EXHIBIT 2
SHARE PURCHASE AGREEMENT
AGREEMENT made as of the 22nd day of December, 1999 by and between
GenRad, Inc., a Massachusetts corporation whose principal place of business
is situated at 7 Technology Park, Westford, Massachusetts, MA01886, USA (the
"Purchaser") and Xxxxx Xxxxxxx of 0 Xxxxx Xxxxx , Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxx XX0 0XX (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller is the owner of the entire issued share capital of
Motor Industry Services Limited (company number 3051850) whose registered office
is situated at 0 Xxxxxxxx Xxxxx, Xxxxxxxxx Xxx, Xxxxxxxx, Xxxxx XX00 0XX, a
company incorporated in England ("MIS") consisting of two ordinary shares of
(pound)1 each (the "Shares"); and
WHEREAS, MIS owns the entire issued share capital of its subsidiary,
Mastertech Automotive Limited (company number 3453734) whose registered office
is at 0 Xxxxxxxx Xxxxx, Xxxxxxxxx Xxx, Xxxxxxxx, Xxxxx XX00 0XX, a company
incorporated in England ("MAT") (hereinafter, MIS and MAT are collectively
referred to as "the Companies"); and
WHEREAS, the Seller desires to sell, and the Purchaser desires to buy, the
Shares on the terms and conditions set out in this Agreement;
NOW, THEREFORE, in consideration of the obligations hereinafter set out,
the parties hereto agree as follows:
1. PURCHASE AND SALE OF SHARES.
Subject to and upon the terms and conditions of this Agreement, the Seller
agrees to sell to the Purchaser with full title guarantee and transfer ownership
of, and the Purchaser agrees to purchase from the Seller, free and clear of all
liabilities, liens, claims and encumbrances, all of the Shares as of the
Completion Date (as hereinafter defined).
2. PURCHASE PRICE AND RESTRICTIONS ON RESALE.
a. The consideration for the sale of the Shares (the "Total Purchase
Payment") shall be aggregate of:
i. payment in cash of (pound)250,000 upon Completion (as herein
defined) by the Purchaser to the Seller; and
ii. the issue by the Purchaser to the Seller of such number of shares
of the common stock, $1.00 par value, of the Purchaser as has the
value (pound)1,100,000 determined in accordance with Clause 2(b)
(the "Initial Shares");
iii. the issue by the Purchaser to the Escrow Agent of such number of
shares of the common stock, $1.00 par value, of the Purchaser as
has the value (pound)150,000 determined in accordance with Clause
2(b) and subject to the terms of Clause 13 and to the terms of an
Escrow Agreement (the "Escrow Agreement") by and between State
Street Bank and Trust Company (the "Escrow Agent"), the Seller
and the Purchaser of even date herewith (the "Escrow Shares")
(the Initial Shares and Escrow Shares are hereinafter
collectively referred to as the "GenRad Shares").
b. The number of GenRad Shares shall be determined by multiplying the
elements of the Total Purchase Payment referred to in Clauses 2(a)(ii)
and 2(a)(iii) by the Exchange Rate and dividing the product by the
Average Closing Price. The term "Exchange Rate" shall be the average
exchange rate (U.S. dollars to British pounds) as reported in THE WALL
STREET JOURNAL for the ten trading days immediately preceding the
third trading day immediately preceding Completion (as hereinafter
defined). The term "Average Closing Price" shall mean the lower of,
(i) the average of the closing prices of GenRad common stock on the
New York Stock Exchange as reported in THE WALL STREET JOURNAL for the
ten trading days immediately preceding the third trading day
immediately preceding Completion and (ii) the closing price of GenRad
common stock on the New York Stock Exchange as reported in the WALL
STREET JOURNAL for the last day of such ten day trading period.
c. The GenRad Shares have not been registered under the Securities Act of
1933, as amended (the "Act") and are being issued pursuant to
Regulation S, an exemption from registration under the Act. The
securities may not be offered, sold, transferred or otherwise disposed
of in the United States or to any U.S. person without registration or
exemption under the Act. The shares may not be sold outside the United
States except in compliance with Regulation S. In addition, hedging
transactions with respect to the GenRad Shares are prohibited unless
in compliance with the Act.
d. The certificates representing the GenRad Shares to be issued to the
Seller and the Escrow Agent hereunder will bear restrictive legends
requiring compliance with the statutory and contractual prohibitions
on transfer contained in Clause 7 in connection with any resale of
such shares including, restrictions on transfer pursuant to the Act
and Regulation S, promulgated thereunder.
3. COMPLETION.
a. The completion of the matters contemplated hereby (the "Completion")
shall take place at 11:00 a.m. on December 22, 1999, at the offices of
the Purchaser's counsel or at such other time or place as may be
agreed upon in writing by the Purchaser and the Seller (the
"Completion Date").
b. At Completion, the Seller shall deliver share certificates in respect
of the Shares together with a duly executed stock transfer form in
favour of the Purchaser, satisfactory to the Purchaser, validly
transferring the Shares to the Purchaser. In addition, the Seller
shall deliver the agreements, documents and other instruments set out
in Clause 8.
-2-
c. At Completion, the Purchaser shall deliver to the Seller share
certificates in respect of the Initial Shares and (pound)250,000 in
cash by telegraphic transfer of immediately available funds to a bank
specified by the Seller (upon receipt of share certificates in respect
of the Shares) and the other instruments, documents and agreements set
out in Clause 9.
d. Promptly and no later than one business day after Completion, the
Purchaser shall deposit in escrow pursuant to Clause 13, the Escrow
Shares. The Escrow Shares shall be issued in the name of the Escrow
Agent. The Escrow Shares shall be held for the purposes described in
Clause 13 and in the Escrow Agreement and shall be released in
accordance with the provisions of Clause 13 and the Escrow Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
Subject to those matters fully and fairly disclosed in the disclosure
letter sent by the Seller to the Purchaser immediately before the signing
of this Agreement (the "Disclosure Letter") and to Clause 11 and Clause
12(f), the Seller represents and warrants to the Purchaser as follows:
a. CONSTITUTION. The Companies are both private companies limited by
shares and incorporated in England and Wales, with all requisite
corporate power and authority to own, lease and operate their
properties and to carry on their respective businesses as presently
conducted.
b. AUTHORITY. (i) The Seller owns all of the Shares legally and
beneficially free and clear of any liens, claims, encumbrances or
restrictions or rights, title or interests of others. The Shares
constitute the entire issued share capital of MIS. The Seller has the
absolute right, power and capacity to sell, assign and deliver the
Shares to Purchaser, free and clear of all liens, claims, encumbrances
or restrictions, or rights, title or interests of others, and to enter
into and complete the transactions contemplated hereby, including
without limitation the execution of this Agreement and the execution
of the Ancillary Agreements set out in Clause 8. There are no
agreements, written or oral, between the Seller and any other person
or entity, including the Companies, relating to the acquisition,
disposal or voting of the Shares.
(ii) MIS owns all of the outstanding share capital of MAT (the "MAT
Shares") beneficially and legally free and clear of any liens, claims,
encumbrances or restrictions or rights, title or interests of others.
The MAT Shares constitute the entire issued share capital of MAT.
There are no agreements, written or oral, between the Seller and/or
MIS and any other person or entity relating to the acquisition,
disposal or voting of the MAT Shares.
c. CAPITALISATION.
(i) The Shares are duly authorised, validly issued, fully paid and are
free and clear of all rights, title and interests of all persons other
than the Seller and are subject to no restrictions on transfer. There
are no outstanding or authorised subscriptions,
-3-
options, warrants, calls, rights, commitments, or other agreements of
any nature which require MIS to issue any additional shares of its
capital or any securities convertible into or evidencing the right to
subscribe for any share capital of MIS.
(ii) The MAT Shares are duly authorised, validly issued, fully paid,
and are free and clear of all rights, title and interests of all
persons other than MIS and are subject to no restrictions on transfer.
There are no outstanding or authorised subscriptions, options,
warrants, calls, rights, commitments, or other agreements of any
nature which require MAT to issue any additional share capital or any
securities convertible into or evidencing the right to subscribe for
any share capital of MAT.
d. SUBSIDIARIES. Except with respect to MAT, (the wholly owned subsidiary
of MIS), the Companies have no subsidiaries, domestic or foreign, or
any other interest in the share capital of any other corporation, or
interest in any partnership, association (other than the Retail Motor
Industry Federation), business trust, other business entity or joint
venture.
e. NO CONFLICT. Neither the execution and delivery by the Seller of this
Agreement or any of the Ancillary Agreements nor the performance by
the Seller of his obligations hereunder or thereunder will, nor with
the giving of notice or the lapse of time or both, would:
i. conflict with or result in a breach of or constitute a default
under any provision of the respective memoranda and articles of
association of the Companies or any contract, indenture, lease,
sublease, loan agreement or other agreement to which either of
the Companies is a party;
ii. breach any order, injunction, decree, law, statute, rule or
regulation applicable to the Seller or to either of the Companies
in any jurisdiction; or
iii. result in the creation or imposition of any lien, claim,
restriction, charge or encumbrance upon the Shares, the MAT
Shares or any of the assets or properties of the Companies or
result in any other liability relating to the Shares, the MAT
Shares or the business, assets or properties of the Companies.
f. ENVIRONMENTAL.
i. The Companies comply and have at all times complied with all
Environmental Laws and Environmental Licences.
ii. There are no circumstances entitling any Environmental Licence to
be revoked, suspended, amended, varied, withdrawn or not renewed
or which would prevent compliance with any Environmental Licence.
iii. The Companies are not and are not likely to be required by an
Environmental Licence or any Environmental Law or as the result
of any Environmental Claim to incur any expenditure or to desist
from taking any
-4-
action which might have a material adverse effect on either of
the Companies' financial condition.
iv. No Environmental Claim has been made or threatened or is likely
to be made or threatened against either of the Companies or any
of their directors, secretaries or senior employees or any
occupier of the property leased, occupied or controlled by either
of the Companies (the "Property") and so far as the Seller is
aware neither of the Companies nor any of their respective
officers have or is likely to have any liability in relation to
Environmental Matters. Neither of the Companies have at any time
owned or occupied any property other than the Property.
v. No Relevant Substance has been disposed of, kept, transported,
used, collected, sorted or produced at any time on, to or from
the Property or controlled by either of the Companies as a result
of or in connection with that Companies' activities in
circumstances, and there is nothing arising out of the business
of the Companies, which could result in an Environmental Claim
against either of the Companies or which would have a material
adverse effect on the use or value of any property of the
Companies.
Notwithstanding any other provisions of this Agreement, for purposes of
this Clause 4(f), the following terms have the following meanings:
"ENVIRONMENT" means the environment as defined in section 1(2) of the
Environmental Protection Xxx 0000;
"ENVIRONMENTAL CLAIM" means any claim, prosecution, demand, voluntary
action approved by the Environment Agency pursuant to section 78H of the
Environmental Protection Act 1990 (as inserted by section 57 of the Environment
Xxx 0000, other action, investigation, official warning, abatement or other
order or notice (conditional or otherwise), relating to Environmental Matters or
requiring compliance with the terms of any Environmental Licence or
Environmental Law or arising as a result of any Environmental Law;
"ENVIRONMENTAL LAW" includes:
all laws (including the provisions of section 57 of the Environment
Xxx 0000 and the draft circular on contaminated land and draft regulations
dated September 1999, applicable to the Companies at the date of this
Agreement (to the extent that such section and draft circular are
subsequently brought into force and provided that the liability of the
Seller shall be no greater than if such provisions were currently and
remained in force in such form));
all statutes, rules, regulations, treaties, directives, directions,
by-laws, codes of practice, circulars, guidance notes, orders, notices and
demands; and
all decisions of the courts or of any governmental authority, agency,
regulatory body or any other body or person whatsoever,
-5-
in each case relating to Environmental Matters applicable to the Companies
and/or the business of the Companies;
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation, consent
or other approval required at any time by the Companies or in relation to the
business carried on by the Companies pursuant to any Environmental Law;
"ENVIRONMENTAL MATTERS" includes:
any generation, deposit, disposal, keeping, treatment, transportation,
transmission, handling or manufacture of any Relevant Substance;
any nuisance, noise, defective premises and health and safety at work
or elsewhere; and
the pollution, contamination, conservation or protection of the
Environment whether relating to land, water, air, man or any living
organisms supported by the Environment or to natural resources or any other
matter whatsoever affecting the Environment or any part of it.
"RELEVANT SUBSTANCE" means any substance whatsoever (whether in a solid or
liquid form or in the form of a gas or vapour and whether alone or in
combination with any other substance) or waste (as defined in the Environmental
Protection Act 1990) which is capable of causing harm to man or any other living
organism supported by the Environment or damaging the Environment or public
health or welfare;
g. CONSENT. All consents, approvals, filings or registrations with or
agreement of any person, party, court, entity, or government agency,
including, without limitation, all Environmental Licenses, required to be
obtained by the Seller in connection with the execution and delivery of
this Agreement or any of the Ancillary Agreements executed in connection
herewith or by the Seller or by either of the Companies in connection with
the completion of the transactions contemplated hereby or thereby, have
been obtained by the Seller.
h. ASSETS.
i. Tangible Assets - The Companies own, free and clear of any liens,
claims, encumbrances, or rights of others, all of the machinery,
equipment, tools, furniture, fixtures, supplies, inventory, vehicles
and other tangible personal property and assets reflected in the
Accounts and Management Accounts (as hereinafter defined) ("Tangible
Assets"). A list of all Tangible Assets of the Companies, and the
locations thereof including accurate particulars of all hire -
purchase, conditional sale, leasing or rental agreements ("Hire
Agreements") is set out in the Disclosure Letter with specific
reference to this Clause 4(h)(i). All such assets are in good repair
and adequate for the purposes for which they are used or intended and
comply with appropriate safety regulations, except for minor defects
and reasonable wear and tear. Neither the Seller nor any other person
or entity directly or indirectly owns or controls any assets or
properties which
-6-
are necessary or material to the respective business or operations of
the Companies.
ii. There has been no exercise or purported exercise of any claim,
mortgage, lien, pledge, charge, encumbrance, equity, hypothecation,
right of preemption or other security interest or any other
restriction or right exercisable by, or in favour of, any third party
(or an agreement or commitment to create any of them) ("Security
Interest") over any of the Tangible Assets or other assets of the
Companies and there is no dispute directly or indirectly relating to
any such assets.
iii. With respect to any Hire Agreements:
(1) the amount of the last rental specified in the Disclosure Letter
with specific reference to this Clause 4(h)(iii) to be payable by
the Companies is the amount currently payable under such
hirepurchase, conditional sale, leasing or rental agreement
having regard to all its terms, and at the date of this Agreement
no circumstance exists by virtue of which the lessor or the owner
is or might be entitled to require an upward adjustment to the
rental or to payments at a future date under the relevant
agreement at above the last rental specified in the Disclosure
Letter with specific reference to this Clause 4(h)(iii);
(2) No circumstances have occurred which would entitle the lessor or
the owner to terminate any Hire Agreement and no circumstances
have occurred which constitute an event of default under any Hire
Agreement; and
(3) no inquiry or investigation is being conducted by the Inland
Revenue concerning the availability to the lessor of capital
allowances in respect of any of the items referred to in the
Disclosure Letter with specific reference to this Clause
4(h)(iii).
iv. The Companies own no freehold property. The Disclosure Letter contains
a description of all real property leases and subleases (written or
oral) to which either of the Companies is a party with specific
reference to Clause 4(h)(iv). The leases and subleases referred to
above are valid, binding and enforceable against the Companies in
accordance with their terms, and neither of the Companies is and, to
the knowledge of the Seller, no other party is, in default thereunder.
The Companies have not waived any material rights under any such
leases or subleases. The transactions contemplated by this Agreement
will not affect or impair the terms, validity or enforceability of any
of such leases or subleases.
i. STOCK. At Completion the Seller shall deliver to the Purchaser a schedule
setting out all work-in-progress and finished goods ("Stock") of the
Companies as of November 30, 1999. All Stock is good and saleable in the
ordinary course of business and no material portion thereof is obsolete and
all such inventory is fairly reflected on the Balance Sheet.
-7-
j. EMPLOYEE RELATIONS.
i. No employees of the Companies are currently or have in the past been
represented by any trade union during their period of employment by
the Companies. Neither of the Companies is nor has ever been party to
any collective bargaining agreement, and, to the best of Seller's
knowledge, there is no threatened dispute between the Companies and
any trade unions or otherwise with respect to the employees of the
Companies.
ii. There has been no strike, dispute, slowdown, or work stoppage nor are
any of the above actually pending or, to the best of Seller's
knowledge, threatened against or affecting either of the Companies.
iii. No grievance or arbitration proceeding is pending and no claim
therefor has been asserted against either of the Companies.
iv. Neither of the Companies is involved in any dispute with any of their
respective employees affected by (or in any negotiation under or
affected by) the Employment Rights Xxx 0000 ("ERA"), the Equal Pay Xxx
0000, the Sex Discrimination Acts 1975 and 1986, the Race Relations
Xxx 0000, the Disability Discrimination Xxx 0000 and the Trade Union
and Labour Relations (Consolidation) Xxx 0000 and, so far as the
Seller is aware, there are no present circumstances which are likely
to give rise to any such dispute.
v. Within the period of one year preceding the date of this Agreement,
neither of the Companies has given notice of any redundancies to the
Secretary of State for Employment or started consultations with any
independent trade union or unions under Part XI ERA and neither of the
Companies has failed to comply with any obligation under such Part XI;
and neither of the Companies has been a party to any relevant transfer
as defined in the Transfer of Undertakings (Protection of Employment)
Regulations 1981 (as amended) and the Companies have not failed to
comply with any duty to inform and consult any independent trade
union.
vi. All employees of the Companies together with an accurate description
of their duties and job titles and current rates of all forms of
remuneration and all sales representatives and distributors of the
Companies together with their locations and descriptions of their
territory and product lines and current rates of all forms of
remuneration are set out in the Disclosure Letter with specific
reference to this Clause 4(j)(vi). The Disclosure Letter also contains
details of all directors and the secretaries of the Companies with
specific reference to this Clause 4(j)(vi) and their current rates of
all forms of remuneration.
vii. The Companies are in material compliance with all laws respecting
employment and employment practices, terms and conditions of
employment, and wages and hours, and are not engaged in any unfair
labour practice, and there are no arrears in the payment of wages.
-8-
viii. True and accurate copies of all contracts of employment between the
Companies and their respective employees and of any agreements or
contracts relating to the provision of consultancy services have been
provided to the Purchaser.
ix. No gratuitous payment has been made or promised by either of the
Companies in connection with the actual or proposed termination,
breach, suspension or variation of any employment or engagement of any
present or former director, officer or employee or consultant; and
there is no outstanding obligation or ex gratia arrangement for either
of the Companies to pay any compensation to any present or former
director, officer, employee or consultant.
x There are no training schemes arrangements or proposals in existence
nor have there been any such schemes or arrangements at any material
time in the past in respect of which a levy may become payable by
either of the Companies under the Industrial Training Xxx 0000.
k. LITIGATION. There are no court proceedings, or administrative, arbitration
or other proceedings or governmental investigations (i) pending to which
the Seller or either of the Companies are parties or (ii) to the best
knowledge of the Seller, threatened against either of the Companies, with
respect to any of the transactions contemplated hereby or that would,
singly or in the aggregate, have any material adverse effect on the
business, assets or financial condition of either of the Companies, or
which would impair or prevent the completion of any of the transactions
contemplated hereunder and, to the knowledge of the Seller, there exists no
basis or grounds for any of the foregoing. There is no outstanding order,
judgment or decree of any court or any governmental agency, authority or
body against either of the Companies or any person for whose acts the
Company may be vicariously liable.
l. ACCOUNTS. The Seller has delivered to the Purchaser unaudited management
accounts for each of the Companies dated November 30, 1999 ( collectively
the "Management Accounts"). Seller has also delivered to Purchaser audited
accounts prepared in accordance with generally accepted accounting
principles in the United Kingdom of MIS and, on a consolidated basis, for
MIS and MAT (collectively, the "Accounts") for the financial year ended
April 30, 1999 (the "Accounts Date").
i. GENERAL. The Accounts:
(1) comply with the requirements of the Companies Xxx 0000;
(2) comply with all current statements of standard accounting
practice and financial reporting standards applicable to a
company incorporated in the United Kingdom and have been prepared
in accordance with the historical cost convention, on a
recognised and consistent basis and on the same basis and in
accordance with the same accounting policies as the corresponding
accounts for all preceding financial years;
-9-
(3) give a true and fair view of: the state of affairs of each of the
Companies on the Accounts Date; the assets and liabilities of
each of the Companies as of the Accounts Date and the profit or
losses of the Companies for the financial year ended on that date
and have not been affected by any unusual, extraordinary,
exceptional or non-recurring items;
(4) are accurate in all material respects; and
(5) make full provision for all established liabilities and make
proper provision for (or contain a note in accordance with good
accounting practice and generally accepted accounting principles
applicable in the United Kingdom) all deferred or contingent
liabilities (whether liquidated or unliquidated) at the Accounts
Date, including for the cessation or diminution of any part of
the Companies' business, closure costs and deferred taxation,
provided that (without limitation) where provision for deferred
taxation is not made in the Accounts, details of all or any
deferred taxation liability have been disclosed to the Purchaser.
ii. STOCK AND WORK-IN-PROGRESS. Without limiting Clause 4(h)(i):
(1) proper provision has been made in the Accounts: (i) for
depreciation of assets; (ii) in valuing work-in-progress and
stock, for any foreseeable losses which may arise on completion
or realisation; (iii) for any foreseeable liabilities in relation
to the disposal of any assets or the cessation or diminution of
any part of the business of the Companies or closures; (iv) for
bad or doubtful debts; and (v) for the future cost (calculated on
an actuarial basis) of any unfunded commitments under all pension
schemes (if any) involving the Companies; and
(2) stock and work-in-progress have been valued in the Accounts at
the lower of cost and net realisable value.
iii. FIXED ASSETS. The value of the fixed assets shown in the Accounts did
not exceed their market value at the Accounts Date.
iv. AUDITED ACCOUNTS FOR PREVIOUS FINANCIAL PERIODS. The results shown by
the audited accounts for each of the financial periods of the
Companies preceding the financial year ended on the Accounts Date were
not (save as disclosed therein) affected by any extraordinary,
exceptional or non-recurring item or by any other factor rendering
such results for all or any part of such periods unusually high or
low.
v. ACCOUNTING RECORDS OF THE COMPANIES. The accounting records of the
Companies have been properly written up on a consistent basis and
accurately present and reflect, in accordance with generally accepted
accounting principles and standards, all the transactions to which
either of the Companies has been a party and contain accurate details
of the business
-10-
activities of the Companies and of all matters required by the
Companies Xxx 0000 to be entered in them.
vi. MANAGEMENT ACCOUNTS:
(1) have been prepared on a prudent basis consistent with the
Accounts;
(2) accord with the books and accounts of the respective Companies;
and
(3) fairly and properly reflect the financial operations of the
business of the Companies for the period to which they
respectively relate.
vii. REPORTS BY FINANCIAL OR MANAGEMENT CONSULTANTS. There have been no
reports concerning the Companies by accountants or by financial or
management consultants since incorporation.
viii. FACTORING OR DISCOUNTING OF DEBTS. Neither of the Companies have
factored or discounted any of their debts or engaged in financing of a
type which would not require to be shown or reflected in the Accounts.
ix. DEBTS DUE TO THE COMPANIES.
(1) All debts (less any specific provision made in the Accounts) due
to the Companies included in the Accounts and the Management
Accounts and all debts now due to the Companies have either been
prior to the date of this Agreement realised or will within 12
months after such date realise their full amount in cash.
(2) The Seller does not nor any person connected with the Seller
(within the meaning of section 839 Income and Corporation Taxes
Act 1988) owes any amount to either of the Companies.
m. ABSENCE OF CHANGES. Since the date of the Management Accounts there has not
been:
i. any change (individually or in the aggregate) in the contingent
obligations of the Companies by way of guarantee, endorsement,
indemnity, warranty, or otherwise;
ii. any damage, destruction, or loss, whether or not covered by insurance,
materially and adversely affecting the properties or business of the
Companies;
iii. any waiver or compromise by the Companies of a valuable right or of a
material debt owed to it;
iv. any loans made by the Companies to its employees, officers, or
directors other than travel advances made in the ordinary course of
business;
-11-
v. any material increases in the compensation of or bonuses paid to any
of the Companies' employees, officers, or directors;
vi. any declaration or payment of any dividend or other distribution of
the assets of the Companies;
vii. any redemption, issue or sale by the Companies of any share capital or
any securities convertible into such share capital or any options,
warrants, pre-emptive rights or other rights to purchase or acquire
any such securities or share capital; or
viii. any other event or condition of any nature that has affected or could
affect, materially or adversely, the Companies' business or property
taken as a whole.
n. COMPLIANCE. Except as set out in the Disclosure Letter with specific
reference to this Clause 4(n), at all times prior to the date hereof the
Companies have, in all material respects, complied with and have not
committed any material breach of, any laws, regulations or orders
applicable to the Companies' business and the Companies have all permits,
registrations, approvals and licenses required thereby and neither of the
Companies nor the Seller has received any notice of any failure so to
comply or of any such breach. All such permits, registrations, approvals
and licenses are valid and in full force and effect and not subject to
revocation or limitation by virtue of any misleading or untrue statement,
or of any omission, made in the course of securing the same. There is no
term or provision of any mortgage, indenture, contract, agreement or
instrument to which either of the Companies is a party or by which either
of the Companies is bound or of any provision of any judgment, decree,
order, statute, rule or regulation applicable to or binding upon either of
the Companies, which materially adversely affects the Companies' business
in a manner which is materially different from such effects on entities in
the same or similar business as the Companies.
o. INSURANCE. The Companies have adequate insurance covering all aspects of
their business and operations and all of their tangible assets and have
effected all insurance required by law to be effected by them. The
Companies have insurance in at least such amounts and insure against at
least such risks as are generally insured against by companies engaged in
the same or a similar business. The Companies have not been refused any
insurance during the last three years and, the Companies are in compliance
with all requirements of the policies under which they are currently
insured. Neither of Companies has received any notice or other written
communication from any issuer of its current insurance policies canceling
or materially amending any of its current insurance policies, materially
increasing any deductibles or retained amounts thereunder, or materially
increasing the annual or other premiums payable thereunder, and, to the
best knowledge of the Seller, no such cancellation, amendment or increase
of the deductibles, retained amount or premiums is threatened. In the event
of any loss or damage, the proceeds of, or any claims for loss payable
under, any insurance policy with respect thereto shall be held by the
Companies in trust to repair, replace, or restore such lost or damaged
assets and to restore the Companies' business to its former condition. A
list and brief description of all policies of
-12-
insurance related to the properties or assets of the Companies (showing the
name of insurer and type of insurance) maintained by the Companies are set
out in the Disclosure Letter with specific reference to this Clause 4(o).
p. NO BROKER. No agent, broker, person or firm acting on behalf of the Seller
or the Companies or under their authority is or will be entitled to a
financial advisory fee, brokerage commission, finder's fee or like payment
in connection with any of the transactions contemplated hereby other than
Xxxx Xxxxxx and/or Pall Mall Capital Partners whose fees or commissions
shall be paid by the Seller.
q. PENSIONS. The Companies do not make and are not obliged to make
contributions to any written or oral:
i. pension, life assurance or profit sharing plan;
ii. employee share ownership, share option scheme, share purchase plan or
profit sharing bonus or other incentive scheme;
iii. medical, healthcare, life, disability or other similar plan;
iv. bonus or incentive scheme;
x. xxxxxxxxx or vacation pay (in each case, except as set out in service
agreements disclosed to the Purchaser or as provided by law) or
scholarship, legal services, educational assistance, or dependent care
plan, programme, policy, or practice;
vi. retirement, death benefit or other fringe benefit plan; or
vii. any other employee benefit plan, program, policy or practice of any
kind.
r. CONTRACTS. There is attached to the Disclosure Letter with specific
reference to this Clause 4(r) a list of those contracts and agreements,
oral and written, (other than contracts of employment or consultancy
agreements disclosed pursuant to Clause 4(j)(viii)) to which either of the
Companies is a party or under which either of the Companies is obliged:
i. which involve or may involve, future expenditures or obligations on
the part of either of the Companies in excess of (pound)10,000,
ii. which have a term of more than one year,
iii. which, without regard to monetary amount or period of time, were
entered into other than in the ordinary course of business,
iv. to which the Seller, or any person connected with the Seller (within
the meaning of Section 839 Income and Corporation Taxes Act), directly
or indirectly, is also a party, or in which the Seller or any
associate of the Seller has an interest,
-13-
v. under which either of the Companies is in default or may be in default
due to the completion of the transactions contemplated hereby,
vi. which require prior approval in connection with a change in control of
the Companies, or
vii. which involve the licensing by or to either of the Companies of any
copyright, software or technology which is necessary for the conduct
of, or material to, the business of the Companies.
As to agreements required to be disclosed, a true and complete copy of each
such written agreement and a true and complete summary of each such oral
agreement has been furnished to the Purchaser. Each contract set out in the
Disclosure Letter is in full force and effect and constitutes the valid,
legal and binding obligations of the Companies and the other parties to it
enforceable by and against the Companies in accordance with its terms; to
the best of the Seller's knowledge, no party thereto is in default (and no
event has occurred which with notice or lapse of time or both would become
a default) or has an accrued right of termination thereunder; and no such
contract requiring the purchase by either of the Companies of properties or
services is for a quantity in excess of the normal requirements of the
Companies' business or at a price in excess of the generally prevailing
price for the item to be purchased at the time such contract was entered
into.
s. DISCLOSURE. Neither this Agreement nor any Ancillary Agreement contains or
will contain any untrue statement of any material fact or omits to state a
material fact necessary to make the statements herein or therein, when
taken as a whole, not misleading.
t. SUFFICIENCY OF ASSETS. The Companies either own outright, or possess valid
and enforceable licenses, leases or other rights to use, all of the
material assets, properties and rights, real or personal, tangible or
intangible, including without limitation, Intellectual Property necessary
or material to conduct their business as presently conducted.
u. MARKETING RESTRICTIONS. The Companies are not restricted from carrying out
their business and operations anywhere in the world by any agreement,
license or by court decree in any action to which either of the Companies
was or is a party.
v. CUSTOMERS. There are no pending or threatened disputes of a material nature
with customers of the Companies, nor, to the best of the Seller's
knowledge, are present customers of the Companies intending to cease doing
business with the Companies. The Companies have not received any notice
that any customer is dissatisfied with, or has refused to pay for, services
performed by the Companies. A true, correct and complete list of the names
and addresses of all customers currently receiving or under contract for
services in excess of(pound)5,000 from the Companies is set out in the
Disclosure Letter with specific reference to this Clause 4(v).
-14-
w. PRODUCT OR SERVICE WARRANTIES. The Companies have not given any third party
any express written or oral product or service warranties relating to
products produced, sold, delivered or serviced or services provided by the
Companies. The Companies have not sold any products or performed any
services which fail to comply with any warranty given by the Companies with
respect to such products or services.
x. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent reflected or
reserved against in the Accounts, there are no material liabilities or
obligations of the Companies or related to their business or operations, of
any nature, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, other than liabilities which have been incurred in
the ordinary course of business and which are not material in relation to
the business of the Companies.
y. INTELLECTUAL PROPERTY. For the purpose of this Agreement "Intellectual
Property" means all items of intangible property owned by or used in
connection with the business of the Companies, including but not limited to
software, trade secrets, know-how, data, technical specifications,
drawings, any other proprietary information, patents, trade names,
trademarks, service marks, copyrights, designs and design rights, and
registrations or applications for any of the foregoing. A true, correct and
complete list of all Intellectual Property of which the Companies are or
have applied to be registered as proprietor or user are attached to the
Disclosure Letter with specific reference to this Clause 4(y). A true,
correct and complete list of all licences or similar agreements or
arrangements to which either of the Companies is a party (but excluding any
standard form "shrink wrap" licenses), either as licensee or licensor, with
respect to any Intellectual Property is also set out in the Disclosure
Letter with specific references to this Clause 4(y).
i. The Companies are the legal and beneficial owners of all right, title
and interest in and to the Intellectual Property of the Companies,
free and clear of all liens, Security Interests, charges, or
encumbrances or other adverse claim.
ii. the Companies have and following Completion shall continue to have the
right and authority, to use all Intellectual Property currently used
by them in connection with the conduct of their business in
substantially the same manner as presently conducted, and such use
does not conflict with, infringe upon or breach any rights of any
other person, corporation or entity.
iii. Neither of the Companies is infringing upon any trade secret,
copyright or other proprietary right of a third party in the
conduct of their business and the Companies have not received
notice of, and the Seller does not have any knowledge of any basis
for, any litigation or threatened claim, interference action or
other judicial or adversarial proceeding against either of the
Companies that any of the operations, activities, products,
services or publications of the Companies infringe or will infringe
any patent, trademark, design registration, service xxxx, trade
name, copyright, trade secret or other proprietary right of a third
party, or that either of
-15-
the Companies is illegally or otherwise using the trade secrets, data,
technical specifications, drawings, formulae or proprietary rights of
others.
iv. No Intellectual Property used by the Companies in their business is
owned by or held in the name of the Seller or any present or former
employee of or consultant to either of the Companies.
v. There are no outstanding nor, to the best knowledge of the Seller, are
there any threatened disputes or other disagreements with respect to
any licenses or similar agreements or arrangements described in the
Disclosure Letter with specific reference to this Clause 4(y) or with
respect to infringement by a third party of any of the Intellectual
Property.
vi. The Intellectual Property owned or licensed by the Companies is
sufficient to conduct and continue conducting the Companies' business
in substantially the same manner as presently conducted and the
termination of any licence agreement will not prevent the Companies
from continuing to conduct their business in substantially the same
manner as presently conducted.
vii. The Companies have taken all steps reasonably necessary to protect
their continuing right, title and interest in and to the Intellectual
Property currently used by them in their business or in which they
otherwise have any right and their continued use of such Intellectual
Property.
viii. The Seller has no knowledge that any third party is infringing upon
or otherwise violating or will threaten to infringe upon or otherwise
breach any of the Intellectual Property in which the Companies have
ownership rights.
ix. Nothing in the Basic Agreement by and between Olyslager Organisation
B.V. and MIS dated October 15, 1997 nor the Licence Agreement by and
between Olyslager Organisation B.V. and MIS dated April 24, 1998,
shall prevent the Companies from obtaining data, technical
specifications or automotive repair specifications from any third
party or will otherwise restrict the Companies from continuing to
conduct their business as heretofore conducted or as planned to be
conducted by the Purchaser (to the extent that the Purchaser has
notified its plans in a letter dated 22 December 1999 from the
Purchaser to the Seller) prior to and after termination of such
agreements.
z. REBATES AND PREPAYMENTS. The Companies have not made any commitment to
grant any rebates or discounts to their customers other than as normal and
ordinary trade terms to encourage early payment by customers. Set out in
the Disclosure Letter with specific reference to Clause 4(z) is a list of
all prepayments or deposits received by the Companies from customers for
services to be performed after the Completion Date
-16-
other than annual subscriptions paid by customers to the Companies in the
ordinary course of business.
aa. BANKS AND INDEBTEDNESS. A complete list of:
i. All instruments, agreements or arrangements pursuant to which either
of the Companies has currently borrowed or is able to borrow any
money, incurred any indebtedness as of the date hereof or can incur
any indebtedness, guaranteed any liability as of the date hereof, or
established any line of credit or other banking arrangement;
ii. All obligations of the Companies which are personally guaranteed by
any of the officers of either of the Companies;
iii. Each bank in which the Companies have an account or safe deposit box,
the names of all persons authorised to draw thereon or have access
thereto and the balance on each account as of the close of business on
the day which is one day prior to the Completion Date; and
iv. The names of each person holding a power of attorney from the
Companies
is set out in the Disclosure Letter with specific reference to this Clause
4(aa). Since the date of each balance referred to in Clause 4(aa)(iii), no
payment out of any such account has been made, except in the ordinary
course, and the present balances are not substantially different from those
shown in the Disclosure Letter.
bb. SECURITY INTERESTS AND OVERDRAFT AND OTHER FACILITIES. In relation to the
Security Interests (as defined in Clause 4(h)(ii)) to which any of the
Companies' assets are subject and all overdraft, loan and other financial
and leasing facilities available to the Companies:
i. full details thereof and true and correct copies of all documents
relating thereto have been disclosed to the Purchaser;
ii. there has been no contravention of, or non-compliance with, any
provision of any such document;
iii. no steps for the enforcement of any Security Interest have been taken
or threatened;
iv. there has not been any alteration in the terms and conditions of any
of such arrangements or facilities, all of which are in full force and
effect;
v. nothing has been done or omitted to be done whereby the continuance of
any of such arrangements and facilities in full force and effect might
be affected or prejudiced; and
vi. none of such arrangements is dependent on the guarantee of a third
party.
cc. BANK FACILITIES AND BORROWINGS OF THE COMPANIES
-17-
The total amount borrowed by the Companies:
i. from bank(s) does not exceed any applicable facility or overdraft
limits; or
ii. from whatsoever source does not exceed any limitation on borrowing
contained in the articles of association of either of the Companies or
any debenture or loan instrument or other deed or document binding on
the Companies.
iii. No event has occurred or been alleged which is or, with the passage of
time and/or the giving of any notice, certificate, declaration or
demand, would become an event of default under, or a breach of any of,
the terms of any loan capital, borrowing, debenture or financial
facility of or relating to either of the Companies or would entitle
any third party to call for repayment prior to normal maturity.
dd. MINUTE AND REGISTER OF MEMBERS. All material corporate action which has
heretofore been taken by the respective shareholders and boards of
directors of the Companies (and committees thereof) is properly recorded in
the respective minutes of the Companies. Complete and accurate records with
respect to the issue, transfer, redemption or cancellation of all shares of
the Companies are contained in the respective statutory books of the
Companies.
ee. POWERS OF ATTORNEY AND SURETYSHIPS. Neither of the Companies have any
general or special powers of attorney outstanding (whether as grantor or
grantee) and have no obligation or liability or indemnity (whether actual,
accrued, contingent or otherwise) as guarantor, surety, co-xxxxxx,
endorser, or as a party to any partnership, joint venture, association,
organisation or other entity, except as signatory or grantor of cheques or
letters of credit, respectively, signed or granted in the ordinary course
of business.
ff. OBLIGATIONS TO OR FROM AFFILIATES. A true and complete description of each
material transaction conducted or completed, in whole or in part, between
either of the Companies (on the one hand) and (on the other hand) any
officer or director of the Companies (including the Seller), or any
Affiliate (as defined below), of any such person is set out in the
Disclosure Letter with specific reference to this Clause 4(ff). Each
transaction heretofore between either of the Companies and either of the
Companies' officers or directors or any Affiliate of any such officer or
director has been conducted on an arm's-length basis on terms no more
favorable than would be obtained if the transaction had been between either
of the Companies and an unrelated party. Except for debts or other
outstanding obligations reflected on the Accounts or the Management
Accounts, there are no debts or other obligations of either of the
Companies to, or to either of the Companies from, any officer or director
(including the Seller), or any Affiliate of such officer or director. As
used herein, an "Affiliate" of an officer or director means the parent,
sibling or child of any such person or, in each case, the spouse of such
person or family member of such person or any entity in which such person
or any such family member is an officer or owner of more than five percent
of beneficial interest in the entity's outstanding share capital.
-18-
gg. YEAR 2000. Full details are set out in the Disclosure Letter with specific
reference to this Clause 4(gg) of all work undertaken by or on behalf of
either of the Companies as to whether any of the computer software,
computer firmware, computer hardware (whether general or special purpose),
and other similar or related items of automated, computerised, and/or
software systems that are used in the conduct of the Companies' business or
relied upon in the conduct of the Companies' business (the "Computer
Systems") will malfunction, cease to function, generate incorrect data, or
produce incorrect results when processing, providing and/or receiving (i)
date-related data into and between the twentieth and twenty-first centuries
and during the years 1999 and 2000, including leap year calculations (the
"Year 2000 Problem"). Neither of the Companies have any contracts with, or
commitments to, any third party with respect to their Computer Systems
relating to the Year 2000 Problem, and the Seller is not aware of any
expense that either of the Companies will incur in connection with the
resolution of any Year 2000 Problem. The Seller is not aware of inabilities
on the part of suppliers, customers or service providers with which the
Companies transact business to promptly remedy their own deficiencies in
respect of the Year 2000 Problem.
hh. INFORMATION TECHNOLOGY (INCLUDING COMPUTER HARDWARE AND SOFTWARE)
i. DATA PROTECTION
The Companies have not received notice or allegation from either the
Data Protection Registrar or a data subject alleging non-compliance
with the data protection principles or any other provisions of the
Data Protection Acts 1984 and 1998, including without limitation,
those prohibiting the transfer of data to a place outside the United
Kingdom.
ii. COMPUTER HARDWARE AND SYSTEMS USED BY THE COMPANIES
Details of any computer hardware and systems used by the Companies
(and any related third party support or maintenance agreement or
arrangements) which do not comprise a network of linked workstations
or personal computers of a type generally available to the public are
set out in the Disclosure Letter with specific reference to this
Clause 4(hh)(ii).
iii. COMPUTER SOFTWARE USED BY THE COMPANIES
The Companies do not use any computer software other than standard off
the shelf packages generally available to the public ("Standard
Software") and no Standard Software used by the Companies has been
materially modified.
The Companies possesses all necessary licences with respect to their
use of Standard Software and no licence terms have been breached.
iv. DATA STORAGE, BACK-UP AND SYSTEM BREAKDOWNS
The Companies have exclusive ownership (free of any lien or other
third party rights) of and direct control of and access to:
-19-
aa. all documents of title relating to their assets;
bb. all subsisting written agreements to which either of them is a
party;
cc. all records, systems, data and information held by either of them
or on their behalf which are recorded, maintained, stored or
otherwise wholly or partly dependent on any system (including,
without limitation, any electronic, mechanical or photographic
process whether computerised or not) whether operated by the
Company or not).
No disclosure has been made to any person other than the Purchaser of
any of the commercial and industrial know-how of the financial or
trade secrets of the Company except properly and in the ordinary
course of business and on the footing that such disclosure is to be
treated as being of a conditional nature.
In the year immediately preceding the date of this Agreement the
Companies have not suffered any failures or breakdowns of any of the
Computer Systems which have resulted in significant or repeated
disruption or loss.
The Computer Systems are not shared with any other person and there
are in existence no agreements or arrangements (binding or otherwise)
for any other person to share or to have access to or use of the
Computer Systems and the Computer Systems are not wholly or partly
dependent upon any facilities not under the exclusive ownership or
control of the Companies.
v. SUPPORT AND MAINTENANCE
The employees of the Companies include a sufficient number who have
the requisite knowledge and experience to ensure the proper operation
of the Computer Systems.
The Companies either have in their possession or are entitled to have
immediate access to (in the event of the insolvency or breach of
contract of the supplier or maintainer thereof), the source codes to
all material items of computer software forming part of the Computer
Systems, such source codes being, so far as the Companies are aware,
sufficient to enable a reasonably skilled programmer to amend, enhance
and maintain the software in question.
vi. DATA SECURITY
The Companies have taken reasonable and prudent precautions to
preserve the availability, confidentiality, security and integrity of
data held or transmitted by the Computer Systems (including without
limitation) the use of virus checking software, password protection
procedures and the taking and storing of back-up copies of data both
on and off site at least once every 24 hours.
-20-
ii. GRANTS, SUBSIDIES OR OTHER FINANCIAL ASSISTANCE IN FAVOUR OF THE COMPANIES.
The Companies have not received any grant or subsidy or other financial
assistance from any governmental or quasi-governmental or other body or
authority other than under the Department of Trade and Industry's Loan
Guarantee Scheme to the extent that details of any such grant are set out
in the Disclosure Letter with specific reference to this Clause 4(ii).
jj. THE CONSUMER CREDIT ACT OF 1974. No loan has been made by the Companies in
breach of the Consumer Credit Xxx 0000 and the Companies do not require a
license under the Consumer Credit Xxx 0000 in relation to their business.
5. REPRESENTATION AND WARRANTIES OF THE PURCHASER.
The Purchaser represents to the Seller as follows:
a. ORGANISATION AND GOOD STANDING. The Purchaser is a corporation duly
incorporated organised, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts.
b. AUTHORITY. The Purchaser has the corporate power and authority to enter
into and perform this Agreement and to complete the transactions
contemplated hereby.
c. NO CONFLICT. Neither the execution and delivery by the Purchaser of this
Agreement nor the performance by the Purchaser of its obligations hereunder
will, nor with the giving of notice or the lapse of time or both, would (i)
conflict with or result in a breach of or constitute a default under any
provision of the charter or by-laws of the Purchaser; or (ii) breach any
order, injunction, decree, law, statute, rule or regulation applicable to
the Purchaser in any jurisdiction.
d. CONSENT. All consents, approvals, filings or registrations with or
agreement of any person, party, court, entity, or government agency,
required to be obtained by the Purchaser in connection with the execution
and delivery of this Agreement or in connection with the completion of the
transactions contemplated hereby, have been or will, prior to the
Completion Date, be obtained by the Purchaser.
e. LITIGATION. There are no court proceedings, actions, or administrative,
arbitration or other proceedings or governmental investigations, pending
or, to the best knowledge of the Purchaser, threatened, against the
Purchaser, with respect to any of the transactions contemplated hereby or
that would, singly or in the aggregate, have any material adverse effect on
the business, operations, assets or financial condition or prospects of the
Purchaser, or which would impair or prevent the completion of any of the
transactions contemplated hereunder.
f. GENRAD SHARES
i. The issuance of the GenRad Shares has been duly authorised by all
necessary corporate action. When issued, the GenRad Shares will be
duly authorised, validly issued, fully paid and non-assessable.
-21-
ii. The GenRad Shares when issued to the Seller shall be free and clear of
any pledge, lien, charge, encumbrance, security interest or other
claim.
g. CAPITALISATION OF THE PURCHASER
i. The GenRad Shares are duly authorised, validly, issued, fully paid and
are free and clear of all rights, title and interests of all persons
other than the Seller and are subject to no restrictions on transfer
except as otherwise set out in this Agreement.
ii. The common stock of the Purchaser is currently traded on the New York
Stock Exchange. The Purchaser has delivered to the Seller copies of
its most recent 10-K, Form 10-Q and Form 8-K (if any) filings with the
Commission (as hereinafter defined) and its most recent Proxy
Statement and as of their respective dates, these documents did not
contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
iii. Since the date of the Purchaser's most recent 10-K, to the knowledge
of the Purchaser, there has not been any material adverse change in
the financial condition or business of the Purchaser which was
required to be disclosed in a filing under the Securities Act of 1934,
as amended (other than as previously disclosed) which filing was
required to be filed on or before the date hereof.
iv. The Purchaser is eligible to use Form S-3 under the Act for the
registration of the GenRad Shares.
6. REGISTRATION OF THE GENRAD SHARES.
a. Immediately following Completion, the Purchaser will use its best endeavors
to register for resale on Form S-3 the GenRad Shares (the "Registration
Statement") with the United States Securities and Exchange Commission (the
"Commission") and to list such shares on the New York Stock Exchange (the
"Registration"). Any offering of the GenRad Shares under the Registration
Statement shall not be underwritten.
b. The Purchaser shall its best endeavors to cause the S-3 Registration
Statement to remain effective until the first to occur of 24 months from
Completion or such earlier date on which all GenRad Shares are sold.
d. In the event that (i) the Purchaser is engaged or has fixed plans to engage
in an underwritten public offering of GenRad Common Stock registered under
the Act or (ii) the Purchaser is engaged in any activity or transaction or
preparations or negotiations for any activity or transaction that the
Purchaser desires to keep confidential for valid business reasons and the
Purchaser determines in good faith that the public disclosure requirements
imposed on the Purchaser under the Act in connection with the Registration
would require disclosure of such activity, transaction, preparation or
negotiations, the Purchaser may, by written notice to the Seller, (A) delay
the filing or effectiveness of the Registration Statement for up to a
-22-
total of ninety (90) days or (B) suspend, for up to ninety (90) days, the
Registration after effectiveness and require that the Seller immediately
cease sales of shares pursuant to the Registration Statement during such 90
day period.
e. CERTAIN REGISTRATION PROCEDURES. GenRad shall use its best endeavors to
carry out the following as expeditiously as possible:
i. prepare and file with the Commission any amendments and supplements to
the Registration Statement and the prospectus included in the
Registration Statement as may be necessary to keep the Registration
Statement effective for a period of 24 months from Completion or until
such earlier date as all GenRad Shares are sold;
ii. furnish to the Seller such reasonable number of copies of the
prospectus included in the Registration Statement, in conformity with
the requirements of the Act, and such other documents as the Seller
may reasonably request in order to facilitate the public sale or other
disposition of the GenRad Shares owned by the Seller;
iii. register or qualify the GenRad Shares covered by the Registration
under the securities or Blue Sky laws of such states of the USA as the
Seller shall reasonably request and shall be required under applicable
law, and do any and all other acts and things that may be reasonably
necessary to enable the Seller to complete the public sale or other
disposition in such jurisdictions of the GenRad Shares owned by the
Seller, provided, however, that GenRad shall not be required to
qualify as a foreign corporation or execute a general consent to
service of process in any jurisdiction; and
iv. immediately notify the Seller, at any time when a prospectus contained
in the Registration is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus contained
in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing
and provide the Seller with revised prospectuses.
f. ALLOCATION OF EXPENSES. GenRad will pay all Registration Expenses (as
defined below) for the Registration. For purposes of this Clause 6(f), the
term "Registration Expenses" shall mean all expenses incurred by GenRad in
preparing and filing the Registration Statement and any amendments thereto,
including, without limitation, all registration and filing fees, exchange
or New York Stock Exchange listing fees, printing expenses, accounting
fees, fees and disbursements of counsel for GenRad, state securities fees
and expenses of special audits incident to or required by any such
registration, but excluding underwriting discounts and selling commissions
relating to the GenRad Shares and fees and disbursements of legal advisers
to the Seller.
g. INFORMATION BY SELLER. GenRad shall not be required to include any GenRad
Shares in the Registration Statement unless: the Seller furnishes to GenRad
in writing such information regarding the Seller and the distribution
proposed by the Seller as GenRad may reasonably request in writing in
connection with the Registration or as
-23-
shall be required in connection therewith by the Commission or any state
securities law authorities; and
h. NO RIGHTS TO REGISTER STOCK. Except as described in this Clause 6, the
Purchaser has no obligation to register any shares of GenRad Common Stock.
i. INDEMNITY. The Purchaser hereby indemnifies the Seller against any loss or
damage which may be caused directly or indirectly by any material
misstatements or omissions in the Registration Statement (excluding
information provided by the Seller).
7. REGULATION S REPRESENTATIONS. The Seller understands and agrees that the
GenRad Shares issued pursuant to this Agreement are being issued pursuant
to Regulation S, an exemption from registration under the Act and have not
been registered under the Act. In connection with the issuance of the
GenRad Shares to the Seller, the Seller hereby covenants and agrees with
the Purchaser as follows:
a. The Seller is acquiring the GenRad Shares for his own account and not with
a view to any distribution in violation of the Act.
b. Each stock certificate representing the GenRad Shares shall bear the
following legends until such Shares are registered under the Act:
"The Shares represented by this certificate are issued pursuant to
Regulation S under the Securities Act of 1933 as Amended (the "Act"), and
may not be sold, pledged or otherwise transferred without an effective
registration under the Act or unless GenRad shall have received an opinion
of counsel satisfactory to GenRad that an exemption from registration under
such Act is then available. All hedging transactions with respect to the
shares represented by this certificate are prohibited unless in compliance
with the Act."
"The GenRad Shares are subject to certain restrictions on resale contained
in a certain Share Purchase Agreement dated as of December 22, 1999, a copy
of which may be obtained by written request to GenRad."
c. The Seller will not sell the GenRad Shares outside of the United States
unless in compliance with Regulation S promulgated under the Act and will
not sell the GenRad Shares in the United States or to any U.S. Person (as
such terms are defined in Regulation S) except in compliance with the Act
(including compliance with the one year distribution compliance period
under Regulation S.
d. Notwithstanding the registration of the GenRad Shares pursuant to Clause 6,
the Seller shall not sell or otherwise transfer or dispose of more than
50,000 GenRad Shares in any single week during the first ten weeks
following the effectiveness of the Registration Statement.
8. DELIVERIES OF SELLER. The Seller shall deliver the following at Completion:
a. The Shares and the MAT Shares, represented by certificates, together with
transfers of the Shares duly executed and completed in favour of the
Purchaser.
-24-
b. TAXATION DEED. The Taxation Deed duly executed in the Form of EXHIBIT A
(the "Taxation Deed").
c. EMPLOYMENT. A duly executed Employment Agreement in the form attached
hereto as EXHIBIT B.
d. OPINION OF LEGAL ADVISERS. An opinion, dated the Completion Date, of Xxxxx
and Xxxxx legal advisers for the Seller, in the form of EXHIBIT C.
e. ASSIGNMENTS OF INVENTIONS. Assignments of Inventions duly executed in the
form attached hereto as EXHIBIT D1 and D2.
f. ESCROW AGREEMENT. An Escrow Agreement duly executed in the form attached as
EXHIBIT E.
g. STATUTORY RECORDS AND MINUTE BOOKS
i. All the statutory and minute books of each of the Companies (duly
written up to immediately preceding the Completion Date).
ii. The common seals (if any) of each of the Companies.
h. DIRECTORS AND SECRETARIES RESIGNATIONS. Written resignations of the
directors and officers of the Companies resigning their respective offices.
i. EVIDENCE OF RELEASE OF GUARANTEES. Evidence in a form reasonably
satisfactory to the Purchaser that all guarantees given by the Companies in
respect of liabilities of:
i. the Seller, and
ii. any person associated with the Seller have been released.
j. DOCUMENTS AND OTHER ITEMS TO BE MADE AVAILABLE BY THE SELLER. The following
documents and other items shall be made available by the Seller for
collection immediately following Completion by the Purchaser or its
authorised representatives:
i. All insurance policies, cheque books and unused cheques,
paying-in-books and credit or charge cards in the name of the
Companies.
ii. All keys to the Property or any other assets of the Companies held by
any of the directors or the officers, including the Seller.
iii. All assets of the Companies (including motor vehicles together with
the keys and registration documents in respect of them) which are not
situated at the Property.
-25-
9. DELIVERIES OF PURCHASER. The Purchaser shall deliver the following at
Completion:
a. OPINION OF COUNSEL. An opinion, dated the Completion Date, and in form and
substance satisfactory to the Seller and his legal advisers, of Xxxxxx,
XxXxxxxxx & Fish, counsel for the Purchaser, in the form of EXHIBIT F.
b. EMPLOYMENT AGREEMENT. A duly executed Employment Agreement with GenRad
Limited in the form attached hereto as EXHIBIT B.
c. ESCROW AGREEMENT. An Escrow Agreement, duly executed in the form attached
as EXHIBIT E.
10. OTHER COVENANTS OF THE SELLER. The Seller hereby covenants and agrees with
Purchaser that:
a. For a period of three (3) years following the Completion Date, the Seller
whether by himself, his employees or agents or howsoever otherwise, whether
as employee, officer, manager, partner, consultant, adviser, agent,
shareholder, investor, lender, service provider, or in any other capacity,
will not compete with any business of the Companies as carried on at the
date of this Agreement anywhere in the United Kingdom, the Republic of
Ireland or the Netherlands. The phrase "compete with the business of" shall
be deemed to include (without hereby limiting the generality of the same)
engaging or being interested, directly or indirectly, in any type of
business or enterprise which is competitive with the business of the
Companies as carried on at the date of this Agreement. The foregoing shall
not prevent the Seller from owning up to 5% of the issued share capital of
any class of shares listed on London Stock Exchange Limited or any other
recognised investment exchange (as such term is defined in the Financial
Services Act 1986) which may compete with any such entity (provided the
Seller has no other relationship with such entity); and
b. For a period of three (3) years following the Completion Date, the Seller
will not directly or indirectly (through any person, firm, corporation,
association or other entity):
i. employ or solicit, entice away or induce, any of Xxxxxx Xxxxx, Xxxxxxx
Xxxxxx, Siemona Xxxxxxxx, Xxxx Xxxxxxx, Xxx Xxxxxxxxx, Xxxxx Xxxxxxxx,
Xxxx Stock, Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxx Xxxxxxxx, Xxxxx
Xxxxxxxxx, Xxxxx Xxxxx or Reg Xxxxx each of whom is at the Completion
Date an employee of the Companies to terminate their relationship with
the companies, the Purchaser or its affiliates; or
ii. solicit, direct, divert or take away, the business or patronage of any
persons or entities of which are at the Completion Date or which were
in the 12 months prior to the Completion Date customers or accounts,
or with which the Seller had direct dealings or contact within such 12
month period with a view to them becoming customers or accounts, of
the Companies.
11. LIMITATIONS ON THE SELLER'S LIABILITY.
-26-
a. The Purchaser hereby acknowledges that it has not entered into this
Agreement in reliance on any warranties, representations, covenants,
undertakings or indemnities howsoever or by whosoever or to whomsoever made
except insofar as they are contained in the Agreement or any of the
Ancillary Agreements.
b. Without prejudice to the generality of Clause 11(a) the Purchaser
irrevocably and unconditionally waives any right it may have to claim
damages and/or to rescind this Agreement for any misrepresentation not
contained in this Agreement or the Ancillary Agreements or for breach of
any warranty not contained in this Agreement or the Ancillary Agreement
unless such misrepresentation or warranty was made or given fraudulently
was not made or given in good faith.
c. No claims shall be brought by the Purchaser in respect of any breach of the
warranties set out in Clause 4 of this Agreement or Part C of the Tax Deed
(including any claim under such warranties pursuant to the indemnity in
Clause 12) (each a "Warranty" and collectively the "Warranties") unless
notice in writing of the claim (specifying in reasonable detail the event,
matter of default which gives rise to the claim, the breach that results
and the amount claimed) has been given to the Seller not later than the
expiration of the appropriate period. For the purpose of this Clause the
"appropriate period":
i. in respect of a claim brought by the Purchaser under the Warranties in
the Taxation Deed is 7 years from the Completion Date;
ii. in respect of any claim which brought by the Purchaser under the
Warranties in Clauses 4(a) and 4(b) of this Agreement is 4 years from
the Completion Date; or
iii. in respect of any other claims under the Warranties is 18 months from
the Completion Date.
d. Any claim under the Warranties set out in Clause 4 of this Agreement
(including any claim under such Warranties pursuant to the indemnity in
Clause 12) shall be deemed to have been withdrawn (if it has not been
previously satisfied, settled or withdrawn) 6 months after the expiration
of the appropriate period, unless proceedings in respect of it have
commenced by being issued and serviced on the Seller.
e. The Seller shall be liable, in respect of any claim brought by the
Purchaser for a breach of the Warranties, only if the liability of the
Seller for such claims would exceed in aggregate (pound)15,000 and, in that
event, the Seller shall be liable only for the excess.
f. The total liability of the Seller in respect of all claims under the
Warranties shall not exceed (pound)1,000,000.
g. Any statement in this Agreement or the Taxation Deed which is qualified as
being made "so far as the Seller is aware" or "to the best of the
knowledge, information and belief of the Seller" or any similar expression
has been so qualified after enquiries by
-27-
the Seller or the executive directors, company secretary, general
managers and financial controller of the Companies.
h. The provisions of Clauses 11(c) to 11(f) shall not apply in the case of any
fraud by the Seller or to the Seller choosing not to disclose any matter
against the Warranties, knowing it to be relevant to be disclosed.
12 INDEMNITY
a. Subject to Clauses 11(b) to (f) (inclusive) and Clauses 12(d) and (e), the
Seller shall indemnify, exonerate and hold harmless the Purchaser and the
Companies against and in respect of any losses, liabilities, deficiencies,
demands, claims, judgments, causes of action, expenses or damages
(including, without limitation, reasonable legal and other expenses and
fees properly incurred and arising directly from any of the foregoing
("Costs")) incurred or sustained by the Purchaser or the Companies based
upon, arising out of or resulting from any of the following (the "Losses")
(by payment to the Purchaser of an amount equal to any such Losses):
i. the failure of the Seller to transfer to the Purchaser good and
sufficient, record and marketable title to the Shares, free and clear
of all liens, pledges, charges, claims, encumbrances or rights, title
and interest in others;
ii. any breach of a Warranty.
b. The Purchaser shall promptly notify the Seller in writing of any claim it
may have under this Clause 12, including the institution of any legal
action against the Purchaser or the Companies specifying in reasonable
detail the individual items of liability, damage, cost or expense, and the
nature of the breach of Warranty, to which such item is related. Such
notice shall not be a condition precedent to any liability of the Seller
under this indemnity unless such failure materially prejudices the ability
of the Seller to defend such claim.
c. In case any third party claim or action shall be brought against the
Purchaser or the Companies the Purchaser shall notify the Seller of the
commencement thereof. The Seller shall be entitled to participate
therein except with respect to a claim as defined in the Taxation Deed
and, to the extent that it shall wish, to assume the defence thereof and
after notice from the Seller to the Purchaser of its election so to
assume the defence thereof and of its agreement to be fully responsible
for all liability and costs arising from such action, the Seller shall
not be liable to the Purchaser for any legal fee or expenses of other
legal advisers, in each case subsequently incurred by the Purchaser in
connection with the defence thereof. In such event, the Purchaser shall
have the right to employ separate legal adviser in such action and to
participate in the defence thereof but the fees and expenses of such
legal adviser shall not be at the expense of the Seller unless the
employment of such legal adviser has been specifically authorised by the
Seller. The Seller shall not settle or compromise a claim with respect
to the Purchaser or the Companies without prior written notice to and
consent of the Purchaser or the Companies which shall not be
unreasonably withheld or delayed.
-28-
d. The Purchaser warrants that it shall and shall procure that the Companies
shall at all times take all reasonable action to minimise or avoid any
claim against the Seller under this Agreement and to mitigate its loss. The
Seller shall not be liable under this indemnity for any loss or damage
suffered by the Purchaser which is directly attributable to a breach by the
Purchaser of this Clause 12(d).
e. Notwithstanding the provisions of this Clause 12, the Seller shall be in no
way liable to the Purchaser under this Agreement for any implied warranty,
condition or other term or any duty at common law which is not expressly
provided for in this Agreement or for any indirect, special or
consequential loss or damage (whether for loss of profit or otherwise).
f. Notwithstanding any other provision of this Agreement or the Disclosure
Letter the matters referred to in Clause 4(y) shall not be subject to any
disclosure whether under the Disclosure Letter or otherwise and the Seller
indemnifies the Purchaser (in accordance with this Clause 11) in respect of
the matters in Clause 4(y), notwithstanding any statement made by the
Seller or the Companies, whether in the Disclosure Letter or otherwise.
g. All representations and warranties shall survive Completion whether or not
any party relied thereon or had knowledge acquired either before or after
the date hereof, from its own investigation or otherwise, of any facts at
variance with or of any breach of any such representations or warranties.
The representations, warranties and covenants contained in the Taxation
Deed shall survive as set out therein
13. PAYMENT OF LOSSES FROM ESCROW SHARES.
a. Promptly and no later than 1 working day after Completion the Purchaser
shall deposit the Escrow Shares with the Escrow Agent. The Escrow Shares
shall be held by the Escrow Agent for the benefit of the Seller unless and
until any such Escrow Shares are applied in satisfaction of any
Representation Claim (as hereinafter defined).
b. The Escrow Shares shall be reserved to satisfy any and all Losses based
upon, arising out of or resulting from any claim under this Agreement or
any of the Ancillary Agreements ("Representation Claim") and all Costs
related thereto.
c. Upon the determination of the amount of any Losses, whether by agreement of
the Purchaser and the Seller or by any other final adjudication, a number
of Escrow Shares with an Escrow Value (hereinafter defined) equal to the
amount of such Losses shall be delivered to the Purchaser within five (5)
business days of such determination. Remainder issued on expiry of one
year. Escrow Value shall mean the value of the Escrow Shares, as determined
by multiplying the number of such Escrow Shares by the Average Closing
Price.
d. To the extent the amount of Losses for any such Representation Claim and
related Costs exceeds the Escrow Value of the remaining Escrow Shares,
the Seller shall pay the excess to the Purchaser in accordance with the
terms set out in the relevant provision of this Agreement or the
relevant Ancillary Agreement.
-29-
e. As of the date which is one year from the Completion Date (the "Expiration
Date"), the Escrow Shares shall be distributed to the Seller in accordance
in reasonable detail with the Escrow Agreement, provided that, if, on such
date, there exists a bona fide Representation Claim notice of which has
been given by the Purchaser to the Seller prior to the Expiration Date, but
which is not then finally resolved and discharged, a number of Escrow
Shares having an Escrow Value equal to the reasonable estimate of Losses
from such Representation Claim and Costs shall remain in escrow pending
resolution thereof provided that the Purchaser shall proceed with any
discussions and/or proceedings relating to such Representation Claim and
shall not unreasonably delay such discussions and/or proceedings.
f. Nothing in this Clause 13 shall be construed to limit the indemnity
obligations of the Seller under Clause 12, including, but not limited to
the time period for survival of such indemnity obligations.
14. FURTHER ASSURANCES.
From time to time after Completion, at the Purchaser's reasonable request and
expense, the Seller shall execute and deliver such other and further instruments
of conveyance, assignment, transfer and consent, and take such other action as
the Purchaser may reasonably request for the more effective conveyance and
transfer of ownership of the Shares and to otherwise give effect to the other
transactions contemplated hereby.
15. POWER OF ATTORNEY
a. APPOINTMENT OF ATTORNEY. The Seller hereby appoints any director for the
time being of the Purchaser ("THE ATTORNEY") severally to be the agent,
proxy and attorney of the Seller and in the Seller's name, place and stead
to exercise all the rights and powers of the Seller as a member of MIS from
and including Completion until and including the day on which the Purchaser
or its nominee is entered in the register of members of MIS as the holder
of the entire issued share capital of the Company ("THE REGISTRATION DATE")
and:
i in connection therewith, to receive notices of and attend and vote at
all meetings of the members of MIS during such period; and
ii for such purpose the Seller hereby authorises:
(1) MIS to send any notices in respect of his holding of shares in
MIS to the Purchaser; and
(2) the Attorney to complete in such manner as he thinks fit and to
return proxy cards, consents to short notice, written resolutions
and any other document required to be signed by him in his
capacity as a member of MIS.
b. RATIFICATION. The Seller shall ratify everything which the Attorney shall
do or purport to do by virtue of this Power of Attorney except where such
acts constitute a breach of any law or MIS's memorandum or articles of
association.
-30-
c. DELEGATION. The Attorney may at any time and on more than one occasion
appoint a substitute to act as the attorney of the Seller under this Power
of Attorney (with the same powers, except the power to appoint a
substitute, as the Attorney) and may revoke such an appointment. Such
appointments and revocations shall be in writing.
d. DURATION. This Power of Attorney shall be irrevocable until the
Registration Date.
16. EXPENSES OF THE PARTIES.
Whether or not the purchase contemplated by this Agreement is completed, each
party shall pay and be responsible for all costs, fees and expenses incurred by
such party. The expenses of MIS (including, without limitation, the fees and
disbursements of Seller's legal advisers and brokers or investment bankers) in
connection with the negotiation of this Agreement and completion of the
transactions contemplated hereby shall be paid by Seller and no such expenses
shall be paid by the Companies.
17. ENTIRE AGREEMENT, WAIVERS, AMENDMENTS.
This Agreement and the Ancillary Agreements hereto comprise the entire
agreement between the parties hereto as to the subject matter hereof and
supersedes all prior agreements and understandings between them relating
thereto, including, without limitation, the Heads of Agreement dated October 28,
1999 by and among the Seller, the Companies and the Purchaser. Each party may
extend the time for, or waive the performance of, any of the obligations of the
other, waive any inaccuracies in the representations or warranties of the other,
or waive compliance by the other with any of the covenants or conditions
contained in this Agreement, but only by an instrument in writing signed by the
party granting such extension or waiver. This Agreement may be amended only by
an instrument in writing executed by all the parties hereto.
18. NOTICES.
a. Any notice to any party hereto given pursuant to this Agreement or the
Taxation Deed or any agreement delivered in connection herewith shall be
given by hand delivery or internationally recognised express courier
delivery service addressed as follows:
if to the Seller: Xxxxx Xxxxxxx
0 Xxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxxx
Xxxxx XX0 0XX
with a copy to: Xxxxx & Xxxxx
Xxxxxxx Xxxxx
000 Xxxxx Xxxx
Xxxxxxxxx XX0 0XX
-31-
if to the Purchaser: GenRad, Inc.
0 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
with a copy to: Xxxxxx, XxXxxxxxx & Fish, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Xx., Esquire
Any such address may be changed by any party by written notice to the other
party. If the notice is delivered by hand, it shall be deemed to have been
delivered on the date received by the recipient of such notice. If the notice is
delivered by international courier, it will be deemed delivered two (2) days
after being mailed.
19. SUCCESSORS AND ASSIGNS.
This Agreement shall enure to the benefit of, and be binding upon and
enforceable against the respective heirs, administrators, successors and assigns
of the parties hereto but may not be assigned by any party without the prior
written consent of the other parties hereto.
20. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original for all purposes.
21. SEVERABILITY.
If any term or provision of this Agreement or the application thereof to any
person or circumstance, shall to any extent be invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby and each term and provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.
22. SPECIFIC PERFORMANCE.
The Seller agrees that the agreements of the parties set out in Clause 10 are
unique and that the Purchaser will be irreparably harmed in the event that such
agreements are not specifically enforced. The parties further agree it is
impossible to measure in money the damage which will accrue by reason of a
refusal by the Seller to perform his obligations under Clause 10. Therefore, in
the event that the Purchaser shall institute any action to enforce the
provisions thereof, the Seller hereby acknowledges that the Purchaser does not
have an adequate remedy at law and that injunctive or other equitable relief
will not constitute any hardship on the Seller and that this Agreement and the
obligations of the Seller may be specifically enforced.
-32-
23. NO ANNOUNCEMENTS.
Seller shall consult and cooperate with Purchaser as to the timing and content
of any announcement of this transaction to the general public and the Companies'
customers and suppliers. Seller shall not make any announcement relating to this
Agreement or the transactions contemplated hereby without the consent of the
Purchaser, provided, however, that nothing herein shall prevent Seller from
making any disclosure which is required by law.
24. GOVERNING LAW.
This Agreement is governed by and shall be interpreted and construed in
accordance with English law and the parties hereby irrevocably submit to the
exclusive jurisdiction of the High Court of Justice in England in respect of any
matter arising from or in connection with it.
25. DEFINITIONS.
References to the "Ancillary Agreements" shall mean the Disclosure Letter, the
Taxation Deed, the Employment Agreement, the Assignment of Inventions and the
Escrow Agreement in their respective forms attached to this Agreement.
Reference to a "Clause" is to the relevant clause of this Agreement.
-33-
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be
executed and delivered as a Deed the day and year first above written.
Purchaser:
GENRAD, INC.
Executed and delivered
as a Deed by GenRad, Inc.
acting by:
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Vice President & Chief Financial Officer
Executed and delivered
as a Deed by Xxxxx Xxxxxxx Seller:
in the presence of:
/s/ Xxxxx Xxxxxxx
-------------------------------
Xxxxx Xxxxxxx
Witness:
Signature /s/ Xxxxx Xxxxxxxx
---------------------------
Name Xxxxx Xxxxxxxx
--------------------------------
-34-
