<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 1996
REGISTRATION NO. 333-04855
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
UNIPHASE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-2579683
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
163 BAYPOINTE PARKWAY
SAN JOSE, CALIFORNIA 95134
(408) 434-1800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
KEVIN N. KALKHOVEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
UNIPHASE CORPORATION
163 BAYPOINTE PARKWAY
SAN JOSE, CALIFORNIA 95134
(408) 434-1800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
MICHAEL C. PHILLIPS, ESQ. DAVID J. SEGRE, ESQ.
MORRISON & FOERSTER LLP J. ROBERT SUFFOLETTA, ESQ.
755 PAGE MILL ROAD WILSON SONSINI GOODRICH & ROSATI
PALO ALTO, CA 94304-1018 PROFESSIONAL CORPORATION
(415) 813-5600 650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(415) 493-9300
---------------
EFFECTIVE DATE: June 11, 1996.
If any of the securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
The Registrant has obtained a policy of directors' and officers' liability
insurance that insures the Company's directors and officers against the cost
of defense, settlement or payment of a judgment under certain circumstances.
The Underwriting Agreement provides for cross-indemnification of the
Underwriters and the Registrant and its officers and directors for certain
liabilities arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS
(a) Exhibits
<TABLE>
<CAPTION>
NO. DESCRIPTION
--- -----------
<C> <S>
1.1+ Form of Underwriting Agreement
2.1+ Purchase and Sale Agreement between Registrant and Tasman-Sterling
Associates, a California general partnership, dated January 30, 1996
(incorporated by reference to the indicated exhibit to the Company's
Current Report on Form 8-K filed February 22, 1996)
2.2+ Form of Stock Purchase Agreement between Registrant, Fiberoptic
Alignment Solutions, Inc., an Illinois corporation ("FAS"), Uniphase
Telecommunications Products, Inc., a Delaware corporation, and the
shareholders of FAS named therein, and Amendment No. 1 thereto dated
as of May 31, 1996
2.3++ Form of Agreement between Registrant and GCA Fibreoptics Limited for
the Sale and Purchase of the Entire Issued Share Capital of GCA
Fibreoptics Limited
5.1+ Opinion of Morrison & Foerster LLP
23.1+ Consent of Ernst & Young LLP, Independent Auditors
23.2+ Consent of Counsel (included in Exhibit 5.1)
24.1+ Power of Attorney (see page II-3)
27+ Financial Data Schedule
</TABLE>
- -------
+ Previously filed.
++Previously filed in paper format pursuant to a continuing hardship
exemption, and filed electronically herewith, in accordance with Rule 202 of
Regulation S-T.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) For the purpose of determining liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS POST-
EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF SAN JOSE,
STATE OF CALIFORNIA, ON THE 20TH DAY OF JUNE, 1996.
Uniphase Corporation
/s/ Kevin N. Kalkhoven
By: _________________________________
KEVIN N. KALKHOVEN
PRESIDENT, CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD OF
DIRECTORS
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
POST-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED
BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Kevin Kalkhoven President, Chief
- ------------------------------------- Executive Officer June 20, 1996
KEVIN N. KALKHOVEN and Chairman of the
Board of Directors
(Principal
Executive Officer)
/s/ Dan E. Pettit* Vice President,
- ------------------------------------- Finance, Chief June 20, 1996
DAN E. PETTIT Financial Officer
and Secretary
(Principal
Financial and
Accounting Officer)
Director
- -------------------------------------
WILLIAM B. BRIDGES, PH.D.
/s/ Robert C. Fink* Director
- ------------------------------------- June 20, 1996
ROBERT C. FINK
/s/ Catherine P. Goodrich* Director
- ------------------------------------- June 20, 1996
CATHERINE P. GOODRICH
/s/ Stephen C. Johnson* Director
- ------------------------------------- June 20, 1996
STEPHEN C. JOHNSON
/s/ Anthony R. Muller* Director
- ------------------------------------- June 20, 1996
ANTHONY R. MULLER
Director
- -------------------------------------
WILSON SIBBETT, PH.D.
*By: /s/ Kevin N. Kalkhoven
----------------------------------
KEVIN N. KALKHOVEN
Attorney-in-fact
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBITS PAGE
------- -------- ------------
<C> <S> <C>
1.1+ Form of Underwriting Agreement
2.1+ Purchase and Sale Agreement between Registrant and
Tasman-Sterling Associates, a California general
partnership, dated January 30, 1996 (incorporated by
reference to the indicated exhibit to the Company's
Current Report on Form 8-K filed February 22, 1996)
2.2+ Form of Stock Purchase Agreement between Registrant,
Fiberoptic Alignment Solutions, Inc., an Illinois
corporation ("FAS"), Uniphase Telecommunications
Products, Inc., a Delaware corporation, and the
shareholders of FAS named therein, and Amendment No. 1
thereto dated as of May 31, 1996
2.3++ Form of Agreement between Registrant and GCA
Fibreoptics Limited for the Sale and Purchase of the
entire issued share capital of GCA Fibreoptics Limited
as of May 24, 1996
5.1+ Opinion of Morrison & Foerster LLP
23.1+ Consent of Ernst & Young LLP, Independent Auditors
23.2+ Consent of Counsel (included in Exhibit 5.1)
24.1+ Power of Attorney (see page II-3)
27+ Financial Data Schedule
</TABLE>
- --------
+ Previously filed.
++Previously filed in paper format pursuant to a continuing hardship
exemption, and filed electronically herewith, in accordance with Rule 202 of
Regulation S-T.
<PAGE>
EXHIBIT 2.3
DATED 1996
- --------------------------------------------------------------------------------
(1) UNIPHASE CORPORATION
AND
(2) INDUSTRIAL TECHNOLOGY SECURITIES LIMITED
AND
(3) MR JONATHAN TIMOTHY GREAVES
AND
(4) MRS WENDY GREAVES
-------------------
A G R E E M E N T
FOR THE SALE AND PURCHASE OF THE
ENTIRE ISSUED SHARE CAPITAL OF GCA FIBREOPTICS LIMITED
(COMPANY NUMBER 1725096)
-------------------
Dibb Lupton Broomhead
125 London Wall
LONDON
EC2Y 5AE
Tel: 0345 262728
Fax: 0171 600 1727
Ref: CAS/PH
<PAGE>
CONTENTS
1. INTERPRETATION..................................................... 1
2. SALE OF SHARES..................................................... 8
3. CONSIDERATION...................................................... 9
4. WARRANTIES AND PARTIES' OBLIGATIONS................................ 9
5. COMPLETION......................................................... 13
6. CONFIDENTIAL INFORMATION........................................... 13
7. ASSIGNMENT......................................................... 13
8. AMENDMENT AND WAIVER............................................... 14
9. RIGHTS CUMULATIVE.................................................. 14
10. TIME............................................................... 14
11. PAYMENTS........................................................... 14
12. PUBLICITY.......................................................... 14
13. NOTICES............................................................ 14
14. COSTS.............................................................. 15
15. ENTIRE AGREEMENT................................................... 15
16. WAIVER OF RIGHTS BASED ON MISREPRESENTATIONS....................... 15
17. SURVIVORSHIP....................................................... 16
18. FORCE MAJEURE...................................................... 16
19. LAW AND JURISDICTION............................................... 17
<PAGE>
SCHEDULE 1
SALE SHARES AND ITS SHARES............................................... 18
SCHEDULE 2
THE COMPANY.............................................................. 19
SCHEDULE 3
THE WARRANTIES........................................................... 21
PART I
ACCOUNTS WARRANTIES...................................................... 22
PART II
TAX WARRANTIES........................................................... 27
PART III
PROPERTY WARRANTIES...................................................... 34
PART IV
GENERAL WARRANTIES....................................................... 38
SCHEDULE 4
COMPLETION REQUIREMENTS.................................................. 58
<PAGE>
THIS AGREEMENT is made on 199__
BETWEEN:
(1) UNIPHASE CORPORATION (a Delaware Corporation) whose registered office is at
163 Baypointe Parkway, San Jose, CA95134, USA.
(2) INDUSTRIAL TECHNOLOGY SECURITIES LIMITED (registered in England and Wales
under Company No 1792376) whose registered office is at Henrietta House,
Henrietta Street, London WC2E 8QA; and
(3) MR JONATHAN TIMOTHY GREAVES of 21 Hid's Copse Road, Cumnor Hill, Oxford,
OX2 9JJ.
(4) MRS WENDY GREAVES of 21 Hid's Copse Road, Cumnor Hill, Oxford, OX2 9JJ.
WHEREAS:
(A) GCA FIBREOPTICS LIMITED ("the Company") is a private company limited by
shares incorporated in England and Wales on 20 May 1983 under Company
registration number 1725096.
(B) The Vendors are the beneficial and registered owners of the numbers and
classes of shares in the capital of the Company set opposite their
respective names in Schedule 1 and have the right power and authority to
sell, transfer or renounce (as the case may be) such shares free from all
and any claims, charges, liens, encumbrances options or equities.
(C) ITS is entitled to procure the sale of shares set against its name in
Schedule 1 free from all and any claims, charges, liens, encumbrances,
options or equities and has agreed to cancel an option it holds to
subscribe for additional shares in the Company.
(D) The Company has no subsidiaries.
(E) The Purchaser wishes to acquire the entire issued share capital of the
Company and the Vendors are willing to sell or procure the sale (as the
case may be) of all the shares in the capital of the Company held by them
or on their behalf respectively.
1
<PAGE>
1. INTERPRETATION
--------------
1.1 In this agreement, unless the context requires otherwise:
<TABLE>
<S> <C>
"AUDITED ACCOUNTS" means the audited financial statements of the Company
for the financial year ended on the Balance Sheet Date
comprising its individual accounts and cash flow
statement and the directors' and auditors'
reports as attached to the Disclosure Letter;
"BALANCE SHEET DATE" means 31 October 1995;
"BOND" means the bond to be issued by the Purchaser to the Vendors
pursuant to Clause 3 in the agreed terms;
"CLAIM" means any claim for breach of or non-compliance with any of the
Sale Documents (including any Warranty Claim)
or any Covenant Claim;
"COMPANY" means GCA Fibreoptics Limited a company registered in England
under number 1725096 details of which are set
out in schedule 2;
"COMPANIES ACT" means the Companies Act 1985 (as amended);
"COMPLETION" means completion of the sale and purchase of the Sale Shares in
accordance with clause 5;
"COMPLETION DATE" means the date hereof;
"COMPUTER KNOWHOW" means all information (including that comprised in or derived
from data, discs, tapes, manuals, source codes,
flowcharts and specifications) relating to the use
or programming of any computer which is not
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
intended by any person legally entitled to it for
use by any unauthorised person and any
computer software in whatever form held;
"CONSIDERATION" means the consideration for the Sale Shares specified in clause 3;
"COVENANT CLAIM" any claim made under the Tax Covenant;
"CROSSOVER TIME" means midnight (British Summer Time) on 31
May 1996;
"DEED OF COVENANT" means a deed of covenant by the person named in it in the agreed
terms;
"DIRECTORS" means the persons listed as such in schedule 2;
"DISCLOSURE LETTER" means the letter (with the attachments specified in it) identified
as such, written on behalf of the Vendors to the
Purchaser in agreed terms and delivered before
exchange of this agreement;
"ENCUMBRANCE" means any interest or equity of any person (including, without
limitation, any right to acquire, option or right
of pre-emption), any mortgage, charge, pledge,
lien, assignment, hypothecation, security
interest, title retention or any other security
agreement or arrangement affecting property of
any kind (or rights in it);
"FAS AGREEMENT" means the Stock Purchase Agreement made between Uniphase
Corporation (1) Fibreoptic Alignment Solutions
Inc (2) and the
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
shareholders of Fiberoptic Alignment Solutions Inc
on 24 May 1996;
"INTELLECTUAL PROPERTY" means patents, trade marks, service marks, registered designs,
utility models, applications for and rights to
apply for any of the foregoing, unregistered
design rights, trade marks and service marks,
trade or business names and copyright, any
rights in any invention, discovery or process,
confidential information or knowhow, and any
similar rights in any country;
"INTEREST RATE" means 2% over the base rate current from time to time of Lloyds
Bank plc;
"ITN BOND" means the bond to be issued by the Purchaser to or at the
direction of ITS in the agreed terms;
"ITS" means Industrial Technology Securities Limited;
"ITS BOND" means the bond to be issued by the Purchaser to or at the
direction of ITS in the agreed terms;
"ITS CANCELLATION DEED" means the deed to be made between ITS (1) the Company (2) the
Purchaser (3) and the Vendors (4) in the agreed
terms;
"ITS SHARES" means the shares in the Company set against the name of ITS in
schedule 1;
"ITS SOLICITORS" means North & Co of Henrietta House, 17-18 Henrietta Street,
London WC2E 8EX;
"MANAGEMENT ACCOUNTS means the profit and loss account and balance
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
DATE" sheet as and at 30 April 1996 attached to the
Disclosure Letter;
"MANAGEMENT ACCOUNTS 30 April 1996;
DATE"
"MARKETING INFORMATION" means all information relating to the marketing of any products or
services (including customer names and lists,
sales targets, sales statistics, market share
statistics, marketing surveys and reports,
marketing research and any advertising or other
promotional materials);
"PLANNING ACTS" means the Town and County Planning Act 1990, the Planning
(Listed Buildings and Conservation Areas) Act
1990 and the Planning (Hazardous Substances)
Act 1990;
"PROPERTY" means the interests in or rights over land and buildings,
particulars of which are set out in the Disclosure
Letter and each and all of those rights and
interests;
"PURCHASER" Uniphase Corporation;
"PURCHASER'S SOLICITORS" means Dibb Lupton Broomhead of 125 London Wall, London,
EC2Y 5AE;
"SALE DOCUMENTS" means this agreement, the Tax Covenant, the Disclosure Letter,
the ITS Cancellation Deed and the ITS Escrow
Agreement;
"SALE SHARES" means the ordinary shares of (Pounds)0.01 each in the capital of the
Company to be bought and sold pursuant to
clause 2 (particulars of which are set out in
schedule 1) but excluding the ITS Shares;
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
"SSAP" AND "FRS" mean respectively a "Statement of Standard Accounting Practice"
or a "Financial Reporting Standard" in force at
this date as made or adopted by the Accounting
Standards Board Limited;
"TCGA" means the Taxation of Chargeable Gains Act 1992;
"TCPA" means the Town and Country Planning Act 1990;
"TAX" means (a) within the United Kingdom, corporation tax, advance
corporation tax, income tax (including income
tax required to be deducted or withheld from or
accounted for in respect of any payment),
capital gains tax, development land tax,
petroleum revenue tax, capital transfer tax,
inheritance tax, VAT, national insurance
contributions, capital duty, stamp duty, stamp
duty reserve tax, duties of customs and excise,
any amount recoverable under Section 601 of
the Taxes Act and any other taxes, levies, duties,
charges, imposts or withholdings corresponding
to, similar to, replaced by or replacing any of
them, together with all penalties, charges and
interest relating to any of them; and (b) outside
the United Kingdom, all taxes, levies, duties,
imposts, charges and withholdings of any nature
whatever, including (without limitation) taxes on
gross or net income, profits or gains and taxes
on receipts, sales, use occupation, franchise,
value added, and personal property, together
with all penalties, charges and interest relating
to any of them; regardless (in either case) of
whether any such
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
taxes, levies, duties, imposts,
charges, withholding, penalties, and interest are
chargeable directly or primarily against or
attributable directly or primarily to the
Company, or any other person and of whether
any amount in respect of any of them is
recoverable from any other person;
"TAX AUTHORITY" means any taxing or other authority (whether within or outside
the United Kingdom) competent to impose any
Tax liability;
"TAX COVENANT" means the tax covenant in agreed terms;
"TAXES ACT" means the Income and Corporation Taxes Act 1994;
"VAT" means value added tax together with all fines, penalties, costs,
charges and expenses relating to any liability to
value added tax;
"VATA" means the Value Added Tax Act 1994;
"VENDORS" Jonathan Timothy Greaves and Wendy Greaves;
"VENDORS' SOLICITORS" means Evans Dodd of 5 Balfour Place, Mount Street, London,
W1Y 5RG;
"WARRANTIES" means the warranties, undertakings and representations set out in
schedule 3;
</TABLE>
1.2 In this agreement, where the context admits:
1.2.1 words and phrases which are defined or referred to in section
262A or Part XXVI of the Companies Act have the same meanings
as in the Companies Act (unless otherwise expressly defined in
this agreement or the other Sale Documents (as the case may
be));
7
<PAGE>
1.2.2 sections 5, 6, 8 and 9 of and schedule 1 to the Interpretation
Act 1978 apply in the same way as they do to Acts;
1.2.3 any reference to a statutory provision includes reference to:
1.2.3.1 any order, regulation, statutory instrument or
other subsidiary legislation at any time made under
it for the time being in force (whenever made);
1.2.3.2 any modification, amendment, consolidation, re-
enactment or replacement of it or provision of which
it is a modification, amendment, consolidation, re-
enactment or replacement;
1.2.4 reference to a clause, sub-clause, schedule or paragraph is to
a clause, sub-clause, schedule or a paragraph of a schedule of
or to this agreement respectively;
1.2.5 reference to the parties to this agreement includes their
permitted assigns and personal representatives;
1.2.6 section 839 of the Taxes Act applies as it applies in that
Act, to determine whether one person is connected with
another;
1.2.7 reference to any document being "in agreed terms" is to that
document in the form agreed and, for identification purposes,
signed by or on behalf of the parties;
1.2.8 reference to persons includes corporations and unincorporated
associations and partnerships and vice versa, and reference to
any party to this agreement comprising more than one person
includes each person constituting that party;
1.2.9 reference to any professional firm or company includes any
firm or company effectively succeeding to the whole, or
substantially the whole, of its practice or business;
8
<PAGE>
1.2.10 headings and any descriptive notes are for ease of reference
only and shall not affect the construction or interpretation
of this agreement and the other Sale Documents;
1.2.11 the sterling US dollar exchange rate applicable in respect of
this document is (Pounds)1 = $1.55.
1.3 All agreements and obligations made in this agreement by the Vendors
are made or given jointly and severally by them.
1.4 This agreement incorporates the schedules to it.
2. SALE OF SHARES.
---------------
2.1 Subject to the terms of this agreement and on the basis of the
Warranties, the Vendors shall sell and the Purchaser shall purchase
the Sale Shares and ITS shall procure the sale of and the Purchaser
shall purchase the ITS Shares free from all Encumbrances as and with
effect from the Crossover Time and together with all rights after the
Crossover Time attaching to them (including all unpaid dividends and
other distributions declared or made as at the date of this
agreement).
2.2 Subject to the terms of this agreement, each of the Vendors covenants
that, in relation to his holding of Sale Shares:
2.2.1 he has good right to sell and transfer them;
2.2.2 the Purchaser will have quiet possession and enjoyment of
them;
2.2.3 they are free from Encumbrance other than those about which
such Vendor does not, and would not reasonably be expected to
know; and
2.2.4 he will, at his own cost, take any steps reasonably requested
by the Purchaser to perfect the Purchaser's title to them.
2.3 Subject to the terms of this agreement ITS covenants in respect of
the ITS Shares:
2.3.1 it has good right to sell and procure the transfer of them;
9
<PAGE>
2.3.2 the Purchaser will enjoy quiet possession and enjoyment of
them;
2.3.3 they are free from Encumbrance other than those about which
ITS does not, and would not reasonably be expected to know;
and
2.3.4 ITS will at its own cost take any steps reasonably requested
by the Purchaser to perfect the Purchaser's title to them.
2.4 The Vendors and ITS waive and agree to procure the waiver of any of
their respective pre-emption rights which they or any third party may
have relating to the Sale Shares or the ITS Shares (as the case may
be), whether conferred by the Company's articles of association or
otherwise.
3. CONSIDERATION.
--------------
3.1 The consideration for the Sale Shares is $1,326,134 which shall be
satisfied by the issue to the Vendors of the Bond.
3.2 The consideration for the ITS Shares shall be $3,391,686 which will
be satisfied by the issue of the ITN Bond with principal value
$1,887,372 and $984,333 in cash.
3.3 In addition to the payment in Clauses 3.2 ITS shall receive a further
sum of $519,981 pursuant to the terms of the ITS Cancellation Deed
which shall be satisfied by the issue of the ITS Bond with principal
value $377,474 and cash of $142,507.
4. WARRANTIES AND PARTIES' OBLIGATIONS.
------------------------------------
4.1 The Vendors represent, warrant and undertake to the Purchaser that
each of the Warranties is true and accurate in all respects and not
misleading as a result of any omission or otherwise.
4.2 ITS, to the best of its knowledge but not having made any enquiry
other than of the Vendors and the Company and save as provided in the
Sale Documents represents warrants and undertakes to the Purchaser
that each of the Warranties set out in Clause 8 of Schedule 3 Part IV
of this Agreement is true and accurate
10
<PAGE>
in all material respects and not misleading as a result of any
omission or otherwise.
4.3 Immediately before the time of Completion, both the Vendors and ITS
shall be deemed to repeat the Warranties given pursuant to Clauses
4.1 and 4.2 (as the case may be) by reference to the facts then
subsisting. For this purpose any express or implied reference in a
Warranty to the date of this Agreement is to be construed as a
reference to the date of Completion.
4.4 The Vendors and ITS respectively acknowledge that the Purchaser is
entering into this agreement in reliance upon the Warranties and that
they form the basis of this agreement.
4.5 The Warranties are qualified only by and to the extent that matters
are fairly disclosed in the Disclosure Letter in respect of them.
4.6 The Vendors and ITS respectively agree with the Purchaser to waive
any of their respective rights in respect of any inaccuracy or
omission in or from any information or advice supplied or given by
the Company and any officers or employees (save in their capacity as
Vendors) of the Company in connection with the Warranties, the Tax
Covenant or the Disclosure Letter or other Sale Documents, and agrees
that any such advice or information does not constitute a
representation and that no warranty or guarantee has been given in
respect of its accuracy.
4.7 The rights and remedies of the Purchaser or any amount recoverable
shall not be affected by completion of this agreement nor by any
investigation made by or on behalf of the Purchaser into the affairs
of the Company nor by any other information relating to it known
(actually or constructively) to the Purchaser.
4.8 Each of the Warranties is separate and independent and (except as
otherwise expressly provided) is not limited or restricted by
reference to or inference from the terms of any other provision of
this agreement or the other Sale Documents or by the giving of any
time or other indulgence by the Purchaser to any person but shall
only be affected by a specific waiver or release by the Purchaser in
writing and any such waiver or release shall be specific to the
matter to which it relates and not prejudice or affect any other
rights of the Purchaser.
11
<PAGE>
Warranties
4.9 Where any of the Warranties is qualified by an expression such as "so
far as ITS is aware" or "so far as the Vendors are aware" as the case
may be, or "to the best of the knowledge information and belief of
ITS" or to the best of the knowledge information and belief of the
Vendors as the case may be, or any similar expression, it shall be
deemed (unless expressly otherwise stated) to include an additional
statement that it has been made after due diligent and careful
enquiry.
4.10 Without restricting the rights of the Purchaser or the ability of the
Purchaser to claim damages on any basis available to it, if any of
the Warranties is broken, untrue or misleading the Vendors or ITS as
the case may be in relation to the Warranties given by them shall on
demand pay to the Purchaser:
4.10.1 the amount necessary to put the Company, at the date of the
demand, into the position which would have existed had the
Warranty not been broken, untrue or misleading;
4.10.2 (without prejudice to sub-clause 4.9.1) in respect of any
breach of the Warranties relating to the Property, an amount
equal to the difference between the value of the Property had
those warranties been true or not broken and the actual value
of the Property at the date of the demand together with the
amount of any other loss occasioned by such breach; and
4.10.3 all costs and expenses incurred by the Purchaser and the
Company as a result of the circumstances giving rise to the
claim.
4.11 The Purchaser shall have no right to recover in respect of any Claim
unless and until the aggregate liability of the Warrantors (but for
this paragraph) in respect of all Claims would exceed (Pounds)50,000,
but, if such aggregate liability should exceed that sum, the Vendors
or ITS (as the case may be) shall be liable for the full amount of
such liability and not just the excess over that amount.
4.12 The Purchaser shall have no right to recover in respect of any
individual Claim in respect of which the liability of the Vendors or
ITS (as the case may be) (but for this paragraph) would not exceed
(Pounds)5,000 but such Claim shall not be
12
<PAGE>
Warranties
discounted in calculating the aggregate liability of the Warrantors
for the purposes of Clause 4.10.
4.13 The liability of each of the Vendors under this Clause 4 shall be
joint and several and the liability as between ITS and the Vendors
together shall be several.
4.14 The maximum liability of the Vendors and ITS in respect of all Claims
shall not exceed in each case the amount received by way of
consideration by each of the them save where the facts or
circumstances giving rise to such Claim are such as to permit the
Purchaser to allege fraud on behalf of the Vendors or ITS (as the
case may be) when the liability shall be without limit.
4.15 The liability of the Vendors and ITS in relation to the Warranties
shall cease on 31 August 1998 save as regards any alleged specific
breach of which notice in writing has been given to the Vendor or ITS
(as appropriate) prior to that date.
4.16 The Vendors agree with the Purchaser that, during the period between
exchange of this agreement and Completion, they will procure that:
4.16.1 the Company does not depart from the ordinary course of the
conduct of its business as conducted in the financial year
ending on the Balance Sheet Date;
4.16.2 that the Company shall not (without prejudice to sub-clause
4.16.1):
4.16.2.1 incur, or enter into any commitment to incur, any
capital expenditure;
4.16.2.2 dispose of, or agree to dispose of, or grant any
rights in respect of, any of its fixed assets;
4.16.2.3 enter into any abnormal contract or commitment;
4.16.2.4 declare, make or pay any dividend or other
distribution;
13
<PAGE>
Warranties
4.16.3 no resolution of the shareholders of the Company is passed.
4.17 The Vendors undertake to notify the Purchaser immediately upon
becoming aware before Completion of any matter or thing which
constitutes a breach of Clause 4.16 or which is inconsistent with any
of the Warranties or which might make any of them inaccurate or
misleading or which is relevant to be disclosed in respect of them.
4.18 In the event that the Vendors make a notification pursuant to Clause
4.17 or the Company fails to comply with provisions of Clause 4.16 or
the Purchaser otherwise becomes aware that any of the Warranties is
inaccurate or misleading the Purchaser shall at its absolute
discretion either:
4.18.1 proceed to Completion in accordance with Clause 5 whereupon
it shall have no other remedy pursuant to this Agreement in
respect of the matters referred to in this Clause; or
4.18.2 by notice to the Vendors and ITS rescind this Agreement such
rescission to be without prejudice to any rights it may have
pursuant to this Agreement or otherwise.
4.19 The Purchaser shall be entitled to set off any sums payable or
alleged to be payable by the Vendors or either of them under any of
the Warranties or under the Tax Covenant against any sums which would
otherwise be payable by the Purchaser upon redemption of the Bond.
The provisions of this clause 4.19 shall take precedence over any
provision to the contrary whether express or implied, contained in
the Bond.
5. COMPLETION.
-----------
5.1 Completion shall take place at the offices of the Vendors' Solicitors
on the Completion Date when each party shall do what is specified
in schedule 4.
5.2 Completion shall take place only when the Purchaser shall have
provided to the Vendors and ITS (in such form as they consider to be
reasonably appropriate)
14
<PAGE>
Warranties
confirmation that formal legal completion of
the FAS Agreement shall have taken place.
6. CONFIDENTIAL INFORMATION.
-------------------------
6.1 The Vendors each undertake to the Purchaser that they will not
(except as required by law and the provisions of the ITS Escrow
Agreement) divulge or communicate to any person (other than to any
officer or employee of the Company who needs that knowledge in the
discharge of his duties) any confidential information concerning the
business, customers, accounts, financial or contractual arrangements,
transactions or affairs of the Company which may be within or come to
its knowledge to the extent and so long as that information is
confidential and not in the public domain and that the said Vendor
will use all reasonable endeavours to prevent the publication or
disclosure of any such confidential information.
6.2 The Vendors shall provide to the Purchaser all information in their
possession or under their control relating to the business and
affairs of the Company that the Purchaser may from time to time
reasonably require (whether before or after Completion) and will give
or procure the giving to the Purchaser and those authorised by it
such access (including the right to take copies) to any records
containing that information as the Purchaser may from time to time
reasonably require.
7. ASSIGNMENT.
-----------
This agreement is binding upon and shall enure for the benefit of the
successors of the parties but shall not be assignable.
8. AMENDMENT AND WAIVER
--------------------
8.1 No variation of this agreement shall be effective unless made in
writing and signed by all the parties.
8.2 No waiver of any term provision or condition of this agreement shall
be effective except to the extent made in writing and signed by the
waiving party.
15
<PAGE>
Warranties
8.3 No omission or delay on the part of any party in exercising any right
power or privilege under this agreement shall operate as a waiver by
it of any right to exercise it in future or of any other of its
rights under this agreement.
8.4 Completion of this agreement does not constitute a waiver by the
Purchaser of any breach of any provision of this agreement whether or
not known to the Purchaser at that time.
9. RIGHTS CUMULATIVE.
------------------
All rights conferred upon the Purchaser under this agreement are additional
and without prejudice to any other rights and remedies available to it.
10. TIME
----
Time shall be of the essence of this agreement.
11. PAYMENTS
--------
Any payment to the Vendors pursuant to this agreement may be made to the
Vendors' Solicitors and any payment to ITS shall be made to ITS Solicitors
whose respective receipt shall in the case of payments made to them be an
absolute discharge.
12. PUBLICITY
---------
Except to the extent required by law, no announcement or disclosure in
respect of the making or terms of this agreement shall be made or disclosed
by the Vendors or ITS without the prior written consent of the Purchaser.
13. NOTICES
-------
13.1 Any notice or other document to be served under this agreement must
be in writing and may be delivered or sent by pre-paid first class
letter post or facsimile transmission to the party to be served at
that party's address above or at such other address or number as that
party may from time to time notify in
16
<PAGE>
Warranties
writing to the other party to this agreement or (in the case of the
Vendors) to the Vendors' Solicitors or (in the case of ITS) to ITS'
Solicitors.
13.2 Any notice or document shall be deemed served:
13.2.1 if delivered, at the time of delivery provided that, if
delivery takes place after 5.00pm or on a Saturday, Sunday or
bank holiday, delivery shall be deemed to have taken place on
the next business day;
13.2.2 if posted, forty-eight hours after posting; and
13.2.3 if sent by facsimile transmission, at the time of
transmission if before 5.00pm on Monday to Friday (other than
statutory holidays) or otherwise on the next succeeding
banking business day.
13.3 In proving service (without prejudice to any other means) it shall
only be necessary to prove:
13.3.1 by post, that the notice or document was contained in an
envelope properly stamped and posted as provided in this
clause 13;
13.3.2 by facsimile transmission, that the notice or document was
duly received by production of a copy facsimile bearing the
addressee's answerback code or automatic record of correct
transmission.
14. COSTS.
------
Each party shall pay its own costs in relation to the negotiation,
preparation, execution and implementation of this agreement.
15. ENTIRE AGREEMENT
----------------
15.1 The Sale Documents constitute the entire agreement between the
parties in connection with their subject matter.
17
<PAGE>
Warranties
15.2 No party has relied upon any representation or warranty except as
expressly set out in the Sale Documents.
16. WAIVER OF RIGHTS BASED ON MISREPRESENTATIONS.
---------------------------------------------
16.1 Each party unconditionally waives any rights it may have to claim
damages against the other on the basis of any statement made by the
other (whether made carelessly or not) not set out or referred to in
this agreement (or for breach of any warranty given by the other not
so set out or referred to) unless such statement or warranty was made
or given fraudulently.
16.2 Each party unconditionally waives any rights it may have to seek to
rescind this agreement on the basis of any statement made by the
other (whether made carelessly or not) whether or not such statement
is set out or referred to in this agreement unless such statement was
made fraudulently.
16.3 The Sale Documents supersede any prior agreements, understandings and
arrangements between the parties and any representations (oral or
written) relating to the subject matter of the Sale Documents.
17. SURVIVORSHIP.
-------------
This agreement shall, as to any of its provisions remaining to be performed
in whole or in part or capable of having effect following Completion (or
any transfer of the Sale Shares or the ITS Shares), remain in full force
and effect despite Completion (or any transfer of the Sale Shares or the
ITS Shares).
18. FORCE MAJEURE
-------------
18.1 Neither party shall be liable to the other or be deemed to be in
breach of this agreement by reason of any delay in performing, or
failure to perform, any of its obligations under this agreement if
the delay or failure was beyond that party's reasonable control
(including, without limitation, any strike, lock out or other
industrial action, Act of God, war or threat of war, accidental or
malicious damage, or prohibition or restriction by governments or
other legal authority).
18
<PAGE>
Warranties
18.2 A party claiming to be unable to perform its obligations under this
agreement (either on time or at all) in any of the circumstances set
out in clause 18.1 must immediately notify the other party of the
nature and extent of the circumstances in question.
18.3 This clause 18 shall cease to apply when such circumstances have
ceased to have effect on the performance of this agreement.
18.4 If any circumstance relied on by either party for the purposes of
this clause 18 continues for more than six months, the other party
shall be entitled to terminate this agreement by one months' notice.
19. LAW AND JURISDICTION.
---------------------
19.1 This agreement shall be governed by and construed in all respects in
accordance with English law.
19.2 The parties to this agreement irrevocably agree that the English
courts shall have exclusive jurisdiction to settle any dispute which
may arise out of or in connection with this agreement and that,
accordingly, any proceedings, suit or action arising out of this
agreement shall be brought in such courts.
19.3 The parties to this agreement irrevocably appoint their respective
solicitors specified in this agreement as their agents to accept
service of any process to be served on them in relation to this
agreement or anything arising out of it.
19.4 The rights set out in this clause 19 are in addition to any other
manner of service permitted by law.
IN WITNESS of which this agreement has been duly executed by the parties.
19
<PAGE>
Warranties
SCHEDULE 1
----------
SALE SHARES AND ITS SHARES
--------------------------
<TABLE>
<CAPTION>
NUMBER OF ORDINARY SHARES
-------------------------
AS BENEFICIAL AS REGISTERED ENTITLEMENT TO
NAME AND ADDRESS OWNER OWNER TOTAL CONSIDERATION
- ---------------- ------------- ------------- ----- --------------
<S> <C> <C> <C> <C>
Jonathan Timothy Greaves 36,200 36,200 36,2000 )
21 Hid's Copse Road, ) $1,326,134
Cumnor, Oxford, OX2 9JJ )
Wendy Greaves 14,800 14,800 14,800 )
21 Hid's Copse Road,
Cumnor, Oxford, OX2 9JJ
Industrial Technology 50,000 NIL 50,000 $2,879,686
Securities Limited
Henrietta House
17-18 Henrietta Street
London, WX2E 8QX
</TABLE>
20
<PAGE>
Schedule 2
SCHEDULE 2
----------
THE COMPANY
-----------
Registered number:
Date of incorporation:
Registered office: GCA House, Building 19 Thorneylees Business Park, Witney,
Oxfordshire, OX8 7QE
Share capital:
Authorised: (Pounds)250,000 divided into:
Class Denomination Number
----- ------------ ------
Ordinary
25,000,000
Issued: (Pounds)1,010 divided into:
Class Denomination Number
----- ------------ ------
Ordinary 101,000
Directors: Jonathan Timothy Greaves
21 Hid's Copse Road
Cumnor Hill
Oxford, OX2 9JJ
Wendy Greaves
21 Hid's Copse Road
Cumnor Hill
Oxford, OX2 9JJ
Robert Marcus Whitehouse
17 The Springs
Witney
Oxfordshire, OX8 9AJ
John Delfryn Price
Mill Cottage
Milland Lane
Milland, Liphook
Hampshire, GU30 7JP
21
<PAGE>
Schedule 2
Secretary: Robert Marcus Whitehouse
Accounting reference date: 31 October
Annual return date: 27 April 1995
Date last accounts filed: 27 April 1995
Auditors: Morley & Scott
Bankers: Lloyds Bank Plc
Note: ITS holds an option to subscribe for a total of 50,000 Ordinary Shares
pursuant to the terms of an option agreement dated 23 March 1988. This
option will be cancelled by the ITS Cancellation Deed at Completion.
22
<PAGE>
Schedule 3
SCHEDULE 3
----------
THE WARRANTIES
--------------
PART I - Accounts
PART II - Tax
PART III - Property
PART IV - General
23
<PAGE>
Schedule 3 Part I
PART I
------
ACCOUNTS WARRANTIES
-------------------
1. BOOKS AND RECORDS
-----------------
The Company has kept all accounts, books, ledgers, financial, statutory and
other records required by law to be kept by it and these and all other
accounts, books, ledgers, financial, statutory and other records of the
Company of whatever kind and however recorded:
1.1 Have been fully, properly and accurately maintained, and are up to
date;
1.2 Are in the possession of the Company;
1.3 Contain true and accurate records of all matters required by law to
be entered in them;
1.4 Do not contain or reflect any inaccuracies or discrepancies;
1.5 (So far as relating to financial information) give and reflect a true
and fair view of the matters which ought to appear therein;
1.6 Contain information in accordance with generally accepted accounting
principles of all transactions to which the Company is or has been
party and under which it may still have any liability;
1.7 Include accurate statements of its financial, contractual and trading
position and its assets and liabilities;
and no notice or allegation that any of them is incorrect or should be
rectified has been received.
24
<PAGE>
Schedule 3 Part I
2. MANAGEMENT ACCOUNTS
-------------------
2.1 True copies of the Management Accounts of the Company for the period
ended on the Management Accounts Date are attached to the Disclosure
Letter. The Management Accounts have been prepared in accordance with
the Company's normal practice and, so far as the Vendors are aware,
are complete and accurate.
3. BASES OF AUDITED ACCOUNTS
-------------------------
The Audited Accounts:
3.1 Have been prepared in accordance with the requirements of all
relevant statutes and generally accepted accounting principles;
3.2 Comply with all applicable accounting standards;
3.3 Show a true and fair view of the assets and liabilities of the
Company at the Balance Sheet Date and the profits of the Company for
the financial period ended on the Balance Sheet Date;
3.4 Adopt bases and apply accounting policies which have been
consistently adopted or applied in the Company's audited balance
sheets and profit and loss accounts for the three financial years
before the Balance Sheet Date;
3.5 Are not affected by any extraordinary, exceptional, unusual or non-
recurring items or the effects of any contract or commitment entered
into on other than proper commercial arms-length terms.
4. FIXED ASSETS
------------
The value attributed to each fixed asset of the Company in the Audited
Accounts does not exceed its market value as at the Balance Sheet Date.
25
<PAGE>
Schedule 3 Part I
5. ASSETS AND CHARGES
------------------
5.1 The Company is the owner of and has good marketable title to all
assets included in the Audited Accounts and all assets which have
been acquired by the Company since the Balance Sheet Date (except for
current assets disposed of by the Company for full market value in
the ordinary course of its business).
5.2 No asset of the Company nor any of its undertaking, goodwill or
uncalled capital is subject to any Encumbrance or any agreement or
commitment to give or create any Encumbrance.
5.3 No asset is shared by the Company with any other person and the
Company does not depend for its business upon, or use, any assets,
facilities or services owned or supplied by the Vendor or any person
connected with the Vendor.
5.4 The Company has no contracts for the purchase of current or fixed
assets at prices in excess of market prices:
5.4.1 at the dates when those contracts were made;
5.4.2 as at the date of this agreement.
6. DEBTS DUE TO THE COMPANY
------------------------
6.1 Each of the debts owed to the Company will realise its full face
value within three months of Completion and be good and collectable
in the ordinary course of business.
6.2 No amount included in the Audited Accounts as owing to the Company at
the Balance Sheet Date and no debt arising to the Company since that
date has been released for an amount less than its face value or is
now regarded by the Vendors or the Company as not being fully
recoverable.
6.3 The Company has not lent any money.
6.4 The Company has not factored or discounted any of its debts or agreed
to do so.
26
<PAGE>
Schedule 3 Part I
7. THE COMPANY'S BUSINESS SINCE THE BALANCE SHEET DATE
---------------------------------------------------
Since the Balance Sheet Date:
7.1 The Company has carried on business:
7.1.1 in the ordinary and usual course;
7.1.2 without entering into any transaction, assuming any liability
or making any payment (not provided for in the Audited
Accounts) which is not in the ordinary course of its
business;
7.1.3 without any interruption or alteration in the nature, scope
or manner of its business;
7.2 The Company has not borrowed or raised any money or taken any
financial facility;
7.3 The Company has paid its debts by the time they have legally fallen
due and so that there are none outstanding by the Company which have
been due for more than four weeks;
7.4 The Company has not entered into, or agreed to enter into, any
capital commitments;
7.5 No share or loan capital has been issued or agreed to be issued by
the Company and no option has been granted for any such issue;
7.6 No distribution of capital or income has been declared, made or paid
in respect of any share capital of the Company and (excluding
fluctuations, attributable only to the ordinary course of business,
in overdrawn current accounts with bankers) no loan or loan capital
or preference capital of the Company has been repaid in whole or part
or has become liable to be repaid;
27
<PAGE>
Schedule 3 Part I
7.7 There has been no deterioration in the financial position or
prospects or turnover of the Company;
7.8 There has been no reduction in the net asset value of the Company and
the assets of the Company have been in the possession or under the
control of the Company;
7.9 The business of the Company has not been 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;
7.10 No Encumbrance has been created over any part of the assets of the
Company;
7.11 There has been no resolution of or consent by the members of the
Company or any class of them;
7.12 The Company has not acquired or disposed of or agreed to acquire or
dispose of:
7.12.1 any business;
7.12.2 any asset (except stock in trade and current assets
bought or sold at full market value in the ordinary course
of business);
7.13 The Company has not assumed or acquired any liability (including any
contingent liability) otherwise than in the ordinary course of its
business;
7.14 The Company has not disposed of or agreed to acquire or dispose of
any asset for a consideration payable by instalments where any
instalment remains unpaid;
7.15 The Company has not incurred any liability to Tax (except in respect
of trading profits arising on transactions entered into in the
ordinary course of carrying on the Company's business since the
Balance Sheet Date) and has not since that date suffered any loss of
credit, relief, deduction or allowance in relation to any liability
to Tax which was taken into account in the preparation of the Audited
Accounts as reducing or limiting any liability of the Company for
Tax;
28
<PAGE>
Schedule 3 Part I
7.16 The Company has not paid nor agreed to pay any agency, consultancy,
financial or management fees or similar charges to any person;
7.17 The Company has not paid or become liable to pay any sum by way of
interest except as payable (otherwise than on default or breach of
any terms) in respect of the financial facilities detailed in the
Disclosure Letter;
7.18 All cash and payments of any kind received by the Company have been
credited to its accounts with its bankers specified in schedule 2;
and
7.19 No change has been made in the basis or rate of emoluments or other
terms of employment of any of the directors or employees of the
Company.
29
<PAGE>
Schedule 3 Part II
PART II
-------
TAX WARRANTIES
--------------
1. TAX PROVISIONS
--------------
Full provision or reserve has been made in the Audited Accounts for all Tax
liable to be assessed on the Company whether as principal, agent or trustee
or for which it is accountable in respect of income, profits or gains
earned, accrued or received on or before the Balance Sheet Date or in
respect of any event on or before the Balance Sheet Date including
distributions made down to such date or provided for in the Audited
Accounts and proper provision has been made in the Audited Accounts for
deferred Tax in accordance with SSAP 15.
2. ADMINISTRATION AND RETURNS
--------------------------
2.1 The Company has, within the requisite time limits, duly made all
returns, given all notices, made all applications and supplied all
other information required to be supplied to the Inland Revenue and
any other relevant United Kingdom or other Tax Authorities including
(without limiting the generality of the foregoing) full and accurate
returns of benefits in kind provided to directors and employees; all
such information, applications, returns and notices were and remain
complete, true and accurate and were made on the proper bases and are
not the subject of any dispute with the relevant authorities and the
Tax computations in respect of all periods up to and including the
Balance Sheet Date have been agreed with all relevant authorities;
there are no disputes with any Tax Authority which could give rise to
additional assessments to Tax on or withdrawal of relief from the
Company and no event has occurred which would or might do so.
2.2 The Disclosure Letter contains details, so far as they affect the
Company, of all concessions, arrangements and agreements (whether
formal or informal) negotiated with any Tax Authority and no action
has been taken by or on behalf of the Company which has had or might
have the result of altering, prejudicing or in any way disturbing any
such concession, arrangement or agreement.
3. The Company has not within the period of six years ending on the date of
this agreement been the subject of an investigation, audit or visit by or
involving any Tax Authority and no
30
<PAGE>
Schedule 3 Part II
circumstances exist which may make it likely that such an investigation,
audit or visit will be made.
4. PAYMENT OF TAX
--------------
The Company has duly and punctually paid all Tax which it has become liable
to pay and is under no liability to pay, nor are there any circumstances by
virtue of which the Company is likely to become liable to pay, any fine,
penalty, surcharge or interest in connection with any claim for Tax.
5. PAYE AND NATIONAL INSURANCE
---------------------------
5.1 The Company has properly operated the Pay As You Earn and National
Insurance systems deducting Tax as required by law from all payments
made, or treated as made, to employees and former employees of the
Company and has accounted to the Inland Revenue, DSS or Contributions
Agency (as the case may be) for all Tax so deducted and all Tax
chargeable on benefits provided for employees of the Company.
5.2 The Company has complied in full with all reporting requirements and
has kept proper books and records relating to all payments and
benefits made or provided, or treated as made or provided, to its
directors, employees or officers or former directors, employees or
officers.
5.3 The Disclosure Letter contains details of all current dispensations
or notices granted by the Inland Revenue relating to the Company
under section 166 of the Taxes Act.
5.4 The Disclosure Letter contains details of all share option, profit
sharing, share incentive, profit related pay and bonus schemes
operated by the Company at Completion.
6. BASE VALUES
-----------
If each of the capital assets of the Company were disposed of at Completion
for a consideration equal to the book value of that asset in or adopted for
the purpose of the
31
<PAGE>
Schedule 3 Part II
Audited Accounts, no liability to corporation tax on chargeable gains would
arise (disregarding for this purpose any reliefs and allowances available
to the Company other than amounts falling to be deducted from the
consideration receivable under section 38 of the TCGA (acquisition and
disposal costs)).
6.1 No gain chargeable to corporation tax will accrue to the Company on
the disposal of any debt owing to the Company not being a debt on a
security.
6.2 The Company has not acquired benefits under any policy of assurance
otherwise than as original beneficial owner.
6.3 The Company has not disposed of nor acquired any asset in
circumstances such that the provisions of section 17 of the TCGA
(consideration deemed to be market value) could apply to such
disposal or acquisition.
7. STAMP DUTY
----------
All documents which confer any right on the Company and which attract stamp
duty have been properly stamped, no claim for exemption from or reduction
of stamp duty is outstanding and no exemption already granted can be
withdrawn, cancelled or deemed not allowed.
8. PAYMENTS
--------
No rents, interest, annual payments or other sums of an income nature paid
or payable by the Company, or which the Company is under an obligation to
pay in the future, are wholly or partially disallowable as deductions or
charges in computing profits for the purposes of corporation tax by reason
of the provisions of sections 74, 125, 338, 339, 494 or 779 to 787
(inclusive) of the Taxes Act or otherwise.
9. SHARES AND SECURITIES
---------------------
9.1 The Company has not purchased any of its own shares in circumstances
to which section 219 of the Taxes Act applies.
9.2 The Company has not at any time since 6 April 1965:
32
<PAGE>
Schedule 3 Part II
9.2.1 purchased or agreed to purchase, repaid or agreed to repay or
redeemed or agreed to redeem any of its share capital for the
purpose of section 210 of the Taxes Act; or
9.2.2 capitalised or agreed to capitalise in the form of shares or
debentures any profits or reserves of any class or
description nor has it passed or agreed to pass any
resolution to do so.
10. ANTI-AVOIDANCE
--------------
The Company has not been involved in any transaction or series of
transactions which, or any part of which, may, for any Tax purposes, be
disregarded by reason of any motive to avoid, reduce or delay a possible
liability to Tax.
11. VAT
---
11.1 The Company is a registered and taxable person for the purposes of
VAT and no such registration is subject to any condition imposed by
or agreed with HM Customs and Excise.
11.2 The Company has complied with all statutory provisions, rules,
regulations, orders and directions and made all necessary returns in
relation to VAT and, within the prescribed time limits, has provided
all necessary information and documents to HM Customs and Excise and
paid all amounts due to the proper person.
11.3 The Company has at all times kept complete, correct and up-to-date
records, invoices and other documents required for the purposes of
VAT.
11.4 The Company has not been required by HM Customs and Excise to give
security under paragraph 4 of schedule 11 to the VATA.
11.5 No act or transaction has been effected in consequence of which the
Company is or may be held liable for any VAT calculated by reference
to the supply of goods and services by any other person.
33
<PAGE>
Schedule 3 Part II
11.6 The Company is not liable and will not (in respect of anything done
before Completion) be liable to any interest, penalty or surcharge in
respect of VAT and in particular (but without prejudice to the
generality of the foregoing) the Company is and will not be so
liable:
11.6.1 to a penalty under sections 63 to 65 (inclusive) of the
VATA;
11.6.2 to interest under section 74 of the VATA; or
11.6.3 to a surcharge under section 59 of the VATA.
11.7 Neither the Company nor any of its officers or directors is or will
(in respect of anything done before Completion) be liable to a
penalty under sections 60 or 61 of the VATA.
11.8 The Company is not and has not agreed to become an agent, manager or
factor for the purposes of sections 47 and 48 of the VATA of any
person who is not resident in the United Kingdom.
11.9 The Company is not and has not at any time been a member of a group
of companies for VAT purposes.
11.10 The Disclosure Letter sets out full details of all adjustments
which have been made or could be made in relation to the Company
under Part V of the Value Added Tax (General) Regulations 1985
(capital goods scheme).
12. VAT ON PROPERTY
---------------
12.1 The Company does not own the fee simple in any building or civil
engineering work which is uncompleted or which was completed (within
the meaning of Note (2) to Group 1 of schedule 9 to the VATA) less
than three years before the date of this agreement or was completed
before 1 April 1989 but (in the case of a building) was not fully
occupied or (in the case of a civil engineering work) not fully used
before 1 April 1989.
34
<PAGE>
Schedule 3 Part II
12.2 The Company has not made any election under paragraph 2 of schedule
10 to the VATA to waive exemption from VAT in relation to any land or
building and no such election has been made in relation to any land
or building by any member or former member of any group of companies
of which the Company is or was a member for VAT purposes.
13. CUSTOMS DUTIES
--------------
13.1 The Company has complied with all statutory provisions, rules,
regulations, orders and directions and made all necessary returns in
relation to the collection and payment of customs duties, excise
duties and other charges having an equivalent effect; and the Company
has provided all necessary information and documents and paid all
amounts due to HM Customs and Excise in relation to such charges
within the prescribed time limits.
13.2 Details of all bonds, recognisances and guarantees given to HM
Customs and Excise by or in relation to the Company are set out in
the Disclosure Letter.
14. GIFTS
-----
14.1 No transfer of value (as defined by the Inheritance Tax Act 1984) or
disposal by way of gift (within the meaning of section 102 of the
Finance Act 1986) has at any time been made by or to the Company, and
there are no other circumstances by reason of which any liability in
respect of capital transfer tax or inheritance tax has arisen or
could arise on the Company.
14.2 The Company has not been a party to associated operations in relation
to a transfer of value within the meaning of section 268 of the
Inheritance Tax Act 1984.
14.3 No Inland Revenue charge (as defined in section 237 of the
Inheritance Tax Act 1984) is outstanding over any asset of the
Company or in relation to any shares in the capital of the Company.
14.4 No circumstances exist whereby any such power as is mentioned in
section 212 of the Inheritance Tax Act 1984 could be exercised in
relation to any shares in, securities of, or assets of, the Company.
35
<PAGE>
Schedule 3 Part II
15. CLOSE COMPANY
-------------
The Company is not and never has been a close company within the meaning of
section 414 of the Taxes Act.
16. CAPITAL ALLOWANCES
------------------
16.1 No balancing charge under the Capital Allowances Act 1990 (or other
legislation relating to any capital allowances) could be made on the
Company on the disposal of any pool of assets (that is to say, all
those assets expenditure relating to which would be taken into
account in computing whether a balancing charge would arise on a
disposal of any one or more of those assets) or on the disposal of
any asset not in such a pool, on the assumption that the disposals
are made for a consideration equal to the book value shown in or
adopted for the purpose of the Audited Accounts in respect of the
assets in the pool or (as the case may be) for the asset;
16.2 No event has occurred since the Balance Sheet Date, otherwise than in
the ordinary course of business, by reason of which any balancing
charge may fall to be made against, or any disposal value may fall to
be brought into account by, the Company under the Capital Allowances
Act 1990 (or other legislation relating to capital allowances).
16.3 All expenditure which the Company has incurred or may incur under any
subsisting commitment on the provision of machinery or plant has
qualified or will qualify (if not deductible as a trading expense of
the trade carried on by the Company) for writing-down allowances
under Part II of the Capital Allowances Act 1990.
17. RESIDENCE.
----------
The Company is and always has been resident in the United Kingdom for the
purposes of the Taxes Act.
36
<PAGE>
Schedule 3 Part III
PART III
--------
PROPERTY WARRANTIES
-------------------
1. PROPERTY COMPRISES ALL REAL PROPERTY
------------------------------------
1.1 The Property comprises all the land and premises of any tenure owned,
used or occupied by the Company or in which it has agreed to acquire
any interest and the particulars of it set out in the Disclosure
Letter are true and accurate in all respects.
1.2 The Property comprises the whole of the land in which the Company has
any interest (including rights under options, rights of pre-emption
or other contractual relationship).
2. TITLE
-----
2.1 The Company has a good and marketable title to the Property which
title is (in respect of each of the properties comprising the
Property) freehold or leasehold as indicated in the Disclosure Letter
and vested in the Company unless otherwise indicated in the
Disclosure Letter.
2.2 There are no matters which adversely affect the value of the Property
or cast any doubt on the right or title of the Company to it.
2.3 All deeds and documents necessary to prove the title of the Company
to the Property are in the possession or under the control of the
Company.
2.4 The superior titles to any leasehold property have been investigated
and are satisfactory.
3. ENCUMBRANCES
------------
3.1 The Property is not subject to any Encumbrance (including without
limitation any overriding interest (as defined in section 70 of the
Land Registration Act 1925), option, agreement for sale or claim.
37
<PAGE>
Schedule 3 Part III
3.2 There are no rights, interests, covenants, restrictions,
reservations, licences or easements, nor any disputes or outstanding
notices whether given by a lessor, local or other authority or any
other person which could adversely affect the value of the Property
or its use and enjoyment.
3.3 There are no circumstances which would entitle or require a lessor or
any other person to exercise any power of entry upon or of taking
possession of the Property or which would otherwise restrict or
terminate the continued possession or occupation of it or which could
prevent any development of it for which planning permission has been
or is expected to be obtained or applied for.
3.4 The Company has performed, observed and complied with (and the use of
the Property does not contravene) any covenants, restrictions,
reservations, conditions, agreements, statutory requirements, bye-
laws, orders, building regulations and other stipulations and
regulations affecting the Property and its use, including the terms
of any lease or tenancy agreement under which any part of the
Property is held.
3.5 All rents service charges and outgoings affecting the Property have
been promptly paid and none are outstanding.
4. VACANT POSSESSION/RIGHTS OF OCCUPATION
--------------------------------------
4.1 Except as referred to in the Disclosure Letter, the Company is
entitled to and has exclusive vacant possession of the Property and
no part of the Property is subject to any (or any agreement to grant
any) lease, tenancy or licence and no person (other than the Company)
has or claims any estate, right, interest or easement in the
Property.
4.2 In respect of all leases, tenancies, licences and agreements under
which the Property is held:
4.2.1 no rent review is in the course of being determined or is
exercisable by the landlord;
38
<PAGE>
Schedule 3 Part III
4.2.2 the Company (except where premiums as disclosed in the
Disclosure Letter were paid for leases of the Property) has
not commuted, or agreed to commute, any rent or paid any rent
ahead of the date for payment thereof and has in all material
respects observed and performed all covenants (including for
the payment of any rents or licence or occupation fees),
obligations and restrictions affecting or relating to the
Property;
4.2.3 the landlord is not in breach of any covenant, obligation or
restriction;
5. MONETARY CLAIMS
---------------
There is no outstanding monetary claim or liability, contingent or
otherwise, affecting the Property.
6. USE
---
6.1 The existing use of the Property is that indicated in the Disclosure
Letter and is the lawful permitted use whether under the Planning
Acts (and in the case of leasehold property under the terms of the
lease or tenancy agreement under which that property is held) or
otherwise, is not a temporary use and all necessary consents to the
existing use have been obtained and are valid, subsisting and
irrevocable within the conditions imposed.
6.2 The existing use of the Property (and all plant and machinery in it)
complies with all relevant provisions of legislation applicable to it
(including without limitation the Health and Safety at Work etc. Act
1974, the Fire Precautions Act 1971, the Factories Act 1961, Offices,
Shops and Railway Premises Act 1963, the Control of Pollution Act
1974 and the Environmental Protection Act 1990) and with all relevant
permissions, bye-laws, regulations, consents, notices and orders made
by any local or central government, legal authority or other
regulatory body (whether or not made by or under statutory powers or
otherwise).
6.3 There are no onerous conditions attaching to any of the consents and
permissions affecting the Property and no conditions to any planning
consent which have not been fully satisfied so that no continuing
liability remains under them.
39
<PAGE>
Schedule 3 Part III
6.4 There is no resolution, proposal, order, act or thing made or done or
contemplated for compulsory acquisition of any of the Property by the
local or any other authority nor any outstanding order, notice or
other requirement of any such authority that affects the existing use
of the Property or involves expenditure in complying with it nor are
there any other circumstances which may result in any such order or
notice being made or served or which may otherwise affect the
Property.
6.5 The Property is not subject to any agreement under section 106 of the
TCPA.
7. ACCESS AND FACILITIES
---------------------
7.1 There is full unrestricted vehicular and pedestrian access to the
Property over adopted routes and paths maintainable at public
expense.
7.2 None of the facilities (including without limitation light and air)
presently enjoyed or necessary for the enjoyment of the Property or
its present use are capable of being terminated or curtailed by any
person.
8. CONTINUING LIABILITY
--------------------
The Company is not actually or contingently liable as (or as guarantor of)
an original contracting party to any lease of property other than the
leases of the Property referred to in the Disclosure Letter.
40
<PAGE>
Schedule 3 Part IV
PART IV
-------
GENERAL WARRANTIES
------------------
THE COMPANY AND THE VENDORS AND ITS
- -----------------------------------
1. LIABILITIES OWING TO OR BY THE VENDORS OR ITS
---------------------------------------------
1.1 There is no outstanding debt or other liability (actual or
contingent) owing by the Company to the Vendors or ITS or any person
connected with any of them, nor is there any debt owing to the
Company by the Vendors or ITS, and no promise or representation has
been made to the Vendors or ITS in connection with the Warranties or
the Disclosure Letter (or with this agreement for the Sale Documents
in any other way) in respect of which the Company (or any of its
officers or employees) might be liable.
1.2 Details of any contracts or arrangements entered into between the
Company and the Vendors or ITS or any company or person connected
with the Vendors or ITS in the last three financial years of the
Company ending on the Balance Sheet Date are set out in the
Disclosure Letter.
2. VENDORS OTHER INTERESTS
-----------------------
Neither the Vendors nor any person connected with the Vendors have any
interest, directly or indirectly:
2.1 In any business other than that now carried on by the Company which
is or is likely to be or become competitive with the business or any
proposed business of the Company;
2.2 In any Intellectual Property used by the Company;
2.3 In any business or undertaking which is a customer or supplier of the
Company.
41
<PAGE>
Schedule 3 Part IV
SALE OF SHARES
- --------------
3. COMMISSION
----------
No one is entitled to receive from the Company any finder's fee, brokerage,
or other commission in connection with the sale or purchase of shares in
the Company.
4. CONSEQUENCE OF SHARE ACQUISITION BY THE PURCHASER
-------------------------------------------------
To the best of the knowledge, information and belief of the Vendors neither
the acquisition of the Sale Shares or the ITS Shares by the Purchaser nor
compliance with the terms of this agreement:
4.1 Will cause the Company to lose the benefit of any right or privilege
it presently enjoys;
4.2 Will cause any person who normally does business with the Company not
to continue to do so on the same basis as previously;
4.3 Will relieve any person of any obligation to the Company (whether
contractual or otherwise) or enable any person to determine any
obligation by or to the Company or any right or benefit enjoyed by
the Company or to exercise any right under any agreement with or
otherwise in respect of, the Company;
4.4 Will result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable earlier
than otherwise;
4.5 Will give rise to or render exercisable any right of pre-emption or
termination;
4.6 Will conflict with or result in the breach of or a default under or
give rise to any obligation of the Company (whether under any
agreement trust or instrument or the judgment, award or order of any
authority) or give rise to any increased liability of the Company
under any such obligation;
and the Company's relationships with clients, customers, suppliers and
employees will not be adversely affected by such acquisition.
42
<PAGE>
Schedule 3 Part IV
5. OPTIONS ETC
-----------
No person has the right (whether exercisable now or in the future and
whether contingent or not) to call for the allotment, issue, sale or
transfer of any share or loan capital of the Company under any option or
other agreement (including conversion rights and rights of pre-emption).
6. TRANSFERS AT AN UNDERVALUE
--------------------------
None of the Sale Shares or the ITS Shares nor any assets represented by the
Sale Shares or the ITS Shares have ever been the subject of a transaction
at an undervalue.
THE COMPANY'S CONSTITUTION
- --------------------------
7. REGISTERED AND OTHER PARTICULARS
--------------------------------
The particulars of the Company in schedule 2 are complete and accurate.
8. SHARE CAPITAL
-------------
8.1 All the issued shares in the Company are fully paid and are
beneficially owned and registered as set out in schedule 1 and
schedule 2 free from any Encumbrance or interest in favour of any
other person.
8.2 The Sale Shares and the ITS Shares represent the entire issued share
capital of the Company and there are no options or other agreements
outstanding which call for the issue of or accord to any person the
right to call for the issue of any shares in the capital of the
Company.
8.3 The Company has not:
8.3.1 repaid or redeemed any shares of any class of its share
capital or otherwise reduced its issued share capital or any
class of it or purchased any of its own shares or carried out
any transaction having the effect of a reduction of capital;
43
<PAGE>
Schedule 3 Part IV
8.3.2 made or resolved to make any issue of shares or other
securities by way of capitalization of profits or reserves;
8.3.3 given any financial assistance as defined in section 151 of
the Companies Act;
8.3.4 offered any shares or securities to the public or except in
accordance with the provisions as to authority and pre-
emption contained in the Companies Act; or
8.3.5 agreed to do any such thing specified in this paragraph 8.
9. MEMORANDUM AND ARTICLES OF ASSOCIATION
--------------------------------------
The copy of the memorandum and articles of association of the Company
attached to the Disclosure Letter is true and complete and includes or has
attached to it a copy of every such resolution or agreement as is referred
to in section 380 Companies Act 1985.
10. COMPANY RESOLUTIONS
-------------------
10.1 Neither the Company nor any class of its members has passed any
resolution (other than resolutions relating to business at annual
general meetings which was not special business).
10.2 The Company has at all times carried on its business and affairs in
accordance with its Memorandum and Articles of Association.
10.3 The Company has not given any power of attorney or any other
authority (express, implied or ostensible) to any person to enter
into any contract or commitment or do anything on its behalf which is
still outstanding or effective (other than any authority of directors
or employees to enter into routine trading contracts in the normal
course of their duties).
44
<PAGE>
Schedule 3 Part IV
THE COMPANY AND THE LAW
- -----------------------
11. COMPLIANCE WITH LAWS
--------------------
The Company has conducted its business in all respects in accordance with
all laws statutes regulations or directives of the European Union
applicable in the United Kingdom (including those made or issued pursuant
to the Treaties of Rome, Paris and Maastricht) and any relevant foreign
country and there is no order, decree or judgment of any court or any
governmental agency of the United Kingdom, the European Union or any
foreign country outstanding against the Company (or any of its officers or
employees in their capacities as such) or which may have an adverse effect
upon the assets or business of the Company.
12. LICENCES ETC
------------
All necessary licences, consents, permits and authorities (public and
private) have been obtained by the Company to enable the Company to carry
on its business effectively in the places and in the manner in which that
business is now carried on and they are all valid and subsisting and there
is no reason why any of them should be suspended, cancelled or revoked.
13. BREACH OF LEGAL PROVISIONS
--------------------------
Neither the Company, nor any of its officers, agents or employees (during
the course of their duties in relation to the Company) have committed, or
omitted to do, any act or thing the commission or omission of which is, or
could be, a breach or contravention of any of the laws, statutes,
regulations or directives referred to in paragraph 11 of this part of this
schedule.
45
<PAGE>
Schedule 3 Part IV
14. LITIGATION AND CONTRACTUAL PERFORMANCE
--------------------------------------
14.1 Neither the Company nor (to the best of the knowledge and belief of
the Vendors any of its officers or employees in relation to their
duties with the Company or for which it may be vicariously liable) is
engaged in any criminal prosecution or litigation or arbitration
proceedings or dispute resolution procedures and the Company is not
liable to indemnify any person in relation to any current or
threatened litigation, arbitration proceedings or dispute resolution
procedure.
14.2 To the best of the knowledge and belief of the Vendors no criminal
prosecution or arbitration litigation proceedings or dispute
resolution procedures are pending or threatened by or against the
Company (or any of its officers or employees in relation to their
duties with the Company or for which it may be vicariously liable)
and there are no facts likely to give rise to any litigation,
arbitration or dispute.
14.3 The Company is not and has not been a party to any undertaking or
assurance (which is still in force) given to any court or
governmental agency.
14.4 To the best of the knowledge and belief of the Vendors no
governmental or official investigation or inquiry concerning the
Company is in progress or pending and there are no facts or
circumstances likely to give rise to any such investigation or
inquiry.
15. RETURNS
-------
The Company has complied with the provisions of the Companies Acts and all
returns, particulars, resolutions and other documents required under those
Acts or any legislation to be delivered by or on behalf or in respect of
the Company or sent to the Registrar of Companies or to any other authority
whatsoever have properly been made and delivered within the time limits
contained mentioned or referred to in those Acts or other legislation.
FINANCE
- -------
16. FINANCE OBLIGATIONS
-------------------
The Company does not have outstanding:
46
<PAGE>
Schedule 3 Part IV
16.1 Any loan, loan capital or other liability in the nature of borrowings
(including but not limited to acceptance credits, unmatured bills or
other commercial paper) which will or may result in the Company being
liable to make any payment or incur any other liability;
16.2 Any guarantee, indemnity, suretyship or other arrangement under which
the Company is or may become liable for any obligation of any other
person;
16.3 Any factoring or similar agreement;
16.4 Any indebtedness except trade creditors in the ordinary course of
business;
16.5 Any bond.
17. REPAYMENT REQUIREMENTS
----------------------
The Company has received no notice to repay any monies or liabilities which
are repayable on demand and no default or event has occurred entitling any
person (with or without giving any formal notice and whether immediately or
after expiry of any notice) to demand or accelerate repayment, appoint a
receiver or take other action to protect security granted to it by the
Company.
18. GRANTS
------
The Company has not applied for or received any financial assistance from
any supra-national, national or local authority or governmental agency
within the last three years or any financial assistance which is or may be
or become repayable.
19. FINANCIAL SERVICES ACT 1986
---------------------------
The Company has not:
19.1 Carried on in the United Kingdom any activity constituting
"investment business" as defined by section 1 of the Financial
Services Act 1986; or
47
<PAGE>
Schedule 3 Part IV
19.2 Committed any breach or done any act or thing prohibited by the
Financial Services Act 1986.
20. INSOLVENCY
----------
20.1 No receiver or administrative receiver has been appointed in respect
of the Company or any of the assets or undertaking of the Company.
20.2 No administration order has been made and no petition has been
presented for such an order in respect of the Company.
20.3 No meeting has been convened at which a resolution will be proposed,
no resolution has been passed, no petition has been presented and no
order has been made for the winding-up of the Company.
20.4 The Company has not stopped or suspended payment of its debts, become
unable to pay its debts (within the meaning of section 123 of the
Insolvency Act 1986) or otherwise become insolvent.
20.5 No unsatisfied judgment, order or award is outstanding against the
Company.
20.6 No written demand under section 123(1)(a) of the Insolvency Act 1986
has been made against the Company.
20.7 No distress or execution has been levied on, or other process
commenced against, any asset of the Company.
20.8 No voluntary arrangement has been proposed under section 1 of the
Insolvency Act 1986 in respect of the Company.
20.9 To the best of the knowledge and belief of the Vendors no
circumstances have arisen which entitle any person to take any
action, appoint any person, commence proceedings or obtain any order
of the type mentioned in any part of this paragraph 20.
48
<PAGE>
Schedule 3 Part IV
21. INSURANCE
---------
21.1 Particulars of all the insurance policies maintained by the Company
at the date of this agreement are disclosed in the Disclosure Letter
(including without limitation any on the life or in respect of the
incapacity of any person).
21.2 All premiums due in respect of those insurance policies have been
fully paid; and the next renewal date for each of such insurances is
as specified in the Disclosure Letter.
21.3 All those insurance policies are currently in full force and effect,
and to the best of the knowledge and belief of the Vendors there are
no circumstances which may lead to liability under any such
insurances being avoided by the insurers or to the premiums being
increased (other than generally applicable normal rate increases) or
not renewed at the normal or generally applicable rate of premium and
none of the insurances is subject to any special or unusual terms or
restrictions or to the payment of any premium in excess of the normal
generally applicable rate.
21.4 No claim is outstanding under any of the insurances and, to the best
of the knowledge and belief of the Vendors no circumstances exist
which are likely to give rise to any such claim.
21.5 To the best of the knowledge and belief of the Vendors there are no
outstanding claims against the Company, by any employee or other
person, in respect of any accident injury or damage, which are not
fully covered by insurance.
21.6 There have been no material claims against insurers by the Company in
the 5 years ending on the date of this agreement.
CONTRACTS
- ---------
22. The Company is not party to:
22.1 Any agreement or arrangement entered into otherwise than by way of
bargain at arms length in the ordinary and proper course of its
business;
49
<PAGE>
Schedule 3 Part IV
22.2 Any agreement which:
22.2.1 cannot readily be fulfilled by the Company without undue
or unusual expenditure of money or effort using only fixed
assets presently owned by it and current assets of the types
presently held by it and in quantities requiring a level of
purchase of current assets not materially greater than during
the period covered by the Audited Accounts and finance within
the existing facilities of the Company;
22.2.2 being a trading contract is known to be unprofitable;
22.2.3 is for the supply to or by the Company of goods or
services which may last longer than three months;
22.2.4 is otherwise abnormal or long term;
22.2.5 represents a contribution to turnover of more than 5 per
cent of the turnover of the Company specified in the Audited
Accounts;
22.2.6 involves the payment by or to the Company for goods
and/or services of more than (Pounds)5,000;
22.2.7 is for the supply of goods or services by the Company of
a type not manufactured or supplied by it in the period
covered by the Audited Accounts.
22.3 The profits or losses of the Company in its last five financial years
ending on the Balance Sheet Date have not been affected by any such
arrangement as specified in this paragraph 22.
22.4 The Vendors are not aware of any fact, matter or circumstance which
might result in any claim being made under or pursuant to any
guarantee, warranty or penalty provision in any contract entered into
by the Company.
22.5 The Company has not been party to a transaction pursuant to or as a
result of which an asset owned, purportedly owned or otherwise held
by the Company is
50
<PAGE>
Schedule 3 Part IV
liable to be transferred or re-transferred to another person or
which, by virtue of the financial terms of such transaction, gives,
or may give rise to, a right of compensation or other payment in
favour of another person.
COMPETITION
- -----------
23. RESTRICTIVE AGREEMENTS
----------------------
23.1 There are no agreements:
23.1.1 which have or will have the effect of restricting the
freedom of the Company to provide or take goods or services
or to otherwise conduct its trade or business by such means
and from or to such persons at such prices (and otherwise in
such manner) as the Company may from time to time think fit;
23.1.2 which will or may restrict the use or disclosure of
information by the Company or oblige it to disclose
information;
23.1.3 limiting or excluding the Company's right to do business
and/or compete in any area or field with any other person;
23.1.4 to which the Company is party which are, or should be,
registered under the Restrictive Trade Practices Acts 1976 or
1977 or notified to the European Commission under or pursuant
to the Treaty of Rome 1957 or the Treaty of Paris 1951 or the
Treaty of Maastricht or which contravene any of the
provisions of those Acts or Treaties or which have been
notified to the European Commission for an exemption or in
respect of which applications have been made to the European
Commission for clearances.
23.2 The Company has never been party to any agreement of the types
referred to in this paragraph 23 under which or as a result of which
it may have any liability.
51
<PAGE>
Schedule 3 Part IV
24. CONSUMER, TRADE, ANTI-COMPETITIVE AND OTHER RESTRICTIVE PRACTICES
-----------------------------------------------------------------
24.1 None of the practices or arrangements of the Company or any of its
understandings with other persons is or has been or is likely to be
the subject of, susceptible to or affected by, any investigation,
reference, report or order made under the Fair Trading Act 1973 or
the Competition Act 1980 and no undertaking has been given by the
Company pursuant to any action taken under either of those Acts.
24.2 The Company has not received any process, notice or communication,
(formal or informal) by or on behalf of the Office of Fair Trading,
the Monopolies and Mergers Commission, the Secretary of State for
Trade and Industry, the European Commission or any other authority of
any country or supra-national organisation having jurisdiction in
competition or anti-trust matters, in relation to any aspect of the
business of the Company or any agreement or arrangement to which the
Company is or was, or is alleged to be or have been, a party and the
Company is not likely to receive any such process, notice or
communication.
25. RELATIONSHIPS WITH THIRD PARTIES
--------------------------------
25.1 To the best of the knowledge and belief of the Vendors no person
presently doing business with the Company nor any customer or
supplier who is in the habit of purchasing from or selling to the
Company (as the case may be), or who has done business with the
Company in its last two financial years is likely to cease to do so
or otherwise substantially reduce its purchases from or supplies to
the Company during the 12 calendar months following Completion.
25.2 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 Company in any trading period of 52 weeks are (or
during the period covered by the Audited Accounts were) obtained from
or made to the same supplier or customer (or connected suppliers or
customers).
25.3 To the best of the knowledge and belief of the Vendors there is no
embargo or trade boycott on the business of the Company or any of its
products or suppliers nor is it
52
<PAGE>
Schedule 3 Part IV
likely that any material source of supply to the Company or any
material outlet for the sales of the Company is or will be or may be
put in jeopardy by an embargo or trade boycott (whether as a result
of political action or trade dispute or otherwise).
25.4 The Disclosure Letter contains details of any industry, trade or
professional organisation, regulatory body or quality control
organisation of which the Company is a member to which it is
affiliated or to whose regulation it is subject or in respect of
which it has any continuing liability (including details of any
shares held, fees payable and rules governing membership).
25.5 The Company has complied with the rules (whether or not legally
binding) of any organisation or body of the types specified in
paragraph 25.4 of which it is a member or to which it is subject.
25.6 To the best of the knowledge and belief of the Vendors the Company is
not subject to or threatened with any disciplinary action or penalty
by any such organisation or body as is specified in paragraph 25.4.
26. TERMS OF TRADE
--------------
26.1 During the three years ending on the date of this agreement there has
been no material change in the basis or terms on which any person has
been or is prepared to do business with the Company (apart from
normal generally applicable price changes) and to the best of the
knowledge and belief of the Vendors no such change is likely to occur
in the future or likely to arise from completion of this agreement.
26.2 Copies of all current standard conditions of sale or purchase or
business of the Company are attached to the Disclosure Letter and
these conditions are used by the Company and details of any different
former standard conditions of the Company under which it could now
incur any liability in excess of that provided for in the present
conditions are attached to the Disclosure Letter.
53
<PAGE>
Schedule 3 Part IV
27. DEFECTIVE PRODUCTS
------------------
27.1 The Company has not manufactured, sold or supplied products which
are, or were, or may become, in any material respect faulty or
defective or which do not comply with any warranties or
representations expressly or impliedly made by the Company or with
all applicable regulations, standards and requirements in respect of
them.
27.2 The Company has not accepted any obligation to service, repair,
maintain, take back or otherwise do anything in respect of any
article sold or delivered by it.
27.3 The Company is not liable or potentially liable under the Consumer
Protection Act 1987 in respect of products manufactured by others.
INFORMATION
- -----------
28. SECRET OR CONFIDENTIAL INFORMATION, COMPUTER KNOWHOW AND MARKETING
------------------------------------------------------------------
INFORMATION
-----------
28.1 The Company has not at any time (save in the ordinary course of
business) to persons under duties to it to maintain confidentiality
or to its professional advisers disclosed to any person other than
the Purchaser:
28.2 Any information relating to any of its Intellectual Property or any
other confidential information or property (including, without
limitation, secret processes, financial and technical information,
designs, drawings, plans, models, prototypes, statistics, documents,
files, records and papers); nor
28.3 Any other information relating to its business or affairs the
disclosure of which might or could cause loss or damage to or
adversely affect the Company; nor
28.4 Any secret or confidential information relating to its manufacturers,
suppliers, customers, clients and agents or to any other person who
has or has had any dealings with it.
54
<PAGE>
Schedule 3 Part IV
28.5 All computer knowhow and marketing information used by the Company is
owned by it or is the subject of a valid grant of rights to the
Company listed in the Disclosure Letter (as the case may be) and is
not subject to any restriction which materially and adversely affects
the Company's ability to use it for the purpose of its business.
28.6 The Company has not disclosed (other than to its own employees under
obligations of confidence to it), nor is it obliged to disclose, any
Computer Knowhow or Marketing Information of a confidential nature to
any person.
28.7 The Company is not in breach of any agreement under which any
Computer Knowhow or Marketing Information was or is to be made
available to it.
28.8 Details of all agreements made by the Company for the use by others
of its Computer Knowhow or Marketing Information are set out in the
Disclosure Letter.
29. DATA AND RECORDS
----------------
29.1 The Company has not received any notice or allegation from either the
Data Protection Registrar or a data subject alleging non-compliance
with the data protection principles or prohibiting the transfer of
data to a place outside the United Kingdom.
29.2 No individual has claimed or will have the right to claim
compensation from the Company under that Act for loss or unauthorised
disclosure of data before Completion.
30. INTELLECTUAL PROPERTY RIGHTS
----------------------------
30.1 Details of all:
30.1.1 registrable Intellectual Property owned or used by the
Company in its business;
30.1.2 unregistered trademarks, service marks and design rights
owned by it or used by it in its business;
55
<PAGE>
Schedule 3 Part IV
30.1.3 Intellectual Property licensed to it by others;
30.1.4 Intellectual Property it has licensed to others;
are set out in the Disclosure Letter.
30.2 The Company is the sole beneficial owner of the Intellectual Property
used by it in its business and (where such property is capable of
registration) its registered proprietor.
30.3 Except for copyrights, the Company owns no Intellectual Property
other than that detailed in the Disclosure Letter.
30.4 Except as specified in the agreements disclosed in the Disclosure
Letter:
30.4.1 no person has been authorised to make any use whatsoever
of any Intellectual Property owned by the Company;
30.4.2 the Company has not been authorised to make any use of
any Intellectual Property owned by any other person.
30.5 The Company owns the copyright in the designs of all its products and
none of the processes or products of the Company infringe any right
of any other person relating to Intellectual Property or involves the
unlicensed use of confidential information disclosed in circumstances
which might give rise to a claim against the Company, and none of the
Intellectual Property owned or used by the Company is being used,
claimed, opposed or attacked by any person.
56
<PAGE>
Schedule 3 Part IV
ENVIRONMENTAL HAZARDS
- ---------------------
31. COMPLIANCE WITH ENVIRONMENTAL PROTECTION LAWS
---------------------------------------------
31.1 Neither the Company nor any of its officers, agents or employees have
committed, whether by act or omission, any breach of legal
requirements for the protection of the environment or of human health
or amenity, and they have conformed at all times with all relevant
codes of practice, guidance notes, standards and other advisory
material issued by any competent authority.
31.2 The Company has not received any notice, order or other communication
from any relevant authority in respect of the Company's business,
failure to comply with which would constitute breach of any legal
requirements (or compliance with which could be secured by further
proceedings) and to the best of the knowledge and belief of the
Vendors there are no circumstances which might give rise to such
notice, order or other communication being received or of any
intention on the part of such authority to give such notice.
32. CIVIL LIABILITY
---------------
There is no actual or potential liability on the part of the Company
arising from any activities or operations of the Company or the state or
condition of any properties now or formerly owned or occupied by the
Company or facilities now or formerly used by the Company and in particular
(but without limitation) any such liability in respect of: injury to
persons (including impairment of health or interference with amenity);
damage to land or personal property; interference with riparian or other
proprietary or possessory rights; public or private nuisance; liability for
waste or other substances; and damage to or impairment of the environment
including living organisms.
33. CONDITION OF SITES AND OTHER LAND
---------------------------------
33.1 No notice or other communication has been received from any relevant
authority relating to the physical condition of any site now or
formerly owned or occupied by the Company nor is there any
circumstance likely to give rise to the service of any such notice or
communication.
57
<PAGE>
Schedule 3 Part IV
33.2 No site now or formerly owned or occupied by the Company has been
used for the deposit of waste controlled by any legislation during
the ownership or occupation of the Company and neither the Vendors
nor the Company is aware of any such use before its ownership or
occupation.
34. INTERNAL POLICY ASSESSMENTS AND PLANS
-------------------------------------
34.1 Details of all the Company's statements of corporate environmental
policy and operating procedures are set out in the Disclosure Letter.
34.2 The Company has complied with all its statements of corporate
environmental policy and operating procedures.
34.3 The Company has properly carried out and made all such assessments or
plans as are required by law in relation to the Company's substances,
processes, operations and wastes (including without limitations those
relating to hazardous substances, accident hazards, releases to the
environment and noise); proper records have been kept of such
assessments and plans and neither the Vendors nor the Company know of
any circumstances which would render such appraisals or plans
incorrect or subject to revision.
THE COMPANY AND ITS EMPLOYEES
- -----------------------------
35. DIRECTORS AND SECRETARIES
-------------------------
The particulars shown in schedule 2 are true and complete and no person
other than those named as such in that schedule is a director or secretary
of the Company.
36. EMPLOYMENT TERMS
----------------
36.1 Full particulars are contained in the Disclosure Letter of all
contracts of service with or other terms of employment of directors
and other employees of the Company and of all consultancy agreements
or contracts for services with the Company which are current or under
which the Company may still have any liability.
58
<PAGE>
Schedule 3 Part IV
36.2 No director or employee of the Company has given notice terminating
his contract of employment or is under notice of dismissal.
36.3 There are no arrears of remuneration due to any director or employee.
36.4 There is no agreement or understanding (contractual or otherwise)
between the Company and any employee or ex-employee with respect to
his employment, his ceasing to be employed or his retirement which is
not included in the written terms of his employment or previous
employment (as the case may be).
37. COMPLIANCE WITH LEGISLATION ETC
-------------------------------
37.1 The Company has in relation to each of its employees (and so far as
relevant to each of its former employees):
37.1.1 complied with all obligations imposed on it by all
statutes and regulations and codes of conduct and practice
relating to employment;
37.1.2 maintained adequate and proper records regarding its
employees (including as to any disciplinary action taken);
37.1.3 complied with all collective agreements for the time
being having effect as regards relations with or the
conditions of service of its employees or the trade unions
representing them;
37.1.4 complied with its obligations with respect to the PAYE
system, National Insurance and Social Security legislation
including making all payments due in respect of those
obligations and deducting and accounting for all payments or
contributions due from any other person; and
37.1.5 complied with its obligations with respect to statutory sick
pay as defined in the Social Security Contributions and
Benefits Act 1992.
37.2 The Company does not have in existence, nor is it proposing to
introduce and has not undertaken to introduce:
59
<PAGE>
Schedule 3 Part IV
37.2.1 any share incentive scheme, share option scheme or profit
sharing scheme corporate personal equity plan profit related
pay scheme or similar scheme for any of its directors,
officers or employees; or
37.2.2 any scheme under which any director, officer or employee
of the Company is entitled to a commission or remuneration of
any other sort calculated by reference to the whole or part
of the turnover, profits or sales of the Company.
38. PAYMENTS ON TERMINATION
-----------------------
38.1 The Company has no liability (and will have no liability as a result
of the decision in the case of R v Secretary of State for Employment
ex parte Equal Opportunities Commission and Another) for breach of
any contract of service or for services, for redundancy payments,
protective awards or for compensation for wrongful dismissal or
unfair dismissal or for failure to comply with any order for the
reinstatement or re-engagement of any employee or for any other
liability accruing from the termination of any contract of employment
or for services.
38.2 No gratuitous payment has, during the three years ending on the date
of this agreement, been made or promised by the Company (whether or
not pursuant to any legally binding obligation) in connection with
the actual or proposed termination or suspension of employment or
variation of any contract of employment of any present or former
director or employee.
38.3 The Company has not and will not at Completion have made or agreed to
make any payment to, or provided or agreed to provide any benefit
for, any present or former director or former employee or any
dependant of any such director, former director or former employee.
39. REDUNDANCIES AND TRANSFER OF BUSINESS
-------------------------------------
The Company has not within the period of three years preceding the date of
this agreement:
39.1 Given notice of any redundancies to the relevant Secretary of State
or started consultations with any trade union under sections 188 to
198 (inclusive) of the
60
<PAGE>
Schedule 3 Part IV
Trade Union and Labour Relations (Consolidation) Act 1992 nor has the
Company failed to comply with any such obligation under those
sections of that Act; and
39.2 Been a party to any relevant transfer as defined in the Transfer of
Undertakings (Protection of Employment) Regulations 1981 nor has the
Company failed to comply with any duty to inform and consult any
independent trade union under those regulations.
40. TRADE UNIONS AND DISPUTES
-------------------------
40.1 The Company has no agreement or other arrangement (binding or
otherwise) with any trade union or other body representing its
employees or any of them.
40.2 The Company is not involved in any industrial or trade disputes or
any dispute or negotiation regarding a claim with any trade union or
association of trade unions or organisation or body of employees and
has not been involved in any such dispute within the last three
years.
41. TRAINING
--------
There are no training schemes, arrangements or proposals in existence at
the date of this agreement nor have there been any such schemes,
arrangements or proposals in the past in respect of which a levy may become
payable by the Company under the Industrial Training Acts 1964 and 1982 or
otherwise.
42. VARIATION OF TERMS
------------------
The Company has not entered into, agreed to or undertaken any obligation
(whether or not legally binding) to take effect at any time on or after the
Balance Sheet Date to alter the rates of remuneration of or to make any
bonus or incentive payments or provided any benefits in kind or any
payments under a profit sharing scheme to or on behalf of any of its
directors or employees at any future date.
61
<PAGE>
Schedule 3 Part IV
43. ATTACHMENT OF EARNINGS
----------------------
The Company has not received notice of an attachment of earnings order made
against any employee of the Company.
44. PREGNANCIES
-----------
Neither the Company nor the Vendors have been notified or are aware that
any employee of the Company is pregnant.
THE COMPANY AND ITS SUBSIDIARIES
- --------------------------------
45. SUBSIDIARIES AND SUBSIDIARY UNDERTAKINGS
----------------------------------------
The Company does not have and has not at any time had any subsidiary
company or subsidiary undertaking.
46. INVESTMENTS, ASSOCIATIONS AND BRANCHES
--------------------------------------
The Company:
46.1 Is not the holder or beneficial owner of, and has not agreed to
acquire, any share or other capital of any company or corporation
(whether incorporated in the United Kingdom or elsewhere);
46.2 Is not and has not agreed to become a member of any partnership,
joint venture, consortium or other unincorporated association;
46.3 Has no branch, agency or place of business outside the United Kingdom
and no permanent establishment (as that expression is defined in the
respective Double Taxation Relief Orders current at the date of this
agreement) outside the United Kingdom; and
62
<PAGE>
Schedule 3 Part IV
46.4 Has no outstanding or potential liability in respect of any of the
matters specified in this paragraph 47.
47. BUSINESS NAME
-------------
The Company does not carry on and has not carried on business under any
name other than its own corporate name.
48. MATERIAL DISCLOSURE
-------------------
48.1 The information given in the schedules to this agreement and in the
Disclosure Letter is true and accurate in all respects, is fairly
presented and is not misleading because of any omission or ambiguity
or for any other reason.
48.2 All information contained in any written document or communication
referred to or attached to the Disclosure Letter is true and accurate
in all respects and there is no fact or matter not disclosed in such
documents or communication which renders any such information untrue,
misleading, false or deceptive because of any omission or ambiguity
or for any other reason.
63
<PAGE>
Schedule 4
SCHEDULE 4
----------
COMPLETION REQUIREMENTS
-----------------------
1. The Vendors shall deliver or procure to be delivered to the Purchaser
(where appropriate as agent for the Company):
1.1 Duly executed transfers in favour of the Purchaser or its nominees of
all the Sale Shares together with share certificates for the Sale
Shares;
1.2 The common seal, certificate of incorporation, any certificates of
incorporation on change of name and the statutory books of the
Company made up to Completion;
1.3 Any waivers, consents or other documents necessary to vest in the
Purchaser the full beneficial ownership of each of the Sale Shares
and to enable the Purchaser or its nominees to be registered as
their owners;
1.4 The following documents duly executed by each party (other than the
Purchaser) (where appropriate in escrow pending Completion):
the Tax Covenant
the Deed of Covenant
the ITS Cancellation Deed
1.5 The title deeds and documents relating to the Property and any
registered Intellectual Property;
1.6 Acknowledgments under seal in agreed terms from the Vendors and ITS
that the Company is not indebted to them in any way;
1.7 The written resignations in agreed terms of:
1.7.1 Mr J B Price as a Director of the Company with effective
waivers of any statutory employment claims or rights or
binding acknowledgements that there are no such rights or
claims in agreed terms;
64
<PAGE>
Schedule 4
1.7.2 (if required by the Purchaser) the auditors of the Company
resigning office with effect from Completion confirming they
have no claim against the Company and containing a statement
in accordance with section 394 of the Companies Act to the
effect that there are no circumstances connected with their
ceasing to hold office which they consider should be brought
to the attention of members or creditors of the Company.
1.8 Copies of all bank mandates and authorities relating to the accounts
of the Company;
1.9 All cheque books in respect of all bank accounts operated by the
Company together with bank statements as at the close of business on
the second business day before Completion and a bank reconciliation
statement made up to Completion (certified by a director of the
Company) and a certificate from the bankers of the Company stating
the balance on the Company's account at the close of business the day
before Completion;
1.10 A copy of the memorandum and articles of association of the Company
certified by a Director as complete and accurate;
1.11 Any other documents in the control of the Company which the
Purchaser's Solicitors notify the Vendor's Solicitors as being
required at Completion;
1.12 Evidence that no charge affecting the Company or any of its assets
has crystallized or become enforceable; and
1.13 Any power of attorney pursuant to which any document specified in
this schedule is executed on behalf of any party to it (other than
the Purchaser) and evidence to the Purchaser's satisfaction of the
authority of any person executing any such document.
1.14 The documents in the agreed form complying with the provisions of
Sections 155 to 158 Companies Act 1985 in relation to the transaction
contemplated by the ITS Cancellation Deed.
65
<PAGE>
Schedule 4
2. The Vendors and ITS shall procure that a meeting of the board of Directors
is held at which the Directors shall validly (to the Purchaser's
satisfaction):
2.1 Appoint such persons as the Purchaser may nominate as additional
directors of the Company;
2.2 Approve the share transfers and vote in favour of the registration of
the Purchaser or its nominees as members (subject only to due
stamping where necessary);
2.3 Authorise the issue of share certificates to the new members;
2.4 If so requested by the Purchaser accept the resignation of the
secretary of the Company and appoint the Purchaser's nominee as
secretary;
2.5 Change the registered office of the Company to the place specified by
the Purchaser;
2.6 Amend the mandates and authorities in respect of the Company's bank
accounts as the Purchaser may require;
2.7 If so requested by the Purchaser accept the resignation of the
auditors of the Company and appoint accountants nominated by the
Purchaser as auditors;
2.8 Change the accounting reference date of the Company as specified by
the Purchaser;
2.9 Accept the resignations of the resigning directors of the Company;
3. ITS shall deliver or procure to be delivered to the Purchaser duly executed
transfers in favour of the Purchaser or its nominees of the ITS Shares
together with the relevant share certificates
4. On completion of the matters set out in paragraphs 1 2 and 3 the Purchaser
shall.
4.1 Deliver to the Vendors counterparts of the Tax Covenant and the Deed
of Covenant.
66
<PAGE>
Schedule 4
4.2 Deliver to the Vendors the Bond and to ITS the ITS Bond and the ITN
Bond.
4.3 Deliver to ITS Solicitors a banker draft for $1,126,840.
67
<PAGE>
Schedule 4
Signed by duly authorised for
and on behalf of UNIPHASE CORPORATION
in the presence of
Witness:
Name:
Address:
Signed by
duly authorised on behalf of
INDUSTRIAL TECHNOLOGY SECURITIES
LIMITED in the presence of
Witness:
Name:
Address:
Signed by JONATHAN TIMOTHY GREAVES
the presence of
Witness:
Name:
Address:
68
<PAGE>
Schedule 4
Signed by WENDY GREAVES
the presence of
Witness:
Name:
Address:
69
<PAGE>
DEED OF COVENANT
----------------
This Deed of Covenant (this "Deed") dated 1996 made between
Uniphase Corporation ("Uniphase"), a Delaware corporation, and Jonathan Timothy
Greaves and Wendy Greaves (the "Principal Shareholders").
Pursuant to an Agreement dated as of June 1996 (the "Purchase
Agreement"), by and among Uniphase, Industrial Technology Securities Limited,
(registered in England under company number 1792376), and the Shareholders of
GCA Fibreoptics Limited ("GCA"), Uniphase is acquiring the entire issued shares
in GCA. Capitalised terms used herein and not otherwise defined have the
meanings assigned to them in the Purchase Agreement.
The Principal Shareholders have agreed in paragraph of 1.4 of Schedule 4 of the
Purchase Agreement to execute and deliver to Uniphase at the Completion Date a
Deed of Covenant.
THE PARTIES HERETO AGREE AS FOLLOWS:
1. NON-COMPETE OBLIGATION
----------------------
1.1 The Principal Shareholders hereby agree and covenant that for a
period of three years after the Completion Date each of them shall
neither directly nor indirectly:
1.1.1 make known to any person the names and addresses of any of the
customers of GCA or any other information pertaining to them;
1.1.2 take away any of the customers of GCA on whom he has called,
or with whom he has dealt or become acquainted with, either
for himself or for any other person.
1.1.3 accept a position with or otherwise become affiliated with,
any other person for the purpose of competing with Uniphase's
business. Each Principal Shareholder acknowledges and
understands that this provision not to compete is necessary to
protect GCA's and Uniphase's trade secrets, proprietary
information,
1
<PAGE>
confidential information, and know-how by avoiding such
situations which would inherently create a fraud with the
potentiality of intentional or unintentional revelations of
such trade secrets, information and know-how.
1.1.4 interfere with the business of Uniphase in any manner
whatsoever including, without limitation, recruiting or hiring
employees of Uniphase or ex-employees of GCA or Uniphase whose
employment with employer was terminated less than one (1) year
prior to the date of such interference.
2. SPECIFIC PERFORMANCE
--------------------
Each Principal Shareholder acknowledges that any violation of the
provisions of this Agreement would cause irreparable damage for which
monetary damages would be inadequate and therefore agrees that Uniphase
shall have the right to obtain, in addition to all other remedies it may
have, such injunctive and other equitable relief from a court of competent
jurisdiction as may be necessary or appropriate to prevent or remedy any
violation of this Agreement.
3. GOVERNING LAW
-------------
This Agreement is governed by the laws of England and shall inure to
the benefit of and be binding upon the successors, assigns, heirs and
personal representatives of the parties hereto.
4. COUNTERPARTS: AMENDMENTS
------------------------
This Agreement may be executed in one or more counterparts, all of
which documents shall be considered one and the same document. This
Agreement may not be changed, amended or modified, in whole or in part,
except by written agreement signed by all parties.
5. NOTICES
-------
Any notice or other communication required or permitted hereunder
shall be in writing and shall be deemed given when so delivered in person,
by overnight courier, by facsimile transmission (with
2
<PAGE>
receipt confirmed by telephone or by automatic transmission report) or
two business days after being sent by prepaid registered post (return
receipt requested), as follows:
TO UNIPHASE:
- ------------
at 163 Baypointe Parkway
San Jose
CA95134
USA
In each case with a copy to:
Dibb Lupton Broomhead
125 London Wall
London
EC2Y 5AE
Attention: David R Barrett
Telephone: 0171 814 6374
Fax: 0171 600 1727
TO THE PRINCIPAL SHAREHOLDERS:
- ------------------------------
Jonathan Timothy Greaves
21 Hid's Copse Road
Cumnor Hill
Oxford OX2 9JJ
With a copy to: Wendy Greaves
at the same address
3
<PAGE>
With a copy to:
Evans Dodd
5 Balfour Place
Mount Street
London W1Y 5RG
Attention: Ian Shane
Telephone: 0171 491 4729
Fax: 0171 499 2297
Addresses may be changed by written notice given pursuant to this section. Any
notice given hereunder may be given on behalf of any party by his counsel or
other authorised representative.
6. HEADINGS: SEVERABILITY
----------------------
All headings of this Agreement are for reference only and shall not
affect its interpretation. In the event that any provisions of this
Agreement should be held unenforceable by a court of competent
jurisdiction, all remaining provisions shall continue in full force and
effect without being impaired or invalidated in any way.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as of the date first stated above.
Signed by )
duly authorised on behalf of )
UNIPHASE CORPORATION in the )
presence of:
Executed as a deed by )
JONATHAN TIMOTHY GREAVES )
4
<PAGE>
in the presence of: )
Executed as a deed by )
WENDY GREAVES )
in the presence of: )
5
<PAGE>
DATED 1996
- --------------------------------------------------------------------------------
(1) J T GREAVES AND W GREAVES
AND
(2) UNIPHASE CORPORATION
- --------------------------------------------------------------------------------
TAX COVENANT
RELATING TO THE ACQUISITION OF SHARES IN GCA FIBEROPTICS LIMITED
- --------------------------------------------------------------------------------
DIBB LUPTON BROOMHEAD
125 LONDON WALL
LONDON EC2Y 5AE
REF: TJ/JP
<PAGE>
THIS DEED OF COVENANT is made 1996
BETWEEN:
(1) JONATHAN TIMOTHY GREAVES and WENDY GREAVES both of 21 Hid's Copse Road,
Cumnor Hill, Oxford OX2 9JJ ("the Covenantors");
(2) UNIPHASE CORPORATION a Delaware Corporation whose registered office is at
163 Baypointe Parkway, San Jose, CA95134 (the "Purchaser"); and
(3) GCA FIBEROPTICS LIMITED (Company No 1725096) whose registered office is at
GCA House, Building 19, Thorneylees Business Park, Witney, Oxfordshire OX8
7QE (the "Company").
RECITAL
This deed is entered into pursuant to the Agreement.
1. INTERPRETATION
--------------
1.1 Unless otherwise expressly defined in this deed and unless the context
requires otherwise, words, expressions and abbreviations shall have
the same meaning in this deed as in the Agreement.
1.2 In this deed, unless the context requires otherwise:
"Agreement" means the agreement of even date with this deed
between the Covenantors and the Purchaser for the sale and purchase
of the Sale Shares;
"claim" means the issue of any notice, letter or other document
by or on behalf of any Tax Authority or the taking of any other
action by or on behalf of any Tax Authority from which notice, letter,
document or action it appears that a Tax liability is to be, or may
come to be, imposed on the Company;
1
<PAGE>
"Covenantors' Relief" means any Relief which:
(a) arises as a consequence of any Event occurring on or
before the Accounts Date and not by reference to or in consequence
of any Event occurring after the Accounts Date; and
(b) is not a Relief or right to repayment of Taxation
which has been treated as an asset in the Accounts or taken into
account in computing (and so reducing any provision for deferred Tax).
"event" means any event including any transaction, action or
omission, any change in the residence of any person for the purposes
of any Tax, the death of any person, any failure to take any action
which would avoid an apportionment or deemed distribution of income
(regardless of whether the taking of any such action after Completion
could have avoided such apportionment or deemed distribution), and
shall also include Completion;
"Relief" means any relief, allowance or credit in respect of any
Tax or deduction in computing income, profits or gains for the
purposes of any Tax;
"Tax assessment" means any assessment, demand or other similar
formal notice of a Tax liability issued by or on behalf of any Tax
Authority by virtue of which the Company either is liable to make a
payment of Tax or will, with the passing of time, become so liable (in
the absence of any successful application to postpone any such
payment).
1.3 In this deed, reference to any "Tax liability" of the Company means a
liability of the Company to make actual payments of Tax and also:
1.3.1 the loss, or the setting-off against income, profits or gains
earned or accrued before Completion (where, but for such
setting-off, the Company would have had an actual Tax liability
in respect of which the Purchaser would have been able to make
a claim against the Covenantors under this deed), of any Relief
2
<PAGE>
which would (were it not for the said loss or setting-off) have
been available to the Company and which has been taken into
account in computing (and so reducing) any provision for
deferred Tax which appears in the Audited Accounts (or which,
but for the presumed availability of such Relief would have
appeared in the Audited Accounts);
1.3.2 the loss of a right to repayment of Tax which has been treated
as an asset of the Company in preparing the Audited Accounts or
the setting-off of any right to repayment of Tax against any
actual Tax liability in respect of which the Purchaser would,
but for that setting-off, have been able to make a claim
against the Covenantors under this deed; and
1.3.3 the setting-off against income, profits or gains earned,
accrued or received on or before Completion of any Relief which
arises in respect of an event occurring after Completion and
not in respect of any event occurring on or before Completion
in circumstances where, but for such setting-off, the Company
would have had an actual Tax liability in respect of which the
Purchaser would have been able to make a claim against the
Covenantors under this deed,
and, in such a case, the amount of Tax which could
otherwise have been relieved, allowed, exempted or credited by the
Relief so lost or set off, or the amount of repayment which would
otherwise have been obtained, shall be treated as the amount of a Tax
liability which has arisen.
1.4 In this deed, reference to:
1.4.1 "income, profits or gains" includes any such income, profits or
gains which are deemed to be earned, accrued or received for
the purposes of any Tax;
1.4.2 income, profits or gains (as defined in sub-clause 1.4.1) as
being earned, accrued or received on or before a particular
date or in respect of a particular period includes income,
profits or gains which are deemed to have been earned, accrued
3
<PAGE>
or received on or before that date or in respect of that period
for the purposes of any Tax;
1.4.3 any payment or distribution as being made on or before a
particular date includes:
1.4.3.1 any payment or distribution which has fallen due to be
made on or before that date; and
1.4.3.2 any event which has occurred on or before that date
and is, or is deemed to be, a payment or distribution
for (in either such case) the purposes of any Tax.
2. COVENANT TO PAY
---------------
Subject to the provisions of clause 3, the Covenantors covenant
jointly and severally (on behalf of themselves and their respective personal
legal representatives) with the Purchaser (for itself and as trustee for its
successors in title) that they shall pay to the Purchaser or at the option
of the Purchaser as the Purchaser shall direct a sum equal to any of the
following:
2.1 any Tax liability of the Company arising:
2.1.1 as a consequence of or by reference to any event which occurred
on or before Completion or was deemed to occur on or before
Completion for the purposes of any Tax; or
2.1.2 in respect of or by reference to any income, profits or gains
which were earned, accrued or received on or before Completion
or in respect of a period ending on or before Completion;
2.2 any depletion in the assets or increase in the liabilities of the
Purchaser or the Company as a result of any Inheritance Tax which is,
at the Completion Date, a charge on any of the shares or assets of the
Company or gives rise to a power to sell, mortgage or charge any of
4
<PAGE>
the shares or assets of the Company; or, after the Completion Date,
becomes a charge on or gives rise to a power to sell, mortgage or
charge any of the shares or assets of the Company being a liability in
respect of Inheritance Tax payable as a result of the death of any
person within seven years after a transfer of value if a charge on or
power to sell, mortgage or charge any such shares or assets existed at
the Completion Date or would, if the death had occurred immediately
before the Completion Date and the Inheritance Tax payable as a result
thereof had not been paid, have existed at the Completion Date or
arises as a result of a transfer of value made on or before Completion
by or to the Company AND FOR THE AVOIDANCE OF DOUBT, any payment made
by the Purchaser or the Company to discharge or remove any charge or
power to sell, mortgage or charge shall give rise to a depletion in
the assets of the Purchaser or the Company and there shall be ignored
any right of the Purchaser or the Company to pay Inheritance Tax in
instalments and any right which the Covenantors may have to pay any
amount due under this deed by instalments;
2.3 any costs and expenses reasonably and properly incurred by the
Purchaser or the Company in connection with any such Tax liability as
is mentioned in clauses 2.1 or 2.2 or with any claim for them or in
taking or defending any action under this deed.
3. LIMITS TO COVENANT
------------------
3.1 The covenant given by clause 2 shall not apply to any Tax liability of
the Company to the extent that:
3.1.1 provision or reserve in respect of that Tax liability was made
in the Audited Accounts;
3.1.2 that Tax liability arises or is increased as a result only of
any increase in rates of Tax made after Completion with
retrospective effect or of any change in law occurring after
Completion with retrospective effect,
3.1.3 the Tax liability arises as a result of transactions in the
ordinary course of business since the Accounts Date;
5
<PAGE>
3.1.4 such Tax liability would not have arisen but for a voluntary
act carried out by the Purchaser or the Company after the date
of this Deed being an act which:
3.1.4.1 is not in the ordinary course of business of the
Company as carried on at the date of this Deed or
otherwise than pursuant to a legally binding
obligation created on or before the date hereof; and
3.1.4.2 the Purchaser knew or should have known would give
rise to a Taxation liability and the Covenantors did
not expressly or impliedly consent;
3.1.5 such Tax liability arises directly as a result of the change of
the date to which the Company makes up its accounts;
3.1.6 such Tax liability arises as a result only of any change after
Completion in the accounting policies of the Company other than
any such change or changes which are necessary to bring such
accounting policies into line with the SSAPs and FRSs which are
in force at Completion;
3.1.7 a Covenantors' Relief is available to reduce such Tax liability
and has not previously been taken into account under this
clause 3.1.7.
3.2 The provisions of clauses 4.11, 4.12 and 4.14 of the Agreement shall
apply in respect of claims made under clause 2 of this Deed as if the
same were set out in full herein.
3.3 The liability of the Covenantors under this Tax Covenant and the Tax
Warranties shall determine on the seventh anniversary of Completion.
3.4 If after the Covenantors have satisfied in full any liability under
this Tax Covenant the Company or the Purchaser receives a benefit or
makes an actual saving which it would not
6
<PAGE>
have received or made but for the circumstances giving rise to that
claim under this Tax Covenant then the Purchaser shall use reasonable
endeavours to procure that:-
3.4.1 reasonable details of the benefit or saving are given to the
Covenantors as soon as reasonably practicable;
3.4.2 any payment already made by the Covenantors in respect of the
claim is forthwith repaid to the Covenantors.
4. RELIEFS
-------
4.1 If the auditors for the time being of the Company shall certify (at
the request and expense of the Covenantors) that any Tax liability
which has resulted in a payment having been made or becoming due from
the Covenantors under this deed will give rise to a Relief for the
Company which would not otherwise have arisen, then, as and when the
liability of the Company to make an actual payment of or in respect of
Tax is reduced by reason of that Relief and after taking account of
the effect of all other Reliefs that are or become available to the
Company (including any Relief derived from a subsequent accounting
period), the amount by which that liability is so reduced shall be
dealt with in accordance with clause 4.2.
4.2 Where it is provided under clause 4.1 that any amount (the "Relevant
Amount") is to be dealt with in accordance with this clause:
4.2.1 the Relevant Amount shall first be set off against any payment
then due from the Covenantors under this deed;
4.2.2 to the extent that there is an excess, a refund shall be made
to the Covenantors of any previous payment or payments made by
the Covenantors under this deed and not previously refunded
under this clause 4 up to the amount of such excess; and
4.2.3 to the extent that the excess referred to in sub-clause 4.2.2
is not exhausted under that sub-clause, the remainder of that
excess shall be carried forward and set off
7
<PAGE>
against any future payment or payments which become due from
the Covenantors under this deed.
4.3 Where any such certification as is mentioned in clause 4.1 has been
made, the Covenantors or the Purchaser or the Company may request the
auditors for the time being of the Company to review such
certification in the light of all relevant circumstances, including
any facts which have become known only since such certification, and
to certify whether such certification remains correct or whether, in
the light of those circumstances, the amount that was the subject of
such certification should be amended.
4.4 If the auditors certify under clause 4.3 that an amount previously
certified should be amended, that amended amount shall be substituted
for the purposes of clause 4.2 as the Relevant Amount in respect of
the certification in question in place of the amount originally
certified, and such adjusting payment (if any) as may be required by
virtue of the above-mentioned substitution shall be made as soon as
practicable by the Covenantors or (as the case may be) to the
Covenantors.
5. RECOVERY FROM OTHER PERSONS
---------------------------
If, in the event of any payment becoming due from the Covenantors
pursuant to clause 2, the Company either is immediately entitled at the due
date for the making of that payment to recover from some other person (not
being the Company but including any Tax Authority) any sum in respect of the
Tax liability that has resulted in that payment becoming due from the
Covenantors, or at some subsequent date becomes entitled to make such a
recovery, then the Company being entitled to make that recovery shall (in
either of those cases) promptly notify the Covenantors of their entitlement
and shall, if so required by the Covenantors and at the Covenantors sole
expense, take all appropriate steps to enforce that recovery (keeping the
Covenantors fully informed of the progress of any action taken) and shall
account to the Covenantors for, or where the Covenantors have not yet made
the payment due under this deed the amount due shall be reduced by,
whichever is the lesser of:
5.1 any sum so recovered (including any interest or repayment supplement
paid by the Tax Authority or other person on or in respect of it less
any Tax chargeable on the Company in respect of that interest); and
8
<PAGE>
5.2 the amount paid by or due from (as the case may be) the Covenantors
pursuant to clause 2 in respect of the Tax liability in question.
6. CLAIMS PROCEDURE
----------------
6.1 Upon the Purchaser or the Company becoming aware of a claim relevant
for the purposes of this deed, it shall, so soon as may be
practicable, give notice of it to the Covenantors, and the Company
shall (if the Covenantors shall indemnify and secure the Company to
its reasonable satisfaction against all losses, costs, damages and
expenses including interest on overdue Tax, which may be incurred in
so doing) take such action and give such information and assistance in
connection with the affairs of the Company as the Covenantors may
reasonably and promptly by written notice request to avoid, resist,
appeal or compromise the claim; PROVIDED THAT the Company shall not be
obliged to appeal against any Tax assessment raised on it if, having
given the Covenantors written notice of the receipt of that Tax
assessment, it has not, within 14 days after that, received
instructions in writing from the Covenantors, in accordance with the
preceding provisions of this clause, to make that appeal; AND PROVIDED
FURTHER THAT the Company shall not be obliged to take any action under
this clause which involves contesting any Tax assessment before any
court or other appellate body (excluding the authority or body
demanding the Tax in question) unless the Covenantors furnishes the
Company with the written opinion of leading Tax Counsel or senior
junior Counsel to the effect that an appeal against the Tax assessment
in question shall, on the balance of probabilities, be won.
6.2 The actions which the Covenantors may reasonably request under clause
6.1 shall include the Company applying to postpone (so far as legally
possible) the payment of any Tax and/or allowing the Covenantors to
take on or take over at their own expense the conduct of all or any
proceedings of whatever nature arising in connection with the claim in
question, PROVIDED THAT if the Covenantors takes on or takes over the
conduct of proceedings:
9
<PAGE>
6.2.1 the Purchaser and the Company shall provide such information
and assistance as the Covenantors may reasonably require in
connection with the preparation for and conduct of those
proceedings;
6.2.2 the Covenantors shall keep the Company fully informed of all
matters relating to any dispute, appeal, negotiations or other
proceedings conducted by the Covenantors or on their behalf
(other than by the Company) pursuant to this clause 6 and shall
provide the Company with copies of all material correspondence
and other documents relating to them;
6.2.3 the Covenantors shall first submit to the Company all material
communications (written or otherwise) relating to any dispute,
appeal, negotiations or other proceedings conducted by the
Covenantors or on its behalf (other than by the Company)
pursuant to this clause 6 which are to be transmitted to any
authority responsible for Tax and such communications shall
only be finally transmitted if the prior approval of the
Company is given to them, such approval not to be unreasonably
withheld or delayed;
6.2.4 the Covenantors shall not compromise or settle any Tax Claim
and shall not agree any matter which is likely to affect the
amount of any Claim or any future liability to Tax of the
Company without the prior written approval of the Company, such
approval not to be unreasonably withheld or delayed.
7. TAX RETURNS
-----------
7.1 The Covenantors or their duly authorised agents shall prepare the tax
returns of the Company for all accounting periods ended on or before
Completion to the extent that the same shall not have been prepared
before Completion.
7.2 The Company shall cause the returns mentioned in clause 7.1 to be
authorised, signed and submitted to the appropriate authority without
amendment or with such amendments as the Covenantors shall agree, and
shall give the Covenantors or its agents all such assistance as may be
required to agree those returns with the appropriate authorities;
PROVIDED THAT the Company shall not be obliged to take any such action
as is
10
<PAGE>
mentioned in this clause 7.2 in relation to any tax return that
is not full, true and accurate in all material respects.
7.3 Nothing done by the Company pursuant to this clause 7 shall in any
respect restrict or reduce any rights which the Purchaser or it may
have to make a claim against the Covenantors under this deed in
respect of any such Tax liability as is mentioned in clause 2.
8. DUE DATE OF PAYMENT
-------------------
8.1 Where the Covenantors becomes liable to make any payment pursuant to
clause 2, the due date for the making of that payment shall be:
8.1.1 in a case which involves an actual payment of Tax by the
Company, the date which is the later of seven days after
notification by the Company or the Purchaser of the amount due
and seven days before the last date on which the Tax is due and
payable to the appropriate Tax Authority in order to avoid
incurring a liability to interest or a charge or penalty in
respect of that Tax liability;
8.1.2 in a case falling within clause 1.3.1, the date falling seven
days after the date when the Covenantors have been notified by
the Company or the Purchaser that the auditors for the time
being of the Company have certified, at the request of the
Purchaser or the Company, that the Covenantor(s) have a
liability for a determinable amount under clause 2; or
8.1.3 in case falling within clause 1.3.2, the later of seven days
after notification by the Company or the Purchaser of the
amount due and seven days after the date on which the repayment
would otherwise have been made.
8.1.4 in a case falling within clause 1.3.3, the later of seven days
after notification by the Company or the Purchaser of the
amount due and seven days before the date on which the Tax
which has been saved by reason of the setting-off of the Relief
would otherwise have been payable to the Tax Authority in order
to avoid
11
<PAGE>
incurring a liability to interest or a charge or penalty in
respect of that Tax liability.
8.1.5 in a case falling within clause 2.3, within seven days of
notification by the Company or the Purchaser of the amount due.
8.2 If any payment required to be made by the Covenantors under this deed
is not made by the due date for making it, then, except to the extent
that the Covenantors liability under clause 2 compensates the
Purchaser for the late payment by virtue of its extending to
interest and penalties, that payment shall carry interest from that
due date until the date when the payment is actually made at the rate
of 2 per cent above the base rate from time to time of Lloyds Bank
PLC.
9. PURCHASER'S FURTHER OBLIGATION
------------------------------
The Purchaser undertakes with the Covenantors that it shall preserve and
shall procure that the Company preserves all documents records
correspondence accounts and other information whatsoever in respect of or
relevant for the purposes of determining any Tax Liability of the Company
until such time as the Covenantors shall cease to have any Tax Liability
pursuant to this Tax Covenant.
10. DEDUCTIONS FROM PAYMENTS
------------------------
10.1 All sums payable by the Covenantors under this deed shall be paid free
and clear of all deductions or withholdings whatever, save only as are
required by law.
10.2 If any deductions or withholdings are required by law to be made from
any of the sums payable as mentioned in clause 9.1, the Covenantors
shall be obliged to pay to the relevant person such sum as shall,
after the deduction or withholding has been made, leave that person
with the same amount as it would have been entitled to receive in the
absence of any such requirement to make a deduction or withholding.
10.3 If any sum payable by the Covenantors under this deed (other than
interest under clause 8) shall be subject to a Tax liability in the
hands of the Purchaser, the Covenantors shall be
12
<PAGE>
under the same obligation to make an increased payment in relation
to that Tax liability as if the liability were a deduction or
withholding required by law.
11. GENERAL
-------
The following provisions of the Agreement shall, unless the context
requires otherwise, be incorporated in this deed mutatis mutandis as if
specifically set out in this deed:
Clause 1 Interpretation
Clause 7 Assignment
Clause 8 Amendment and waiver
Clause 9 Rights cumulative
Clause 10 Time
Clause 11 Payments
Clause 12 Publicity
Clause 13 Notices
Clause 14 Costs
Clause 17 Survivorship
Clause 19 Law and Jurisdiction
IN WITNESS of which this deed has been duly executed by the parties.
13
<PAGE>
SIGNED and DELIVERED as a DEED by )
JONATHAN TIMOTHY GREAVES )
in the presence of: )
Director
Secretary
SIGNED and DELIVERED as a DEED by )
WENDY GREAVES )
in the presence of: )
Director
Secretary
SIGNED and DELIVERED as a DEED by )
UNIPHASE CORPORATION acting by )
two officers )
Director
Secretary
SIGNED and DELIVERED as a DEED by )
GCA FIBREOPTICS LIMITED acting by )
two officers )
Director
Secretary
14
<PAGE>
DEED OF COVENANT
----------------
This Deed of Covenant (this "Deed") dated 1996 made between
Uniphase Corporation ("Uniphase"), a Delaware corporation, and Jonathan Timothy
Greaves and Wendy Greaves (the "Principal Shareholders").
Pursuant to an Agreement dated as of June 1996 (the "Purchase
Agreement"), by and among Uniphase, Industrial Technology Securities Limited,
(registered in England under company number 1792376), and the Shareholders of
GCA Fibreoptics Limited ("GCA"), Uniphase is acquiring the entire issued shares
in GCA. Capitalised terms used herein and not otherwise defined have the
meanings assigned to them in the Purchase Agreement.
The Principal Shareholders have agreed in paragraph of 1.4 of Schedule 4 of the
Purchase Agreement to execute and deliver to Uniphase at the Completion Date a
Deed of Covenant.
THE PARTIES HERETO AGREE AS FOLLOWS:
1. NON-COMPETE OBLIGATION
----------------------
1.1 The Principal Shareholders hereby agree and covenant that for a period
of three years after the Completion Date each of them shall neither
directly nor indirectly:
1.1.1 make known to any person the names and addresses of any of the
customers of GCA or any other information pertaining to them;
1.1.2 take away any of the customers of GCA on whom he has called,
or with whom he has dealt or become acquainted with, either for
himself or for any other person.
1.1.3 accept a position with or otherwise become affiliated with,
any other person for the purpose of competing with Uniphase's
business. Each Principal Shareholder acknowledges and
understands that this provision not to compete is necessary to
protect GCA's and Uniphase's trade secrets, proprietary
information,
1
<PAGE>
confidential information, and know-how by avoiding such
situations which would inherently create a fraud with the
potentiality of intentional or unintentional revelations of
such trade secrets, information and know-how.
1.1.4 interfere with the business of Uniphase in any manner
whatsoever including, without limitation, recruiting or hiring
employees of Uniphase or ex-employees of GCA or Uniphase whose
employment with employer was terminated less than one (1) year
prior to the date of such interference.
2. SPECIFIC PERFORMANCE
--------------------
Each Principal Shareholder acknowledges that any violation of the
provisions of this Agreement would cause irreparable damage for which
monetary damages would be inadequate and therefore agrees that Uniphase
shall have the right to obtain, in addition to all other remedies it may
have, such injunctive and other equitable relief from a court of competent
jurisdiction as may be necessary or appropriate to prevent or remedy any
violation of this Agreement.
3. GOVERNING LAW
-------------
This Agreement is governed by the laws of England and shall inure to
the benefit of and be binding upon the successors, assigns, heirs and
personal representatives of the parties hereto,
4. COUNTERPARTS: AMENDMENTS
------------------------
This Agreement may be executed in one or more counterparts, all of
which documents shall be considered one and the same document. This
Agreement may not be changed, amended or modified, in whole or in part,
except by written agreement signed by all parties.
5. NOTICES
-------
Any notice or other communication required or permitted hereunder shall be
in writing and shall be deemed given when so delivered in person, by
overnight courier, by facsimile transmission (with
2
<PAGE>
receipt confirmed by telephone or by automatic transmission report) or two
business days after being sent by prepaid registered post (return receipt
requested), as follows:
TO UNIPHASE:
- ------------
at 163 Baypointe Parkway
San Jose
CA95134
USA
In each case with a copy to:
Dibb Lupton Broomhead
125 London Wall
London
EC2Y 5AE
Attention: David R Barrett
Telephone: 0171 814 6374
Fax: 0171 600 1727
TO THE PRINCIPAL SHAREHOLDERS:
- ------------------------------
Jonathan Timothy Greaves
21 Hid's Copse Road
Cumnor Hill
Oxford OX2 9JJ
With a copy to: Wendy Greaves
at the same address
3
<PAGE>
With a copy to:
Evans Dodd
5 Balfour Place
Mount Street
London W1Y 5RG
Attention: Ian Shane
Telephone: 0171 491 4729
Fax: 0171 499 2297
Addresses may be changed by written notice given pursuant to this section. Any
notice given hereunder may be given on behalf of any party by his counsel or
other authorised representative.
1. HEADINGS: SEVERABILITY
----------------------
All headings of this Agreement are for reference only and shall not
affect its interpretation. In the event that any provisions of this
Agreement should be held unenforceable by a court of competent
jurisdiction, all remaining provisions shall continue in full force and
effect without being impaired or invalidated in any way.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as of the date first stated above.
Signed by )
duly authorised on behalf of )
UNIPHASE CORPORATION in the )
presence of:
Executed as a deed by )
JONATHAN TIMOTHY GREAVES )
4
<PAGE>
in the presence of: )
Executed as a deed by )
WENDY GREAVES )
in the presence of: )
5
<PAGE>
PROMISSORY NOTE
---------------
1996
FOR VALUE RECEIVED, and pursuant to Clause 3 of the Agreement for the purchase
of the entire share capital of GCA Fiberoptics Limited ("the Agreement") made
between and by the undersigned, Uniphase Corporation, a Delaware corporation
("Maker"), Jonathan Timothy Greaves and Wendy Greaves, and Industrial Technology
Nominees Limited ("ITN"), Maker promises to pay to ITN, at such place as ITN
shall designate, without counterclaim, deduction or offset of any kind, in
lawful money of the United States of America, the principal sum of US$1,887,372
plus interest thereon, as set out forth below.
1. INTEREST
--------
Interest on the principal sum of this Note shall accrue at the rate of 6%
per annum, compounded annual, based on a 365 day year and the actual number
of days elapsed.
2. PAYMENTS
--------
Accrued interest and principal shall be payable in one payment due 31st
August 1997.
3. PREPAYMENT IN DOLLARS
---------------------
(a) This Note may be prepaid in whole or in part, at any time, after a
date which is six months from the date hereof without penalty or
premium by Maker.
(b) This option shall be exercisable by Maker giving ITN notice in
writing.
(c) The notice may be given at any time falling within the period
commencing six months after the date hereof and ending 11 months after
the date hereof but not otherwise.
1
<PAGE>
(d) Prepayment pursuant to this Section shall be made on the date
following 14 days after the date on which the notice is given.
(e) No prepayment shall be made in respect of any Promissory Note issued
pursuant to the Agreement or the agreement of even date hereto
relating to the purchase by Maker of the Common Stock of Fiberoptic
Alignment Solutions, Inc ("the FAS Agreement") in priority to any
prepayment made hereunder.
4. APPLICATION OF PAYMENTS
-----------------------
All payments and prepayments received by ITN shall be applied first to
accrued interest, then to other charges due with respect to this Note and
then to unpaid principal balance.
5. DEFAULT AND REMEDIES
--------------------
A. DEFAULT
-------
Maker will be in default under this Note if:
(i) Makers fails to make a payment of principal and/or interest
hereunder when due or declared due, whether as scheduled
maturity, by acceleration or otherwise, within ten (10)
business days after receipt of written notice of such
nonpayment;
(ii) Maker breaches any other material covenant, agreement or
understanding under this Note and such breach continues for ten
(10) or more business days after the receipt of written notice
from ITN of the occurrence of such breach; or
(iii) Maker files a petition in bankruptcy, is adjudicated insolvent,
petitions or applies to any tribunal for the appointment of a
receiver, custodian, or any trustee for Maker or commences any
proceeding under any bankruptcy, reorganisation, arrangement,
readjustment of debt, dissolution or liquidation law or statue
of any
2
<PAGE>
jurisdiction of any such proceeding has been commenced
against Maker which remains undismissed for a period of sixty
days.
B. REMEDIES
--------
Upon Maker's default, ITN may:
(i) upon written notice to Maker, declare the entire principal sum
and all accrued and unpaid interest hereunder immediately due
and payable; and
(ii) exercise any and all of the remedies provided in the
Agreement and applicable law.
C. ATTORNEYS' FEES AND COSTS
-------------------------
Maker promises to pay on demand all out-of-pocket costs and expenses
of ITN in connection with the collection of amounts due hereunder,
including, without limitation, attorneys' fees and expenses incurred
in connection therewith, whether or not any lawsuit is ever filed with
respect thereto.
6. MISCELLANEOUS
-------------
(a) All communications or notices required or given under this Note shall
be given in accordance with the provisions of Clause 14 of the
Agreement.
(b) This Note may be modified only by a written agreement executed by
Maker and ITN.
(c) This Note shall be governed by the laws of the State of California to
the non exclusive jurisdiction of whose courts the parties submit.
3
<PAGE>
(d) The terms of this Note shall inure to the benefit of and bind Maker
and ITN and their respective heirs, legal representatives and
successors and assigns.
(e) Time is of the essence with respect to all matters set forth in this
Note.
(f) If this Note is destroyed, lost or stolen, Maker will deliver a new
Note to ITN on the same terms and conditions as this Note with a
notation of the unpaid principal and accrued and unpaid interest in
substitution of the prior Note. ITN shall furnish to Maker reasonable
evidence that the Note was destroyed, lost or stolen and any security
or indemnity that may be reasonably required by Maker in connection
with the replacement of this Note.
IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first
above written.
MAKER:
...............................................
UNIPHASE CORPORATION
By: ..........................................
Its: ..........................................
4
<PAGE>
PROMISSORY NOTE
---------------
1996
FOR VALUE RECEIVED, and pursuant to Clause 3 of the Agreement for the purchase
of the entire share capital of GCA Fiberoptics Limited ("the Agreement") made
between and by the undersigned, Uniphase Corporation, a Delaware corporation
("Maker"), Jonathan Timothy Greaves and Wendy Greaves, and Industrial Technology
Securities Limited ("ITS"), Maker promises to pay to ITS, at such place as ITS
shall designate, without counterclaim, deduction or offset of any kind, in
lawful money of the United States of America, the principal sum of US$377,474
plus interest thereon, as set out forth below.
1. INTEREST
--------
Interest on the principal sum of this Note shall accrue at the rate of 6%
per annum, compounded annual, based on a 365 day year and the actual number
of days elapsed.
2. PAYMENTS
--------
Accrued interest and principal shall be payable in one payment due 31st
August 1997.
3. PREPAYMENT IN DOLLARS
---------------------
(a) This Note may be prepaid in whole or in part, at any time, after a
date which is six months from the date hereof without penalty or
premium by Maker.
(b) This option shall be exercisable by Maker giving ITS notice in
writing.
(c) The notice may be given at any time falling within the period
commencing six months after the date hereof and ending 11 months after
the date hereof but not otherwise.
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<PAGE>
(d) Prepayment pursuant to this Section shall be made on the date
following 14 days after the date on which the notice is given.
(e) No prepayment shall be made in respect of any Promissory Note issued
pursuant to the Agreement or the agreement of even date hereto
relating to the purchase by Maker of the Common Stock of Fiberoptic
Alignment Solutions, Inc ("the FAS Agreement") in priority to any
prepayment made hereunder.
4. APPLICATION OF PAYMENTS
-----------------------
All payments and prepayments received by ITS shall be applied first to
accrued interest, then to other charges due with respect to this Note and
then to unpaid principal balance.
5. DEFAULT AND REMEDIES
--------------------
A. DEFAULT
-------
Maker will be in default under this Note if:
(i) Makers fails to make a payment of principal and/or interest
hereunder when due or declared due, whether as scheduled
maturity, by acceleration or otherwise, within ten (10)
business days after receipt of written notice of such
nonpayment;
(ii) Maker breaches any other material covenant, agreement or
understanding under this Note and such breach continues for ten
(10) or more business days after the receipt of written notice
from ITS of the occurrence of such breach; or
(iii) Maker files a petition in bankruptcy, is adjudicated insolvent,
petitions or applies to any tribunal for the appointment of a
receiver, custodian, or any trustee for Maker or commences any
proceeding under any bankruptcy, reorganisation, arrangement,
readjustment of debt, dissolution or liquidation law or statue
of any
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<PAGE>
jurisdiction of any such proceeding has been commenced against
Maker which remains undismissed for a period of sixty days.
B. REMEDIES
--------
Upon Maker's default, ITS may:
(i) upon written notice to Maker, declare the entire principal sum
and all accrued and unpaid interest hereunder immediately due
and payable; and
(ii) exercise any and all of the remedies provided in the
Agreement and applicable law.
C. ATTORNEYS' FEES AND COSTS
-------------------------
Maker promises to pay on demand all out-of-pocket costs and expenses
of ITS in connection with the collection of amounts due hereunder,
including, without limitation, attorneys' fees and expenses incurred
in connection therewith, whether or not any lawsuit is ever filed with
respect thereto.
6. MISCELLANEOUS
-------------
(a) All communications or notices required or given under this Note shall
be given in accordance with the provisions of Clause 14 of the
Agreement.
(b) This Note may be modified only by a written agreement executed by
Maker and ITS.
(c) This Note shall be governed by the laws of the State of California to
the non exclusive jurisdiction of whose courts the parties submit.
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<PAGE>
(d) The terms of this Note shall inure to the benefit of and bind Maker
and ITS and their respective heirs, legal representatives and
successors and assigns.
(e) Time is of the essence with respect to all matters set forth in this
Note.
(f) If this Note is destroyed, lost or stolen, Maker will deliver a new
Note to ITS on the same terms and conditions as this Note with a
notation of the unpaid principal and accrued and unpaid interest in
substitution of the prior Note. ITS shall furnish to Maker reasonable
evidence that the Note was destroyed, lost or stolen and any security
or indemnity that may be reasonably required by Maker in connection
with the replacement of this Note.
IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first
above written.
MAKER:
...............................................
UNIPHASE CORPORATION
By: ..........................................
Its: ..........................................
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<PAGE>
PROMISSORY NOTE
---------------
1996
FOR VALUE RECEIVED, and pursuant to Clause 3 of the Agreement for the purchase
of the entire share capital of GCA Fibreoptics Limited ("the Agreement") made
between and by the undersigned, Uniphase Corporation, a Delaware corporation
("Maker"), Jonathan Timothy Greaves ("Mr Greaves") and Wendy Greaves ("Mrs
Greaves"), and Industrial Technology Securities Limited, Maker promises to pay
to Mr and Mrs Greaves, at such place as Mr and Mrs Greaves shall designate,
without counterclaim, deduction or offset of any kind (save as set out herein),
in lawful money of the United States of America, the principal sum of
US$1,326,134 plus interest thereon, as set out forth below.
1. INTEREST
--------
Interest on the principal sum of this Note shall accrue at the rate of 6%
per annum, compounded annual, based on a 365 day year and the actual number
of days elapsed.
2. PAYMENTS
--------
Subject to Clause 3 below, accrued interest and principal shall be payable
in one payment due 31st August 1997.
3. PREPAYMENT: RIGHT OF OFFSET
---------------------------
This Note may be prepaid in whole or in part, at any time, after a date
which is six months from the date hereof without penalty or premium. This
Notes shall be subject to a right of offset in favour of Maker as provided
in Clause 4.19 of the Agreement.
4. PREPAYMENT IN DOLLARS
---------------------
(a) Maker shall have the option to prepay this Note in whole or in part in
US dollars.
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<PAGE>
(b) This option shall be exercisable by Maker giving Mr and Mrs Greaves
notice in writing.
(c) The notice may be given at any time falling within the period
commencing six months after the date hereof and ending 11 months after
the date hereof but not otherwise.
(d) Prepayment pursuant to this Section shall be made on the date
following 14 days after the date on which the notice is given.
(e) The amount of US dollars to be prepaid pursuant to this Section shall
be calculated at the following rate of exchange namely $1.51 per
(Pounds)1 of principal being redeemed.
5. APPLICATION OF PAYMENTS
-----------------------
All payments and prepayments received by Mr and Mrs Greaves shall be
applied first to accrued interest, then to other charges due with respect
to this Note and then to unpaid principal balance.
6. DEFAULT AND REMEDIES
--------------------
A. DEFAULT
-------
Maker will be in default under this Note if:
(i) Makers fails to make a payment of principal and/or interest
hereunder when due or declared due, whether as scheduled
maturity, by acceleration or otherwise, within ten (10)
business days after receipt of written notice of such
nonpayment;
(ii) Maker breaches any other material covenant, agreement or
understanding under this Note and such breach continues for ten
(10) or more business days after the
2
<PAGE>
receipt of written notice from Mr and Mrs Greaves of the
occurrence of such breach; or
(iii) Maker files a petition in bankruptcy, is adjudicated insolvent,
petitions or applies to any tribunal for the appointment of a
receiver, custodian, or any trustee for Maker or commences any
proceeding under any bankruptcy, reorganisation, arrangement,
readjustment of debt, dissolution or liquidation law or statue
of any jurisdiction of any such proceeding has been commenced
against Maker which remains undismissed for a period of sixty
days.
B. REMEDIES
--------
Upon Maker's default, Mr and Mrs Greaves may:
(i) upon written notice to Maker, declare the entire principal sum
and all accrued and unpaid interest hereunder immediately due
and payable; and
(ii) exercise any and all of the remedies provided in the
Agreement and applicable law.
C. ATTORNEYS' FEES AND COSTS
-------------------------
Maker promises to pay on demand all out-of-pocket costs and expenses
of Mr and Mrs Greaves in connection with the collection of amounts due
hereunder, including, without limitation, attorneys' fees and expenses
incurred in connection therewith, whether or not any lawsuit is ever
filed with respect thereto.
7. MISCELLANEOUS
-------------
(a) All communications or notices required or given under this Note shall
be given in accordance with the provisions of Clause 14 of the
Agreement.
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<PAGE>
(b) This Note may be modified only by a written agreement executed by
Maker and Mr and Mrs Greaves.
(c) This Note shall be governed by the laws of the State of California to
the non exclusive jurisdiction of whose courts the parties submit.
(d) The terms of this Note shall inure to the benefit of and bind Maker
and Mr and Mrs Greaves and their respective heirs, legal
representatives and successors and assigns.
(e) Time is of the essence with respect to all matters set forth in this
Note.
(f) If this Note is destroyed, lost or stolen, Maker will deliver a new
Note to Mr and Mrs Greaves on the same terms and conditions as this
Note with a notation of the unpaid principal and accrued and unpaid
interest in substitution of the prior Note. Mr and Mrs Greaves shall
furnish to Maker reasonable evidence that the Note was destroyed, lost
or stolen and any security or indemnity that may be reasonably
required by Maker in connection with the replacement of this Note.
IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first
above written.
MAKER:
...............................................
UNIPHASE CORPORATION
By: ..........................................
Its: ..........................................
4
