<PAGE> 1
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 25, 1997
WPI GROUP, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
NEW HAMPSHIRE 0-19717 02-0218767
- ---------------------------------------------- ------------------------ --------------------------------------
(STATE OR OTHER JURISDICTION OF INCORPORATION) (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
1155 ELM STREET, MANCHESTER, NEW HAMPSHIRE 03101
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (603) 627-3500
NONE
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(FORMER NAME, FORMER ADDRESS, AND FORMER FISCAL YEAR, IF CHANGED SINCE
LAST REPORT)
<PAGE> 2
WPI GROUP, INC.
FORM 8-K
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
None.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 25, 1997, WPI Group, Inc. completed the acquisition of Husky Computers
Limited, Husky Computers, Inc. and Husky Computers GmbH (collectively "the Husky
Group") from Peek plc. The Company acquired all of the issued and outstanding
shares of common stock of the Husky Group for approximately $16 million and the
assumption of approximately $5 million in liabilities. Husky is a leading
producer of rugged handheld computers used in utility meter reading,
geotechnical, field service and other applications. The Company plans no changes
in the business of the Husky Group.
A more complete description of the transaction is contained in the Stock
Purchase Agreement which is Exhibit 4.12 to this report and is incorporated
herein by reference.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
None.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
None.
- 2 -
<PAGE> 3
WPI GROUP, INC.
FORM 8-K
ITEM 5. OTHER EVENTS.
On June 23, 1997, the Company issued a press release announcing that WPI Group,
Inc. had acquired the Husky Group. The press release is Exhibit 99.1 to this
report and is incorporated herein by reference.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
None.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Financial: The financial statements required to be filed are currently not
available and will be filed under Form 8 within the time specified
by Item 7(a)(4) of Form 8-K.
Exhibits: 4.12 - Share Purchase Agreement dated June 20, 1997.
4.13 - Fourth Amendment to Commercial Loan Agreement and Loan
Documents dated June 20, 1997.
4.14 - Promissory Note in the principal amount of $15,000,000.00
dated June 20, 1997.
4.15 - Stock Pledge and Security Agreement dated June 20, 1997.
99.1 - Press release dated June 23, 1997.
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
- 3 -
<PAGE> 4
WPI GROUP, INC.
FORM 8-K
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
WPI GROUP, INC.
Dated: July 2, 1997 By: /s/ Dennis M. Deegan
------------------------------
Dennis M. Deegan
President, Treasurer and
Chief Operating Officer
- 4 -
<PAGE> 1
Exhibit 4.12
DATED JUNE 20, 1997
-------------------
(1) RADLEY SERVICES LIMITED
(2) PEEK CORPORATION
(3) WPI GROUP (UK)
(4) PEEK PLC
(5) WPI GROUP INC
-----------------------------------
A G R E E M E N T
FOR THE SALE AND PURCHASE OF
THE SHARE CAPITAL OF
HUSKY COMPUTERS LIMITED
HUSKY COMPUTERS INC, AND HUSKY COMPUTERS GmbH
-----------------------------------
Slater Heelis
71 Princess Street
Manchester
M2 4HL
Ref: D.6853/5.CFD
<PAGE> 2
INDEX
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CLAUSES
- -------
1 Interpretation
2 Sale and Purchase
3 Consideration
4 Conditions
5 Completion
6 Period between Contract and Completion
7 Restrictions on the Guarantor and the Vendors
8 Warranties and Representations
9 Guarantees and Indemnities
10 US Lease
11 Pensions
12 Guarantee by the Guarantor
13 General
SCHEDULES
- ---------
First Schedule: Vendors and Consideration
Second Schedule: Part 1 - The UK Company
Part 2 - The US Company
Part 3 - The German Company
Third Schedule: Interpretation
Fourth Schedule: Completion Arrangements
Fifth Schedule: Part 1 - Warranties and Representations
Part 2 - US Warranties and Representations
Part 3 - Limitations on Warranties
Sixth Schedule: Pensions
Seventh Schedule: The Properties
Eighth Schedule: Completion Accounts
Ninth Schedule: Conduct of Business before Completion
AGREED FORM DOCUMENTS
- ---------------------
Accounts
Disclosure Letter
Officer's Resignation Letter
Tax Deed
Deed of Indemnity re Litigation
<PAGE> 3
THIS AGREEMENT is made the day of One thousand nine hundred and
ninety seven
B E T W E E N :-
(1) RADLEY SERVICES LIMITED a company registered in England under number 2617074
whose registered office is at 309 Reading Road, Henley-on-Thames, Oxon, RG9 1EL
("the Vendor")
(2) PEEK CORPORATION a Delaware Corporation having its main place of business at
2701 North Rocky Point Drive, Suite 930, Tampa, Fl.33607-5975 USA ("the US
Vendor")
(3) WPI GROUP (UK) a company registered in England under number 3227062 whose
registered office is at Fairoak House, Church Road, Newport, Gwent, NP9 7EJ
("the Purchaser")
(4) PEEK PLC a company registered in Scotland under number 19299 whose
registered office is at George House, 50 George Square, Glasgow, G2 1RR ("the
Guarantor")
(5) WPI GROUP INC a New Hampshire Corporation having its main place of business
at 1155 Elm Street, Manchester, NH 03101 USA ("the Purchaser's Guarantor")
W H E R E A S:
- --------------
(A) HUSKY COMPUTERS LIMITED ("the UK Company) is a private company limited
by shares incorporated in England under the Companies Act(s) 1948 to
1976 under company number 1328356 and further information concerning
the UK Company is set out in Part 1 of the Second Schedule.
(B) HUSKY COMPUTERS INC ("the US Company") is a corporation incorporated in
Florida and further information concerning the US Company is set out in
Part 2 of the Second Schedule.
<PAGE> 4
(C) HUSKY COMPUTERS GmbH ("the German Company") is a corporation
incorporated in Germany and is registered at the Commercial Register of
the Siegburg District Court ("Amsgericht") under file number HRB 3396,
formerly Cologne District Court, HRB 20139, and further information
concerning the German Company is set out in Part 2 of the Second
Schedule.
(D) The Vendors are respectively the beneficial holders of the entire
issued share capital of the Companies as set out in the First Schedule
and the Vendors have the right, power and authority to sell and
transfer such shares free from all and any claims charges liens
encumbrances options or equities thereto.
(E) The Guarantor is the ultimate holding company of the Vendors and the
Purchaser's Guarantor is the ultimate holding company of the Purchaser.
(F) The Vendors have respectively agreed to sell and the Purchaser has
agreed to purchase the entire issued share capital of each of the
Companies on the terms and subject to the conditions set out in this
Agreement and in the Schedules hereto ("the Agreement").
NOW IT IS HEREBY AGREED as follows:
- -----------------------
INTERPRETATION
- --------------
In this Agreement the words and expressions defined in the Third
Schedule hereto shall (unless the context otherwise requires)
have the meanings thereby given to them and this Agreement
shall be construed and interpreted accordingly.
SALE AND PURCHASE
Subject to the terms of this Agreement
the Vendor shall sell (or procure the sale of) the UK Shares
and the German Shares with full title guarantee
the US Vendor shall sell (or procure the sale of) the US
Shares with the full title guarantee
and the Purchaser shall purchase the Shares in each case free
from all Encumbrances and together with all rights now or
hereafter attaching thereto
<PAGE> 5
The Purchaser shall not be obliged to complete the purchase unless
the purchase of all the Shares is completed simultaneously
the UK Vendor hereby waives any pre-emption rights it may have
relating to the UK Shares and the German Shares
howsoever conferred
the US Vendor hereby waives any rights it may have to purchase
the US Shares howsoever conferred
The Purchaser shall be entitled to the benefit of the Shares with
effect from the date hereof.
CONSIDERATION
- -------------
The consideration for the said sale and purchase of the Shares shall
be an amount equal to the aggregate of the Net Tangible
Assets and (p)7,000,000 and shall be apportioned between
the Vendors in the manner set opposite their respective names
in the First Schedule.
The sum of (p)13,000,000 on account of the Consideration shall be paid
on the date hereof into one or more joint accounts
respectively in the joint names of the Vendors' Solicitors and
the Purchaser's Solicitors to be held in escrow on terms that
the total sum of (p)13,000,000 plus interest accrued (a) shall
be paid out to the Vendors' Solicitors on Completion of the
Vendors' obligations under Clause 5 or (b) in the event that
Completion shall not occur as hereinafter provided, shall be
paid out to the Purchaser's Solicitors. The parties hereby
instruct their respective solicitors accordingly.
CONDITIONS
- ----------
This Agreement is conditional upon the passing at a general meeting of
the Guarantor of a resolution approving the sale of the
Companies.
If the condition referred to in paragraph 4.1 is not fulfilled on or
before 5 August 1997, this Agreement shall be void and cease
to have effect and the rights and obligations of the parties
hereunder shall cease and determine without any claim by any
of them against the other or others of them.
<PAGE> 6
In the event of it becoming apparent on or before Completion that any
of the Guarantor, the Vendor or the US Vendor is in material
breach of any of the Warranties, the Guarantor's Warranty or
any other material term of this Agreement, the Purchaser may
rescind this Agreement by notice in writing to the Guarantor
but without prejudice to any other rights it may have.
"Material Breach" for the purposes of this clause shall mean
an event or matter which would cause the value of the shares
to decrease by 5% or more.
The Guarantor shall be entitled to waive the condition contained in
Clause 4.1 above by giving written notice to the Purchaser
whereupon the said condition shall be deemed to have been
satisfied.
COMPLETION
- ----------
Subject to the provisions of this Clause Completion shall take place
as soon as practicable after the fulfilment of the condition
in Clause 4.1 above, but in no event later than 5th August
1997 ("the Completion Date") at the offices of the Vendors'
Solicitors whereupon the business described in the Fourth
Schedule will be transacted.
If in any respect the provisions of the Fourth Schedule are not
complied with on the last date for Completion set by Clause
5.1 but this Agreement shall otherwise have become
unconditional then the Purchaser may:
defer Completion to a date not more than twenty-eight
days after the last date for Completion set
by Clause 5.1 (and so that the provisions of
this Clause 5 shall apply to Completion as
so deferred); or
proceed to Completion so far as practicable (without
prejudice to its rights hereunder); or
rescind this Agreement.
PERIOD BETWEEN CONTRACT AND COMPLETION
- --------------------------------------
Following the date of this Agreement up to and including the Completion
Date the parties agree that the business of the Companies will
be conducted in accordance with the wishes of the Purchaser
and under the effective control of the Purchaser PROVIDED that
the Vendors shall remain the registered owners of the Shares
and
<PAGE> 7
shall be entitled to appoint and remove directors and officers
of the Companies and the Vendors and the Purchaser agree that
neither of them shall permit without the written consent of
the other any of the Companies to do any of the things set out
in the Ninth Schedule, FURTHER PROVIDED ALWAYS that any losses
and profits attributable to the Companies in the period
between contract and completion shall be at the risk of, or as
the case may be, for the benefit of, the Purchaser.
The Purchaser shall indemnify the Vendors and each of them against all
losses, damages, costs or liabilities suffered or incurred by
the Vendors or any of them arising out of or in connection
with any act or omission of any of the Companies, their
servants and agents performed or omitted to be performed at
the request or instigation of the Purchaser.
During the said period, the Vendor shall not be obliged to fund the
businesses of the Companies and the Purchaser shall be obliged
to maintain adequate working capital facilities for the
continuing activities of the businesses of the Companies.
RESTRICTION ON THE GUARANTOR AND THE VENDORS
- --------------------------------------------
Each of the Guarantor and the Vendors hereby covenants and undertakes
with and to the Purchaser and the Company in further
consideration of this Agreement (and as separate and
independent agreements) that save with the written consent of
the Purchaser they will not and will procure that no Vendor
Group Company will:-
at any time during the period of three years after the date of
Completion be engaged concerned or interested either
solely or jointly or with any other period firm or
company and whether directly or indirectly in the
carrying on of any business which is competitive or
likely to be competitive with any businesses carried
on by any of the Companies during the period of one
year prior to the date of Completion including
(without limitation) the business of the design,
manufacture and sale of handheld computer systems
including the provision of related services for
incorporation into customer specific applications.
PROVIDED THAT nothing in this clause shall prevent
the Guarantor (or any of its subsidiaries) from
acquiring any business or company, part of whose
business is competitive as aforesaid but
<PAGE> 8
where such part represents less than 20% of the
turnover of the company or business concerned. The
Guarantor will make reasonable efforts to dispose of
such part within a reasonable time from such
acquisition.
at any time hereafter either use for its own benefit or
disclose to any person other than the Purchaser any
secret information other than information which
relates to the Guarantor or any of its subsidiaries
(other than the Companies) concerning the business
accounts or finances of any of the Companies any of
their transactions or affairs or concerning
techniques or methods used in the business of any of
the Companies which may come to its knowledge and
shall use its best endeavours to prevent the
publication or disclosure of any confidential
information concerning such matters unless such
information shall then be in the public domain
otherwise than by reason of a breach of the terms of
this paragraph
at any time hereafter use or procure the use in connection
with any business of the names including the words
"Husky" or any other trade names currently used by or
reserved for the use of the Companies or any
colourable imitation thereof
The duration, extent and application of each of the
restrictions contained in Clause 7.1 above are
considered to be no greater than is necessary for
the protection of the goodwill of the business of
the Companies and the value of the Shares and the
restrictions contained in Clause 7.1 are considered
reasonable by the parties having regard to the
global nature of the business of the Companies as
conducted by the Vendor Group and intended to be
conducted by the Purchaser, but in the event that
any such restriction shall be found to be void but
would be valid if some part thereof were deleted
such restriction shall apply with such deletion as
may be necessary to make it valid and effective and
shall be enforced to the extent permitted by law
The Guarantor agrees to procure that the name of Husky
Computers BV is changed within two months of
Completion so as to remove reference to the name
"Husky" or any colourable imitation thereof
<PAGE> 9
WARRANTIES AND REPRESENTATIONS
- ------------------------------
The Vendor warrants and represents to the Purchaser in the terms of
Part I of the Fifth Schedule hereto in respect of the UK
Company and the German Company and the US Vendor warrants and
represents to the Purchaser in the terms of Parts I and 2 of
the Fifth Schedule hereto in respect of the US Company and the
Vendor and the US Vendor acknowledge that the Purchaser is
entering into this Agreement in reliance on each of the
Warranties
The Warranties are given subject to matters fairly disclosed in the
Disclosure Letters
The Warranties shall be separate and independent and save as expressly
provided shall not be limited by reference to any other
sub-paragraph or anything in this Agreement other than the
provisions of Part 3 of the Fifth Schedule.
Without restricting the rights of the Purchaser or the ability of the
Purchaser to claim damages on any basis available to it in the
event that any of the Warranties is broken or proves to be
untrue or misleading, the Warrantors shall in such event pay
to the Purchaser on demand the amount necessary to put the
Companies or any of them into the position which would have
existed if the Warranties had not been broken and had been
true and not misleading together with all costs and expenses
incurred by the Purchaser and any of the Companies as a result
of such breach.
Where any statement in the Fifth Schedule is qualified by the
expression "KIB" "so far as the Warrantors are aware" or the
expression "to the best of the Warrantors' knowledge,
information and belief "or any similar expression or wording
of similar import, that statement shall be deemed to include
an additional statement that it has been made after due
enquiry of the Directors of Husky Computers Limited (other
than J G Sanger and A Standley) and Messrs L Lamb and M A
Jenkins
Any information supplied by or on behalf of the Companies or the
respective officers to the Guarantor, the Warrantors or their
agents or accountants, solicitors or other advisors in
connection with the Warranties or otherwise in relation to the
business and affairs of the Companies shall not constitute a
representation or warranty or guarantee as to the accuracy
thereof by the Company and the Warrantors and the Guarantor
hereby waive any and all claims which they might otherwise
have against the Company in respect thereof
<PAGE> 10
The Guarantor and the Warrantors shall procure that (save only as may
be necessary to give effect to this Agreement) neither they
nor the Company shall knowingly do or procure any act or
omission before Completion which would constitute a breach of
any of the Warranties if they were given at Completion or
which would make any of such Warranties inaccurate or
misleading if they were so given
Each of the sub-paragraphs of Part 1 of the Fifth Schedule applies
(unless the context otherwise requires) to each of the
Companies and references therein to "the Company" shall be
interpreted accordingly.
Guarantor's Warranty
--------------------
The Guarantor warrants and represents to the Purchaser that
the aggregate value of the Net Tangible Assets of the
Companies at the close of business on 20 June 1997
determined in accordance with the same accounting
policies as those applied in the Accounts and in
accordance with the Eighth Schedule will not be less
than (p)6,000,000 less the amount of any overdraft
with Lloyds Bank plc of the UK Company at Completion.
The parties agree that the procedure set out in the Eighth
Schedule shall be followed in relation to the
determination of the Net Tangible Assets.
GUARANTEES AND INDEMNITIES
- --------------------------
Each of the Guarantor and the Vendors undertake with the Purchaser that
they will each use their best endeavours to procure the release of the
Companies from all guarantees, indemnities and securities given by the
Companies in respect of liabilities of any Associate thereof and prior
to the formal release of the Companies from liability under or in
connection with any such guarantees, indemnities and securities shall
indemnify the Companies and keep them indemnified from and against any
payment made under any such guarantees, indemnities and securities and
any expense, loss, damage, cost, claim or liability whatsoever which
the Company may incur under or in connection therewith
<PAGE> 11
US LEASE
- --------
The US Vendor and the Purchaser shall co-operate together with a view
to obtaining the consent of the landlord of the US Property
pursuant to clause 25 of the US Lease.
The US Vendor and the Purchaser shall use all reasonable endeavours to
obtain from the Landlord a release of any liabilities of the
US Company in respect of the US Property and any liabilities
of the US Vendor as guarantor of the obligations of the US
Company with regard thereto and in connection therewith, the
Purchaser shall offer the Purchaser's Guarantor as a
substitute guarantor for the obligations of the tenant under
the US Lease.
Pending the obtaining of landlord's consent pursuant to clause 25 of
the US Lease and the release of the US Company's and the US
Vendor's liabilities the Purchaser and the Purchaser's
Guarantor shall indemnify and keep indemnified the US Company
and the US Vendor against all costs, claims, demands, expenses
and liabilities whatsoever arising pursuant to the US Lease or
the guarantee thereof by the US Vendor.
PENSIONS
- --------
The provisions of the Sixth Schedule shall apply.
GUARANTEE BY THE GUARANTOR
- --------------------------
In consideration of the Purchaser entering into this Agreement at its
request the Guarantor unconditionally and irrevocably
guarantees to the Purchaser
as a primary obligation and debt of the Guarantor the due and
punctual payment by the Vendors and each of them of
any sum due under this Agreement and the Tax Deed
the due and punctual performance of any obligation of the
Vendors and each of them or any other member of the
Vendor Group under this Agreement and the Tax Deed
and undertakes with the Purchaser that if and whenever any
Vendor shall be in default of any of its obligations
under this Agreement and the Tax Deed the
<PAGE> 12
Guarantor will forthwith make good the default as if
the Guarantor instead of that Vendor was expressed to
be the primary obligor under this Agreement and the
Tax Deed (as the case may be) and notwithstanding any
indulgence granted by the Purchaser to that Vendor.
This guarantee shall not be affected by any legal limitation disability
or other circumstances relating to the Vendors or any
irregularity unenforceability or invalidity or of any
obligations of the Vendors under this Agreement.
The Purchaser's Guarantor (unconditionally and irrevocably guarantees
to the Guarantor (for itself and as trustee for the Vendors),
the due and punctual performance by the Purchaser of each of
its obligations hereunder and under any document in agreed
terms
as a primary obligation and debt of the Purchaser's Guarantor
its due and punctual payments by the Purchaser of any
sum that may become due to the Vendors (or any of
them under this Agreement);
the due and punctual performance of any obligation of the
Purchaser under this Agreement and the Tax Deed.
GENERAL
- -------
This Agreement shall not be assignable save that the Purchaser shall be
entitled to assign the same to a Related Company and
accordingly the expression "the Purchaser" as used herein
shall where the context so admits include any such assignee
PROVIDED that (a) the Purchaser shall remain primarily liable
for all its obligations under this Agreement and (b) the
guarantee of the Purchaser's Guarantor shall remain in full
force and effect
This Agreement (together with any documents referred to herein)
constitutes the whole agreement between the parties hereto in
connection with the sale and purchase of the Shares and it is
expressly declared that no variations hereof shall be
effective unless made in writing and agreed between all the
parties hereto. The Purchaser agrees that it will have no
remedy in respect of any untrue statement made to the
Purchaser upon which the Purchaser relied in entering into
this Agreement and that the only remedies available to the
Purchaser will be for breach of contract.
<PAGE> 13
The provisions of this Agreement insofar as the same shall not have
been performed at Completion shall remain in full force and
effect notwithstanding Completion
Subject to Clause 13.1 above this Agreement shall be binding upon and
enure for the benefit of the respective assigns successors and
personal representatives of the parties
At any time after the date hereof the Vendors and the Guarantor shall
at the request of the Purchaser, at their cost, execute such
documents as the Purchaser may reasonably require for the
purpose of vesting the Shares in the Purchaser or its nominee
and giving to the Purchaser the full benefit of all the
provisions of this Agreement
This Agreement shall be governed by and construed in accordance with
the laws of England and Wales and the parties hereby submit to
the non-exclusive jurisdiction of the Courts of England and
Wales
Each party to this Agreement shall pay its own costs of and incidental
to this Agreement and the sale and purchase hereby agreed to
be made
No announcement or circular in connection with the subject matter of
this Agreement (except any such announcement as may be
required in the case of the Guarantor to comply with the
requirements of The Stock Exchange or in the case of the
Purchaser to comply with the requirements of the NASDAQ/NMS)
shall be made by or on behalf of the Vendors the Guarantor or
the Purchaser without the prior written approval of the
Guarantor (on its own behalf and on behalf of the Vendors) and
the Purchaser, such consent not being unreasonably withheld or
delayed
(a) Any notice required to be given under this Agreement
shall be sufficiently given:
(i) if delivered personally; or
(ii) if sent by courier; or
(iii) if sent by facsimile copier or other
electronic means of communication followed
by special air service delivery; or
(iv) by letter despatched by first class recorded
delivery pre-paid post (by airmail if to an
overseas address) in which case such
<PAGE> 14
notice is deemed to be given at the close of
business on the next following Business Day,
(b) "Business Day" means any day (other than a Saturday
or a Sunday) on which clearing banks are open for a
full range of banking transactions in the country of
the recipient
(c) Any notice required to be given under this Agreement
shall be sent:
(i) to the Guarantor and the Vendors
c/o Peek Plc
309 Reading Road,
Henley-on-Thames,
Oxon,
RG9 13L
for the attention of Mark Jenkins
(ii) to the Purchaser at:
WPI Group, Inc.
1155 Elm Street
Manchester
New Hampshire 03101
Facsimile No: 603 627 3150
For the attention of: Michael Tule, Vice
President and General Counsel
with a copy to the Purchaser's Solicitors
at:
Slater Heelis
71 Princess Street
Manchester
M2 4HL
Facsimile No: 0161 661 0048
For the attention of: Christopher Dunn
or to such other address or facsimile number as is
notified in writing from time to time by any party to
the other parties to this Agreement
<PAGE> 15
Any date or period mentioned in this Agreement may be extended by
mutual agreement between the parties hereto, but as regards
any date or period (whether or not extended as aforesaid) time
shall be of the essence of this Agreement
No waiver by any of the parties of any of the requirements hereof or of
any of its rights hereunder shall have effect unless given in
writing and signed by the party or by the party or by the
director or other duly authorised officer of such party
The Vendors and the Guarantor agree that the obligations and
undertakings on their part which are for the benefit of the
Companies are owed to the Purchaser both for itself and as
trustee for the Companies and the Purchaser hereby declares
itself a trustee of the benefit of such obligations and
undertakings for itself and the Companies
If there are provisions of this Agreement (or of any agreement of
which it forms part) by virtue of which particulars of this
Agreement (or of an agreement of which it forms part) are, at
the date of this Agreement, required to be furnished to the
Director General of Fair Trading under the Restrictive Trade
Practices Act 1976 and 1977;
the parties shall ensure that those particulars are furnished
as soon as possible and in any event within the time
specified by those Acts;
those provisions do not take effect until the day after those
particulars have been furnished.
None of the Vendor the US Vendor and the Guarantor shall be liable to
the Purchaser in respect of any losses costs damages
liabilities or expenses arising in any way whatsoever out of
or in connection with anything done or omitted to be done by
any of them on or before Completion or arising out of or in
connection with any property goods or other assets of the
Companies or any other property that they have at any time
owned or occupied in so far as they relate to or arise from
any Environmental Liability (as defined in Paragraph 9 of
Part 1 of the Fifth Schedule hereto) or any actual or alleged
violation of or non-compliance with any Environmental
Requirement (defined as aforesaid) or Environmental Licence
(defined as aforesaid) unless and to the extent that they
constitute a breach of one or more of the environmental
warranties of Paragraph 9 of the Fifth Schedule hereto.
<PAGE> 16
I N W I T N E S S whereof this Agreement has been entered into the day and
year first before written
<PAGE> 17
SIGNED BY )
FOR AND ON BEHALF OF RADLEY )
SERVICES LIMITED )
SIGNED BY )
FOR AND ON BEHALF OF PEEK )
CORPORATION )
SIGNED BY )
FOR AND ON BEHALF OF WPI )
GROUP (UK) )
SIGNED BY )
FOR AND ON BEHALF OF PEEK PLC )
SIGNED BY )
FOR AND ON BEHALF OF WPI )
GROUP, INC. )
<PAGE> 1
Exhibit 4.13
FLEET BANK - NH
FOURTH AMENDMENT TO COMMERCIAL LOAN AGREEMENT
AND LOAN DOCUMENTS
THIS FOURTH AMENDMENT (the "Amendment") made as of the 20th day of
June, 1997, is by and among FLEET BANK - NH, a bank organized under the laws of
the State of New Hampshire with an address of Mail Stop NHNA E02A, 1155 Elm
Street, Manchester, New Hampshire 03101 (the "Bank"), and WPI GROUP, INC., WPI
ELECTRONICS, INC., WPI MAGNETEC, INC., WPI MICRO PALM, INC., WPI POWER SYSTEMS,
INC., WPI TERMIFLEX, INC., WPI MICRO PROCESSOR SYSTEMS, INC., and WPI
DECISIONKEY, INC., WPI UK HOLDING, INC., WPI UK HOLDING II, INC., and WPI OYSTER
TERMINALS, INC., each a New Hampshire corporation, WPI GROUP (U.K.), an
unlimited company organized under the laws of England and Wales, and WPI OYSTER
TERMINALS LIMITED, a corporation organized under the laws of England and Wales,
all such entities having executive offices at 1155 Elm Street Manchester, New
Hampshire 03101 (all of such entities are hereinafter referred to collectively
as the "Borrowers").
R E C I T A L S:
----------------
WHEREAS, pursuant to a Commercial Loan Agreement dated October 24,
1995, as amended by First Amendment to Commercial Loan Agreement and Loan
Documents dated March 20, 1996, Second Amendment to Commercial Loan Agreement
and Loan Documents dated July 12 , 1996, and Third Amendment to Commercial Loan
Agreement and Loan Documents dated February 27, 1997, by and among the Borrowers
and the Bank (as amended, the "Loan Agreement") and certain Loan Documents as
defined therein, the Bank has extended to the Borrowers a revolving line of
credit loan in the principal amount of up to Thirty Million Dollars
($30,000,000.00) (the "Revolving Line of Credit Loan");
WHEREAS, the Borrowers have requested, and the Bank has agreed to make,
a Fifteen Million Dollar ($15,000,000.00) term loan to Borrowers to finance the
acquisition by WPI Group, Inc. (the "Acquisition") of Husky Computers Limited, a
corporation organized under the laws of England, Husky Computers, Inc., a
Florida corporation, and Husky Computers GmbH, a corporation organized under the
laws of Germany (individually and collectively, "Husky"), subject to the terms
and conditions of the Loan Agreement, provided Husky, upon completion of the
Acquisition becomes a Borrower under the Loan Agreement and the other Loan
Documents, and the Borrowers pledge all of the shares of stock which each owns
in the other to the Bank as collateral security for all Loans and other
Obligations under the Loan Agreement and the other Loan Documents; and
WHEREAS, to effect the foregoing, as well as to amend certain existing
financial covenants contained in the Loan Agreement and insert an additional
financial covenant respecting debt service coverage, the Bank and the Borrowers
are entering into this Amendment. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
<PAGE> 2
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants, agreements and promises contained herein, the parties hereby
agree as follows:
1. ADDITION OF HUSKY AS BORROWER. The Borrowers and the Bank
agree that, effective immediately upon the Acquisition, each of the Loan
Agreement and the Loan Documents shall be amended to join and include Husky,
jointly and severally, as a borrower thereunder, such that each reference to
"Borrower" or "Borrowers" in the Loan Agreement and in each of the Loan
Documents which shall thereupon mean and include each of WPI Group, Inc., WPI
Electronics, Inc., WPI Magnetec, Inc., WPI Micro Palm, Inc., WPI Power Systems,
Inc., WPI Termiflex, Inc., WPI Micro Processor Systems, Inc., WPI Decisionkey,
Inc., WPI UK Holding, Inc., WPI UK Holding II, Inc., WPI Oyster Terminal, Inc.,
WPI Oyster Terminals Limited, WPI Group (U.K.), Husky Computers Limited, Husky
Computers, Inc., and Husky Computers GmbH, jointly and severally. Borrowers
agree to take all such further actions and to execute all such further documents
and instruments as are necessary, proper, or required to effect the provisions
of this Section 1. Failure to so amend the Loan Agreement shall be an Event of
Default under the Loan Agreement and the other Loan Documents.
2. $15,000,000 TERM LOAN. The Bank agrees to make a Fifteen
Million Dollar ($15,000,000.00) term loan ("Term Loan") to the Borrowers and New
Borrower, to be evidenced by the term promissory note in form attached hereto as
Exhibit A (the "Term Note"). Such Term Loan shall be deemed a Loan as defined in
the Loan Agreement, shall be subject to the terms and conditions of the Loan
Agreement, and shall be secured by a pledge of all of the capital stock of the
Borrowers (other than WPI Group, Inc.). The Term Note shall be a Loan Document
and Note as such terms are defined in the Loan Agreement. Furthermore, it is
understood that the proceeds of the Term Loan shall be held in escrow until the
Acquisition is consummated and all requisite governmental, London Stock Exchange
and corporate approvals received. If the Acquisition is not consummated by
September 30, 1997, and in any event if the decision is made prior to that date
to unwind the Acquisition, the proceeds of the Term Loan shall be returned to
the Bank, together with all accrued and unpaid interest, make whole payments and
prepayment fees, and the obligation of the Bank to make the Term Loan
terminated.
3. AMENDMENT OF LOAN AGREEMENT.
(a) Section III. of Schedule A of the Loan Agreement shall be and
hereby is amended by deleting Paragraph A thereof, and inserting in place
thereof the following new Paragraph A:
"A. BORROWER SHALL HAVE ON A CONSOLIDATED BASIS A NET WORTH (AS
HEREINAFTER DEFINED) EQUAL TO AT LEAST EIGHTEEN MILLION DOLLARS
($18,000,000.00) AS AT SEPTEMBER 30, 1996 AND AT ALL TIMES THEREAFTER
THROUGH SEPTEMBER 29, 1997, AND EQUAL TO LEAST TWENTY-ONE MILLION
DOLLARS ($21,000,000.00) AS AT SEPTEMBER 30, 1997 AND AT ALL TIMES
THEREAFTER THROUGH SEPTEMBER 29, 1998, AND. EQUAL TO LEAST TWENTY-FIVE
MILLION DOLLARS ($25,000,000.00) AS AT SEPTEMBER 30, 1998 AND AT ALL
TIMES THEREAFTER. "NET WORTH " MEANS TOTAL ASSETS MINUS TOTAL
LIABILITIES, ALL AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES FROM BORROWER'S FINANCIAL STATEMENTS DELIVERED TO
THE BANK IN ACCORDANCE WITH THE COVENANTS OF BORROWER HEREINABOVE (THE
"FINANCIAL STATEMENTS")".
<PAGE> 3
(b) Section III of Schedule A of the Loan Agreement shall be and hereby
is further amended by deleting paragraph B thereof and inserting the following
new Paragraph B:
"B. BORROWER SHALL HAVE ON A CONSOLIDATED BASIS A RATIO OF FUNDED DEBT
(AS HEREINAFTER DEFINED) TO EBITDA (AS HEREINAFTER DEFINED) OF NOT
GREATER THAN (I) 3.0:1 AS AT MARCH 31, 1997; (II) 4.5.0:1 AS AT
SEPTEMBER 30, 1997; AND (III) 3.0:1 AS AT SEPTEMBER 30, 1998 AND AS AT
EACH FISCAL QUARTER END THEREAFTER. "FUNDED DEBT " MEANS THE AGGREGATE
INTEREST BEARING INDEBTEDNESS OF THE BORROWER AS OF THE APPLICABLE DATE
OF DETERMINATION, ALL AS DETERMINED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES FROM BORROWER'S FINANCIAL STATEMENTS.
"EBITDA" MEANS EARNINGS FOR THE TWELVE-MONTH PERIOD ENDING ON THE
APPLICABLE DATE OF DETERMINATION, BEFORE REDUCTION FOR INTEREST, TAXES,
DEPRECIATION, AND AMORTIZATION EXPENSE FOR SUCH PERIOD, ALL AS
DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
FROM BORROWER'S FINANCIAL STATEMENTS."
(c) Section III of Schedule A of the Loan Agreement shall be and hereby
is further amended by inserting the following new Paragraph C and re-lettering
the succeeding paragraphs:
"C. THE BORROWER SHALL MAINTAIN EBITDA OF NOT LESS THAN $3,500,000 FOR
THE THREE (3) MONTHS ENDED DECEMBER 31, 1997; $7,500,000 FOR THE SIX
(6) MONTHS ENDED MARCH 31, 1998; AND $11,500,000 FOR THE NINE (9)
MONTHS ENDED JUNE 30, 1998, ALL AS SHOWN ON BORROWER'S FINANCIAL
STATEMENTS."
(d) Section III of Schedule A of the Loan Agreement, Paragraph D
(formerly Paragraph C), shall be and hereby is amended by changing the minimum
ratio of EBIT to Interest Expense from "2.0:1" to "3.0:1".
(e) Section III of Schedule A of the Loan Agreement, Paragraph E
(formerly Paragraph D), shall be and hereby is amended to read in its entirety
as follows:
"E. BORROWER SHALL NOT MAKE CAPITAL EXPENDITURES IN ANY FISCAL YEAR IN
AN AGGREGATE AMOUNT EXCEEDING $2,500,000, COMMENCING WITH THE FISCAL
YEAR ENDING SEPTEMBER 30, 1998."
(f) Section III of Schedule A of the Loan Agreement shall be and hereby
is further amended by inserting the following new Paragraph F and re-lettering
the succeeding paragraph:
"F. BORROWER SHALL HAVE A RATIO OF EBITDA TO DEBT SERVICE (AS
HEREINAFTER DEFINED) OF NOT LESS THAN 2.0:1 AS OF EACH FISCAL QUARTER
END OF BORROWER COMMENCING SEPTEMBER 30, 1997. AS USED HEREIN, "DEBT
SERVICE" MEANS THE AGGREGATE INTEREST ON THE REVOLVING LINE OF CREDIT
LOAN AND PRINCIPAL AND INTEREST ON ALL OTHER LOANS UNDER THE LOAN
AGREEMENT DUE AND PAYABLE DURING THE TWELVE (12) MONTH PERIOD ENDING ON
THE DATE OF DETERMINATION, ALL AS DETERMINED IN ACCORDANCE WITH GAAP
FROM BORROWER'S FINANCIAL STATEMENTS."
<PAGE> 4
4. PLEDGE OF STOCK OF ALL SUBSIDIARIES. Each of the Borrowers
owning shares of stock in the other Borrowers shall pledge and grant to the Bank
a security interest in all of such shares as collateral security for all
obligations of the Borrowers respecting the Revolving Line of Credit Loan, the
Term Loan and any other obligations under the Loan Agreement and the other Loan
Documents.
5. AMENDMENT OF OTHER LOAN DOCUMENTS. Each of the other Loan
Documents, whether or not specifically referenced herein or hereby, shall be and
hereby is amended to reflect the terms and conditions of this Amendment and to
include within the scope of such Loan Documents and the description of loans and
notes therein, the Term Loan.
6. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers
(including New Borrower) individually hereby makes, confirms, reasserts, and
restates all of the representations and warranties of the Borrowers under the
Loan Agreement and each of the Loan Documents, all as of the date hereof.
7. AFFIRMATIVE COVENANTS. Each of the Borrowers (including New
Borrower) individually hereby makes, confirms, reasserts, and restates all of
the Affirmative Covenants of the Borrowers as set forth in the Loan Agreement
and each of the Loan Documents, as amended hereby, all as of the date hereof.
8. NEGATIVE COVENANTS. Each of the Borrowers (including New
Borrower) individually hereby makes confirms, reasserts, and restates all of the
Negative Covenants of the Borrowers as set forth in the Loan Agreement and each
of the Loan Documents, all as of the date hereof.
9. NO OTHER MODIFICATIONS. Except as specifically modified or
amended herein or hereby, all of the terms and conditions of each of the
Revolving Line of Credit Loan, the Loan Agreement and the Loan Documents, remain
otherwise unchanged, and in full force and effect, all of which are hereby
confirmed and ratified by the parties hereto.
10. COSTS AND EXPENSES OF BANK. The Borrowers and New Borrower
agree to reimburse the Bank for all reasonable costs, expenses, and fees,
including attorneys' fees, associated with the documentation of this Amendment.
Borrowers and New Borrower consent to Bank charging Borrowers' Revolving Line of
Credit Loan account for all such costs, expenses and fees.
IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment all as of the date first set forth above.
FLEET BANK - NH
By: /s/ Mark L. Young
- ---------------------------------- ------------------------------------
Witness Mark L. Young, Senior Vice President
<PAGE> 5
BORROWERS:
WPI GROUP, INC.,
WPI POWER SYSTEMS, INC.,
WPI MAGNETEC, INC.,
WPI ELECTRONICS, INC.,
WPI TERMIFLEX, INC.,
WPI MICRO PALM, INC.,
WPI MICRO PROCESSOR SYSTEMS,
INC.,
WPI DECISIONKEY, INC.,
WPI GROUP (U.K.),
WPI OYSTER TERMINALS LIMITED,
WPI UK HOLDING, INC.,
WPI UK HOLDING II, INC., and
WPI OYSTER TERMINALS, INC.,
By: /s/ Michael Foster
- ---------------------------------- ------------------------------------
Witness Michael Foster, for, on behalf of,
and as Duly Authorized Officer or
Agent of each of the above-named
entities
<PAGE> 6
RSA 399-B STATEMENT OF FINANCE CHARGES
--------------------------------------
In connection with the $15,000,000 term loan transaction consummated on
this 20th day of June, 1997, by and between FLEET BANK - NH, a New Hampshire
bank with an address of Mail Stop NHNA E02A, 1155 Elm Street, Manchester, New
Hampshire 03101 ("Bank") and WPI GROUP, INC., WPI ELECTRONICS, INC., WPI
MAGNETEC, INC., WPI MICRO PALM, INC., WPI POWER SYSTEMS, INC., WPI TERMIFLEX,
INC., WPI MICRO PROCESSOR SYSTEMS, INC., WPI DECISIONKEY, INC., WPI UK HOLDING,
INC., WPI UK HOLDING II, INC., and WPI OYSTER TERMINALS, INC., each a New
Hampshire corporation, WPI GROUP (U.K.), an unlimited company organized under
the laws of England and Wales, and WPI OYSTER TERMINALS LIMITED, a corporation
organized under the laws of England and Wales, all such entities having
executive offices at 1155 Elm Street Manchester, New Hampshire 03101 (all of
such entities are hereinafter referred to individually and collectively as the
"Borrower"), pursuant to the Commercial Loan Agreement dated October 24, 1995,
as amended to date, among the Bank and the Borrower (the "Loan Agreement"), the
Borrower is hereby informed and advised pursuant to New Hampshire RSA 399-B that
Borrower shall be liable for and shall pay the following charges (all
capitalized terms not defined herein shall have the meanings ascribed to them in
the Loan Agreement):
1. INTEREST. Interest is payable on the outstanding principal balance
of the Term Loan in the amount of Fifteen Million Dollars ($15,000,000.00) (the
"Loan") at the one-month LIBOR Rate plus 162.5 basis points.
2. CLOSING COSTS AND EXPENSES. The Borrower shall pay the Bank's legal
counsel fees and expenses of $3,500 (estimate) in connection with the amendment
of the Loan on the date hereof.
3. BANK FEES. The Borrower shall pay the Bank a fee of $25,000 at
closing.
4. LATE CHARGES. In the event any installment of principal or interest
on the Loan is not paid when due, the Bank may assess a late payment charge of
five percent (5%) of the amount of principal and/or interest which is more than
ten (10) days overdue.
5. DEFAULT RATE. If an Event of Default occurs under the Loan, the
Borrower shall pay interest on all amounts outstanding at the contract rate of
the Loan, plus an additional five percent (5%) per annum.
The Borrower hereby acknowledges receipt of a copy of this Statement at
or before the loan closing of even date, and confirms that this transaction is a
commercial loan not subject to federal truth-in-lending laws and regulations,
including without limitation, the Real Estate Settlement Procedures Act and
Regulation Z.
Disclosed by Bank and acknowledged by Borrower this 20th day of June, 1997.
<PAGE> 7
WITNESSES: BORROWER:
WPI GROUP, INC.,
WPI POWER SYSTEMS, INC.,
WPI MAGNETEC, INC.,
WPI ELECTRONICS, INC.,
WPI TERMIFLEX, INC.,
WPI MICRO PALM, INC.,
WPI MICRO PROCESSOR SYSTEMS, INC., WPI
DECISIONKEY, INC.,
WPI GROUP (U.K.),
WPI OYSTER TERMINALS
LIMITED, WPI UK
HOLDING, INC., WPI
UK HOLDING II, INC.,
and WPI OYSTER
TERMINALS, INC.
By: /s/ Michael Foster
- ---------------------------------- ------------------------------------
Witness Michael Foster, for, on behalf of,
and as Duly Authorized Officer or
Agent of each of the above-named
entities
<PAGE> 1
Exhibit 4.14
PROMISSORY NOTE
---------------
$15,000,000.00 Manchester, New Hampshire
June 20, 1997
1. PROMISE TO PAY.
FOR VALUE RECEIVED, WPI GROUP, INC., WPI ELECTRONICS, INC., WPI
MAGNETEC, INC., WPI MICRO PALM, INC., WPI POWER SYSTEMS, INC., WPI TERMIFLEX,
INC., WPI MICRO PROCESSOR SYSTEMS, INC., and WPI DECISIONKEY, INC., WPI UK
HOLDING, INC., WPI UK HOLDING II, INC., and WPI OYSTER TERMINALS, INC., each a
New Hampshire corporation, WPI GROUP (U.K.), an unlimited company organized
under the laws of England and Wales, and WPI OYSTER TERMINALS LIMITED, a
corporation organized under the laws of England and Wales, , all such entities
having executive offices at 1155 Elm Street Manchester, New Hampshire 03101 (all
of such entities are hereinafter referred to individually and collectively as
the "Borrower"), jointly and severally promise to pay to the order of FLEET
BANK-NH, a bank organized under the laws of New Hampshire, having an address at
1155 Elm Street, Manchester, New Hampshire, ("Lender"), the principal sum of
Fifteen Million and 00/100 ($15,000,000.00) DOLLARS, with interest thereon, or
on the amount thereof from time to time outstanding, to be computed, as
hereinafter provided, until such principal sum shall be fully paid. Interest and
principal shall be payable in installments as set forth in Section 4 below. The
total principal sum, or the amount thereof outstanding, together with any
accrued but unpaid interest, shall be due and payable in full on March 31, 2002
("Maturity Date").
2. LOAN AGREEMENT.
This Note is issued pursuant to the terms, provisions and conditions of
an agreement captioned "Commercial Loan Agreement" dated as of October 24, 1995
between Borrower and Lender, as amended to date, (the "Loan Agreement") and
evidences the Term Loan made pursuant thereto (herein, the "Loan"). Capitalized
terms used herein which are not otherwise specifically defined shall have the
same meaning herein as in the Loan Agreement.
3. INTEREST RATE.
Principal amounts outstanding under the Loan shall bear interest at the
LIBOR Interest Rate, subject to the conditions and limitations provided for in
this Note, during the period from the date hereof up to and including the
Maturity Date.
<PAGE> 2
4. PAYMENT OF INTEREST AND PRINCIPAL.
4.1. PAYMENT AND CALCULATION OF INTEREST. All interest shall be: (a)
payable in arrears commencing July 1, 1997 and continuing on the same day of
each month thereafter until the principal together with all interest and other
charges payable with respect to the Loan shall be fully paid; and (b) calculated
on the basis of a 360 day year and the actual number of days elapsed. Interest
at the LIBOR Interest Rate shall be computed from and including the first day of
the applicable Interest Period to, but excluding, the last day thereof.
4.2. PRINCIPAL. Principal shall be repaid in quarterly installments of
$750,000, commencing on October 1, 1998 and continuing on the first day of each
January, April and July thereafter. The entire principal balance shall be due
and payable in full upon Maturity.
4.3. PREPAYMENT. The Loan or any portion thereof may be prepaid in full
or in part at any time upon fifteen (15) days' prior written notice to the
holder of this Note, provided that with respect to LIBOR Rate Advances, any
prepayment, whether partial or in full, shall be subject to a make-whole
provision and payment of a Yield Maintenance Fee as provided below. Any partial
prepayment of principal shall first be applied to any installment of principal
then due and then be applied to the principal installments due in the reverse
order of maturity, and no such partial prepayment shall relieve Borrower of the
obligation to pay each subsequent installment of principal when due.
4.4. MATURITY. At Maturity all accrued interest, principal and other
charges due with respect to the Loan shall be due and payable in full and the
principal balance and such other charges, but not unpaid interest, shall
continue to bear interest at the Default Rate until so paid.
4.5. METHOD OF PAYMENT; DATE OF CREDIT. All payments of interest,
principal and fees shall be made in immediately available funds: (a) by direct
charge to an account of Borrower maintained with Lender (or the then holder of
this Note), (b) by wire transfer to Lender, (c) by check payable to Lender and
delivered to Lender at 1155 Elm Street, Manchester, New Hampshire, or (d) to
such other bank or address as the holder of this Note may designate in a written
notice to Borrower. Payments shall be credited on the Business Day on which
immediately available funds are received prior to one o'clock P.M. Eastern Time;
payments received after one o'clock P.M. Eastern Time shall be credited to the
Loan on the next Business Day. Payments which are by check, which Lender may at
its option accept or reject, or which are not in the form of immediately
available funds shall not be credited to the Loan until such funds become
immediately available to Lender, and, with respect to payments by check, such
credit shall be provisional until the item is finally paid by the payor bank.
4.6. BILLINGS. Lender may submit monthly billings reflecting payments
due; HOWEVER, any changes in the interest rate which occur between the date of
billing and the due date may be reflected in the billing for a subsequent month.
Neither the failure of Lender to submit a billing nor any error in any such
billing shall excuse Borrower from the obligation to make full payment of all
Borrower's payment obligations when due.
<PAGE> 3
4.7. DEFAULT RATE. Lender shall have the option of imposing, and
Borrower shall pay upon billing therefor, an interest rate which is five percent
(5%) per annum above the interest rate otherwise payable ("Default Rate"): (a)
while any monetary Default exists and is continuing, during that period between
the due date and the date of payment; (b) following any Event of Default, unless
and until the Event of Default is waived by Lender; and (c) after Maturity.
4.8. LATE CHARGES. Borrower shall pay, upon billing therefor, a "Late
Charge" equal to five percent (5%) of the amount of any payment of principal,
other than principal due at Maturity, interest, or both, which is not paid
within ten (10) days of the due date thereof. Late charges are: (a) payable in
addition to, and not in limitation of, the Default Rate, (b) intended to
compensate Lender for administrative and processing costs incident to late
payments, (c) are not interest, and (d) shall not be subject to refund or rebate
or credited against any other amount due.
4.9. CALCULATION OF YIELD MAINTENANCE FEE.
(i) The Yield Maintenance Fee shall be calculated separately for
each installment of principal due prior to the Maturity Date, as well as the
entire balance of principal due at the Maturity Date (including any effective
extension thereof) all in accordance with the following:
(A) If the Treasury Rate is greater than the applicable
LIBOR Interest Rate, there shall be no Yield Maintenance Fee payable for such
installment or balance.
(B) If the Treasury Rate is less than the applicable
LIBOR Interest Rate, the Yield Maintenance Fee shall equal the aggregate of all
Present Values, computed separately for each installment or balance having a
separate due date, of the product of:
1. the amount of each installment or balance
so prepaid, multiplied by
2. the amount by which the LIBOR Interest Rate,
expressed as a percentage, exceeds the Treasury Rate, expressed as a percentage,
computed separately for each installment or balance having a different maturity
date, and
3. which product in turn shall be multiplied by
a fraction, computed separately for each installment or balance having a
different due date, the numerator of which is the number of days from the date
of prepayment to the due date of the installment or balance and the denominator
of which is 360.
(ii) Neither all nor any portion of the principal which bears
interest at the LIBOR Interest Rate may or shall be prepaid prior to the last
day of the applicable Interest Period, except upon fifteen (15) days' prior
written notice to Lender and the payment to Lender of a Yield Maintenance Fee
computed in accordance with clause (i) above.
(iii) The Yield Maintenance Fee shall be payable in respect of all
prepayments of principal whether voluntary or involuntary including, without
limitation, prepayments made upon acceleration of the Loan, or application of
insurance or eminent domain proceeds.
<PAGE> 4
(iv) Once written notice of intention to prepay is given, the Loan,
or the applicable portion thereof, shall become due and payable in full on the
date specified in the notice of prepayment and the failure to so prepay the Loan
on such date, together with any applicable Yield Maintenance Fee, shall
constitute an Event of Default.
4.10. MAKE WHOLE PROVISION. Borrower shall pay to Lender, immediately
upon request and notwithstanding contrary provisions contained in any of the
Loan Documents, such amounts as shall, in the conclusive judgment of Lender (in
the absence of manifest error), compensate Lender for the loss, cost or expense
which it may reasonably incur as a result of (i) any payment or prepayment,
under any circumstances whatsoever, whether voluntary or involuntary, of all or
any portion of the Loan bearing interest at the LIBOR Interest Rate on a date
other than the last day of the applicable Interest Period, or (ii) the
conversion, for any reason whatsoever, whether voluntary or involuntary, of any
LIBOR Rate Advance to a Variable Rate Advance on a date other that the last day
of the applicable Interest Period. Such amounts payable by Borrower shall be
equal to any administrative costs actually incurred plus any amounts required to
compensate for any loss, cost or expense incurred by reason of the liquidation
or re-employment of deposits or other funds acquired by Lender to fund or
maintain the Loan or any portion thereof while it is bearing interest at the
LIBOR Interest Rate plus, in any event, but without duplication, a Yield
Maintenance Fee.
5. CERTAIN DEFINITIONS AND PROVISIONS RELATING TO INTEREST RATE.
5.1. BANKING DAY. The term "Banking Day" means a day on which banks are
not required or authorized by law to close in the city in which Lender's
principal office is situated.
5.2. BUSINESS DAY; SAME CALENDAR MONTH. The term "Business Day" means
any Banking Day and, with respect to determining or selecting the LIBOR Interest
Rate, any London Banking Day. If any day on which a payment is due is not a
Business Day, then the payment shall be due on the next day following which is a
Business Day, unless, with respect to a LIBOR Rate Advance, the effect would be
to make the payment due in the next calendar month, in which event such payment
shall be due on the next preceding day which is a Business Day. Further, if
there is no corresponding day for a payment in the given calendar month (i.e.,
there is no "February 30th"), the payment shall be due on the last Business Day
of the calendar month.
5.3. DOLLARS. The term "Dollars" or "$" means lawful money of the
United States.
5.4. INTEREST PERIOD. The term "Interest Period" means, with respect to
each LIBOR Rate Advance, a period of one (1) month. Interest Periods shall
initially be scheduled to commence on the same day of each month (the first
Interest Period to commence on the day that the proceeds of the Loan are
advanced to Borrower), and to end on the numerically corresponding day in the
next succeeding month; PROVIDED, HOWEVER: (a) if there is no such numerically
corresponding day, such Interest Period shall end on the last Business Day of
the applicable month, (b) if the last day of such an Interest Period would
otherwise occur on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day, but (c) if such extension would
otherwise cause such last day to occur
<PAGE> 5
in a new calendar month, then such last day shall occur on the next preceding
Business Day. In no event, however, shall an Interest Period extend beyond the
Maturity Date of the Loan.
5.5. LIBOR RATE. The term "LIBOR Rate" means, with respect to any LIBOR
Rate Advance, the rate of interest, expressed as an annual rate, determined on
the basis of the offered rates for deposits in U.S. dollars for a period of time
comparable to the Interest Period selected or deemed selected by Borrower for
such LIBOR Rate Advance which appear on the Telerate page 3750 as of 11:00 a.m.
London time on the day that is three Banking Days preceding the first day of
such LIBOR Rate Advance. If such rate does not appear on the Telerate page 3750
the rate for that date will be determined on the basis of the offered rates for
deposits in U.S. dollars for a period of time comparable to the Interest Period
for such LIBOR Rate Advance which are offered by four major banks in the London
interbank market at approximately 11:00 a.m. London time, on the day that is
three Banking Days preceding the first day of such LIBOR Rate Advance. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for a period of time comparable to the
Interest Period for such LIBOR Rate Advance offered by major banks in New York
City at approximately 11:00 a.m. New York City time, on the day that is three
Banking Days preceding the first day of such LIBOR Rate Advance. In the event
that the Bank is unable to obtain any such quotation as provided above, it will
be deemed that the LIBOR Rate for such LIBOR Rate Advance cannot be determined.
In the event that the Board of Governors of the Federal Reserve System shall
impose a Reserve Percentage with respect to LIBOR Rate deposits of the Lender,
then for any period during which such Reserve Percentage shall apply, LIBOR Rate
shall be equal to the amount determined above divided by an amount equal to 1
minus the Reserve Percentage.
5.6. LIBOR INTEREST RATE. The term "LIBOR Interest Rate" means the per
annum rate equal to the LIBOR Rate plus 162.5 basis points.
5.7. LIBOR RATE ADVANCE. The term "LIBOR Rate Advance" means any
principal outstanding under this Note which pursuant to this Note bears interest
at the LIBOR Interest Rate.
5.8. MATURITY. The term "Maturity" means the Maturity Date, or the
maturity upon acceleration of the Loan, if the Loan has been accelerated by
Lender upon an Event of Default.
5.9. PRESENT VALUE. The term "Present Value" means the value at the
applicable maturity discounted to the date of prepayment using the Treasury
Rate.
5.10. PRIME RATE. The term "Prime Rate" means the rate published by THE
WALL STREET JOURNAL from time to time under the category "Prime Rate: The Base
Rate on Corporate Loans posted by at least 75% of the Nation's 30 Largest Banks"
(the lowest of the rates so published if more than one rate is published under
this category at any given time) or such other comparable index rate selected by
the Bank in its sole discretion if THE WALL STREET JOURNAL ceases to publish
such rate. The Borrowers acknowledge that the Prime Rate is used for reference
purposes only as an index and is not necessarily the lowest interest rate
charged by the Bank on commercial loans.
<PAGE> 6
5.11. TREASURY RATE. The term "Treasury Rate" means, as of the date of
any calculation or determination, the latest published rate for United States
Treasury Notes or Bills (but the rate on Bills issued on a discounted basis
shall be converted to a bond equivalent) as published weekly in the Federal
Reserve Statistical Release H.15(519) of Selected Interest Rates in an amount
which approximates (as determined by Lender) the amount (i) approximately
comparable to the portion of the Loan to which the Treasury Rate applies for the
Interest Period, or (ii) in the case of a prepayment, the amount prepaid and
with a maturity closest to the original maturity of the installment which is
prepaid in whole or in part.
5.12. VARIABLE RATE. The term "Variable Rate" means a per annum rate
equal at all times to the Prime Rate, with changes therein to be effective
simultaneously with any change in the Prime Rate.
6. ADDITIONAL PROVISIONS RELATED TO INTEREST RATE SELECTION.
6.1 INCREASED COSTS. If, due to any one or more of: (i) the
introduction of any applicable law or regulation or any change (other than any
change by way of imposition or increase of reserve requirements already referred
to in the above definition of LIBOR Rate) in the interpretation or application
by any authority charged with the interpretation or application thereof of any
law or regulation; or (ii) the compliance with any guideline or request from any
governmental central bank or other governmental authority (whether or not having
the force of law), there shall be an increase in the cost to Lender of agreeing
to make or making, funding or maintaining LIBOR Rate Advances, including without
limitation changes which affect or would affect the amount of capital or
reserves required or expected to be maintained by Lender, with respect to all or
any portion of the Loan, or any corporation controlling Lender, on account
thereof, then Borrower from time to time shall, upon written demand by Lender,
pay Lender additional amounts sufficient to indemnify Lender against the
increased cost. A certificate as to the amount of the increased cost and the
reason therefor submitted to Borrower by Lender, in the absence of manifest
error, shall be conclusive and binding for all purposes.
6.2. ILLEGALITY. Notwithstanding any other provision of this Note, if
the introduction of or change in or in the interpretation of any law, treaty,
statute, regulation or interpretation thereof shall make it unlawful, or any
central bank or government authority shall assert by directive, guideline or
otherwise, that it is unlawful, for Lender to make or maintain LIBOR Rate
Advances at the LIBOR Interest Rate or to continue to maintain the LIBOR Rate
Advances then, on written notice thereof and demand by Lender to Borrower, (a)
the obligation of Lender to make LIBOR Rate Advances and to convert or continue
any Loan Advances at the LIBOR Interest Rate shall terminate and (b) all
principal outstanding under this Note shall be interest at the Variable Interest
Rate.
6.3. ADDITIONAL LIBOR CONDITIONS. The utilization of a LIBOR Interest
Rate and the maintenance of Advances at such rate shall be subject to the
following terms and conditions:
(i) AVAILABILITY. If Lender notifies Borrower that:
(a) dollar deposits in the amount and for the maturity
requested are not available to Lender in the London
interbank market at the rate specified in the
definition of LIBOR Rate set forth above, or
<PAGE> 7
(b) reasonable means do not exist for Lender to determine
the LIBOR Rate for the amounts and maturity
requested,
then the principal which would have born interest at the LIBOR
Rate Interest Rate shall bear interest at the Variable
Interest Rate.
(ii) PAYMENTS NET OF TAXES. All payments and prepayments of
principal and interest under this Note shall be made net of
any taxes and costs resulting from having principal
outstanding at or computed with reference to a LIBOR Rate.
Without limiting the generality of the preceding obligation,
illustrations of such taxes and costs are taxes, or the
withholding of amounts for taxes, of any nature whatsoever
including income, excise, interest equalization taxes (other
than United States or state income taxes) as well as all
levies, imposts, duties or fees whether now in existence or
which become in effect as the result of a change in or
promulgation of any treaty, statute, regulations, or
interpretation thereof or any directive guideline or otherwise
by a central bank or fiscal authority (whether or not having
the force of law) or a change in the basis of, or the time of
payment of, such taxes and other amounts resulting therefrom.
7. ACCELERATION; EVENT OF DEFAULT.
At the option of the holder, this Note and the indebtedness evidenced
hereby shall become immediately due and payable without further notice or
demand, and notwithstanding any prior waiver of any breach or default, or other
indulgence, upon the occurrence at any time of any one or more of the following
events, each of which shall be an "Event of Default" hereunder and under the
Loan Agreement and each other Loan Document: (i) default continuing uncured
beyond the applicable grace period, if any, set forth in the Loan Agreement, in
making any payment of interest, principal, other charges or payments due
hereunder; (ii) any other Event of Default as defined in or as set forth in the
Loan Agreement or any other Loan Document, each as the same may from time to
time hereafter be amended; or (iii) any other event which pursuant to any
express provision of the Loan Agreement, or of any other Loan Document, gives
Lender the right to accelerate the Loan.
8. CERTAIN WAIVERS, CONSENTS AND AGREEMENTS.
Each and every party liable hereon or for the indebtedness evidenced
hereby whether as maker, endorser, guarantor, surety or otherwise hereby: (a)
waives presentment, demand, protest, suretyship defenses and defenses in the
nature thereof; (b) waives any defenses based upon and specifically assents to
any and all extensions and postponements of the time for payment, changes in
terms and conditions and all other indulgences and forbearances which may be
granted by the holder to any party now or hereafter liable hereunder or for the
indebtedness evidenced hereby; (c) agrees to any substitution, exchange,
release, surrender or other delivery of any security or collateral now or
hereafter held hereunder or in connection with the Loan Agreement, or any of the
other Loan Documents, and to the addition or release of any other party or
person primarily or secondarily liable; (d) agrees that if any security or
collateral given to secure this Note or the indebtedness evidenced hereby or to
secure any of the obligations set forth or referred to in the Loan Agreement, or
any of the other Loan Documents, shall
<PAGE> 8
be found to be unenforceable in full or to any extent, or if Lender or any other
party shall fail to duly perfect or protect such collateral, the same shall not
relieve or release any party liable hereon or thereon nor vitiate any other
security or collateral given for any obligations evidenced hereby or thereby;
(e) agrees to pay all costs and expenses incurred by Lender or any other holder
of this Note in connection with the indebtedness evidenced hereby, including,
without limitation, all attorneys' fees and costs, for the implementation of the
Loan, the collection of the indebtedness evidenced hereby and the enforcement of
rights and remedies hereunder or under the other Loan Documents, whether or not
suit is instituted; and (f) consents to all of the terms and conditions
contained in this Note, the Loan Agreement, or any one or more of the other Loan
Documents.
9. DELAY NOT A BAR.
No delay or omission on the part of the holder in exercising any right
hereunder or any right under any instrument or agreement now or hereafter
executed in connection herewith, or any agreement or instrument which is given
or may be given to secure the indebtedness evidenced hereby or by the Loan
Agreement, or any other agreement now or hereafter executed in connection
herewith or therewith shall operate as a waiver of any such right or of any
other right of such holder, nor shall any delay, omission or waiver on any one
occasion be deemed to be a bar to or waiver of the same or of any other right on
any future occasion.
10. PARTIAL INVALIDITY.
The invalidity or unenforceability of any provision hereof, of the Loan
Agreement, of the other Loan Documents, or of any other instrument, agreement or
document now or hereafter executed in connection with the Loan made pursuant
hereto and thereto shall not impair or vitiate any other provision of any of
such instruments, agreements and documents, all of which provisions shall be
enforceable to the fullest extent now or hereafter permitted by law.
11. COMPLIANCE WITH USURY LAWS.
All agreements between Borrower and Lender are hereby expressly limited
so that in no contingency or event whatsoever, whether by reason of acceleration
of maturity of the indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to Lender for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law" shall mean the law in effect as
of the date hereof, PROVIDED, HOWEVER, that in the event there is a change in
the law which results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In this regard, it
is expressly agreed that it is the intent of Borrower and Lender in the
execution, delivery and acceptance of this Note to contract in strict compliance
with the laws of the State of New Hampshire from time to time in effect. If,
under or from any circumstances whatsoever, fulfillment of any provision hereof
or of any of the Loan Documents or the Security Documents at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by applicable law, then the obligation to be fulfilled
shall automatically be reduced to the limit of such validity, and if under or
from any circumstances whatsoever Lender should ever receive as interest an
amount which would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of
<PAGE> 9
the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between Borrower
and Lender.
12. USE OF PROCEEDS.
All proceeds of the Loan shall be used solely for the purposes more
particularly provided for and limited by the Loan Agreement.
13. SECURITY.
This Note is secured by a pledge of the capital stock of the Borrower
(other than WPI Group, Inc.) and such security as may now or hereafter secure
Loans under the Loan Agreement.
14. NOTICES.
Any notices given with respect to this Note shall be given in the
manner provided for in the Loan Agreement.
15. GOVERNING LAW AND CONSENT TO JURISDICTION.
15.1. SUBSTANTIAL RELATIONSHIP. It is understood and agreed that all of
the Loan Documents were negotiated, executed and delivered in the State of New
Hampshire, which State the parties agree has a substantial relationship to the
parties and to the underlying transactions embodied by the Loan Documents.
15.2. PLACE OF DELIVERY. Borrower agrees to furnish to Lender at
Lender's office at 1155 Elm Street, Manchester, New Hampshire all further
instruments, certifications and documents to be furnished hereunder.
15.3. GOVERNING LAW. This Note and each of the other Loan Documents
shall in all respects be governed, construed, applied and enforced in accordance
with the internal laws of the State of New Hampshire without regard to
principles of conflicts of law.
15.4. CONSENT TO JURISDICTION. Borrower hereby consents to personal
jurisdiction in any state or Federal court located within the State of New
Hampshire.
16. WAIVER OF JURY TRIAL.
BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER
LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS
<PAGE> 10
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT THIS NOTE AND MAKE
THE LOAN.
17. NO ORAL CHANGE.
This Note and the other Loan Documents may only be amended, terminated,
extended or otherwise modified by a writing signed by the party against which
enforcement is sought. In no event shall any oral agreements, promises, actions,
inactions, knowledge, course of conduct, course of dealing, or the like be
effective to amend, terminate, extend or otherwise modify this Note or any of
the other Loan Documents.
18. RIGHTS OF THE HOLDER.
This Note and the rights and remedies provided for herein may be
enforced by Lender or any subsequent holder hereof. Wherever the context permits
each reference to the term "holder" herein shall mean and refer to Lender or the
then subsequent holder of this Note.
[REST OF PAGE LEFT INTENTIONALLY BLANK]
<PAGE> 11
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
and delivered as of the date set forth above.
BORROWER:
WPI GROUP, INC.,
WPI POWER SYSTEMS, INC.,
WPI MAGNETEC, INC.,
WPI ELECTRONICS, INC.,
WPI TERMIFLEX, INC.,
WPI MICRO PALM, INC.,
WPI MICRO PROCESSOR SYSTEMS,
INC., WPI
DECISIONKEY, INC.,
WPI GROUP (U.K.),
WPI OYSTER TERMINALS
LIMITED, WPI UK
HOLDING, INC., WPI
UK HOLDING II, INC.,
and WPI OYSTER
TERMINALS, INC.
By: /s/ Michael Foster
- --------------------------------- ------------------------------------
Witness Michael Foster, for, on behalf of,
and as Duly Authorized Officer or
Agent of each of the above-named
entities
<PAGE> 1
Exhibit 4.15
FLEET BANK - NH
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT is made this 20th day of June,
1997, by WPI GROUP, INC., WPI UK HOLDING, INC., WPI UK HOLDING II, INC., each a
New Hampshire corporation, and WPI GROUP (U.K.), an unlimited company organized
under the laws of England and Wales, each with executive offices at 1155 Elm
Street, Manchester, New Hampshire 03101 (individually and collectively, the
"Parent") to FLEET BANK - NH, a bank organized under the laws of the State of
New Hampshire with a principal place of business at 1155 Elm Street, Manchester,
New Hampshire 03101 (the "Bank").
WITNESSETH:
-----------
WHEREAS, the Bank has extended a revolving line of credit loan in the
principal amount of up to Thirty Million Dollars ($30,000,000.00) (the "Line of
Credit") and a term loan in the principal amount of Fifteen Million Dollars
($15,000,000.00) (the "Term Loan," and the Line of Credit and the Term Loan
collectively, the "Loan") to WPI GROUP, INC. and to its subsidiaries (the
"Subsidiaries"), namely WPI ELECTRONICS, INC., WPI MAGNETEC, INC., WPI MICRO
PALM, INC., WPI POWER SYSTEMS, INC., WPI TERMIFLEX, INC., WPI MICRO PROCESSOR
SYSTEMS, INC., and WPI DECISIONKEY, INC., WPI UK HOLDING, INC., WPI UK HOLDING
II, INC., and WPI OYSTER TERMINALS, INC., each a New Hampshire corporation, WPI
GROUP (U.K.), an unlimited company organized under the laws of England and
Wales, and WPI OYSTER TERMINALS LIMITED, a corporation organized under the laws
of England and Wales, all such entities having executive offices at 1155 Elm
Street Manchester, New Hampshire 03101 (the WPI Group, Inc. and all of its
Subsidiaries collectively referred to as the "Borrower"), pursuant to and in
accordance with the Commercial Loan Agreement dated October 24, 1995, as amended
to date, among the Bank, WPI Group, Inc. and the Subsidiaries, as the same may
be further amended from time to time (collectively, the "Loan Agreement"), and
the related loan documents between WPI Group, Inc., the Subsidiaries, and the
Bank (such documents defined in the Loan Agreement as the "Loan Documents");
WHEREAS, the Parent collectively is the owner of all of the outstanding
shares of the capital stock of the Subsidiaries (collectively, the "Shares");
WHEREAS, the obligation of the Bank to make the Term Loan to the
Borrower is subject to the condition, among others, that the Loan and all other
obligations of Borrower under the Loan Agreement and the other Loan Documents
shall be secured by this pledge and collateral assignment by the Parent to the
Bank of the Shares; and
WHEREAS, the Term Loan will benefit the Parent directly and indirectly
as the proceeds of the Term Loan will provide the Borrower with term financing
for the acquisition of Husky Computers, Inc., Husky Computers Limited and Husky
Computers GmbH. Terms not otherwise defined herein shall have the meanings
ascribed to them in the Loan Agreement.
<PAGE> 2
NOW, THEREFORE, in order to induce the Bank to make the Term Loan to
the Borrower pursuant to and in accordance with the terms and conditions of the
Loan Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Parent, the Parent hereby
covenants and agrees as follows:
1. PLEDGE OF SHARES. Parent hereby pledges and collaterally assigns the
Shares, and all Income and Proceeds thereof (as hereinafter defined), to the
Bank as collateral security for the payment and performance of the Borrower's
obligations under the Loan Agreement and the Loan Documents, including, but not
limited to, the repayment of the Loan and all interest, charges, and fees with
respect thereto. As used in this agreement, "Income" means all current and
future interest, dividends, distributions and other payments and benefits in
whatever form with respect to the Shares and "Proceeds" means all proceeds from
the sale or other disposition of the Shares.
2. DELIVERY OF THE SHARES. Parent herewith delivers to the Bank all
certificates evidencing the Shares and separate assignments of all of the Shares
(whether or not evidenced by certificates) duly executed in blank, together with
irrevocable proxies which provide the Bank with full and complete voting power
and authority respecting the Shares exercisable however only upon the occurrence
of an Event of Default (hereinafter defined).
3. GRANT OF SECURITY INTEREST. The Parent hereby grants to the Bank a
security interest in the Shares delivered herewith, and in all Income and
Proceeds of the foregoing, to secure the payment and performance of the
Borrower's obligations to the Bank under the Loan Agreement and the other Loan
Documents, including but not limited to repayment of the Loan and all interest,
charges, and fees with respect thereto.
4. RIGHTS UPON EVENT OF DEFAULT. Upon the occurrence of an event of
default under, or breach of any of the terms and conditions of, the Loan
Agreement or any of the other Loan Documents ("Event of Default"), the Bank
shall then have all of the rights and remedies provided to it under said
agreements and instruments and, in addition, the right to (a) exercise each and
all the rights and privileges of a record holder of the Shares, including
without limitation, the right to sell, transfer, or otherwise dispose of the
Shares and to retain and/or to collect any and all Income and Proceeds, and (b)
exercise all rights of a secured party under the Uniform Commercial Code as in
effect in the State of New Hampshire upon the date hereof and under other
applicable law, including without limitation private sale of the Shares. All
amounts received by the Bank through the exercise of its rights as aforesaid
shall be applied to the extent required to satisfy the obligations of the
Borrower under the Loan Agreement and the other Loan Documents. Any amounts
remaining thereafter shall be paid over to Parent.
5. VOTING RIGHTS. Until the occurrence of an Event of Default, the
Parent shall hold and maintain all ownership rights associated with the Shares,
including the right to vote said Shares on any corporate question, subject to
the restriction on issuance of additional shares provided in Paragraph 6 below,
provided that the Parent shall not be entitled to any Income from the Shares.
6. PROHIBITION OF ISSUANCE OF ADDITIONAL SHARES. Until the Obligations
under the Loan Agreement are paid in full, Parent shall not permit or vote for
the issuance by any Borrower of any subscription
<PAGE> 3
warrants, options or other rights with respect to any of the Shares, or the
issuance of any additional shares of capital stock or other shares, whether in
connection with a merger, consolidation, exchange, combination,
reclassification, reorganization, stock split, stock dividend, or otherwise.
7. PROTECTION OF SHARES. Parent shall pay all taxes, charges and
assessments against the Shares and do all acts necessary and appropriate to
preserve and maintain the value thereof. In the event of the failure of the
Parent to do so, Bank may make such payments and take such actions on account
thereof as it, in its sole discretion, deems desirable. Parent shall reimburse
Bank immediately on demand for each and all such payments and any costs so
incurred.
8. POWER OF ATTORNEY. Parent hereby irrevocably appoints the Bank as
Parent's attorney-in-fact, with full power of substitution, to, upon the
occurrence of an Event of Default (a) take any and all actions in Parent's names
and stead with respect to the Shares, (b) sell, transfer, assign, or otherwise
dispose of the Shares, (c) demand, collect, receive, receipt for, and recover
all Income and Proceeds, and (d) execute in Parent's name and to deliver any
necessary documents and instruments required with respect to the Shares
necessary for the exercise of the Bank's rights hereunder.
9. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents and
warrants that as of the date hereof:
(a) Parent is the sole owner of the Shares and has the right,
authority and capacity to pledge, transfer, assign, and grant a security
interest in and to all right, title and interest in and to the Shares
pursuant to this assignment;
(b) The Shares are not subject to any right, security interest,
lien, encumbrance or adverse claim of any third party except the
interest of the Bank arising under this agreement;
(c) This agreement and consummation of the transactions set
forth herein do not violate or constitute a breach of any indenture,
agreement or undertaking to which Parent is a party or by which Parent
is bound, or of any laws, statutes and regulations of the United States
or any state or political subdivision thereof to which Parent may be
subject;
(d) Except for this agreement, there are no restrictions upon
the transfer or assignment of any of the Shares;
(e) The execution, delivery and performance hereof by Parent are
not in contravention of any prior obligation of Parent or any obligation
with respect to the Shares; and
(f) The Shares constitute all of the capital stock of each of
the Subsidiaries.
10. WAIVERS. Parent assents to any extension, modification or waiver of
any obligation of Borrower. No waiver or modification of any of the provisions
hereof shall be binding on Bank unless in writing and signed by Bank and no
waiver by Bank of any rights it may have hereunder shall be deemed a waiver of
any other rights it may have. All rights and remedies of Bank shall be
cumulative and may be exercised singly or concurrently.
<PAGE> 4
11. COSTS. Parent shall pay all costs including, without limitation,
reasonable attorneys' fees, incurred by Bank in protecting, enforcing or
releasing any of its rights hereunder.
12. ADDITIONAL DOCUMENTS. Upon the request of Bank, Parent will execute
and deliver such further documents and take such further action as Bank may
reasonably request in order to fully effect the purposes of this agreement and
to protect its rights hereunder. Upon satisfaction of all of the Borrower's
obligations to the Bank under the Loan Agreement and the other Loan Documents,
and the termination of this agreement, the Bank shall deliver the Shares to the
Parent.
13. MISCELLANEOUS.
(a) This agreement shall be interpreted under and construed in
accordance with the laws of the State of New Hampshire.
(b) Any notice or other communications required or permitted
hereunder shall be in writing and shall be given as provided in the
Loan Agreement.
(c) This agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
(d) This agreement shall be binding upon and inure to the
benefit of the parties hereto, their successors and permitted assigns,
and may not be changed or modified except by an instrument in writing
signed by the party to be charged therewith.
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this agreement as of the date first above written.
PARENT:
WPI GROUP, INC.
By: /s/ Michael Foster
- ---------------------------------- ------------------------------------
Witness Signature and Title/Duly Authorized
WPI UK HOLDING, INC.,
WPI UK HOLDING II, INC.,
WPI GROUP (U.K.)
By: /s/ Michael Foster
- ---------------------------------- ------------------------------------
Witness Michael Foster, for, on behalf of,
and as Duly Authorized Officer or
Agent of each of the above-named
entities
FLEET BANK - NH
By: /s/ Mark L. Young
- ---------------------------------- ------------------------------------
Witness Mark L. Young
Senior Vice President
ACKNOWLEDGMENT BY THE SUBSIDIARIES
----------------------------------
WPI Electronics, Inc., WPI Magnetec, Inc., WPI Micro Palm, Inc., WPI
Power Systems, Inc., WPI Termiflex, Inc., WPI Micro Processor Systems, Inc., WPI
DecisionKey, Inc., WPI UK Holding, Inc., WPI UK Holding II, Inc., WPI Oyster
Terminal, Inc., WPI Oyster Terminals Limited, and WPI Group (U.K.), (the
"Subsidiaries") acknowledge the foregoing agreement and the assignment and
pledge of the Shares made therein by WPI Group ,Inc., and those Subsidiaries who
own Shares in other Subsidiaries. The Subsidiaries, for good and valuable
consideration, the receipt and sufficiency of which are acknowledged, covenant
that no additional shares of their capital stock, including without limitation
shares of stock, stock options and stock warrants, shall be issued so long as
the foregoing agreement and the pledge of stock contained therein remain in
effect.
<PAGE> 6
WPI POWER SYSTEMS, INC.,
WPI MAGNETEC, INC.,
WPI ELECTRONICS, INC.,
WPI TERMIFLEX, INC.,
WPI MICRO PALM, INC.,
WPI MICRO PROCESSOR SYSTEMS, INC., WPI
DECISIONKEY, INC.,
WPI GROUP (U.K.),
WPI OYSTER TERMINALS
LIMITED, WPI UK
HOLDING, INC., WPI
UK HOLDING II, INC.,
and WPI OYSTER
TERMINALS, INC.
By: /s/ Michael Foster
- ---------------------------------- ------------------------------------
Witness Michael Foster, for, on behalf of,
and as Duly Authorized Officer or
Agent of each of the above-named
entities
<PAGE> 1
Exhibit 99.1
[WPI LOGO] NEWS RELEASE
GROUP, INC.
THE WPI FAMILY OF COMPANIES
1155 Elm Street Telephone: 603-627-3500 Contact:
Manchester, NH 03101 Facsimile: 603-627-3150 Mike Foster, CEO
USA Dennis Deegan, COO
For Immediate Release
|WPI GROUP, INC. ACQUIRES HUSKY COMPUTERS LIMITED A LEADING
|UK BASED MANUFACTURER OF RUGGED HANDHELD COMPUTERS
|
|JUNE 23, 1997, MANCHESTER, NH: WPI GROUP, INC.,
|(WPIC-NASDAQ) announced today the acquisition of Husky
|Computers Limited, a subsidiary of Peek plc. Husky, located
|in Coventry, England, is a leading producer of rugged
|handheld computers. Husky's products are used in utility
|meter reading, geotechnical, field service and other
|applications that require full PC capability in a rugged
|handheld unit. WPI acquired all the outstanding shares of
|Husky for approximately $16.0 million in cash and the
|assumption of approximately $5.0 million in debt.
|
|Husky built the first rugged handheld PC in 1981 and has
|continued to maintain its position as a world leader in the
|design, manufacture and distribution of these products.
|Sales for 1996 were approximately $34.0 million. Major
|customers include British Telecom, Itron, Inc. and Southern
|New England Telephone. Husky, with approximately 280
|employees, has full hardware and software design capability.
|Manufacturing is performed in a modern 30,000 square foot
|facility in Coventry. Sales offices are located in the
|United States, France, Germany and Sweden.
|
|Commenting on the acquisition, WPI Chairman and CEO Michael
|Foster said: "We are very pleased to welcome Husky and its
|employees to the WPI family of companies. Husky's reputation
|for quality and innovation is well known throughout the
|industry. When Husky's products are integrated with our
|Termiflex and Oyster Terminals product lines, WPI will offer
|the world's broadest line of rugged handheld terminals and
|PC's.
|
|
|
|
|
|
<PAGE> 2
|
|
|
|
|We will be able to supply our customers with products
|ranging from the lowest-cost, rugged handheld terminals to
|the most sophisticated rugged PC's capable of performing
|under the most demanding environmental conditions.
|
|This expansion of our handheld business should allow us to
|achieve substantial operating efficiencies within our
|Information Solutions Group. We expect that Husky will be a
|positive contributor to our earnings growth."
|
|Husky, along with Termiflex and Oyster Terminals, WPI's
|other handheld businesses, will become part of a new WPI
|Handheld Devices Division within the WPI Information
|Solutions Group. The new division's President will be John
|Whitehead, who is presently Managing Director of Oyster
|Terminals and Termiflex Europe. He will report to Timothy
|Jones, Group Vice President of the Information Solutions
|Group.
|
|WPI Group, Inc. is a leading, international provider of
|specialized information hardware and software products, as
|well as power-related products for industrial, commercial
|and medical markets.
|
|The statements contained in this release which are not
|historical facts may be deemed to contain forward-looking
|statements with respect to events, the occurrence of which
|involve risks and uncertainties, including, without
|limitation, uncertainties detailed in the Company's
|Securities and Exchange Commission filings.
|
|
| ###
|
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|
