditions specified (or deemed to be specified)
in Clause 2.4). The date on which Completion shall occur is hereinafter
referred to as the "Completion Date".
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2.2 At Completion the Vendor and the Purchaser shall do all those things
respectively required of them in Schedule 3 and the Purchaser shall pay, for its
own account, and for the account of the US Purchaser and the UK Purchaser, the
Purchase Price less the Escrow Amount to the Vendor, the US Vendor and the UK
Vendor, as provided in Schedule 7 by transfer of funds for same day value,
US$31,643,824 to be paid to the following account: Fleet Bank NH ABA Number 011-
400-495 Account Number 1510352-03133, Agency Services Wire Clearing Account,
Attention: Heather Cunningham, Reference: WPI Group Inc, US$218,496.09 to be
paid to the ANG Noteholders, to the account of Sheehan Phinney Bass & Green
Trust Account, Citizens Bank, 875 Elm Street, Manchester, NH 03101, Account
330004-911-5, ABA:0115-0012-0, US$180,000 to be paid to the Vendor's solicitors
to the account of Royal Bank of Scotland PLC, St. Anne Street, Manchester,
Account No: 11943297, Sort Code: 16-00-2, Cobbetts Client Account and
US$839,839.91 to be paid to the account of WPI Group Inc. to the account of
Fleet Bank NH ABA Number 011-400-495, Account 9358942298.
2.3 Payment of the Purchase Price in accordance with Clause 2.2 shall be a good
discharge to the Purchaser, the US Purchaser and the UK Purchaser.
2.4 The Purchaser is not obliged to complete this Agreement unless the
following conditions are satisfied:
(a) the purchase of all the Shares is completed simultaneously;
(b) the Asset Purchase Agreement is entered into between the US Vendor and
the US Purchaser prior to or on Completion;
(c) the UK Asset Purchase Agreement is entered into between the UK Vendor
and the UK Purchaser prior to or on Completion;
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(d) completion by the Purchaser to its satisfaction of financial, tax,
legal, technical, operational and human resources due diligence without adverse
findings, provided that if the Purchaser has not advised the Vendor in writing
on or before February 22, 2000 that the results of such due diligence exercise
are not to its satisfaction and that this condition has therefore not been
satisfied, the condition in this Clause 2.4(c) shall be deemed to have been
satisfied;
(e) delivery by Fleet Bank of a duly executed release relating to the
Credit Facility provided to WPI Group Inc. (including a release of any charges
on the Shares of any Group Company to permit the sale of Shares), in form and
substance satisfactory to the Purchaser in its sole discretion;
(f) delivery of a duly executed consent and release from each of the ANG
Noteholders in form and substance satisfactory to the Purchaser;
(g) delivery of a duly executed US legal opinion from the US Vendor's and
Guarantor's US legal counsel in form and substance satisfactory to the
Purchaser;
(h) delivery of a duly executed UK legal opinion from the Vendor's
solicitors in form and substance satisfactory to the Purchaser;
(i) written confirmation from the Vendor that all inter-company
indebtedness shall be discharged by the Vendor at or prior to Completion in
accordance with Clause 3.6.
(j) delivery of a duly executed consent, waiver or discharge, as the case
may be, and evidence of any payments thereof, each in form and substance
satisfactory to the Purchaser in respect of any other loan capital, borrowing or
indebtedness and like obligations of any Group Company or any other party
(including without limitation the guarantees and obligations to be discharged at
the Completion Date in the Disclosure Letter);
(k) delivery by the Vendor to the Purchaser of the Disclosure Letter, in
form and substance satisfactory to the Purchaser by no later than February 22,
2000;
(l) delivery by the Vendor of all those items specified in Clause 1.1 of
Schedule 3;
(m) receipt of all required regulatory approvals, in form and substance
satisfactory to the Purchaser;
(n) receipt of any required consents in relation to any Intellectual
Property Rights which are not legally and beneficially owned by the Vendor or
any Group Company on Completion;
4
<PAGE>
(o) compliance by the Vendor with all of its obligations under this
Agreement;
(p) delivery of duly executed resolutions of the Vendor and the Guarantor
approving the sale and purchase of the Shares in a form and substance
satisfactory to the Purchaser;
(q) delivery by the Vendor of a Deed of Change of Principal Employer duly
and validly executed in relation to The Plan, whereby WPI Husky is substituted
as Principal Employer of The Plan; and
(r) delivery by the Vendor of a Deed of Change of Principal Employer duly
and validly executed in relation to The Husky Plan, whereby WPI Husky ceases to
be the Principal Employer of The Husky Plan.
2.5 If Completion does not take place on the Completion Date because the Vendor
fails to comply with any of its obligations under this Clause 2, the Purchaser
may by notice to the Vendor:
(a) proceed to Completion to the extent reasonably practicable including
without limitation by purchasing some, but not all of the Shares (but if the
Purchaser exercises its right pursuant to this Clause 2.5, completion of the
purchase of some of the Shares does not affect the Purchaser's rights in
connection with the others);
(b) postpone Completion to a date to be no later than 29 February.
(c) terminate this Agreement.
2.6 If the Purchaser postpones Completion to another date in accordance with
Clause 2.6(b), the provisions of this Agreement shall apply as if that other
date is the date for Completion.
2.7 The Warranties and all other provisions of this Agreement, the Asset
Purchase Agreement and the Tax Deed insofar as the same shall not have been
performed at Completion shall not be extinguished or affected by Completion, or
by any other event or matter whatsoever (including, without limitation, any
satisfaction and/or waiver of any condition contained in Clause 2.4, except by a
specific and duly authorised written waiver or release by the Purchaser).
2.8 If the Purchaser terminates this Agreement pursuant to Clause 2.5(c), each
party's further rights and obligations cease immediately on termination, but
termination does not affect a party's accrued rights and obligations at the date
of termination.
2.9 If prior to Completion the Purchaser receives a notification from the
Vendor pursuant to Clause 4.6 that any of the Warranties has, when given, or
will be or would be,
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<PAGE>
at Completion (as if they had been given again at Completion) not complied with
or otherwise untrue or misleading the Purchaser shall be entitled (in addition
to and without prejudice to all other rights or remedies available to it and its
successors in title including the right to claim damages) by notice in writing
to the Vendor to terminate the Agreement. If, notwithstanding such notification
pursuant to Clause 4.6, the Purchaser elects to complete this Agreement, the
occurrence of such an event, the subject of the notification, shall not give
rise to any right to damages or compensation for breach of Warranty. If any
event shall occur (other than an event constituting or giving rise to a breach
of any of the Warranties) which affects or is likely to affect adversely to a
material degree the financial position or turnover or profitability of any of
the Group Companies as a whole or any of the Group Companies, not being an event
affecting or likely to affect generally all companies carrying on similar
businesses in the United Kingdom, the Purchaser shall be entitled by notice in
writing to the Vendor to terminate this Agreement but the occurrence of such an
event shall not give rise to any right to damages or compensation.
2.10 The Vendor agrees with the Purchaser (for itself and as trustee for each
Group Company and their respective officers, employees and agents) to assign to
the Purchaser any rights, remedies or claims which it may have in respect of any
misrepresentation, inaccuracy or omission in or from any information or advice
supplied or given by any Group Company or its respective officers, employees or
agents in connection with assisting the Vendor in the making of any
representation and the giving of the Warranties or the preparation of the
Disclosure Letter and the Tax Deed.
3 Completion Accounts
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3.1 The Completion Accounts. The Purchaser shall procure that as soon as
-----------------------
practicable following Completion there shall be drawn up (a) a consolidated
-
balance sheet of the Group Companies, provided that (i) the US Assets and the UK
-------- -
Assets, the Assumed Liabilities and the UK Assumed Liabilities shall be
reflected on such consolidated balance sheet and (ii) no items in respect of
--
corporation tax shall be reflected on such consolidated balance sheet as at
Completion, and (b) a calculation of the amount of the corporation tax currently
-
payable by the Group Companies as at Completion (the "Current Tax Adjustment")
----------------------
(collectively the "Completion Accounts") and that the same are reviewed by the
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Purchaser's accountants. Any overpayment or prepayment by WPI Husky of life
assurance premiums shall be shown as an asset of the Group Companies for the
purpose of the Completion Accounts. Except as provided above in Clauses (i) and
(ii), the Completion Accounts shall be drawn up in accordance with accountancy
principles generally accepted in the United Kingdom and (so far as not
inconsistent therewith) in accordance with the principles, methods and bases
used in preparing the Accounts and so as to comply with the Companies Act 1985.
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<PAGE>
3.2 Preparation. (a) The Completion Accounts shall be delivered to the Vendor
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by the Purchaser as soon as is practicable following Completion and, in any
event, not later than 60 days after Completion. Prior to such delivery, the
Purchaser shall so far as is practicable consult with the Vendor with a view to
reducing the potential areas of future disagreement.
(b) In order to enable the Purchaser to prepare and the Purchaser's
accountants to review the Completion Accounts, the Vendor shall keep up-to-date
and make available to the Purchaser and to the Purchaser's accountants its books
and records relating to the businesses of the Group Companies during normal
office hours and cooperate with them with regard to the preparation and review
of the Completion Accounts. The Vendor agrees, in so far as it is reasonable to
do so, to make available the services of its employees to assist the Purchaser
in the performance of its duties under this Agreement.
(c) If the Vendor does not within 30 days of presentation to it of the
Completion Accounts give notice to the Purchaser that it disagrees with the
Completion Accounts or any item thereof, such written notice stating the reasons
for the disagreement in reasonable detail (the "Vendor's Disagreement Notice"),
----------------------------
the Completion Accounts shall be final and binding on the parties for all
purposes. If the Vendor gives a valid Vendor's Disagreement Notice within such
30 days, the parties shall attempt in good faith to reach agreement in respect
thereof and, if they are unable to do so within 21 days of such notification or
any other period as agreed between the parties, either party may by notice to
the other require that the Completion Accounts be referred to the Reporting
Accountants (as defined in Clause 3.2(e) below) (an "Appointment Notice").
------------------
(d) Within 21 days of the giving of an Appointment Notice, the Purchaser
may by notice to the Vendor indicate that, in the light of the fact that the
Vendor has not accepted the Completion Accounts in their entirety, the Purchaser
wishes the Reporting Accountants to consider matters relating to the Completion
Accounts in addition to those specified in the Vendor's Disagreement Notice,
such notice stating in reasonable detail the reasons why and in what respects
the Purchaser believes that the Completion Accounts should be altered (the
"Purchaser's Disagreement Notice").
-------------------------------
(e) Deloitte & Touche or such other firm of accountants the parties may
agree (the "Reporting Accountants") shall be engaged jointly by the parties on
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the terms set out in this Clause 3.2(e) and otherwise on such terms as shall be
agreed provided that neither party shall unreasonably (having regard, inter
-------- -----
alia, to the provisions of this Clause 3.2) refuse its agreement to terms
----
proposed by the Reporting Accountants or by the other party. If the terms of
engagement of the Reporting Accountants have not been settled within 45 days of
their identity having been determined (or such longer period as the parties may
agree) then, unless one party is unreasonably refusing its agreement to those
terms, those accountants shall be deemed never to have become the Reporting
7
<PAGE>
Accountants and new Reporting Accountants shall be selected in accordance with
the provisions of this Agreement.
(f) Except to the extent that the parties agree otherwise, the Reporting
Accountants shall determine their own procedure but:
(i) apart from procedural matters and as otherwise set out in this
Agreement shall determine only:
(A) whether any of the arguments for an alteration to the
Completion Accounts put forward in the Vendor's Disagreement Notice or
the Purchaser's Disagreement Notice is correct in whole or in part;
and
(B) if so, what alterations should be made to the Completion
Accounts in order to correct the relevant inaccuracy in it;
(ii) shall apply the principles set out in Schedule 8;
(iii) shall make their determination pursuant to paragraph (i) above
as soon as is reasonably practicable;
(iv) the procedure of the Reporting Accountants shall:
(A) give the parties a reasonable opportunity to make written and
oral representations to them;
(B) require that each party supply the other with a copy of any
written representations at the same time as they are made to the
Reporting Accountants;
(C) permit each party to be present while oral submissions are
being made by the other party; and
(D) for the avoidance of doubt, the Reporting Accountants shall
not be entitled to determine the scope of their own jurisdiction.
(g) The determination of the Reporting Accountants pursuant to Clause
3.2(f) shall (i) be made in writing and made available for collection by the
-
parties at the offices of the Reporting Accountants at such time as they shall
determine and (ii) unless otherwise agreed by the parties include reasons for
--
each relevant determination.
(h) The Reporting Accountants shall act as experts and not as arbitrators
and their determination of any matter falling within their jurisdiction shall be
final and binding on the parties save in the event of manifest error (when the
relevant part of their
8
<PAGE>
determination shall be void and the matter shall be remitted to the Reporting
Accountants for correction). In particular, without limitation:
(i) their determination shall be deemed to be incorporated into the
Completion Accounts, which shall then be final and binding on the parties
save as aforesaid;
(ii) their determination of any fact which they have found it
necessary to determine for their determination pursuant to Clause 3.2(f)(i)
shall be final and binding on the parties for all purposes including any
Warranty claim or alleged or prospective Warranty claim or any claim or
alleged or prospective claim for indemnification.
(i) The expenses of the Reporting Accountant shall be borne as they shall
direct at the time they make any determination under Clause 3.2(f)(i) or,
failing such direction, equally between the Vendor, on the one hand, and the
Purchaser, on the other.
(j) The parties shall co-operate with the Reporting Accountants and comply
with their reasonable requests made in connection with the carrying out of their
duties under this Agreement. In particular, without limitation, the Vendor
shall keep up-to-date and, subject to reasonable notice, make available to the
Purchaser's representatives, the Purchaser's accountants and the Reporting
Accountants its books and records relating to the businesses of the Group
Companies during normal office hours during the period from the appointment of
the Reporting Accountants down to the making of the relevant determination.
(k) Subject to Clause 3.2(l), nothing in this Clause 3.2 shall entitle a
party or the Reporting Accountants access to any information or document which
is protected by legal professional privilege, or which has been prepared by the
other party or its accountants or other professional advisers with a view to
assessing the merits of any claim or argument.
(l) A party shall not be entitled by reason of Clause 3.2(k) to refuse to
supply such part or parts of documents or summaries thereof as contain only the
facts on which the relevant claim or argument is based.
(m) Each party and the Reporting Accountants shall, and shall procure that
its accountants and other advisers shall, keep all information and documents
provided to them pursuant to this Clause 3.2 confidential and shall not use the
same for any purpose, except for disclosure or use in connection with the
preparation of the Completion Accounts, the proceedings of the Reporting
Accountants or another matter arising out of this Agreement or in defending any
claim or argument or alleged claim or argument relating to this Agreement or its
subject matter.
3.3 Adjustment of Consideration
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(a) (i) If the net assets as shown in the consolidated balance sheet
constituting part of the Completion Accounts are less than US$9,592,200, then,
within 14 days of either the Completion Accounts becoming final and binding
under Clause 3.2(c) or the determination of the Reporting Accountants being made
available for collection by the parties pursuant to Clause 3.2(g), the Vendor
shall pay to the Purchaser an amount equal to such difference together with
interest thereon calculated from the Completion Date in accordance with Clause
14. If the net assets as shown in the consolidated balance sheet constituting
part of the Completion Accounts exceed US$9,592,200, then, within 14 days of
either the Completion Accounts becoming final and binding under Clause 3.2(c) or
the determination of the Reporting Accountants being made available for
collection by the parties pursuant to Clause 3.2(g), the Purchaser shall pay to
the Vendor an amount equal to such difference together with interest thereon
calculated from the Completion Date in accordance with Clause 14.
(ii) If the Current Tax Adjustment as shown in the Completion Accounts
is more than US$1,300,000, then within 14 days of either the Completion
Accounts becoming final and binding under Clause 3.2(c) or the
determination of the Reporting Accountants being made available for
collection by the parties pursuant to Clause 3.2(g), the Vendor shall pay
to the Purchaser an amount equal to such difference together with interest
thereon calculated from the Completion Date in accordance with Clause 14.
If the Current Tax Adjustment as shown in the Completion Accounts is less
than US$1,300,000, then within 14 days of either the Completion Accounts
becoming final and binding under Clause 3.2(c) or the determination of the
Reporting Accountants being made available for collection by the parties
pursuant to Clause 3.2(g), the Purchaser shall pay to the Vendor an amount
equal to such difference together with the interest thereon calculated from
the Completion Date in accordance with Clause 14.
(iii) The Vendor and the Purchaser acknowledge and agree that, to the
extent possible, the Purchaser shall obtain payment of any sums owing to
it, as a result of the adjustment of the Purchase Price pursuant to Clause
3.3(a), from the Escrow Account for same day value. For the avoidance of
doubt, in the event that the said payment cannot be satisfied in full from
the monies in the Escrow Account, the Purchaser shall be entitled to any
shortfall from the Vendor in immediately available funds.
(b) (i) Schedule 6 shall apply with respect to the Coventry Property.
(ii) If by the End Date (as defined in Schedule 6) the Vendor has not
complied with paragraph 6 of Schedule 6 therein, the Vendor shall forthwith
pay the Purchaser US$1,000,000 in immediately available funds. The Vendor
and the Purchaser acknowledge and agree that to the extent possible the
Purchaser shall obtain payment of the said US$1,000,000 from the Escrow
Account for same day
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<PAGE>
value. For the avoidance of doubt, in the event that the said payment
cannot be satisfied in full from the monies in the Escrow Account, the
Purchaser shall be entitled to any shortfall from the Vendor in immediately
available funds. Upon payment in accordance with the foregoing, the Vendor
shall have no further responsibility in respect of the Coventry Lease and
the Coventry Property (but without prejudice to the warranties contained in
this Agreement).
(iii) Notwithstanding the provisions of Clauses 3.3(b)(i) and
3.3(b)(ii), the Purchaser and WPI Husky shall cooperate with the Vendor in
any negotiations with the landlord regarding the surrender of the Coventry
Lease and the grant of a new lease to WPI Husky as provided in paragraphs
4.6 and 4.7 of Schedule 6 hereto.
(c) (i) If, as a result of the Group Companies setting off their trading
losses for the financial year ended 26 September 1999 against their profits for
the financial year ended 27 September 1998, the Inland Revenue agrees to a
reduction in the corporation tax liability of the Group Companies (or to a
refund of corporation tax already paid by the Group Companies) in respect of the
year ended 27 September 1998, to the extent that such reduction in liability (or
refund) has not already been taken into account in the calculation of the
Current Tax Adjustment, the Purchaser shall pay an amount equal to such
reduction in liability (or refund) to the Vendor within 30 days of receiving the
same PROVIDED THAT no such payment shall be made before the Inland Revenue has
agreed the tax computations of the Vendor and WPI Husky for the financial year
ended 26 September 1999.
(ii) In order that the Group Companies may have sufficient trading
losses for the financial year ended 26 September 1999 to set off against
their profits for the financial year ended 27 September 1998, the Vendor
hereby agrees to surrender for no cost its tax losses, and to procure the
surrender for no cost by WPI Oyster Termiflex Limited of its tax losses,
for the two financial years ended 26 September 1999 to such of the Group
Companies as the Purchaser may direct and to cooperate fully with the
Purchaser, on behalf of the Group Companies, as regards the filing of the
necessary documentation with the Inland Revenue to effect such surrender.
(d) It is acknowledged by the parties that WPI Husky has made payments on
account to the Inland Revenue in respect of its anticipated tax liabilities for
the financial year ending 26 September 1999 totalling (Pounds)250,000. It is
anticipated that the Accounts for certain of the Group Companies will show a
trading loss in respect of such year. The Purchaser agrees to use reasonable
endeavours to obtain the refund of such pre-payments from the Inland Revenue and
shall pay an amount equal to any such repayment to the Vendor within 30 days of
receiving the same PROVIDED THAT no such payment shall
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<PAGE>
be made before the Inland Revenue has agreed the tax computations of the Vendor
and WPI Husky for the financial year ended 26 September 1999.
3.4 Currency All amounts used or calculated in this Clause 3 shall be
--------
determined in UK pounds sterling and then converted into US dollars using the
prevailing London spot rate of exchange as reported in the Financial Times the
day following February 21, 2000. All payments to be made under this Clause 3
shall be made in U.S. dollars.
3.5 Escrow Arrangements On Completion, 5% of the Purchase Price shall be
-------------------
deposited by the Purchaser for itself and on behalf of the US Purchaser and the
UK Purchaser with the Escrow Agent, to be held, invested and distributed subject
to the terms of the Escrow Agreement. The Purchaser, the US Purchaser and the UK
Purchaser may use money in the Escrow Account to settle claims by the Purchaser
and/or the US Purchaser and/or the UK Purchaser under or pursuant to Clause 6 of
this Agreement, under or pursuant to the Asset Purchase Agreement or under or
pursuant to the UK Asset Purchase Agreement or under the Tax Deed. The Purchaser
shall also be entitled to use money in the Escrow Account to settle any amount
due to the Purchaser from the Vendor pursuant to Clause 3.3 of this Agreement.
3.6 Inter-Company Debt The Vendor agrees, at or prior to Completion, to
------------------
discharge or procure the discharge of all inter-company indebtedness in relation
to each Group Company at or prior to Completion.
4 Warranties
----------
4.1 The Vendor and Guarantor (collectively the "Warrantors") warrant jointly
----------
and severally to the Purchaser that each Warranty is true, accurate and not
misleading at the date of this Agreement and at Completion in accordance with
Clause 4.6.
4.2 The Warrantors acknowledge that the Purchaser is entering into this
Agreement in reliance on each Warranty and the undertakings of the Vendor
contained in Clause 9 which have also been given as a representation and with
the intention of inducing the Purchaser to enter into this Agreement.
4.3 The Purchaser may rely on the Warranties in warranting to any subsequent
purchaser of all or any of the Shares or of all or any part of the undertaking
of any Group Company.
4.4 The Warranties are qualified by the facts and circumstances fairly
disclosed in the Disclosure Letter. No other knowledge regarding any Group
Company (actual, constructive or imputed) prevents or limits a claim made by the
Purchaser for breach of Clause 4.1. The Vendor shall not seek to rely on the
Purchaser's knowledge (actual, constructive or imputed) of a fact or
circumstance which might make a Warranty untrue, inaccurate or misleading as a
defence to a claim for breach of Clause 4.1. Where a
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warranty is qualified by the words "so far as the Vendor is aware", "To the best
of the knowledge, information and belief of the Vendor", it shall be deemed to
be given after the Vendor has made reasonable enquiry only of the senior
management of the Group Companies and for the purposes of this Clause "senior
management" shall mean Messrs. M. Tule, J. Powers, J. Allard, K. Webb, C.
Fellows, T. Blyth, R. Beyer, Ms. S. Patterson, P. Westmoreland, C. Quivaux and
M. Krodel.
4.5 Each Warranty is to be construed independently and (except where this
Agreement provides otherwise) is not limited by a provision of this Agreement or
another Warranty.
4.6 The Vendor further warrants to the Purchaser and its successors in title
that subject to Clause 4.1, each Warranty will be true and accurate in all
respects and not misleading in any respect at Completion as if each Warranty had
been given again at Completion. If after the signing of this Agreement and
before Completion any event shall occur or matter arises which results or may
result in any Warranty being unfulfilled, untrue, misleading or incorrect in any
respect at Completion, the Vendor shall immediately notify the Purchaser in
writing thereof prior to Completion and the Vendor (at its own cost) shall make
investigation concerning the event or matter which the Purchaser may require.
5 Action Pending Completion
-------------------------
5.1 The Vendor shall procure that, pending Completion:
(a) each Group Company will carry on business only in the ordinary course
consistent with past practice, save insofar as agreed in writing by the
Purchaser (such agreement not to be unreasonably withheld or delayed);
(b) the Purchaser and its agents will, upon reasonable notice with the
prior written agreement of the Vendor (acting by the Chief Executive Officer,
Chief Financial Officer or General Counsel of the Guarantor), (such agreement
not to be unreasonably withheld or delayed), be allowed access to, and to take
copies of, the books and records of each Group Company including, without
limitation, the statutory books, minute books, leases, licenses, contracts,
details of receivables, Intellectual Property, tax records, supplier lists and
customer lists in the possession or control of any Group Company;
(c) such representatives and advisers as the Purchaser reasonably requests
with the prior written agreement of the Vendor (acting by the Chief Executive
Officer, Chief Financial Officer or General Counsel of the Guarantor), (such
agreement not to be unreasonably withheld or delayed), may be designated to work
with the Vendor with regard to the management and operations of any of the Group
Companies. The Vendor will consult, and will cause the Group Companies to
consult, with such representatives
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and advisers with respect to any action which may materially affect the business
of any Group Company taken as a whole. The Vendor will furnish and will cause
the Group to provide to such representatives and advisers such information as
they may reasonably request for this purpose;
(d) each Group Company shall take all reasonable steps to preserve its
assets and, in particular, will maintain in force all insurance policies
currently in place and all other such insurances normally kept in force; and
(e) each Group Company shall take all reasonable steps to preserve the
validity of its Intellectual Property.
5.2 Without prejudice to the generality of Clause 5.1, the Vendor shall
collaborate fully with the Purchaser in relation to all material matters
concerning the running of the Group between the date of this Agreement and
Completion and during that period shall procure that each Group Company shall
not without the prior written consent of the Purchaser:
(a) incur or enter into any agreement or commitment involving any capital
expenditure in excess of (Pounds)20,000 per item and (Pounds)100,000 in
aggregate;
(b) enter into or amend any contract or commitment which is not capable of
being terminated without compensation at any time with three months' notice or
less or which is not in the ordinary course of business or which involves or may
involve total annual expenditure in excess of (Pounds)25,000;
(c) in relation to any Property:
(i) apply for any planning permission or implement any planning
permission already obtained but not implemented;
(ii) carry out any material structural alteration or addition to, or
materially effect any change of use of, such Property;
(iii) terminate or serve any notice to terminate, surrender or accept
any surrender of or waive the terms of any lease, tenancy or license which
is material in the context of the relevant Group Company;
(iv) agree any new rent or fee payable under any lease, tenancy or
license which is material in the context of the relevant Group Company;
(v) enter into or vary any agreement, lease, tenancy, license or other
commitment which is material in the context of the relevant Group Company;
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(vi) sell, convey, transfer, assign or charge any Property or grant
any rights or easements over any Property or enter into any covenants
affecting any Property or agree to do any of the foregoing;
(d) incur any additional borrowing or incur any other indebtedness
(including without limitation any overdrafts);
(e) save as required by law, make any amendment to the terms and conditions
of employment (including, without limitation, remuneration, pension entitlements
and other benefits) of any employee (other than minor increases which the Vendor
shall notify to the Purchaser as soon as reasonably possible), provide or agree
to provide any gratuitous payment or benefit to any such person or any of their
dependants, or dismiss any employee or engage or appoint any additional
employee;
(f) discontinue or amend The Plan to any material extent or commence to
wind it up or cause it to cease to admit new members or communicate to any
employee any material plan, proposal or intention to amend, wind up, terminate
or exercise any discretion in relation to The Plan;
(g) pay any benefits under The Plan other than in accordance with the terms
of the documents governing such scheme and not under any discretionary power;
(h) in relation to The Husky Plan, take any action to reverse the winding-
up of The Husky Plan or to do or omit to do anything which would alter to any
extent the liability (if any) of any Group Company in respect of The Husky Plan;
(i) acquire or agree to dispose of or agree to dispose of any material
asset or material stocks or enter into or amend any material contract or
arrangement, in each case, involving consideration, expenditure or liabilities
in excess of (Pounds)25,000;
(j) take steps to procure payment by any debtor generally in advance of the
date on which book and other debts are usually payable in accordance with the
standard terms of business of any Group Company or (if different) the period
extended to any particular debtor in which to make payment;
(k) delay making payment to any trade creditors generally beyond the date
on which payment of the relevant trade debt should be paid in accordance with
credit periods authorised by the relevant creditors (or (if different) the
period extended by creditors in which to make payment) or extend or amend any of
the terms in respect of any trade creditors outside the ordinary course;
(l) amend, to any material extent, any of the terms on which goods,
facilities or services are supplied, such supplies being material in the context
of the relevant Group
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Company except where required to do so in order to comply with any applicable
legal or regulatory requirement;
(m) enter into any guarantee, indemnity or other agreement to secure any
obligation of a third party or create any Encumbrance over any of its assets or
undertaking;
(n) amend any insurance contract, fail to notify any insurance claim in
accordance with the provisions of the relevant policy or settle any such claim
below the amount claimed;
(o) allot, issue, redeem or repurchase any share or loan capital (or option
to subscribe for the same) of any Group Company;
(p) acquire or agree to acquire any share, shares or other interest in any
company, partnership or other venture;
(q) declare, make or pay any dividend or other distribution to
shareholders; or
(r) make any change to its accounting practices or policies or amend its
memorandum or articles of association.
6 Purchaser's Rights
------------------
6.1 If Completion takes place and there is a Warranty Claim, the Vendor shall
pay the Purchaser on demand (at the Purchaser's option) an amount equal to
either:
(a) the reduction in the value of the Shares; or
(b) if:
(i) the value of an asset of each Group Company is or becomes less than
the value would have been had the breach not occurred; or
(ii) either Group Company is subject to or incurs a liability or an
increase in a liability which it would not have been subject to or would
not have incurred had the breach not occurred,
the reduction in the value of the asset or, as the case may be, the amount
of the liability or increased liability.
6.2 The Vendor shall indemnify the Purchaser on demand against each loss,
liability and cost which the Purchaser incurs arising (directly or indirectly)
out of:
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(a) the settlement of a claim against the Vendor in respect of a breach or
alleged breach of any provision of this Agreement or the enforcement of a
settlement;
(b) legal proceedings against the Vendor in respect of a breach or alleged
breach of any provision of this Agreement in which judgment is given for the
Purchaser or the enforcement of the judgment;
(c) any Excluded Liabilities;
(d) any UK Excluded Liabilities;
and whether such loss, liability or cost is incurred before or after the
commencement of an action.
7 Limitations on the Vendor's Liability
-------------------------------------
7.1 The Vendor is not liable in respect of a Warranty Claim unless the amount
which would otherwise be recoverable from the Vendor (but for this Clause 7.1)
in respect of that Warranty Claim exceeds (Pounds)50,000.
7.2 The Vendor is not liable for a Warranty Claim:
(a) in respect of the Warranty contained in paragraph 6 of Schedule 4 or
for any claim under the Tax Deed unless the Purchaser has notified the Vendor of
the Warranty Claim or claim under the Tax Deed stating in reasonable detail the
nature of the Warranty Claim or claim under the Tax Deed and, if practicable,
the amount claimed not later than three months after the expiry of the period
specified by statute during which an assessment of that liability to Tax may be
issued by the relevant Tax Authority or, if there is no such period, on or
before seven years from the date of Completion but any failure to give such
notice shall not affect the rights of the Purchaser except to the extent the
Vendor is prejudiced by such failure;
(b) in respect of any other Warranty unless the Purchaser has notified the
Vendor of the Warranty Claim stating in reasonable detail the nature of the
Warranty Claim and, if practicable, the amount claimed on or before 24 months
from the date of Completion but any failure to give such notice shall not affect
the rights of the Purchaser except to the extent the Vendor is prejudiced by
such failure;
(c) if and to the extent that such Warranty Claim would occur as a result
of any legislation not in force at the date hereof which takes effect
retrospectively or occurs as a result of any increase in the rates of Tax in
force at the date hereof;
(d) if and to the extent that such Warranty Claim would not have arisen but
for:-
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<PAGE>
(i) any act, omission, transaction or arrangement after Completion by the
Purchaser or any Group Company otherwise than in the ordinary course of
business of any Group Company as presently carried on occurring at the
written request or with the written approval of the Purchaser;
(ii) the effect of the provisions of Sections 393, 393A, 343 and/or 768
ICTA in any Group Company and/or the Purchaser.
(e) if and to the extent that:
(i) any Group Company actually recovers a sum in respect of the subject
matter of such Warranty Claim under the terms of any insurance policy held
by any Group Company or from any other third party in force at the date
hereof;
(ii) the Warranty Claim relates to a claim for Tax and the Vendor has
surrendered or procured the surrender of amounts which have offset such
Warranty Claim;
(iii) the Warranty Claim would not have arisen or would have been
reduced or eliminated but for the failure or omission on the part of the
Purchaser to make any claim, election, surrender or disclaimer or give any
notice or consent to do any other thing under the provisions of any
enactment or regulation relating to Tax after Completion;
(iv) the Warranty Claim would not have arisen but for any winding up or
cessation after Completion of, or any change or diminution after Completion
in, any trade or business (or part thereof) carried on by any Group
Company;
(v) the Warranty Claim would not have arisen but for any change in the
accounting policy practice of any Group Company introduced after Completion
at the written request or with the written approval of the Purchaser
whether with retrospective effect or not unless such change in the
accounting policy practice of any Group Company was required to comply with
applicable law, regulations, or regulatory requirements or practice in
force on or before Completion;
(vi) if and to the extent that any sum is received by any Group Company
which has previously been written off as unrecoverable in the accounts of
that Group Company;
(vii) to the extent that the matter giving rise to the Warranty Claim
was done or omitted to be done prior to Completion by the Vendor or any
Group Company at the request of the Purchaser or its authorised
representatives or any of them;
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(viii) to the extent that the aggregate amount of the liability of the
Vendor for all Warranty Claims and all claims under the Tax Deed would
thereby exceed 50% of the Purchase Price;
(ix) to the extent that the claim has been made good or otherwise
compensated for at no expense to the Group Company or the Purchaser.
7.3 If the Purchaser becomes aware of any matter that may give rise to a claim
against the Vendor under this Agreement notice of the fact shall be given as
soon as possible to the Vendor.
7.4 Without prejudice to the validity of the claim or alleged claim in
question, the Purchaser shall allow, and shall procure that the relevant Group
Companies allow the Vendor and its accountants and professional advisers to
investigate the matter or circumstance alleged to give rise to such claim and
whether and to what extent any amount is payable in respect of such claim and
for such purpose the Purchaser shall give, and shall procure that the relevant
Group Company give, subject to their being paid all reasonable costs and
expenses as shall be agreed with the Vendor in advance, all such information and
assistance, including access to premises and personnel, documents and records as
the Vendor or its accountants or professional advisers may reasonably request.
7.5 If the claim in question is a result of or in connection with a claim or
liability to a third party then no admission of liability shall be made by the
Vendor and the claim shall not be compromised, disposed or settled without the
prior written consent of the Purchaser.
7.6 The Purchaser shall be entitled at its own expense in its absolute
discretion to take such action as it deems necessary to avoid, dispute, deny,
defend, resist, appeal, compromise or contest such claim or liability
(including, without limitation, making counter-claims or other claims against
third parties), in the name of and on behalf of the Vendor or the Group Company
concerned and to have the conduct of any related proceedings, negotiations or
appeals provided that in taking such action the Purchaser will act in such a way
to minimise as far as reasonably practicable any damage or harm to the name of
the Vendor or, inter alia, damage or harm to the business, trading or financial
prospects of the Vendor. The provision of Clauses 7.3, 7.4, 7.5 and 7.6 shall
not apply to any claim for breach of a warranty contained in paragraph 6 of
Schedule 4 and the provisions of Clause 5 of the Tax Deed shall apply to such
claims.
7.7 Clauses 7.1 to 7.3 do not apply in respect of a Warranty Claim involving or
relating to breach of Clause 4.1 in respect of a Warranty contained in paragraph
3 of Schedule 4.
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7.8 Nothing in this Clause 7 shall have the effect of limiting or restricting
any liability of the Vendor in respect of a Warranty Claim arising as a result
of any fraud, wilful misconduct or wilful concealment by the Vendor or any
officer or employee or any of the directors of the Group Companies.
7.9 Any amount paid in respect of any Warranty Claim or under the Tax Deed
shall be treated as a reduction in the consideration paid for the Shares.
7.10 If the Purchaser is entitled in its sole discretion (but subject to Clause
5 of the Tax Deed) to make both a Warranty Claim and a claim under the Tax Deed,
the Warranty Claim shall be made first.
7.11 All Warranties, representations, indemnifications, covenants, agreements
and obligations given or entered into by more than one person in this Agreement
are given or entered into jointly and severally.
7.12 The limitations on liability of the Vendor set out in Clause 3 of the Tax
Deed shall apply to limit the liability of the Vendor in respect of Warranty
Claims under the Warranties contained in paragraph 6 of Schedule 4 of this
Agreement as if set out herein mutatis mutandis.
8 Use of Intellectual Property Rights
-----------------------------------
The Vendor shall not with, through or as manager, adviser, consultant or
agent for a person directly or indirectly use or authorise, encourage or assist
any person to use in connection with a business which competes, directly or
indirectly, with a business of any Group Company as operated at the date of this
Agreement, any of the Intellectual Property Rights or use in that connection
anything which is intended, or is likely to be confused, with any of the
Intellectual Property Rights.
9 Vendor's Undertakings and Guarantee
-----------------------------------
9.1 The Vendor undertakes to the Purchaser and its successors in title, for
itself and as agent and trustee for the Group Companies, that it will not and
will procure that any subsidiary undertaking, fellow subsidiary undertaking or
holding company or director of the Vendor will not and will procure that no
person, firm or company carrying on with the consent of the Vendor any business
in succession to the Vendor will do any of the following things:
(a) for a period of 3 years starting on the date of this Agreement through
or as adviser to, or agent of, or manager for, or any person directly or
indirectly carry on or be engaged, concerned or interested in or assist a
business which competes, directly or indirectly, with a business of any Group
Company as carried on at the date of this Agreement (whether carried on under
the name "WPI Group (UK)" or "WPI Husky
20
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Technology" or any name likely to be confused therewith or otherwise) or at any
time in the twelve months prior to that date in a territory in which that
business is or was carried on at any such date or time provided that this Clause
9.1(a) shall not apply to the MPSI business and US Termiflex hand-held business
currently carried on by and on behalf of the Guarantor;
(b) for a period of 3 years starting on the date of this Agreement, do or
say anything which is harmful to any Group Company's goodwill (as subsisting at
the date of this Agreement) or which may lead a person who has dealt with any
Group Company at any time during the twelve months prior to the date of this
Agreement to cease to deal with any Group Company on substantially equivalent
terms to those previously offered or at all;
(c) for a period of 3 years starting on the date of this Agreement, other
than in the ordinary course of business of any Group Company, on its own account
or in conjunction with or on behalf of any other person in respect of the
products or services of a business of any Group Company either seek to obtain
orders from, or do business with, or encourage directly or indirectly another
person to obtain orders from, or do business with, a person who has been a
customer of that business at any time during the twelve months prior to the date
of this Agreement for the products or services of that business in its territory
of operation;
(d) for a period of 3 years starting on the date of this Agreement, engage,
employ, solicit or contact with a view to engagement or employment by another
person, a director, officer, employee or manager of any Group Company or a
person who was a director, employee or manager of any Group Company at any time
during the twelve months prior to the date of this Agreement, in either case
where the person in question either has Confidential Information or know-how and
would be in a position to exploit either Company's trade connections or those of
any Group Company; or
(e) for a period of 3 years starting on the date of this Agreement, seek to
contract with or engage (in such a way as to affect adversely a business of any
Group Company as carried on at the date of this Agreement) a person who has
been contracted with or engaged to manufacture, assemble, supply or deliver
goods or services to that business at any time during the twelve months prior to
the date of this Agreement.
9.2 Each undertaking in Clause 9.1 constitutes an entirely independent
undertaking and if one or more of the undertakings is held to be against the
public interest or unlawful or in any way an unreasonable restraint of trade:
(a) the remaining undertaking(s) shall continue to bind the Vendor with
such deletion or modification as may be necessary to make it valid and
enforceable; and
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(b) if such undertaking(s) would not be held to be so if any period of time
expressed therein were expressed as a shorter period of time then such
undertaking(s) shall be deemed given for such shorter period of time.
9.3 On receiving the Purchaser's reasonable request the Vendor shall (at its
own cost):
(a) do and execute, or arrange to be done and executed, each act, document
and thing necessary to implement this Agreement; and
(b) give to the Purchaser all information it possesses or to which it has
access relating to the business of any Group Company and allow the Purchaser to
copy any document containing that information.
9.4 The Vendor agrees that the restrictions contained in this Clause 9 are no
greater than reasonable and necessary for the protection of the interest of the
Purchaser.
9.5 As soon as possible prior to Completion, the Vendor shall procure that the
name of WPI Husky and WPI Husky GmbH shall be changed to names not incorporating
"WPI" or "Termiflex" or any words resembling the same.
9.6 Without prejudice to Clause 9.5, from the Completion Date, the Purchaser
shall not and shall procure that each Group Company and any other company
connected with the Purchaser shall not, save as permitted in Clause 9.7 or as
contemplated by Clause 9.5 adopt, use or carry on business under any name
incorporating the word "WPI" or any words resembling the same.
9.7 The Purchaser shall after Completion take all steps necessary to remove,
and shall procure that each of the Group Companies and any other company
connected with the Purchaser removes, the name "WPI" from all business materials
used in the United Kingdom, France or Germany including without limitation,
advertising materials and all company vehicles, properties and marketing
products in the United Kingdom, France and Germany within 3 months after
Completion. Prior to the expiry of the 3 month period all advertising materials
shall be overstamped with the new names of the relevant companies.
9.8 The Vendor, the US Vendor, the UK Vendor and the Guarantor agree, that
immediately upon receipt by the Vendor, the US Vendor, the UK Vendor of the
Purchase Price pursuant to Clause a2.2, net of the Vendor's, the US Vendor's and
the UK Vendor's costs arising out of such transactions (the "Proceeds"), the
--------
Vendor, the US Vendor and the UK Vendor shall, and the Guarantor shall procure
that the Vendor, the US Vendor and the UK Vendor pay the Proceeds to each of the
creditors of the Vendor, the US Vendor and the UK Vendor.
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<PAGE>
9.9 In consideration of the Purchaser entering into this Agreement the
Guarantor, at the request of the Vendor, the US Vendor and the UK Vendor, hereby
unconditionally guarantees to the Purchaser, the US Purchaser and the UK
Purchaser and their respective successors, transferees and assigns the due and
punctual performance and observance by the Vendor, the US Vendor and the UK
Vendor of all the Vendor's, the US Vendor's and the UK Vendor's obligations and
the punctual discharge by the Vendor, the US Vendor and the UK Vendor of all the
Vendor's, the US Vendor's and the UK Vendor's liabilities to the Purchaser, the
US Purchaser and the UK Purchaser contained in or arising under this Agreement
or under the Asset Purchase Agreement or under the UK Asset Purchase Agreement
or the Tax Deed or arising from any termination thereof.
9.10 If the Vendor, the US Vendor or the UK Vendor shall make default in the
payment when due of any amount payable to the Purchaser, the US Purchaser or the
UK Purchaser under this Agreement or the Asset Purchase Agreement or the UK
Asset Purchase Agreement or arising from the termination thereof, the Guarantor
shall forthwith on demand by the Purchaser and/or the US Purchaser and/or the UK
Purchaser unconditionally pay to the Purchaser and/or the US Purchaser and/or
the UK Purchaser in the manner prescribed in this Agreement an amount equal to
the amount payable by the Vendor, the US Vendor or the UK Vendor, as the case
may be.
9.11 As an independent and primary obligation, without prejudice to Clause 9.9
the Guarantor hereby unconditionally and irrevocably agrees to indemnify and
keep indemnified the Purchaser, the US Purchaser and the UK Purchaser against
all and any losses, costs, claims, liabilities, damages, demands and expenses
suffered or incurred by the Purchaser, the US Purchaser and the UK Purchaser
arising from failure of the Vendor, the US Vendor and the UK Vendor to comply
with any of its obligations or discharge any of its liabilities under this
Agreement or the Asset Purchase Agreement or the UK Asset Purchase Agreement or
the Tax Deed or arising from the termination thereof or by reason of the Vendor,
the US Vendor or the UK Vendor not being at any time, or ceasing to be, liable
in respect of the obligations and liabilities purported to be assumed by it in
accordance with the express terms of this Agreement or the Asset Purchase
Agreement or the UK Asset Purchase Agreement or the Tax Deed.
9.12 The guarantee and indemnity contained in this Clause shall be a continuing
guarantee and indemnity and shall continue in full force and effect until all
liabilities or purported liabilities of the Vendor, the US Vendor or the UK
Vendor arising under, and all monies owing or payable or purported to be owing
or payable by the Vendor, the US Vendor or the UK Vendor under this Agreement or
the Asset Purchase Agreement or the UK Asset Purchase Agreement or the Tax Deed
or arising from any termination thereof, have been paid, discharged or satisfied
in full and notwithstanding any insolvency of the Vendor, the US Vendor or the
UK Vendor or any change in the status of the Vendor, the US Vendor or the UK
Vendor.
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9.13 The Guarantor shall not be exonerated or discharged nor shall its liability
be affected by any forbearance, whether as to payment, time, performance or
otherwise howsoever, or by any other indulgence being given to the Vendor, the
US Vendor or the UK Vendor or by any variation of the terms of this Agreement or
by any act, thing, omission or means whatever which, but for this provision,
might operate to exonerate or discharge the Guarantor from its obligations under
the guarantee and indemnity contained in Clauses 9.9 to 9.13.
9.14 The Vendor undertakes to indemnify and keep indemnified the Purchaser from
and against any liability, loss, damage, cost, claim or reasonable expense of
whatever kind which it may incur arising out of or in connection with The Husky
Plan up to the Completion Date.
9.15 The Vendor undertakes to indemnify and keep indemnified the Purchaser for
itself and on behalf of any Group Company from and against any liability, cost,
claim or reasonable expense of whatever kind which it may incur arising out of
or in connection with any claims (and for the avoidance of doubt, in connection
with and any payment made to the trustees for the time being of The Plan under
clause 48.3 of the definitive trust deed and rules of The Plan dated September
15 1998 in respect of any such claim being made against the trustees ) from any
current or former employees of the Group Companies relating to benefits on
termination of service with a Group Company in respect of The Plan (or
represented to have been available under The Plan) to the extent that such
claims are made by individuals who on termination had completed less than two
years' pensionable service and are for refunds of contributions (and for the
avoidance of doubt employer's contributions) in excess of the amounts of their
own contributions (plus interest less tax where applicable) in their personal
accounts in The Plan.
9.16 The Vendor undertakes to indemnify and keep indemnified the Purchaser from
and against any liability, loss, damage, cost, claim or reasonable expense of
whatever kind which it may incur arising out of or in connection with Mr. David
Pink's participation in The Plan up to the Completion Date.
9.17 The Vendor undertakes to indemnify and keep indemnified the Purchaser from
and against any liability, loss, damage, cost, claim or expense of whatever kind
which it may incur or may be suffered by the Purchaser arising from the
performance by WPI Husky of the terms and conditions of the Purchase Contract of
the Owner Obligations (as defined therein) whether for itself or for and on
behalf of WPI Oyster Termiflex Ltd or arising from any non-performance or
alleged non-performance of the terms and conditions of the Purchase Contract of
such Owner Obligations.
24
<PAGE>
10 Confidential Information
------------------------
10.1 The Vendor undertakes to the Purchaser, for itself and as agent and trustee
for each Group Company, that before and after Completion the Vendor shall not,
except as required by Clause 5, use or disclose, or permit the use or disclosure
of, any Confidential Information.
10.2 Clause 10.1 does not apply to disclosure of Confidential Information:
(a) to a director, officer or employee of the Purchaser or any Group
Company whose function requires him to have the Confidential Information;
(b) required to be disclosed by law, provided that the disclosure shall be
made after consultation with the Purchaser and after taking into account the
Purchaser's reasonable requirements as to its timing, content and manner of
making or despatch; or
(c) to an adviser for the purpose of advising the Vendor in connection with
the transactions contemplated by this Agreement provided that such disclosure is
essential for these purposes and is on the basis that Clause 10.1 applies to the
disclosure by the adviser.
11 Announcements
-------------
Neither party may, before or after Completion, make or send or issue a
public announcement, communication or circular concerning the transactions
referred to in this Agreement unless they have first obtained the other party's
prior written consent. This shall not affect any announcement or circular
required by law or any regulatory body or the rules of any recognised stock
exchange but the party with an obligation to make an announcement, communication
or circular shall first consult with the other party on the form, substance and
timing of such disclosure insofar as is reasonably practicable before complying
with such obligations.
12 Competition
-----------
Notwithstanding any other provision of this Agreement, if there are
provisions of this Agreement (or of an agreement or arrangement of which it
forms part) by virtue of which particulars of this Agreement (or of an agreement
or arrangement of which it forms part) that are, at the date of this Agreement,
required to be furnished to the Director General of Fair Trading under the
Restrictive Practices Acts 1976 and 1977:
(a) the Purchaser shall ensure that particulars are duly furnished as soon
as possible and in any event within the time specified by these Acts; and
25
<PAGE>
(b) those provisions do not take effect until the day after the particulars
have been duly furnished.
This Clause shall not apply if this Agreement is, or by virtue of the
Competition Act 1998, is to be treated as, a non-notifiable agreement for the
purposes of the Restrictive Trade Practices Acts 1976 and 1977. For the
purposes of this Clause 12, the term "Agreement" shall include every other
agreement which forms part of the same arrangement.
13 Costs
-----
The Vendor shall bear all costs incurred by it and the Group in connection
with the preparation, negotiation, execution and performance by it of this
Agreement, the Tax Deed and the sale of Shares. The Purchaser shall bear all
such costs incurred by it.
14 Interest
--------
If the Vendor, the US Vendor, the UK Vendor or the Purchaser, the US
Purchaser or the UK Purchaser default in the payment when due or any sum payable
under this Agreement, the Asset Purchase Agreement, the UK Asset Purchase
Agreement or the Tax Deed (howsoever determined) the liability of the relevant
Vendor or the relevant Purchaser as the case may be shall be increased to
include interest on such sum from the date when such payment is due until the
date of actual payment (as well as after or before judgment) at a rate of 3 per
cent above the base rate from time to time of Barclays Bank PLC. Such interest
shall accrue from day to day.
15 General
-------
15.1 A variation of this Agreement is valid only if it is in writing and signed
by or on behalf of each party.
15.2 The failure to exercise or delay in exercising a right or remedy provided
with this Agreement or by law does not constitute a waiver of the right or
remedy or a waiver of other rights or remedies. No single or partial exercise of
a right or remedy provided by this Agreement or by law prevents further exercise
of the right or remedy or the exercise of another right or remedy.
15.3 The Purchaser's rights and remedies contained in this Agreement are
cumulative and not exclusive of rights and remedies provided by law.
15.4 Except to the extent that they have been performed and except where this
Agreement provides otherwise, the obligations contained in this Agreement remain
in force after Completion.
26
<PAGE>
16 Assignment
----------
The Purchaser and the UK Purchaser may assign and transfer any of its
rights under the Agreement, the UK Asset Purchase Agreement or Tax Deed in whole
or in part and without restriction.
17 Time of the Essence
-------------------
Time shall be of the essence of this Agreement both as regards any dates
and periods mentioned and as regards any dates and periods which may be
substituted for them in accordance with this Agreement or by agreement in
writing between the parties.
18 Further Assurance
-----------------
At any time after the date of this Agreement, the Vendor shall use its best
endeavors to procure that any necessary third party shall execute such documents
and do such acts and things as the Purchaser may reasonably require for the
purpose of giving to the Purchaser the full benefit of all the provisions of
this Agreement, the Asset Purchase Agreement, or the Asset Purchase Agreement or
Tax Deed.
19 Interpretation
--------------
19.1 In this Agreement:
"Accounts" means each Group Company's individual accounts (as that term is
--------
used in section 226 of the CA 1985) and cashflow statement for the financial
year ended on the Reference Accounts Date, the auditors' report on those
accounts, the directors' report for that year and the notes to those accounts;
"ANG Noteholders" means the holders of the promissory notes, each dated as
---------------
of August 3, 1998, executed by the Guarantor in favour of the following persons
or entities in the following original principal amounts: (a) $275,000 to The
-
Allard Children's Trust f/b/o Lisa Dibrigida; (b) $275,000 to The Allard
-
Children's Trust f/b/o Kim Allard; (c) $275,000 to The Allard Children's Trust
-
f/b/o Michael E. Allard; (d) $275,000 to Gerald R. Allard, trustee of The Gerald
-
R. Allard Revocable Trust; (e) $458,150 to David and Angella Nazarian, trustees
-
of The Nazarian Family Trust; (f) $458,425 to Younes Nazarian; and (g) $458,425
- -
to David Nazarian, trustee of The Samy Nazarian Trust;
"Asset Purchase Agreement" means the agreement to be entered into between
------------------------
the US Vendor, the Guarantor and the US Purchaser;
"Asset Purchase Price" means the purchase price for each of the Shares, the
--------------------
UK Assets and the US Assets set forth in Schedule 7 hereto;
27
<PAGE>
"Assumed Liabilities" means the liabilities to be assumed by the US
-------------------
Purchaser pursuant to the terms of the Asset Purchase Agreement;
"Business Day" means any day (other than a Saturday) when banks are open in
------------
London for ordinary banking business;
"CA 1985" means the Companies Act 1985;
-------
"Claim" means a claim by the Purchaser under or pursuant to the provisions
-----
of Clause 4.1 or a claim by the Purchaser under the Tax Deed;
"Code" means the United States Internal Revenue Code of 1986, as amended.
----
"Company" means WPI Husky, a company incorporated in England and Wales
-------
(registered number 01328356), and whose registered office is at Eden Road,
Walsgrave Triangle Business Park, Coventry, West Midlands CV2 2TB and WPI Husky
GmbH, incorporated in Germany (registered file number HRB 3396) and whose
registered office is at Auelweg 18, 53797 Lohmar, Germany;
"Completion" means completion of the sale and purchase of the Shares in
----------
accordance with this Agreement;
"Completion Accounts" shall have the meanings set out in Clause 3.1;
-------------------
"Confidential Information" means all information which is used in or
------------------------
otherwise relates to any Group Company's business, customers or financial or
other affairs, including, without limitation, information relating to:
(a) the marketing of goods or services including, without limitation,
customer names and lists and other details of customers, sales data, prices and
promotional material; or
(b) future projects, business development or planning, commercial
relationships and negotiations;
but does not include information which is made public by, or with the
consent of, the Purchaser after the Completion Date or which is in the public
domain or becomes a part of the public domain through no fault of the Vendor;
"Coventry Lease" means the lease of the Coventry Property as described in
--------------
Schedule 5;
28
<PAGE>
"Disclosure Letter" means the letter from the Vendor to the Purchaser in
-----------------
relation to the Warranties having the same date as this Agreement, the receipt
of which has been acknowledged by the Purchaser;
"Encumbrance" means a mortgage, charge, pledge, lien, option, restriction,
-----------
right of first refusal, right of pre-emption, third-party right or interest,
other encumbrance or security interest of any kind, or another arrangement
(including, without limitation, a title transfer or retention arrangement)
having similar effect;
"Escrow Account" means the designated account set forth in the Escrow
--------------
Agreement;
"Escrow Agent" means Citizens Bank appointed as agent under the Escrow
------------
Agreement or Cobbetts or such other person(s) to be appointed until the
execution of the Escrow Agreement pursuant to the side letter to be entered into
between Cobbetts, the Vendor and the Purchaser and references in this Agreement
to "Escrow Agent" shall be deemed to refer to Citizens Bank and/or Cobbetts, as
the case may be;
"Escrow Agreement" means the agreement in the agreed form relating to the
----------------
deposit of 5% of the Purchase Price with the Escrow Agent pursuant to Clause 3.5
or such side letter in the agreed form to be entered into between the Vendor,
the Purchaser and Cobbetts until the execution of the Escrow Agreement;
"Escrow Amount" means US$1,730,640;
-------------
"Excluded Liabilities" shall have the meaning set out in the UK Asset
--------------------
Purchase Agreement;
"Financial Statements" means the financial statements of the Guarantor as
--------------------
of September 26, 1999 included in the Annual Report on Form 10-K for the fiscal
year ending September 26, 1999;
"FRS" means a financial reporting standard adopted or issued by the
---
Accounting Standards Board;
"Group" or "Group Companies" means each Company and "Group Company" means
----- --------------- -------------
any one of them;
"ICTA" means the Income and Corporation Taxes Act 1988;
----
"Intellectual Property" means:
---------------------
(a) patents, trade marks, service marks, registered designs, applications
and rights to apply for any of those rights, trade, business and company names,
logos, internet
29
<PAGE>
domain names and e-mail addresses, unregistered trade marks and service marks,
copyrights, database rights, know-how, rights in designs and inventions,
database rights and all similar rights which may subsist in any part of the
world including, where such rights are obtained or enhanced by registration, any
registration of such rights and applications and rights to apply for such
registrations;
(b) rights under licences, consents, orders, statutes or otherwise in
relation to a right in paragraph (a);
(c) rights of the same or similar effect or nature as or to those in
paragraphs (a) and (b) which now or in the future may subsist; and
(d) the right to sue for past infringements of any of the foregoing rights;
"Intellectual Property Rights" means all Intellectual Property owned, used
----------------------------
or required to be used, by WPI Group, or any Group Company;
"Legal Opinion" means the legal opinion to be delivered to the Purchaser at
-------------
or prior to Completion by the Vendor's Solicitors in accordance with Clause
2.4(h);
"Management Accounts" means the unaudited profit and loss account of each
-------------------
Company in respect of the period starting on the date after the Reference
Accounts Date and ending on 31 December, 1999 and the unaudited balance sheet of
each Group Company as at 30 September, 1999;
"Permit" means:
------
(a) a permit, licence, consent, approval, certificate, qualification,
specification, registration or other authorisation; or
(b) a filing of a notification, report or assessment,
in each case necessary for the effective operation of each Group Company's
business, its ownership, possession, occupation or use of an asset or the
execution or performance of this Agreement;
"Property" means the property and interests set out in Schedule 5;
--------
"Purchaser's Accountants" means PricewaterhouseCoopers of 9 Greyfriars
-----------------------
Road, Reading RG1 1JG;
"Purchase Contract" means the contract for the purchase of the Printapen
-----------------
5000 dated June 7, 1999 between WPI Husky and KPR Midlink Limited;
30
<PAGE>
"Purchaser's Solicitors" means Debevoise & Plimpton of Tower 42,
----------------------
International Financial Centre, Old Broad Street, London EC2N 1HQ;
"Reference Accounts Date" means 30 September 1999;
-----------------------
"Shares" means 110 ordinary shares of 10p each and 100 deferred shares of
------
(Pounds)1 each, each fully paid, of WPI Husky, comprising the entire issued
share capital of WPI Husky and 1 fully paid ordinary share of 50,000 DM of WPI
Husky GmbH, comprising the entire issued share capital of WPI Husky GmbH;
"Tax" and "Taxation" has the meaning given in the Tax Deed;
--- --------
"Tax Authority" has the meaning given in the Tax Deed;
-------------
"Tax Deed" means a Tax Deed in the agreed form between the Vendor, the
--------
Guarantor and the Purchaser;
"TCGA" means the Taxation of Chargeable Gains Act 1992;
----
"The Husky Plan" means the Husky Computers Employee Benefit Plan (1983);
--------------
"The Plan" means the WPI Group Money Purchase Plan and where the context so
--------
requires, the trustees of The Plan;
"UK Asset Purchase Agreement" means the agreement to be entered into
---------------------------
between the UK Vendor and the UK Purchaser;
"UK Assets" means the assets owned by the UK Vendor to be sold to the UK
---------
Purchaser pursuant to the UK Asset Purchase Agreement;
"UK Assumed Liabilities" shall have the meaning set out in the UK Asset
----------------------
Purchase Agreement;
"UK Excluded Liabilities" shall have the meaning referred to as the
-----------------------
"Excluded Liabilities" set out in the UK Asset Purchase Agreement;
"US Assets" means the assets owned by the US Vendor to be sold to the US
---------
Purchaser pursuant to the Asset Purchase Agreement;
"US Legal Opinion" means the US legal opinion to be delivered to the
----------------
Purchaser at or prior to Completion from the Vendor's and Guarantor's legal
counsel in accordance with Clause 2.4(g);
"VATA" means, in the United Kingdom, the Value Added Tax Act 1994 and, in a
----
jurisdiction outside the United Kingdom, any equivalent legalisation;
31
<PAGE>
"Vendor's Accountants" means Arthur Andersen, of One Victoria Square,
--------------------
Birmingham B1 1BD;
"Vendor's Solicitors" means Cobbetts, of Ship Canal House, King Street,
-------------------
Manchester, M2 4WB, Manchester;
"Warranty" means a statement contained in Schedule 4 and "Warranties" means
-------- ----------
all those statements;
"Warranty Claim" means a claim by the Purchaser under or pursuant to the
--------------
provisions of Clause 6 or attributable to any inaccuracy of a representation
made by the US Vendor pursuant to Section 3 of the Asset Purchase Agreement or
attributable to any claim made by the UK Purchaser under or pursuant to Clause
10 of the UK Asset Purchase Agreement;
"WPI Group" means each of the Vendor, the Guarantor and any of their
---------
respective subsidiaries;
"WPI Husky GmbH" means WPI Husky Technology GmbH, a limited liability
--------------
company incorporated in Germany and registered at the Commercial Register of the
Siegburg Local Court (file number HRB 3396);
"WPI France" means the French sales office of WPI Husky located at 12, rue
----------
le Corbusier, Parc d'Affaires SILIC, Batiment Iena B2, Rungis.
19.2 In this Agreement, a reference to:
(a) a "subsidiary undertaking" or "parent undertaking" is to be construed
---------------------- ------------------
in accordance with section 258 of the CA 1985 and to a "subsidiary" or "holding
---------- -------
company" is to be construed in accordance with Section 736 of the CA 1985;
-------
(b) liability under, pursuant to or arising out of (or any analogous
expression) any agreement, contract, deed or other instrument includes a
reference to contingent liability under, pursuant to or arising out of (or any
analogous expression) that agreement, contract, deed or other instrument;
(c) a document in the "agreed form" is a reference to a document in a form
-----------
approved and for the purposes of identification signed by or on behalf of each
party;
(d) a statutory provision includes a reference to the statutory provision
of modified or re-enacted or both from time to time before the date of this
Agreement and any subordinate legislation made under the statutory provisions
(as so modified or re-enacted) before the date of this Agreement;
32
<PAGE>
(e) a person includes a reference to any individual, firm, company,
corporation or other body corporate, government, state or agency or a state or
any joint venture, association or partnership (whether or not having separate
legal personality);
(f) a person includes a reference to that person's legal personal
representatives and successors;
(g) a Clause, paragraph or Schedule, unless the context otherwise requires,
is a reference to a Clause or paragraph of, or Schedule to, this Agreement; and
(h) any English legal term for any action, remedy, method of judicial
proceeding, legal document, legal status, court, official or any legal concept
or thing shall in respect of any jurisdiction other than England be deemed to
include what most nearly approximates in that jurisdiction to the English legal
term and to any English statute shall be construed so as to include equivalent
or analogous laws of any other jurisdiction.
19.3 The headings in this Agreement do not affect its interpretation.
20 Notices
-------
20.1 A notice, claim, demand or other communication under and in connection with
this Agreement or with any arbitration under this Agreement (a "Notice") shall
------
be:
(a) in writing
(b) delivered personally or sent by first class post, prepaid recorded
delivery (and airmail if overseas) or by fax to the party due to receive the
Notice to the address set out in Clause 20.3 or to another address, person, or
fax number specified by that party by not less than seven days' written notice
to the other party received before the Notice was despatched.
20.2 Unless there is evidence that it was received earlier, a Notice is deemed
given if:
(a) delivered personally, when left at the address referred to in Clause
20.1(b);
(b) sent by mail, two Business Days after posting;
(c) sent by airmail, six Business Days after posting;
(d) sent by fax, when confirmation of its transmission has been recorded by
the sender's fax machine.
20.3 The address referred to in Clause 20.1(b) is:
33
<PAGE>
<TABLE>
<CAPTION>
Marked for the
--------------
Name of Party Address Facsimile Number Attention of
------------- ------- ---------------- ------------
<S> <C> <C> <C>
The Vendor and WPI 001 603 627 3150 Mike Tule
the Guarantor c/o 1155 Elm Street
New Hampshire
USA
Copy to:
Cobbetts 0161 833 3030 Chris Dunn
Ship Canal House
King Street
Manchester
M2 4WB
The Purchaser 3 New England Mark Tremallo
Executive Park
Burlington
Massachusetts
01 803 5087
USA
Copy to:
Debevoise & Plimpton 0171 588 4180 James Kiernan
Tower 42
International Financial
Centre
Old Broad Street
London EC2N 1HQ
</TABLE>
21 Governing Law and Jurisdiction
------------------------------
21.1 This Agreement and the documents to be entered into pursuant to it shall
be governed by English law.
21.2 The courts of England have exclusive jurisdiction to settle any dispute
arising from or connected with this Agreement and the documents to be entered
into pursuant to it (a "Dispute").
-------
21.3 The parties agree that the courts of England are the most appropriate and
convenient courts to settle any Dispute and, accordingly, they will not argue to
the
34
<PAGE>
contrary. This Clause 21.3 is for the benefit of the Purchaser and shall not
limit its right to take proceedings in any other court of competent
jurisdiction.
21.4 The parties agree that the documents which start any such action or
proceedings (the "Proceedings") and any other documents required to be served in
-----------
relation to those Proceedings may be served on the Vendor in accordance with
Clause 20. These documents may however be served in any other manner allowed by
law. This Clause applies to all Proceedings wherever started.
22 Counterparts
------------
This Agreement may be executed in any number of counterparts, each of
which is an original and all of which together evidence the same Agreement. Any
party may enter into this Agreement by executing any such counterpart.
35
<PAGE>
SCHEDULE 1
----------
Shareholder Details
-------------------
Shareholder No. of Shares Consideration
----------- ------------- -------------
WPI Group (UK) 110 ordinary shares of US$21,204,400
10p each
100 deferred shares of
(Pounds)1 each
in WPI Husky
WPI Group (UK) 1 ordinary share of US$500,000
50,000 DM
in WPI Husky GmbH
36
<PAGE>
SCHEDULE 2
----------
PART 1.
Vendor Details
--------------
1 Registered number: 03227062
2 Place of incorporation: England and Wales
3 Registered office: Walsgrave Business Triangle, Coventry, CV2 2TB
4 Type of company: Private Unlimited
5 Allotted share capital: 10,400,000 ordinary shares of (Pounds)1 each
6 Issued share capital: 10,390,540 ordinary shares
7 Directors: John Raymond Allard
Michael Henry Foster
8 Secretary: Michael Bradford Tule
9 Accounting reference date: September 30
10 Auditors: Arthur Andersen
PART 2.
Particulars of each Company:
---------------------------
WPI Husky
---------
1 Registered number: 01328356
2 Place of incorporation: England and Wales
3 Registered office: Walsgrave Business Triangle, Coventry, CV2 2TB
4 Type of company: Private Limited
5 Allotted share capital: 110 ordinary shares of 10p each
100 deferred shares of (Pounds)1 each
37
<PAGE>
6 Issued share capital: 110 ordinary shares of 10p each
100 deferred shares of (Pounds)1 each
7 Directors: John Raymond Allard
Michael Henry Foster
Richard Kantor
Karl David Webb
8 Secretary: Michael Bradford Tule
9 Accounting reference date: September 30
10 Auditors: Arthur Andersen
WPI Husky Technology GmbH
-------------------------
1 Registered number: HRB 3396, Amtsgericht Siegburg
2 Place of incorporation: Germany
3 Registered office: Auelweg 18, 53797 Lohmar, Germany
4 Type of company: Private Limited (GmbH)
5 Allotted share capital: 1 share of 50,000 DM
6 Issued share capital: 1 share of 50,000 DM
7 Directors: Michael Krodel
Michael Henry Foster
John Raymond Allard
8 Secretary: N/A
9 Accounting reference date: September 30
10 Auditors: Arthur Andersen
38
<PAGE>
SCHEDULE 3
----------
Completion Requirements
-----------------------
1. Vendor's Obligations
-------------------------
1.1 At Completion the Vendor shall deliver to the Purchaser:
(a) duly executed transfer(s) in respect of the Shares to the Purchaser or
its nominee(s) and the share certificate(s) for the Shares and, in the case of
WPI Husky GmbH, a duly executed notarial transfer deed;
(b) any waiver, consent, release or other document necessary to give the
Purchaser or its nominee(s) full legal and beneficial ownership of the Shares;
(c) the common seal (if any) of each Group Company and each register,
minute book and other book required to be kept by each Group Company under the
CA 1985 duly written up to the date of Completion and each certificate of
incorporation and certificate of incorporation on change of name for each Group
Company the share certificates in respect of each of the subsidiaries;
(d) a copy of a letter to each Group Company from its auditors resigning
their office with effect from Completion and containing the statement referred
to in Section 394 of the CA 1985, the original of the letter having been
deposited at the registered office of the relevant company;
(e) a resignation in the agreed form from the secretary of each Group
Company expressed to take effect from the end of the meeting held pursuant to
paragraph 1.2;
(f) a resignation in the agreed form from each of the directors of each
Group Company expressed to take effect from the end of the meeting held pursuant
to paragraph 1.2;
(g) the Management Accounts and all title deeds and other documentation
relating to the Properties;
(h) a copy of each bank mandate of each Group Company and copies of
statements of each bank account of each Group Company made up to a date not
earlier than two Business Days before Completion;
(i) unconditional receipts for rent and other payments due in respect of
the leasehold Property;
39
<PAGE>
(j) all documentation relating to the Intellectual Property Rights,
including (without limitation) the original registration and renewal
certificates for each of the Intellectual Property Rights which are registered
or pending as at Completion (or copies thereof where such original documentation
is not available);
(k) evidence satisfactory to the Purchaser that the provisions of Clause 23
of Schedule 4 ("Insider Agreements") have been duly complied with insofar as
------------------
they require certain matters to be dealt with prior to Completion;
(l) bank statements of all bank accounts of all Group Companies as at the
date of Completion;
(m) the Tax Deed duly executed by the Vendor;
(n) the Escrow Agreement duly executed by the Vendor, the Guarantor, the US
Vendor and the Escrow Agent;
1.2 The Vendor shall ensure that at Completion a meeting of the board of
directors of each Group Company is held at which the directors:
(a) vote in favour of the registration of the Purchaser or its nominee(s)
as member(s) of each Group Company in respect of the Shares (subject to the
production of properly stamped transfers);
(b) subject to the CA 1985, change each Group Company's accounting
reference date to 31 March;
(c) appoint persons nominated by the Purchaser as directors, secretary and
auditors of each Group Company with effect from the end of the meeting;
(d) revoke each existing mandate given by each Group Company for the
operation of its bank accounts and pass the resolutions contained in new
mandate(s) giving authority to persons nominated by the Purchaser OR with effect
from the end of the meeting, authorise the secretary to notify the specimen
signatures of the new officers of each Group Company in connection with each
existing mandate given by the Group Company for the operation of its bank
accounts;
(e) accept the resignation of the secretary so as to take effect from the
end of the meeting and shall hand to the Purchaser duly certified copies of such
Resolutions;
(f) accept the resignation of each director so as to take effect from the
end of the meeting and shall hand to the Purchaser duly certified copies of such
Resolutions.
40
<PAGE>
1.3 Each of the requirements set out in Clauses 1.1 and 1.2 above shall apply
equally to WPI Husky GmbH to the extent applicable under German law.
2. Purchaser's Obligations
----------------------------
2.1 On Completion, the Purchaser shall deliver to the Vendor:
(a) the Tax Deed duly executed duly executed by the Purchaser; and
(b) the Escrow Agreement duly executed by the Purchaser and the US
Purchaser.
41
<PAGE>
SCHEDULE 4
----------
Warranties
----------
1. Capacity and Authority
---------------------------
1.1 The Vendor and each Group Company are companies duly incorporated and
validly existing under English law or the relevant law of incorporation and have
been in continuous existence since incorporation.
1.2 Each Group Company has the right, power and authority to conduct its
business as conducted at the date of this Agreement and to own or lease its
properties, as now conducted, owned or leased.
1.3 The Vendor's obligations under this Agreement, the Tax Deed, the Escrow
Agreement and each document to be executed at or before Completion are, or when
the relevant document is executed will be, enforceable in accordance with their
terms and will not conflict with any other obligation of the Vendor.
2. Information
----------------
2.1 All the information provided to the Purchaser or its agents, employees or
advisers is true, accurate and not misleading, save for the information which to
the knowledge of the Purchaser is not true, accurate and not misleading.
2.2 The information set out in this Agreement, the Tax Deed and the Disclosure
Letter is true, accurate and not misleading.
3. Shares and Subsidiary Undertakings
---------------------------------------
3.1 The Vendor is the sole legal and beneficial owner of the number of Shares
set out against his name in Schedule 1, free from any Encumbrances.
3.2 The Shares comprise the entire issued share capital of each Group Company,
have been properly allotted and issued and are fully paid or credited as fully
paid. The particulars of each Group Company set out in Schedule 2 are true and
complete and the Vendor has no other subsidiaries other than WPI Husky, WPI
Oyster Termiflex Ltd. and WPI Husky GmbH.
3.3 There is no Encumbrance, and there is no agreement, arrangement or
obligation to create or give an Encumbrance, in relation to any of the Shares or
unissued shares in the capital of any Group Company. No person has claimed to be
entitled to an Encumbrance in relation to any of the Shares.
42
<PAGE>
3.4 Other than this Agreement, there is no agreement, arrangement or obligation
requiring the creation, allotment, issue, transfer, redemption or repayment of
or the grant to a person of the right (conditional or not) to require the
allotment, issue, transfer, redemption or payment of a share in the capital of
any Group Company (including, without limitation, an option or right of pre-
emption or conversion).
3.5 A copy of the memorandum and articles of association of each Group Company
is annexed to the Disclosure Letter and is true, accurate and complete and has
annexed thereto a copy of every resolution or agreement as is required by law to
be annexed to it and sets out the rights and restrictions attaching to each
class of share capital in each Group Company.
3.6 WPI Husky GmbH does not have and has never had any subsidiary undertaking.
3.7 Each Group Company has no interest in, and has not agreed to acquire an
interest in, any corporate body.
4. Accounts
-------------
4.1 The Accounts have been prepared and audited on a proper and consistent
basis in accordance with the Companies Act 1985 and applicable standards,
principles and practices generally accepted in the United Kingdom.
4.2 No change in accounting policies has been made in preparing the accounts of
each Group Company for each of the three financial years of each Group Company
ended on the Reference Accounts Date, except as stated in the audited financial
statements for those years.
4.3 The Accounts show a true and fair view of the assets, liabilities and state
of affairs of each Group Company as at the Reference Accounts Date and of the
profits and losses of each Group Company for the financial year ended on the
Reference Accounts Date.
4.4 To the extent required by the Companies Act 1985 and all appropriate FRS,
the Accounts disclose and provide for all bad and doubtful debts, all
liabilities (actual contingent or otherwise) and all financial commitments
existing at the Reference Accounts Date.
4.5 The results shown by the audited profit and loss accounts of each Group
Company for each of the three financial years of each Group Company ended on the
Reference Accounts Date have not (except as disclosed in those accounts) been
effected by any extraordinary, exceptional or non-recurring item or by another
fact or circumstance making the profit or loss for a period covered by any of
those accounts unusually high or low.
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4.6 The Accounts reserve or provide in accordance with applicable standards,
principles and practices generally accepted in the United Kingdom for all Tax
liable to be assessed on each Group Company, or for which it is or may become
accountable, for all periods starting on or before the Reference Accounts Date
(whether or not each Group Company has or may have a right of reimbursement
against another person). The Accounts reserve in accordance with applicable
standards, principles and practices generally accepted in the United Kingdom for
all contingent or deferred liabilities to Tax for all periods starting on or
before the Reference Accounts Date.
4.7 In the Accounts:
(a) stock (except long term contract balances) was valued in the same way
as in the audited accounts of each Group Company for the two preceding financial
years and on the basis of the lower of cost and net realisable value;
(b) all redundant and obsolete stock was written off and all sold, moving
and damaged stock was written down appropriately.
4.8 The basis and rates of depreciation and amortisation used in the Accounts
were the same as those used in the audited accounts of each Group Company for
the two preceding financial years.
4.9 The rates of depreciation and amortisation used in the audited accounts of
each Company for the three financial years of each Group Company ended on the
Reference Accounts Date were sufficient to ensure that each fixed asset of the
Group Company will be written down to nil by the end of its useful life.
4.10 The Management Accounts have been carefully and properly prepared with all
due care on a basis consistent with each other and with the Accounts are not
misleading with respect to the state of assets, liabilities and affairs of the
Group Companies as at the relevant Accounts Date and of the profits or losses
for the period concerned.
4.11 Each Group Company's accounting records are up to date, in its possession
or under its control and are properly completed in accordance with the law and
applicable standards, principles and practices generally accepted in the United
Kingdom.
4.12 None of the debts receivable or due to any Group Company which are included
in the Audited Accounts or which have subsequently arisen has been outstanding
for more than three months from its due date for payment or has been released on
terms that the debtor has paid less than the full value of his debt and all such
debts have realised or, so far as the Vendor is aware (having made all due
enquiry), will realise in the normal course of collection their full value as
included in the Audited Accounts or in the books of the relevant Group Company
after taking into account the provision for bad and doubtful debts made in the
Audited Accounts. For the avoidance of doubt, a debt shall
44
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not be regarded as realising its full value to the extent that it is paid,
received or otherwise recovered in circumstances in which such payment, receipt
or recovery is or may be void, voidable or otherwise liable to be reclaimed or
set aside.
4.13 The Guarantor has made available to the Purchaser a complete and correct
copy of the Annual Report on Form 10-K of the Guarantor for the fiscal year
ending September 26, 1999. The Financial Statements included in such Annual
Report have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved (except as otherwise noted therein) and fairly present in all material
respects the consolidated financial position and the consolidated results of
operations and cash flows of the Guarantor and its subsidiaries on a
consolidated basis as at the dates thereof or for the periods presented therein.
Since September 26, 1999, there has not been any material adverse change in the
business, assets, condition (financial or otherwise) or results of operations of
the Guarantor and any of its subsidiaries.
5. Changes since the Reference Accounts Date
----------------------------------------------
5.1 Since the Reference Accounts Date:
(a) each Group Company's business has been operated in the ordinary and
usual course so as to maintain it as a going concern and without any
interruption or alteration in the nature, scope or manner of its business;
(b) there has been no adverse change in the financial or trading position
or turnover of each Group Company;
(c) no material change has occurred in the assets and liabilities shown in
the Accounts and there has been no reduction in the value of the net tangible
assets of each Group Company on the basis of valuation used in the Accounts; and
(d) no Group Company has borrowed or raised any money or taken any form of
financial facility (whether pursuant to a factoring arrangement or otherwise).
5.2 Since the Reference Accounts Date:
(a) each Group Company has not, other than in the usual course of its
business:
(i) acquired or disposed of or agreed to acquire or dispose of, an
asset; or
(ii) assumed or incurred, or agreed to assume or incur, a liability,
obligation or expense (actual or contingent);
(b) each Group Company has not factored, sold or agreed to sell a debt;
45
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(c) each Group Company's business has not been materially or adversely
affected by the loss of any important customer or source of supply. For these
purposes, an important customer or source of supply means a customer with a
revenue exceeding (Pounds)10,000.
(d) each Group Company has not:
(i) made, or agreed to make, capital expenditure exceeding in total
(Pounds)20,000; or
(ii) incurred, or agreed to incur, a commitment or commitments
involving capital expenditure exceeding in total (Pounds)20,000,
(e) each Group Company's business has not been materially or adversely
affected by the termination of, or a change in the terms of, an agreement or by
the loss of a customer or supplier;
(f) each Group Company has not declared, paid or made a dividend or
distribution (including, without limitation, a distribution within the meaning
of ICTA) except as provided in the Accounts;
(g) each Group Company has not changed its accounting reference period;
(h) no resolutions of the shareholders of any Group Company have been
passed; and
(i) each Group Company has not created, allotted, issued, acquired, repaid
or redeemed share or loan capital or made an agreement or arrangement or
undertaken an obligation to do any of those things.
(j) each Group Company has not been refused any insurance claims or settled
below the amount claimed.
6. Tax
--------
6.1 Each Group Company and the Vendor, save for WPI Husky GmbH and WPI France,
is and has at all times been resident only in the United Kingdom for all Tax
purposes. Each Group Company and the Vendor is not liable to pay and has at no
time incurred any liability to Tax chargeable under the laws of any jurisdiction
other than the United Kingdom.
6.2 Each Group Company has paid all Tax which it has become liable to pay and
is not and has not in the six years ending on the date of this Agreement been,
liable to pay a penalty, surcharge, fine or interest in connection with Tax.
46
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6.3 Without prejudice to paragraph 6.2 each Group Company has deducted or
withheld all Tax which it has been obliged by law to deduct or withhold from
amounts paid by it, has properly accounted to the relevant Tax Authority for all
amounts of Tax so deducted or withheld and has otherwise complied with its legal
obligations in respect of such deductions or withholdings.
6.4 Each Group Company has within applicable time limits made all returns,
provided all information and maintained all records in relation to Tax as it is
required to make, provide or maintain and has fully complied on a timely basis
with all notices served on it and any other requirements lawfully made of it by
any Tax Authority. No return (and nothing in a return) is disputed or is yet to
be determined by, or is subject to agreement with, a Tax Authority.
6.5 Each Group Company has properly operated in all material respects the Pay-
As-You-Earn system and has complied in all material respects with each reporting
obligation in connection with benefits provided (whether by each Company or by
any other person) for each Group Company's directors, other officers and
employees.
6.6 So far as the Vendor is aware, having made all reasonable enquiries, each
Group Company is not and does not expect to be involved in a dispute in relation
to Tax. No Tax Authority has investigated or indicated that it intends to
investigate each Group Company's Tax affairs.
6.7 Each Group Company has sufficient records to determine the Tax consequences
which would arise on a disposal or on the realisation of each asset owned by it
at the Reference Accounts Date, or acquired since the Reference Accounts Date
but before the date of this Agreement.
6.8 No Tax Authority has agreed to operate any special arrangement (that is, an
arrangement which is not based on a strict application of all relevant Tax
legislation, published extra-statutory concessions and published statements of
practice) in relation to the affairs of each Group Company. All notices and
other communications from a Tax Authority requiring or permitting each Group
Company to deal with its Tax affairs in a particular manner or on a particular
basis are in the possession of each Group Company.
6.9 The Disclosure Letter contains full details of all applications which have
been made at any time by each Group Company for any statutory consent or
clearance. All particulars and other information given to any Tax Authority in
connection with any such application for such consent or clearance were full and
accurate in all material respects and any consent or clearance given in response
to such application was valid and effective. All transactions in respect of
which such consent or clearance was obtained have been carried into effect, and
have been undertaken strictly in accordance with the terms of the application
for the relevant consent or clearance.
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<PAGE>
6.10 Except as disclosed in the Disclosure Letter, each Group Company is not and
has not been a party to or otherwise involved in any transaction, agreement or
arrangement otherwise than by way of a bargain at arms' length, or any
transaction, agreement or arrangement (whether or not by way of a bargain at
arms' length) under which it has been or is or may be required to make any
payment for any goods, services or facilities provided to it which is in excess
of the market value of such goods, services or facilities or under which it has
been, or is or may be required to provide goods, services or facilities for a
consideration which is less than the market value of such goods, services or
facilities and/or in consequence of which it is or will be liable to Tax in
respect of an amount deemed for Tax purposes to be income or gains of each Group
Company but not actually income or gains of each Group Company.
6.11 Each Group Company:
(a) is registered for the purposes of the VATA;
(b) has made, given, obtained and kept up-to-date, full and accurate
records, invoices and documents appropriate or required for the purposes of the
VATA;
(c) has complied in all material respects with all other applicable VAT
legislation and in particular has filed all returns and made all payments of VAT
on a timely basis; and
(d) has not been required by a Tax Authority to give security under the
VATA.
6.12 Each Group Company is not under a duty to make payments on account of VAT
pursuant to any order made under section 28 of the VATA.
6.13 In the three years ending on the date of this Agreement each Group Company
has not been in default in respect of an accounting period, as the terms
"default" and "accounting period" are used in section 59(1) of the VATA (the
default surcharge).
6.14 Each Group Company is not and has not been liable to a penalty under
section 63 of the VATA.
6.15 No VAT Return made by each Group Company has contained a material
inaccuracy for the purposes of section 64 of the VATA.
6.16 Each Group Company is entitled under the VATA to credit for all of its
input tax.
6.17 The Disclosure Letter contains adequate details of any method agreed with
or directed by H M Customs and Excise or otherwise applicable to each Group
Company for determining the allowability to that company of input tax in
accordance with Part XIV of the Value Added Tax Regulations 1995.
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6.18 The Disclosure Letter contains details of each claim for bad debt relief
under section 36 of the VATA (bad debts) or section 22 of the Value Added Tax
Act 1983 (refund of tax in cases of bad debts) made by each Group Company.
6.19 No Group Company owns any asset which is a capital item, the input tax on
which may be subject to adjustment in accordance with Part XV of the Value Added
Tax Regulations 1995 (capital goods scheme).
6.20 No Group Company, nor a company of which any Group Company is a relevant
associate within the meaning of paragraph 3(7) of Schedule 10 to the VATA
(election to waive exemption), has elected to waive exemption under paragraph 2
of Schedule 10 in relation to any land owned by it at Completion except as
disclosed in the Disclosure Letter. Each such election disclosed in the
Disclosure Letter has effect. Where any such election has been made, no
supplies in relation to the relevant land will be taken by virtue of paragraph
2(3AA) of Schedule 10 to the VATA to be supplies other than taxable supplies.
Each Group Company does not have an interest in any land supplies in relation to
which, if an election to waive exemption under paragraph 2 of Schedule 10 to the
VATA were to be made by each Group Company (or by a company of which any Group
Company is a relevant associate within the meaning of paragraph 3(7) of Schedule
10 to the VATA), would be taken by virtue of the said paragraph 2(3AA) to be
supplies other than taxable supplies.
6.21 No Group Company has received a notice of and to the best of the Vendor's
knowledge, information and belief there is nothing which indicates that the
grant to any Group Company of an interest in or right over land owned by a Group
Company at Completion or of a licence to occupy land owned by a Group Company at
Completion will not be an exempt supply because of an election under Schedule 10
to the VATA (election to waive exemption).
6.22 No event, transaction, act or omission has occurred by reason or in
consequence of which any Group Company may be deemed to make a taxable supply
under paragraph 1 of Schedule 10 to the VATA or under the Value Added Tax (Self-
Supply of Construction Services) Order 1989.
6.23 No tenancy, lease or licence to which any Group Company is a party is or
may become a developmental tenancy, developmental lease or developmental licence
for the purposes of Group 1 of Schedule 9 to the VATA.
6.24 No Group Company is and has not been a party to any transaction or
arrangements in respect of which a direction has been or could be made under
paragraphs 1 or 2 of Schedule 6 or paragraph 1 of Schedule 7 to the VATA.
49
<PAGE>
6.25 No Group Company is, nor has it, agreed to become an agent, manager or
factor for the purposes of section 47 of the VATA (agents, etc.) of a person not
resident in the United Kingdom.
6.26 No Group Company has been a party to any transactions in respect of which
a direction under the provisions of Schedule 9A to the VATA has been or may be
made.
6.27 All value added tax payable on the import of goods and all customs duties
and duties of excise payable to a Tax Authority in respect of any asset
(including, without limitation, trading stock) imported or owned by each Company
have been paid.
6.28 No Group Company has been a close company for the purposes of ICTA.
6.29 All documents by virtue of which any Group Company has any right or in the
enforcement of which any Group Company is interested have been duly stamped.
7. Assets
------------
7.1 Each asset included in the Accounts or acquired by any Group Company since
the Reference Accounts Date (other than stock disposed of in the usual course of
business) and each asset used by any Group Company or which is in the reputed
ownership of any Group Company is:
(a) legally and beneficially owned solely by each Group Company free from
any Encumbrance; and
(b) where capable of possession, in the possession or under the control of
each Group Company.
7.2 Each Group Company owns or has a right to use each asset necessary for the
effective operation of its business as currently conducted.
7.3 All plant, machinery, vehicles and equipment owned, possessed or used by
each Group Company are in good condition and working order and have been
regularly and properly maintained. None is in need of renewal or replacement or
surplus to each Group Company's requirements.
7.4 Each Group Company's asset registers comprise a complete and accurate
record of all the plant, machinery, equipment, vehicles and other assets owned,
possessed or used by it.
7.5 Maintenance contracts are in force for each asset of each Group Company
which it is normal to have maintained by independent or specialist contractors
and for each asset which each Group Company is obliged to maintain or repair
under a leasing or similar
50
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agreement. Those assets have been regularly maintained to a good technical
standard and in accordance with:
(a) safety regulations required to be observed in relation to them; and
(b) the provision of any applicable leasing or similar agreement.
7.6 No Group Company is a party to, nor is liable under, a lease or hire, hire
purchase, credit sale or conditional sale agreement.
7.7 No charge in favour of any Group Company is void or voidable for want of
registration.
7.8 Each Group Company's stock is of satisfactory quality and saleable in the
usual course of its business in accordance with its current price list.
7.9 No Group Company has supplied, or agreed to supply, defective or unsafe
goods or goods which fail to comply with their terms of sale.
7.10 No goods in a state ready for supply by each Group Company are defective
or unsafe or will fail to comply with terms of sale similar to terms of sale on
which similar goods have previously been sold by any Group Company.
7.11 Each Group Company's level of stock is reasonable having regard to current
and anticipated demand.
7.12 No debt shown in the Accounts, the Management Accounts or any Group
Company's accounting records is overdue by more than 12 weeks or is the subject
of an arrangement other than of the kind, particulars of which are set out in
the Disclosure Letter.
7.13 No Group Company has released a debt shown in the Accounts, the Management
Accounts or its accounting records so that the debtor has paid or will pay less
than the debt's book value. None of the debts shown in the Accounts, the
Management Accounts or any Group Company's accounting records has been deferred,
subordinated or written off or become irrecoverable to any extent. To the best
of the Vendor' knowledge, information and belief, each of those debts will
realise its book value in the usual course of collection.
7.14 No Group Company has acquired or agreed to acquire any material asset on
terms that property thereon does not pass until full payment is made.
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8. Year 2000
--------------
8.1 Each item of equipment and software programme used by any Group Company (a
"Company System") in the course of its business has been produced, tested and/or
--------------
amended in a manner which ensures that:
(a) a change of, reference to or use of a date before, on or after 31
December 1999 in the operation of that Company System, whether alone or in
conjunction with each other Company System, will not have an adverse effect on,
nor give rise to inconvenience in, the operation of that Company System; and
(b) the inclusion of a date or dates before, on or after 31 December 1999
in the date information exchanged with any item of equipment and software
programme which is not a Company System but with which that Company System
exchanges date information in the course of the Company's business will not have
an adverse effect on, nor give rise to inconvenience in, that exchange of date
information or the subsequent use of that date information.
8.2 Each product and service sold by each Group Company (the "Product and
Service") both now and at any time within the last six years has ensured that a
change of, reference to or use of a date before, on or after 31 December 1999 in
the operation of the Product and Service will not have an adverse effect on, nor
give rise to inconvenience in, the operation of that Product and Service.
8.3 Each Company System and Product and Service will, in responding to two-
digit date input and providing date output, resolve an ambiguity as to century
in a manner which is consistent, clearly defined and apparent to the user.
9. Intellectual Property
--------------------------
9.1 Each of the Intellectual Property Rights is:
(a) valid and enforceable and nothing has been done or omitted to be done
by which it may cease to be valid and enforceable;
(b) legally and beneficially owned by and validly granted to each Group
Company alone, free from any licence, Encumbrance, restriction on use or
disclosure obligation (or is lawfully used with the consent of the owner under
a licence); and
(c) not, and will not be, the subject of a claim or opposition from a
person (including, without limitation, an employee of each Company) as to title,
validity, enforceability, entitlement or otherwise.
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9.2 The Disclosure Letter contains details of all the Intellectual Property
Rights in respect of which each Group Company is a registered or beneficial
owner or applicant for registration including full correct and up-to-date
information in relation to each registration and application.
9.3 All renewal and maintenance fees and taxes due and payable prior to
completion in respect of each of the pending and registered Intellectual
Property Rights have been paid in full. Each other action required to maintain
and protect the pending and registered Intellectual Property Rights has been
taken.
9.4 Nothing has been done or omitted to be done and no circumstances exist by
which a person is or will be able to seek cancellation, rectification or other
modification of a registration of any of the Intellectual Property Rights.
9.5 There is and during the two years ending on the date of this Agreement has
been, no civil, criminal, arbitration, administrative or other proceeding or
dispute in any jurisdiction concerning any of the Intellectual Property Rights.
No civil, criminal, arbitration, administrative or other proceeding or dispute
concerning any of the Intellectual Property Rights is pending or threatened. To
the best of the Vendor's knowledge, information and belief, no fact or
circumstance exists which might give rise to a proceeding of that type.
9.6 No Group Company has granted and nor is obliged to grant a licence,
assignment, consent, undertaking, security interest, or other right in respect
of any of the Intellectual Property Rights.
9.7 There are no, and never have been, any outstanding claims against any Group
Company for an infringement or unauthorised use of any of the Intellectual
Property Rights. No Group Company has received any written claim that any of
the Intellectual Property is invalid.
9.8 The activities, processes, methods, products, services or Intellectual
Property used, manufactured, dealt in or supplied on or before the date of this
Agreement by each Company:
(a) are not, at the date of this Agreement, nor were they at the time
used, manufactured, dealt in or supplied, subject to licence, consent or
permission of, or payment to, another person;
(b) to the best of the Vendor's knowledge, information and belief, do not
at the date of this Agreement, nor did they at the time used, manufactured,
dealt in or supplied, infringe, misuse or embody the subject matter of any
rights in the Intellectual Property (including, without limitation, moral
rights) of another person;
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(c) to the best of the Vendor's knowledge, information and belief, have
not given, and will not give, rise to a claim against any Group Company.
9.9 No party to an agreement relating to the use:
(a) by each Group Company of Intellectual Property owned by another
person; or
(b) of any Intellectual Property Rights owned by each Group Company by
another person
is, or has at any time been, in breach of the agreement and no
circumstances exist which would give rise to any breach of any such agreement or
to any such agreement being terminated, suspended, varied or revoked without
each Group Company's consent (other than termination without cause upon notice
in accordance with the terms of the agreement).
9.10 All the Confidential Information is adequately and properly documented to
enable the Purchaser to acquire and retain its full benefit.
9.11 Each Group Company has not disclosed and is not obliged to disclose any
Confidential Information to any person other than its employees who are bound by
obligations of confidence or except in the ordinary and usual course of business
and then only on condition that the disclosure is to be treated as being of a
confidential nature. The Vendor is not aware of any such confidentiality having
been breached.
9.12 The Intellectual Property Rights and each Group Company's ownership,
licence or rights in them will not be adversely affected by the transaction
contemplated by this Agreement.
9.13 The Intellectual Property Rights comprise all the Intellectual Property
necessary for each Group Company to operate its business, and for the business
to continue to operate, as it has been operated during the two year period
ending on the date of this Agreement.
9.14 Each Group Company is not a party to a confidentiality or other agreement
and is not otherwise subject to any duty which restricts the free use or
disclosure of information or of any of the Intellectual Property Rights.
9.15 Each Group Company does not use or operate its business under a name other
than its corporate name.
9.16 The maximum liability of WPI Husky, to the Vendor's knowledge, is not in
excess of (Pounds)60,000 at the date of this Agreement with respect to the
overdue royalty payments due to Teology Networks, Inc.
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10. Insurance
---------------
10.1 Each insurable asset of each Group Company has at all material times been
and is at the date of this Agreement insured to its full replacement value (with
no provision for deduction or excess) against each risk normally insured against
by a person operating the types of business operated by each Group Company.
10.2 Each Group Company has at all material times been and is at the date of
this Agreement adequately insured against accident, damage, injury, third party
loss (including, without limitation, product liability), credit risk, loss of
profits and all other risks to which a person operating the types of business
operated by each Group Company is exposed.
10.3 The Disclosure Letter contains a list of each current insurance and
indemnity policy in respect of which each Group Company has an interest
(including any active historic policies which provide cover on a losses
occurring basis) (together the "Policies") and sets out, in relation to each of
the Policies, a summary including details of the parties, cover, deductibles,
limits, exclusions, conditions and premium payable.
10.4 Each of the Policies is valid and enforceable and is not void or voidable
and will be maintained in full force and effect without alteration pending
Completion and all premiums will be paid on times.
10.5 No Group Company has done anything or omitted to do anything which might:
(a) make any of the Policies void or voidable; or
(b) prejudice the ability to effect insurance on the same or better terms
in the future.
10.6 No insurer under any of the Policies has disputed, or given any indication
that they intend to dispute, the validity of any of the Policies on any grounds.
10.7 To the best of the Vendor's knowledge, information and belief, there is
nothing which could vitiate any of the Policies or prejudice the ability to
effect insurance on the same or better terms in the future.
10.8 No insurer has ever canceled or refused to accept or continue any
insurance in relation to each Group Company.
10.9 No claims have been made, no claim is outstanding and no fact or
circumstance exists which might give rise to a claim under any of the Policies.
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<PAGE>
10.10 No event, act or omission has occurred which requires notification under
any of the Policies.
10.11 None of the insurers under any of the Policies has refused, or given any
indication that it intends to refuse, indemnity in whole or in part in respect
of any claims under the Policies.
10.12 Nothing has been done or omitted to be done, and there is nothing, which
might entitle the insurers under any of the Policies to refuse indemnity in
whole or in part in respect of any claims under the Policies.
10.13 All premiums which are due under the Policies have been paid.
10.14 No Group Company has not done anything or omitted to do anything, and
there is nothing, which might result in an increase in the premium payable under
any of the Policies.
11. Real Property
--------------------
11.1 The Property comprises all land and premises owned, occupied or used by,
or in the possession of, each Group Company.
11.2 There is appurtenant to the Property each right and easement necessary
for its proper and existing use including, without limitation, emergency escape
routes. No right or easement is restricted in any way (including, without
limitation, a restriction on hours of use) or is capable of being lawfully
interrupted or terminated by any person.
11.3 Each Group Company holds each right or easement appurtenant for a term
not less than the unexpired term of the lease, tenancy or licence.
11.4 Each service necessary for the Property's existing use (including,
without limitation, electricity, gas and water supplies, sewerage and
telecommunications lines) is available to each Group Company.
11.5 Each Group Company's access to the Property is sufficient for the
existing use of the Property and is by means of a road adopted by the local
highway authority and maintainable at public expense.
11.6 The Property is not subject to outgoings other than the uniform business
rate, water and sewerage rates, rent, service charge and insurance premiums.
11.7 Neither the Property nor any of its title deeds is subject to an
Encumbrance, agreement, obligation, condition, right, easement, exception,
reservation, or other interest.
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11.8 There is no person in possession or occupation of, or who has or claims a
right or interest of any kind, in the Property adversely to each Company's
interest and each Group Company is entitled to and has exclusive vacant
possession of the Property.
11.9 No fact or circumstance exists which materially and adversely affects the
Property's value or the use or enjoyment of the Property or casts doubt on each
Group Company's right or title to the Property.
11.10 Each Group Company has performed or complied with each Property Permit,
obligation, condition, restriction, agreement (including, without limitation,
the term of any lease) and legal and administrative requirement affecting the
Property, or its respective ownership, occupation, possession or existing use.
11.11 There is, and during the two years ending on the date of this Agreement
has been, no civil, criminal, arbitration, administrative, or other proceeding
or dispute concerning the Property. No civil, criminal, arbitration,
administrative or other proceeding concerning the Property is pending or
threatened. To the best of the Vendor' knowledge, information and belief, no
fact or circumstance exists which might give rise to a proceeding of that type.
There is no outstanding notice affecting the Property.
11.12 There is no resolution or proposal for compulsory acquisition of the
Property by a local or other authority.
11.13 The Property's existing use as hitech/light industrial with associated
offices is the lawful use permitted under applicable town and country planning
legislation and such permission is not temporary or personal.
11.14 Any permission necessary for the Property's existing use, construction
and any subsequent alteration has been obtained and is in force, unimpeachable
and unconditional or subject only to a condition that has been satisfied (and
nothing more remains to be done under the condition).
11.15 To the best of the Vendor's knowledge, information and belief there is no
material deficiency which requires correction in the state or condition of any
building or other structure on or forming part of the Property.
11.16 No flooding, subsidence or other material defect of any kind (including,
without limitation, a design or construction defect) which affects or has
affected the Property.
11.17 No building or other structure on or forming part of the Property
contains a deleterious substance or a substance which is not at the date of this
Agreement used in generally accepted good building practice.
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11.18 There is no fact or circumstance (and, to the best of the Vendor's
knowledge, information and belief, no fact or circumstance will within six
months starting on the date of this Agreement occur or arise) which:
(a) could entitle or require a person (including, without limitation, a
landlord or licensor) to forfeit or enter on, or take possession of, or occupy,
the Property;
(b) could restrict or terminate each Group Company's continued and
uninterrupted possession or occupation of the Property; or
(c) could prevent or restrict the Property's development for which
planning permission has been or is expected to be obtained.
11.19 A rent or fee payable in respect of the Property is not at the date of
this Agreement being reviewed and cannot be reviewed before Completion.
11.20 No person (including, without limitation, a landlord or licensor) has
elected to waive, or indicated an intention to waive, an exemption from payment
by each Group Company of value added tax in respect of a payment made under the
Lease.
11.21 The documents disclosed relating to the Property are all those that are
relevant and are complete copies.
11.22 No Group Company has any contingent liability or other liability as
original tenant, landlord, assignee or otherwise in respect of any real property
or interest in real property except the Property.
11.23 No Group Company has any contingent liability or other actual liability
as original tenant, landlord, assignee or otherwise except in respect of the
Coventry Lease.
12. Environmental Matters, Health and Safety and Products Liability
----------------------------------------------------------------------
12.1 The operation of each Group Company's business does not involve and has
never involved the use, or the release or discharge of a hazardous substance or
article, waste, sewage or other pollutant or contaminant.
12.2 No land or other asset owned, occupied, possessed or used by each Group
Company on or at any time before the date of this Agreement:
12.2.1 contains or has contained (in the case of land, above or below
ground) a hazardous substance or article, waste or other pollutant or
contaminant;
12.2.2 is or has been used for the deposit, storage, treatment or
disposal of waste or sewage; or
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12.2.3 is referred to or listed in a register of polluted or
contaminated land and no fact or circumstance exists which might give rise to an
entry in such a register .
12.3 No Group Company has sold, supplied or provided a defective product or
services in the course of its business on or prior to the date hereof.
12.4 No Group Company has manufactured, sold or supplied any product or
service which:
12.4.1 is, was or will become, in any material respect, faulty or
defective; or
12.4.2 does not comply in any material respect with any warranty or
representation, express or implied, made by or on behalf of any Group Company in
respect of it or with all laws, regulations, standards and requirements
applicable to it; or
12.4.3 was sold or supplied on terms that any Group Company accepts an
obligation to service or repair or replace such products after delivery.
12.5 No Group Company has received a prohibition notice, a notice to warn or a
suspension notice under the Consumer Protection Act 1987 in relation to any of
its products at any time within the last 3 years.
12.6 Each Group Company has in relation to its plant and machinery and other
fixed assets, and the Premises and its employees, complied with all legal
requirements relating to health and safety including, but not limited to, those
imposed by the Health and Safety at Work etc. Act 1974 and all regulations made
thereunder, and no action has been taken by any entering authority in relation
to any actual or alleged breach of such requirements and neither is any Group
Company in receipt of any claim by any officer or employee or any past officer
or employee in relation to any such breach and the Vendor is not aware of any
circumstances which may lead to such action or claim.
12.7 12.7.1 For the purpose of this Warranty, "Environmental Laws" shall mean
any existing laws (local or national) or regulations having application to the
operation of the business of any Group Company including, without limitation,
directives, regulations, rules, codes of practice and guidance notes made
thereunder relating to environmental and health & safety matters.
12.7.2 Each Group Company is and to the Vendor's knowledge always has
been in full compliance with all Environmental Laws and the existence and the
use of the Premises, machinery and other property of any Group Company has been
and is in accordance with all Environmental Laws.
12.7.3 No written notice, written demand or written request for
information has been issued or made and no investigation or review is or has
been threatened or is
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pending by any governmental authority or other person with respect to any
alleged violation by any Group Company of any Environmental Law or liability
thereunder.
12.7.4 No Group Company owns or has in the past owned or had any
interest in land which has been used for a contaminative use or upon which
toxic, radioactive, caustic or other hazardous substances (of whatever kind)
have been stored or processed in a manner inconsistent with any Environmental
Laws.
13. Agreements
-----------------
13.1 To the best of the Vendor's knowledge, information and belief no fact or
circumstance exists which might invalidate or give rise to a ground for
termination, avoidance or repudiation of an agreement, arrangement or obligation
of which each Group Company is a party. No party with whom each Group Company
has entered into an agreement, arrangement or obligation has given notice of its
intention to terminate, or has sought to repudiate or disclaim, the agreement,
arrangement or obligation.
13.2 No Group Company nor any party with whom each Group Company has entered
into an agreement, arrangement or obligation is in material breach of the
agreement, arrangement or obligation. To the best of the Vendor's knowledge,
information and belief, no fact or circumstance exists which might give rise to
a breach of this type.
13.3 No Group Company is a party to and is not liable under a long-term,
onerous or unusual legally binding agreement, arrangement or obligation
including, without limitation:
13.3.1 an agreement, arrangement or obligation entered into other than
in the usual course of its business;
13.3.2 an agreement, arrangement or obligation entered into other than
by way of a bargain at arms length;
13.3.3 an agreement, arrangement or obligation restricting each Group
Company's freedom to operate the whole or part of its business or to use or
exploit any of its assets;
13.3.4 a sale or purchase, option or similar agreement, arrangement or
obligation affecting an asset owned, occupied, possessed or used by each Group
Company or by which each Group Company is bound;
13.3.5 a material agreement, arrangement or obligation with which each
Group Company cannot comply on time or without undue or unusual expenditure of
money or effort;
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13.3.6 a contract for the sale of shares or assets comprising a business
undertaking which contains warranties or indemnities under which any Group
Company still has a remaining liability or obligation or can be terminated as a
result of any change in the underlying ownership or control of any Group
Company, or would be materially affected by such change; or
13.3.7 an agreement, arrangement or obligation which is in any way
otherwise than in the ordinary course of any Company's business.
13.4 Each Group Company is not:
13.4.1 a member of a joint venture, consortium, partnership or
association (other than the bona fide trade association); or
13.4.2 a party to a distributorship, agency, franchise or management
agreement or arrangement.
14. Terms of Trade and Business
----------------------------------
14.1 Each Group Company has paid its creditors within the times agreed with
them. No debt owing by it has been due for more than 30 days.
14.2 During the year ending on the date of this Agreement, no substantial
supplier or customer of each Group Company has:
14.2.1 stopped, or indicated an intention to stop, trading with each
Company;
14.2.2 reduced, or indicated an intention to reduce, trading with each
Company; or
14.2.3 changed or indicated an intention to change, substantially the
terms on which it is prepared to trade with each Group Company.
14.3 To the best of the Vendor's knowledge, information and belief no
substantial supplier or customer of each Group Company is likely to:
14.3.1 stop trading with each Group Company;
14.3.2 reduce substantially its trading with each Group Company; or
14.3.3 change substantially the terms on which it is prepared to trade
with each Group Company.
14.4 To the best of the Vendor's knowledge, information and belief, the
attitude of customers, suppliers and employees with regard to each Group Company
will not be
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prejudicially affected by the execution or performance of this Agreement or any
document to be executed at or before Completion.
14.5 No Group Company has entered into an agreement or arrangement with a
supplier or customer in terms materially different to its standard terms of
business.
14.6 No person (either individually or jointly with another person) has bought
from or sold to each Company, either in the financial year of each Group Company
ended on the Reference Accounts Date or since the Reference Accounts Date, more
than five per cent of the total amount of all purchases or sales made by each
Group Company in that period.
14.7 No Group Company has outstanding any bid, tender, sale or service
proposal.
14.8 None of the records, systems, data or information of each Group Company
is recorded, stored, maintained, operated or otherwise wholly or partly
dependent on or held or accessible by any means (including, without limitation,
any electronic, mechanical or photographic process, computerised or not) which
are not under the exclusive ownership and direct control of each Group Company.
14.9 Each Group Company has at all times complied with the Data Protection
Acts 1984 and 1998 (including, for the avoidance of doubt, the data protection
principles set out in Schedule 1 to the Data Protection Act 1984 and the
Telecommunications (Data Protection and Privacy) (Direct Marketing) Regulations
1998.
15. Effect of Sale
---------------------
Neither the execution nor the performance of this Agreement or any
document to be executed at or before Completion will result in any Group Company
losing the benefit of any licence, consent, permit, approval or authorisation
(public or private) necessary for carrying on each Group Company's business in
the places and in the manner currently carried on or any asset, grant, subsidy,
right or privilege which it enjoys at the date of this Agreement or will:
15.0.1 conflict with;
15.0.2 result in the breach of;
15.0.3 give rise to an event of default under;
15.0.4 require the consent of a person under;
15.0.5 enable a person to terminate; or
15.0.6 relieve a person from an obligation under
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any agreement or arrangement to which any Group Company is a party or any legal
or administrative requirement by which any Group Company is bound or result in
any present or future indebtedness of any Group Company becoming due or capable
of being declared due and payable prior to its stated maturity.
16. Employees
---------------
16.1 There is no employment or other contract of engagement between any Group
Company and any of its directors or other officers. No Group Company is a party
to a consultancy contract.
16.2 There is no employment contract between any Group Company and any its
employees which cannot be terminated by any Group Company by three month's
notice or less without giving rise to a claim for damages or compensation (other
than a statutory redundancy payment or statutory compensation for unfair
dismissal).
16.3 There is no employment or consultancy contract or other contract of
engagement between any Group Company and any person which is in suspension or
has been terminated but is capable of being revised or enforced and in respect
of which each Company has a continuing obligation.
16.4 The Disclosure Letter contains details of:
16.4.1 the total number of Group Company's employees including those who
are on maternity leave or absent because of disability or other long-term leave
of absence and who have or may have a right to return to work with each Group
Company.
16.4.2 the name, date of start of employment, period of continuous
employment, salary and other benefits, grade and age of each employee of each
Group Company and, where an employee has been continually absent for more than
one month, the reason for the absence; and
16.4.3 the terms of the contract of each director, other officer and
employee of each Group Company entitled to remuneration at an annual rate or an
average annual rate, or an average annual rate over the last three financial
years, of more than (Pounds)10,000.
16.5 The basis of the remuneration payable to each Group Company's directors,
other officers and employees is the same as that in force at the Reference
Accounts Date. Each Group Company is not obliged to increase, nor has it made
provision to increase, the total annual remuneration payable to its directors,
other officers and employees by more than five per cent.
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16.6 No Group Company owes any amount to a present or former director, other
officer or employee of each Group Company (or his dependant) other than for
accrued remuneration or reimbursement of business expenses.
16.7 There is no agreement or arrangement between each Group Company and an
employee or former employee with respect to his employment, his ceasing to be
employed or his retirement which is not included in the written terms of his
employment or previous employment. No Group Company has provided, or agreed to
provide, a gratuitous payment or benefit to a director, officer or employee or
to any of their dependants.
16.8 Each Group Company has maintained up-to-date, full and accurate records
regarding the employment of each of its employees (including, without
limitation, details of terms of employment, payments of statutory sick pay and
statutory maternity pay, income tax and social security contributions,
disciplinary and health and safety matters), and termination of employment.
16.9 Except as disclosed in the Accounts, no Group Company has:
16.9.1 incurred a liability for breach or termination of an employment
contract including, without limitation, a redundancy payment, protective award
and compensation for wrongful dismissal, unfair dismissal and failure to comply
with an order for the reinstatement or re-engagement of an employee;
16.9.2 incurred a liability for breach or termination of a consultancy
agreement; or
16.9.3 made or agreed to make a payment or provided or agreed to provide
a benefit to a present or former director, other officer or employee of each
Company or to any of their dependants in connection with the actual or proposed
termination or suspension of employment or variation of an employment contract.
16.10 Each Group Company has complied with:
16.10.1 each obligation imposed on it by, and each order and award made
under, statute, regulation, code for conduct and practice, collective agreement,
custom and practice relevant to relations between it and its employees or a
trade union or the terms of employment of its employees; and
16.10.2 each recommendation made by the Advisory, Conciliation and
Arbitration Service and each award and declaration made by the Central
Arbitration Committee.
16.11 Within the year ending on the date of this Agreement, no Group Company
has:
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16.11.1 given notice of redundancies to the relevant Secretary of State
or started consultations with a trade union under Chapter II of Part IV of the
Trade Union and Labour Relations (Consolidation) Act 1992 or failed to comply
with its obligations under Chapter II of Part IV of that Act; or
16.11.2 been a party to a relevant transfer (as defined in the Transfer
of Undertakings (Protection of Employment Regulations 1981) or failed to comply
with a duty to inform and consult a trade union under those Regulations.
16.12 No Group Company has any arrangement with and does not recognise a trade
union, works council, staff association or other body representing any of its
employees.
16.13 No Group Company is involved in, and no fact or circumstance exist which
might give rise to, a dispute with a trade union, works council, staff
association or other body representing any of its employees.
16.14 No Group Company has and is not proposing to introduce a share incentive,
share option, profit sharing, bonus or other incentive scheme for any of its
directors, other officers or employees.
16.15 There is not and has not been a training scheme, arrangement or proposal
in relation to each Company in respect of which a levy may become payable by
each Company under the Industrial Training Act 1982.
17. Pensions and Other Benefits
----------------------------------
17.1 Save in respect of The Plan, the Group Companies have no obligation
(whether legally binding or not) to provide "relevant benefits" (within the
meaning of Section 612 ICTA 1988) to, or in respect of any person who is now or
has been an officer or employee of any Group Company or spouse or dependant of
such officer or employee;
17.2 Full and accurate details and particulars of The Plan have been disclosed
in the Disclosure Letter together with accurate, up-to-date and complete copies
of all documents relating to The Plan including a list of investments held for
The Plan and there is no obligation to provide benefits under The Plan other
than as revealed in such documents and particulars;
17.3 The Plan is an "exempt approved scheme" (within the meaning of Chapter I
of Part XIV ICTA 1988) and, to the best of the Vendor's knowledge and awareness,
there is no reason why approval of the Board of Inland Revenue should be
withdrawn;
17.4 Other than benefits on death as disclosed, The Plan provides only money
purchase benefits as defined in Section 181 Pension Schemes Act 1993. No person
who is now or has been an officer or employee has been promised that he or his
dependants will receive
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benefits on his retirement, death or leaving service other than money purchase
benefits as defined above.
17.5 During the Vendor's period of ownership of the Companies, the provisions
of The Plan has never discriminated between male and female members.
17.6 All premiums payable under contracts of insurance relating to payment of
benefits on death before normal pension age in respect of any officer or
employee of any Group Company have been paid and all contributions to, and
expenses of, The Plan which have fallen due for payment have been paid.
17.7 Except as fairly disclosed in the Disclosure Letter, there is no dispute
with regard to the benefits payable under The Plan or any other payments or
benefits referred to in paragraph 17.1. Except as fairly disclosed in the
Disclosure Letter, no legal proceedings in connection with The Plan are pending,
threatened or expected nor is there any fact or circumstance likely to give rise
to any such proceedings.
17.8 The Plan has at all times complied with and been administered in
accordance with the provisions governing it and all applicable laws, regulations
and requirements, including the requirements of the Inland Revenue for continued
approval as an exempt approved scheme, and of trust law.
17.9 The Group Companies have at all times complied with all the provisions of
The Plan which apply to it.
17.10 The Plan is not a contracted out plan within the meaning of the Pension
Schemes Act 1993.
18. Liabilities
------------------
18.1 Except as disclosed in the Accounts or in the Disclosure Letter, no Group
Company has any outstanding and has not agreed to create or incur loan capital,
borrowing or indebtedness in the nature of borrowing.
18.2 No Group Company is a party to and is not liable under a guarantee,
indemnity or other agreement to secure or incur a financial or other obligation
with respect to another person's obligation.
18.3 No part of the loan capital, borrowing or indebtedness in the nature of
borrowing of each Group Company is dependent on the guarantee or indemnity of,
or security provided by, another person.
18.4 No event has occurred or been alleged to have occurred which:
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18.4.1 constitutes an event of default, or otherwise gives rise to an
obligation to repay, under an agreement relating to borrowing or indebtedness in
the nature of borrowing (or will do so with the giving of notice or lapse of
time or both) or
18.4.2 will lead to an Encumbrance constituted or created in connection
with borrowing or indebtedness in the nature of borrowing, a guarantee, an
indemnity or other obligation of each Group Company becoming enforceable (or
will do so with the giving of notice or lapse of time or both).
18.5 No Group Company is liable to repay an investment or other grant or
subsidy made to it by a body (including, without limitation, the Department of
Trade and Industry or its predecessor).
18.6 No fact or circumstance (including, without limitation, execution and
performance of this Agreement) exists which might entitle a body to require
repayment of, or refuse an application by each Group Company for, the whole or
part of a grant or subsidy.
18.7 No subsidiary or affiliate of the Guarantor is a creditor of the
Guarantor.
18.8 No subsidiary or affiliate of the Vendor is a creditor of the Vendor.
18.9 The Guarantor has no liabilities or obligations of any nature, whether
known or unknown, absolute, accrued, contingent or otherwise and whether due or
to become due, arising out of or relating to the business and operations of the
Guarantor as previously or currently conducted or contemplated to be conducted
except (a) as and to the extent disclosed or provided for in the Financial
-
Statements and (b) for liabilities and obligations that (i) were incurred after
- -
the date of the Financial Statements in the ordinary course of business
consistent with past practice; (ii) individually and in the aggregate would not
--
have a material adverse effect; and (iii) do not and will not materially impair
---
the ability of the Guarantor to perform its obligations hereunder or under any
document, instrument, certificate or agreement necessary to transfer to the
Purchaser good and valid title to the Shares, free and clear of any and all
Encumbrances thereon, at the Completion Date, or the ability of the Purchaser to
conduct the business and operations of the Company from and after the Completion
Date.
18.10 The Vendor has no liabilities or obligations of any nature, whether known
or unknown, absolute, accrued contingent or otherwise and whether due or to
become due, arising out of relating to the business and operations of the Vendor
as previously or currently conducted or contemplated to be conducted except (a)
-
as and to the extent disclosed or provided for in the Accounts and (b) for
-
liabilities and obligations that (i) were incurred after the Reference Accounts
-
Date in the ordinary course of business consistent with past practice; (ii)
--
individually and in the aggregate would not have a
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material adverse effect; and (iii) do not and will not materially impair the
---
ability of the Vendor to perform its obligations hereunder or under any
document, instrument, certificate or agreement necessary to transfer to the
Purchaser good and valid title to the Shares, free and clear of any and all
Encumbrances thereon, at the Completion Date, or the ability of the Purchaser to
conduct the business and operations of the Company from and after the Completion
Date.
19. Permits
--------------
19.1 Each Group Company has obtained and has complied with the terms and
conditions of each Permit.
19.2 Details of each Permit are set out in the Disclosure Letter.
19.3 Each Permit is in force, unimpeachable and unconditional or subject only
to a condition that has been satisfied. No expenditure or work is or will be
necessary to comply with, maintain or obtain a Permit. To the best of the
Vendor's knowledge, information and belief, no Permit will be revoked,
suspended, canceled or varied or not renewed.
19.4 Each action required for the renewal or extension of each Permit has been
taken.
19.5 No Permit will be revoked, suspended, canceled, varied or not renewed as
a result of the execution or performance of this Agreement or any document to be
executed at or before Completion and there is no circumstances which indicate
that any such Permit is likely to be revoked, suspended, canceled, varied or not
renewed or that any of them will expire within a period of one year from the
date of this Agreement.
20. Insolvency
-----------------
20.1 No order has been made, petition presented or resolution passed for the
winding up of any Group Company or for the appointment of a provisional
liquidator to any Group Company and no administration order has been made in
respect of each Group Company.
20.2 No receiver or manager has been appointed of the whole or part of any
Group Company's business or assets.
20.3 No voluntary arrangement has been proposed under Section 1 of the
Insolvency Act 1986 in respect of any Group Company. No compromise or
arrangement has been proposed, agreed to or sanctioned under section 425 of the
CA 1985 in respect of each Group Company.
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20.4 No Group Company is insolvent or unable to pay its debts within the
meaning of Section 123 of the Insolvency Act 1986.
20.5 No Group Company has stopped paying its debts as they fall due.
20.6 No distress, execution or other process has been levied on an asset of
each Group Company or action taken to repossess goods in each Group Company's
possession which has not been satisfied in full.
20.7 There is no unsatisfied judgment or court order outstanding against any
Group Company.
20.8 No floating charge created by any Group Company has crystallized and, so
far as the Vendor is aware, there are no circumstances likely to cause such
floating charge to crystallize.
20.9 No action has been taken by the Registrar of Companies to strike any
Group Company off the register under section 652 of the CA 1985.
20.10 No Group Company has at any time during the two years immediately prior
to the date of this Agreement:
20.10.1 entered into a transaction with any person at an undervalue (as
referred to in Section 238(4) of the Insolvency Act 1986) or
20.10.2 been given a preference by any person (as referred to in
section 239(4) of the Insolvency Act 1986).
20.11 No event analogous to any of the foregoing has occurred in or outside
England.
21. Competition
------------------
21.1 No Group Company has any liability under, and is not a party to, any
agreement or arrangement
21.1.1 particulars of which have been furnished to the Director
General of Fair Trading under the Restrictive Trade Practices Acts 1976 and
1977;
21.1.2 which is prohibited by any competition law.
21.2 No Group Company has given an undertaking or written assurance (legally
binding or not) to a governmental authority or an authority of the European
Communities or European Economic Area under the Fair Trading Act 1973,
Competition Act 1980, Restrictive Trade Practices Acts 1976 and 1977, Resale
Prices Act 1976, Treaty of Rome,
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Agreement on the European Economic Area or any other statute or legal
instrument. No Group Company is affected by an order or regulation made under
the Fair Trading Act 1973 or the Competition Act 1980 or by a decision of the
Commission of the European Communities, EFTA Surveillance Authority or a
competition or governmental authority of another jurisdiction.
21.3 No Group Company has received a communication or request for information
relating to any aspect of each Group Company's business from or by the Director
General of Fair Trading, Competition Commission, Secretary of State for Trade
and Industry, Commission of the European Communities or EFTA Surveillance
Authority or a competition or governmental authority of another jurisdiction.
No agreement, arrangement or conduct (by omission or otherwise) of each Group
Company is or has been the subject of an investigation, report or decision by
any of those persons or bodies and none is pending or threatened. To the best
of the Vendor's knowledge, information and belief, no fact or circumstance
exists which might give rise to an investigation, report or decision by any of
those persons or bodies.
22. Litigation and Compliance with Law
-----------------------------------------
22.1 No Group Company nor a person for whose acts or defaults each Group
Company may be vicariously liable is involved, or has during the two years
ending on the date of this Agreement been involved, in a civil, criminal,
arbitration, administrative or other proceedings. No civil, criminal,
arbitration, administrative or other proceeding is pending or threatened by or
against each Group Company or a person for whose acts or default each Group
Company may be vicariously liable.
22.2 To the best of the Vendor's knowledge, information and belief, no fact or
circumstance exists which might give rise to a civil, criminal, arbitration,
administrative or other proceeding involving each Group Company or a person for
whose acts or defaults each Group Company may be vicariously liable.
22.3 There is no outstanding judgement, order, decree, arbitral award or
decision of the court, tribunal, arbitrator or governmental agency against each
Group Company or a person for whose acts or defaults each Group Company may be
vicariously liable.
22.4 Each Group Company has, in the Vendor's reasonable knowledge, conducted
its business and dealt with its assets in all material respects in accordance
with all applicable legal and administrative requirements.
22.5 There is not and has not been any governmental or other investigation,
inquiry or disciplinary proceeding concerning each Group Company and none is
pending or threatened. To the best of the Vendor's knowledge, information and
belief no fact or
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circumstance exits which might give rise to an investigation, inquiry or
proceeding of that type.
22.6 No Group Company or any person for whose acts or defaults each Group
Company may be vicariously liable has:
(a) induced a person to enter into an agreement or arrangement with any
Group Company by means of a unlawful or immoral payment, contribution, gift or
other inducement;
(b) offered or made an unlawful or immoral payment, contribution, gift
or other inducement to a government official or employee; or
(c) directly or indirectly made an unlawful contribution to a political
activity.
23. Insider Agreements
-------------------------
There is not, and during the three years ending on the date of this
Agreement, there has not been, any agreement or arrangement (legally enforceable
or not) to which any Group Company is or was a party and in which any of the
Vendor, a director or former director of any Group Company or a person connected
with any of them is or was interested in any way. For this purpose, "connected"
has the meaning given by section 839 of ICTA, except that in construing section
839 "control" has the meaning given by section 840 or section 416 of ICTA so
that there is control wherever either section 840 or 416 requires.
24. Miscellaneous
--------------------
24.1 Each Group Company is operating and has always operated its business in
all respects in accordance with its memorandum and articles of association at
the relevant time.
24.2 Each register, minute book and other book which the CA 1985 requires each
Group Company to keep has been properly kept and contains a complete and
accurate record of the matters which it is required by the CA 1985 to record.
No notice has been received or allegation made that a register or book is
incorrect or should be rectified.
24.3 All returns, particulars, resolutions and other documents required to be
delivered by each Group Company to the Registrar of Companies and other
governmental or other authority or agency have been properly prepared and
delivered.
24.4 No Group Company has not given a power of attorney or other authority by
which a person my enter into an agreement, arrangement or obligation on any
Group
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Company's behalf (other than an authority for a director, other officer or
employee to enter into an agreement in the usual course of that person's
duties).
25. Brokerage or Commission
------------------------------
No person is entitled to receive a finder's fee, brokerage or commission
from any Group Company in connection with this Agreement.
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SCHEDULE 5
----------
Properties
----------
1. The Coventry Property - Premises at Coventry Walsgrave Triangle,
Hinckley Road, Coventry more particularly described in a lease dated
January 24, 1992 between Ashford Developments Limited (1) and Husky
Computers Limited (2) (the "Coventry Lease"). Leasehold - for a term
of 25 years from December 16, 1991 (registered at HM Land Registry
under title no: WK340933).
2. 30, rue du Morvan, Batiment G, Rungis. Leasehold - for a term of 9
years from April 15, 1989 between SILIC and the French Office of WPI
Husky.
12, rue Le Corbusier, Parc d'Affaires SILIC, Batiment Iena B2, Rungis.
Leasehold - for a term of 9 years from June 1, 1998 between SILIC and
the French Office of WPI Husky.
4. Leasehold - for a term of 5 years from April 1995 until March 28, 2000
(automatic renewal for 5 years unless terminated) between WPI Husky
GmbH and Helmut Hermes Verpachtungen.
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SCHEDULE 6
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Property Provisions
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Terms of Sale and Leaseback or Surrender and New Lease of the Coventry Property
-------------------------------------------------------------------------------
Section 1
1. The Vendor agrees with the Purchaser to accept or procure the acceptance by
one of its affiliates of an assignment ("Assignment") of the Coventry Lease
and the Purchaser agrees to grant or procure the grant of the Assignment
(and where reference in this Schedule is made to WPI Husky it shall mean
the Purchaser or at its direction WPI Husky) upon the following provisions
of this part of this Schedule.
2. Insofar as the same are applicable and are not consistent with or varied by
the express terms of this Agreement, the foregoing agreement relating to
the Assignment shall incorporate the Standard Conditions of Sale (Third
Edition) ("Conditions") as varied in the manner set out below and for the
avoidance of doubt for the purposes of the Conditions the seller is the
Purchaser or at its discretion WPI Husky and the Vendor is the buyer.
2.1 In paragraphs (a) and (b) of Condition 1.3.6 the words "unless returned
undelivered" shall be added after the word "posting".
2.2 Paragraph (c) of Condition 3.1.2 shall be amended to read "those of which
the seller does not have actual knowledge" and the following paragraph (f)
shall be added to the Condition:
"(f) all other matters disclosed or reasonably to be expected to be
disclosed by searches and as a result of enquiries made by or for the buyer
or which a prudent buyer ought to make".
2.3 In Condition 3.1.3 the words "of which he receives actual knowledge" shall
be inserted after the words "new public requirement" and shall also be
substituted for the words "which he learns about".
2.4 Condition 4.3.2 shall not apply.
2.5 Conditions 5.1.1 and 5.2.1 shall not apply and the risk of damage to or
destruction of the Coventry Property passes to the Vendor from the date of
this Agreement save that the Purchaser shall continue to comply with the
insurance provisions of the Coventry Lease.
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2.6 The following proviso shall be added at the end of Condition 6.6:
"PROVIDED that the production of such receipt shall not be a condition
of completion but if the seller is unable to produce the same then the
Vendor shall furnish such other evidence (if any) as may be available
in respect thereof" and in paragraph (a) of Condition 8.3.2 the words
"but the Seller shall not be obliged to pay a premium for such
consent" shall be added after the words "obtain it".
2.7 The Coventry Lease is sold together with all easements, rights and licences
attaching or appurtenant thereto and all buildings, structures and fixed
and non-severable plant, machinery and equipment thereon except:
2.7.1 property belonging to the suppliers of gas, water, electricity,
telecommunications or other services; and
2.7.2 landlord's fixtures and fittings; and
2.7.3 tenant's and trade fixtures and fittings on any part of the Coventry
Property which are owned by the Purchaser or WPI Husky
but subject to the easements, rent charges, covenants, restrictions,
leases, tenancies (including statutory tenancies), licences, agreements,
overriding interests (as defined in Section 70(1) of the Land Registration
Act 1925) and also are sold subject also to the rents, covenants and
conditions reserved by or contained in the leases under which the same are
respectively held.
The Vendor shall raise no requisitions nor make any objection in respect of
any of the above.
2.8 The Assignment shall be made without title guarantee.
2.9 The Vendor (as the transferee) will covenant with WPI Husky (as the
transferor) as follows:
"The Assignee hereby covenants with the Assignor that the Assignee and the
Assignee's successors in title will henceforth during the continuance of
the term of the Lease pay the rents reserved thereby and observe and
perform the lessee's covenants and the conditions contained therein and
will indemnify the Assignor and the successors in title of the Assignor
from and against all actions, proceeds, costs, claims, expenses and
liability for or on account of (i) any future breach, non-observance or
-
non-performance thereof and (ii) any breach, non-observance or non-
--
performance of any covenants concerning the state or condition of the
Property".
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2.10 The Vendor is deemed to buy with knowledge in all respects of the
authorised uses of the Coventry Property for the purposes of the
enactments from time to time in force relating to town and country
planning.
2.11 Upon the actual completion of the sale and purchase of the Coventry
Property the Vendor shall simultaneously grant and WPI Husky shall accept
the New Sublease of the Coventry Property.
3. Consents to Transfer of Coventry Property and New Sublease
3.1 WPI Husky shall (or at the request of the Vendor, permit the Vendor to):
3.1.1 apply at the expense of the Vendor for consent to assign the
Coventry Property to the Vendor and for the grant of the New
Sublease to WPI Husky by the Vendor; and
3.1.2 use all reasonable endeavours to obtain such consent;
3.1.3 keep the Vendor fully informed of all progress made with regard to
the obtaining of such consent;
3.1.4 enter into a direct covenant with the landlord for the New Sublease
as reasonably required by the Coventry lease.
3.2 The Vendor shall in connection with obtaining the consents referred to in
paragraph 3.1.1 above:
3.2.1 provide all information and references reasonably required by the
landlord;
3.2.2 enter into direct covenants and provide such other security as
required under the Coventry lease or as the landlord may otherwise
require.
Section 2
4.1 The Vendor may, if it appears that the Landlord will not grant such
consents, request that negotiations be had with the Landlord for the
Landlord to take a surrender from WPI Husky of the Coventry Lease (at a
premium or otherwise) and the simultaneous grant of a new lease by the
Landlord to WPI Husky upon the same terms as the New Sublease.
4.2 WPI Husky, as tenant under the Coventry Lease, shall authorise in writing
Mike Tule of the Vendor to conduct all negotiations with the Landlord but
he shall have no authority to bind or commit WPI Husky or the Purchaser and
all negotiations shall be on a subject to contract and without prejudice
basis.
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4.3 Mr. Tule shall keep WPI Husky fully informed of the progress of any
negotiations, invite WPI Husky to attend any meetings, and copy them in on
all correspondence.
4.4 Any negotiations by the Vendor and/or Mr. Tule under this Schedule shall be
at the cost of the Vendor and any costs and expenses required by the
landlord (including legal) in connection with such negotiations and the
completion of any documentation shall also be at the cost of the Vendor and
the Purchaser and WPI Husky shall be indemnified by the Vendor in respect
of such costs.
4.5 In the event that a surrender of the Coventry Lease and grant of a new
lease to WPI Husky can be negotiated, the Vendor shall pay and indemnify,
in addition to the costs and expenses of the Landlord, any premium or other
consideration required by the Landlord for such Surrender including VAT
thereon and all stamp duty payable on the new lease.
4.6 WPI Husky shall retain the discretion as to whether the terms proposed by
the Landlord for the surrender or a new lease are acceptable to the
Purchaser provided that the Purchaser shall if the following conditions are
fulfilled procure that WPI Husky effects such surrender and accepts a new
lease.
4.7 The conditions referred to in the foregoing paragraph are:
4.7.1 Any premium demanded by the Landlord is paid by the Vendor;
4.7.2 All costs are met by the Vendor;
4.7.3 The terms of the surrender do not impose any post completion
obligations on WPI Husky and all pre-completion obligations are
observed or performed by the Vendor at the Vendor's costs;
4.7.4 The terms of the new lease offered by the Landlord are those of the
New Sublease.
Section 3
5. In this Schedule:-
"New Sublease" means a sublease of the whole of the Coventry Property to be
granted by the Vendor as Transferee of the Coventry Lease at the passing
rent currently payable under the Coventry Lease for a term of five years
commencing on the date of the Assignment with a rent review at 25/12/2001
substantially in the form of the Coventry Lease except that the Tenant
shall not be liable to keep the premises the subject of the demise in a
better state or condition than at the date of this Agreement and the Lease
shall contain an option for the Tenant upon
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giving not less than 6 months' notice before the end of the term for a
further lease for a term expiring 10 years after the date of the Assignment
with a review as at 25.12.2006.
Section
6. The Vendor shall by the End Date either:
6.1 Complete the Assignment and the grant of the New Sublease; or
6.2 Complete the Surrender and procure the grant of a new lease.
7. In paragraph 6 the End Date means 90 days after the date of this Agreement.
--
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SCHEDULE 7
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Purchase Price Apportionment
----------------------------
Purchase Price apportioned to the Shares: U.S.$20,704,400
Purchase Price apportioned to the US Assets: U.S.$10,908,400
Purchase Price apportioned to the UK Assets: U.S.$3,000,000
Total Purchase Price U.S.$34,612,800
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SCHEDULE 8
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Accounting Principles
---------------------
UK GAAP
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SIGNED BY )
on behalf of )
DYNATECH NOMINEES ) /S/ MARK TREMALLO
LIMITED in the presence of:- )
Witness: ALLAN M. KLINE
Signature: /S/ ALLAN M. KLINE
Address:3 NEW ENGLAND EXECUTIVE PARK, BURLINGTON, MA 01802
Occupation: DIRECTOR
SIGNED BY JOHN ALLARD )
for and on behalf of )
WPI GROUP (UK) ) /S/ JOHN ALLARD
in the presence of:- )
Witness: LINDA M. RACETTE
Signature: /S/ LINDA M. RACETTE
Address: 54 MAPLE LANE, MANCHESTER, NH 03109
Occupation: LEGAL ASSISTANT
SIGNED BY JOHN ALLARD )
for and on behalf of ) /S/ JOHN ALLARD
WPI GROUP INC. )
in the presence of:- )
Witness: LINDA M. RACETTE
Signature: /S/ LINDA M. RACETTE
Address: 54 MAPLE LANE, MANCHESTER, NH 03109
Occupation: LEGAL ASSISTANT
