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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 21, 1995
IFR SYSTEMS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-14224 48-0777904
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(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO. )
10200 WEST YORK STREET, WICHITA, KANSAS 67215
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(316) 522-4981
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 21, 1995, the Registrant consummated the acquisition of
substantially all of the assets of York Technology Limited, a company
incorporated in England ("York Tech England"), and York Technology Inc. , a New
Jersey corporation ("York Tech USA"), as well as the real estate and building
previously leased by York Tech England (the "York Tech Building"). The total
purchase price (exclusive of closing costs) for all of these assets was
approximately $6,700,000.
Cornibi Limited, a company incorporated in England and a subsidiary
formed by the Registrant for purposes of the York Tech England acquisition
("Cornibi"), acquired substantially all of the assets of York Tech England
pursuant to the terms of an Agreement for the purchase of the business of York
Technology Limited dated June 21, 1995 by and among York Limited, the parent
company of York Tech England, York Tech England, Cornibi Limited, and the
Registrant, as amended by supplemental agreement dated June 29, 1995 (as
amended, the "York Tech England Acquisition Agreement"). Under the terms of the
York Tech England Acquisition Agreement, Cornibi acquired substantially all of
the assets of York Tech England for a total purchase price of $4,071,000,
payable with a note in the principal amount of $1,872,000 (the "Term Note") and
with the balance paid in cash at closing. The balance of the Term Note, without
interest, is to be paid on December 31, 1996, and may, at the option of Cornibi,
be paid with shares of the Registrant's common stock based on the average market
price of the Registrant's common stock for the twenty trading days ending the
business day prior to the date of delivery of the shares in full or partial
payment of the Term Note. Contemporaneously with the closing of the York Tech
England Acquisition Agreement, Cornibi also purchased the York Tech Building
from TKM Group Pension Trust Limited("TKM") for 700,000 British pounds or
$1,123,000 pursuant to the terms and conditions of a Freehold Agreement dated
June 21, 1995 by and between TKM and Cornibi (the "York Tech Building
contract").
At the same time as the closing of the York Tech England Acquisition
Agreement and the York Tech Building Contract, Photon Kinetics, Inc., an Oregon
corporation and wholly-owned subsidiary of Registrant ("PK"), acquired
substantially all of the assets of York Tech USA pursuant to the terms of an
Agreement for the purchase of the business of York Technology Inc. dated June
21, 1995 by and among York Limited, the English parent company of York Tech USA,
York Tech USA, PK, and the Registrant (the "York Tech USA Acquisition
Agreement"). Under the terms of the York Tech USA Acquisition Agreement, PK
acquired substantially all of the assets of York Tech USA for a total purchase
price of $1,550,907, payable in cash at closing.
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York Tech England and York Tech USA designed, manufactured, and sold
fiber optic test and measurement equipment primarily for the fiber production
and preparation market. Registrant currently intends for Cornibi to continue the
business of York Tech England and for PK to continue the business of York Tech
USA.
The purchase prices for York Tech England and York Tech USA
transactions were determined by arms-length negotiations between representatives
of the Registrant and York Limited. The purchase price for the York Tech
Building was determined by arms-length negotiation between representatives of
the Registrant and TKM. With the exception of the Term Note, Registrant's
source of funds for the acquisitions was a combination of cash reserves and
cash from existing credit facilities.
The foregoing summary of the acquisition of substantially all of the
assets of York Tech England and York Tech USA as well as the York Tech Building
is qualified in its entirety by reference to the York Tech England Acquisition
Agreement, the York Tech USA Acquisition Agreement, and the York Tech Building
Contract, copies of which are exhibits hereto and are incorporated herein by
reference.
Item 7. FINANCIAL STATEMENT AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
It is impractical to provide the required financial
statements at the time this report on form 8-K is filed.
Registrant will file the required financial statements under
cover of Form 8 as soon as practical, but not later than 60
days after July 6, 1995.
(b) PRO FORMA FINANCIAL INFORMATION
It is impractical to file pro forma financial
information at the time this report on Form 8-K is filed.
Registrant will file such pro forma information under cover
of Form 8 as soon as practical, but not later than 60 days
after July 6, 1995.
(c) EXHIBITS
2.1 Acquisition Agreement for York Technology, Inc. dated June 21,
1995.
2,2 Acquisition Agreement for York Technology, Ltd. dated June 21,
1995.
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2.3 Building transfer agreement with TKM Group Pension Trust
Limited dated June 21, 1995.
2.4 Supplemental Agreement dated June 29, 1995.
99 Press Release dated June 21, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
IFR SYSTEMS, INC.
Dated: July 6, 1995 By /s/ Bruce C. Bingham
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Bruce C. Bingham
Treasurer and
Chief Financial Officer
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Exhibit Index
Exhibit Sequentially
No. Description of Exhibit Numbered Page
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2.1 Acquisition Agreement for York Technology, Inc.
dated June 21, 1995. *
2.2 Acquisition Agreement for York Technology, Ltd.
dated June 21, 1995. *
2.3 Building transfer agreement with TKM Group Pension
Trust Limited dated June 21, 1995. *
2.4 Supplemental Agreement dated June 29, 1995. *
99 Press Release dated June 21, 1995. *
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York Limited
York Technology Inc.
IFR Systems, Inc.
Photon Kinetics, Inc.
AGREEMENT
for the purchase of the business of
York Technology Inc.
June 21, 1995
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AGREEMENT
This Agreement is made on the 21st day of June, 1995, between YORK
TECHNOLOGY INC., a New Jersey corporation with principal offices located at
139 Wall Street, Princeton, New Jersey 08540 (the "Seller"), YORK LIMITED, a
company incorporated in England whose registered office is at York House, School
Lane, Chandlers Ford, Hampshire SO5 3DG ("York"), PHOTON KINETICS, INC., a
company incorporated in Oregon with an office at 9405 S.W. Gemini Drive,
Beaverton, Oregon 97005-7160 (the "Buyer"), and IFR SYSTEMS, INC., a company
incorporated in Delaware with an office at 10200 West York Street, Wichita,
Kansas 67215-8999 ("IFR").
WHEREAS, the Seller carries on the Business (as hereinafter defined);
and
WHEREAS, the Seller wishes to sell, and the Buyer wishes to purchase,
the Business as a going concern upon the terms and subject to the
conditions hereinafter contained; and
WHEREAS, York is the Seller's holding company and IFR is the Buyer's
parent company.
NOW, THEREFORE, it is hereby agreed as follows:
INTERPRETATION
1. In this Agreement and the Schedules, unless the context otherwise
requires:
1.1 The following terms shall have the following meanings:
AGENCY AGREEMENTS shall mean all agreements under which the
Seller has appointed agents or distributors or under which the Seller has been
appointed as an agent or distributor in relation to the Business, copies of
which are listed and annexed to the Disclosure Letter.
ASSETS shall mean all the property and assets agreed to be sold
and purchased under this Agreement which shall include all assets used in the
Business.
ASSUMED CONTRACTS shall mean the Agency Agreements nominated
pursuant to Clause 11.5, the Contracts, the Confidentiality Agreements, the
Princeton Lease, and the Supplier Contracts.
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BALANCE SHEET DATE shall mean September 30, 1994.
BUSINESS shall mean the business of the research, development,
design, manufacture and sale of instrumentation for quality assurance testing of
optical fibres, including the business of the manufacture and sale of fibre
preparation products carried on by the Seller and (if any) the Seller's Group as
of the Transfer Date. For avoidance of doubt, the Business does not include the
research, development, design, manufacture and sale of optical fibre sensor
systems and optical switches which is carried on by York Sensors Limited at the
principal place of business of York Technology Limited at York House, School
Lane, Chandler's Ford, Hampshire, United Kingdom 5053 40G and any business
conducted by York Sensors Limited at the presises the subject of the
North Carolina lease.
BUYER'S GROUP shall mean the Buyer and any company which at the
relevant time is a holding company of the Buyer or a subsidiary of the Buyer or
any such holding company.
CLAIMS shall mean all rights and claims of the Seller arising
out of or in connection with the Business under any warranties, representations,
conditions, guarantees or indemnities given by suppliers or other third parties
subsisting at the Transfer Date or arising at any time thereafter, whether
express or implied, excluding those claims known to the Seller and listed in the
Disclosure Letter.
CLOSING shall mean the closing of the sale and purchase of the
Business and Assets in accordance with Clause 4 of this Agreement.
CREDITORS shall mean accounts payable and other debts owing by,
and other liabilities of, the Seller on the Transfer Date to third parties (and
whether or not due and payable) in connection with the Business and including,
without limitation, the outstanding balances of all Uninvoiced Creditor Amounts
and Prepayments and accrued vacation pay and any other claims or liabilities in
relation to the Employees.
CONFIDENTIALITY AGREEMENTS shall mean the Confidentiality
Agreements listed and disclosed on the Disclosure Letter.
CONTRACTS shall mean all the contracts entered into prior to
the Transfer Date by or on behalf of the Seller with customers for the supply of
goods or the provision of services by the Seller in connection with the Business
which then remain in whole or in part to be performed by the Seller, as set
forth in the Disclosure Letter.
COPYRIGHT AND UNREGISTERED DESIGN RIGHT shall mean all
copyright (if any) unregistered design right (if any) and like rights (if any)
arising anywhere in the world in all
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the drawings, designs, plans, specifications, brochures, manuals, reports,
computer software and other materials described in the list annexed to the
Disclosure Letter.
DEBTS shall mean accounts receivable and other debts owing to
the Seller in connection with the Business by third parties, whether or not yet
due and payable, on the Transfer Date including, without limitation, the
outstanding balances of all Uninvoiced Debts.
DISCLOSURE LETTER shall mean the letter of disclosure of even
date herewith from the Seller to the Buyer.
EMPLOYEES shall mean the persons employed in the Business as at
the Transfer Date, brief particulars of whom and the terms on which they are
employed are set out in the list annexed to the Disclosure Letter.
EXCLUDED AGENCY AGREEMENTS shall mean such of the Agency
Agreements to be retained by the Seller pursuant to Clause 11.5.
EXCLUDED ASSETS shall mean the Debts, cash in hand or at Bank,
the Excluded Agency Agreements, and any assets located in the State of North
Carolina (including the N.C. Lease).
FINANCIAL STATEMENTS shall mean the unaudited balance sheet and
profit and loss statements, of the Seller for the financial period ended
September 30, 1993 and on the Balance Sheet Date, copies of which are attached
to the United Kingdom Disclosure Letter.
GOODWILL shall mean the goodwill of the Business, together with
the exclusive right to represent itself as carrying on the Business in
succession to the Seller and with all rights so far as the Seller or York can
grant the same, to use the name "York Technology" and "York Tech".
INTERIM FINANCIAL STATEMENTS shall mean the unaudited balance
sheet and profit and loss statements for the financial periods May 31, 1995,
copies of which are attached to the U.K. Disclosure Letter.
INVENTORY shall mean the inventory, including raw materials,
work in progress and finished goods owned by the Seller as at the Transfer Date
for the purposes of, or in conjunction with, the Business, including items
which, although subject to reservation of title by the suppliers, are under the
control of Seller, but excluding items already invoiced and delivered to
customers where title has been reserved by the Seller.
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KNOWHOW shall mean all information and data of a confidential
nature relating to the Business, whether patentable or not, including
inventions, discoveries, improvements, techniques, processes, formulae,
drawings, designs, specifications, manuals, instructions and lists, details of
which are set out in the list annexed to the Disclosure Letter, including any
rights Seller may have under that certain Technical Information License
Agreement between York Technology, Inc., York Technology Ltd., and Kokusai
Denshin Denwa Co. Ltd. executed March 18, 1994 (the "KDD License").
LEASES shall mean the leases of the Property described in and
attached to the Disclosure Letter for premises located at 139 Wall Street,
Princeton, New Jersey ( the "Princeton Lease") and Executive Suites at
Southpark, 6201 Fairview Road, Charlotte, North Carolina (the "N.C. Lease").
LEASING AGREEMENTS shall mean all agreements for supply to the
Seller on lease, whether finance, hire purchase or otherwise, of plant and
machinery, office equipment, vehicles, computers, computer software, or other
assets used by the Seller in connection with the Business as of the Transfer
Date copies of which are included in the Disclosure Letter, but excluding any
such Agreement pertaining to an Excluded Asset.
PENSION PLAN shall mean Seller's Tax Deferred Savings Plan
adopted on September 1, 1985.
PLANT AND MACHINERY shall mean the plant and machinery, tools,
office equipment, furniture, computers, vehicles, leasehold improvements, and
other items owned by the Seller in connection with the Business wherever
situated including, without limitation, those items which are described in the
list annexed to the Disclosure Letter.
PREPAYMENTS shall mean any amounts received at or before the
Transfer Date by the Seller in connection with the Business in respect of orders
placed for the supply of goods or products not yet dispatched and services not
yet provided, and which have not then been invoiced by the Seller in connection
with the Business.
BUYER'S ATTORNEYS shall mean Boodle Hatfield and Foulston &
Siefkin.
PROPERTY shall mean the leasehold property subject to the
Princeton Lease, brief particulars of which are set out in the Disclosure
Letter.
SELLER'S GROUP shall mean the Seller and any company which, at
the relevant time, is a holding company of the Seller or a subsidiary of the
Seller or of any such holding company.
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SELLER'S ATTORNEYS shall mean Hill Taylor Dickinson and Mason,
Briody, Gallagher & Taylor.
SUPPLIER CONTRACTS shall mean the contracts entered into by or
on behalf of the Seller with suppliers for the supply to the Seller of goods,
products or services in connection with the Business which then remain to be
performed in whole or in part.
TRANSFER DATE shall mean the close of business on June 21,
1995.
U.K. AGREEMENT shall mean the Agreement dated of even date
herewith among York Limited, York Technology Limited, Cornibi Limited and IFR
Systems, Inc. for the purchase of the business of York Technology Ltd.
U.K. DISCLOSURE LETTER shall mean the letter of disclosure of
even date herewith from York Technology Ltd. to Cornibi Ltd. relating to the
sale by York Technology Ltd. of substantially all of its assets to Cornibi Ltd.
UNINVOICED CREDITOR AMOUNTS shall mean amounts which are due to
suppliers in respect of goods and services provided to the Business on or before
the Transfer Date which have not been invoiced as at the Transfer Date including
(without limitation) any amounts referenced in the list annexed to the
Disclosure Letter.
UNINVOICED DEBTS shall mean the amounts which are due from
customers in respect of goods and products delivered and services provided by
the Business on or before the Transfer Date which have not been invoiced by the
Seller at the Transfer Date.
WARRANTIES shall mean the representations, warranties and
agreements contained in the First Schedule.
WARRANTORS shall mean the Seller and York.
1.2 References to a statutory provision shall include references to
such provision and to any regulations promulgated thereunder as, from time to
time, modified, codified or re-enacted and in existence on the date of this
Agreement.
1.3 The masculine gender shall include the feminine and neuter, and
the singular number shall include the plural, and vice versa, and references to
persons shall include bodies corporate, unincorporated associations,
partnerships and individuals.
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1.4 References to a Recital, Clause or Schedule are references to a
Recital, Clause or Schedule of this Agreement, and a reference to a sub-clause
is to a sub-clause of the Clause in which it appears.
1.5 References to any document being "in the Approved Form" means
that such document shall be in a form signed for the purposes of identification
by the Seller's Attorneys and the Buyer's Attorneys.
1.6 In relation to the warranties, the expressions "so far as the
Seller/Warrantors are aware," "to the best of Seller's/Warrantors' information,
knowledge and belief," "there are no facts or circumstances known to the
Seller/Warrantors," and "the Seller/Warrantors are aware," or similar
expressions shall be deemed to cover and include all knowledge that the
Seller/Warrantor would have had after making all diligent inquiries of persons
or examination of documents which a prudent person would have made before giving
the warranty to which the expression relates.
1.7 In relation to the Warranties and where else used in this
Agreement any reference to the actual knowledge or awareness of the Seller or
the Warrantors shall be limited to the actual knowledge of the directors of and
senior employees of the Warrantors whose names are listed for these purposes in
the Disclosure Letter and the actual knowledge of such persons shall be deemed
to include the knowledge they would have had after making all diligent enquiries
of the professional advisers of the Seller/Warrantors and of the relevant
documents and other records under the possession or control of the
Seller/Warrantors and shall be deemed to include the knowledge they would have
had, had they not wilfully, recklessly or grossly negligently disregarded the
relevant facts or circumstances but such actual knowledge or awareness of the
Seller or the Warrantors shall not include the knowledge of any other employee
or other person nor shall imply (save as aforesaid) any obligation to make
enquiries of any other persons documents or records and the expressions "the
Seller/Warrantors actually knew" or "so far as the Seller/Warrantors is/are
actually aware" or the like shall be construed accordingly.
1.8 The headings in this Agreement and the Schedules are inserted
for convenience only, and shall not affect the interpretation of this Agreement.
SALE OF BUSINESS
2.1 The Seller, as beneficial and legal owner, shall sell free from
all liens, security interests, charges, equities and encumbrances, (existing now
or by virtue of any act or omission of the Seller on or before the date hereof
capable of arising at any time after the date hereof), and the Buyer shall
purchase as a going concern on the Transfer Date, for the
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consideration and upon the terms and subject to the conditions hereinafter set
out, the Business as a going concern comprising the following:
(a) the Goodwill;
(b) the Leases;
(c) the Plant and Machinery;
(d) the Inventory;
(e) Copyright and Unregistered Design Rights (if any);
(f) such rights as the Seller has to the Knowhow;
(g) the benefit of the Assumed Contracts but subject to
assumption of obligations thereof, as described in this
Agreement;
(h) the benefit of the Claims; and
(i) all catalogues, price lists, manuals, sales literature
and publicity material in each case owned by the Seller
and used in connection with the Business, and all other
documents and records relating to the Business which are
described in Clause 7.2.
(j) Subject to Clause 2.2, all other assets (if any) of
whatsoever nature owned by the Seller and employed in the
Business at the Transfer Date.
2.2 The Excluded Assets are excluded from the sale and purchase
hereunder.
2.3 The Buyer shall not be obliged to complete the purchase of any
of the Assets unless the purchase of all the Assets (and Cornibi Limited's
purchase of substantially all of the assets of York Technology Limited) is
completed simultaneously.
PURCHASE CONSIDERATION
3.1 The purchase consideration for the Assets shall be One Million
Five Hundred Fifty Thousand Nine Hundred Seven United States Dollars
(US$1,550,907.00), which shall be apportioned among the Assets as follows:
(a) Assumed Contracts US$ 1
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(b) Goodwill US$ 1
(c) Knowhow US$ 878,249
(d) Plant and Equipment US$ 37,734
(e) Inventory US$ 634,922
(subject to adjustment in
accordance with Section 3.3)
TOTAL US $1,550,907
3.2 The consideration shall be satisfied by the payment of US
$1,550,907 in cash at the Closing less a retention of $25,000 against such
adjustment as is referred to in Clause 3.4.
3.3 The purchase consideration for the Inventory shall be increased
or decreased by the difference by which the adjusted value of the Inventory on
the Transfer Date is greater than or less than US $634,922. The adjusted value
of the Inventory on the Transfer Date will be determined as follows:
(a) Within seven (7) days of the Transfer Date the Buyer and
the Seller will cause a physical count to be taken of the Inventory. The
physical count will be adjusted to reflect purchases and sales of the Inventory
since the Transfer Date. Representatives of the Buyer and the Seller shall be
entitled to be present at all times during the taking of the count.
(b) Each item of the Inventory will be priced in accordance
with the statement of policies set out in the Second Schedule of this Agreement.
3.4 The Seller and the Buyer will endeavor to agree on the adjusted
value of the Inventory on the basis set out in Clause 3.3 as soon as possible
after completion of the physical count. In the event that they are unable to
agree on such value within 7 days the matter will be referred by the Seller or
the Buyer to a mutually agreeable independent firm of Certified Public
Accountants who will be asked to certify such adjusted value on the basis set
out in Clause 3.3 and whose certificate shall in the absence of manifest error
bind the parties. The independent firm of Certified Public Accountants shall be
appointed by the Buyer and the Seller jointly or (in default of agreement as to
such appointment within 7 days of one of them notifying the other of its wish to
appoint an independent firm) by the American Arbitration Association on the
application of either of them. The charges of the independent firm shall be
apportioned between the Seller and the Buyer as such firm shall decide.
Forthwith upon agreement between the Seller and the Buyer as to the adjusted
value or upon the receipt of a
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copy of the certificate of the independent firm of Certified Public Accountants
as the case may be:
(a) the Seller will, if the adjusted value is less than US
$609,922, pay to the Buyer the difference between the adjusted value and US
$609,922 and the Buyer shall be absolutely entitled to the retention of US
$25,000 referred to in Clause 3.2; or
(b) the Buyer will, if the adjusted value is greater than US
$609,922, pay to the Seller the difference between the adjusted value and US
$609,922.
CLOSING
4.1 Closing of the sale and purchase of the Business will take
place at the office of Seller's English attorneys on the Transfer Date when all
(but not part only unless the Buyer shall otherwise agree) of the following
shall take place:
(a) The Seller shall deliver to the Buyer:
(i) an assignment of the Princeton Lease, together with
the Landlords' consent to assign the Princeton Lease to the Buyer;
(ii) the tangible assets referred to in Clause 2.1;
(iii) all necessary instruments of transfer and
assignments of the Goodwill, Copyright and Unregistered Design Right and the
Knowhow duly executed by the Seller;
(iv) the Assumed Contracts and, subject to Clause 11,
duly executed assignments to the Buyer of the benefits thereof, together with
the written consent of the parties thereto, other than the Seller, to the
assignment by the Seller to the Buyer of the benefits thereof;
(v) duly executed assignments, transfers or conveyances
as are required to vest in the Buyer, all the other Assets, together with all
documents of title relating thereto;
(vi) all documents and records relating to the Business
which are included in the Assets;
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(vii) releases and/or consents duly executed by any
mortgagee, secured party or other person whose release and/or consent is
necessary for the sale of any of the Assets free from liens, security interests,
and other encumbrances;
(viii) a certified copy of a Resolution of the Seller duly
passed by the Board of Directors of the Seller, together with an Amendment to
the Seller's Certificate of Incorporation, changing its name to "York 1995,
Inc." together with a filing fee of $50. The Seller agrees that the Buyer may
file the Amendment to the Certificate of Incorporation with the New Jersey
Secretary of State on behalf of the Seller at Buyer's expense; and
(ix) a written acknowledgement from the Seller and each
other member of the Seller's Group that all agreements and arrangements between
the Seller and any such member and which affect the Business or the Assets have
been cancelled by mutual agreement and without compensation or damages payable
by either party to the other and that no amount is due by any member of the
Seller's Group to another member of the Seller's Group which affects the
Business or Assets; and
(x) the determination described in Clause 20.
(b) Upon completion of all the matters referred to in sub-
clause (a) above, the Buyer shall transfer to the account of the Seller the sum
of US $1,550,907, less the amount of any Prepayments and the retention
contemplated by Clauses 3.2 and 3.4.
(c) All adjustments relating to the Business (including rent,
maintenance and utilities with respect to the Princeton Lease, real estate and
personal property taxes for the Assets and the Property, if any, accrued
vacation/sick pay for Employees, and license fees and royalties) shall be
apportioned between the Buyer and the Seller, and any amount due from one party
to another shall be paid within fourteen (14) days of the Transfer Date or as
soon as may be reasonably determined, except in the case of any amounts owed
under paragraph 31 of Addendum A to the Princeton Lease, which shall be adjusted
within seven (7) days of Buyer's payment of such charges.
SELLER'S OBLIGATIONS
5.1 The Seller shall retain for at least six years, and permit the
Buyer and its representatives to inspect during usual business hours, the books,
records and documents details of which are set out in the Third Schedule (the
"Retained Books") and which relate both to the Business or, any of the Assets
and also the Excluded Assets. The Buyer shall be entitled, at its own expense,
to take and retain copies thereof and extracts therefrom.
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5.2 With the exception of the Retained Books and the other books
records and documents referred to in Clause 5.1 all books, records and documents
relating to the Business including all records, ledgers and purchase and sales
invoices and other books and records of the Seller necessary for the Buyer to
carry on the Business shall be delivered to the Buyer at the Closing, and shall
thereafter be retained by the Buyer for a minimum of six years from the Transfer
Date, and the Buyer shall permit the Seller, its employees and agents and such
other persons as may be authorized by Seller, at all reasonable times during
usual business hours, to inspect such records at its own expense and to take
such copies therefrom as the Seller may reasonably require.
5.3 Any references in this Clause 5 to books, records or documents
or the like shall be deemed to include relevant information electronically
stored and relevant computer programs.
RESPONSIBILITY FOR LIABILITIES OF THE BUSINESS
6. On and from the Transfer Date, subject to the obligations and
liabilities expressly assumed by the Buyer under this Agreement, the Seller
shall continue to be responsible for and pay and discharge forthwith after the
Closing each amount owed to each Creditor (including, without limitation, all
tax liabilities owed to the State of New Jersey) and to indemnify the Buyer
fully at all times from and against any and all claims actions proceedings
demands, liabilities, costs and expenses in connection with any of the
foregoing. If the Seller shall fail to do so, and the Buyer reasonably deems it
necessary to do so in order to preserve the goodwill of the Business, the Buyer
shall be entitled to pay such Creditors on behalf of the Seller. Seller will
forthwith reimburse the Buyer for the amounts so paid. If Seller does not so
reimburse Buyer, Buyer shall be entitled to set off the amount paid against any
sum due from it to Seller, if any, or if Buyer elects, Buyer may set off any
amounts owed by Cornibi Ltd. to York Technology Ltd. pursuant to the Loan Note
(as such term is defined in the U.K. Agreement) in the form of the draft set out
in Part II of the Second Schedule of the U.K. Agreement.
7. The Buyer shall complete and discharge all the Assumed Contracts in
accordance with their terms, and shall indemnify and keep indemnified the Seller
against all actions, proceedings, costs, claims and demands against or incurred
by the Seller (other than any taxation on or calculated by reference to the
profit of the Business, earned up to the Transfer Date), and against any loss
suffered by the Seller in respect of all or any of the Assumed Contracts and in
each case by reason of only any act, default or delay of the Buyer after the
Transfer Date.
7.1 The Seller covenants and undertakes to the Buyer and IFR that
for a period of 5 years from the Transfer Date in relation to any dealings it
has after the Transfer
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Date with customers and suppliers of the Business to use all reasonable
endeavors to maintain the trade and trade connections of the Business and to
preserve the ongoing business relationship between such customers and suppliers
and the Business and not by any action, omission, default or neglect knowingly
to damage or risk damage to the same.
8. The Seller shall be responsible for and shall indemnify the Buyer
against any and all claims, actions, proceedings, demands, liabilities, costs
and expenses arising after the Transfer Date in respect of any claim from
customers or subsequent purchasers from customers for damage or otherwise
arising under any guarantees or warranties given expressly or by implication of
law or otherwise howsoever arising in respect of goods or products manufactured
or sold or services supplied by the Seller on or before the Transfer Date,
provided however, the Buyer will take all reasonable steps if so requested by
the Seller to provide or, if the Buyer reasonably deems it necessary in order to
preserve the goodwill of the Business, the Buyer shall be so entitled to
provide, after sales service or to meet claims under any guarantee or warranty.
The Seller agrees to reimburse the Buyer forthwith on demand for its direct
costs in doing so. For these purposes, direct costs means employment costs,
materials used and travel and subsistence costs incurred in providing such
services under warranty or guarantee; such services to be provided in accordance
with the policies of the Business prior to the Transfer Date. Provided always
that this Clause shall not affect any right or remedy the Buyer may have for a
breach of the Warranties or any other provision of this Agreement.
WARRANTIES
9.1 The Warrantors jointly and severally represent, warrant and
undertake to the Buyer, contracting for itself and as trustee for any successor
in title to part or all of the Business and Assets and the Property, that the
Warranties are true and correct in all material respects.
9.2 The Warranties shall be qualified by reference to those matters
disclosed, but only to the extent fully, fairly and accurately disclosed, in the
Disclosure Letter.
9.3 It is hereby agreed that:
(a) The liability of the Warrantors in respect of any breach
or breaches of the Warranties relating to the Seller's title to the Inventory
and the Plant and Machinery and any other tangible assets shall be unlimited.
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(b) The aggregate liability of the Warrantors in respect of
any breach or breaches of the Warranties (other than those Warranties referred
to in Clause 9.3(a)) and other than in the case of any breach or breaches of the
Warranties where the Warrantors actually knew or were actually aware at the date
of this Agreement that the relevant Warranty was not true or correct in all
respects shall not exceed US $1,000,000.
(c) The aggregate liability of the Warrantors in respect of
any breach or breaches of the Warranties other than those Warranties referred to
in Clause 9.3(a) in the case of any such breach or breaches where the Warrantors
actually knew or were actually aware at the date of this Agreement that the
relevant Warranty was not true or correct in all respects shall not exceed the
difference between US $2,000,000 and the amount of all other liability for any
breach or breaches of the Warranties pursuant to Clause 9.3(b). For the
avoidance of doubt, the aggregate liability of the Warrantors in respect of all
claims for breach or breaches of the Warranties other than those Warranties
referred to in Clause 9.3(a) shall not exceed US $2,000,000.
(d) The Warrantors shall not be liable in respect of any
claims under the Warranties unless details of the claim shall have been notified
to York in writing in reasonable detail on or before December 31, 1996 and
unless proceedings have been commenced within 6 months of such notification.
9.4 The remedies of Buyer in respect of breach of any of the
Warranties shall continue to subsist notwithstanding Closing.
9.5 The rights and remedies of the Buyer in respect of any breach
of the Warranties shall not be affected by any investigation made by or on
behalf of the Buyer into the affairs of the Seller, by the Buyer failing to
exercise or delaying the exercise of any of their respective rights or remedies
or by any other event or matter whatsoever except a specific and duly authorized
written waiver or release.
9.6 All sums payable by the Warrantors under this Clause 9 shall be
paid free and clear of all deductions or withholdings whatsoever save only as
may be required by law. If any such deductions or withholdings are required by
law, the Warrantors shall be obliged to pay such sum as will after such
deduction or withholding has been made leave the same amount as the recipient
would have been entitled to receive in the absence of any such requirement to
make a deduction or withholding. If any sum payable by the Warrantors under
this Clause 9 shall otherwise be subject to tax in the hands of the recipient
the same obligation to make an increased payment shall apply in relation to such
tax liability as if it were a deduction or withholding required by law. If
Warrantors shall fail to pay any sums payable under this Clause 9, Buyer shall
be entitled to set off the amount paid against any sum due from it to Seller, if
any, or if Buyer elects, Buyer may set off any amounts owed by Cornibi
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Ltd. to York Technology Ltd. pursuant to the Loan Note (as such term is defined
in the U.K. Agreement) in the form set out in Part II of the Second Schedule of
the U.K. Agreement.
9.7 Promptly upon the occurrence of or promptly upon the Seller
becoming aware of the impending or threatened occurrence of any event which
would or might reasonably be expected to cause or constitute a breach (or would
have caused or constituted a breach had such event occurred or been known to the
Seller prior to the date of this Agreement) of any of the Warranties it shall
give written notice of the same to the Buyer and shall use its best efforts to
promptly prevent or remedy the same.
9.8 Where under this Agreement the Seller and/or York shall have
agreed to indemnify the Buyer and/or IFR against any cost, claim, liability or
expense in circumstances where the act or omission or thing giving rise to the
entitlement to be indemnified also gives rise to a breach or breaches of the
Warranties the Buyer and/or IFR shall not be entitled to claim under both the
indemnity and the Warranties and in the event that the Buyer and/or IFR shall
claim under an indemnity the limitations of liability in Clauses 9.3(b) and
9.3(c) shall be reduced by the amount paid in settlement of the claim. In
addition, the limitations of liability in Clauses 9.3(b) and 9.3(c) shall be
reduced by any amounts paid by York or York Technology, Limited to IFR or
Cornibi Limited under the or Warranties provisions of the U.K. Agreement.
EMPLOYEES
10.1 The Seller shall perform and discharge all of its obligations
and liabilities under and in connection with the employment of the Employees
arising from the employment of the Employees up to the Transfer Date. With the
exception of accrued vacation and sick pay for the Employees prorated pursuant
to Clause 4.1(c), the Seller shall pay to the Employees all sums to which they
are entitled up to and including the Transfer Date, and shall indemnify and keep
indemnified the Buyer against all liabilities, costs, claims and demands arising
from the Seller failing to perform and observe the said obligations. Following
the Transfer Date, the Buyer shall perform and discharge all obligations and
liabilities under and in connection with the employment of the Employees,
PROVIDED, HOWEVER, that except as otherwise set forth in the Disclosure Letter
all of the Employees are employees-at-will, terminable by Buyer at anytime for
any reason or no reason whatsoever.
10.2 Immediately upon the execution of this Agreement, the Seller
shall, by notice in writing in a form approved by the Buyer, inform the
Employees of the sale of the Business and the Assets hereunder.
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10.3 Seller shall perform and discharge all of its obligations and
liabilities under its Pension Plan covering its employees including making any
required contributions to such plans and terminating such plans if required by
law and shall indemnify and keep indemnified the Buyer against all liabilities,
costs, claims and demands arising from the Seller failing to perform and observe
the said obligations.
10.4 Seller, either itself or through an affiliate, agrees to
continue to maintain a group health insurance program so as to be able to
provide all of Seller's employees and all other individuals affected by the
transactions contemplated herein, including , but not limited to, re-employed
employees of Seller, "qualified beneficiaries" as defined in Section 4980B of
the Internal Revenue Code of 1986, as amended (the "Code"), and persons
currently electing or eligible to elect group health care continuation coverage
under Section 4980B of the Code and/or any other applicable law or regulation,
with health care continuation coverage in full compliance with Section 498OB of
the Code and all such other laws and regulations as may be applicable, and shall
indemnify and keep indemnified the Buyer against all liabilities, costs, claims
and demands arising from the Seller failing to perform and observe the said
obligations. Seller shall also provide all of its employees and all other such
affected individuals with all notification forms, enrollment forms, summary
descriptions, and all other documents appropriate to permit such individuals to
elect health care continuation coverage. All notices provided by Seller shall
be specifically designed to satisfy the requirements of Section 4980B of the
Code and any other applicable law or regulation, and Seller shall promptly
provide Buyer with copies of each such notice provided by Seller.
10.5 Notwithstanding Clause 10.1 above, with respect to the four (4)
Executive Salary Continuation Agreements (the "Salary Agreements") identified in
the Disclosure Letter, Buyer shall not continue the Salary Agreements or assume
any obligations thereunder. Seller shall be obligated for any and all claims
based on the Salary Agreements and shall indemnify the Buyer against same in
accordance with Clause 10.1.
SUBSTITUTION OF PURCHASER IN ASSUMED CONTRACTS
11.1 Subject to Clause 11.4, the Seller shall at the Closing and
with effect from the Transfer Date assign to the order of the Buyer or procure
the assignment to the order of the Buyer all the Assumed Contracts which are
capable of assignment without the consent of other parties.
11.2 Insofar as any of the Assumed Contracts are not assignable to
the Buyer without the agreement of or novation by or consent to the assignment
from another party and such consent has not been obtained as at the date of
Closing, the Agreement shall not constitute an assignment or attempted
assignment if such assignment or attempted assignment
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would constitute a breach of the same. In the event that consent or novation is
required to such assignment:
(a) The Seller shall at the Buyer's request use reasonable
endeavors with the cooperation of the Buyer to procure such novation or
assignment as aforesaid.
(b) Unless and until any such Assumed Contract shall be
novated or assigned as aforesaid, the Seller shall hold the same in trust for
the Buyer and its successors in title to the Business absolutely and the Buyer
shall (if such subcontracting is permissible and lawful under the Assumed
Contract in question) as the Seller's subcontractor perform all the obligations
of the Seller under such Assumed Contract.
(c) Unless and until any such Assumed Contract shall be
novated or assigned, the Seller will (so far as it lawfully may) give all such
assistance to the Buyer as the Buyer may reasonably require to enable the Buyer
to enforce its rights under such Assumed Contract and (without limitation) will
provide access to all relevant books, documents and other information in
relation to such Assumed Contract as the Buyer may require from time to time.
11.3 Subject to Clause 11.4, if such consent or novation is not
obtained, the Seller will cooperate with the Buyer and at the Seller's cost in
any reasonable arrangements designed to provide for the Buyer the benefits under
any of the Assumed Contracts including enforcement at the cost of and for the
account of the Buyer of any and all rights of the Seller against the other party
to the Assumed Contract arising out of any cancellation by such other party or
otherwise. If and to the extent that in respect of such Assumed Contracts any
such arrangements cannot be made, neither the Seller nor the Buyer shall
(without prejudice to Clause 7) have any further obligation to the other.
11.4 To the extent that any payment is made to the Seller in respect
of the Assumed Contracts on or after the Transfer Date, the Seller shall receive
the same as trustee, shall record such payment separately in its books and shall
account to the Buyer for the same on the Transfer Date or if received thereafter
within 14 days of receipt.
11.5 Within 28 days of the Transfer Date, the Buyer shall be
entitled by written notice to the Seller to nominate any of the Agency
Agreements as an Assumed Contract and in that event, the provisions of Clause
11.1, 11.2, 11.3 and 11.4 above shall apply to such contract with effect from
the date of such nomination.
11.6 Any Agency Agreement not included as an Assumed Contract on the
Transfer Date or nominated pursuant to Clause 11.5 above shall be retained by
the Seller. With respect to each Excluded Agency Agreement the Seller with
forthwith after the expiration of the 28 day period referred to in 11.5 above
advise the other party(s) thereto of the sale of the Business and terminate such
agreement by serving the appropriate notice in accordance with
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the contractual terms of the agreement. The Seller shall indemnify the Buyer
against all claims made actions, proceedings, demands, liabilities, costs and
expenses incurred by the Buyer in respect of any claim against it by the third
party(s) to an Excluded Agency Agreement arising out of the termination thereof
pursuant to the foregoing.
11.7 The Seller hereby acknowledges and consents to the Buyer
approaching or soliciting any of the other parties to those Excluded Agency
Agreements under which the Seller has appointed such third parties agents or
distributors with a view to such third parties also being appointed to act as
agents or distributors of the Buyer.
DEBTS
12.1 Seller shall be entitled to continue to collect the Debts after
the Transfer Date.
12.2 If any of the Debts are paid to the Buyer after the Transfer
Date, then the Buyer shall, not later than seven (7) days after receipt, pay to
the Seller the amount received.
12.3 If any debts due to the Buyer are paid to the Seller after the
Transfer Date, then the Seller shall, not later than seven (7) days after
receipt, pay to the Buyer the amount received.
12.4 The Seller shall consult with the Buyer before commencing legal
or arbitration proceedings, or other action against any person for the recovery
of any Debt, if, after the Transfer Date, such person becomes or remains a
customer of the Buyer in relation to the Business, and if the Buyer deems it
necessary in order to preserve the goodwill of the Business, the Buyer may pay
to the Seller the amount of such Debt and the Seller will assign the debt to the
Buyer.
RESTRICTIVE COVENANT
13.1 The Warrantors hereby jointly and severally undertake that they
will not and York will ensure that no member of the Seller's Group will either
on its own or in conjunction with others and whether directly or indirectly:
(a) for a period of 5 years from the Transfer Date (and save
as the holder of shares in a public company which confer not more than 3 percent
of the votes which could be cast at a shareholders' meeting of such company)
establish, develop, carry on or assist
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in carrying on, or be engaged, concerned, interested or employed in any business
enterprise or venture materially competing with the Business or any part of it;
(b) for a period of 5 years from the Transfer Date, solicit,
canvass or entice away from the Business or the Buyer (or endeavor to solicit,
canvass or entice away) the business of any person, firm or company who was at
any time during the period of [2] years immediately preceding the Transfer Date,
a client or customer of or supplier to the Business for the purpose of offering
to such client or customer or obtaining from such supplier goods or services
similar to or materially competing with those of the Business or the products
produced by the Business;
(c) for a period of 5 years from the Transfer Date solicit,
canvass or entice away or endeavor to solicit, canvass or entice away any of the
Employees from the Buyer for the purposes of employment in an enterprise or
venture materially competing with the Business whether or not such person would
commit a breach of contract by reason of leaving service;
(d) at any time after the Transfer Date disclose to any
person or use for any purpose, any Know-How;
(e) do anything which might prejudice the Goodwill.
13.2 Each covenant contained in Clause 13.1 shall be construed as a
separate covenant and if one or more of the covenants is held to be against the
public interest or unlawful or in any way an unreasonable restraint of trade,
the remaining covenants shall continue to bind the Seller and York.
13.3 In the event that a court should determine that any covenant in
Clause 13.1 is unenforceable, the parties agree that such covenant shall
nevertheless be enforceable for the maximum term and maximum geographical area
allowable by law. The covenants in Clause 13.1 shall be enforceable by the
remedies of specific performance, injunction, and/or damages, as well as all
other rights and remedies available to Buyer by statute or common law, both at
law and in equity. The parties specifically agree that the remedy of damages
alone is inadequate.
13.4 The Seller shall promptly refer to the Buyer all inquiries or
orders relating to the Business including inquiries or orders for any stocks,
spare parts, accessories and other equipment manufactured or sold in connection
with the Business which the Seller may in the future receive.
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NAMES
14.1 York shall ensure that the name of the Seller shall be changed
so as not to include the word "Technology," or "Tech," or any similar word.
14.2 York agrees that neither it nor any member of the Seller's
Group will, at any time hereafter, use any name or names identical or similar to
or capable of confusion with "York Technology" or "York Tech" in connection with
any activity whatsoever, though nothing herein shall prevent or restrict their
using the name "York" alone or with any other word or words which are not
similar to "Tech" or "Technology."
14.3 The Buyer agrees with York, for itself and as trustee for each
member of the Seller's Group, that neither it nor any member of the Buyer's
Group will, at any time hereafter, use any name or names identical or similar to
"York Sensors" in connection with any activity whatsoever, though nothing herein
shall prevent any such company from using the name "York Technology" or "York
Tech."
14.4 The Seller will cooperate with the Buyer to ensure the
telephone numbers used in connection with the Business are transferred to the
Buyer as soon as practicable after the Transfer Date.
COMPLIANCE WITH BULK SALES LAWS
15. Buyer and Seller hereby waive compliance by Buyer and Seller with the
bulk sales law, and any other similar laws in any applicable jurisdiction in
respect of the transactions contemplated by this Agreement. Seller shall
indemnify Buyer from, and hold it harmless against, any liabilities, damages,
costs and expenses resulting from or arising out of (i) the parties' failure to
comply with any of such laws in respect of the transactions contemplated by this
Agreement, or (ii) any action brought or levy made as a result thereof, other
than those liabilities which have been expressly assumed, on such terms as
expressly assumed, by Buyer pursuant to this Agreement.
YORK GUARANTEE
16. York (referred to in this Clause 16 as "the Guarantor") as primary
obligor unconditionally and irrevocably:
(a) guarantees by way of continuing guarantee to the Buyer and IFR
(together referred to in this Clause 16 as "the Obligee"):
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(i) to discharge on written demand the due punctual and
complete payment of all sums payable to the Obligees by; and
(ii) the performance and observance of all obligations for the
benefit of the Obligees of,
the Seller under this Agreement (such payment obligations,
liabilities and obligations being hereinafter called "the Obligations");
(b) undertakes to discharge on written demand such of the
obligations as are not Obligations to pay money as if it were the primary
obligor in respect thereof and agrees that any item or amount claimed by the
Obligees to be included in the Obligations being an obligation to pay money
which is not recoverable from the Guarantor under this Agreement on the basis of
a guarantee shall nevertheless be recoverable from the Guarantor as principal
debtor by way of indemnity and the Guarantor agrees to discharge that liability
on demand; and
(c) as a separate and independent obligation, agrees to indemnify
the Obligees against all direct losses and damages sustained by them or either
of them arising from any non-payment or default of any kind by the Buyer under
or pursuant to this Agreement.
16.2 The Obligees shall not make demand or take any steps against the
Seller or any other person before giving two (2) full days' written notice to
the Guarantor of its intention to make written demand upon the Guarantor in
respect of the Obligations or any of them. A "day" for the purpose of this sub-
clause shall not include a Saturday or a Sunday or other day when clearing banks
are not generally open in London for normal banking business.
16.3 On making written demand in accordance with sub-clause 16.2 above
neither of the Obligees need make demand or take any steps against the Seller or
any other person before being entitled to exercise all and any of its or their
rights under this guarantee and indemnity.
16.4 This guarantee and indemnity is a continuing guarantee and indemnity
and shall remain in full force and effect until all of the Obligations have been
discharged and performed in full.
16.5 Each payment to be made by the Guarantor hereunder shall be made
free and clear of all deductions or withholdings of any kind, except for those
required by law, and if any deductions or withholding must be made by law, the
Guarantor will pay that additional amount which is necessary to ensure that the
Obligees receive a net amount equal to the full amount which they would have
received if the payment had been made without the deduction or withholding. If
any sum payable by the Guarantor shall otherwise be taxable in
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the hands of the recipient in circumstances where it would not have been taxable
had it been paid by the Seller the same obligation to make an increased payment
shall apply in relation to such tax liability or if it were a deduction or
withholding required by law.
16.6 The Guarantor shall pay interest on any amount due from it hereunder
from the date of demand until the date of payment in full (as well after as
before any judgment) calculated on a daily basis at the rate of three per cent
per annum (3%) for the first thirty (30) days and thereafter four per cent (4%)
per annum above in the case of any amount due in pounds sterling, the base rate
for the time being of the Barclays Bank PLC and, in the case of any amount due
in US dollars, LIBOR. For these purposes LIBOR shall mean the rate per annum at
which US dollar deposits for the relevant period and amount are offered by
lending banks in the London Interbank Market.
16.7 The Obligations of the Guarantor hereunder shall not be affected by
any act, omission, matter or thing whatever which but for this provision may
affect such Obligations or operate to release or otherwise exonerate the
Guarantor therefrom and accordingly (without prejudice to the generality of the
foregoing) either of the Obligees may without the Guarantor's consent and
without releasing or reducing the Guarantor's liability to it under this
Agreement;
(a) allow the Seller or any other person any time or indulgence;
(b) enter into, renew, vary, end or neglect to perfect or refrain
from enforcing any agreement or arrangement with or liability of the Seller or
any other person; or
(c) renew, vary, neglect to perfect, refrain from enforcing or
release any present or future security or guarantee or indemnity which either of
the Obligees holds from the Seller or any other person.
16.8 Either of the Obligees may appropriate any sum paid by the Seller the
Guarantor or any other person or recovered or received on account of the
Obligations as it sees fit.
16.9 (a) Until all amounts which may be or become payable hereunder have
been irrevocably paid in full, the Guarantor shall not:
(i) as a result of this guarantee and indemnity or any
payment or performance hereunder be subrogated to any right or security of
either of the Obligees; or
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(ii) claim or prove in competition with either of the Obligees
against the Seller or any other person whether by right of contribution, set
off, indemnity or otherwise;
(b) The Guarantor will not hold any security from the Seller in
respect of this guarantee and indemnity and any such security which is held in
breach of this provision will be held by the Guarantor on trust for the
Obligees.
16.10 The Guarantor will reimburse the Obligees for all legal and other
costs, including reasonable attorney fees incurred by the Obligees in connection
with the valid enforcement of this guarantee and indemnity.
16.11 The Guarantor agrees that if at any time and for any reason, and
whether with the consent of the Obligees or otherwise, any or all of the
Obligations (the "Assigned Obligations") are assigned, transferred or novated
to, or assumed by any other person (a "transferee"), then the Guarantor's
obligations pursuant to this guarantee and indemnity shall extend, mutatis
mutandis, to the transferee to the extent of the Assigned Obligations, and shall
not be impaired, released, diminished or discharged as the result of any such
assignment, transfer, novation or assumption.
IFR GUARANTEE
17. IFR hereby guarantees to York and Seller the performance by Buyer of
its obligations set forth in Clause 7 hereof upon the same terms as York
guarantees the obligations of Seller pursuant to Clauses 16.1 to 16.11 above.
ENVIRONMENTAL
18. At the Closing, Seller shall provide Buyer with a de minimus quantity
exemption determination received from the New Jersey Department of Environmental
Protection and Energy pursuant to the Industrial Site Recovery Act.
MISCELLANEOUS
19. Each party will pay its own costs and expenses in relation to the
negotiation, preparation, signing and carrying into effect of this Agreement.
20. This Agreement shall be binding upon and inure to the benefit of the
successors of the parties, but shall not be assignable in whole or in part by
the Seller.
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21. Except as otherwise expressly contemplated by this Agreement none of
the parties hereto shall divulge to any third party, which expression shall
include making announcements to employees or to the press and the issue of
written documents, except to their respective professional advisors, or as may
be required by the rules of The National Association of Securities Dealers, Inc.
or the NASDAQ Market or by law any information in regard to the existence or
subject matter of this Agreement without the prior agreement of the other
parties, such agreement not to be unreasonably withheld.
22. At the written request of the Buyer, the Seller shall, and shall
ensure that any other necessary person shall, execute and sign all such deeds,
documents and instruments, and perform all such acts and things as may be
necessary subsequent to the Transfer Date to vest in the Buyer the legal and
beneficial ownership of the Business and the Assets and for due performance of
the obligations of the Seller under this Agreement.
23. All notices, demands and other communications hereunder, or for the
purposes hereof, shall be in writing and shall be deemed to have been duly given
if delivered, transmitted by facsimile or posted, first-class postage pre-paid,
or airmail if overseas:
(a) if to the Seller and York, to:
Hill Taylor Dickinson
Irongate House
Dukes Place
London, EC3A 7LP
Fax No: 0171 338 0260
Attention of: T.J. Railton
With copy to Mason, Briody, Gallagher & Taylor
104 Carnegie Center
Suite 201
Princeton, NJ 08540
Attn: Kevin M. Briody, Esq.
Fax Number 609-987-1478
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(b) if to the Buyer, to:
Photon Kinetics, Inc.
c/o IFR Systems, Inc.
10200 West York
Wichita, Kansas 67215
Fax Number: 316-522-3022
Attention of: Bruce Bingham, Chief
Financial Officer and Treasurer
With copy to: Foulston & Siefkin L.L.P.
700 Fourth Financial Center
Broadway at Douglas
Wichita, KS 67202
Attn: Harvey Sorensen, Esq.
Fax Number: 316-267-6345
or at such other number or address as may last hereafter have been designated by
notice given in the manner provided in this Clause. If sent by facsimile, as
aforesaid, all such notices, demands and communications shall be deemed to have
been given at the time transmitted according to the senders verification of
transmission; if delivered, shall be deemed to be received when delivered to the
address provided above; and if mailed, as aforesaid, shall be deemed to have
been given and received on the business day in London, England following such
mailing, or the sixth (6th) business day if sent airmail, and in proving the
time of mailing, it shall be sufficient to show that the envelope containing
such notice was properly addressed, stamped and posted.
24. (a) This Agreement, together with the documents and schedules
referred to herein, constitutes the whole agreement between the parties hereto
in relation to the sale and purchase of the Business and the Assets, and
supersedes all other prior written or oral agreements or representations.
(b) No variation of this Agreement shall be effective unless made
in writing signed by all the parties hereto, or their duly authorized
representatives.
(c) The parties agree that no party has relied on any
representation of any other party, save for representations expressly set out or
referred to in this Agreement.
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25. Except insofar as the same is performed on Closing, this Agreement
shall remain in full force and effect thereafter.
26. This Agreement may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which, when executed
and delivered, shall constitute an original, but all of which shall together
constitute one and the same instrument.
27. The Buyer may freely assign all or any part of the benefit of this
Agreement (including the Warranties).
28. This Agreement shall be governed by, and construed in accordance
with, the laws of the United States and the State of New Jersey, and the parties
irrevocably submit to the exclusive jurisdiction of the United States District
Court for the District of New Jersey.
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THE FIRST SCHEDULE - WARRANTIES
1. Accuracy of Disclosures
The factual information contained in the Recitals and the Schedules to this
Agreement and the facts relating to the Business and Assets set out in the
Disclosure Letter, or annexes to it, and the information given by or on behalf
of the Seller or any other member of the Seller's Group to the Buyer or any
other member of the Buyer's Group during the course of the negotiations leading
to this Agreement (details of which are set out in the Disclosure Letter) was
when given and remains, true accurate and complete in all material respects.
The Seller is not aware of any other fact or matter which would make any of that
information misleading.
2. Accuracy of Financial Statements
The Financial Statements have been prepared in accordance with generally
accepted accounting principles and practices for the United States of America
and other applicable U.S. statutes and regulations and accurately and fairly
represent the financial condition of the Business as at the Balance Sheet Date
and September 30, 1993 and of the profit and losses of the Business for the
periods ended on the Balance Sheet Date and September 30, 1993.
3. Capacity of Seller
The Seller has full power and authority to enter into and to perform this
Agreement which, when executed, will constitute valid and binding obligations
upon it in accordance with its terms. The Warrantors are companies duly
organized and existing under the laws of England and the State of New Jersey,
respectively, and have full power and authority to enter into and to perform
this Agreement and any document entered into by each of them in accordance with
this Agreement without obtaining the consent of any third party. This Agreement
and such other documents when executed will constitute valid and binding
obligations upon each of them in accordance with their respective terms and so
far as the Seller is actually aware the Seller is duly qualified licensed or
domesticated and in good standing as a foreign corporation authorized to do
business in all states within the United States and all jurisdictions outside
the United States where the Seller has conducted business prior to the Transfer
Date.
4. The Property
The Property is the only fee or leasehold property used in connection with
the Business.
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<PAGE>
5. Interim Financial Statements
The Interim Financial Statements have been prepared in accordance with
generally accepted accounting principles and the bases and policies of
accounting adopted for the purpose of preparing the Interim Financial Statements
are the same as those adopted in preparing the September 30, 1993 and September
30, 1994 Financial Statements. The Interim Financial Statements reflect the
state of affairs of the Business in all material respects and apply bases and
policies of accounting which have been consistently applied in the September 30,
1993 and September 30, 1994 Financial Statements save that such Interim
Financial Statements have not been audited.
6. Seller's Books and Records
The Seller's accounts books ledgers financial and other records relating to
the Business have been maintained in accordance with generally accepted
accounting practices and standards and there are no material inaccuracies or
discrepancies of any kind contained or reflected therein or in any of them and
they give and reflect in all material respects a true and fair view of the
financial and contractual and trading position of the Seller in relation to the
Business and of its plant machinery and other fixed assets debtors creditors
stock-in-trade work-in-progress and other current assets and liabilities in
relation to the Business (including so far as the Warrantors are aware
contingent liabilities) and will be fully completed and closed as of May 31,
1995.
7. No written notice has been received by the Seller or York nor to the best
of the knowledge of Warrantors, has the Seller committed or omitted to do any
act or thing in connection with the Business the commission or omission of which
is or could be a contravention of any applicable laws and regulations and has or
could result in the Buyer incurring a financial or other liability or penalty.
8. The Seller is not in connection with the Business a party to any litigation
or arbitration or prosecution or other legal proceedings or any dispute (save
for routine debt collections) and no litigation or arbitration proceedings are
threatened or pending, either by or against the Seller in connection with the
Business or the Assets, and there are no facts or circumstances to the best of
the knowledge of the Warrantors which might give rise to any such proceedings or
to any such dispute.
9. No distress execution or other process has been levied or threatened in
writing on, and there has been no exercise, purported exercise or claim for any
mortgage, charge, lien, encumbrance or equity over and there is no dispute
directly or indirectly relating to any of the Assets.
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<PAGE>
10. The Seller has not been a party to any undertaking or assurance given to
any court or governmental agency relating to the Business and/or the Assets
which is still in force.
11. Conduct of Business Since the Balance Sheet Date
Since the Balance Sheet Date and save as disclosed in the Disclosure
Letter:
(a) The Business has been carried on in the ordinary and usual course and
without entering into any transaction assuming any liability or making any
payment which is not in the ordinary course of the Business and without
interruption or alteration in the nature, scope or manner of the Business to any
material extent.
(b) The Seller has not entered into or agreed to enter into any capital
commitments in relation to the Business which are being assumed by the Buyer.
(c) There has been no material deterioration in the financial position or
revenues of the Business.
(d) There has been no disposal of any material assets other than sales of
inventory in the ordinary course of trading.
(e) The sales and revenues of the business measured both in terms of
volume of goods sold and in terms of value (taking due account of inflation) in
the period from September 30, 1994 to May 31, 1995 has not been less than its
sales and revenues for the period from September 30, 1993 to May 31, 1994.
(f) There has been no unusual increase in the inventory or work-in-
progress of the Business nor have any fixed assets or inventory of the Business
been written up or revalued nor will they be prior to the Transfer Date.
(g) The Seller has not done or omitted to do anything which might
prejudicially affect the Goodwill or the Know-How to a material extent.
12. Consequence of Acquisition of the Business by the Buyer
The acquisition of the Business and/or the Assets by the Buyer or
compliance with the terms of this Agreement will not:
(a) So far as the Warrantors are actually aware cause the Business to
lose the benefit of any right or privilege it presently enjoys or cause any
person who normally does business with the Business not to continue to do so on
the same basis as previously;
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<PAGE>
(b) Give rise to or cause to become exercisable any right of pre-emption
relating to the Business or any of the Assets;
(c) So far as the Warrantors are actually aware, result in a breach of or
constitute a default under the terms, conditions or provisions of (i) any
agreement, license or consent, authorization, understanding, arrangement or
instrument so as to affect adversely the Buyer's ability to carry on the
Business in the same manner as it has hitherto been carried on by the Seller or
(ii) any order, judgment or decree of any court or governmental agency to which
the Seller is a party or by which the Seller is bound in relation to the
Business;
(d) So far as the Seller is actually aware the relationship of the
Business with clients, customers, suppliers and the employees will not be
adversely affected by the execution, completion and/or implementation of this
Agreement.
13. Brokerage Commission
No one is entitled to require from the Seller any finder's fee, brokerage
or other commission in connection with the sale and purchase of the Business and
the Assets under this Agreement.
14. Assumed Contracts
The Assumed Contracts comprise all current contracts of the Business.
15. Defaults
Neither the Seller nor any other party to an Assumed Contract is in default
under such agreement being a default which would be material in the context of
the financial or trading position of the Business or in the context of its
Assets nor are there any circumstances likely to give rise to such a default by
the Seller and nor (as far as the Seller is actually aware) are there any
circumstances likely to give rise to such a default by any other party to an
Assumed Contract.
16. Powers of Attorney
There are in force no powers of attorney given by the Seller in connection
with the conduct of the Business.
17. Compliance with Applicable Laws
Seller has complied in all material respects with all and is not in
violation of any material applicable federal, state, and local laws, statutes,
ordinances, regulations, rules affecting
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<PAGE>
the Business or the Assets, including without limitation the provisions thereof
relating to wages, hours, workers rights, collective bargaining, employment
discrimination, and equal employment opportunity, and the provisions thereof
concerning the conservation and protection of the environment. Seller has also
complied with all applicable notice requirements and provided coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (continuation
coverage requirements for group health plans), and has no liability for which
Buyer might incur liability.
18. Existing Suppliers and Customers
(a) The Business has not since the Balance Sheet Date been materially
adversely affected by the loss of any important customer or source of supply or
by any abnormal factor not affecting similar businesses to a like extent and the
Warrantors are not actually aware of any facts which are likely to give rise to
any such effects.
(b) Neither more than 25 percent of the aggregate amount of all the
purchases nor more than 25 percent of the aggregate amount of all the sales of
the Business were in the period from May 1, 1994 to May 31, 1995 obtained or
made from or to the same supplier or customer (including any person in any way
connected with a supplier or customer) nor so far as the Warrantors are actually
aware is any material source of supply to the Business or any material outlet
for the sales of the Business in jeopardy or likely to be in jeopardy.
19. Business Name(s)
The Seller uses no name for any purpose in connection with the Business
other than York Technology or York Tech.
20. Disclosure of Know-How
The Seller has not (except in the ordinary and normal course of business)
disclosed or permitted to be disclosed or undertaken or arranged to disclose to
any person other than the Buyer any of its Know-How, trade secrets or
confidential information or lists of customers or suppliers relating to the
Business.
21. Assets
(a) The Seller is the owner of and has a good and marketable title to all
the Assets and such Assets are owned absolutely by and in the possession or
under the control of the Seller and there is no outstanding option right to
acquire, mortgage, charge, pledge, lien, bill of sale, leasing or hire purchase
agreement, credit sale or conditional sale agreement or other form of security
or encumbrance or equity whatsoever on, over or affecting the whole or any part
of the Assets and in particular none of the Inventory is subject to any
reservation of title
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<PAGE>
in favor of any third party or purchased generally on terms that ownership does
not pass to the Seller until payment is made by it to the Supplier and there is
no agreement or commitment to give or create any of the foregoing nor has any
claim been made by any person to be entitled to any of the same.
(b) There is not now outstanding any Assumed Contract under which the
Seller or so far as the Seller is actually aware any other party thereto is in
material breach and no party to such contracts is entitled to terminate the same
or any benefit enjoyed by the Seller.
(c) The Inventory has been fully paid for by the Seller and is of
satisfactory quality, readily realizable and saleable at normal selling prices
in the ordinary course of the Business and includes no obsolete, obsolescent or
slow moving items save for that part of the Inventory which has been valued in
accordance with Clause 3.3 as obsolete, obsolescent or slow moving, or otherwise
to take account of any defect in the Inventory.
(d) The Inventory is sufficient for the normal requirements of the
Business.
(e) The work-in-progress is at its normal level having regard to current
orders and to orders reasonably anticipated from customers of the Business.
(f) The Assets comprise all assets now used in the Business and which are
necessary for the continuation of the Business as currently carried on. No
Asset is shared by the Business with any other person and the Business does not
depend for its business upon any assets, facilities, or services owned or
supplied by any member of the Seller's Group.
(g) The stocks of raw materials, packaging materials and finished goods
included in the Inventory are consistent with the normal requirements of the
Business and adequate in relation to the current trading requirements of the
Business.
(h) So far as the Seller is aware the Plant and Machinery do not
contravene any requirement or restriction having the force of law and are in
good repair and condition having regard to their age and are regularly and
properly maintained and fully serviceable and all relevant vehicles are road-
worthy and duly licensed for the purposes for which they are used and are
capable of being used for the purposes of the Business and they are adequate for
and not surplus to the requirements of the Business.
22. Bonus Plans
The Disclosure Letter contains full details of all stock option or other
plans in operation or proposed by or in relation to the Business whereunder any
Employee is or is to be entitled to any shares or a bonus commission or
remuneration of any other sort calculated by reference to the whole or part of
the turnover, profits or sales of the Seller.
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<PAGE>
23. Particulars of Employees
(a) The Employees are all the employees (full time and part time) engaged
in the Business as at the Transfer Date and the particulars of their terms of
employment, ages, length of service, remuneration, bonus, commission and other
monies payable to such employees, benefits in kind, periods of notice, pension
and other rights under any retirement benefits, life insurance or medical
insurance plan are shown in the annex to the Disclosure Letter and are complete
and accurate in all material respects. Except as set forth in the Disclosure
Letter, all the Employees are employees-at-will terminable by Buyer at any time
for any reason or no reason.
(b) The Seller is not under any legal commitment to change or vary any of
the details referred to in paragraph 15(a), nor has the Seller made any verbal
or written promise to do so.
(c) All accrued vacation pay due to any of the Employees up to the
Transfer Date is set out in the Disclosure Letter.
(d) No liability has been incurred by the Seller and not yet been
discharged for breach of any contract of service or employment or for damages or
compensation for wrongful dismissal or unfair dismissal or otherwise or for
failure to comply with any order for reinstatement or re-engagement of any
Employee engaged in connection with the Business.
(e) The Seller has in relation to each Employee complied in all material
respects with:
(i) all obligations imposed on it by all statutes, regulations and
codes of conduct and practice relevant to the relations between it and any
Employee or trade union (including without limitation any obligations under any
health and safety legislation or any legislation relating to the environment);
(ii) all collective agreements and customs and practices currently
in effect dealing with relations between the Seller and any Employee or any
trade union or the terms and conditions of service of any of the Employees; and
(iii) all relevant orders, declarations and awards made under any
relevant statute regulation or codes of conduct and practice affecting the
conditions of service of any of the Employees.
(f) The Seller has not given nor received any notice to terminate any
contract of employment of any of the Employees or any other person employed in
the Business which expires on or after the Transfer Date.
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<PAGE>
(g) The Seller has not offered and will not prior to Closing offer a
contract of employment or for services to any person.
(h) So far as the Seller is actually aware, none of the Employees is a
member of a trade union or other body representing employees. The Seller has
not entered into any union membership, collective bargaining or employment
recognition or other collective agreement (whether legally binding or not) with
a trade union, nor has it done any act which might be construed as recognition.
24. Licenses and Consents
(a) So far as the Seller is aware, the Seller has obtained all necessary
licenses, authorizations and consents from any federal, state or local authority
or governmental agency for the proper carrying on of the Business and is not in
breach of any of their terms or conditions.
(b) Details of all such licenses, authorizations and consents are set out
in and copies of the same are annexed to the Disclosure Letter.
25. Grants
The Seller has not received any financial assistance from any national or
local authority or governmental agency in connection with the Business since
October 1, 1992.
26. Investments, Associations and Branches
The Seller:
(a) Is not and/or has not been a party to any joint venture or consortium
or any partnership arrangement or agreement or to any agreement or arrangement
for sharing commissions or other income relating to the Business:
(b) Does not conduct and/or has not conducted any part of the Business
through a branch or permanent establishment outside the United States;
(c) Is not a member of any partnership, trade association society or
other group whether formal or informal which is materially relevant to or has
any material influence over the Business as now carried on.
27. Guarantees and Warranties
(a) The Seller has not given any guarantee, indemnity or warranty or made
any representation in respect of any products or services sold or supplied or
contracted to be sold or supplied by it or in respect of any other aspect of the
Business save in respect of those
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<PAGE>
products or services listed in the Disclosure Letter and save for any guarantee,
indemnity or warranty implied by law. Save as aforesaid the Seller has not
accepted any liability or obligation to service, repair, maintain, take back or
otherwise do or not do anything in respect of any products or services that
would apply after any such products or services have been delivered or supplied
by it in connection with the Business.
(b) The terms of any guarantee, indemnity or warranty or representation
given by the Seller in respect of the products listed in the Disclosure Letter
are set out in the Disclosure Letter ("the Product Warranties").
(c) So far as the Seller is actually aware, no claims have been made
which are outstanding or are threatened or pending against the Seller in respect
of the Product Warranties.
28. Agreements Concerning the Business
(a) There have been no legally enforceable arrangements and
understandings between the Seller and any person who is directly or indirectly a
shareholder or the beneficial owner of any interest in the Seller or any member
of the Seller's Group or any company in which the Seller is interested relating
to the management of the Business or the ownership or transfer of ownership of
any off the Assets or the provision of goods or services to or by the Seller or
otherwise in any way relating to the Business or the Assets otherwise than on
arms length terms.
(b) The Disclosure Letter contains particulars of all agency,
distributorship franchise or marketing agreements relating to or affecting the
Business or any part of it.
29. Offers
No offer or tender relating to the Business which is capable of being
converted into an obligation of the Business by an acceptance or other act of
some other person is outstanding.
30. Compliance with U.S. Laws
The Seller has not in connection with any business transactions involving
the Seller made or promised to make or authorized any agent to make or promise
to make any payment or transfer of anything of value, directly or indirectly:
(i) to any governmental official or candidate for governmental
office or government employee (including employees of government-controlled
enterprises);
(ii) to any political party or candidate for political party office;
(iii) to an intermediary for payment to any of the foregoing;
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<PAGE>
(iv) to any officer, director, employee, or representative of any
actual or potential customer of the Seller;
(v) to any officer, director, or employee of York or any other
member of the Seller's Group for payment to any of the foregoing; or
(vi) to any other person or entity
if such payment or transfer described in (i) to (vi) inclusive above would
violate the laws of the country in which made or the laws of the United States
of America.
31. Intellectual Property
The Seller owns no registered copyrights, trademarks, patents, patent
applications or other intellectual property rights other than the Knowhow,
Copyright and Unregistered Design Rights and the KDD License, and so far as
Seller is aware no patent or license to use any patent is necessary to operate
and conduct the Business without infringing upon the rights of any third party.
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<PAGE>
THE SECOND SCHEDULE
Statement of policies relating to the Inventory
The valuation of the Inventory for the purposes of Clause 3.3 shall be on
the following basis, which is consistent in all respects which the 1994
Financial Statements:
(i) Inventory is stated at the lower of cost incurred in bringing
each product to its present location and condition, and net realizable value, in
accordance with Statement of Standard Accounting Practice No. 9 (revised);
(ii) Raw material cost is defined as the Seller's standard cost,
which is not materially different from the supplier invoice price on a first in
first out basis:
(iii) The cost of work in progress and finished goods is defined as
the total of the Seller's standard costs of raw materials, direct labor and
attributable production overheads, which include indirect production labor,
production engineering labor and costs relating to factory occupancy and
facilities. Standard labor and overhead rates are not materially different from
actual rates;
(iv) Net realizable value is based on estimated selling price less
further costs expected to be incurred to completion and disposal; and
(v) Provision will be made for slow moving and obsolescent
inventory on a basis which is consistent with the 1994 Financial Statements.
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<PAGE>
THE THIRD SCHEDULE
Retained Books and Records
STATUTORY RECORDS
Certificate of incorporation
Minute books
Directors and officers
TAXATION
Corporation Tax Returns
ACCOUNTING RECORDS
Nominal and Private Ledgers
Cash Books
Sales and Purchase Ledgers
Nominal and Private Journals
Petty Cash Books
Salaries and Wage Registers
Sales and Purchase Day Books
SUPPORTING DOCUMENTS
Sales and purchase invoices
Delivery notes
Receipts and payment documents
Returned checks
Bank statements, etc.
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<PAGE>
AS WITNESS the hands of the duly authorized representatives of the parties
hereto the day and year first before written.
- 39 -
<PAGE>
York Limited
/s/ Roger Brambley /s/ Raymond Lye
- ------------------------------ ------------------------------
Witness Name: Raymond Lye
Title: President
York Technology, Inc.
/s/ Roger Brambley /s/ Raymond Lye
- ------------------------------ ------------------------------
Witness Name Raymond Lye:
Title: President
Photon Kinetics, Inc.
/s/ J A Bloomer /s/ Alfred H. Hunt III
- ------------------------------ ------------------------------
Witness Name: Alfred H. Hunt III
Title: President
IFR Systems, Inc.
/s/ J A Bloomer /s/ Alfred H. Hunt III
- ------------------------------ ------------------------------
Witness Name: Alfred H. Hunt III
Title: President
- 40 -
<PAGE>
DATED 21st June 1995
(1) YORK LIMITED
(2) YORK TECHNOLOGY LIMITED
(3) CORNIBI LIMITED
(4) IFR SYSTEMS, INC.
---------------------------------
AGREEMENT
FOR THE PURCHASE OF THE BUSINESS
OF YORK TECHNOLOGY LIMITED
----------------------------------
MESSRS. HILL TAYLOR DICKINSON
IRONGATE HOUSE
Duke's Place
LONDON EC3A 7LP.
TJR:CORNAA.INV
21/6/1995
<PAGE>
- 2 -
THIS AGREEMENT is made on 21st June 1995
BETWEEN:-
(1) YORK TECHNOLOGY LIMITED a company incorporated in England with registered
no 1721892 whose registered office is at York House, School Lane,
Chandler's Ford, Hampshire, United Kingdom SO53 4DG ("the Seller");
(2) YORK LIMITED a company incorporated in England with registered no 1388871
whose registered office is at York House aforesaid ("York");
(3) CORNIBI LIMITED a company incorporated in England with registered no
3038149 whose registered office is at 43 Brook Street, London, W1Y 2BL
("the Buyer"); and
(4) IFR SYSTEMS, INC. a company incorporated in Delaware of 10200 West York
Street, Wichita, Kansas 67215-8999, United States of America ("IFR")
WHEREAS:-
(A) The Seller carries on the Business (as hereinafter defined).
(B) The Seller wishes to sell, and the Buyer wishes to purchase, the Business
as a going concern upon the terms and subject to the conditions
hereinafter contained.
(C) York is the Seller's holding company and IFR is the Buyer's, holding
company.
NOW IT IS HEREBY AGREED as follows:-
INTERPRETATION
1. In this Agreement and the Schedules, unless the context otherwise
requires:-
<PAGE>
- 3 -
1.1 The following expressions shall have the following meanings:-
"the 1993 Accounts" the audited balance sheet and profit and loss
account together with the notes, the
auditors' report and the directors' report
thereon of the Seller for the financial
period ended on 30th September 1993.
"the 1994 Accounts" the audited balance sheet and profit and loss
account together with the notes, the draft
auditors' report and the draft directors'
report thereon of the Seller for the
financial period ended on the Accounts Date a
copy of which is attached to the Disclosure
Letter.
"the Accounts Date" 30th September 1994.
"the Agency Agreements" all agreements under which the Seller has
appointed agents or distributors or under
which the Seller has been appointed as an
agent or distributor in relation to the
Business copies of which are listed and
annexed to the Disclosure Letter.
"the Assets" all the property and assets agreed to be sold
and purchased under this Agreement which
shall include all assets used in the
Business.
"Assumed Contracts" the Agency Agreements nominated pursuant to
Clause 13.5.1, the Confidentiality
Agreements, the Contracts, the Intellectual
Property Licences other than the agreements
referred to in Clause 13.3.2 the Leasing
Agreements, and the Supplier Contracts.
<PAGE>
"Auditors" the auditors for the time being of the
Seller, KPMG.
"the Business" the business of the research, development,
design, manufacture and sale of
instrumentation for quality assurance testing
of optical fibres including the business of
the manufacture and sale of fibre preparation
products carried on by the Seller and (if
any) the Seller's Group as at the Transfer
Date. For the avoidance of doubt the Business
does not include the research, development,
design, manufacture and sale of optical fibre
sensor systems and optical switches which is
carried on by York Sensors Limited also at
the Property.
"Buyer's Accountants" Ernst & Young
"Buyer's Solicitors" Boodle Hatfield
"Buyer's Group" the Buyer and any company which at the
relevant time is a holding company of the
Buyer or a subsidiary of the Buyer or of any
such holding company.
"Claims" all rights and claims of the Seller arising
out of or in connection with the Business
under any warranties representations
conditions guarantees or indemnities given by
suppliers or other third parties subsisting
at the Transfer Date or arising at any time
thereafter
<PAGE>
- 4 -
whether expressed or implied excluding those
claims known to the Seller and listed in the
Disclosure Letter.
"the Companies Acts" the Companies Acts 1985 and 1989.
"Completion" completion of the sale and purchase of the
Business and the Assets in accordance with
Clause 6 of this Agreement.
the "Confidentiality the confidentiality agreements listed and
Agreements" annexed to the Disclosure Letter.
"Copyright and Unregistered all copyright (if any) unregistered design
Design Right" right (if any) and like rights (if any)
arising anywhere in the world in all the
drawings, designs, plans, specifications,
brochures, manuals, reports, computer
software and other materials relating to the
Business and described in the list annexed to
the Disclosure Letter.
"Cornibi/Sensors an agreement between the Buyer and York
Licence" Sensors Limited to be entered into at
Completion in the form of the draft set out
in the First Schedule.
"Contracts" all the contracts entered into prior to the
Transfer Date by or on behalf of the Seller
with customers for the supply of goods or the
provision of services by the Seller in
connection with the Business which then
remain in whole or in part to be performed by
the Seller as listed and annexed to the
Disclosure Letter.
<PAGE>
- 5 -
"Creditors" the book and other debts owing by and other
liabilities of the Seller on the Transfer
Date to third parties (and whether or not due
and payable) in connection with the Business
and including (but without limitation) the
outstanding balances of all Uninvoiced
Creditors and Prepayments and PAYE, National
Insurance, VAT and accrued holiday pay in
relation to the Employees.
"Debts" the book and other debts owing to the Seller
in connection with the Business by third
parties (and whether or not yet due and
payable) on the Transfer Date including
(without limitation) the outstanding balances
of all Uninvoiced Debts.
"the Disclosure Letter" the letter of disclosure of even date
herewith from the Seller's Solicitors to the
Buyer.
"the Employees" the persons employed in the Business as at
the Transfer Date, as set out in the list
annexed to the Disclosure Letter.
"the Excluded Agency such of the Agency Agreements to be retained
Agreements" by the Seller pursuant to Clause 13.5.2
"the Excluded Assets" the Debts, cash in hand or at Bank, the
Excluded Agency Agreements, the plant,
machinery, tools, office equipment,
furniture, computers and other items
physically located in the premises
<PAGE>
- 6 -
described in the Sensors Lease on the
Transfer Date and the other assets specified
in the Disclosure Letter as being excluded
from this Agreement.
"the Goodwill" the goodwill of the Business together with
the exclusive right to represent itself as
carrying on the Business in succession to the
Seller and the exclusive right so far as the
Seller can grant the same to use the names
"York Technology" and "York Tech".
"holding company" a holding company as defined in the Companies
Acts.
"Intellectual Property" the Patents, the Copyright and Unregistered
Design Right, the Know-How, the rights
acquired by the Seller under the Intellectual
Property Licences and the rights acquired by
the Buyer under the Cornibi/Sensors Licence.
"Intellectual Property the licences entered into by or on behalf
Licences" of the Seller prior to the Transfer
Date which permit the use of certain
Intellectual Property not owned by the Seller
as listed and annexed to the Disclosure
Letter.
"Inventory" the Inventory including raw materials, work
in progress and finished goods owned by the
Seller as at the Transfer Date for the
purposes of or in conjunction with the
Business including items which although
subject to reservation of title by the
<PAGE>
- 7 -
suppliers are under the control of the Seller
but excluding items already invoiced and
delivered to customers where title has been
reserved by the Seller.
"Know-How" all information and data of a confidential
nature relating to the Business whether
patentable or not including inventions,
discoveries, improvements, techniques,
processes and formulae described in the list
annexed to the Disclosure Letter.
"the Lease" the lease of the Property dated 16th July
1984 made between TKM Group Pension Trust
Limited (1) and York (2).
"the Leasing Agreements" all agreements for supply to the Seller on
lease (whether finance, hire purchase or
otherwise) of plant and machinery, office
equipment, vehicles, computers, computer
software or other assets used by the Seller
in connection with the Business as at the
Transfer Date as described in the list
annexed to the Disclosure Letter but
excluding any such agreement pertaining to an
Excluded Asset.
"the Liabilities" all the liabilities of the Business including
without limitation those relating to the
Seller's Scheme outstanding at the Transfer
Date.
"Loan Notes" unsecured convertible loan notes to be issued
by the Buyer in the form of the drafts set
out in Parts I and II of the Second Schedule
to be guaranteed by IFR in
<PAGE>
- 8 -
the terms of the Deeds of Guarantee drafts
which are set out in Parts III and IV of the
Second Schedule
"the Management Accounts" the balance sheet of the Seller made up as at
31st May 1995 and the trading and profit and
loss account of the Seller for the period of
eight months ended on 31st May 1995.
"the Patents" all the patents and patent applications
listed and annexed to the Disclosure Letter
including all rights to make any application
in respect thereof anywhere in the world.
"the Plant and Machinery" the plant and machinery, tools, office
equipment, furniture, computers, vehicles,
leasehold improvements, and other items owned
by the Seller in connection with the Business
wherever situated including (without
limitation) those items which are described
in the list annexed to the Disclosure Letter
but excluding any plant and machinery which
are Excluded Assets.
"Prepayments" any amounts received at or before the
Transfer Date by the Seller in connection
with the Business in respect of orders placed
for the supply of goods or products not yet
despatched and services not yet provided and
which have not then been invoiced by the
Seller in connection with the Business.
<PAGE>
- 9 -
"the Property" the leasehold property brief particulars of
which are set out in the Third Schedule.
"the 1981 Regulations" the Transfer of Undertakings (Protection of
Employment) Regulations 1981 as amended.
"the Seller's Group" the Seller and any company which at the
relevant time is a holding company of the
Seller or a subsidiary of the Seller or of
any such holding company except York
Technology Inc.
"the Seller's Scheme" the scheme known as the "York Limited
Retirement Benefit Scheme (1984)" as
constituted by a Trust Deed dated 21st May
1984 and made between the Seller and the
trustees named in such Deed, as amended to
date.
"the Seller's Solicitors" Hill Taylor Dickinson
"the Sensors Lease" the lease between the Buyer and York Sensors
Limited to be entered into at Completion in
the form of the draft annexed hereto for the
occupation of part of the Property by York
Sensors Limited.
"subsidiary" a subsidiary as defined in the Companies
Acts.
"Supplier Contracts" the contracts entered into by or on behalf of
the Seller with suppliers for the supply to
the Seller of goods, products or
<PAGE>
- 10 -
services in connection with the Business
which then remain to be performed in whole or
in part.
the "Taxes Act" Income and Corporation Taxes Act 1988.
"the Transfer Date" the close of business on the 21st June 1995.
"Uninvoiced Creditors" amounts which are due to suppliers in respect
of goods and services provided to the
Business on or before the Transfer Date which
have not been invoiced as at the Transfer
Date including (without limitation) those
amounts referred to in the list annexed to
the Disclosure Letter.
"Uninvoiced Debts" amounts which are due from customers in
respect of goods and products delivered and
services provided by the Business on or
before the Transfer Date which have not been
invoiced by the Seller at the Transfer Date.
"VAT" Value Added Tax.
"the VAT Act" Value Added Tax Act 1994.
"the Warranties" the representations, warranties and
undertakings contained in the Fourth
Schedule.
"the Warrantors" the Seller and York.
1.2 References to a statutory provision shall include references to such
<PAGE>
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provision and to any regulations made in pursuance thereof as from time
to time modified, codified or re-enacted and in existence on the date of
this Agreement.
1.3 The masculine gender shall include the feminine and neuter and the
singular number shall include the plural and vice versa and references to
persons shall include bodies corporate, unincorporated associations and
partnerships.
1.4 References to a Recital, Clause or Schedule are references to a Recital,
Clause or Schedule of this Agreement and a reference to a sub-clause is
to a sub-clause of the Clause in which it appears.
1.5 References to any document being "in the Approved Form" means that such
document shall be in a form signed for the purposes of identification by
the Seller's Solicitors and the Buyer's Solicitors.
1.6 In relation to the Warranties, the expressions "so far as the
Seller/Warrantors is/are aware", "to the best of the Seller's/Warrantor's
information, knowledge and belief", "there are no facts or circumstances
known to the Seller/Warrantors" and "the Seller/Warrantors is/are not
aware" or similar expressions shall be deemed to cover and include all
knowledge that the Seller/ Warrantors would have had after making all
diligent enquiries of persons or documents or other records which a
prudent person would have made before giving the Warranty to which the
expression relates.
1.7 In relation to the Warranties and where else used in this Agreement any
reference to the actual knowledge or awareness of the Seller or the
Warrantors shall be limited to the actual knowledge of the directors of
and senior employees of the Warrantors whose names are listed for these
purposes in the Disclosure Letter and the actual knowledge of such
persons shall be deemed to include the knowledge they would have had
after making all diligent enquiries of the professional advisers of the
Seller/Warrantors and of the relevant documents and other records under
the possession or control of the
<PAGE>
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Seller/Warrantors and shall be deemed to include the knowledge they would
have had, had they not wilfully recklessly or grossly negligently
disregarded the relevant facts or circumstances but such actual knowledge
or awareness of the Seller or the Warrantors shall not include the
knowledge of any other employee or other person nor shall imply (save as
aforesaid) any obligation to make enquiries of any other persons
documents or records and the expressions "the Seller/Warrantors actually
knew" or "so far as the Seller/Warrantors is/are actually aware" or the
like shall be construed accordingly.
1.8 The headings in this Agreement and the Schedules are inserted for
convenience only and shall not affect the interpretation of this
Agreement.
SALE OF BUSINESS
2.1 The Seller as beneficial owner shall sell free from all liens charges
equities and encumbrances (existing now, or by virtue of any act or
omission on or before the date hereof capable of arising at any time
after the date hereof) and the Buyer shall purchase as a going concern as
at and with effect from the Transfer Date for the consideration and upon
the terms and subject to the conditions hereinafter set out the Business
as a going concern comprising the following:-
(a) the Goodwill.
(b) the Plant and Machinery.
(c) the Inventory.
(d) the Patents and the Copyright and Unregistered Design Right.
(e) such rights as the Seller has to the Know-How.
<PAGE>
- 13 -
(f) the benefit of the Assumed Contracts (but subject to the burden
thereof as described in this Agreement).
(g) the benefit of the Claims and the Prepayments.
(h) all price lists, manuals, instructions, catalogues, sales
literature, publicity material and all supplier, client, marketing
and customer information files and records, in each case owned or
used by the Seller in connection with the Business and all other
documents and records relating to the Business which are described
in Clause 7.2.
(i) subject to Clause 2.2, all other assets (if any) of whatsoever
nature owned by the Seller and employed in the Business at the
Transfer Date.
2.2 The Excluded Assets are excluded from the sale and purchase hereunder.
2.3 The Buyer shall not be obliged to complete the purchase of any of the
Assets unless the purchase of all the Assets is completed simultaneously.
PURCHASE CONSIDERATION
3.1 Subject to Clause 4, the purchase consideration for the Assets shall be
Four million four hundred and seventeen thousand and ninety three United
States Dollars which shall be apportioned amongst the Assets as follows:-
US $
Assumed Contracts (except the Intellectual 1
Property Licences)
Goodwill 1
<PAGE>
- 14 -
Intellectual Property (except the Know-How) 72,000
Know-How 2,751,549
Plant and Machinery 192,000
Inventory
(subject to adjustment in
accordance with Clause 3.3) 1,305,542
----------------
TOTAL $4,321,093
----------------
3.2 The consideration shall be satisfied by:-
(a) The payment of US $ 1,449,093 (subject to adjustment in accordance
with Clause 3.3) in cash on Completion less a retention of US
$150,000 against such adjustment as is referred to in Clause 3.3.
(b) The issue of a Loan Note of US $ 1 million in the form of the draft
set out in Part I of the Second Schedule.
(c) The issue of a Loan Note of US $ 1,872,000 in the form of the draft
set out to Part II of the Second Schedule (subject to the
adjustments referred to in and on the terms of Clause 4).
3.3 The purchase consideration for the Inventory shall be increased or
decreased by the difference by which the adjusted value of the Inventory
on the Transfer Date is greater than or less than US $ 1,305,542. The
adjusted value of the Inventory on the Transfer Date will be determined
as follows:-
(a) Within 7 days of the Transfer Date the Buyer and the Seller will
cause a physical count to be taken of the Inventory. The
<PAGE>
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physical count will be adjusted to reflect purchases and sales of
the Inventory since the Transfer Date. Representatives of the Buyer
and the Seller shall be entitled to be present at all times during
the taking of the count.
(b) Each item of the Inventory will be priced in accordance with the
statement of policies set out in the Fifth Schedule to this
Agreement.
The Auditors will prepare their report on the value of the Inventory
within 7 days of the date of this Agreement.
3.4 The Seller and the Buyer will endeavour to agree the adjusted value of
the Inventory on the basis set out in Clause 3.3 as soon as possible
after the Auditors report is presented. In the event that they are unable
to agree such value within 7 days the matter will be referred by the
Seller or the Buyer to an independent firm of Chartered Accountants who
will be asked to certify such adjusted value on the basis set out in
Clause 3.3 and whose certificate shall in the absence of manifest error
bind the parties. The independent firm of Chartered Accountants shall be
appointed by the Buyer and the Seller jointly or (in default of agreement
as to such appointment within 7 days of one of them notifying the other
of its wish to appoint an independent firm) by the President for the time
being of the Institute of Chartered Accountants of England and Wales on
the application of either of them. The charges of the independent firm
shall be apportioned between the Seller and the Buyer as such firm shall
decide. Forthwith upon agreement between the Seller and the Buyer as to
the adjusted value or upon the receipt of a copy of the certificate of
the independent firm of Chartered Accountants as the case may be:-
(a) the Seller will if the adjusted value is less than US $1,155,542 pay
to the Buyer the difference between the adjusted value and US
$1,155,542 and the Buyer shall be absolutely entitled to the
retention of US $150,000 referred to in Clause 3.2 (a); or
<PAGE>
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(b) the Buyer will if the adjusted value is greater than US $1,155,542
pay to the Seller the difference between the adjusted value and US
$1,155,542.
4. PRICE ADJUSTMENT
4.1 The purchase consideration for the Assets shall be reduced if the Gross
Sales (as defined in Clause 4.4 below) in the period from 1st July 1995
to 30th June 1996 (the "Earn Out Period") are less than US$7,650,000. The
reduction will be 20% of the amount by which such sales are less than
US$8,500,000 subject to a maximum reduction of US $425,000.
4.2 The purchase consideration for the Assets shall be increased if the Gross
Sales are greater than US$9,350,000. The increase will be 10% of the
amount by which such sales are greater than US$8,500,000 subject to a
maximum increase of L425,000.
4.3.1 For the purposes of this Clause 4 the "Products" means the
following products of the Combined Businesses:-
<TABLE>
<CAPTION>
US $
Target Sales
-------------
<S> <C>
S14 484,000
S17 0
S18 1,689,600
S19 968,000
S200 484,000
S25 844,800
<PAGE>
- 17 -
PMD 0
STRAIN 316,800
P104 1,056,000
P106 704,000
P107 0
STRIPPER 228,000
RIBBON 53,200
FK10 0
FK11 1,216,000
FK12 456,000
</TABLE>
and the "Combined Businesses" means the Business and the
"Business" as defined in an agreement of even date with this
Agreement between York Technology Inc. York Limited, IFR
Systems, Inc. and Photon Kinetics, Inc.
4.3.2 If any Product is discontinued entirely or to a material
extent then the relevant target sales shall be reduced by
such proportion as the number of days remaining of the Earn
Out Period as at the date of such discontinuation bears to
the total number of days comprised in the Earn Out Period
and in Clauses 4.1 and 4.2 above the figures of
US$7,650,000, 8,500,000 and 9,350,000 shall also each be
reduced by such proportion.
<PAGE>
- 18 -
4.3.3 For the purposes of this Clause 4 all sales of Products in
UK L Sterling will be converted to US Dollars at a constant
rate of US$1.6 to the L1, regardless of the actual exchange
rate at the date of the sales. All other currencies will be
converted to US Dollars on the basis of the actual exchange
rates offered by the Buyer's bank on the date of the
relevant invoice for the Products.
4.4 For the purposes of this Clause 4 "Gross Sales" shall mean the aggregate
invoice price net of any discounts, refunds, rebates or credits granted
or issued or agreed to be granted or issued or agreed and net of any VAT
or other sales taxes of the Products which have been sold and invoiced in
the normal course of business during the Earn Out Period by the Buyer or
any company in the Buyer's Group which has succeeded to the Combined
Businesses or any part thereof.
During the Earn Out Period the Buyer will use all reasonable endeavours
to promote sales of the Products in all reasonable markets.
In the event of a sale of Products to a member of the Buyer's Group at
less than arms length price there shall be substituted the price at which
the Product would have been sold at arms length (the "Substituted
Price").
If any Product is disposed of other than by way of lease, hire or loan or
the like or other than by way of sale it shall be deemed to have been
sold at the Substituted Price, provided that Products supplied to
distributors, agents or other sales representatives on approval or for
demonstration or test purposes shall not be deemed to have been sold and
any such Products subsequently sold to such distributors, agents or other
sales representative at a discount to reflect the fact that they have
been used for demonstration or test purposes shall not be deemed sold at
the Substituted Price.
<PAGE>
- 19 -
4.5 As soon as possible after 30th June 1996 the parties will endeavour to
agree the Gross Sales and the purchase consideration adjustment pursuant
to Clauses 4.1 or 4.2 above. The Buyer will make available to the Seller
and its advisers at reasonable times during usual business hours such
books and records and other information which are relevant to the
calculation of the purchase consideration adjustment. If the Gross Sales
and purchase consideration adjustment cannot be agreed by the parties by
31st August 1996 the matter may be referred by the Buyer or the Seller to
the Buyer's Accountants who shall be asked to certify the Gross Sales and
the purchase consideration adjustment. In the absence of manifest error
their certificate will bind the parties. Their costs shall be borne
equally by the Buyer and Seller.
Within 7 days of the purchase consideration adjustment being agreed or
certified or if later the date on which the Buyer and/or IFR shall pay
all monies due to the Seller pursuant to the Loan Note a draft of which
is set out in Part II of the Second Schedule or in the case of IFR the
Deed of Guarantee a draft of which is set out in Part IV of the Second
Schedule the Buyer will pay to the Seller or the Seller will pay to the
Buyer the amount of the increase in the purchase consideration or
reduction as the case may be. For the avoidance of doubt if monies are
due from the Seller to the Buyer the Buyer shall be entitled to set off
the amount against the amount payable pursuant to the Loan Note referred
to above.
The purchase consideration adjustment shall be attributed to the price
payable for Know-How which shall be deemed to be increased or reduced as
the case may be.
5. PROPERTY
York will surrender the Lease to the freeholder of the Property
immediately prior to the purchase of the freehold interest in the
Property by the Buyer.
<PAGE>
- 20 -
COMPLETION
6.1 Completion of the sale and purchase of the Business will take place at
the premises of the Seller's Solicitors on the Transfer Date when all
(but not part only unless the Buyer shall otherwise agree) of the
following shall take place:-
(a) the Seller shall deliver or cause to be delivered to the Buyer:-
(i) counterparts of the Sensors Lease together with three copies
of the Court Application to be made to the Central London
County Court to exclude the provisions of Section 38(4) of
the Landlord and Tenant Act 1954 in relation to the Sensors
Lease and the Cornibi/Sensors Licence duly executed by York
Sensors Limited;
(ii) save for those assets referred to in Clause 6.1 (a)(vi), all
the Assets capable of passing by delivery;
(iii) transfers and assignments in the Approved Form of the
Goodwill, the Patents, Copyright and Unregistered Design
Right and the Know-How duly executed by the Seller;
(iv) the Assumed Contracts and subject to Clause 13 duly executed
assignments to the Buyer in the Approved Form of the benefit
of all Assumed Contracts which are capable of assignment
without the written consent of other parties and of all
Assumed Contracts which are not assignable without the
written consent of other parties but in respect of which
such consent has been obtained together with the written
consent (if any) of the parties thereto (other than the
Seller) to the assignment by the Seller to the Buyer of the
benefit thereof;
<PAGE>
- 21 -
(v) duly executed assignments transfers or conveyances in the
Approved Form as are required to vest in the Buyer all the
other Assets together with all documents of title relating
thereto;
(vi) all documents and records relating to the Business which are
to be transferred to the Buyer pursuant to this Agreement;
(vii) releases and/or consents and/or certificates of
non-crystallisation in a form acceptable to the Buyer duly
executed by any mortgagee or chargee or other person whose
release and/or consent is necessary for the sale of any of
the Assets free from encumbrances;
(viii) a Special Resolution of the Seller duly passed by the
shareholders of the Seller changing its name to "York 1995
Limited" and the sum of L20 (the filing fee payable to the
Registrar of Companies on change of name). The Seller agrees
that the Buyer may file the Special Resolution with the
Registrar of Companies on behalf of the Seller;
(ix) irrevocable powers of attorney by each of the Seller and
York in the Approved Form in accordance with Clause 22;
(x) if the Buyer so requires a banker's draft in favour of the
Buyer in the sum equal to all Prepayments;
(xi) a written acknowledgement from the Seller and each other
member of the Seller's Group that all agreements and
arrangements between the Seller and any such member and
which affect the Business or the Assets have been cancelled
by mutual agreement and without compensation or damages
payable by either party to the other and that no
<PAGE>
- 22 -
amount is due by any member of the Seller's Group is another
member of the Seller's Group which affects the Business or
Assets; and
(xii) a joint election by the Seller and the Buyer pursuant to
Section 531(3) Taxes Act in the Approved Form executed by
the Seller
(b) upon completion of all the matters referred to in sub-clause (a)
above the Buyer shall transfer to the account of the Seller at
Barclays Bank plc Account No. 20997145 the sum of US $ 1,299,093
(less an amount equal to all Prepayments unless the Buyer shall
require a banker's draft from the Seller in respect of such
Prepayments) and deliver to the Seller Loan Notes for US $ 2,872,000
and the Buyer shall deliver the Sensors Lease and the
Cornibi/Sensors Licence to the Seller on behalf of York Sensors
Limited.
6.2 (a) All periodic charges and outgoings of the Business including but not
limited to rates gas electricity water telephone charges licence
fees and royalties and all liabilities in relation to salaries wages
accrued holiday pay national insurance pension contributions PAYE
remittances and all other payments to or in respect of the Employees
shall be apportioned on a time basis so that such part of the
relevant charges attributable to the period ended on the Transfer
Date shall be borne by the Seller and such part of the relevant
charges attributable to the period commencing on the day following
the Transfer Date shall be borne by the Buyer. All rents, licence
fees royalties and other similar sums receivable in respect of the
Business shall be apportioned between the Seller and the Buyer on
like terms. The Seller will reimburse to the Buyer all amounts paid
by the Buyer to suppliers in respect of Supplier Contracts on
account of sums due under such contracts
<PAGE>
- 23 -
(b) A statement showing the net amount (if any) payable by or to the
Seller under this Clause 6.2 shall be agreed between the Buyer and
the Seller within 14 days after the date of Completion and failing
such agreement shall be ascertained and certified by an independent
firm of Chartered Accountants agreed between the Buyer and the
Seller or (in default of agreement as to such appointment within 7
days of one of them notifying the other of its wish to appoint an
independent firm) appointed by the President for the time being of
the Institute of Chartered Accountants of England and Wales on the
application of either of them. Within 14 days after such agreement
or certification the Seller shall pay to the Buyer or as the case
may be the Buyer shall pay to the Seller the net amount contained in
the apportionment statement so agreed or certified.
6.3 The 1994 Accounts will be approved by the Board of directors of the
Seller and signed on behalf of the same by a director of the Seller
immediately after Completion and the Seller shall procure that the
auditors' report to the 1994 Accounts will be signed by the Auditors
within 28 days after Completion and the 1994 Accounts once signed and
approved as aforesaid will be in the same form as the copy of the 1994
Accounts attached to the Disclosure Letter.
6.4 The Seller shall use all reasonable endeavours to procure that not later
than seven days from the Transfer Date such of the Employees who are
directors of any companies within the Seller's Group shall resign from
such directorships. The Seller further agrees to use its reasonable
endeavours to procure that such of the Employees who are trustees of the
Seller's Scheme resign from such trusteeship not later than twenty-eight
days after the Payment Date (as defined in The Sixth Schedule to this
Agreement)"
SELLER'S OBLIGATIONS
7.1 The Seller shall retain at least for 6 years and permit the Buyer and its
representatives to inspect at any time during such period during
<PAGE>
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usual business hours the books, records and documents details of which
are set out in the Seventh Schedule (the "Retained Books") and such
books, records and documents which relate both to the Business or any of
the Assets and also the Excluded Assets and the Buyer shall be entitled
at its own expense to take and retain copies thereof and extracts
therefrom.
7.2 With the exception of the Retained Books and the other books records and
documents referred to in Clause 7.1 all books, records and documents
relating to the Business including stock records, information relating to
the customers and suppliers of the Business, and personnel files relating
to the Employees, files relating to the Intellectual Property (including
details of the Seller's patent agents) and other books, records and
documents of the Seller necessary for the Buyer to carry on the Business
shall be delivered to the Buyer on Completion and shall thereafter be
retained by the Buyer for 6 years from the Transfer Date and the Buyer
shall permit the Seller its servants and agents and such other persons as
may be authorised by the Seller at all reasonable times during usual
business hours to inspect such records and at its own expense to take
such copies therefrom as the Seller may reasonably require.
7.3 Any reference in this Clause 7 to any form of books, records or other
documents or the like shall be deemed to include relevant information
electronically stored and relevant computer programmes.
RESPONSIBILITY FOR LIABILITIES OF THE BUSINESS
8. On and from the Transfer Date, subject to the obligations and liabilities
expressly assumed by the Buyer under this Agreement, the Seller shall
continue to be solely responsible for all the Liabilities and undertakes
to pay and discharge in accordance with the terms of trade between the
Seller and each such Creditor each amount owed to each and every Creditor
and to indemnify the Buyer fully at all times from and against any and
all claims actions proceedings demands liabilities costs and expenses in
connection with
<PAGE>
- 25 -
any of the foregoing. If the Seller shall fail to do so and the Buyer
reasonably deems it necessary to do so in order to preserve the goodwill
of the Business the Buyer shall be entitled to pay such Creditors on
behalf of the Seller and the Seller will forthwith on demand reimburse
the Buyer against any amount so paid.
9. The Buyer shall complete and discharge all the Assumed Contracts in
accordance with their terms and shall indemnify and keep indemnified the
Seller against all actions, proceedings, costs, claims and demands
against or incurred by the Seller (other than any taxation on or
calculated by reference to the profit of the Business, earned up to the
Transfer Date) and against any loss suffered by the Seller in respect of
all or any of the Assumed Contracts and in each case by reason of only
any act, default or delay of the Buyer in relation to the Assumed
Contracts after the Transfer Date.
10.1 The Seller covenants and undertakes to the Buyer and IFR that for a
period of 5 years from the Transfer Date in relation to any dealings it
has after the Transfer Date with customers and suppliers of the Business
to use all reasonable endeavours to maintain the trade and trade
connections of the Business and to preserve the ongoing business
relationship between such customers and suppliers and the Business and
not by any action, omission, default or neglect knowingly to damage or
risk damage to the same.
10.2 The Buyer covenants and undertakes to York, that in relation to any
dealings it has from the Transfer Date to the end of the Earn Out Period
with customers the Business to use all reasonable endeavours to maintain
the trade and trade connections of the Business and to preserve the
ongoing business relationship between such customers and the Business and
not by any action, omission, default or neglect knowingly to damage or
risk damage to the same. Provided that nothing in this Clause shall
prevent the Buyer from discontinuing any products sold by the Business.
<PAGE>
- 26 -
10.3 The Seller shall be responsible for and shall indemnify the Buyer against
any and all claims actions proceedings demands liabilities costs and
expenses arising after the Transfer Date in respect of any claim from
customers or subsequent purchasers from customers for damage or otherwise
arising under any guarantees or warranties given expressly or by
implication of law or otherwise howsoever arising in respect of goods or
products manufactured or sold or services supplied by the Seller on or
before the Transfer Date, provided however the Buyer will take all
reasonable steps if so requested by the Seller to provide or, if the
Buyer reasonably deems it necessary in order to preserve the goodwill of
the Business, the Buyer shall be entitled to provide, after sales service
or to meet claims under any contractual guarantee or warranty. The Seller
agrees to reimburse the Buyer forthwith on demand for its direct costs in
doing so. For these purposes direct costs means employment costs,
materials used and travel and subsistence costs incurred in providing
such services under warranty or guarantee; such services to be provided
in accordance with the policies of the Business prior to the Transfer
Date. The Buyer shall be entitled to set off any sum owed to it by the
Seller pursuant to this sub-clause against any sum due from it to the
Seller. Provided always that this Clause shall not affect any right or
remedy the Buyer may have for a breach of the Warranties or any other
provision of this Agreement.
WARRANTIES
11.1 The Warrantors jointly and severally represent, warrant and undertake to
the Buyer and IFR (contracting for themselves and as trustees for any
successor in title to part or all of the Business and Assets and the
Property) that the Warranties are true and correct in all respects.
11.2 The Warranties shall be qualified by reference to those matters disclosed
(but only to the extent fully, fairly and accurately disclosed) in the
Disclosure Letter.
<PAGE>
- 27 -
11.3 It is hereby agreed that:-
(a) The liability of the Warrantors in respect of any breach or breaches
of the Warranties relating to the Seller's title to the Inventory
and the Plant and Machinery and any other tangible Assets shall be
unlimited.
(b) The aggregate liability of the Warrantors in respect of any breach
or breaches of the Warranties (other than those Warranties referred
to in Clause 11.3(a) and other than in the case of any breach or
breaches of the Warranties where the Warrantors actually knew or
were actually aware at the date of this Agreement that the relevant
Warranty was not true or correct in all respects) shall not (subject
to sub-clause (e) below) exceed US$1 million.
(c) The aggregate liability of the Warrantors in respect of any breach
or breaches of the Warranties (other than those Warranties referred
to in Clause 11.3 (a)) in the case of any such breach or breaches
where the Warrantors actually knew or were actually aware at the
date of this Agreement that the relevant Warranty was not true or
correct in all respects shall not exceed the difference between US$2
million and the amount of all other liability for any breach or
breaches of the Warranties pursuant to Clause 11.3(b). For the
avoidance of doubt the aggregate liability of the Warrantors in
respect of all claims for breach or breaches of the Warranties other
than those warranties referred to in Clause 11.3(a) shall not
(subject to sub-clause (e) below) exceed US$2 million.
(d) The Warrantors shall not be liable in respect of any claims under
the Warranties unless details of the claim shall have been notified
to York (only) in writing in reasonable detail on or before 31st
December 1996 and unless proceedings have been commenced within 6
months of such notification.
<PAGE>
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(e) The limits of US 1 million in sub-clause (b) and US $2 million in
sub-clause (c) shall be reduced by the amount of any claim or claims
which Photon Kinetics Inc ("Photon Kinetics") or IFR shall notify in
writing by 31st December 1996 to York or York Technology Inc ("York
US") under any of the Warranties (as therein defined) in the
agreement dated 21st June 1995 between York (1) York US (2) Photon
Kinetics (3) and IFR (4) and which York US or York shall pay as if
such claims were made and paid under the terms of this Agreement.
11.4 The remedies of the Buyer and IFR in respect of breach of any of the
Warranties shall continue to subsist notwithstanding Completion.
11.5 The rights and remedies of the Buyer and IFR in respect of any breach of
the Warranties shall not be affected by any investigation made by or on
behalf of the Buyer or IFR into the affairs of the Seller, by the Buyer
or IFR failing to exercise or delaying the exercise of any of their
respective rights or remedies or by any other event or matter whatsoever
except a specific and duly authorised written waiver or release.
11.6 The Buyer shall be entitled to set off against any liability which it may
have to repay the Loan Note in the form of the draft set out in Part II
of the Second Schedule (or any liability to deliver shares of IFR voting
common stock pursuant to the same):-
11.5.1 (a) if not paid when due, the amount due from the Seller to the
Buyer pursuant to Clause 3.4; and
(b) if not paid when due, the amount of any purchase consideration
adjustment due from the Seller to the Buyer pursuant to Clause
4.5; and
(c) if not paid or transferred when due, the amount of the Transfer
Amount due from the trustees of the Seller's Scheme to the
trustees of the Buyer's Scheme. For the
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purposes of this paragraph the terms the "Transfer Amount","the
Seller's Scheme" and "the Buyer's Scheme" shall bear the
meanings attributed to them in the Sixth Schedule; and
(d) the amount of any claim or claims which the Buyer or IFR shall
notify in writing by 31st December 1996 to the Seller or York
under any of the Warranties and/or under any of the indemnities
in and/or under or in respect of any other obligations or
liabilities of the Seller or York under this Sale Agreement;
and
11.6.2 the amount of any claim or claims which Photon Kinetics, Inc.
("Photon Kinetics") or IFR shall notify in writing by 31st
December 1996 to York or York Technology, Inc. ("York US")
under any of the warranties in and/or under any of the
indemnities in and/or under or in respect of any other
obligations or liabilities of York US or York under the
agreement dated 21st June 1995 between York (1) York US (2)
Photon Kinetics (3) and IFR (4) for the sale by York US of its
business to Photon Kinetics.
11.7 The exercise of a right of set-off under Clause 11.6 shall in no way
prejudice or affect any other rights or remedies of the Buyer or IFR for
the purpose of recovering any amount due to the Buyer or IFR.
11.8 All sums payable by the Warrantors under this Clause 11 shall be paid
free and clear of all deductions or withholdings whatsoever save only as
may be required by law. If any such deductions or withholdings are
required by law the Warrantors shall be obliged to pay such sum as will
after such deduction or withholding has been made leave the same amount
as the recipient would have been entitled to receive in the absence of
any such requirement to make a deduction or withholding. If any sum
payable by the Warrantors under this Clause 11 shall otherwise be subject
to tax in the hands of the recipient
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the same obligation to make an increased payment shall apply in relation
to such tax liability as if it were a deduction or withholding required
by law.
11.9 In the event that the Buyer and/or IFR shall purport to exercise a right
of set-off as referred to in Clause 11.6 above and the claim or claims in
respect of which such right is purportedly exercised shall not be valid
or enforceable the Buyer and/or IFR shall be liable to pay interest to
the Seller on the amount withheld from the date withheld to the date of
payment in full (as well after as before any judgment) calculated on a
daily basis at the rate of three percent per annum (3%) above, LIBOR for
the first 30 days and four percent (4%) above thereafter. For these
purposes LIBOR shall mean the rate per annum at which US dollar deposits
for the relevant period and amount are offered by leading banks in the
London Interbank market.
11.10 It is hereby agreed and declared that neither the Buyer nor IFR shall be
entitled to set-off any amount against its liability to the Seller in the
case of the Buyer under the Loan Note in the form of the draft set out in
Part I of the Second Schedule and in the case of IFR the Deed of
Guarantee in the form of the draft set out in Part III of the Second
Schedule.
11.11 Promptly upon the occurrence of or promptly upon the Warrantors becoming
aware of the impending or threatened occurrence of any event which would
or might reasonably be expected to cause or constitute a breach (or would
have caused or constituted a breach had such event occurred or been known
to the Warrantors prior to the date of this Agreement) of any of the
Warranties it shall give written notice of the same to the Buyer and IFR
and shall use their best endeavours promptly to prevent or remedy the
same.
11.12 Where under this Agreement the Seller and/or York shall have agreed to
indemnify the Buyer and/or IFR against any cost, claim, liability or
expense in circumstances where the act or omission matter or thing giving
rise to the entitlement to be indemnified also gives rise to a
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breach or breaches of the Warranties the Buyer and/or IFR shall not be
entitled to claim under both the indemnity and the Warranties in respect
of the same loss.
12. EMPLOYEES
12.1 For the avoidance of doubt, it is hereby acknowledged by the Seller and
the Buyer that this Agreement and the sale of the Business and the Assets
hereunder constitute a "relevant transfer" within the meaning of the 1981
Regulations. In accordance with the 1981 Regulations, the contract of
employment of each of the Employees shall automatically be transferred
(subject as provided in the 1981 Regulations) to the Buyer with effect
from the Transfer Date which shall be the "time of transfer" under the
1981 Regulations.
The Seller agrees that Mr. J. Bulpett ("Mr. Bulpett") shall remain in the
employment of the Seller and the Seller shall indemnify the Buyer and
keep it fully indemnified against all claims of whatever nature which may
be made against it by Mr. Bulpett pursuant to the 1981 Regulations or
otherwise (including any costs or expenses incurred in connection with
any such claims)
12.2 The Seller shall perform and discharge all its obligations and
liabilities under and in connection with the contracts of employment of
the Employees (or the obligations and liabilities the Seller would have
had under and in connection with the said contracts but for the operation
of the 1981 Regulations) (such obligations and liabilities being deemed
to include statutory obligations) arising from the employment of the
Employees up to the Transfer Date. The Seller shall pay to the Employees
all sums to which they are entitled and the Seller shall on the normal
due dates make all national insurance payments and contributions (both
employer's and employees contributions) to retirement benefit schemes
relating to the Employees up to and including the Transfer Date and shall
indemnify and keep indemnified the Buyer against all liabilities claims
and demands costs and expenses arising from the Seller failing to perform
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and observe the said obligations or arising from any operation of the
Seller's Scheme in a way which discriminates between male and female
members of such Scheme at any time prior to the Transfer Date
12.3 If the Buyer shall make any Employees redundant within 3 months of the
Transfer Date the Seller will indemnify the Buyer against the termination
payments made to such Employees up to a limit of US $75,000. For these
purposes termination payments will include any statutory or contractual
redundancy payments or payments in lieu of notice due and/or any
compensation to which any such Employee is entitled pursuant to the 1981
Regulations.
12.4 The Seller shall further indemnify the Buyer against each and every cost
claim liability expense or demand which relates to or arises out of any
act or omission by the Seller or any other event or occurrence prior to
the Transfer Date and which the Buyer may incur in relation to any
contract of employment and collective agreements concerning the Employees
pursuant to the 1981 Regulations including without limitation any such
matter relating to or arising out of:
(a) the Seller's rights powers duties and/or liabilities under or in
connection with any such contract of employment and any such
collective agreements (which rights powers duties and/or liabilities
are or will be transferred to the Buyer in accordance with the 1981
Regulations); or
(b) anything done or omitted before the Transfer Date by or in relation
to the Seller in respect of any contract of employment or any such
collective agreements or any person employed in the Business which
is deemed to have been done or omitted by or in relation to the
Buyer in accordance with the 1981 Regulations; or
(c) the Seller's failure to pay to any Employee any sums due in respect
of the period prior to the Transfer Date; or
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(d) any claim by any trade union staff association or staff body
recognised by the Seller in respect of all or any of the Employees
arising out of the Seller's failure to comply with its legal
obligations to such trade unions or staff associations or bodies; or
(e) by reason of the Seller's Scheme not being sufficiently or
effectively funded to ensure that all benefits currently or
prospectively payable under the Seller's Scheme can be paid.
12.5 Forthwith upon the execution of this Agreement, the Seller shall, by
notice in writing in a form approved by the Buyer, inform the Employees
of the sale of the Business and the Assets hereunder.
12.6 The provisions of the Sixth Schedule shall have effect in relation to the
pension entitlements of the Employees.
SUBSTITUTION OF PURCHASER IN ASSUMED CONTRACTS
13.1 Subject to Clause 13.5.1 the Seller with effect from the Transfer Date
hereby assigns to the Buyer all the Assumed Contracts which are either
capable of assignment without the consent of other parties or not capable
of assignment without the consent of other parties but such consent has
been obtained prior to the date of Completion.
13.2 Subject to Clause 13.5.1 insofar as any of the Assumed Contracts are not
assignable to the Buyer without the agreement of or novation by or
consent to the assignment from another party and such consent has not
been obtained as at the date of Completion this Agreement shall not
constitute an assignment or attempted assignment if such assignment or
attempted assignment would constitute a breach of the same. In the event
that consent or novation is required to such assignment:
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13.2.1 the Seller shall at the Buyer's request use reasonable endeavours with
the co-operation of the Buyer to procure such novation or assignment as
aforesaid;
13.2.2 unless and until any such Assumed Contract shall be novated or assigned
as aforesaid the Seller shall hold the same in trust for the Buyer and its
successors in title to the Business absolutely and the Buyer shall (if such
sub-contracting is permissible and lawful under the Assumed Contract in
question) as the Seller's sub-contractor perform all the obligations of the
Seller under such Assumed Contract;
13.2.3 unless and until any such Assumed Contract shall be novated or assigned
the Seller will (so far as it lawfully may) give all such assistance to the
Buyer as the Buyer may reasonably require to enable the Buyer to enforce
its rights under such Assumed Contract and (without limitation) will
provide access to all relevant books documents and other information in
relation to such Assumed Contract as the Buyer may require from time to
time.
13.3.1 Subject to Clause 13.5.1 if such consent or novation is not obtained the
Seller will co-operate with the Buyer and at the Seller's cost in any
reasonable arrangements designed to provide for the Buyer the benefits
under any of the Assumed Contracts including enforcement at the cost of and
for the account of the Buyer of any and all rights of the Seller against
the other party to the Assumed Contract arising out of any cancellation by
such other party or otherwise. If and to the extent that in respect of such
Assumed Contracts any such arrangements cannot be made neither the Seller
nor the Buyer shall (without prejudice to Clause 9) have any further
obligation to the other.
13.3.2 It is acknowledged by the parties that Kokusai Denshin, Denwa Company
Limited ("KDD") and Corning Inc ("Corning") have indicated
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that they are prepared to enter into new contracts with the Buyer but will
not agree to the assignment or novation of existing contracts with the
Seller.
The Buyer and the Seller agree that they will cooperate one with the other
to ensure that the Buyer is able to enter into contracts with KDD and
Corning substantially in the terms of the existing contracts to which the
Seller is a party and the Seller is released from such contracts (so far as
they remain to be performed). With respect to the contract between Corning
and the Seller (a copy of which is contained in the Disclosure Letter) (the
"Corning Contract") the further sum of US $90,000 exclusive of VAT is due
to the Seller in respect of the first P106 machine supplied subject to
Corning's acceptance of the machine in accordance with the Corning
Contract.
The Buyer agrees to carry out such work and provide such services as are
required to enable the Buyer to perform its outstanding obligations to
Corning in respect of the first P106 Machine and to be paid the outstanding
sum of US $90,000 and the Seller agrees to reimburse to the Buyer forthwith
on demand its direct costs (as defined in Clause 10.3) in doing so (whether
or not the US$90,000 or any part thereof is paid by Corning to the Buyer or
the Seller).
In the event that a new agreement is entered into between Corning the Buyer
and the Seller prior to acceptance by Corning of the first P106 Machine and
payment of the US $90,000 to the Seller the Buyer will upon acceptance by
Corning of the first P106 machine pay to the Seller the sum of US $90,000
less its direct costs (as defined in Clause 10.3) in performing all
outstanding obligations with respect to such machine in order to become
entitled to the said US $90,000.The Seller agrees with the Buyer to
indemnify the Buyer against all claims, actions proceedings demands and
liabilities which it may incur under its new contract with Corning or
otherwise in respect of the first P106 machine.
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For the avoidance of doubt, the Buyer shall have no liability or
obligations to KDD or Corning under the existing contracts between those
companies and the Seller save for its obligation to the Seller to perform
the Seller's outstanding obligations to Corning in respect of the first
P106 machine.
13.4 To the extent that any payment is made to the Seller in respect of the
Assumed Contracts on or after the Transfer Date the Seller shall receive
the same as trustee, shall record such payment separately in its books and
shall account to the Buyer for the same on the Transfer Date or if received
thereafter within 14 days of receipt.
13.5.1 Within 28 days of the Transfer Date the Buyer shall be entitled by
written notice to the Seller to nominate any of the Agency Agreements as an
Assumed Contract and in that event the provision of Clauses 13.1, 13.2,
13.3 and 13.4 above shall apply to such contract with effect from the date
of such nomination. For these purposes the arrangements with respect to the
China office and Russian joint venture shall be deemed an Agency Agreement.
13.5.2 Any Agency Agreement not included as an Assumed Contract on the Transfer
Date or nominated pursuant to Clause 13.5.1 above shall be retained by the
Seller. With respect to each Excluded Agency Agreement the Seller will
forthwith after the expiration of the 28 day period referred to in 13.5.1
above advise the other party(s) thereto of the sale of the Business and
terminate such agreement by serving the appropriate notice in accordance
with the contractual terms of the agreement. The Seller shall indemnify the
Buyer against all claims made actions, proceedings, demands, liabilities,
costs and expenses incurred by the Buyer in respect of any claim made
against it by the third party(s) to an Excluded Agency Agreement arising
out of the termination thereof pursuant to the foregoing.
13.5.3 The Seller hereby acknowledges and consents to the Buyer approaching or
soliciting any of the other parties to those Excluded
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Agency Agreements under which the Seller has appointed such third parties
agents or distributors with a view to such third parties also being
appointed to act as agents or distributors of the Buyer.
13.5.4 The Buyer shall have no obligation in any event under any provision of
this Agreement to transact any business of any nature in Iran, Iraq or
North Korea or assume any liaibility to any entity in any of those
jurisdictions in relation to the Business.
DEBTS
14.1 The Seller shall be entitled to continue to collect the Debts after the
Transfer Date.
14.2 If any of the Debts are paid to the Buyer after the Transfer Date then the
Buyer shall account for any such Debts received not later than 7 days after
receipt.
14.3 If any debts due to the Buyer are paid to the Seller after the Transfer
Date then the Seller shall not later than 7 days after receipt pay to the
Buyer the amount received.
14.4 The Seller shall consult with the Buyer before commencing legal or
arbitration proceedings or other action against any person for the recovery
of any Debt if after the Transfer Date such person becomes or remains a
customer of the Buyer in relation to the Business and, if the Buyer deems
it necessary in order to preserve the goodwill of the Business, the Buyer
may pay to the Seller the amount of such Debt and the Seller will assign
the debt to the Buyer.
RESTRICTIVE COVENANT
15.1 The Warrantors hereby jointly and severally undertake that they will not
and York will procure that no member of the Seller's Group will either on
its own or in conjunction with others and whether directly or indirectly:
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(a) for a period of 5 years from the Transfer Date (and save as the
holder of shares or debentures in a limited company which confer not
more than 3 per cent of the votes which could be cast at a general
meeting of such company) establish develop carry on or assist in
carrying on or be engaged concerned interested or employed in any
business enterprise or venture materially competing with the
Business or any part of it;
(b) for a period of 5 years from the Transfer Date solicit canvass or
entice away from the Business or the Buyer (or endeavour to solicit
canvass or entice away) the custom of any person firm or company who
was at any time during the period of 2 years immediately preceding
the Transfer Date a client or customer of or supplier to the
Business for the purpose of offering to such client or customer or
obtaining from such supplier goods or services similar to or
materially competing with those of the Business or the products
produced by the Business;
(c) for a period of 5 years from the Transfer Date solicit canvass or
entice away or endeavour to solicit canvass or entice away any of
the Employees from the Buyer for the purposes of employment in an
enterprise or venture materially competing with the Business whether
or not such person would commit a breach of contract by reason of
leaving service;
(d) at any time after the Transfer Date disclose to any person or use
for any purpose, any Know-How;
(e) do anything which might prejudice the Goodwill.
15.2 Each covenant contained in Clause 15.1 shall be construed as a separate
covenant and if one or more of the covenants is held to be against the
public interest or unlawful or in any way an unreasonable restraint of
trade the remaining covenants shall continue to bind the Seller and York.
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15.3 If any covenant contained in Clause 15.1 would be void as drawn but would
be valid if the period of application were reduced or if some part of the
covenant were deleted the covenant in question shall apply with such
modification as may be necessary to make it valid and effective.
15.4 The Seller shall promptly refer to the Buyer all enquiries or orders
relating to the Business including enquiries or orders for any stocks
spares parts accessories and other equipment manufactured or sold in
connection with the Business which the Seller may in future receive.
NAMES
16.1 York and the Seller agree that neither they nor any member of the Seller's
Group will at any time hereafter use any name or names identical or similar
to or capable of confusion with "York Technology" or "York Tech" in
connection with any activity whatsoever though nothing herein shall prevent
or restrict their using the name "York" alone or with any other word or
words which are not similar to "Technology" or "Tech".
16.2 The Buyer agrees with York for itself and as trustee for each member of the
Seller's Group that neither it nor any member of the Buyer's Group will at
any time hereafter use any name or names identical or similar to "York
Sensors" in connection with any activity whatsoever though nothing herein
shall prevent any such company using the names "York Technology" or "York
Tech".
16.3 The Seller will cooperate with the Buyer to ensure the telephone numbers
used in connection with the Business are transferred to the Buyer as soon
as practicable after the Transfer Date.
17. VALUE ADDED TAX
17.1 Each of the Seller and the Buyer warrants to the other that it is a
registered taxable person for the purposes of the VAT Act.
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17.2 The consideration referred to in Clause 3 is exclusive and without the
addition of VAT, the Seller and the Buyer being of the view that this is a
transaction for the transfer of the Business as a going concern to the
Buyer as at and with effect from the Transfer Date and that accordingly the
sale and purchase hereunder is not to be treated as either a supply of
goods or a supply of services for the purposes of VAT by virtue of Article
5 of the Value Added Tax (Special Provisions) Order 1995. However, if and
to the extent to which all or any part or parts of this transaction shall
subsequently be found to be such a supply, then the Buyer shall pay to the
Seller the amount of the VAT payable in connection therewith forthwith on
demand against presentation of an invoice giving the requisite details of
the taxable supply.
17.3 The Seller undertakes to provide all assistance and information to the
Buyer and to execute all such documents and do all such acts as the Buyer
may reasonably request to assist the Buyer in satisfying H.M. Customs and
Excise that the sale and purchase of the Assets hereunder is not subject to
VAT.
17.4 On Completion the Seller shall deliver to the Buyer all records relating to
the Business referred to in Section 49 VAT Act. The Buyer will retain such
records for 6 years from the Transfer Date and the Buyer shall permit the
Seller its servants and agents and such other persons as may be authorised
by the Seller at all reasonable times during usual business hours to
inspect such records and at its own expense to take such copies therefrom
as the Seller may reasonably require.
18. GUARANTEE YORK
18.1 York (referred to in this Clause 18 as "the Guarantor") as primary obligor
unconditionally and irrevocably:
(a) guarantees by way of continuing guarantee to the Buyer and IFR
(together referred to in this Clause 18 as "the Obligees");
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(i) to discharge on written demand the due punctual and complete
payment of all sums payable to the Obligees by;
and
(ii) the performance and observance of all obligations for the
benefit of the Obligees of,
the Seller under this Agreement and under any Assignment of the
Patents and the Goodwill, Copyright Unregistered Design Right and
Know-How (such payment obligations, liabilities and obligations
being hereinafter called "the Obligations")
(b) undertakes to discharge on written demand such of the obligations as
are not Obligations to pay money as if it were the primary obligor
in respect thereof and agrees that any item or amount claimed by the
Obligees to be included in the Obligations being an obligation to
pay money which is not recoverable from the Guarantor under this
Agreement on the basis of a guarantee shall nevertheless be
recoverable from the Guarantor as principal debtor by way of
indemnity and the Guarantor agrees to discharge that liability on
demand; and
(c) as a separate and independent obligation, agrees to indemnify the
Obligees against all direct losses and damages sustained by them or
either of them arising from any non-payment or default of any kind
by the Seller under or pursuant to this Agreement.
18.2 The Obligees shall not make demand or take any steps against the Seller or
any other person before giving two (2) clear days' written notice to the
Guarantor of its intention to make written demand upon the Guarantor in
respect of the Obligations or any of them. A "day" for the purpose of this
sub-clause shall not include a Saturday or a Sunday or other day when
clearing banks are not generally open in London for normal banking
business.
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18.3 On making written demand in accordance with sub-clause 18.2 above neither
of the Obligees need make demand or take any steps against the Seller or
any other person before being entitled to exercise all and any of its or
their rights under this guarantee and indemnity.
18.4 This guarantee and indemnity is a continuing guarantee and indemnity and
shall remain in full force and effect until all of the Obligations have
been discharged and performed in full.
18.5 Each payment to be made by the Guarantor hereunder shall be made free and
clear of all deductions or withholdings of any kind, except for those
required by law, and if any deductions or withholding must be made by law,
the Guarantor will pay that additional amount which is necessary to ensure
that the Obligees receive a net amount equal to the full amount which they
would have received if the payment had been made without the deduction or
withholding. If any sum payable by the Guarantor shall otherwise be taxable
in the hands of the recipient in circumstances where it would not have been
taxable had it been paid by the Seller the same obligation to make an
increased payment shall apply in relation to such tax liability as if it
were a deduction or withholding required by law.
18.6 The Guarantor shall pay interest on any amount due from it hereunder from
the date of demand until the date of payment in full (as well after as
before any judgment) calculated on a daily basis at the rate of three per
cent per annum (3%) for the first thirty (30) days and thereafter four per
cent (4%) per annum above, in the case of any amount due in pounds
sterling, the base rate for the time being of the Barclays Bank PLC and, in
the case of any amount due in US dollars, LIBOR. For these purposes LIBOR
shall mean the rate per annum at which US dollar deposits for the relevant
period and amount are offered by lending banks in the London Interbank
Market.
18.7 The Obligations of the Guarantor hereunder shall not be affected by any act
omission matter or thing whatever which but for this provision may affect
such Obligations or operate to release or
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otherwise exonerate the Guarantor therefrom and accordingly (without
prejudice to the generality of the foregoing) either of the Obligees may
without the Guarantor's consent and without releasing or reducing the
Guarantor's liability to it under this Agreement:
(a) allow the Seller or any other person any time or indulgence;
(b) enter into, renew, vary, end or neglect to perfect or refrain from
enforcing any agreement or arrangement with or liability of the
Seller or any other person;
(c) renew, vary, neglect to perfect, refrain from enforcing or release
any present or future security or guarantee or indemnity which
either of the Obligees holds from the Seller or any other person; or
(d) compound with the Seller or any other person.
18.8 Either of the Obligees may appropriate any sum paid by the Seller, the
Guarantor or any other person or recovered or received on account of the
Obligations as it sees fit.
18.9 (a) Until all amounts which may be or become payable hereunder have been
irrevocably paid in full, the Guarantor shall not:
(i) as a result of this guarantee and indemnity or any payment or
performance hereunder be subrogated to any right or security of
either of the Obligees; or
(ii) claim or prove in competition with either of the Obligees against
the Seller or any other person whether by right of contribution, set
off, indemnity or otherwise;
(b) The Guarantor will not hold any security from the Seller in
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respect of this guarantee and indemnity and any such security which
is held in breach of this provision will be held by the Guarantor on
trust for the Obligees.
18.10The Guarantor will reimburse the Obligees for all legal and other costs
(including value added tax) incurred by the Obligees in connection with the
valid enforcement of this guarantee and indemnity.
18.11The Guarantor agrees that if at any time and for any reason, and whether
with the consent of the Obligees or otherwise, any or all of the
Obligations (the "assigned obligations") are assigned, transferred or
novated to, or assumed by (or are purportedly assigned, transferred or
novated to, or assumed by) any other person (a "transferee"), then the
Guarantor's obligations pursuant to this guarantee and indemnity shall
extend, mutatis mutandis, to the transferee to the extent of the assigned
obligations, and shall not be impaired, released, diminished or discharged
as the result of any such assignment, transfer, novation or assumption.
19. GUARANTEE (IFR)
19.1 IFR (referred to in this Clause 19 as "the Guarantor") as primary obligor
unconditionally and irrevocably:
(a) guarantees by way of continuing guarantee to the Seller and York
(together referred to in this Clause 19 as "the Obligees");
(i) to discharge on written demand the due punctual and complete payment
of all sums payable to the Obligees by;
and
(ii) the performance and observance of all obligations for the benefit of
the Obligees of,
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the Buyer under Clauses 9, 10.3 and 13 this Agreement (such payment
obligations, liabilities and obligations being hereinafter called "the
Obligations")
(b) undertakes to discharge on written demand such of the obligations as
are not Obligations to pay money as if it were the primary obligor
in respect thereof and agrees that any item or amount claimed by the
Obligees to be included in the Obligations being an obligation to
pay money which is not recoverable from the Guarantor under this
Agreement on the basis of a guarantee shall nevertheless be
recoverable from the Guarantor as principal debtor by way of
indemnity and the Guarantor agrees to discharge that liability on
demand; and
(c) as a separate and independent obligation, agrees to indemnify the
Obligees against all direct losses and damages sustained by them or
either of them arising from any non-payment or default of any kind
by the Buyer under or pursuant to this Agreement.
19.2 The Obligees shall not make demand or take any steps against the Buyer or
any other person before giving two (2) clear days' written notice to the
Guarantor of its intention to make written demand upon the Guarantor in
respect of the Obligations or any of them. A "day" for the purpose of this
sub-clause shall not include a Saturday or a Sunday or other day when
clearing banks are not generally open in London for normal banking
business.
19.3 On making written demand in accordance with sub-clause 19.2 above neither
of the Obligees need make demand or take any steps against the Buyer or any
other person before being entitled to exercise all and any of its or their
rights under this guarantee and indemnity.
19.4 This guarantee and indemnity is a continuing guarantee and indemnity and
shall remain in full force and effect until all of the Obligations have
been discharged and performed in full.
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19.5 Each payment to be made by the Guarantor hereunder shall be made free and
clear of all deductions or withholdings of any kind, except for those
required by law, and if any deductions or withholding must be made by law,
the Guarantor will pay that additional amount which is necessary to ensure
that the Obligees receive a net amount equal to the full amount which they
would have received if the payment had been made without the deduction or
withholding. If any sum payable by the Guarantor shall otherwise be taxable
in the hands of the recipient in circumstances where it would not have been
taxable had it been paid by the Buyer the same obligation to make an
increased payment shall apply in relation to such tax liability as if it
were a deduction or withholding required by law.
19.6 The Guarantor shall pay interest on any amount due from it hereunder from
the date of demand until the date of payment in full (as well after as
before any judgment) calculated on a daily basis at the rate of three per
cent per annum (3%) for the first thirty (30) days and thereafter four per
cent (4%) per annum above, in the case of any amount due in pounds
sterling, the base rate for the time being of the Barclays Bank PLC and, in
the case of any amount due in US dollars, LIBOR. For these purposes LIBOR
shall mean the rate per annum at which US dollar deposits for the relevant
period and amount are offered by lending banks in the London Interbank
Market.
19.7 The Obligations of the Guarantor hereunder shall not be affected by any act
omission matter or thing whatever which but for this provision may affect
such Obligations or operate to release or otherwise exonerate the Guarantor
therefrom and accordingly (without prejudice to the generality of the
foregoing) either of the Obligees may without the Guarantor's consent and
without releasing or reducing the Guarantor's liability to it under this
Agreement:
(a) allow the Buyer or any other person any time or indulgence;
<PAGE>
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(b) enter into, renew, vary, end or neglect to perfect or refrain from
enforcing any agreement or arrangement with or liability of the
Buyer or any other person;
(c) renew, vary, neglect to perfect, refrain from enforcing or release
any present or future security or guarantee or indemnity which
either of the Obligees holds from the Buyer or any other person; or
(d) compound with the Buyer or any other person.
19.8 Either of the Obligees may appropriate any sum paid by the Buyer, the
Guarantor or any other person or recovered or received on account of the
Obligations as it sees fit.
19.9 (a) Until all amounts which may be or become payable hereunder have been
irrevocably paid in full, the Guarantor shall not:
(i) as a result of this guarantee and indemnity or any payment or
performance hereunder be subrogated to any right or security of
either of the Obligees; or
(ii) claim or prove in competition with either of the Obligees
against the Buyer or any other person whether by right of
contribution, set off, indemnity or otherwise;
(b) The Guarantor will not hold any security from the Buyer in respect
of this guarantee and indemnity and any such security which is held
in breach of this provision will be held by the Guarantor on trust
for the Obligees.
19.10The Guarantor will reimburse the Obligees for all legal and other costs
(including value added tax) incurred by the Obligees in connection with the
valid enforcement of this guarantee and indemnity.
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19.11The Guarantor agrees that if at any time and for any reason, and whether
with the consent of the Obligees or otherwise, any or all of the
Obligations (the "assigned obligations") are assigned, transferred or
novated to, or assumed by (or are purportedly assigned, transferred or
novated to, or assumed by) any other person (a "transferee"), then the
Guarantor's obligations pursuant to this guarantee and indemnity shall
extend, mutatis mutandis, to the transferee to the extent of the assigned
obligations, and shall not be impaired, released, diminished or discharged
as the result of any such assignment, transfer, novation or assumption.
MISCELLANEOUS
20. Each party will pay it own costs and expenses in relation to the
negotiation preparation signing and carrying into effect of this Agreement.
21. This Agreement shall be binding upon and enure to the benefit of the
successors of the parties but shall not be assignable in whole or in part
by the Seller.
22. Save as expressly contemplated by this Agreement, none of the parties
hereto shall divulge to any third party (which expression shall include
making announcements to employees or to the press and the issue of
circulars) without the prior agreement of the other parties (such agreement
not to be unreasonably withheld or delayed) except to their respective
professional advisers or as may be required by the rules of The National
Association of Securities Dealers, Inc, relating to the NASDAQ market or by
law any information in regard to the existence or subject matter of this
Agreement.
23. At the written request of the Buyer the Seller and York shall (and shall
procure that any other necessary person shall) execute and sign all such
deeds, documents and instruments and perform all such acts and things as
may be necessary subsequent to the Transfer Date to vest in the Buyer the
beneficial ownership of the Business and the
<PAGE>
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Assets and for due performance of the obligations of the Seller and York
under this Agreement. Without prejudice to the foregoing, the Seller and
York shall each grant to the Buyer on Completion an irrevocable power of
attorney in the Approved Form to enable the Buyer on behalf and in the name
of each of them to execute and sign all such deeds, documents and
instruments and perform all such acts and things as may be necessary
subsequent to the Transfer Date to vest in the Buyer the beneficial
ownership of the Business and the Assets.
24. All notices, demands and other communications hereunder or for the purposes
hereof shall be in writing and shall be deemed to have been duly given if
delivered, transmitted by facsimile or posted (first class postage pre-paid
or airmail if overseas ):-
(a) in the case of the Seller and York to
Hill Taylor Dickinson
Irongate House
Dukes Place
London EC3A 7LP
Fax No: 0171 338 0260
marked for the attention of T.J. Railton
(b) in the case of the Buyer and IFR to
IFR Systems Inc
10200 West York
Wichita, Kansas 67215
USA
Fax No: + 316 522 3022
<PAGE>
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marked for the attention of Bruce Bingham, Chief Financial Officer
and Treasurer
or at such other number or address as may last hereafter have been
designated by notice given in the manner provided in this Clause. If
sent by facsimile as aforesaid all such notices, demands and
communications shall be deemed to have been given at the time
transmitted according to the senders verification of transmission,
if delivered shall be deemed to be received when delivered to the
address provided above and if mailed as aforesaid shall be deemed to
have been given and received on the business day in London England
following such mailing (or the sixth business day if sent airmail)
and in proving the time of mailing it shall be sufficient to show
that the envelope containing such notice was properly addressed,
stamped and posted.
25. (a) This Agreement together with the documents and accounts referred to
herein constitutes the whole agreement between the parties hereto in
relation to the sale and purchase of the Business and the Assets and
supersedes all other prior written or oral agreements or
representations.
(b) No variation of this Agreement shall be effective unless made in
writing signed by all the parties hereto (or their duly authorised
representatives).
(c) The parties agree that no party has relied on any representation of
any other party save for representations expressly set out or
referred to in this Agreement.
26. Except insofar as the same is performed on Completion, this Agreement shall
remain in full force and effect thereafter.
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27. This Agreement may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which when
executed and delivered shall constitute an original, but all of which shall
together constitute one and the same instrument.
28. The Buyer may freely assign all or any part of the benefit of this
Agreement (including the Warranties).
29. This Agreement shall be governed by and construed in accordance with
English law and the parties irrevocably submit to the exclusive
jurisdiction of the English Courts.
WITNESS the hands of the duly authorised representatives of the parties hereto
the day and year first before written.
THE FIRST SCHEDULE
------------------
Part I
Cornibi/Sensors Licence
Part II
Sensors Lease
THE SECOND SCHEDULE
-------------------
Part I
Loan Note
Part II
Loan Note
Part III
Deed of Guarantee
Part IV
Deed of Guarantee
<PAGE>
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THE THIRD SCHEDULE
------------------
Property
The leasehold land and property on the north west side of School Lane,
Chandlers Ford, Eastleigh, Hants as the same is registered at H.M. Land
Registry under leasehold title number
HP 262261
THE FOURTH SCHEDULE
-------------------
Warranties
ACCURACY OF DISCLOSURES
1. The factual information contained in the Recitals and the Schedules to this
Agreement and the facts relating to the Business and Assets set out in the
Disclosure Letter or annexures to it are, and the information given by or
on behalf of the Seller or any other member of the Sellers' Group to the
Buyer or any other member of the Buyer's Group during the course of the
negotiations leading to this Agreement (details of which are set out in the
Disclosure Letter) was when given and remains, true accurate and complete
in all material respects. The Seller is not aware of any other fact or
matter which would make any of that information misleading.
2. ACCURACY OF ACCOUNTS
The 1993 Accounts and the 1994 Accounts have been prepared in accordance
with the historic cost convention, generally accepted accounting principles
and practices and with the Companies Acts and other applicable statutes and
regulations of the United Kingdom and the bases and policies of accounting
adopted for the purpose of preparing the 1994 Accounts are the same as
those adopted in preparing the 1993 Accounts. The 1993 Accounts and the
1994 Accounts show a true and fair view of the state of affairs of the
Business as at the date to which such accounts are respectively made up and
of the profit and losses of the Business for the period ended on the
<PAGE>
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date to which such accounts are respectively made up and to the extent
required by the Companies Acts and all relevant United Kingdom Statements
of Standard Accounting Practice and Financial Reporting Standards, set out
all the assets and liabilities of the Business as at the date to which such
accounts are respectively made up and to such extent as aforesaid make
provision for all liabilities and capital commitments of the Seller as the
same then existed.
3. MANAGEMENT ACCOUNTS
The Management Accounts have been prepared in accordance with generally
accepted accounting principles and the bases and policies of accounting
adopted for the purpose of preparing the Management Accounts are the same
as those adopted in preparing the 1993 Accounts and the 1994 Accounts. The
Management Accounts reflect the state of affairs of the Business in all
material respects and apply bases and policies of accounting which have
been consistently applied in the 1993 Accounts and the 1994 Accounts save
that such Management Accounts have not been audited.
4. SELLER'S BOOKS AND RECORDS
4.1 The Seller's accounts books ledgers financial and other records relating to
the Business have been maintained in accordance with generally accepted
accounting practices and standards and there are no material inaccuracies
or discrepancies of any kind contained or reflected therein or in any of
them and they give and reflect in all material respects a true and fair
view of the financial and contractual and trading position of the Seller in
relation to the Business and of its plant machinery and other fixed assets
debtors creditors stock-in-trade work-in-progress and other current assets
and liabilities in relation to the Business (including so far as the
Warrantors are aware contingent liabilities) and will be fully written up
to 31st May 1995.
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4.2 Without limiting paragraph 4.1, all proper records have been kept and all
proper returns and payments made as required by law for the purposes of the
enactments relating to VAT in connection with the Business and the Seller
will not as at the Transfer Date be treated or at any time has been treated
for the purpose of the said enactments as a member of a group and no
application shall have been made for such treatment.
5. COMPLIANCE
5.1 Compliance with the terms of this Agreement and any document entered into
by the Warrantors in accordance with it does not and will not conflict with
or result in a breach of any of the provisions of the Warrantors'
Memorandum or Articles of Association.
5.2 The Seller has at all times carried on the Business in all respects in
accordance with its Memorandum and Articles of Association for the time
being in force.
5.3 Neither the Seller, York Technology Inc. nor any members of the Seller's
Group has any interest directly or indirectly in any company or business
other than the Business which is or is likely to be or become competitive
with the Business as conducted at the date hereof.
6. CONDUCT OF THE BUSINESS SINCE THE ACCOUNTS DATE
Since the Accounts Date and save as disclosed in the Management Accounts:
6.1 The Business has been carried on in the ordinary and usual course and
without entering into any transaction assuming any liability or making any
payment not provided for in the 1994 Accounts or the Management Accounts or
which is not in the ordinary course of the Business and without
interruption or alteration in the nature scope or manner of the Business to
any material extent;
<PAGE>
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6.2 The Seller has not entered into or agreed to enter into any capital
commitments in relation to the Business which are being assumed by the
Buyer;
6.3 There has been no material deterioration in the financial position or
turnover of the Business;
6.4 There has been no disposal of assets other than trading stock in the
ordinary course of trading;
6.5 The turnover of the Business measured both in terms of volume of goods sold
and in terms of value (taking due account of inflation) in the period from
30th September 1994 to 31 May 1995 has not been less than its turnover for
the period from 30th September 1993 to 31 May 1994.
6.6 There has been no unusual increase in the stocks or work-in-progress of the
Business nor have any fixed assets or stocks of the Business been written
up or revalued nor will they be prior to the Transfer Date;
6.7 The Seller has not done or omitted to do anything which might prejudicially
affect the Goodwill or the Know-How to a material extent.
7. CONSEQUENCE OF ACQUISITION OF THE BUSINESS BY THE BUYER
The acquisition of the Business and/or the Assets by the Buyer or
compliance with the terms of this Agreement will not;
7.1 So far as the Warrantors are actually aware cause the Business to lose the
benefit of any right or privilege it presently enjoys or cause any person
who normally does business with the Business not to continue to do so on
the same basis as previously;
<PAGE>
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7.2 Give rise to or cause to become exercisable any right of pre-emption
relating to the Business or any of the Assets;
7.3 Result in a breach of or constitute a default under the terms conditions or
provisions of any agreement licence consent authorisation or instrument so
as to affect adversely the Buyer's ability to carry on the Business in the
same manner as it has hitherto been carried on by the Seller or (ii) any
order judgment or decree of any court or governmental agency to which the
Seller is a party or by which the Seller is bound in relation to the
Business;
And so far as the Seller is actually aware the relationship of the Business
with clients customers suppliers and the Employees will not be adversely
affected by the execution completion and/or implementation of this
Agreement.
8. BROKERAGE COMMISSION
No one is entitled to require from the Seller any finder's fee, brokerage
or other commission in connection with the sale and purchase of the
Business and the Assets under this Agreement.
9. ASSUMED CONTRACTS
The Assumed Contracts comprise all current contracts of the Business.
10. DEFAULTS
Neither the Seller nor any other party to an Assumed Contract is in default
under such agreement being a default which would be material in the context
of the financial or trading position of the Business or in the context of
its Assets nor are there any circumstances likely to give rise to such a
default by the Seller and nor (as far as the Seller is actually aware) are
there any circumstances likely to give rise to such a default by any other
party to an Assumed Contract.
<PAGE>
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11. POWERS OF ATTORNEY
There are in force no powers of attorney given by the Seller in connection
with the conduct of the Business.
12. STATUTORY RESTRICTIONS
12.1 So far as the Warrantors are aware no agreement practice or arrangement
carried on by the Seller and relating to the Business or its Assets;
12.1.1 is or requires to be registered in accordance with the provisions of
the Restrictive Trade Practices Acts 1976 and 1977 or contravenes the
provisions of the Resale Prices Act 1976 or is or has been the subject
or any enquiry investigation or proceeding in respect of the same; or
12.1.2 is or has been the subject of an enquiry investigation reference or
report under the Fair Trading Act 1973 (or any previous legislation
relating to monopolies or mergers) or the Competition Act 1980; or
12.1.3 infringes Article 85 of the Treaty of Rome or constitutes an abuse of
dominant position contrary to Article 86 of such Treaty or infringes
any Regulation or other enactment made under Article 87 of such Treaty
or is or has been the subject of any enquiry investigation or
proceeding in respect of the same; or
12.1.4 infringes any other competition anti-restrictive trade practice
anti-trust or consumer protection law or legislation applicable in the
United Kingdom or elsewhere and not specifically mentioned in this
sub-paragraph; or
12.1.5 contravenes the provisions of the Trade Descriptions Acts 1968 and
1972 or the Consumer Credit Act 1972 or the Consumer Credit Act 1974
or the Financial Services Act 1986.
<PAGE>
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12.2 The Seller has not given any undertaking to the Restrictive Practices Court
or the Director General of Fair Trading or the Secretary of State for Trade
and Industry or the Commission or Court of Justice of the European
Communities or to any other court person or body and is not subject to any
Act decision regulation order or other instrument made by any of them
relating to any matter referred to in this paragraph.
13. EXISTING SUPPLIERS AND CUSTOMERS
13.1 The Business has not since the Accounts Date been materially or adversely
affected by the loss of any important customer or source of supply or by
any abnormal factor not affecting similar businesses to a like extent and
the Warrantors are not actually aware of any facts which are likely to give
rise to any such effects.
13.2 Neither more than 25 per cent of the aggregate amount of all the purchases
nor more than 25 per cent of the aggregate amount of all the sales of the
Business were in the period from 1st June 1994 to 31st May 1995 obtained or
made from or to the same supplier or customer) including any person in any
way connected (as that phrase is defined in Section 839 Taxes Act) with a
supplier or customer nor so far as the Warrantors are actually aware is any
material source of supply to the Business or any material outlet for the
sales of the Business in jeopardy or likely to be in jeopardy.
14. CAPACITY OF SELLER
The Warrantors are companies duly organised and existing under the laws of
the England and have full power and authority to enter into and to perform
this Agreement and any document entered into by each of them in accordance
with this Agreement without obtaining the consent of any third party. This
Agreement and such other documents when executed will constitute valid and
binding obligations upon each of them in accordance with their respective
terms and so far as the Seller is actually aware the Seller is duly
qualified licensed or
<PAGE>
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domesticated and in good standing as a foreign corporation authorised to do
business in all jurisdictions outside the United Kingdom where the Seller
has conducted business prior to the Transfer Date.
15. THE PROPERTY
15.1 The Property is the only freehold heritable or leasehold property used in
connection with the Business.
15.2 So far as the Warrantors are actually aware the information provided by or
on behalf of the Seller in written replies to the Buyer's preliminary
enquiries relating to the Property and observations on those replies were
when given and remain true and accurate in material respects.
15.3 The Seller is fully entitled to vacant possession of the Property and there
are no other occupiers of the Property.
15.4 Copies of all structural surveys, site surveys, engineers reports and
architects reports which are in the possession of the Seller and which
relate to the Property or any structures on the Property are annexed to the
Disclosure Letter.
15.5 So far as the Warrantors are actually aware no high alumina cement, calcium
chloride, blue asbestos, wood-wool slabs, seadredged aggregates or any
other substance or material which is defective or a risk to health or
safety or which is not in accordance with the current British Standards has
been used in the construction of the mezzanine floor installed at the
Property by the Seller or any alterations or additions to any building or
other erection on the Property carried out by the Seller.
15.6 So far as the Warrantors are actually aware the replies in the
questionnaire completed by Gibb Wales in conjunction with the preparation
of the Buyer's environment assessment of the Property are accurate.
<PAGE>
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16. STATUTORY OBLIGATIONS
No written notice has been received by the Seller nor is the Seller
actually aware that is has committed or omitted to do any act or thing in
connection with the Business the commission or omission of which is or
could be a contravention of any applicable laws and regulations and has or
could result in the Buyer incurring a financial or other liability or
penalty.
17. LITIGATION
17.1 The Seller is not in connection with the Business a party to any
litigation or arbitration or prosecution or other legal proceedings or
any dispute (save for routine debt collections) and no litigation or
arbitration proceedings are threatened or pending, either by or
against the Seller in connection with the Business or the Assets, and
there are no facts or circumstances in the actual knowledge of the
Warrantors which might give rise to any such proceedings or to any
such dispute.
17.2 No distress execution or other process has been levied or threatened
in writing on, and there has been no exercise purported exercise or
claim for any mortgage, charge, lien, encumbrance or equity over and
there is no dispute directly or indirectly relating to any of the
Assets.
17.3 The Seller has not been a party to any undertaking or assurance given
to any court or governmental agency relating to the Business and/or
the Assets which is still in force.
18. INTELLECTUAL PROPERTY WARRANTIES
18.1 The Seller is the unencumbered sole beneficial owner of each of the Patents
and no rights, licences, permissions or assignments dealing
<PAGE>
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with any interest in any of the Patents have been granted in favour of any
third party by the Seller nor has the Seller encumbered any of the Patents.
18.2 The Patents are in force and the Seller has neither by act nor omission
caused or permitted anything which may cause the Patents to lapse or to be
the subject of a compulsory licence.
18.3 The Seller is the unencumbered sole beneficial owner of all the Copyright
and Unregistered Design Right and no rights, licences, permissions or
assignments dealing with any interest in the Copyright and Unregistered
Design Right have been granted in favour of any third party.
18.4 The Disclosure Letter contains details of the Know-How and this Agreement
transfers to the Buyer such rights as the Seller has to use all Know-How
used by the Seller in connection with the Business. The Seller is not a
party to any secrecy agreement or other agreement which may restrict the
use or disclosure by it of any information relevant to the Business.
18.5 The Seller is not the proprietor of any registered trade marks or trade
names anywhere in the world and no trade marks (whether registered or not)
are used in connection with the Business.
18.6 The Seller is not the proprietor of any registered designs anywhere in the
world and no registered designs are used in connection with the Business.
18.7 To the actual knowledge of the Warrantors none of the Seller's rights under
any of the Intellectual Property, is being challenged, violated or
infringed by any person.
18.8 To the best of the Warrantors knowledge, none of the Intellectual Property
infringes the rights of any third party and the carrying on of the Business
does not require any licences or consents from third
<PAGE>
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parties in respect of any intellectual or industrial property rights
other than the Intellectual Property Licences and the Cornibi/ Sensors
Licence. Without prejudice to the generality of the foregoing, the
Intellectual Property Licences include all licences required to use
any and all software in use in the Business.
18.9.1 To the best of the Warrantors knowledge the Intellectual Property
comprises all intellectual and industrial property rights required for
the purposes of the manufacture and sale of the current range of
products of the Business.
18.9.2 To the best of the Warrantors' knowledge all intellectual and
industrial property rights required for the purposes of the
manufacture and sale of discontinued products of the Business are
included in the Intellectual Property to the extent such rights have
been retained by the Seller.
18.9.3 To the best of the Warrantors' knowledge all intellectual and
industrial property rights required for the purposes of the
manufacture and sale of products currently being developed as part of
the Business are included in the Intellectual Property to the extent
that such rights have already come into existence and are owned by
the Seller.
18.10 In relation to the Intellectual Property Licence dated 20th July 1982
between the National Research Development Corporation (now British
Technology Group) ("BTG") and the Seller ("the BTG Licence"):-
18.10.1 The Disclosure Letter contains details of the patents ("the BTG
Patents") which have been granted or obtained pursuant to the patent
applications referred to in the BTG Licence ("the BTG Patent
Applications") and so far as the Seller is actually aware no other
patents have been obtained or granted in respect of the BTG Patent
Applications. So far as the Seller is actually aware the BTG Patents
are in force and have not lapsed or been declared invalid;
<PAGE>
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18.10.2 So far as the Seller is actually aware the grant of a patent pursuant
to any of the BTG Patent Applications has not been refused and none of
the BTG Patent Applications has been abandoned;
18.10.3 No formal licence has been granted to the Seller under the terms of
the BTG Licence and the only terms on which the BTG Patents and the
BTG Patent Applications are licensed to the Seller are those set out
in the BTG Licence;
18.10.4 A copy of the consent from BTG in relation to the sub-licences granted
under the BTG Patents and BTG Patent Applications to Corning
Incorporated is annexed to the Disclosure Letter. No other sublicences
under the BTG Patents or the BTG Patent Applications have been granted
to any person by the Seller;
18.10.5 The royalties payable by the Seller have always exceeded #4,000 per
annum and to the best of the knowledge of the Warrantors there is no
reason why the royalties should fall below such a figure in the
future.
19. BUSINESS NAME(S)
The Seller uses no name for any purpose in connection with the Business
other than "York Technology" or "York Tech".
20. DISCLOSURE OF KNOW-HOW
The Seller has not (except in the ordinary and normal course of business)
disclosed or permitted to be disclosed or undertaken or arranged to
disclose to any person other than the Buyer any of its Know-How trade
secrets or confidential information or lists of customers or suppliers
relating to the Business.
21. ASSETS
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21.1 With the exception of the Intellectual Property (in respect of which
Warranties as to title to the Patents and the Copyright and Unregistered
Design Right are contained in paragraph 18 of this Schedule) the Seller is
the owner of and has a good and marketable title to all the Assets and such
Assets are owned absolutely by and in the possession or under the control
of the Seller and there is no outstanding option right to acquire mortgage
charge pledge lien bill of sale leasing or hire purchase agreement credit
sale or conditional sale agreement or other form of security or encumbrance
or equity whatsoever on over or affecting the whole or any part of the
Assets and in particular none of the Inventory is subject to any
reservation of title in favour of any third party or purchased generally on
terms that ownership does not pass to the Seller until payment is made by
it to the supplier and there is no agreement or commitment to give or
create any of the foregoing nor has any claim been made by any person to be
entitled to any of the same.
21.2 There is not now outstanding any Assumed Contract under which the Seller or
so far as the Seller is actually aware any other party thereto is in
material breach and no party to such contracts is entitled to terminate the
same or any benefit enjoyed by the Seller.
21.3 The Inventory has been fully paid for by the Seller and is of satisfactory
quality, readily realisable and saleable at normal selling prices in the
ordinary course of the Business and includes no obsolete, obsolescent or
slow moving items save for that part of the Inventory which has been valued
in accordance with Clause 3.3 as obsolete, obsolescent or slow moving, or
otherwise to take account of any defect in the Inventory.
21.4 The Inventory is sufficient for the normal requirements of the Business.
21.5 The work-in-progress is at its normal level having regard to current orders
and to orders reasonably anticipated from customers of the Business.
<PAGE>
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21.6 The Assets comprise all assets now used in the Business and which are
necessary for the continuation of the Business as currently carried on.
No Asset is shared by the Business with any other person and the
Business does not depend for its business upon any assets facilities or
services owned or supplied by any member of the Seller's Group.
21.7 The stocks of raw materials packaging materials and finished goods
included in the Inventory are consistent with the normal requirements of
the Business and adequate in relation to the current trading requirements
of the Business.
21.8 All documents which in any way affect the right title or interest of the
Seller in or to any of the Assets and on which Stamp Duty is payable have
been duly stamped within the requisite period for stamping.
21.9 So far as the Warrantors are aware the Plant and Machinery do not
contravene any requirement or restriction having the force of law and are
in good repair and condition having regard to their age and are regularly
and properly maintained and fully serviceable and all relevant vehicles
are roadworthy and duly licensed for the purposes for which they are used
and are capable of being used for the purposes of the Business and they
are adequate for and not surplus to the requirements of the Business.
21.10 The Capital Goods Scheme as contained in Regulations 37A to 37E
inclusive of the Value Added Tax (General) Regulations 1985 does not
apply to any of the Assets.
21.11 The plant and machinery, tools, office equipment, furniture, computers
and other items physically located in the premises described in the
Sensors Lease has not changed location since 1st April 1995.
22. BONUS SCHEMES
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The Disclosure Letter contains full details of all stock option or other
schemes in operation or proposed by or in relation to the Business
whereunder any Employee is or is to be entitled to any shares or a bonus
commission or remuneration of any other sort calculated by reference to the
whole or part of the turnover, profits or sales of the Seller.
23. PARTICULARS OF EMPLOYEES
23.1 The Employees are all the persons (full time and part time) engaged in the
Business as at the Transfer Date and the particulars of their terms of
employment, ages, length of service, remuneration, bonus, commission and
other monies payable to such persons, benefits in kind, periods of notice,
pension and other rights under any retirement benefits, life assurance or
hospital insurance scheme are shown in the annex to the Disclosure Letter
and are complete and accurate in all material respects. The pro-forma terms
and conditions of employment annexed to the Disclosure Letter are the only
terms and conditions on which the Employees are employed.
23.2 The Seller is not under any legal commitment to change or vary any of the
details referred to in paragraph 23.1. nor has the Seller made any verbal
or written promise to do so.
23.3 All accrued holiday pay due to any of the Employees up to the Transfer Date
is set out in the Disclosure Letter.
23.4 No liability has been incurred by the Seller and not yet been discharged
for breach of any contract of service or employment or for redundancy
payments (including protective awards) or for damages or compensation for
wrongful dismissal or unfair dismissal or otherwise or for failure to
comply with any order for reinstatement or re-engagement of any Employee
engaged in connection with the Business.
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23.5 The Seller has in relation to each Employee complied in all material
respects with:
23.5.1 all obligations imposed on it by all statutes regulations and codes of
conduct and practice relevant to the relations between it and any
Employee or trade union (including without limitation any obligations
under any health and safety legislation or any legislation relating to
the environment);
23.5.2 all collective agreements and customs and practices for the time being
dealing with relations between the Seller and any Employee or any
trade union or the terms and conditions of service of any of the
Employees; and
23.5.3 all relevant orders declarations and awards made under any relevant
statute regulation or codes of conduct and practice affecting the
conditions of service of any of the Employees.
23.6 The Seller has not given nor received any notice to terminate any contract
of employment of any of the Employees or any other person employed in the
Business which expires on or after the Transfer Date.
23.7 The Seller has not offered and will not prior to Completion offer a
contract of employment or for services to any person.
23.8 So far as the Seller is actually aware none of the Employees is a member of
a trade union staff association or other body representing employees. The
Seller has not entered into any union membership security or employment
recognition or other collective agreement (whether legally binding or not)
with a trade union staff association or staff body nor has it done any act
which might be construed as recognition.
23.9 Save for the Employees no person will be transferred to the Buyer as an
employee by virtue of the 1981 Regulations.
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24. LICENCES AND CONSENTS
24.1 So far as the Seller is aware the Seller has obtained all necessary
licences authorisations and consents from any person, authority or body for
the proper carrying on of the Business and is not in breach of any of their
terms or conditions.
24.2 Details of all such licences authorisations and consents are set out in and
copies of the same are annexed to the Disclosure Letter.
25. GRANTS
The Seller has not received any financial assistance from any national or
local authority or governmental agency in connection with the Business
since 1st October 1992.
26. INVESTMENTS ASSOCIATIONS AND BRANCHES
The Seller:
26.1 Is not and/or has not been a party to any joint venture or consortium or
any partnership arrangement or agreement or to any agreement or arrangement
for sharing commissions or other income relating to the Business;
26.2 Does not conduct and/or has not conducted any part of the Business through
a branch or permanent establishment outside the United Kingdom;
26.3 Is not a member of any partnership trade association society or other group
whether formal or informal which is materially relevant to or has any
material influence over the Business as now carried on.
27. GUARANTEES AND WARRANTIES
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27.1 The Disclosure Letter contains details of all guarantees indemnities
warranties or representations given or made by the Seller in respect of
products of the Business and of such products and customers to whom such
products have been supplied ("the Product Warranties") where the Seller has
an outstanding contractual obligation to service, repair maintain take back
or otherwise do something in respect of such products.
27.2 The Disclosure Letter contains details of the costs incurred by the Seller
since 1st October 1992 in honouring the Product Warranties and in carrying
out any servicing, repairs, maintenance of or taking back products of the
Business which the Seller was not obliged to do so pursuant to the Product
Warranties.
27.3 So far as the Seller is actually aware no claims have been made which are
outstanding or are threatened or pending against the Seller in respect of
the Product Warranties.
28. AGREEMENTS CONCERNING THE BUSINESS
28.1 There have been no legally enforceable arrangements and understandings
between the Seller and any person who is directly or indirectly a
shareholder or the beneficial owner of any interest in the Seller or any
member of the Seller's Group or any company in which the Seller is
interested relating to the management of the Business or the ownership or
transfer of ownership or the letting of any of the Assets or the provision
of goods or services to or by the Seller or otherwise in any way relating
to the Business or the Assets otherwise than on arms length terms.
28.2 The Disclosure Letter contains particulars of all agency, distributorship
franchise or marketing agreements relating to or affecting the Business or
any part of it.
29. OFFERS
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No offer or tender relating to the Business which is capable of being
converted into an obligation of the Business by an acceptance or other act
of some other person is outstanding.
30. COMPLIANCE WITH US LAWS
The Seller has not in connection with any business transactions involving
the Seller made or promised to make or authorised any agent to make or
promise to make any payment or transfer of anything of value, directly or
indirectly:-
(i) to any governmental official or candidate for governmental office or
government employee (including employees of government-controlled
enterprises);
(ii) to any political party or candidate for political party office;
(iii)to an intermediary for payment to any of the foregoing;
(iv) to any officer, director, employee, or representative of any actual or
potential customer of the Seller for payment to any of the foregoing;
(v) to any officer, director, or employee of York or any other member of
the Seller's Group for payment to any of the foregoing; or
(vi) to any other person or entity
if such payment or transfer described in (i) to (vi) inclusive above
would violate the laws of the country in which made or the laws of the
United States of America.
31. PENSIONS
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31.1 With the exception of the Sellers's Scheme there are not in existence nor
has any proposal been announced or verbal or written promise given to
establish any retirement death or disability benefit schemes for Employees
or obligations to or in respect of Employees with regards to retirement
death or disability pursuant to which the Seller is or is likely to be
liable to make payments and no pension or retirement or sickness gratuity
is currently being paid or has been promised by the Seller to or in respect
of any Employee.
31.2 Accurate, up to date and complete copies of all the trust deeds and rules
constituting and governing the Seller's Scheme are annexed to the
Disclosure Letter and except as may be expressed otherwise therein such
documents are satisfactory to ensure continued treatment of the Seller's
Scheme as an exempt approved scheme.
31.3 Accurate, up to date and complete copies of all explanatory booklets and
announcements and other communications to Employees relating to the
Seller's Scheme are annexed to the Disclosure Letter and the Seller has no
obligation under the Seller's Scheme in respect of any Employee other than
under the documents referred to in this paragraph 31.3 and paragraph 31.2.
31.4 The Seller's Scheme is a contracted-out scheme within the meaning of the
Social Security Pensions Act 1975 and is an exempt approved scheme within
the meaning of Chapter I Part XIV Income and Corporation Taxes Act 1988 and
has been administered in accordance with the requirements of those Acts and
all other applicable legislation.
31.5.1 The requirements and obligations imposed on the Seller under the Seller's
Scheme which relate to or are owed to the Relevant Employees have been
duly observed and performed by it;
31.5.2 The requirements and obligations imposed on the trustees of the
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Seller's Scheme under the Seller's Scheme which relate to or are owed to
the Relevant Employees have, so far as the Seller is aware, been duly
observed and performed by such trustees; and
31.5.3to the best of the knowledge and belief of the Seller there is no dispute
with regard to the benefits payable under the Seller's Scheme and no legal
proceedings by or against the trustees of the Seller's Scheme in their
capacity as such are pending or, so far as the Seller is aware, threatened
or expected and so far as the Seller is aware (having made due and careful
enquiry of such trustees) there is no fact or circumstance likely to give
rise to any such proceedings.
31.6 All contributions which under the Seller's Scheme have become payable by
the Seller have been duly paid.
31.7 All benefits (other than a refund of contributions from the Scheme) payable
under the Seller's Scheme on the death of the member or during periods of
sickness or disability of the member are fully insured under a policy
effected with an insurance company of good repute and each member has been
covered for such insurance by such insurance company at its normal rates
and on its normal terms for persons in good health and all insurance
premiums payable have been paid and the Seller does not know of any reason
why payment of such benefits should be refused.
31.8 There has not been exercised any power under the Seller's Scheme to augment
any benefit under it or otherwise to provide more favourable terms of
membership for any of the Employees than would apply but for the exercise
of that power.
31.9 No undertaking or verbal or written promise has been given to any Employee:
31.9.1 who is not a member of the Seller's Scheme to include him in the
Seller's Scheme;
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31.9.2 who is a member of the Seller's Scheme:
31.9.2.1 to increase the rate at which contributions are being paid to the
Seller's Scheme in respect of him;
31.9.2.2 to provide a particular level of benefits (by way of example but
without limitation a pension of two-thirds of his final salary at
retirement).
31.10 No payment or repayment of any of the assets of the Seller's Scheme
has been made to the Seller or any member of the Seller's Group or to
any member of the Seller's Scheme.
31.11 The Seller's Scheme has not at any time prior to the Transfer Date
been operated in such a way as to discriminate between male and female
members of such Scheme.
31.12 No event has occurred which will result in the determination and
winding up of, or which entitles the trustees of the Seller's Scheme
to determine and wind up, the Seller's Scheme and the Warrantors are
not aware of any facts or circumstances which are likely to give rise
to any such event.
THE FIFTH SCHEDULE
-------------------
Statement of policies relating to the Inventory
The Inventory will be valued in #Sterling and the final figure converted to
US$ at the rate of $1.60 to L1.
The valuation of the Inventory for the purposes of Clause 3.3 shall be on
the following basis, which is consistent in all respects with the 1994
Accounts:
(i) Inventory is stated at the lower of cost incurred in bringing
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each product to its present location and condition, and net realisable
value, in accordance with United Kingdom Statement of Standard
Accounting Practice No 9 (revised);
(ii) Raw material cost is defined as the Seller's standard cost, which is
not materially different from the supplier invoice price on a first in
first out basis;
(iii) The cost of work in progress and finished goods is defined as the
total of the Seller's standard costs of raw materials, direct labour
and attributable production overheads, which include indirect
production labour, production engineering labour and costs relating to
factory occupancy and facilities.Standard labour and overhead rates
are not materially different from actual rates;
(iv) Net realisable value is based on estimated selling price less further
costs expected to be incurred to completion and disposal; and
(v) Provision will be made for slow moving and obsolescent stock on a
basis which is consistent with the 1994 Accounts.
THE SIXTH SCHEDULE
------------------
Pensions
1. DEFINITIONS
In this Schedule the following expressions shall unless the context
otherwise requires have the following meanings:
"Actuarial Assumptions" means the actuarial methods and assumptions
agreed between the Seller's Actuary and the
Buyer's Actuary as set out in a letter dated
16th June 1995
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from the Seller's Actuary to the Buyer's
Actuary (a copy of which letter, signed for
the purposes of identification by the Seller
and the Buyer is contained in Appendix A to
this Schedule).
"Approval" means approval by the Board of the Inland
Revenue as an exempt approved scheme for the
purposes of Chapter I or Chapter IV of Part
XIV of ICTA.
"Buyer's Actuary means Moray Sharp of Ernst & Young or such
other actuary as the Buyer may for the time
being appoint for the purposes of this
Schedule.
"Buyer's Scheme" means the retirement benefits scheme or
personal pensions scheme nominated,
established or to be established by or at the
instance of the Buyer in accordance with
paragraph 3 of this Schedule.
"ICTA" means the Income and Corporation Taxes Act
1988.
"Interest" means interest equal to the base rate from
time to time prescribed by National
Westminster Bank plc compounded with monthly
rests.
"Interest Adjustment" means adjusted from the Transfer Date to the
next first working day of a month by
reference to the change in the Financial
Times-Actuaries All-Share
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Total Return Index over that period and
adjusted thereafter in respect of the period
from the next first working day of a month to
the first working day of a month immediately
before, or coincident with, the Payment Date
by reference to the changes in the unit bid
price of units in the Provident Mutual
Diversified Managed Fund and adjusted
thereafter in respect of the period from the
first working day of a month immediately
before, or coincident with, the Payment Date
to the Payment Date by reference to the
change in the Financial Times-Actuaries
All-Share Total Return Index over that
period.
"Interim Period" means the period between the Transfer Date
and the Partition Date.
"Interim Period Costs" means the amount equal to the aggregate of:
(a) the total cost of providing the salary
related lump sums and spouse's death in
service benefit on death in service
equivalent to 1.1% of Pensionable Salary
contingently payable under the Seller'
Scheme in respect of the Transferring
Employees during the Interim Period;
(b) 1.2% of the total Pensionable Salaries
of the Relevant Employees who have not
opted out of the
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Seller's Scheme and who are in the
Buyer's employ during the Interim Period
or any part thereof towards the
administrative costs and expenses
arising out of or in connection with the
participation of the Buyer in the
Seller's Scheme together with a sum
equal to notional Interest on each such
cost from the date on which such cost in
is incurred to the Payment Date.
"Interim Period Pension means an amount equal to the
Contributions" contributions (excluding any additional
voluntary contributions) made after the
Transfer Date to the Seller's Scheme by
and in respect of the Transferring
Employees pursuant to paragraph 2.2
hereof plus in each case a sum equal to
interest on each such contribution for
the period from the date of receipt of
each such contribution by the trustees
of the Seller's Scheme to the Payment
Date.
"Life Assurance Employees" means those employees of the Business
who are members of the Seller's Scheme
only in respect of lump sum death in
service benefits on or before the
Transfer Date and who become employed by
the Buyer immediately after the Transfer
Date.
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"Partition Date" means the date six months after the
Transfer Date or such earlier date as
the Buyer and the Seller shall agree in
writing or the Inland Revenue shall
require for the cessation of the Buyer's
participation in the Seller's Scheme.
"Payment Date" means the later of:
(a) such date as shall be agreed
between the Seller and the Buyer
falling on or after the Partition
Date or, in default of agreement,
the date which is one month after
the Transfer Amount is determined;
(b) the date on which the Buyer
supplies the Seller with written
confirmation from the Pension
Schemes Office of the Inland
Revenue that the Buyer's Scheme has
obtained Approval or that the
Pension Schemes Office has
confirmed that the trustees of the
Buyer's Scheme may accept a
transfer from the Seller's Scheme
in respect of the Transferring
Employees; and
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(c) if the employment of the
Transferring Members is to become
contracted-out by reference to the
Buyer's Scheme, the date on which
the Seller has received
confirmation from the Occupational
Pensions Board that the trustees of
the Seller's Scheme may make a
transfer from the Seller's Scheme
in respect of the Transferring
Employees.
"Pensionable Salary" means the pensionable salary as defined
in the Seller's Scheme.
"Pensionable Service" means the pensionable service as defined
in the Seller's Scheme up to the
Partition Date.
"Relevant Employees" means those employees (except the Life
Assurance Employees) of the Business who
are members of the Seller's Scheme on or
before the Transfer Date and who become
employed by the Buyer immediately after
the Transfer Date.
"Seller's Actuary" means Colin Chesire of Hogg Robinson
Financial Services Limited or such other
actuary as the Seller may for the time
being appoint for the purposes of this
Schedule.
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"Seller's Pension Liabilities" means the actuarial value (calculated as
at the Transfer Date in accordance with
the Actuarial Assumptions and adjusted
by the Interest Adjustment) of the
benefits prospectively and contingently
payable under the rules of the Seller's
Scheme in force at the Transfer Date to
and in respect of the Transferring
Employees and their dependants
(excluding for the avoidance of doubt
any salary-related lump sum death in
service benefits other than refunds of
contributions, any spouses' pensions
payable on death in service and any
benefit arising from the payment of
additional voluntary contributions
pursuant to the provisions of the
Seller's Scheme) calculated by reference
to pensionable service completed by the
Transfer Date and the Pensionable Salary
at the Transfer Date, but, for the
avoidance of doubt, making proper
allowance (on the basis of the Actuarial
Assumptions) for projected increases in
the rate of Pensionable Salary of each
Transferring Employee after the Transfer
Date.
"Transfer Amount" means such amount as shall be calculated
by the Seller's Actuary and agreed by
the Buyer's Actuary in accordance with
paragraph 4 of this Schedule as being
equal to the aggregate of:
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(a) the Seller's Pension Liabilities;
plus
(b) the Interim Period Pension
Contributions; less
(c) the Interim Period Costs increased by
the total of all sums referred to in
paragraph 2.2 below which are due but
unpaid at the Partition Date.
"Transferring Employees" means those of the Relevant Employees:
(a) who have not opted out of the Seller's
Scheme during the Interim Period; and
(b) who become members of the Buyer's Scheme
with effect from the Partition Date
pursuant to the offer of membership
referred to in paragraph 3.1 below; and
(c) who consent in writing to a payment or
transfer from the Seller's Scheme to the
Buyer's Scheme in respect of the
benefits under the Seller's Scheme
accrued for and in respect of them up to
the Partition Date; and
(d) in respect of whom the
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appropriate amount has been paid to the
Buyer's Scheme as part of the Transfer
Amount.
2. INTERIM PERIOD
It is hereby agreed that:-
2.1 Subject to the approval of the Commissioners of Inland Revenue, the Buyer
shall participate in the Seller's Scheme in respect of the Relevant
Employees (and in respect of the Life Assurance Employees the lump sum
death benefit only) up to the Partition Date subject to Approval of the
Seller's Scheme not being adversely affected thereby and subject also to
due compliance by the Buyer with its obligations under this Schedule.
2.2 The Buyer shall:
2.2.1promptly pay to the trustees of the Seller's Scheme (A) the contributions
payable by the Buyer as a participating company during the Interim Period
pursuant to the rules of the Seller's Scheme in force at the Transfer Date
at the rate of 9.6% of Pensionable Salary and (B) the member contributions
under such rules during the Interim Period at the rate of 5% of the
Pensionable Salary of the Relevant Employees who have not opted our of the
Seller's Scheme and who are from time to time in the Buyer's employ; and
2.2.2promptly pay to the trustees of the Seller's Scheme the contributions
payable by the Buyer as a participating company during the Interim Period
pursuant to the rules of the Seller's Scheme in force at the Transfer Date
at the rate of 0.5% of Pensionable Salary in respect of the Life Assurance
Employees who have not opted out of the Seller's Scheme and who are from
time to time in the Buyer's employ; and
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2.2.3comply in all other respects with the trust deed and rules of the Seller's
Scheme during the Interim Period; in the event that the said contributions
are received by the trustees of the Seller's Scheme more than seven days
after the date on which the same became due the Buyer shall in addition and
at the same time pay to the trustees of the Seller's Scheme Interest
thereon from the said due date to the actual date of payment. The Buyer
shall ensure that all such contributions are correctly calculated and shall
make available to the Seller such information as it may reasonably request
in order to verify the said contributions from time to time;
2.3 The Buyer and the Seller shall use their respective reasonable endeavours
to procure that the Relevant Employees who are members of the Seller's
Scheme and have not opted out the Seller's Scheme shall continue to be in
contracted-out employment (within the meaning of section 8 of the Pension
Schemes Act 1993) by reference to the Seller's Scheme during the Interim
Period while they are employed by the Buyer;
2.4 During the Interim Period the Seller will not amend or terminate or consent
to the amendment or termination (save as required by law) of the Seller's
Scheme in respect of the Relevant Employees without the prior written
approval of the Buyer (which shall not unreasonably be withheld or delayed)
PROVIDED THAT nothing contained in this paragraph 2.4 shall prevent such
amendments, alterations and modifications as the Seller or the trustees of
the Seller's Scheme may from time to time require to be made to the
Seller's Scheme insofar as the same (A) do not adversely affect the rights
and duties of the Relevant Employees thereunder as at the Transfer Date or
(B) do not reduce the Transfer Amount which would otherwise be payable;
or (c) are necessary in order to maintain or retain the Approval of the
Seller's Scheme or its status as a contracted-out scheme; and
2.5 The Seller and the Buyer shall give all such consents and execute all such
documents in their power as may be required to give effect to this
paragraph 2.
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3. BUYER'S SCHEME
3.1 The Buyer shall procure that with effect from the date no later than the
Partition Date the Buyer will have set up the Buyer's Scheme: (i) which is
approved or capable of approval under Chapter I of Part XIV or Chapter IV
of Part XIV as the case may be of ICTA; and (ii) to which the trustees of
the Seller's Scheme can make a transfer of cash and/or assets without
prejudicing Approval of the Seller's Scheme and (iii) provide benefits on a
basis described in paragraph 6.1.1. Such of the Relevant Employees as have
not ceased to be in the employment of the Buyer or opted out of the
Seller's Scheme or attained the normal pension age in the Buyer's Scheme or
the Seller's Scheme at the Partition Date will be offered membership of the
Buyer's Scheme with effect from the Partition Date.
3.2 The Buyer undertakes that membership of the Buyer's Scheme shall be open to
the Relevant Employees who remain employed by the Buyer on the Partition
Date.
4. DETERMINATION OF TRANSFER AMOUNT
4.1 Immediately after the Partition Date, the Seller shall instruct the
Seller's Actuary to calculate the amount of the Transfer Amount and to
submit his findings within 30 days of the Partition Date to the Buyer's
Actuary for verification. If the Buyer's Actuary is unable to approve the
Transfer Amount within 30 days of receipt of the calculation from the
Seller's Actuary the matter shall be referred to an independent actuary
pursuant to paragraph 8 below.
4.2 The Seller shall use its reasonable endeavours to procure that such
information as the Buyer's Actuary may request for the purpose of verifying
the Transfer Amount and which is in the Seller's possession or in its power
to provide or procure that there shall be provided shall be made available
to the Buyer's Actuary and the Seller warrants that all such information
shall, to the best of the Seller's knowledge and belief, be true and
accurate.
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4.3 The Transfer Amount attributable to each Transferring Employee shall be no
less than the statutory cash equivalents (as defined in the Pension Schemes
Act 1993).
5. PAYMENT OF TRANSFER AMOUNT
5.1 The Seller shall use its reasonable endeavours to procure the trustees of
the Seller's Scheme to have the Transfer Amount paid or transferred to the
trustees of the Buyer's Scheme on the Payment Date in full and final
satisfaction of the interests of and in respect of the Transferring
Employees in the Seller's Scheme. Such payment of the Transfer Amount shall
be made in cash.
5.2 If the Transfer Amount is not transferred on the Payment Date pursuant to
paragraph 5.1 above the Transfer Amount (or the unpaid part of it) shall
carry interest from the Payment Date to the date of actual payment.
5.3 If the cash actually transferred by the Payment Date from the Seller's
Scheme to the Buyer's Scheme pursuant to this Schedule is an amount which
is less than the Transfer Amount (the amount of such difference being
referred to in this paragraph as "the shortfall") then the Seller shall pay
to the trustees of the Buyer's Scheme on the Payment Date a sum in cash
equal to the shortfall together with Interest thereon in respect of the
period from and including the Payment Date up to but excluding the date of
actual payment.
6. BUYER'S OBLIGATIONS
6.1 The Buyer's Scheme will provide for and in respect of each Transferring
Employee:
6.1.1provided the Transfer Amount is paid, such credit relating to Pensionable
Service as the Buyer's Actuary and the Seller's Actuary shall certify to be
broadly equivalent in value overall; and
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6.1.2that liability is accepted for the accrued rights up to the Partition Date
to guaranteed minimum pensions within the meaning of the Pension Schemes
Act 1993 of each Transferring Employee in respect of whom an amount is
included in the Transfer Amount; and
6.2 A Relevant Employee who is still employed by the Buyer at the Partition
Date who does not agree to become a Transferring Employee by the Partition
Date shall on and after the Partition Date be eligible for membership of
the Buyer's Scheme but otherwise in accordance with the rules thereof as
are generally applicable to employees of the Buyer.
6.3 The Buyer undertakes with the Seller that:
6.3.1it will not do or omit to do any act or thing whereby the Approval of the
Seller's Scheme or its status as a contracted-out scheme, would or might be
prejudiced; and
6.3.2it will not exercise any right, power or discretion conferred on the Buyer
by the Seller's Scheme except on such terms (whether as to payment of
additional contributions of otherwise) as the Seller may agree; and
6.3.3it will on demand provide, or use its reasonable endeavours to procure that
there shall be provided, such information as is in its possession or in its
power to provide or procure that there shall be provided and as is required
by the Seller or the Seller's Scheme for the purposes of the administration
of the Seller's Scheme.
7. ADDITIONAL VOLUNTARY CONTRIBUTIONS
7.1 Any additional voluntary contributions made by the Transferring Employees
together with the accrued investment return thereon shall be disregarded
for the purposes of determining the Transfer Amount.
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7.2 The Seller shall use its reasonable endeavours to procure that on the
Payment Date the trustees of the Seller's Scheme shall pay or transfer to
the trustees of the Buyer's Scheme in addition to the Transfer Amount any
sums or policies which the Seller's Actuary determines as at the Payment
Date to relate to additional voluntary contributions paid to the Seller's
Scheme by the Transferring Employees.
8. DISPUTES
Any dispute between the Seller and the Buyer or the Seller's Actuary and
the Buyer's Actuary concerning the calculation of the Transfer Amount or
any other matter of an actuarial nature shall, in the absence of agreement
between them, be referred to an independent actuary agreed by the Seller
and the Buyer or, failing such agreement within 14 days of one party
calling upon the other in writing so to agree, appointed by the President
for the time being the Institute of Actuaries. Any such independent actuary
shall act as an expert and not as an arbitrator and his decision shall (in
the absence of manifest error) be final and binding upon the Seller and the
Buyer.The charges and expenses of the independent actuary in respect of any
such reference shall be borne equally by the Seller and the Buyer.
9. INDEMNITY
The Seller hereby agrees and undertakes to indemnify the Buyer and keep it
fully indemnified in respect of any actions, proceedings, claims, demands,
compensation, tribunal or court orders or awards, costs and expenses and
all other liabilities whatsoever arising as a result of the determination
and winding up of the Seller's Scheme during the Interim Period save for
any determination or winding up of the Seller's Scheme caused by any act or
omission of the Buyer.
APPENDIX A
----------
(Actuarial Assumptions)
<PAGE>
- 88 -
THE SEVENTH SCHEDULE
--------------------
STATUTORY RECORDS
----------------
Memorandum and Articles of Association
Certificate of incorporation
Minute books
Registers of:
Members
Charges
Debenture holders
Directors and Secretaries
Directors' interest in shares
and debentures
Directors' service contracts
TAXATION
--------
Management accounts and supporting schedules.
Corporation Tax Returns
Assessments and related correspondence including in particular details
relating to:
(1) the cost for capital gains purposes of all chargeable assets, taking
account where relevant of roll-over or hold-over relief under the
Taxation of Chargeable Gains Act 1992.
(2) records of realised capital gains and losses,
(3) specific Revenue rulings, S482 clearances, etc.
(4) trading losses, management expenses, etc. carried forward.
<PAGE>
- 89 -
ACCOUNTING RECORDS
------------------
Nominal and Private Ledgers,
Cash Books, Sales and Purchase
Ledgers
Nominal and Private Journals,
Petty Cash Books, Salaries and Wage
Registers, Sales and Purchase Day Books
Fixed Asset Registers, year-end
statements of stock and supporting statements of stocktakings
ACCOUNTS
--------
Published accounts and supporting
schedules (signed copies)
SUPPORTING DOCUMENTS
--------------------
Sales and purchase invoices
Delivery notes
Receipts and payment documents
Returned cheques
Paying in books
Bank statements, etc
Bills of exchange and other negotiable instruments
<PAGE>
- 90 -
SIGNED by Raymond Lye )
----------------------------) /s/ Raymond Lye
for and on behalf of YORK LIMITED )
in the presence of:-
/s/ JP Brooks
JP Brooks
43 Brook Street Solicitor
London W1Y 2BL
SIGNED by Raymond Lye )
----------------------------) /s/ Raymond Lye
for and on behalf of YORK TECHNOLOGY))
LIMITED in the presence of: - )
/s/ JP Brooks
JP Brooks
43 Brook Street Solicitor
London W1Y 2BL
SIGNED by Alfred Hunt )
----------------------------) /s/ Alfred Hunt
for and on behalf of CORNIBI LIMITED )
in the presence of:- )
/s/ JP Brooks
AS ABOVE
SIGNED by Alfred Hunt )
---------------------------) /s/ Alfred Hunt
for and on behalf of IFR SYSTEMS,INC )
in the presence of:- )
/s/ JP Brooks
AS ABOVE
<PAGE>
DATED 21st June 1995
-----------------------------------------------------------------
(1) TKM GROUP PENSION TRUST LIMITED
(2) CORNIBI LIMITED
--------------------------------------------------------------
TRANSFER
relating to Land and Buildings on the north
west side of School Lane Chandlers Ford
--------------------------------------------------------------
BOODLE
HATFIELD
43 Brook Street London W1Y 2BL
Telephone 0171 629 7411 Fax 0171 629 2621 DX53
<PAGE>
H M LAND REGISTRY
LAND REGISTRATION ACTS 1925-1986
County and District: Hampshire - Eastleigh
Title Number: HP215875
Property: Land and buildings on the north west
side of School Lane Chandlers Ford
Date: 21st June 1995
1. IN CONSIDERATION of the payment of SEVEN HUNDRED THOUSAND POUNDS
(L700,000.00) inclusive of Value Added Tax if any) (receipt of which is
hereby acknowledged) TKM GROUP PENSION TRUST LIMITED of 40 Church Street
Staines Middlesex TW18 4EP (the "Transferor") as trustees HEREBY TRANSFERS
to CORNIBI LIMITED whose registered office is at 43 Brook Street London W1Y
2BL (the "Transferee") the land comprised in the above title.
2. THE Transferee hereby covenants with the Transferor to comply with the
covenants and conditions contained or referred to in the title above
mentioned and to indemnify the Transferor against any breach of those
covenants and conditions where such breach would expose the Transferor to
continuing liability.
IN WITNESS the parties have today executed this document as a deed.
1
<PAGE>
THE COMMON SEAL of )
TKM GROUP PENSION TRUST LIMITED ) [SEAL]
was hereunto affixed )
in the presence of :- )
Director /s/____________________________
Director /s/____________________________
THE COMMON SEAL of )
CORNIBI LIMITED was ) [SEAL]
hereunto affixed in the )
presence of :- )
Director /s/ Alfred H. Hunt III
Secretary /s/ Andrew Drake
2
<PAGE>
[LOGO]
[NABARRO NATHANSON Letterhead]
DATED 21st June 1995
--------------------------------------------
TKM GROUP PENSION TRUST LIMITED
- and -
CORNIBI LIMITED
________________________________________
AGREEMENT
relating to the sale and purchase of
York House
School Lane
Chandler's Ford Hampshire
----------------------------------------
Nabarro Nathanson
50 Stratton Street
London W1X 6NX
Tel: 0171 493 9933
2S/DJL/T7/55/tmc WP0876P 12/06/95
<PAGE>
Date of Agreement: 21st June 1995
PARTICULARS
-----------
Vendor: TKM GROUP PENSION TRUST LIMITED
of 40 Church Street Staines Middlesex TW18 4EP
- --------------------------------------------------------------------------------
Purchaser: CORNIBI LIMITED whose registered office is at 43
Brook Street London W1Y 2BL
- --------------------------------------------------------------------------------
Property: York House School Lane Chandlers Ford Hampshire
- --------------------------------------------------------------------------------
Property price: L700,000
- --------------------------------------------------------------------------------
Completion Date: 21st June 1995
- --------------------------------------------------------------------------------
Registered Title: County and District Hampshire Eastleigh
(where title registered): (or London Borough):
Title Number: HP215875
Class of Title: Freehold Absolute
- --------------------------------------------------------------------------------
Occupational Lease: The documents referred to in the Schedule
- --------------------------------------------------------------------------------
Assurance: The transfer of the Property to the Purchaser
- --------------------------------------------------------------------------------
Interest: Interest at the rate of 4% per annum above
Midland Bank plc base rate from time to time in
force
- --------------------------------------------------------------------------------
Vendor's Solicitors: Nabarro Nathanson
50 Stratton Street
London W1X5FL
Ref: 2S/MK/T7/55
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Purchaser's Solicitors: Boodle Hatfield
of 43 Brook Street London W1Y 2BL
Ref: KNM/13982/002
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
1. INTERPRETATION
1.1 The Particulars constitute part of this Agreement and the
expressions contained in the Particulars are incorporated as
definitions.
1.2 The National Conditions of Sale (Twentieth Edition) as set
out in pages 2 and 3 of the printed form of contract
published by the Solicitors' Law Stationery Society Plc
("National Conditions") (except as varied by or inconsistent
with this Agreement) are incorporated.
1.3 The clause headings in this Agreement are for ease of
reference only and are not to be used for the purposes of
construing this Agreement.
1.4 Obligations undertaken by more than one person are joint and
several obligations.
1.5 This Agreement may only be varied in writing signed by or on
behalf of the parties to it.
2. SALE AND PURCHASE
The Vendor will sell and the Purchaser will purchase the Property for
the Property Price on the terms and conditions of this Agreement.
3. COMPLETION
3.1 The sale and purchase will be completed and the Property
Price paid before 1.00 pm on the Completion Date.
Completion will take place at the Vendor's Solicitors
offices or where they reasonably require within the City of
London. If the Vendor's Solicitors agree to complete by
post it will be at the Purchaser's risk.
3.2 The money due on completion will be paid by direct credit
transfer (which the Vendor's Solicitors must receive as
cleared funds by 1.00 pm on the day of completion) for the
credit of a bank account specified by the Vendor's
Solicitors or by any other method reasonably requested by
the Vendor's Solicitors.
1
<PAGE>
4. CAPACITY
The Vendor sells as Trustee.
5. TITLE
Title to the Property will comprise Office Copies of the filed plan
and entries appearing on the Registered Title.
6. MATTERS AFFECTING THE PROPERTY
The Property is sold subject to and with the benefit of all and any of
the following in existence before the actual time of completion:
6.1 the matters contained or referred to in the entries
appearing on the Registered Title but excluding entry number
4 of the Charges Register relating to the Occupational
Lease.
6.2 all matters capable of registration as Local Land Charges or
otherwise whether registered or not.
6.3 all notices served and proposals requirements or agreements
made by or (as the case may be) with any competent authority
or arising under statute.
6.4 all matters in the nature of overriding interests as set out
in Section 70(1) of the Land Registration Act 1925 as
amended.
6.5 all matters disclosed or which might reasonably be expected
to be disclosed by searches and enquiries made by the
Purchaser or which a prudent purchaser ought to make
PROVIDED THAT the Vendor hereby warrants that the Vendor has
disclosed to the Purchaser all such matters as referred to
in 8.1, 8.2, 8.3 and 8.4 of which the Vendor is aware prior
to the date hereof.
2
<PAGE>
7. NATIONAL CONDITIONS
The National Conditions are varied as follows:
7.1 "Working Day" means a day on which Clearing Banks in the
City of London are (or would be but for a strike, lock-out,
or other stoppage affecting a particular bank or banks
generally) open during banking hours
7.2 National Condition 5(3) will not apply
7.3 Proviso (i) to National Condition 5(5) is deleted and the
following is substituted:
"(i) for the purposes of conditions 6, 7 and 8 only, if
completion takes place later than 2.00 pm then the
date of actual completion will be deemed to be the
next Working Day after the day on which completion
has taken place".
7.4 In National Condition 6(3) the words "or if the Vendor
remains in beneficial occupation of the property after the
Completion Date" are deleted.
7.5 National Conditions 8(3) and 8(4) will not apply.
7.6 National Conditions 15(2) 15(3) 15(4) 21(2) and 21(3) will
not apply.
7.7 In National Conditions 22(2) and 22(3) "10 Working Days" is
substituted for "16 working days". Any loss referred to in
National Condition 22(3) will include Interest on the
balance of the Property Price (giving credit for any re-sale
price received by the Vendor).
8. ACKNOWLEDGEMENTS
The Purchaser confirms that:-
8.1 it has inspected the Property
8.2 it has not been induced to enter into this Agreement by or
in reliance upon any oral or written statement by the Vendor
or anyone else on its
3
<PAGE>
behalf, except the Vendor's Solicitors' written replies to
the written enquiries made by the Purchaser's Solicitors.
8.3 no error mis-statement or omission will annul the sale or
entitle the Purchaser to compensation.
8.4 title to the Property has been deduced in full and copies of
the Occupational Lease supplied to the Purchaser's
Solicitors and the Purchaser will be deemed to purchase with
full knowledge of the Vendor's title to the Property and the
matters subject to which the Property is sold and will raise
no objections or requisitions about them.
9. ASSURANCE
9.1 The Purchaser will not assign charge or deal in any way with
the benefit of this Agreement and the Vendor will only
execute one Assurance of the Property as a whole in favour
of the Purchaser named in this Agreement at the Property
Price.
9.2 In the Assurance the Purchaser will covenant with the Vendor
to comply with the covenants and conditions contained or
referred to in the Registered Title and to indemnify the
Vendor against any breach of those covenants and conditions
where such breach would expose the Vendor to continuing
liability.
9.3 The Assurance will be prepared in original and counterpart
and the original will be executed by the Vendor and the
counterpart will be executed by the Purchaser. The
Purchaser will arrange for the counterpart Assurance to be
stamped and denoted at the Purchaser's expense and returned
within 21 days after completion to the Vendor's Solicitors.
10.1 The Vendor hereby warrants that it is has not made any
election to waive exemption in respect of the Property and
agrees that it will not exercise
4
<PAGE>
such election at any time whether before or after the date
of actual completion.
10.2 If the Vendor has elected or so elects to waive exemption in
respect of the Property clause 12.1 shall not apply and the
Purchase Price shall be deemed to be inclusive of any VAT
for which the Vendor becomes accountable.
11. INSURANCE
At any time after the date of completion the Vendor may terminate any
insurance policy effected by it in relation to the Property.
12. JURISDICTION
The proper law of this Agreement and the jurisdiction to which the
parties are subject is that of England and the Purchaser agree that
the office of the Purchaser's Solicitors is an effective address for
service upon it of any notices to be served under this Agreement or of
any proceedings commenced in the English Courts and the Assurance will
contain a provision in this form.
13. NON-MERGER
The provisions of this Agreement will remain in full force and effect
(notwithstanding completion of the sale and purchase) to the extent
that they remain to be complied with.
14. NOTICES
14.1 Any demand or notice to be served on any party under this
Agreement will be validly served if sent by first class post
addressed to that party (and if there is more than one of
them to any of them) at the person's registered office
address (as recorded for the time being at Companies'
Registration Office) if it is a company or at its last known
address or at the address given in this Agreement.
5
<PAGE>
14.2 Any demand or notice sent by post will be conclusively
treated as having been served forty eight (48) hours after
posting.
14.3 The provisions for postal service set out above are not to
prevent any other effective form of service.
THE SCHEDULE hereinbefore referred to
(OCCUPATIONAL LEASE)
DOCUMENT DATE PARTIES
Lease 16.07.1984 The Vendor (1)
York Limited (2)
Licence for Alterations 28.08.1985 The Vendor (1)
York Limited (2)
SIGNED for and on behalf )
of the Vendor by an ) /s/________________________________
authorised signatory )
SIGNED for and on behalf )
of the Purchaser by an ) /s/________________________________
authorised signatory )
6
<PAGE>
DATED 1995
------------------------------------
(1) YORK 1995 LIMITED
(2) YORK LIMITED
(3) YORK TECHNOLOGY LIMITED
(4) IFR SYSTEMS, INC.
_____________________________
Counterpart/
AGREEMENT
supplemental to an agreement dated
21 June 1995 for the purchase
of the business of
York Technology Limited
(now known as York 1995 Limited)
_____________________________
<PAGE>
THIS AGREEMENT is made on 1995
BETWEEN:
(1) YORK 1995 LIMITED (formerly known as York Technology Limited) a company
incorporated in England with registered number 1721892 whose registered office
is at York House, School Lane, Chandlers Ford, Hampshire S053 4DG, United
Kingdom ("the Seller");
(2) YORK LIMITED a company incorporated in England with registered number
1388871 whose registered office is at York House aforesaid ("York");
(3) YORK TECHNOLOGY LIMITED (formerly known as Cornibi Limited) a company
incorporated in England with registered number 3038149 whose registered office
is at York House aforesaid ("the Buyer");
(4) IFR SYSTEMS, INC. a company incorporated in Delaware whose principal place
of business is at 10200 West York Street, Wichita, Kansas 67215-8999, United
States of America ("IFR")
WHEREAS:-
(A) By an agreement dated 21 June 1995 ("the Agreement") the Seller agrees to
sell the Assets and the Business to the Buyer for US $4,321,093 (subject to the
adjustments referred to in the Agreement) of which US $1,449,093 was paid by the
Buyer in cash on completion of the sale on 21 June 1995 (subject to a retention
of US $150,000) and the balance of the purchase consideration was satisfied by
the issue by the Buyer to the Seller of a Loan Note of US $1,000,000 and a
further Loan Note of US $1,872,000, both of which Loan Notes are due for
repayment on 31 December 1996.
(B) The parties to the Agreement have agreed to any the amount and manner of
payment of the purchase consideration on the terms set out below
NOW IT IS HEREBY AGREED as follow:-
1. Words and expressions defined in the Agreement shall bear the same meaning
in this Agreement.
2. In consideration of the Buyer paying to the Seller on the signing of this
Agreement the sum of US $750,000 (receipt of which the Seller acknowledges), the
parties agree that the purchase consideration for the Assets set out in Clause
3.1 of the Agreement shall be reduced by US $250,000 to US $4,071,093 (subject
to adjustment in accordance with Clauses 3.3 and 4 of the Agreement).
3. The Agreement shall be amended as follows:-
3.1 The second line of Clause 3.1 of the Agreement shall be amended by deleting
the words "Four million four hundred and seventeen thousand and ninety three"
(which the parties acknowledge should have stated "Four million three hundred
and twenty one thousand and ninety three") and by substituting the
<PAGE>
words "Four million and seventy one thousand and ninety three" in their place;
3.2 The table in Clause 3.1 of the Agreement shall be amended by substituting
for the proportion of the purchase consideration attributed to Know-How the
figure of US $2,501,549 and by substituting for the total purchase consideration
shown at the bottom of the table the sum of US $4,071,093;
3.3 Clause 3.2 of the Agreement shall be amended by deleting sub-paragraph (b)
and substituting the following in its place:-
"(b) The payment of US $750,000 in cash on 30 June 1995."; and
3.4 All references in the Agreement to the Loan Note and to the Deed of
Guarantee in the form of the drafts set out in Part I and Part III,
respectively, of the Second Schedule to the Agreement shall be deemed to be
deleted.
4. The Seller surrenders:-
4.1 to the Buyer for cancellation the Loan Note of US $1,000,000 issued by the
Buyer in the form of the draft set out in Part I of the Second Schedule to the
Agreement; and
4.2 to IFR the Deed of Guarantee granted by IFR on 21 June 1995 in the form set
out in Part III of the Second Schedule to the Agreement.
(receipt of which the Buyer and IFR, respectively, acknowledge) and the Seller
irrevocably releases the Buyer and IFR from all their obligations and
liabilities under the said Loan Note and Deed of Guarantee, respectively.
5. All other terms of the Agreement shall continue in full force and effect.
6. This Agreement shall be governed by and construed in accordance with the
laws of England and the parties irrevocably submit to the exclusive jurisdiction
of the English courts.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
SIGNED by ALFRED H HUNT )
for and on behalf of ) /s/ Alfred H Hunt
YORK TECHNOLOGY LIMITED )
in the presence of:- )
/s/ J A Bloomer
<PAGE>
SIGNED BY ALFRED H HUNT )
for and on behalf of ) /s/ Alfred H Hunt
IFR SYSTEMS, INC. )
in the presence of:- )
/s/ J A Bloomer
<PAGE>
[IFR LOGO] NEWS RELEASE
FOR IMMEDIATE RELEASE: JUNE 21, 1995
IFR SYSTEMS, INC. CONTACT: JEFF BLOOMER
10200 WEST YORK STREET INVESTOR RELATIONS
WICHITA, KANSAS 67215-8935 316-522-4981 ext.345
OTC: NMS (IFRS)
IFR SYSTEMS, INC. ACQUIRES
ASSETS OF YORK TECHNOLOGY COMPANIES
Wichita, Kansas, June 21, 1995 - IFR Systems, Inc. announced today that it
had completed the acquisition of the assets of York Technology Ltd. of England
and York Technology, Inc. of New Jersey, USA for an undisclosed amount of cash
and notes. York Technology manufactures fiber optic test and measurement
equipment primarily for the fiber production and preparation market.
Alfred H. Hunt, III, President and CEO, said "Acquiring the assets of York
adds significant growth to our product offering position in the fiber optic
production and laboratory test business. Together, with our Photon Kinetics
subsidiary, this acquisition places IFR as the world leader in fiber optic
production test equipment. It also means that we will now have a strategic
operating base in England which could benefit our total operations throughout
the European Union".
IFR Systems, Inc. is a leading designer and manufacturer of electronic test
instruments for communications, avionics and general test and measurement
applications. Its Photon Kinetics subsidiary is a leading designer and
manufacturer of test equipment and measurement systems for optical fibers and
fiber optic telecommunications networks, a rapidly growing component of the
telecommunications networks, a rapidly growing component of the
telecommunications industry. The company's 5.5 million shares are traded over
the NASDAQ National Market System, symbol: IFRS.
###
